A Critical Analysis of the Proposed the Consumer Protection Bill, 2018

                                                              Introduction

The technology has changed tremendously the way of our lives especially shopping. To buy all of our basic necessities we usually allocate not the only amount but also the day that needs to go on a shopping spree before any festival /occasion. Digital transformation rooted now everyone by way of smartphones by tapping our finger on the small screen, we can see and buy things of our choice any minute and to deliver at our doorstep.

The  Concept of buying and selling definition also expand still law meant to protect the consumer and also, say Caveat emptor is Latin for "Let the buyer beware".

This article analyzes the recent consumer protection bill with the consumer protection act, 1986 

Brings out important features.

                                       

                                  Comparison of 1986 Act with the 2018 Bill

The Bill introduces new provisions related to the product liability, Mediation (Alternate Dispute resolution mechanism), Appointment of additional authority, Investigation Wing, Powers to search and seizure and unfair contracts. It also creates a new regulatory body called the Central Consumer Protection Authority and permits mediation for the settlement of consumer complaints.

Extended definitions

These below newly included definitions in the consumer protection bill 2018 in compare with the consumer protection act 1986

"Advertisement"         

 means any audio or visual publicity, representation,

endorsement or pronouncement made by means of light, sound, smoke, gas, print,

electronic media, internet or website and includes any notice, circular, label, wrapper,

invoice or such other documents;

 "Consumer rights" includes,—

(i) the right to be protected against the marketing of goods, products or

services which are hazardous to life and property;

(ii) the right to be informed about the quality, quantity, potency, purity,

standard and price of goods, products or services, as the case may be, so as to

protect the consumer against unfair trade practices;

(iii) the right to be assured, wherever possible, access to a variety of

goods, products or services at competitive prices;

(iv) the right to be heard and to be assured that consumer's interests will

receive due consideration at appropriate fora;

(v) the right to seek redressal against unfair trade practice or restrictive

trade practices or unscrupulous exploitation of consumers; and

(vi) the right to consumer awareness;

 "Deficiency"         

(i) any act of negligence or omission or commission by such person

which causes loss or injury to the consumer; and

(ii) deliberate withholding of relevant information by such person to the

consumer;

 "Design", in relation to a product, means the intended or known physical

and material characteristics of such product and includes any intended or known

formulation or content of such product and the usual result of the intended

manufacturing or other process used to produce such a product;

 "Direct selling" means marketing, distribution and sale of goods or provision

of services through a network of sellers, other than through a permanent retail location;

 "e-commerce" means buying or selling of goods or services including

digital products over a digital or electronic network;

"electronic service provider" means a person who provides technologies

or processes to enable a product seller to engage in advertising or selling goods or

services to a consumer and includes any online market place or online auction sites;

 "endorsement", in relation to an advertisement, means—

(i) any message, verbal statement, demonstration; or

(ii) depiction of the name, signature, likeness or another identifiable personal

characteristics of an individual; or

(iii) depiction of the name or seal of any institution or organisation,

which makes the consumer believe that it reflects the opinion, finding or experience

of the person making such endorsement;

 "establishment" includes an advertising agency, commission agent,

manufacturing, trading or any other commercial agency which carries on any business,

trade or profession or any work in connection with or incidental or ancillary to any

commercial activity, trade or profession, or such other class or classes of persons

including public utility entities in the manner as may be prescribed;

 "express warranty" means any material statement, an affirmation of fact,

promise or description relating to a product or service warranting that it conforms to

such material statement, affirmation, promise or description and includes any sample

or model of a product warranting that the whole of such product conforms to such

sample or model

"goods" means every kind of movable property and includes "food" as

defined in clause (j) of sub-section (1) of section 3 of the Food Safety and Standards

Act, 2006;

 "harm", in relation to product liability includes—

(i) damage to any property, other than the product itself;

(ii) personal injury, illness or death;

(iii) mental agony or emotional distress attendant to personal injury or

illness or damage to property; or

(iv) any loss of consortium or services or other loss resulting from a harm

referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii),

but shall not include any harm caused to a product itself or any damage to the

property on account of breach of warranty conditions or any commercial or economic

loss, including any direct, incidental or consequential loss relating thereto;

 "injury" means any harm whatever illegally caused to any person, in

body, mind or property;

 "manufacturer" means a person who—

(i) makes any goods or parts thereof; or

(ii) assembles any goods or parts thereof made by others; or

(iii) puts or causes to be put his own mark on any goods made by any

another person;

 "mediation" means the process by which a mediator mediates the consumer

disputes;

"mediator" means a mediator referred to in section 75

 "misleading advertisement" in relation to any product or service, means

an advertisement, which—

(i) falsely describes such product or service; or

(ii) gives a false guarantee to, or is likely to mislead the consumers as to

the nature, substance, quantity or quality of such product or service; or

(iii) conveys an express or implied representation which, if made by the

manufacturer or seller or service provider thereof would constitute an unfair

trade practice; or

(iv) deliberately conceals important information;

                                                      

 "product" means any article or goods or substance or raw material or any

the extended cycle of such product, which may be in gaseous, liquid, or solid state

possessing intrinsic value which is capable of delivery either as wholly assembled or

as a component part and is produced for introduction to trade or commerce, but does

not include human tissues, blood, blood products and organs;

 "product liability" means the responsibility of a product manufacturer or

product seller, of any product or service, to compensate for any harm caused to a

consumer by such defective product manufactured or sold or by a deficiency in services

relating thereto;

 "product liability action" means a complaint filed by a person before a

District Commission or State Commission or National Commission, as the case may

be, for claiming compensation for the harm caused to him;

 "product manufacturer" means a person who—

(i) makes any product or parts thereof; or

(ii) assembles parts thereof made by others; or

(iii) puts or causes to be put his own mark on any products made by any

another person; or

(iv) makes a product and sells, distributes, leases, installs prepare,

packages, labels, markets, repairs, maintains such product or is otherwise

involved in placing such a product for a commercial purpose; or

(v) designs produce, fabricates, constructs or re-manufactures any

product before its sale; or

(vi) being a product seller of a product is also a manufacturer of such

product;

"product seller", in relation to a product, means a person who, in the

the course of business, imports, sells, distributes, leases, installs, prepares, packages,

labels, markets, repairs, maintains, or otherwise is involved in placing such product

for commercial purpose and includes—

(i) a manufacturer who is also a product seller; or

(ii) a service provider,

but does not include—

(a) a seller of immovable property, unless such person is engaged in the

sale of a constructed house or in the construction of homes or flats;

(b) a provider of professional services in any transaction in which, the

sale or use of a product is only incidental thereto, but furnishing of opinion,

skill or services being the essence of such transaction;

(c) a person who—

(I) acts only in a financial capacity with respect to the sale of the

product;

(II) is not a manufacturer, wholesaler, distributor, retailer, direct seller

or an electronic service provider;

(III) leases a product, without having a reasonable opportunity to

inspect and discover defects in the product, under a lease arrangement

in which the selection, possession, maintenance, and operation of the

product is controlled by a person other than the lessor;

 "product service provider", in relation to a product means a person who

provides any service in respect of such product;

 "regulations" means the regulations made by the National Commission, or

as the case may be, the Central Authority;

 "unfair contract" means a contract between a manufacturer or trader or

service provider on one hand, and a consumer on the other having such terms which

cause a significant change in the rights of such consumer, including the following,

namely:—

 (i) requiring manifestly excessive security deposits to be given by a

consumer for the performance of contractual obligations; or

(ii) imposing any penalty on the consumer, for the breach of contract

thereof which is wholly disproportionate to the loss occurred due to such

breach to the other party to the contract; or

(iii) refusing to accept early repayment of debts on payment of applicable

penalty; or

(iv) entitling a party to the contract to terminate such contract unilaterally,

without reasonable cause; or

(v) permitting or has the effect of permitting one party to assign the

contract to the detriment of the other party who is a consumer, without his

consent; or

(vi) imposing on the consumer any unreasonable charge, obligation or

a condition which puts such consumer to disadvantage;

 "unfair trade practice"-

(i) making any statement, whether orally or in writing or by visible

representation including by means of an electronic record, which—

(ii) permitting the publication of any advertisement, whether in any

newspaper or otherwise, including by way of an electronic record,

(vii) not issuing bill or cash memo or receipt for the goods sold or services

rendered in such manner as may be prescribed;

(viii) refusing, after selling goods or rendering services, to take back or

withdraw defective goods or to withdraw or discontinue deficient services and

to refund the consideration thereof, if paid, within the period stipulated in the

bill or cash memo or receipt or in the absence of such stipulation, within a

period of thirty days;

(ix) disclosing to another person any personal information given in

confidence by the consumer unless such disclosure is made in accordance

with the provisions of any law for the time being in force.

              

                                                     CHAPTER III

                     

                   CENTRAL CONSUMER PROTECTION AUTHORITY

Establishment of New authority

Central Consumer Protection Authority (CCPA) is to

promote, protect and enforce the rights of consumers; make interventions when

necessary to prevent consumer detriment arising from unfair trade practices and to

initiate class action including enforcing recall, refund and return of products, etc.

This fills an institutional void in the regulatory regime extant. Currently, the task of prevention

of or acting against unfair trade practices is not vested in any authority. This has been

provided for in a manner that the role envisaged for the CCPA complements that of the

sector regulators and duplication, overlap or potential conflict is avoided.

Power of the Central Authority to recall of goods

20. Where the Central Authority is satisfied on the basis of the investigation that there is

sufficient evidence to show a violation of consumer rights or unfair trade practice by a

person, it may pass such order as may be necessary, including—

(a) recalling of goods or withdrawal of services which are dangerous, hazardous

or unsafe;

(b) reimbursement of the prices of goods or services so recalled to purchasers

of such goods or services; and

(c) discontinuation of practices which are unfair and prejudicial to consumers'

Powers and functions of Central Authority.

(c) intervene in any proceedings before the District Commission or

State Commission or National Commission, as the case may be, in respect of any

allegation of violation of consumer rights or unfair trade practices;

(d) review the matters relating to, and the factors inhibiting the enjoyment of,

consumer rights, including safeguards provided for the protection of consumers

under any other law for the time being in force and recommend appropriate remedial

measures for their effective implementation;

(e) recommend adoption of international covenants and best international

practices on consumer rights to ensure effective enforcement of consumer rights;

(f) undertake and promote research in the field of consumer rights;

(g) spread and promote awareness on consumer rights;

(h) encourage non-Governmental organisations and other institutions working

in the field of consumer rights to co-operate and work with consumer protection

agencies;

(i) mandate the use of unique and universal goods identifiers in such goods,

as may be necessary, to prevent unfair trade practices and to protect consumers'

interest;

(j) issue safety notices to alert consumers against dangerous or hazardous or

unsafe goods or services;

(k) advise the Ministries and Departments of the Central and State Governments

on consumer welfare measures;

(l) issue necessary guidelines to prevent unfair trade practices and protect

consumers' interest.

The District Collector (by whatever name called) may, on a complaint or on a

reference made to him by the Central Authority or the Commissioner of a regional office,

inquire into or investigate complaints regarding violation of rights of consumers as a class,

on matters relating to violations of consumer rights, unfair trade practices and false or

misleading advertisements, within his jurisdiction and submit his report to the Central

Authority or to the Commissioner of a regional office, as the case may be.

Power of Central Authority to issue directions and penalties against false

or misleading advertisements.

Provided that the Central Authority shall give the person an opportunity of being

heard before passing an order under this section.

21. (1) Where the Central Authority is satisfied after an investigation that any

advertisement is false or misleading and is prejudicial to the interest of any consumer or is

in contravention of consumer rights, it may, by order, issue directions to the concerned

trader or manufacturer or endorser or advertiser or publisher, as the case may be, to

discontinue such advertisement or to modify the same in such the manner and within such time

as may be specified in that order.

(2) Notwithstanding the order passed under sub-section (1) if the Central Authority

is of the opinion that it is necessary to impose a penalty in respect of such false or misleading

advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer

or endorser a penalty which may extend to ten lakh rupees:

Provided that the Central Authority may, for every subsequent contravention by a

manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees.

(3) Notwithstanding any order under sub-section (1) and (2), where the Central

Authority deems it necessary, it may, by order, prohibit the endorser of a false or misleading

advertisement from making an endorsement of any product or service for a period which may

extend to one year:

Provided that the Central Authority may, for every subsequent contravention, prohibit

such endorser from making an endorsement in respect of any product or service for a period

which may extend to three years.

(4) Where the Central Authority is satisfied after an the investigation that any person is

found to publish, or is a party to the publication of, a misleading advertisement, it may

impose on such person a penalty which may extend to ten lakh rupees.

(5) No endorser shall be liable to a penalty under sub-section (2) and (3) if he has

exercised due diligence to verify the veracity of the claims made in the advertisement

regarding the product or service being endorsed by him.

(6) No person shall be liable to such penalty if he proves that he had published

or arranged for the publication of such advertisement in the ordinary course of his

business:

Provided that no such defence shall be available to such person if he had previous

knowledge of the order passed by the Central Authority for withdrawal or modification of

such advertisement.

(7) While determining the penalty under this section, regard shall be had to the

following, namely: —

(a) the population and the area impacted or affected by such offence;

(b) the frequency and duration of such offence;

(c) the vulnerability of the class of persons likely to be adversely affected by

such offence; and

(d) the gross revenue from the sales effected by virtue of such offence.

(8) The Central Authority shall give the person an opportunity of being heard before

an order under this section is passed.

Power of Central Authority to issue directions and penalties against false

or misleading advertisements.

Search and seizure.

After conducting an investigation after a preliminary inquiry

under sub-section (1) of section 19, the Director-General or any other officer authorised by

him in this behalf, or the District Collector, as the case may be, may if he has any reason to believe that any person has violated any consumer rights or committed unfair trade practice

or causes any false or misleading advertisement to be made, shall,—

(a) enter at any reasonable time into any such premises and search for any

document or record or article or any other form of evidence and seize such document,

record, article or such evidence;

(b) make a note or an inventory of such record or article; or

(c) require any person to produce any record, register or other document or

article.

(2) The provisions of the Code of Criminal Procedure, 1973, relating to search and

seizure shall apply, as far as may be, for search and seizure under this Act.

(3) Every document, record or article seized under clause (a) of sub-section (1) or

produced under clause (c) of that sub-section shall be returned to the person, from whom

they were seized or who produce the same, within a period of twenty days of the date of

such seizure or production, as the case may be, after copies thereof or extracts therefrom

certified by that person, in such manner as may be prescribed, have been taken.

(4) Where any article seized under sub-section (1) are subject to speedy or natural

decay, the Director-General or such other officer may dispose of the article in such a manner

as may be prescribed.

(5) In the case of articles other than the articles referred to in sub-section (4),

provisions contained

 in clause (c) of sub-section (2) of section 38 shall mutatis mutandis

apply in relation to analysis or tests.

Findings of District Commission.

Compensation

District Commission shall have the power to grant punitive damages in such circumstances as it deems fit;

(e) to pay such amount as may be awarded by it as compensation in a product

liability action 

                                                   Chapter VI

The minimum amount of sum so payable not less than 5% has increased to 25%

Appeal.—

Period of District Forum to State commission appeal extended from 30 days to 45 days

 Appointment of President

State government to lose control over rules in framing Appointment, method of recruitment, the procedure of appointment, the term of

office, resignation and removal of the President and members of the State Commission. Only the central Government may by notification have the power as such herein.

The pecuniary jurisdiction of State and National  Commission.

It shall have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services and compensation, if any, claimed 5[exceeds rupees twenty lakhs but does not exceed rupees one crore which has increased to 10 crore rupees.

 Service of notice, etc.—

Notice of service other than postal services such as Email (electronic service provider) is accepted

Clause 65. (1) All notices, required by this Act to be served, shall be served by delivering or

transmitting a copy thereof by registered post acknowledgement due addressed to opposite

the party against whom the complaint is made or to the complainant by speed post or by such

courier service, approved by the District Commission, the State Commission or the National

Commission, as the case may be, or by any other mode of transmission of documents

including electronic means.

(2) Without prejudice to the provisions contained in sub-section (1), the notice required

by this Act may be served on an electronic service provider at the address provided by it on

the electronic platform from where it provides its services as such and for this purpose, the

the electronic service provider shall designate a nodal officer to accept and process such notices.

 Penalty Amount increased for non-compliance of the order.

Penalty amount increased from 10,000 which shall not be less than twenty-five thousand rupees, but which may extend to one lakh rupees, or with both

Conclusion.

This bill covered most aspects of the basic rights of consumers concerning the right to be protected against unfair trade practices in times of digital shopping. This Bill has put an end to the practice of not issuing a bill or cash memo or receipt for the goods sold or services and refusing, after selling goods or rendering services, to take back. It is believed without any further amendments, if this bill becomes an act it will put the consumer in a strong position.

Sources: Consumer Protection Act, 1986; Consumer Protection Bill, 2018; PRS.

Understanding the street vendors conundrum in the Online shopping era

                                                 Introduction

Our Constitution of India has provided rights to any individual to carry on any the profession of their choice. Article 19 (1)(g) to practise any profession, or to carry on any occupation, trade or business. At the same time, if any vendors illegally obstruct the payment that is meant for the public for his commercial ends. 

Its violation of those who are involved will be booked under the Indian Penal code section 283 specifically describes a “public nuisance” as “one which causes injury, danger or annoyance to the public or to the people in general who live or occupy the property in the vicinity”

In Sodan Singh and Others versus New Delhi Municipal Council in 1989, the Supreme Court of India had ruled: “The right to carry on a trade or business mentioned in Article 19 (1) g of the constitution, on street pavements, if properly regulated, cannot be denied on the ground that the streets are meant exclusively for passing or re-passing and no other use.”

The Central Government drafted a street vendor bill in the year 2012 to safeguard their rights to do business within the legal framework.

In 2014 bill passed the street vendors (protection of livelihood and regulation of street vending) act 2014.

It covered rules, regulations, duty, grounds of eviction, relocation and dispute resolution mechanism.

Decentralization of legislative power

Under section 22 of the Act empower the appropriate state government may, by rules made in this behalf, provide for the term and the manner of constituting a Town Vending Committee in each local authority:

Provided that the appropriate Government may, if considers necessary, provide for the constitution of more than one Town Vending The committee, or a Town Vending Committee for each zone or ward, in each local authority.

(2) Each Town Vending Committee shall consist of:—

(a) Municipal Commissioner or Chief Executive Officer, as the case may be, who shall be the Chairperson; and

(b) such number of other members as may be prescribed, to be nominated by the appropriate Government, representing the local authority, medical officer of the local authority, the planning authority, traffic police, police, an association of street vendors, market associations, traders associations, non-governmental organisations, community-based organisations, resident welfare associations, banks and such other interests as it deems proper;

(c) the number of members nominated to represent the non-governmental organisations and the community-based organisations shall not be less than ten per cent.;

(d) the number of members representing the street vendors shall not be less than forty per cent. who shall be elected by the street vendors themselves in such manner as may be prescribed:

Provided that one-third of members representing the street vendors shall be from amongst women vendors:

Provided further that due representation shall be given to the Scheduled Castes, the Scheduled Tribes, Other Backward Classes, minorities and persons with disabilities from amongst the members representing street vendors.

The Chairperson and the members nominated under sub-section (2) shall receive such allowances as may be prescribed by the appropriate Government.

Barriers in the issue of license.

Section 5 (b) mentioned that only the vendor who has no other means of livelihood to be issued the license.

To monitoring and identify if any vendors involved in any other activity for earning.

It's difficult to enforce the condition for the TVC.

Issue of License.

Town vendor committee has granted the powers to identify and issue a license to the vendors.

Issue of a license is easy for the stationery vendor as who operated at a specified location, but not such case for mobile /roam vendors who intended to do business at not on specific location regularly always on the go.

To overcome this issue time frame should be given for them to apply for a license before any proposed event.

Section 28 Penalty for contraventions.—If any street vendor—

(a) indulges in vending activities without a certificate of vending;

(b) contravenes the terms of the certificate of vending; or

(c) contravenes any other terms and conditions specified for the purpose of regulating street vending under this Act or any rules or schemes made thereunder,

he shall be liable to a penalty for each such an offence which may extend up to rupees two thousand as may be determined by the local authority

Welfare schemes - In our country, millions of workers belong to the informal sector

Without any social security, Section 31 of the act take that into that consideration- The appropriate Government may, in consultation with the Town Vending Committee, local authority, planning authority and street vendors associations or unions, 10 promotional measures of making available credit, insurance and other welfare schemes of social security for the street vendors.

Implementing such schemes for those vendors will improve economic-social conditions.

Risk/emergency management plan - TVC should prepare a plan to identify a risk that might occur while operating a market/event at any location.

Conclusion.                           

As more and more people do online shopping already a big debate going on is visiting stores passe. It is imperative that the customer should realize those vendors be it in on a sizzling summer or torrential downpour selling on the streets. buying from those vendors will directly help them to earn a dignified livelihood. This act brings huge relief to them.