January 08, 2018
The much awaited and touted Consumer Protection Bill, 2018 was introduced in the Lok Sabha by Shri Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution on January 05, 2018. The entire text of the Bill can be accessed here.
The Bill primarily seeks to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for connected matters.
Need for Revamping Consumer Protection Law
The Ministry recognizes the following shortcomings in the Consumer Protection Act, 1986 which prompted the need of a New Act:
- Disposal of cases has not been fast due to various constraints. Several shortcomings have been noticed while administering the various provisions of the said Act.
- Consumer markets for goods and services have undergone drastic transformation since the enactment of the Consumer Protection Act, 1986. The modern market place contains a plethora of products and services.
- The emergence of global supply chains, rise in international trade and the rapid development of e-commerce have led to new delivery systems for goods and services and have provided new options and opportunities for consumers.
- E-commerce has rendered the consumer vulnerable to new forms of unfair trade and unethical business practices. Misleading advertisements, tele-marketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and will require appropriate and swift executive interventions to prevent consumer detriment.
In view of the aforesaid factors, the Ministry has proposed to repeal and re-enact the Act.
Key Highlights of the Consumer Protection Bill, 2018
Central Consumer Protection Authority (CCPA)
The Bill provides for the establishment of an executive agency to be known as the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers, make interventions when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class action including enforcing recall, refund and return of products, etc. This fills an institutional void in the regulatory regime extant. Currently, the task of prevention of or acting against unfair trade practices is not vested in any authority. This has been provided for in a manner that the role envisaged for the CCPA complements that of the sector regulators and duplication, overlap or potential conflict is avoided.
Filing of Consumer Complaints Electronically
Section 35 of the Bill also enumerates the manner in which a consumer complaint can be filed electronically. It states that a complaint, in relation to any goods sold or delivered or any service provided, may be filed with a District Commission electronically in such manner as may be prescribed.
Product Liability Action
The Bill also envisages provisions for product liability action on account of harm caused to consumers due to a defective product or by deficiency in services. Under this a product liability action may be brought by a complainant against a product manufacturer or seller for any harm caused to him on account of a defective product. Under the Bill, a product service provider is rendered liable if the service provided by him was faulty or imperfect or deficient in quality or manner of performance or if there was an act of omission or commission or negligence or conscious withholding any information which caused harm to the consumer.
Reference to Mediation
Chapter V of the Bill renders exclusive provisions for reference of a dispute to Mediation as an Alternate Dispute Resolution Mechanism. The Bill states that if it appears to the District Commission that there exists elements of a settlement which may be acceptable to the parties it may direct the parties to give in writing consent to have their dispute settled by mediation in accordance with the provisions of the Act.
The Bill further provides for the establishment of Consumer Mediation Cell and also enumerates the procedure for mediation.
Measures to Prevent Unfair Trade Practices in E-commerce
The Bill in the wake of rapid technological advancement and augmentation of e-commerce transactions in India renders an exclusive definition of “e-commerce” and state that it means buying or selling of goods or services including digital products over digital or electronic network.
In order to prevent unfair trade practices in E-commerce the Bill empowers the Central Government to take such measures in the manner as may be prescribed to protect the interest and rights of consumers.
Enhancing of Pecuniary Jurisdiction
The Bill also seeks to enhance the pecuniary jurisdiction of the Consumer Disputes Redressal Agencies. The pecuniary jurisdiction for filing complaint in:
- District Commission shall be for value of goods or services not exceeding one crore rupees.
- State Commission shall be for value of goods or services exceeds rupees one core but does not exceed rupees ten crore.
- National Commission shall be for value of goods and services exceeding ten crore rupees.