Consumer Protection Bill

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Topics covered:

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

 

Consumer Protection Bill

 

What to study?

For prelims: Key features of the bill.

For mains: issues present with the Act, need for reforms and significance.

 

Context: Landmark Consumer Protection Bill, 2019 gets Parliamentary approval.

 

Key Provisions of the Bill:

(Note: For details of the bill, please refer https://www.insightsonindia.com/2019/07/31/consumer-protection-bill/. )

 

  1. Definition of consumer:

A consumer is defined as a person who buys any good or avails a service for a consideration

What it covers?

It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.

What it doesn’t?

It does not include a person who obtains a good for resale or a good or service for commercial purpose

 

  1. Six consumer rights have been defined in the Bill, including the right to:

(i) be protected against marketing of goods and services which are hazardous to life and property; (ii) be informed of the quality, quantity, potency, purity, standard and price of goods or services; (iii) be assured of access to a variety of goods or services at competitive prices; and (iv) seek redressal against unfair or restrictive trade practices.

 

  1. Proposes to set up a Central Consumer Protection Authority:

It will be set up by the central government.

 

  1. Functions of CCPA:

CCPA shall promote, protect and enforce the rights of consumers. 

It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. 

 

  1. Penalties for misleading advertisement:

The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement. In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.

 

  1. Consumer Disputes Redressal Commission:

CDRCs will be set up at the district, state, and national levels. A consumer can directly file a complaint with CDRCs. 

 

  1. Jurisdiction of CDRCs:

The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore

The State CDRC will entertain complaints when the value is more than Rs one crore but does not exceed Rs 10 crore

Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.

 

  1. Product liability:

Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.  To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.

 

Why is this Bill significant?

  1. Swift remedies: Presently Consumer only have a single point of access to justice, which is time consuming. Additional swift executive remedies are proposed in the bill through Central Consumer Protection Authority (CCPA).
  2. Deterrent punishmentto check misleading advertisements and adulteration of products.
  3. Product liability provision to deter manufacturers and service providers from delivering defective products or deficient services.
  4. Ease of approaching Consumer Commission and Simplification of Adjudication process.
  5. Scope for early disposal of cases through mediation.

 

What’s missing?

  1. Does not address the fundamental problem of protracted and complicated litigation, the bane of consumer forums constituted under the Consumer Protection Act of 1986.
  2. Does provide for a regulator, but there is no proper focus on the duties of the regulator.
  3. The definition of ‘consumer rights’ in the Bill is not simple and straight forward, so that consumers at least know what their entitlements are.
  4. By not imposing judicial qualifications like in the Act of 1986 for members of the redressal body, the Bill indirectly allows appointment of non-judicial members to the district/state and national commissions. Conflict of interest could arise when government nominees hear cases involving a government entity.