Indian consumers are all set to get a shot in their arm as new consumer protection laws will soon come into force. Both the houses of Parliament have passed the Consumer Protection Bill, 2019 and is currently awaiting the President's assent. The bill was introduced in Lok Sabha by the Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, on July 8 and will replace the Consumer Protection Act, 1986.
The bill seeks to protect the rights of consumers and elevate the standard in favour of them. Here are the key changes:
1. Rights of consumers
The bill has attempted to redefine the consumer rights in the country. Here are the consumer rights that have been defined in the bill:
(i) right to be protected against marketing of goods and services that are hazardous to life and property
(ii) right to be informed of the quality, quantity, potency, purity, standard and price of goods or services
(iii) right to be assured of access to a variety of goods or services at competitive prices
(iv) right to seek redressal against unfair or restrictive trade practices.
2. Central Consumer Protection Authority (CCPA)
The bill proposes to set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.
3. Penalties for misleading adverts
The CCPA has also the authority to impose 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. This means that any celebrity endorsing or promoting false advertising and adulterated goods can be penalised.
In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years. The endorser of a misleading advertisement can also be prohibited from endorsing the product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years.
4. Consumer Disputes Redressal Commissions (CDRCs)
The bill has also recommended setting up Consumer Disputes Redressal Commissions (CDRCs) at the district, state, and national levels. This would enable consumers to approach the CDRC to file a complaint with respect to defective goods or services, overcharging, unfair trade practices and sale of goods or services, which may be hazardous.
This becomes especially beneficial for consumers, since they would no longer be required to file and pursue the complaint where the seller/service provider is located, which has significant time and cost implications on the complainant. It also becomes relevant for complainants against e-commerce and e-transactions, especially in cases when the registered offices are anywhere else in the world.
The district CDRC will listen to complaints for all goods and services where the value does not exceed Rs 1 crore. The state CDRC will entertain complaints where the value is more than Rs 1 crore and up to Rs 10 crore, while complaints for goods and services valued at over Rs 10 crore will be heard by the national CDRC.
5. Product liability
This provision holds the manufacturer, service provider or seller responsible for any harm or injury suffered by a consumer due to a defective product or deficient service. In order to claim compensation, a consumer will have to prove any one of the conditions for defect or deficiency, as set out in the bill.
