On August 6, 2019, Parliament passed the Consumer Protection Bill, 2019 which replaces the Consumer Protection Act, 1986. It seeks to establish authorities for timely and effective administration and settlement of consumer disputes.
- Background: The Bill was introduced in Lok Sabha by the Minister of Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on July 8, 2019 and it was passed in the Lok Sabha on July 30, 2019.
- Rights of consumers: Bill defined 6 consumer rights including the right to be protected against the marketing of goods and services which are hazardous to life and property; be informed of the quality, quantity, potency, purity, standard and price of goods or services; be assured of access to a variety of goods or services at competitive prices; and seek redressal against unfair or restrictive trade practices.
- Central Consumer Protection Authority: The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers and regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. It will have an investigation wing, headed by a Director-General.
- Penalties for misleading advertisement: The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to 2 years for a false or misleading advertisement. In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to 5 years. It can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to 1 year. For every subsequent offence, the period of prohibition may extend to 3 years.
- Consumer Disputes Redressal Commission: Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels. Complaints against an unfair contract can be filed with only the State and National Appeals from a District CDRC will be heard by the State CDRC. Appeals from the State CDRC will be heard by the National CDRC. Final appeal will lie before the Supreme Court.
- Jurisdiction of CDRCs: The District CDRC will entertain complaints where the value of goods and services does not exceed Rs 1 crore. The State CDRC will entertain complaints when the value is more than Rs 1 crore but does not exceed Rs 10 crore. Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.
- Product liability: Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service. To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.