The Consumer Protection Bill, 2015 (Important) (Download PDF)

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Union Cabinet approved a new Consumer Protection Bill giving more strength to safeguard consumer rights. It mandates formation of Consumer Dispute Redressal Commissions and establishes a Consumer Protection Authority. It also has provisions to deal with misleading advertisements and ban celebrities from endorsing such products.

Image of Consumer Protection Bill

Image of Consumer Protection Bill

Image of Consumer Protection Bill

Background

  • In August 2015, the Centre introduced the Consumer Protection Bill in the Lok Sabha to repeal the 30-year-old Consumer Protection Act, 1986.
  • The Ministry of Consumer Affairs brought the fresh bill as there were too many amendments to the Bill introduced in 2015.
  • A parliamentary standing committee submitted its recommendations in April 2016.
  • The Bill is expected to be tabled in the Lok Sabha during the Winter Session

Highlights of the Bill

  • The Bill replaces the Consumer Protection Act, 1986.

  • It enforces consumer rights providing mechanism for redressal of complaints regarding defect in goods and deficiency in services.

  • Consumer Dispute Redressal Commissions will be set up at the district, state, and national levels for adjudicating consumer complaints.

  • Establishes a Consumer Protection Authority to investigate consumer complaints, issue safety notices for goods and services, recall goods, and prevent misleading advertisements.

  • Under the new bill, if a consumer suffering injury from a defect in a good may file a claim of product liability against the manufacturer if seven conditions are established.

  • Bill classifies six contract terms as ‘unfair’ including:

    • Payment of excessive security deposits

    • Disproportionate penalty for a breach

    • Unilateral termination without cause

    • Putting the consumer at a disadvantage.

Key Issues and Analysis

  • Empowers central government to supervise functioning of district, state and national consumer redressal commissions influencing the independence of these quasi-judicial bodies.

  • The District Commission, a quasi-judicial body, may be headed by a District Magistrate, who is part of the executive violating the principle of separation of powers between the judiciary and executive.

  • The National Commission, headed by a judicial member and comprising at least 15 technical or judicial members, is provisioned to examine complaints on questions of law contradicting a Supreme Court judgment questioning the competence of such technical members.

  • 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. It addition they must 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 there is little clarity on conditions for claiming services deficiency.

- Published/Last Modified on: January 3, 2018

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