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Consumer protection bill, 2018

  • Category
    Polity & Governance
  • Published
    3rd Jan, 2019

The Consumer Protection Bill, 2018 has been passed in Lok Sabha which replaces the Consumer Protection Act, 1986. The Bill enforces consumer rights, and provides a mechanism for redressal of complaints regarding defect in goods and deficiency in services.

Issue

Context

  • The Consumer Protection Bill, 2018 has been passed in Lok Sabha which replaces the Consumer Protection Act, 1986. The Bill enforces consumer rights, and provides a mechanism for redressal of complaints regarding defect in goods and deficiency in services.
  • The Bill passed will reduce cost and time of litigation and improve consumer grievance redressal process

Background

  • The Consumer Protection Act, 1986 enforces rights of consumers, and provides for redressal of complaints at the district, state and national level.
  • Over the years, there have been challenges in the implementation of the Act. A high number of consumers were unaware of their rights under the Act while the disposal rate of consumer cases was high (about 90%), the time taken for their disposal was long. It took 12 months on an average to resolve a consumer case.
  • Also, the Act does not address consumer contracts between a consumer and manufacturer that contain unfair terms. In this context, the Law Commission of India had recommended that a separate law be enacted and presented a draft Bill in relation to unfair contract terms.
  • In 2011, a Bill to amend the 1986 Act was introduced to enable consumers to file online complaints, and against unfair terms in a contract. However, the Bill lapsed with the dissolution of the 15th Lok Sabha.
  • The Consumer Protection Bill, 2015 was introduced in Lok Sabha to replace the 1986 Act. The Bill introduced various new provisions, which included: (i) product liability; (ii) unfair contracts; and (iii) setting up of a regulatory body.
  • The Consumer Protection Bill, 2018 was introduced in January 2018 to replace the 2015 Bill.

About

Highlights of the Bill:

  • Consumer Disputes Redressal Commissions will be set up at the District, State and National levels for adjudicating consumer complaints. Appeals from the District and State Commissions will be heard at the next level and from the National Commission by the Supreme Court.
  • The Bill sets up a Central Consumer Protection Authority to promote, protect and enforce consumer rights as a class. It can issue safety notices for goods and services, order refunds, recall goods and rule against misleading advertisements.
  • If a consumer suffers an injury from a defect in a good or a deficiency in service, he may file a claim of product liability against the manufacturer, the seller, or the service provider.
  • The Bill defines contracts as ‘unfair’ if they significantly affect the rights of consumers. It also defines unfair and restrictive trade practices.
  • The Bill establishes Consumer Protection Councils at the district, state and national levels to render advice on consumer protection.

Analysis

Key issues

  • The Bill sets up the Consumer Disputes Redressal Commissions as quasi-judicial bodies to adjudicate disputes. The Bill empowers the central government to appoint members to these Commissions.  The Bill does not specify that the Commissions will comprise a judicial member.  If the Commissions were to have members only from the executive, the principal of separation of powers may be violated.
  • The Bill empowers the central government to appoint, remove and prescribe conditions of service for members of the District, State and National Consumer Disputes Redressal Commissions. The Bill leaves the composition of the Commissions to the central government.  This could affect the independence of these quasi-judicial bodies.
  • Consumer Protection Councils will be set up at the district, state, and national level, as advisory bodies. The State and National Councils are headed by Ministers in-charge of Consumer Affairs.  The Bill does not specify whom the Councils will advise.  If the Councils advise the government, it is unclear in what capacity such advice will be given.

Other Standing Committee recommendations not addressed :The Standing Committee that examined the Consumer Protection Bill, 2015 gave several recommendations.  While several recommendations have been included in the 2018 Bill, the following recommendations have not been included.

  1. The right to terminate a contract on the grounds of quality of goods or services received should be included under consumer rights outlined in the Bill. It reasoned that under the Sale of Goods Act, 1930, the buyer has certain rights to terminate the contract, and the Bill should have a similar provision for consumers.
  2. In order to facilitate early disposal of cases, involvement of advocates in complaints involving compensation value of up to Rs 20 lakh should be prohibited. It attributed inordinate delay in disposal of cases to deployment of advocates, and consequently recommended prohibition on their involvement in certain cases.
  3. The Standing Committee noted that Consumer Commissions do not admit complaints in relation to services to which a special law applies. It recommended that a provision may be inserted to clarify that the proposed Bill will apply to any matter covered under a special law, unless the special law excludes the application of the proposed Bill.
  4. The advertising code presently being followed by the Advertising Standards Council of India (ASCI) should be given legal backing. It recommended that a provision may be incorporated in the Bill to the effect that the misleading advertiser is compelled to issue a corrective advertisement.

    Comparison of the 1986 Act with the 2018 Bill

 Provision

 1986 Act

2018 Bill

 Ambit of law

  • All goods and services for consideration.
  • Free and personal services are excluded.
  • All goods and services, including telecom and housing construction, and all modes of transactions (online, teleshopping, etc.) for consideration.
  • Free and personal services are excluded.

 Unfair Trade Practices

 Included six types of such practices, like false   representation, misleading advertisement.

 Adds three types of practices to the list 1.   Failure to issue bill or receipt 2. Refusal to   return a good within 30 days. 3. Disclosure of   information.

 Product Liability

 No provision

 Claims for product liability can be made   against manufacturer, service provider and   seller

 

 Regulator

 No Provision

 Provides CCPA

 Composition ofCommissions

 District:  Headed by current or former District Judge   and two members.

 

 State:  Headed by a current or former High Court   Judge and at least two members.

 National:  Headed by a current or former Supreme   Court Judge and at least four members.

 District:  Headed by a President and at least   two members.

 

 State:  Headed by a President and at least   four members.

 

 National:  Headed by a President and at least   four members.

 Appointment

 Selection Committee (comprising a judicial member   and other officials) will recommend members on the   Commissions.

 No provision for Selection Committee.  Central   government will appoint through notification.

 E-commerce

 No provision.

 Defines direct selling, e-commerce and   electronic service provider.

 The central government may prescribe rules   for preventing unfair trade practices in e-   commerce and direct selling.

Other steps taken by government in this regard:

Following four key initiatives has been taken by the Department of consumer affairs to reduce costs and ensure timely redressal of consumer grievances:

  1. Strengthening of National Consumer Helpline with new software and additional counselors and Zonal Helplines in 6 zones. for regional language services. 480 major Companies including several e-commerce platforms have been roped in as convergence partners leading to speedy resolution of cases.
  2. Strengthening of Consumer Fora with new infrastructure and CONFONET which is about computer networking of consumer fora.
  3. NCDRC on directions of Supreme Court issued new Regulations making admission or rejection of cases in 21 days and pronouncing judgment in 45 days after final hearing. Model Rules have alsobeen framed for States to recruit qualified persons for District fora and State Commissions.
  4. The new Consumer Protection Bill, 2018 through Central Consumer Protection Authority (CCPA) and alternate dispute resolution mechanism through mediation and simplification of adjudication procedures will result in quick disposal of consumer cases.

Conclusion:

The Ministry of consumer affairs is also trying to create an enabling environment for consumers to get the right goods and services at the right time and right place. The quick disposal of cases is essential as justice delayed is justice denied and for this purpose quasi-judicial system should be strengthened and streamlined.

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