No time to lose on consumer protection

Bejon Misra | Updated on March 09, 2018 Published on July 24, 2017

Little protection For ordinary Indian shoppers   -  KR Deepak

Parliament should pass a pending Bill in this regard. Consumers need new norms in the context of e-commerce transactions

It is high time that the long-term Consumer Protection Amendment Bill is passed by Parliament. Consumers continue to be at the receiving end.

For instance, the revelation made in a recent response to an RTI query by the Reserve Bank of India that banks cannot be held responsible for the loss of valuables kept in bank lockers has come as a rude shock. This has put a big question mark over the safety of valuables/documents stored in bank lockers for safe-keeping.

But the crucial issue is this — the proposed Bill requires the inclusion of more provisions to deal with the fast changing technological and market dynamics, e-commerce being the latest.

Many developments which have altered the market dynamic significantly both from a retail and a technological perspective were not envisaged by the creators of the Act. Even after three amendments to The Consumer Protection Act 1986 in 1991, 1993 and 2002, the problems remained unresolved and new ones continue to mushroom.

In a time warp

The Act in its present form is an inefficient piece of legislation, not keeping pace with the new market dynamics, multi-layered delivery chains, and innovative and often misleading advertising and marketing machinery.

The main problem is with the implementation procedure. The Act doesn’t grant the authority to proceed against any person guilty of a violation under the Act or take suo motu cognisance of an unfair trade practice or an action undermining the rights of a consumer. Penal steps can be taken only through a judicial process before the State or District Consumer Redressal Forums.

Unfortunately, as is the case with our judicial machinery, these forums are plagued by administrative issues. For example, the National Consumer Disputes Redressal Commission is grappling with appeals and original complaints filed in the period 2008-2010, which means consumers are being made to suffer for an average of five years to get their grievances redressed.

The Maharashtra State Consumer Disputes Redressal Commission has recently opened up cases kept aside in the sine-die list for the period 1998-2004; this is just an illustration of the ground level scenario from one State.

Thus, in an effort to replace a 29-year-old piece of legislation, the Centre approved a new Consumer Protection Bill 2015 in July 2015. The new legislation seeks to provide a comprehensive framework to protect consumer interest and would ultimately replace the Consumer Protection Act 1986.

The Consumer Protection Bill 2015 was introduced in Lok Sabha on August 10, 2015, by Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan and was opened for comments by the general public and stakeholders; these were reproduced in the report of the Parliamentary Standing Committee on Consumer Affairs published in April 2016.

Innovative changes

The new Bill includes the establishment of an executive agency, the Central Consumer Protection Authority (CCPA), which will protect and enforce the rights of consumers.

The authority will intervene whenever necessary to protect consumers from unfair trade practices and initiate class action including enforcing recall, refund and return of products. This body will act in a manner similar to enforcement agencies in other jurisdictions such as the Federal Trade Commission (FTC) in the US. This will be a landmark step in upgrading the implementation mechanism to global standards.

Besides, in order 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 a consumer complaint affects more than one individual.

This is the first time that powers to take action for damage caused by a product have been introduced in a consumer protection framework. This step will act as a deterrent for manufacturers since the liability quotient has increased.

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 State and District Commissions to review their orders, and setting up a ‘circuit bench’ in order to facilitate quicker disposal of complaints.

The Bill also proposes to set up Consumer Mediation Cells which will be attached to the redressal commissions at the district, State and national levels which will further help reduce the backlog of cases and lessen the strain on redressal forums.

Hopefully, these proposals will lead to significantly reducing the huge backlog of cases and prevent further stalling of disputes. The new Bill is proposed on the lines of institutions in the US, and in European countries which provide that a consumer protection law should derive its basis from the contract law and the law of sale of goods, without which the law of consumer protection tends to be confusing and conflicting.

Covering e-commerce

Due to tremendous increase in the popularity of e-commerce, 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. The new Bill contains an enabling provisions for consumers to file complaints electronically, and in consumer courts that have jurisdiction over the place of residence of the complainant.

At present, the Government has made about 80 changes in the Bill which will replace the Consumer Protection Bill introduced in Parliament in 2015 based on recommendations of the Parliamentary Standing Committee. The committee, among other things, has recommended stringent provisions to tackle misleading advertisements, as well as to fix liability on endorsers and celebrities.

The Bill was proposed to be tabled in the last Budget session but since the amendments were not incorporated it wasn’t tabled. The delay has extensive negative ramifications which will expand exponentially unless a new framework is brought about.

The Centre has been introducing several policy measures to improve the economic climate in the country in order to attract more investments. Introduction of GST is the most recent amongst these measures.

But policymakers and law-makers must understand that in the absence of an effective, modern and updated consumer protection framework, these initiatives will be akin to watering a dead plant. Consumers are the backbone of the economy and no actual progress can occur without safeguarding their interests. Parliament should pass the pending Bill in the forthcoming monsoon session.

The writer, a board member of FSSAI and Governing Council member of the Consumer Coordination Council, is the founder of Consumer Online Foundation

Published on July 24, 2017
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