More power to the consumer

Pushpa Girimaji

The National Consumer Day this year will certainly be very special, albeit a little paradoxical. We have all along been celebrating December 24 to commemorate the day the Consumer Protection (CP) Bill of 1986 received the President’s assent and became a law. This year, however, we rejoice in the replacement of that law with a new one that is in tune with the modern-day concepts of consumer protection, the new market dynamics and the rapid advances in digital technology that have transformed our world.

However, I must hasten to add that the Consumer Protection Bill 2019, passed by both Houses of Parliament, retains all the components of the landmark 1986 law that gave Indian consumers their six basic rights and a consumer justice system. But what makes this Bill so different and comprehensive is the provision for a powerful regulatory body called the Central Consumer Protection Authority that will protect, promote and enforce the rights of consumers. Thus, while the 1986 law laid the foundation for consumer protection in the country, the CP Bill 2019 builds on it, brick by brick.

To be more specific, the 1986 law encapsulated the rights of consumers, but, failed to provide for a regulator to enforce them. Take, for example, the right to be protected from unsafe goods and services. Even though this is one of the most important rights (consider the number of deaths caused by unsafe gas geysers), the law did not bestow a mechanism to collect data on product or service-related injuries and deaths, investigate into them and order their recall.

Similarly, even though the consumers have a right to be protected from unfair trade practices, the 1986 law did not provide for a watchdog to investigate suo motu into such practices, including false and misleading advertisements and put a stop to them. To put it differently, the 1986 law only provided for an adjudicatory body to compensate consumers for the harm or injury caused on account of violations of consumer rights. It did not provide a regulatory body to prevent such violations and the resultant injury.

The 2019 Bill finally addresses this issue through the creation of the Central Consumer Protection Authority. The Authority will have a chief commissioner and as many commissioners as the rules may suggest, to deal with different issues such as unsafe goods and services, unfair trade practices, including misleading advertisements, unfair terms in consumer contracts, enforcement of consumer laws and promotion of consumer awareness. The authority thus has the power to recall unsafe goods and direct refund of the cost of such goods to the consumers. It can similarly put a stop to all unfair trade practices, including unfair terms in consumer contracts and false and misleading advertisements. More important, the Bill, for the first time, holds celebrity endorsers too liable for false and misleading promotions. By providing stringent punishment, including financial penalty and jail term for advertisers as well as endorsers found guilty of promoting false advertisements, the Bill takes a very serious view of the violations of consumer rights. All in all, it’s a dynamic Bill that keeps up with the developments in the digital arena.

However, there are some disappointments too. For example, the Bill does nothing to cut down on the delays in consumer courts, simplify the procedures and make them more accessible to consumers without the help of lawyers. Instead, it provides for an option of mediation to people who approach these consumer courts. 

Evaluation of the working of consumer courts by the Indian Institute of Public Administration (in 2013), as well as the Comptroller and Auditor General of India (in 2004) have shown how lawyers have introduced in these courts all the trappings of civil litigation, such as repeated adjournments, complicated procedures and protracted litigation. Yet, the new law neither prohibits their presence at these courts nor restricts them to high-value cases. Taking note of this, the Parliamentary Standing Committee that examined the Bill had recommended that lawyers be prohibited from appearing for cases up to a value of Rs 20 lakh, but the government did not accept this. 

Again, there is too much focus on misleading advertisements and too little on consumer safety. The Bill, for example, provides for a steep fine and even imprisonment of 2-5 years for false or misleading advertisements. There are similar punishments for endorsers, too. For storing, selling, distributing, manufacturing or importing products containing adulterants, the Bill prescribes penalty and stiffer jail terms. Injuries caused by spurious goods, too, attract imprisonment. But for manufacturing, importing, storing and selling unsafe products and services that can lead to injuries and death, there is no such punishment.

However, all said and done, we have really come a long way and there is much to rejoice. If executed well, the regulatory authority can really bring about far-reaching changes in the way consumers are protected in the country. All in all, the Bill is a game changer and one looks forward to quick implementation of the law.

— The writer is a consumer rights and safety expert

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CHANGES AT A GLANCE

Consumer Protection Act 1986

• It defined six consumer rights
• Provided for redressal of consumer disputes through three-tier quasi-judicial bodies or consumer courts
• Established advisory bodies called Consumer Protection Councils at the central, state and district level to promote and protect consumer rights

Consumer Protection Bill 2019

• Defines six rights of a consumer
• Provides consumer courts…

i) With wider jurisdiction to deal with complaints pertaining to e-commerce, direct selling entities and unfair contracts

ii) It is in tune with the digital age, facilitating e-filing of complaints and hearing through videoconferencing

iii) Offers an enlarged definition of unfair trade practices; would include refusal to take back defective goods and issue refund and also failure to issue receipts or cash memo

iv) Not necessary to file a complaint at the place where the opposite party resides or works or where the cause of action arose. Complaint can be filed even at the place where she/he resides or works 

• Provision for mediation as an option for settlement of dispute.
• Provision for product liability action against manufacturer/seller/service provider for any defects or even failure to provide adequate warning or non-conformity with express warranty.
• n Sets up Central Consumer Protection Authority (a regulatory body) to promote, protect and enforce the rights of consumers

i) It can issue safety alerts, order withdrawal of unsafe goods or services and refund of the cost

ii) Put a stop to all unfair trade practices, including false and misleading ads

iii) Impose fine and jail term on advertisers and even endorsers for such ads

iv) Take similar action in case of spurious and adulterated goods

v) Investigate into complaints of consumers as a class and file class action suit before the consumer courts

vi) Investigate into all violations of consumer rights and take appropriate action

vii) Undertake and promote research in the area of consumer protection

viii) Promote consumer education

• Advisory bodies called Consumer Protection Councils at the central, state and the district level to promote and protect consumer rights 

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Timeline 

2014:  A committee constituted by the Union Ministry of Consumer Affairs drafts a new Consumer Protection Bill to replace the 1986 law

August 10, 2015: The Consumer Protection Bill 2015 is introduced in Lok Sabha and referred to the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution

April 26, 2016: The Standing Committee submits its report

January 5, 2018: The government re-introduces the Consumer Protection Bill 2018 in Lok Sabha after incorporating the recommendations of the Standing Committee

December 20, 2018: Lok Sabha passes the Bill, but it but lapses with the term of the 16th Lok Sabha coming to an end

July 8, 2019: The Bill is re-introduced in the 17th Lok Sabha

July 30, 2019: Passed by Lok Sabha

August 6, 2019: Passed by Rajya Sabha