The passing of the Consumer Protection Bill by the Lok Sabha in the ongoing session of Parliament is a welcome step. The bill was originally brought in 2015 and later reintroduced in 2018.
The new law will apply to all goods and services, including sale or construction of homes or flats and telecom services.
The new law is more comprehensive in terms of unfair trade practices as it also defines unfair contracts.
- The Bill improves upon the Act of 1986 on a few counts.
- It provides for product liability action on account of harm caused to consumers due to a defective product or by deficiency in services.
- In case of defects and deficiencies, manufacturers, sellers or service providers are legally bound to compensate to consumers
- It is likely to form a regulatory authority known as the Central Consumer Protection Authority (CCPA) with powers of enforcement, unlike the existing Consumer Protection Councils which are only advisory bodies.
- The CCPA will have powers to initiate class action including enforcing recall, refund and return of products.
- Considering that even consumer courts face piling up and backlog of cases, there is now room for an alternative dispute resolution mechanism as the Bill sets up mediation cells attached to district forums, state and national commissions.
- The Bill calls upon the endorsers to exercise due diligence before they dive into advertisements.
- Failure to do so will attract a penalty of ₹10-50 lakh and/or a ban from further endorsements for a period of 1-3 years.
- The Bill is commendable for its efforts to move further towards caveat venditor from the days of caveat emptor.
- Since many sectors have their own regulators, duplication or clashes between CCPA and these bodies may arise.
- By not imposing judicial qualifications like in the Act of 1986 for members of the redressal body, the Bill indirectly allows appointment of non-judicial members to the district/state and national commissions.
- Conflict of interest could arise when government nominees hear cases involving a government entity.
- Easy access, simple process and time-bound resolution must be ensured.