Thursday, August 17, 2017

Is Consumer really a king? ....Almost

The Consumer Protection Bill 2015 that has been introduced in the monsoon session of parliament seeks to replace the existing Consumer Protection Act, 1986. The primary motivation to replace the older law with a new one is to modernize the law with respect to the development of new markets and to further widen the ambit and a scope of the law to deal with consumer matters. incorporate nuances so that the big companies cannot use them as loop holes to exploit the consumers and to further increase the accountability of the said companies.
The new law assumes significant focus as there is growing concern over the safety of consumer products, the reason behind coming up of new Bill was the demand of 80-odd amendments in the 1986 Act. On account of which, the law ministry suggested to bring in the form of a consumer friendly legislation.
With a forward looking approach including protection of consumer’s rights while transacting through e-commerce, this bill has been drafted after extensive consultations with stakeholders. While drafting the Bill, special emphasis has been made to ensure simplicity, speed, access, affordability and timely delivery of justice.
India is spending about 30-50 million US dollars on consumer protection annually and has initiated a number of consumer centric schemes based on the broad fundamentals of consumer awareness, standard and conformity assessment and inexpensive and quick redressal. The recent initiatives for the benefit of consumers include the launch of a portal ‘Grievance Against Misleading Advertisements (GAMA)’ to handle complaints of consumers relating to misleading advertisements, issuance of guidelines on direct selling and online case monitoring system.
Statement of objects and reasons of the Bill
In India, the checks and balances system has been working effectively. However, it has come to notice that some of the Tribunals and Commissions have exclusive provisions where only retired judges of the Supreme Court or the High Courts are being appointed by the executives. This lies absolutely against the spirit of Constitution. The proposed legislation seeks to ensure that the doctrine of checks and balances and right to equality is maintained.
The amendment seeks to remove the provision for appointment of retired judges as the Chairperson and members. Thus, only a sitting judge of the Supreme Court or a High Court, as the case may be, can be appointed for this post if that judge wishes to leave his office of Judge voluntary and assents to join Tribunal or Commission.
The Bill also proposes to insert wherein an advocate with not less than ten years of practice becomes eligible to be appointed as the Chairperson of the Tribunal. The rational of such could be found in our Constitution which provides for appointment of advocates with certain years of practice as Judge of the Supreme Court or a High Court. The same should be applied for consumer forums.
Highlights of the bill
Consumer Dispute Redressal Commissions will be set up at the district, state and national levels for adjudicating consumer complaints.
The key features of the new bill include establishment of an exclusive agency called the Central Consumer Protection Authority (CCPA) to investigate into consumer complaints, issue safety notices for goods and services and protect and enforce the rights of consumers. CCPA has the power to recall products and in extension to that the power to withdraw misleading advertisement.
The Bill classifies six contract terms as ‘unfair’. These cover terms such as
-      Payment of excessive security deposits,
-      Disproportionate penalty for a breach,
-      Unilateral termination without cause; and
-      Any term which puts the consumer at an disadvantage        

The new bill seeks to make manufacturers liable for any injury attributed to the consumer or death of a consumer or property damage and get them sentenced for life.
Key issues and analysis
The Bill empowers the central government to supervise the functioning of, and issue binding directions to the district, state and national consumer redressal commissions.
-      The District Commission, a quasi-judicial body, may be headed by a District Magistrate and the State Commission by a High court Judge, who are a part of the executive. 
-      The National Commission, headed by a judicial member and comprising at least 15 technical or judicial members, will examine complaints on questions of law. 
In order to claim product liability, a claimant must establish four kinds of defects in the product, the injury caused from it, and that it belonged to the manufacturer. The claimant must also establish that the manufacturer had knowledge of such a defect.
Pre-Payment - in order to minimize frivolous litigation there is a mandatory requirement of depositing fifty percent of the total amount that the defendant has been asked to pay in terms of the appealable order in case he intends to prefer an appeal to an appellate Commission.
Penalty for Frivolous Complaint- The penalty for filing a frivolous complaint has also been proposed to be enhanced from INR 10,000/- to INR 50,000/- to discourage frivolous complaints.
Mediation- the Bill introduces the concept of mediation, if it appears to the Commission that there exists possibility of settlement on terms acceptable to both the parties.
Time to dispose- the new Bill requires the Commissions to dispose of the complaint within three months from the date of receipt of notice by the opposite party and within five months where the commodity requires any testing/analysis. The Commissions are required to ordinarily decide the complaint on the basis of affidavits and documentary evidence filed before it and an oral hearing is only allowed when a special cause is shown to exist and the reasons for allowing such request are to be recorded in writing.

Product Liability- the Bill has introduced a much needed concept of affixing liability on a manufacturer or producer and even a product seller in certain specified circumstances for any personal injury, death or property damage caused to a consumer resulting from defects in manufacture, construction, design, formula, preparation, assembly, testing, service, warning, instruction, marketing, packaging, or labeling of any product.
With regard to Jurisdiction for filing a Complaint there is a change with regard to the filing of the consumer complaint in case of more than one opposite parties, the complainant can file the complaint in any of the Commissions where either of the opposite party resides or before the Commission where the complainant himself resides or personally works for gain.
The Bill requires the electronic intermediary to furnish an address for service of the notice(s) on the electronic platform from where it provides services and also to designate a grievance officer authorizing him to access and process such notice(s) and furnish such information, documents or records as may be required under the notice.
Assistance of an Expert- Considering the increasing technological complexities, the National Commission/State Commission can direct any individual/organization or an expert to assist it in the ongoing matters.
Enforceability of the Order- the Bill makes any and every order passed by the District Commission, State Commission and National Commission enforceable as if it were a decree passed by a court in a suit pending before it.
The District Commission and the State Commission are given power to review their orders in case there is an error apparent on the face of it.
Higher Pecuniary Jurisdiction- Pecuniary jurisdiction of the District, State as well as National Commission has been proposed to be enhanced to INR Fifty Lacs or up to thrice the limit of such value as may be prescribed, for state INR Ten Crores or up to thrice the limit of such value as may be prescribed and for national commission INR Ten Crore and or up to thrice the limit of such value as may be prescribed.
Consumer protection laws in India are a form of government regulations that aim to protect the rights of consumers. The influencing businesses are supporting consumer needs to get a better response, however not every business is consumer focused. To give effect to the better enforcement of consumer rights inviting the new legislation with filling the pit falls of the 1986 Act was essential. The new bill is designed to protect the consumers from the businesses that engage in fraud or specified unfair practices along with the above mentioned concepts introduced, thus the proposed legislation seeks to provide a comprehensive framework to protect consumer interest.
Note: the draft Bill is pending with the Standing Committee of Food and Consumer Affairs.

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