6th August – New Consumer Protection Bill

The passing of the Consumer Protection Bill by the Lok Sabha in the ongoing session of Parliament is a welcome step.

New Consumer Protection Bill

Background –

  • Originally brought out in 2015, the Bill was referred to a standing committee and later reintroduced in 2018, only to lapse with the end of the term of the earlier government.
  • A lot has changed in the way goods and services are bought and sold since 1986 when the first Consumer Protection Act was enacted.
  • The Bill recognises this, bringing within its fold online sales, teleshopping, direct selling, and multi-level marketing in addition to the traditional methods.

Provisions of the new Bill –

  • The new law will apply to all goods and services, including sale or construction of homes or flats and telecom services.
  • While the earlier law did cover unfair trade practices, the current one makes it more comprehensive. It also defines unfair contracts.
  • The Bill improves upon the Act of 1986 on a few counts. It provides for product liability action on account of harm caused to consumers due to a defective product or by a deficiency in services.
  • Manufacturers, sellers or service providers are legally bound to compensate consumers for defects or deficiency.
  • It envisages a regulatory authority known as the Central Consumer Protection Authority (CCPA) with powers of enforcement, unlike the existing Consumer Protection Councils which are only advisory bodies.
  • The CCPA will have powers to initiate class-action including enforcing recall, refund, and return of products.
  • Considering that even consumer courts face piling up and the backlog of cases, there is now room for an alternative dispute resolution mechanism as the Bill sets up mediation cells attached to district forums, state and national commissions.
  • The Bill calls upon the endorsers to exercise due diligence before they plunge into advertisements. Failure to do so will attract a penalty of ₹10-50 lakh and/or a ban from further endorsements for a period of 1-3 years.

Concerns –

  • For one, since many sectors have their own regulators, duplication or clashes between CCPA and these bodies may arise. By not imposing judicial qualifications like in the Act of 1986 for members of the redressal body, the Bill indirectly allows the 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. Finally, easy access, simple process, and time-bound resolution must be ensured.

SourceThe Hindu Business Line

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