By Advocate Khushbu Sahu
Misleading advertisements, tele-marketing, multi-level marketing, direct selling and e-tailing
The proposed amendment seeks to ensure that no person engages himself in unfair trade practices or takes part in the publication of any advertisement which is false or misleading.
In order to promote, protect and enforce the rights of consumers CCPA will carry out the following functions: inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum; passing orders for recall of goods, or withdrawal of services and reimbursement of the price paid, and pass directions for discontinuation of unfair trade practices; issuing safety notices and order withdrawal of advertisements; and declaring contracts that are unfair to a consumer as void.
Consumers should be assured of access to a variety of goods or services at competitive prices, and to seek redressal against unfair or restrictive trade practices.
Consumer Disputes Redressal Commissions
Consumer Grievance Redressal Commissions are to be set up at the district, state and national levels. A consumer can file a complaint with these commissions, regarding:
- unfair or restrictive trade practices
- defective goods or services
- overcharging or deceptive charging
- the offering of goods or services for sale which may be hazardous to life and safety
- incurring loss due to an unfair contract
The District Commission may issue orders regarding a complaint to: remove the defect, replace the good, return the price amount, stop the sale or manufacture of hazardous products, discontinue unfair trade practices or pay compensation for any loss suffered by the consumer.
Appeals from the decisions of District Commission will be heard by the State Commission. Further appeals may be filed before the National Commission, and then before the Supreme Court. Hence providing four tier mechanism to the consumer to redress their problem in best possible way.
Setting up Consumer Protection Authority
It is proposed in an amendment to establish an executive agency, namely “Central Consumer Protection Authority” that would prevent exploitation of consumers and violation of their rights and to promote, protect and enforce the rights of consumers.
The basic objectives to formulate CCPA are:
- to protect and enforce the rights of consumers such as the right to be protected against the marketing of goods/products and services which are unsafe or hazardous to life and property
- the rights to be informed about the quality, quantity, potency, purity, standard and price of goods or services
- to prevent unfair trade practices as defined under Section 2(1)(r) of the Act
- to ensure that no advertisement is made of any goods or services which is misleading or deceiving or contravenes the provisions of this Act and rules and regulations made under it
- to ensure that no person engages himself in unfair trade practices or takes part in the publication of any advertisement which is false or misleading
Inclusion of e-commerce transactions
Due to tremendous increase in the popularity of e-commerce and online shopping market, the proposed amendment attempts to include e-commerce transactions under the ambit of the Act.
Under the current consumer protection Act, a consumer can initiate legal action against a seller only in the place where transaction takes place. However, seeing the shift in shopping regime and increasing trend of online shopping in India, the Government has proposed an amendment to the Act which allow ‘territory free’ legal action against any goods or service provider thus saving the consumer from such seller who take advantage of existing loophole in the law related to the consumers.
Mediation
The draft bill also provides for a mediation process in case of disputes and suggests a simple judicial process in order to ensure inexpensive justice to consumers and to make processes in consumer courts simpler so that consumers will not require lawyers to fight a case.
Consumer Mediation Cells: The Bill proposes to set up Consumer Mediation Cells which will be attached to the redressal commissions at the district, state and national levels.
Mediation process: A new Section 2(1)(ja) is also proposed to be inserted which describes the process of mediation in which a mediator will be appointed by the National Forum or a State Forum or a District Forum, as the case may be, who would mediate the dispute between the parties to the complaint:
- by facilitating discussion between parties
- by assisting parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to solve the dispute
- emphasizing that it is the parties’ own responsibility for making decisions which affect them
Product liability
The proposed amendments to the Act include a new chapter on the product liability which embraces provisions related to actions brought for or on account of personal injury, death, or property damage caused by or resulting from the manufacture, construction, design, formula, preparation, assembly, testing, service, warning, instruction, marketing, packaging, or labeling of any product.
Further, the proposed amendment is also set to introduce product liability charges in cases of train or flight delays. This instead of just refunding the amount paid by the consumer for the services hired, the service providers will now also be liable for punitive action, fine and compensation.
Advertisement
The Act specifies that a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice which includes permitting the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are intended to be offered for sale or supply at the bargain price, or for a period that is, for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.
In order to make the existing provisions related to advertisement more effective, the proposed amendments have defined the term “Advertisement” which means any audio or visual publicity, representation or pronouncement made by means of any light, sound, smoke, gas, print, electronic media, internet or website and includes through any notice, circular, label, wrapper, invoice or other documents.
Penalties
Any person who fails to comply with an order of either of the Commissions would be liable for imprisonment from one month to three years, or with a fine from 10,000 rupees to 50,000 rupees.
Analysis
Pros
- The new bill include establishment of an executive agency ‘Central Consumer Protection Authority’ (CCPA) which will protect and enforce the rights of consumers. The authority will intervene whenever necessary to protect consumer from unfair trade practices and to initiate class action including enforcing recall, refund and return of products.
- Apart from this, to ensure safe products to consumers, the bill has a provision for product liability and provides enough powers to the regulatory authority to recall products and cancel licences if any consumer complaint affects more than one individual.
- Provisions for ‘product liability’ states that, if product/services causes any personal injury, death or property damage regulatory authority will have power to take action against defaulting manufacturers or service providers.
- The Bill also provides for rigorous penalty, including life imprisonment in certain cases.
- The bill also has several provisions aimed at simplifying the consumer dispute resolution process. 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’ in order to facilitate quicker disposal of complaints and moreover there is also 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.
- With a view to review consumer complaints effectively and efficiently, there is also a provision which states that if the question of admissibility is not decided within 21 days the complaints will be deemed as admitted.
Cons
- The draft bill seeks to set up a regulatory authority that is National Consumer Protection Authority (NCPA), to tackle unfair trade practices and expedite redressal of consumer grievances. The proposed authority is suppose to have parallel powers which would overlap with that of the judiciary thus making the process of consumer grievance redressal even more convoluted and cumbersome. Such a situation is indeed not desirable in law as it leads to encroachment on the powers of consumer courts.
- The draft bill also provides for a mediation process but the mediation process will further delay the process of settlement. On the one hand, where Consumers are being assured to get conclusive settlement in 90 days, such a step on the other hand would prolong the cases and defeat the very objective of the proposed amendment.
- The grey area in the proposed amendment bill is that it does not properly lay down the categories of products and services which would qualify for commercial purpose. It is very much required that a bill should clearly specify the same so that this loophole does not hinder the very objective of the amendment.
Conclusion
India is emerging as the world’s largest middle class consumer market. The new bill is expected to enhance the quality and safety of products and services, the proposed law has much needed provisions which is required to ensure fair, equitable and consistent outcomes for consumers.
The proposed amendments address various issues which remained unaddressed under the existing consumer protection regime which is being offered by Indian law. Upon implementation of these amendments to the existing laws, the consumer laws of our country will not only get stronger but will also help India to outshine in the global strata with a stronger consumer driven economy.