22 April, 2020
7 Min Read
Consumer Protection act
Part of: GS-II- Rights/Consumer rights (PT-MAINS-PERSONALITY TEST)
The Lok Sabha passed the Consumer Protection Bill 2019 after due consideration and discussion. The Union Minister for Consumer Affairs, Food and Public Distribution said that the bill aims at protecting the interests of consumers by establishing authorities for timely and effective administration and settlement of consumers’ dispute, to simplify a number of rules, quick redressal of their complaints and consumers will be able to get speedy justice. He said the government aims to simplify the entire process of redressal of consumer grievances.
Under the Bill, there is provision for central government to set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers and will be empowered to investigate, recall, refund and impose penalties. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. There is also a provision for class action law suit for ensuring that rights of consumers are not infringed upon. The authority will have power to impose a penalty on a manufacturer or an endorser of up to 10 lakh rupees and imprisonment for up to two years for a false or misleading advertisement.
Several countries like Canada, Estonia have devised advertisement regulations for unhealthy foods targeted at children. Countries such as the UK, Ireland and Belgium have specifically banned celebrity endorsement of unhealthy foods. The impact of such restrictions has been reported to be significant.
The present passed Bill seeks to replace the three-decade-old Consumer Protection Act, 1986.
Salient Features of the Bill
1. Central Consumer Protection Authority (CCPA): Executive Agency to provide relief to a class of consumers. The CCPA will be empowered to-
2. Simplified Dispute Resolution process
i) Pecuniary Jurisdiction enhanced to-
ii) Deemed admissibility after 21days of filing
iii) Empowerment of Consumer Commission to enforce their orders
iv) Appeals only on question of law after second stage
v) Ease of approaching consumer commission
4. Product Liability
A manufacturer or product service provider or product seller to be responsible to compensate for injury or damage caused by defective product or deficiency in services
The Basis for product liability action will be:
New Bill- Benefit to Consumers
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)
Deterrent punishment to check misleading advertisements and adulteration of products
Product liability provision to deter manufacturers and service providers from delivering defective products or deficient services
Ease of approaching Consumer Commission and Simplification of Adjudication process
Scope for early disposal of cases through mediation
Provision for rules for new age consumer issues: e-commerce & direct selling
Rights of consumers: Six consumer rights have been defined in the Bill, including the right to:
The bill proposes strict action against the advertiser in case of misleading advertisements but not against the media through which the advertisement is being publicised.
Celebrities can be fined up to ?10 lakh. For repeat offences, this may rise to ?50 lakh, with a jail term of up to five years.
The principle of separation of powers:
Independence of these quasi-judicial bodies:
Unfair trade by rivals and penalizing misleading celebrity endorsement:
Standing Committee recommendations not addressed:
Suggestion for Improvement
Misleading ads, tele-marketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and will require appropriate and swift executive intervention to prevent consumer detriment.
However, certain issues such as the appointment of mediators to settle disputes are contentious as this would lead to arm-twisting of the weaker parties and may encourage corruption.
The Bill does not address the fundamental problem of protracted and complicated litigation, the bane of consumer forums constituted under the Consumer Protection Act of 1986. Instead, it provides an alternative to the consumer forums, in the form of mediation.
The setting up of a Consumer Authority and absence of provisions to streamline the conducting of cases in courts may only lead to greater regulations and complexities.
Addressing these issues is necessary to ensure that the new amendments bring about definitive improvements in the CPA.
India is likely to cross China’s population by 2024 and consumerism is growing fast.
With the passage of the Consumer Protection Bill in Parliament, consumer rights are set to receive a massive boost. The new regulations put more responsibility on companies for misleading advertising and faulty products.
In a global first, it also lays out penalties for celebrities endorsing or promoting false advertising and adulterated goods.
The emergence of global supply chain, rise in global trade and rapid development of e-commerce have led to a new delivery system for goods and services and also provided new options and opportunities for consumers.
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