A new draft bill seeking up to five-year jail term and a fine of Rs 50 lakh for celebrities found endorsing misleading advertisements will be taken up by a group of ministers tomorrow.
The Centre in August last year had introduced the Consumer Protection Bill 2015, in Lok Sabha, to repeal the 30-year-old Consumer Protection Act. A Parliamentary Standing Committee had submitted its recommendations in April.
After studying the panel's report, the Consumer Affairs Ministry has accepted some key recommendations such as provisions for fixing liability on celebrities, stringent punishment for adulteration among others.
According to sources, the Department of Consumer Affairs has received comments from other ministries on the draft law.
Almost all the ministries have no objections to the proposed provision to impose hefty penalty and imprisonment to celebrities endorsing misleading advertisements as well as those involved in adulteration, they added.
A group of ministers, headed by Finance Minister Arun Jaitley, is scheduled to meet tomorrow to discuss the changes proposed by the Consumer Affairs Ministry in the draft law before placing it for the Cabinet nod.
Besides Jaitley, Consumer Affairs Minister Ram Vilas Paswan, Heath Minister J P Nadda, Transport Minister Nitin Gakari, Law Minister Ravi Shankar Prasad, Power Minister Piyush Goyal and Commerce Minister Nirmala Sitharaman are part of the informal GoM.
According to sources, the ministry has proposed stringent provisions to tackle misleading advertisements as well as to fix liability on endorsers/celebrities.
"For the first time offence, a fine of Rs 10 lakh and imprisonment of up to two years. For second and subsequent offenses, a fine of Rs 50 lakh and imprisonment of five years has been proposed for celebrities and brand ambassadors," a source said.
In order to check the menace of adulteration, the ministry has proposed 'penal offense' and imprisonment at par with celebrities for violation. It has also proposed a provision for suspension and cancellation of licence.
That apart, the ministry has accepted the panel's recommendation to include 'deficiency in services' in product liability.
On Panel's suggestion, it has agreed to provide an enabling provision for rule making to regulate e-commerce and direct selling.
Among other changes, the ministry has enhanced the pecuniary jurisdiction of a district commission to Rs 1 crore.
It has removed overlap of powers of Central Consumer Protection Authority (CCPA) and the Consumer Fora. Power of declaring terms of contracts as 'null and void' will be shifted to Consumer Fora, while the power of awarding of penalty of CCPA substituted by compounding fees.
The ministry has proposed setting up of an investigating wing for CCPA and limited the role of a district collector to support CCPA in investigation.
It has also removed a provision for penalty on consumers for frivolous complaints.
