Lok Sabha Passes Consumer Protection Bill 2019

The Lok Sabha recently unanimously passed the Consumer Protection Bill 2019, which seek out to wholly replace the Consumer Protection Act 1986 and establish the Central Consumer Protection Authority (CCPA) for protecting and enforcing consumer rights.

The Union Minister for Consumer Affairs, Food and Public Distribution Ram Vilas Paswan presented the Bill and stated that a new law for strengthening consumer rights was essential considering the modern-day concerns.

The Bill with 109 clauses seeks out towards establishing a national level regulator, the Central Consumer Protection Authority is to deal with consumer grievances on a proactive measure. The current law doesn’t have a regulator.

Likewise, the Bill comprises major provisions dealing with class actions, product liability, misleading advertisements, liability for celebrity endorsements and so forth. The Bill also addressed the new age developments like e-commerce, direct selling, telemarketing and many more.

The major highlights of the Bill are:

Central Consumer Protection Authority (CCPA)

The Central Consumer Protection Authority (CCPA) is a national level regulator dealing with difficulties regarding violation of rights of consumers, unfair trade practices as well as false or misleading ads which are prejudicial towards the interests of public and customers. Chapter III of the Bill comprises provisions regarding CCPA.

CCPA manages the rights of consumers as a class. It would have an investigation division controlled by a Director-General and has powers of search as well as seizure.

The District Collector is authorized to report to the CCPA concerning mass consumer grievances in the concerned jurisdiction.

It has also power towards ordering the recall of products which are dangerous, hazardous or unsafe and towards directing discontinuation of practices which are unfair and prejudicial to the interests of customers. Depending on the inquiry reports, the CCPA has power for filing complaints before the relevant Consumer Dispute Redressal Forum.

It likewise has the power to levy punishments on manufacturers and celebrity endorsers for misleading ads.

Misleading advertisements

The Bill comprises provisions to manage misleading advertisements.

'Misleading advertisements' are well-defined under Clause 2(28) as advertisement, which

• falsely describes such good or service or gives a false guarantee towards, or is to be expected to mislead the customers as to the nature, substance, quantity or quality of such good or service; or

• conveys an express or implied representation which, if made through the manufacturer or seller or service provider, shall constitute an unfair trade practice; or

• deliberately hides important information.

Misleading ads could attract fine up to Rs 10 lakhs from the CCPA under Clause 21. It is an offense punishable with imprisonment for a term which might extend to 5 years and with the penalty which might extend to Rs 50 lakh as per Clause 89.
 

Ram Vilas Paswan, who is the Union Food and Consumer Affairs Minister, stated that this bill suggests stringent action for misleading advertisements against the advertiser but not against the media by means of which ads are being publicized.

Liability of celebrity endorsers 

The Bill also addresses the liability of endorsers.

"Endorsement", is stated under Clause 2(18) which means:-

• any message, verbal statement, demonstration; or

• depiction of the name, signature, likeness or other identifiable personal characteristics of a person; or

• depiction of the name or seal of any institution or organization, which makes the customer believe that it reflects the opinion, finding or experience of the individual making such endorsement;

The endorser could be charged with a penalty up to Rs 10 lakhs through the CCPA for false and misleading ads, under Clause 21.

Though, the endorser would not be legally responsible if he has exercised due diligence towards verifying the veracity of the claims made in the ads concerning the good or service being endorsed by the celebrity.

Product liability

The Bill includes a special chapter-Chapter VI- for dealing with 'product liability'.
 

In accordance with Clause 2(34) "product liability" means the duty of a product manufacturer or product seller, of any product or service, for compensating for any harm caused towards a consumer through such defective good manufactured or sold or by a deficiency in services.

As per 2(22), "harm", with regard to product liability, comprises of— 

• damage towards any property, other than the product itself;

• personal injury, illness or death;

• mental agony or emotional distress attendant towards personal injury or illness or damage to property; or

• any loss of consortium or services or additional loss resulting from harm referred above.

But it would not contain any harm caused owing to breach of warranty conditions or any commercial or economic loss, which includes any direct, incidental or consequential loss

A product liability action might be brought by a plaintiff against a product manufacturer or a product service provider or a product seller, for any harm caused towards him owing to a defective product.

It could be brought against even the product seller in some circumstances like seller exercising substantial control over designing, packing, testing, manufacturing, etc, or seller altering or changing the product. The seller would also be legally responsible if he failed towards exercising reasonable care in assembling, inspecting or maintaining such product or he didn’t pass on the warnings or instructions of the product manufacturer concerning the risks involved or proper use of the product while selling such product.

The definition of 'deficiency' implies

The Bill expands the definition of 'deficiency' in Clause 2(11) to include:-

• Any act of negligence or omission or commission by such individual which causes loss or injury towards the customer; and

• Deliberate withholding of relevant information by such individual towards the customer;

Enhanced pecuniary jurisdiction 

The restrictions of pecuniary jurisdiction were expanded, which comprises:

District Forum- Rs. 1 Crore from Rs. 20 Lakhs.

State Commission- Rs. 10 Crores from Rs. 1 Crore.

National Commission- Above Rs. 10 Crores from Rs. 1 Crore.

The Bill similarly commands the Consumer Fora and Commissions towards exploring mediation possibilities before adjudicating the complaint.

Offenses 

• The Bill also makes violation of consumer rights a punishable offense and has Chapter VII managing with them.

As mentioned above, misleading ads are also been made punishable. 

• The Bill also addressed the risk of adulteration, through making manufacture, sale, storage of goods mixed with adulterants is a punishable offense.

The cognizance of offense could be taken through a court only on a complaint has been filed by CCPA.

The Bill comprises expanded definitions for "unfair trade practice" as well as "unfair contracts" under Clauses 2(47) and 2(46).

The Central Government is authorized to make rules towards regulating direct selling, multi-level marketing, e-commerce, teleshopping, and so forth.

Author:

eStartIndia Team