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Consumer protection enhanced; companies, celebrities, beware

The Consumer Protection Bill 2019, already passed by Lok Sabha, was approved in the Upper House by voice vote; it will replace the 1986 law


New Delhi: Parliament on Tuesday approved a new Bill to revamp the process of administration and settlement of consumer disputes, with strict penalties including jail term for adulteration and misleading ads by companies. The Consumer Protection Bill 2019, already passed by Lok Sabha, was approved in the Upper House by voice vote and will replace the Consumer Protection Act, 1986. It was placed in Parliament today by Union Food and Consumer Affairs Minister Ram Vilas Paswan.

A consumer cannot be swept off his feet by a celebrity

Participating in the debate, KC Ramamurthy (Congress) supported the Bill but called for action against unfair practices as defined by the Bill and punitive measures thereof, saying the issue is being dealt by the Competition Commission also. “The Bill is silent on the promotion of false and misleading advertisements,” he said, demanding action against celebrities and those who promote such false advertisements.

However, under the Bill, celebrities endorsing misleading ads are liable for a fine. Some famous or infamous examples where consumers were taken for a ride or they let their guards down because their favourite stars were endorsing the brand are the commercials and print advertisements of Maggi by Amitabh Bachchan, of the Amrapali Group by Mahendra Singh Dhoni, of Vigneshwara Developers by Anupam Kher, etc.

While Dhoni dumped Amrapali and assured the investors who had approached them that he would fight for them with the realtor, Bachchan said on national television and Kher said during an event of a book launch that celebrities should not be expected to know the bona fides of the brands they endorsed. This excuse will no longer work.

Responding to a point regarding celebrity endorsements raised by Samajwadi Party member Jaya Bachchan, Paswan said when the Bill was sent to a standing committee earlier, it set jail term as punishment for all. However, later when an assessment was conducted, it was found that worldwide there is no provision of serious punishment for celebrities.

Paswan observed that media and celebrities must only advertise what has been given in writing to them by manufacturers, else they will be responsible (for the misleading advertisements). The minister was quick to add that celebrities were also endorsing Swachhta campaign and other social messages.

The food and consumer affairs minister said the government would further examine rules regarding stunts in advertisements.

On consumer complaint, entire product batch to be tested

Paswan sought to establish a Central Consumer Protection Authority (CCPA) to promote, protect and enforce consumer rights. The Bill strengthens the rights of a consumer and provides a mechanism for redress of his or her complaints regarding defects in goods and deficiency in services.

Replying to a debate on the Bill, Paswan said that the suggestions given by members would be included in the rules framed by the Ministry under this legislation.

The minister said if a product was found faulty, instead of earlier individual examination, the entire batch would be examined. He said the new Bill sought to take care of product liabilities and service, as well as action against publishers and celebrities of misleading advertisements.

On maximum retail price (MRP), Paswan said many restaurants were overcharging but when it tried to intervene, the matter was challenged in court. He said MRP should be displayed prominently on products apart from the date of expiry, date of manufacturing and complaints redressal mechanism. He observed that there is no concept of levying a service charge globally and the government advised restaurants to make it voluntary.

Paswan urged the state governments to pay more attention to consumer awareness programmes like ‘Jaago Graahak Jaago’. “Since 90% of cases are coming to district consumer commissions, the compensation has been increased to Rs one crore and Rs 10 crore for State-level commissions, while the compensation for above Rs 10 crore has been kept for the national commission,” he said.

Vijay Goel (BJP) suggested that a Ministry of Moral Responsibility or Moral Education be also set up to ensure that lawmakers follow certain rules. He cited the example of the Ministry of Loneliness set up in UK and the Ministry of Happiness in Bhutan. He said the long queues for essential items under the Congress rule were no longer there.

Goel said India was likely to cross China’s population by 2024 and consumerism is growing fast. He said this Bill came in 2015 but could not be passed by Rajya Sabha even after Lok Sabha approved it. The Bill has also been sent to two Stranding Committees, he noted.

The Bill seeks further the establishment of a Central Consumer Protection Authority (CCPA) to promote, protect and enforce consumer rights as a class. The CCPA would make interventions to prevent consumer detriment arising from unfair practices. The agency can also initiate class action, including enforcing recall, refund and return of products.

Bill’s supporters

Speaking in favour of the Bill, Ravi Prakash Verma (SP) demanded that the government create a consumer-friendly ecosystem in the country and create more awareness about consumer rights.

Amar Patnaik (BJD) said the Bill is good but several things need to reconsider, especially definition of consumer needs to be broadened and welcomed a provision a class action.

Supporting the Bill, Kahkashan Perween (JD-U) shared her bad experience of buying diabetes medicine from an online platform.

Opposition demands red tape in the name of federalism

The dilly-dallying tactic of Derek O’Brien (TMC) and KK Ragesh (CPI) of sending the Bill to a select committee of the Rajya Sabha for further scrutiny was rejected by the Upper House, as the amendments moved by them were deemed unnecessary.

The Left parties, DMK and Trinamool favoured a more red-tape-ridden approach, wherein the State governments in addition to the Union government would adjudicate over matters of consumer disputes. To ensure that, they said the Bill should be referred to a select committee.

Derek O’Brien insisted that sending the Bill to a select committee was not a delaying tactic by the opposition but it was to ensure that the legislation was properly scrutinised. He alleged that through this Bill, the central government was “snatching” away the rights of States. “All executive powers are retained by the Centre, but the financial burden of setting up consumer commissions lies with the States. The States’ federal powers have been taken away,” he noted.

O’Brien had earlier quoted Dr who had stated that “there is a majority and there is a minority and the rights of minorities should be protected”.

“This Bill is a must in the current juncture but takes away the States’ powers. What is the reason for taking away the States’ powers indirectly in every Bill?,” DMK member Tiruchi Siva questioned in Rajya Sabha. He pointed to a provision in the Bill wherein members of the State and district level consumer disputes redressal forums will be appointed by the central government, “usurping the powers of the State”.

While proposing that the Bill be referred to a select committee, Siva said the disputes redress forums proposed in the Bill did not have members from the judiciary. “How can it be called a quasi-judiciary body? It is a pseudo-judiciary body,” he said.

Echoing the views, CPI(M) member KK Ragesh called this a “sabotage of federalism and centralisation of powers” and added that even State’s powers to frame rules had been snatched away.

Supporting the Bill, RJD member Manoj Kumar Jha noted, “In this session of Rajya Sabha, there was a pattern to reduce the position and powers of States. BJP has always been concerned about federalism. I don’t know where those concerns have gone now.” He urged the government to take steps against advertisers on financial instruments and mutual funds to ensure the advertisements are clear to consumers.

Claiming that the Bill is not “foolproof” and has many “drawbacks”, TRS member K Keshava Rao said the government had not accepted the 11 recommendations of the Parliamentary Standing Committee that vetted the draft law. He also said it challenged the federalism as members of the state and district forums will be appointed in consultation with the central government.

Rao pointed out that the Bill had not been drafted in a “simple language” for the benefit of consumers. The definition of consumer rights is written in a complicated way, he said.

Paswan explains

Paswan had earlier noted it is long pending legislation and except five, all recommendations of a parliamentary standing committee have been included in the Bill. Paswan said the government had dropped healthcare from the Bill as several members had objected to it. He said this “non-controversial” Bill among other things, proposed the setting up of a Consumer Disputes Redressal (sic) Commission and forums at the district, State and national levels for adjudicating consumer complaints.

The minister said there were a number of cases, over 20,304 cases at national, 1,18,319 cases pending at the State level and 3,23,163 cases are pending at the district level in the country. “Now we are naming district commission, State commission and national commission, with the district and State commissions under State governments,” he said.

The minister lamented that still, in 118 districts out of 596 districts, the posts of president of consumer commissions were not appointed and as many as 362 posts of members are lying vacant.


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