Articles

An insight into Consumer Protection Bill, 2018

Drafted by CS Vishal Agrawal

The Consumer Protection Bill, 2018 was introduced in Lok Sabha by the Minister of Consumer
Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on January 5, 2018. The Bill
replaces the Consumer Protection Act, 1986. The object behind the Bill is to protect consumer
interests and enable quick and effective administration and settlement of disputes by
responding to the new changes in the market.

Although the Consumer Protection Act, 1986 has been playing the role as a legislative measure,
of protecting the interest of consumers, there have been several shortcomings that have called
for its amendment. Some of the shortcomings like delay in disposal due to practical constraints
in resolution process, not keeping pace with the new market dynamics, multi-layered delivery
chains, misleading advertising and marketing machinery. Further the need is emerge for new
provisions to deal with the fast changing technological and e-commerce being the latest. In
order to address these shortcomings this new bill is a necessity.

Let us understand who is “Consumer” under the bill- A consumer is defined as a person who
buys any good or avails a service for a consideration. It does not include a person who obtains
a good for resale or a good or service for commercial purpose. It covers transactions through all
modes including offline, and online through electronic means, teleshopping, multi-level
marketing or direct selling. It reflects the realities of 21st century by widening of the definition of
the consumer to include online, teleshopping etc. Further this bill provide for six consumer rights
which includes right to be protected against marketing of goods and services which are
hazardous to life and property, right to be informed of the quality, quantity, potency, purity,
standard and price of goods or services, right to be assured of access to a variety of goods or
services at competitive prices, and right to seek redressal against unfair or restrictive trade
practices.

Under this bill the central government will going to set up a Central Consumer Protection
Authority (CCPA) to promote, protect and enforce the rights of consumers. It will regulate
matters related to violation of consumer rights, unfair trade practices, and misleading
advertisements. The CCPA may impose a penalty on a manufacturer or an endorser for a false
or misleading advertisement. The penalty for bringing false or frivolous claims has been
increased from Rs 10,000 to Rs 50,000. CCPA can also prohibit the endorser of a misleading
advertisement from endorsing that particular product or services for a specified period. However
exceptional situation are there in which endorser may not be penalized. Further this bill provides
for setting up of Consumer Disputes Redressal Commissions (CDRCs) at the district, state, and
national levels and also the mediation cell attached to Consumer Disputes Redressal
Commission at each level.

A unique concept has been introduced under it i.e. Product Liability Action, which envisages
liability of manufacturer, producer or seller in certain circumstances specified herein. These are
personal injury, death, damage to property caused to a consumer as a result of any defect in
manufacturing, construction, formula, designing, preparation, assembly, testing, service,
instruction, marketing, warning, packaging or labeling a product. This provides enough powers
to the regulatory authority to recall products and cancel licences if a consumer complaint affects
more than one individual. The powers to take action for damage caused by a product will act as
a deterrent for manufacturers since the liability quotient has increased.

Certain issue involved in the bill are :-

● In order to claim product liability, a claimant must establish four kinds of defects in the e
product, the caused from it, and that it belonged to the manufacturer The claimant injury must
also establish that the manufacturer had knowledge of such a defect. It may be argued that the
conditions to establish a product liability claim are unreasonable.

● The Bill defines product liability to include defects in goods and deficiency in services.
However, the conditions to be proven to claim product liability do not include conditions for
services. It is unclear how a consumer can claim product liability for deficiency in services under
the Bill.

● The Bill empowers the central government to supervise the functioning of, and issue binding
directions to the district, state and national consumer redressal commissions. This could affect
the independence of these quasi judicial bodies.

The major significance of the bill is the extended liabilities on the manufacturer or an endorser
for a false or misleading advertisement. Further the celebrity status was often misused to market
fraudulent products will be prevented and also the provision of mediation cell as it will promote
alternate adjudication mechanisms and reduces burden on the judiciary. With all its advantages
and features along with the issues and shortcomings involved under the bill it is a step forward
for strengthening the consumer rights protection mechanisms so that the consumers are well
aware of the rights and there is an effective mechanisms to uphold the consumer rights.

Disclaimer:

The entire contents of this Article have been prepared on the basis of relevant and as per the
information existing at the time of the preparation. Although care has been taken ensure the
accuracy, completeness and reliability of the information provided, I assume no responsibility
therefore. Users of this information are expected to refer to the relevant existing provisions of
applicable Laws and regulations. I further agree that the information is not a professional advice
and is subject to change without notice. I assume no responsibility for the consequences of use
of such information.

ABOUT THE AUTHOR 

CS Vishal Agrawal a commerce graduate and an associate member of Institute of Company Secretaries of India (ICSI) from Raipur, Chhattisgarh. CS Vishal Agrawal can be contacted and  reached out at csvishalagrawal118@gmail.com.

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *