Lok Sabha passes consumer protection Bill

The Lok Sabha on Tuesday passed the Consumer Protection Bill 2019, which seeks to give enhanced protection to interests of consumers and timely settlement of their grievances.

The Bill, which will soon be taken up in the Rajya Sabha for discussion, has the provision for setting up an executive agency called Central Consumer Protection Authority (CCPA) with a mandate to carry out investigations into violations of consumer rights, recall of unsafe goods and services and discontinue unfair trade practices and misleading advertisements. The CCPA is also empowered to impose penalties on manufacturers of unsafe goods and endorsers and publishers of misleading advertisements.

It seeks to give manufacturers and service providers who make false or misleading advertisements repeatedly a jail term of up to five years and a fine of up to ₹50 lakh. An additional features of the new Bill, however, is the quantum of punishment that it proposes to hand out to celebrities who endorse products or feature in ads with misleading claims.

As per the Bill, an endorser may have to pay a penalty of up to ₹10 lakh and may even be barred from endorsing any product for a year. Every subsequent contravention the bar may go up to three years, it said.

The rules will be formulated after the Bill gets the nod from the Upper House and the President gives his assent to the legislation.

Besides, the new legislation, which would replace the Consumer Protection Act, 1986, has expanded the scope of product liability beyond manufacturing and design defects to include deviation from manufacturing specification, failing to contain adequate instruction for correct use and for providing faulty, imperfect and deficient services.

To deal with grievances

The new Consumer Protection Bill for the first time have a mechanism spelt out for dealing with grievances of e-commerce consumers. To help dispose cases early, it also provides for court-directed mediation to redress grievances. No appeal will be allowed on cases settled through mediation.

Under the new Bill, pecuniary jurisdiction of district and State consumer bodies have been enhanced. While a district commission can entertain complaints relating to products and services up to a value of ₹1 crore (under consumer protection act of 1986 it was up to ₹20 lakh), a state commission can take up cases with a value between ₹1 crore and ₹10 crore (earlier it was not exceeding ₹1 crore). Any case with more than ₹10 crore in claims can go directly to the national commission. There will also be a deemed admissibility of cases 21 days after filing the complaint.

One major change from the Bill that was proposed in 2018 was that the new Bill does not insist on having at least 50 per cent of consumer commission should be from judicial background both at district as well as at State levels.

ASCI welcomes the Bill

“This is a great development in favour of consumers and Advertisement Standards Council of India (ASCI) welcomes the passing of the new Consumer Protection Bill. Protection of consumers’ interest is also ASCI’s core mission,” said ASCI chairman D Shivakumar in a statement.

“As an expert body dealing with complaints pertaining to misleading advertisements, ASCI has been working closely with the Department of Consumer Affairs. Complaints being received on the Grievances Against Misleading Advertisement portal are being examined by ASCI. We expect this co-regulation model to be strengthened further as per recommendations of the Parliamentary Standing Committee,” he said.

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