July.31,2015: The Cabinet has approved a new Consumer Protection Bill 2015 that seeks to replace a 29-year-old law and proposes to set up a regulatory authority which will have powers to recall products and initiate class class suit against defaulting companies, including e-tailers.
The proposed new law assumes importance as there is growing concern over safety of consumer products and services especially after the Maggi controversy.
The new bill, approved by the Cabinet today and likely to be introduced in the ongoing session of Parliament, provides for a comprehensive framework for protection of consumer interest and will replace the Consumer Protection Act, 1986, sources said.
The decision comes against the backdrop of emergence of complex products and services in the era of growing e-commerce business in India that has rendered consumers vulnerable to new forms of unfair trade and unethical business practices, sources said.
Sources said establishment of a central consumer protection authority (CCPA) will prove a game changer as the executive agency will have the power to inquire into violations of consumer rights, unfair trade practices and false or misleading advertisement. It will also have the power to conduct search and seizure of documents. "The authority can order discontinuation of unfair practices, order reimbursement for faulty products and can issue corrective advertisements," said a source.
The authority will also be empowered to impose fine and declare terms of contracts as "null and void" which are unfair to consumers. It will also protect consumers who are placed in an "unequal bargaining capacity".
The major changes proposed to make consumer forums (to be known as commissions) at district, state and national levels include increasing the number of members for faster disposal of complaints. "The consumers will be allowed to file cases from the place of stay or work against the present practice of filing such cases at place where a product was bought. Consumers can also file cases through electronic mode," said an official.
Moreover, the members of district commissions will be selected by state public service commissions after conducting tests. At present, there are examples of politicians, housewives and social workers getting such postings.
The other key changes include allowing consumers to fight their cases himself or through a recognized agent or an advocate. Affidavits and documents submitted in the commissions will be enough for deciding the case rather than insisting on personal appearance.
That apart, the bill has provisions for "product liability" if product/services causes personal injury, death or property damage and will take action against defaulting manufacturers or service providers.
For speedy disposal of court cases, the bill proposes "mediation" as an alternative dispute resolution mechanism. The mediation will be under the aegis of consumer courts.
Explaining the rational behind bring a new bill, sources said that misleading advertisements, tele-market , multi-level marketing, direct selling and e-tailing pose new challenges to consumer protection. Hence, there was a need to modernise the act to address the situation effectively.
The Bill also provides for stringent penalty, including life imprisonment in certain cases, sources added. The Consumer Protection Act 1986 was amended thrice earlier in 1991, 1993 and 2002.
The bill also has several provisions aimed at simplifying the consumer dispute resolution process in the consumer dispute resolution process in the consumer fora. They include enhancing the pecuniary jurisdiction of the Consumer Grievance Redress Agencies, power to review their own records by the state and district commissions.
The bill also has a provision for setting up of a 'circuit bench' to facilitate quicker disposal of complaints and there is an enabling provisions for consumers to file complaints electronically and file complaints in consumer courts that have jurisdiction over the place of residence of the complainant.
The complaints will be deemed as admissible if the question of admissibility is not decided within 21 days.
"The new bill ois expected to enhance the quality and safety of products and services," sources said, adding the proposed law has much needed provisions ensuring fair equitable and consistent outcomes for consumers.