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.
