Consumer Protection Bill 2018 : An Opportunity Lost

Indian Parliament has been notorious for its regular disruptions where parties deliberately stall its functioning, this practice may have large political impact and media also covers its widely unfortunately the main purpose of the parliament i.e. passing of laws is lost in this process. The latest causality of this has been the Consumer Protection Bill, 2018 [1] which has lapsed due to the dissolution of the Lok Sabha in 2019.

The Consumer protection law in India was set up in the year 1986 replacing the then Monopoly Restrictive Trade Practice (MRTP) Act, 1969 [2], which was insufficient to deal with consumer challenge.  The consumer Protection Act 1986 was set up to provide better protection and for the establishment of forums for the settlement of Consumer disputes, the government feels the mechanism created under the Act has served the purpose to a great extent but the disposal of the cases has been a matter of concern.

Consumer markets have gone through a massive transformation with the emergence of Global Supply Chain, Rise in international trade and the rapid development of e-commerce.  This has led to a new delivery system and options to the consumers.  However, with these changes in the commercial transaction consumers have been open to new vulnerabilities in the form of unethical and unfair business practices, misleading advertisement, telemarketing, direct level marketing and e-commerce poses new challenge to the consumers. Moreover, the Consumer protection Act 1986 was implemented for the consumer to directly approach the Consumer Courts if any dispute/damage arises, however due to the courts following the complicated procedures of the Code of Civil Procedure it has become a lawyer’s paradise.

The Consumer Protection bill, 2018 sets looking for all the issues which will lead towards violation of Consumer rights.  The biggest of the changes this Bill would bring is that it will set up a Central Consumer Protection Authority (CCPA)[3].  This authority is very similar to Competition Commission of India[4] set up under the Competition Act, 2002.  The CCPA will be having huge powers under the Act including Suo Motto mandate[5] where cognisance can be taken besides that they would be having an investigation wing which will be headed by a Director General (D.G)[6] again very similar to the Competition Act, 2002.  The CCPA would have the powers to:

  • Recall goods that are hazardous.
  • Discontinuation of Unfair Trade Practice.
  • Misleading Advertisement or Modification
  • Impose penalties & safety instructions.[7]

This is unlike the existing Consumer Protection Act where no prevention can take place and consumers can only approach after a damage has been caused to them.  However, the existing Consumer Protection Act also has a provision of a preventive body but in reality, they are powerless advisory bodies.

The Bill also has a provision of Alternative Dispute Redressal through the provision of Mediation in the bill [8].  This as we have seen with our experience in Insolvency and Bankruptcy Courts have been very effective to reach a swift and inexpensive settlement.  The bill also brings changes when it comes to jurisdiction as the complaint can also be filed in the place of work or residence and not only in the place of the Company office [9].  The Bill was a great step in furtherance of protection of Consumer protection and elimination of unfair trade practice, the existing Act came before the market liberalisation and is not suited for the current relatively free market conditions.  The bill may not be as strong as the Federal Trade Commission in the United States but it was a great leap forward.      

  • [1] http://164.100.47.4/billstexts/LSBillTexts/AsIntroduced/1_2018_LS_Eng.pdf
  • [2]http://www.mca.gov.in/Ministry/actsbills/pdf/The_Monopolies_and_Restrictive_Trade_Practices_Act_1969.pf
  • [3] Section 10, Consumer Protection Bill, 2018
  • [4] Section 7, Competition Act, 2002
  • [5] Section 18 (2) (a), Consumer Protection Bill, 2018
  • [6] Section 15, Consumer Protection bill, 2018
  • [7] Section 20, Consumer Protection Bill, 2018
  • [8] Chapter V, Section 74, Consumer Protection Bill, 2018
  • [9] Section 34 (2) (a), Consumer Protection Bill, 2018

 

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