The Lok Sabha on 20th December, 2018 passed the Consumer Protection Bill 2018 and once it comes into force it will apply to the whole of India except Jammu & Kashmir and will replace the existing Consumer Protection Act, 1986 as a whole.
The 3 main highlights of the bill are:
- National Level Regulator :
The Consumer Protection Bill, 2018 has paved the way for a regulator called Central Consumer Protection Authority (CCPA). It will deal with matters relating to violation of consumer rights, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of consumers and public. It is very interesting to note that the present law did not have a regulator to regulate the consumer affairs.
CCPA will have the power to search, seize, order recall of goods and file complaints before the relevant Consumer Dispute Redressal Forum and has an investigation wing headed by a Director General.
2. Liability of Celebrity Endorsers:
“Endorsement”, is defined under Clause 2(18) to mean:-
- any message, verbal statement, demonstration; or
- depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or
- depiction of the name or seal of any institution or organisation, which makes the consumer to believe that it reflects the opinion, finding or experience of the person making such endorsement.
The endorser can be levied with penalty up to rupees ten lakhs by the CCPA for false and misleading advertisements.
However, the endorser will not be liable if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.
This provision will be huge blow to celebrities and sports personalities especially cricketers as they will have to be extra careful in endorsing their products because at a later stage if it is found to be misleading or false it will not only dent their image but they will also have to face consequences under the Act and will be liable to penalty.
3. Pecuniary jurisdiction:
The limits of pecuniary jurisdiction has been expanded in the following manner :-…
District Forum :- Rs. One Crore from Rs. Twenty Lakhs.
State Commission :- Rs. Ten Crores from Rs. One Crore.
National Commission :- Above Rs. Ten Crores from Rs. One Crores.
As an Alternate dispute redressal mechanism mediation cells will be attached to the District, State, and National Commissions.
The Consumer Protection Bill, 2018 has been well drafted and it covers many new provisions which were not there in the earlier law such as product liability, unfair contracts, alternate dispute redressal mechanism, E-Commerce, tele-marketing etc.
For celebrities involved in misleading or false advertisements , there will be penalties but no jail term but in my opinion even the penalty of Rs.10 Lakh on celebrity endorsers are not so austere as the amount of remuneration received by the celebrity endorsers for endorsement will run into lakhs and crores of rupees. So a penalty in the lines of say – a minimum of Rs 10,00,000/- and a maximum of Rs 1 crore depending upon the status & reach of the celebrity in the society and its impact on Consumers minds would have been flawless because ultimately the celebrity endorsers play a pivotal role in forcing the consumers and public to choose and follow a brand.
Apart from this when the Consumer protection bill, 2018 sees the daylight it will be a shot in the arm of consumers and a much needed relief from the archaic law.
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ABOUT THE AUTHOR
The article is drafted by CS S.Abhinav is a graduate of Commerce from Kerala University and an Associate Member of the Institute of Company Secretaries of India (ICSI). He is currently working as a Company Secretary in a Public Company in New Delhi. He can be contacted at firstname.lastname@example.org or at +91 9400939427.