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The Consumer Protection Laws are a set of laws which promote rights of a consumer and at the same time confront unfair trade practices prevalent in an open market. These set of laws evolved as a product of market economies where the business houses would be willing to go to any extent in order to maximize profits.
Therefore, to protect the vulnerable (Consumer in this case) it was sooner realized that a comprehensive set of rules and regulations should be put in place in order to promote ethical conduct in Consumer affairs.
The domain of 1986 Act.
In India prior to 1986, scant cases of consumer disputes could only be addressed through the cumbersome processes of filing Suit under the domain of Contract Laws, Sale of Goods Act and various other similar legislations.
Consumer Protection Act of 1986 was a watershed moment in the history of consumer laws for it recognizes basic consumer rights of protection against hazardous products, right to be informed about quality, potency, purity, standard and price of goods or services; be assured of variety of goods or services at competitive prices and seek redressal against unfair or restrictive trade practices.
Further the Act provides for Consumer redressal forums dispersed at district, state and central levels. The most pertinent feature of this act being that it provides for a flexible procedure to seek redress in these forums.
However, the 1986 act lacked features such as provisions for product liability, a centralized regulatory authority, checks on misleading advertisements (penalty), and scope for early disposal of cases through mediation. Subsequent proposed amendments to this act intended to improvise with these aspects, however they failed to see the light of the day due to lapses.
What are the key takeaways for the consumer?
The present Consumer Protection Bill of 2019 has been passed by both houses of the parliament and will soon be assented by the President. This bill on becoming an act will repeal the Consumer Protection Act, 1986.
- Unfair Trade Practices – This includes practices like false representation and misleading advertisements. In addition to this the 2019 bill includes failure to issue a bill or receipt, refusal to accept a good returned as specified in cash memo or if not specified then 30 days, also includes disclosure of personal information given in confidence unless required by law in public interest.
- Product Liability – This is a new feature of the 2019 Bill. It means that the manufacturer/service provider shall be squarely liable if the defect in the good or deficiency in services causes physical damage to the consumer.
- Unfair Contracts– This new provision attempts to address terms of contracts which are blatantly discriminatory vis a vis consumer rights. Such complaints can be filed only with State and National redress forums.
- Regulator– A regulator to be called as Central Consumer Protection Authority shall be set up to enforce, promote and protect consumer rights. It can take suo moto actions such as recall of products, declaring unfair contract terms null and void and can also impose penalties for violation of consumer rights.
- Enhanced Pecuniary Jurisdiction– Accepting the recommendations of Standing Committee on Food, Consumer Affairs, and Public Distribution, 2016 the new bill enhances the pecuniary jurisdiction of all three levels of redressal forums- District Forum up to Rs. 1 Crore; State Forum up to Rs. 10 Crore and National Forum above Rs. 10 Crore.
- Penalties– The new bill recommends graded penalties for adulterated products and spurious goods.
- Misleading Advertisements– The 1986 Act only provided for directions to modify advertisements in order to neutralize misleading advertisements. In the new Act for false and misleading advertisements, a penalty of up to Rs 10 Lakh may be imposed on the manufacture or even an endorser. Such a manufacturer could also be punished with imprisonment of up to two years which can extend to even up to five years.
- E- Commerce– Under the new Bill of 2019 the central government may prescribe rules for preventing unfair trade practices in e-commerce and direct selling.
- Mediation– The 2019 bill also proposes for early disposal of cases through mediation.
What are the key issues regarding the 2019 bill?
- With regard to delay in consumer protection litigation the bill does not hit the eye of the problem. Rather suggests an alternate remedy of mediation. The bill could have fixed the time limit within which the complaint should be absolved.
- The biggest anomaly in this new bill is with regard to healthcare services. The bill drops healthcare services from the ambit of consumer redress.
- The bill does not give teeth to the regulatory authority. As in the there is no proper focus on the functions and duties of the regulator.
Consumer Rights are basic rights which very well come under the purview of Right to Life guaranteed by our Constitution. Therefore, it is required that our government take effective positive measures in this domain. Along with enacting laws it is also required that the government and civil society members take steps to educate people with respect to their consumer rights. Repealing the old act of 1986 and with current changing circumstances the new bill has bigger shoes to fill in.
–This article is brought to you in collaboration with Bhoomika Prakash from Rajiv Gandhi National University of Law, Punjab.