The Consumer Protection Act, 1986 is set to be replaced with a slew of ambitious provisions and simplified procedures. The Union Cabinet has cleared the Consumer Protection Bill, 2017 which is set to be tabled in the Lok Sabha during the Winter Session.
The new regime primarily focuses on the modern consumer market, which requires an updated Statue to effectively deal with consumer grievances.
Some of the crucial changes in the new legislation have been summarised below
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Establishing the Central Consumer Protection Authority to provide consumers swift remedial action.
The CCPA will be an executive regulator with the power to supervise the three tier quasi-judicial framework of consumer courts which are already in existence.
CCPA has been given immense powers to bring justice to consumers, while also ensuring the overall consumer market is progressing forward in a manner which is beneficial to the consumers. This is regulatory body has been given the powers to investigate and prosecute.
Suo Moto cognizance and class action cases-
- Among other things, it is the mandate of the CCPA to treat consumers with similar grievances, club the cases together to form a class action case, and then pass any orders deemed fit.
- The CCPA can launch inquiries (suo motu, on a complaint or via direction from the government) into violations of consumer rights and launch prosecutions in the appropriate forums.
Judicial powers- It can also conduct search and seizure of evidence, summon delinquent manufacturers, advertisers and service providers and, pass orders for the recall/withdrawal of goods or services found to be unsafe, and order reimbursement to consumers.
Power to impose criminal liability – The CCPA can order imprisonment for up to six months, and impose fines up to Rs. 50,000. If these orders have not been complied with, it can impose a fine up to Rs. 1 lakh for each day of non-compliance.
2. Pecuniary Jurisdiction
- The pecuniary jurisdiction of the Consumer Courts will be enhanced.
- District Commission jurisdiction stands enhanced to Rs. 50 lacs from Rs. 20 Lacs. This may further be increased to Rs.1 crore.
- The idea behind increasing the jurisdictional scope- enabling aggrieved consumers all over the country to file a case in their own district without having to travel to state capitals or New Delhi.
3. Minimum Members
Increasing the minimum number of members in consumer courts for faster disposal of complaints.
4. 21 days for date of Admissibility
Admissibility of the complaint shall be decided within 21 days. If not decided by then, the complaint will be deemed as ‘accepted’.
5. Product Liability
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Any defective product sold to a consumer or deficiency in services that causes any personal injury, death, or damage to property; makes the service provider or distributor as well its ‘endorsers’ – i.e. celebrities who appear in its ads, liable personally.
This is the first time product liability, along with a wide definition of ‘endorser’ has been introduced in consumer cases. Any individual, group or institution can be an ‘endorser’ as per the new Act.
For example, if a car dealership wrongly advertises the release date of a car, and takes bookings with down payments –
- As per the old law, the aggrieved consumer might have been able to file a consumer complaint against the company, but it would have become long drawn and hard-fought process.
- However, as per the new law, the victim can approach the CCPA directly.
Personal liability for celebrities- brand ambassadors (commonly used to provide credibility to outrageous claims) who endorse any product or services which causes injury to consumers are to be held liable.
- This offense will be punishable with imprisonment for a term which may extend to two years and with fine which may extend to Rs 10 lacs.
- A celebrity can only escape liability by proving that he or she took reasonable precautions and exercised all due diligence before endorsing the product or service.
6. Appointments Reforms
Reforming the process for the appointment of the President and Members of the District Commission.
Enabling provisions for consumers to file complaints electronically.
8. Residence Jurisdiction
Any aggrieved person can file complaints in consumer courts that have jurisdiction over the place of residence of the complainant.
- Filing a case where the consumer resides no matter where the transaction may have initially taken place will supplement a three-tier consumer grievance redressal system.
- These provisions will also enable e-commerce website users to file complaints against the websites in the jurisdiction of their residence.
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As a means of speeding up consumer dispute resolutions, alternative settlement options have been provided.
- The introduction of statutory provisions enabling mediation as an alternate remedy will prove to be crucial.
- The resolution of consumer disputes through mediation will substantially help in making the process less cumbersome and simple.
The concept of ‘unfair contract’ has been included to protect consumers with unequal bargaining capacity. Agreements which will be deemed to be ‘Unfair Contracts’ include the following (but are not limited to these)-
- require manifestly excessive security deposits,
- impose wholly disproportionate penalties,
- refuse early repayment of debts,
- impose unreasonable charges.