How New Consumer Protection Bill, 2019 will take on false & misleading ads

With the Lok Sabha passing the Consumer Protection Bill, 2019, the entire process of redressal of consumer grievances is expected to be simplified and consumers will be able to get speedy justice. The Bill was moved by Minister of State for Consumer Affairs, Food and Public Distribution, Raosaheb Patil Danve. 

Under the Bill, there is provision for the Central Government to set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers and will be empowered to investigate, recall, refund and impose penalties. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. There is also a provision for class action law suit for ensuring that rights of consumers are not infringed upon. The authority will have power to impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement. 

Salient Features of the Bill 

1. Central Consumer Protection Authority (CCPA): Executive Agency to provide relief to a class of consumers. The CCPA will be empowered to:

• Conduct investigations into violations of consumer rights and institute Complaints/ Prosecution
• Order recall of unsafe goods and services
• Order discontinuance of Unfair Trade Practices and Misleading Advertisements
• Impose penalties on Manufacturers/ Endorsers/ Publishers of Misleading Advertisements 

2. Simplified Dispute Resolution process
3. i) Pecuniary Jurisdiction enhanced to:

• District Commission – Up to Rs 1 crore
• State Commission – Between Rs 1 crore and Rs 10 crore
• National Commission – Above Rs 10 crore 

ii) Deemed admissibility after 21 days of filing 

iii) Empowerment of Consumer Commission to enforce their orders 

iv) Appeals only on question of law after second stage 

v) Ease of approaching consumer commission

• Filing from place of residence
• E-filing
• Video conferencing for hearing 

3. Mediation

• An Alternate Dispute Resolution (ADR) mechanism
• Reference to Mediation by Consumer Forum wherever scope for early settlement exists and parties agree for it.
• Mediation cells to be attached to Consumer Forum
• No appeal against settlement through mediation 

4. Product Liability

A manufacturer or product service provider or product seller to be responsible to compensate for injury or damage caused by defective product or deficiency in services 

The basis for product liability action will be:

• Manufacturing defect
• Design defect
• Deviation from manufacturing specifications
• Not conforming to express warranty
• Failing to contain adequate instruction for correct use
• Services provided are faulty, imperfect or deficient 

New Bill - Benefit to Consumers 

• At present, consumer only have a single point of access to justice, which is time consuming. Additional swift executive remedies are proposed in the bill through Central Consumer Protection Authority (CCPA)
• Deterrent punishment to check misleading advertisements and adulteration of products
• Product liability provision to deter manufacturers and service providers from delivering defective products or deficient services
• Ease of approaching Consumer Commission and Simplification of Adjudication process
• Scope for early disposal of cases through mediation
• Provision for rules for new age consumer issues: e-commerce & direct selling 

Reactions to the New Bill 

Union Minister for Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, said that the Bill aimed at protecting the interests of consumers by establishing authorities for timely and effective administration and settlement of consumers’ dispute. 

D Shivakumar, Chairman, Advertising Standards Council of India (ASCI), remarked, “This is a great development in favour of consumers and ASCI welcomes the passing of the new Consumer Protection Bill. Protection of consumers’ interest is also ASCI’s core mission. As an expert body dealing with complaints pertaining to misleading advertisements, ASCI has been working closely with the Department of Consumer Affairs. Complaints being received on the GAMA portal are being examined by ASCI since the launch of the GAMA portal. We expect this co-regulation model to be strengthened further as per recommendations of the Parliamentary Standing Committee.”