Hindu Business Line: Opinion: Tuesday, July 25, 2017.
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)
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