Brief history

The Consumer Protection Bill, 2018 was introduced in Lok Sabha on January 5, 2018 by the Minister of Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan. The Bill replaces the Consumer Protection Act, 1986. On August 10, 2015, the Consumer Protection Bill, 2015 was introduced in Lok Sabha to replace the 1986 Act. The Bill was referred to the Standing Committee on Food, Consumer Affairs, and Public Distribution. The Standing Committee submitted its report on April 26, 2016. At the time of introduction of the 2018 Bill, the 2015 Bill was withdrawn.

The Government introduced Consumer Protection Bill, 2018 to replace The Consumer Protection Act 1986. A Consumer Protection Bill to replace the Act was introduced in 2015, but has been withdrawn post the introduction of the 2018 Bill.

Salient features of the Bill are –

• Establishment of an executive agency to be known as the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of the consumers and will be empowered to investigate, recall, refund and impose penalties. The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.
• The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 Lakh for a false or misleading advertisement. In case of a subsequent offence, the fine may extend to Rs 50 Lakh. The manufacturer can also be punished with imprisonment of up to two years which may extend to five years for every subsequent offence.
• The Bill further imposes that if the party is found guilty of adulteration and results in the death of a consumer, the offender is liable with imprisonment for a term which shall not be less than 7 years, but which may extend to imprisonment for life and with fine which shall not be less than Rs 10 Lakh.
• Consumer Disputes Redressal Commissions will be set up at the District, State and National levels for adjudicating consumer complaints. Appeals from a District CDRC will be heard by the State CDRC. Appeals from the State CDRC will be heard by the National CDRC. Final appeal will lie before the Supreme Court.
• The Bill also classified six contract clauses as ‘unfair’. These contracts maybe between a manufacturer or trader or service provider on one hand, and a consumer on the other. Also a consumer can file a complaint with CDRCs in relation to: (i) unfair or restrictive trade practices; (ii) defective goods or services; (iii) overcharging or deceptive charging; and (iv)the offering of goods or services for sale which may be hazardous to life and safety.
• The Jurisdiction of the Consumer Disputes Redressal Commissions has also been revised now the District CDRCs can entertain cases where value of goods and services does not exceed Rs 1 Crore. The State CDRC will entertain complaints when the value is more than Rs 1 Crore but does not exceed Rs 10 Crore. Complaints with value of goods and services over Rs 10 Crore will be entertained by the National CDRC.
• The Bill also imposes an obligation on celebrity endorsers to verify the claims regarding the product or the services before endorsing the same, failing the authority may prohibit the endorser of a false or misleading advertisement from making endorsement of any product for a period of 1 year, and a further prohibition of upto 3 years for every subsequent contravention.
• Now the consumers can file the complaint electronically.

  Comparison In between

  Consumer Protection Act 1986 and Consumer Protection Bill 2018

  Provisions	Consumer Protection Act 1986	Consumer Protection Bill 2018
  REGULATOR	No Provision	Establishes the Central Consumer Protection Authority (CCPA) to enforce consumer rights. CCPA can pass orders regarding recall of products, unfair contracts, and misleading advertisements. Investigation wing set up under CCPA.
  The Jurisdiction of the Consumer Disputes Redressal Commissions (Adjudicatory body)	District CDRCs: Up to Rs 20 Lakh.   State CDRCs: Between Rs 20 Lakh and up to Rs 1 Crore.   National CDRCs: Above Rs 1 Crore.	District CDRCs: Up to Rs. 1 Crore   State CDRCs: Between Rs 1 Crore and up to Rs 10 Crore.   National CDRCs: Above Rs. 10 Crore.
  Composition of Consumer Disputes Redressal Commissions	District: Headed by current or former District Judge and two members.   State: Headed by a current or former High Court Judge and at least two members.   National: Headed by a current or former Supreme Court Judge and at least four members	District: Headed by a President and at least two members.   State: Headed by a President and at least four members.   National: Headed by a President and at least four members.
  Penalties	Failure to comply with an order of the district, state or national Commissions will attract imprisonment of up to three years, or fine of up to Rs 10,000, or both.	In case of Commissions, fine increased to a maximum of Rs 1 Lakh. Failure to follow CCPA order – imprisonment of up to six months or fine of up to Rs 20 Lakh, or both. For adulterated products – first time offence, imprisonment of two years with a fine of Rs 10 Lakh and suspension of license for a period of two years; for second time offence, rigorous imprisonment of five years with a fine of Rs 50 Lakh and cancellation of license. In Case of death of the consumer the offender is liable with imprisonment for a term which shall not be less than 7 years, but which may extend to imprisonment for life and with fine which shall not be less than Rs. 10 Lakh
  Misleading advertisements	The District Forum can ask the party to issue a corrective advertisement to neutralize the effect of the misleading advertisement	The CCPA can issue direction to discontinue false advertisements, or modify it. For false and misleading advertisements, a penalty of up to Rs. 10 Lakh may be imposed on a manufacturer or an endorser. For a subsequent offence, the fine may extend to Rs.  50 Lakh. The manufacturer can also be punished with imprisonment of up to two years, which may extend to five years in case of every subsequent offence. The CCPA can also prohibit the endorser of a misleading advertisement from endorsing any particular product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years. There are certain exceptions when an endorser will not be held liable.
  Unfair contracts	No provision	Lists six contract terms which may be held as unfair. Complaints against unfair contracts can be filed with only the State and National Commission.
  E – commerce	No provision	Direct selling, e-commerce and electronic service provider defined. The central government may prescribe rules for preventing unfair trade practices in ecommerce and direct selling.

By

Sushant Chaturvedi