Consumer protection Bill cleared

New Bill proposes to set up a regulatory authority having powers to recall products and initiate class action suit against defaulting companies, including e-tailers

The Cabinet on Wednesday gave its nod to a new Consumer Protection Bill, which seeks to replace the Consumer Protection Act, 1986 and proposes to set up a regulatory authority having the powers to recall products and initiate class action suit against defaulting companies, including e-tailers. The Bill assumes importance as there is growing concern over the safety of consumer products and services, especially after the Maggi controversy.

Sources say the Bill might be introduced in the ongoing session of Parliament. The move comes in the backdrop of complex products and services in e-commerce, which has rendered consumers vulnerable to new forms of unfair trade and unethical business practices.

The key features of the Bill include establishment of a Central Consumer Protection Authority, which will protect and enforce the rights of consumers.

"The authority will intervene when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class action including enforcing recall, refund and return of products," the sources added.

Besides, the Bill has provisions for "product liability" if product/services causes personal injury, death or property damage and will take action against defaulting manufacturers or service providers.

For speedy disposal of court cases, the Bill proposes 'mediation' as an alternative dispute resolution mechanism. The mediation will be under the aegis of consumer courts.

Explaining the rational behind bring a new Bill, the sources said misleading advertisements, tele-marketing, multi-level marketing, direct selling and e-tailing pose new challenges to consumer protection. Hence, there was a need to modernise the Act to address the situation effectively.

The Bill also provides for stringent penalty, including life imprisonment in certain cases. The Act had been amended thrice earlier - in 1991, 1993 and 2002.

The Bill also has several provisions aimed at simplifying the consumer dispute resolution process in the consumer fora, which includes enhancing the pecuniary jurisdiction of the consumer grievance redressal agencies.

The Bill has a provision to set up a 'circuit bench' to facilitate quicker disposal of complaints and there is an enabling provision for consumers to file complaints electronically. Complaints can also be filed in consumer courts that have jurisdiction over the place of residence of the complainant.

The complaints will be deemed as admissible if the question of admissibility is not decided within 21 days.

"The new Bill is expected to enhance the quality and safety of products and services," the sources said, adding the proposed law has much needed provisions ensuring fair equitable and consistent outcomes for consumers.