The Consumer Protection Bill, 2018 was introduced in Lok Sabha in January 2018. The Bill replaces the Consumer Protection Act, 1986. Previously in 2015, a Bill had been introduced to replace the 1986 Act. The 2015 Bill acknowledged that the rapid change in consumer markets, introduction of practices such as misleading advertisements, and new modes of transactions (online, teleshopping, etc.) had necessitated the need for a new law. The Bill was subsequently referred to a Standing Committee, which recommended several changes to it. The Bill was withdrawn and replaced with the Consumer Protection Bill, 2018. The Bill is listed for passage in the ongoing Monsoon Session. In this post, we analyse the Bill in its current form.
How is the 2018 Bill different from the 1986 Act?
The Bill adds various provisions for consumer protection that were absent in the 1986 Act. Key among them are the provisions on product liability and unfair contracts. Under product liability, when a consumer suffers an injury, property damage or death due to a defect in a product or service, he can file a claim for compensation under product liability. The Bill outlines cases in which the product manufacturer, service provider and seller will be held guilty under product liability. Under the proposed law, to claim product liability, an aggrieved consumer has to prove any one of the conditions mentioned in the Bill with regard to a manufacturer, service provider and seller, as the case may be.
An unfair contract has been defined as a contract between a consumer and manufacturer/ service provider if it causes significant change in consumer rights. Unfair contracts cover six terms, such as payment of excessive security deposits in an arrangement, disproportionate penalty for a breach, and unilateral termination without cause. The consumer courts being set up under the Bill will determine contract terms to be unfair and declare them null and void.
What are the different bodies being set up under the Bill?
The Bill sets up Consumer Protection Councils as advisory bodies, who will advise on protection and promotion of consumer rights. However, it does not make it clear who these Councils will render advise to. Under the 1986 Act, the Consumer Protection Councils have the responsibility to protect and promote consumer rights.
To promote, protect, and enforce consumer rights, the Bill is setting up a regulatory body, known as the Central Consumer Protection Authority. This Authority can also pass orders to prevent unfair and restrictive trade practices, such as selling goods not complying with standards, and impose penalties for false and misleading advertisements.
The Bill also sets up the Consumer Disputes Redressal Commissions (known as consumer courts) at the district, state and national levels. These Commissions will adjudicate a broad range of complaints, including complaints on defective goods and deficient services of varying values. These Commissions are also present under the 1986 Act. However, their pecuniary jurisdiction (amount up to which they can hear complaints) has been revised under the Bill. The Bill also adds a provision for alternate dispute redressal mechanism. As part of this, mediation cells will be attached with the Consumer Disputes Redressal Commissions.
What are the penal provisions under the Bill?
The Bill increases penalties for different offences specified in it. It also adds penalties for offences such as issuing misleading advertisements, and manufacturing and selling adulterated or spurious goods. For example, in case of false and misleading advertisements, the Central Consumer Protection Authority can impose a penalty of up to Rs 10 lakh 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 for every subsequent offence. The Authority 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 for such a penalty.
Are there any issues to think about in the Bill?
The 2018 Bill is a marked improvement over the 2015 Bill and addresses several issues in the 2015 Bill. However, two major issues with regard to the Consumer Disputes Redressal Commissions remain. We discuss them below.
First issue is with regard to the composition of these Commissions. The Bill specifies that the Commissions will be headed by a ‘President’ and will comprise other members. However, the Bill delegates the power of deciding the qualifications of the President and members to the central government. It also does not specify that the President or members should have minimum judicial qualifications. This is in contrast with the existing Consumer Protection Act, 1986, which states that the Commissions at various levels will be headed by a person qualified to be a judge. The 1986 Act also specifies the minimum qualification of members.
Under the current Bill, if the Commissions were to have only non-judicial members, it may violate the principle of separation of powers between the executive and the judiciary. Since these Commissions are adjudicating bodies and will look at consumer dispute cases, it is unclear how a Commission that may comprise only non-judicial members will undertake this function.
Second issue is with regard to the method of appointment of members of the Commissions. The Bill permits the central government to notify the method of appointment of members of the Commissions. It does not require that the selection involve members from the higher judiciary. It may be argued that allowing the executive to determine the appointment of the members of Commissions could affect the independent functioning of the Commissions. This provision is also at variance with the 1986 Act. Under the Act, appointment of members to these Commissions is done through a selection committee. These section committees comprise a judicial member.
As mentioned previously, the Commissions are intended to be quasi-judicial bodies, while the government is part of the executive. There may be instances where the government is a party to a dispute relating to deficiency in service provided by a government enterprise, for e.g., the Railways. In such a case, there would be a conflict of interest as the government would be a party to the dispute before the Commissions and will also have the power to appoint members to the Commission.
The Monsoon Session of Parliament begins tomorrow and will continue till August 10, 2018. It is scheduled to have 18 sittings during this period. This post outlines what is in store in the upcoming session.
The session has a packed legislative agenda. Presently, there are 68 Bills pending in Parliament. Of these, 25 have been listed for consideration and passage. In addition, 18 new Bills have been listed for introduction, consideration, and passage. This implies that Parliament has the task of discussing and deliberating 43 Bills listed for passage in an 18-day sitting period. Key among them include the Bills that are going to replace the six Ordinances currently in force. The government is going to prioritize the passage of these six Bills to ensure that the Ordinances do not lapse.
Besides the heavy legislative agenda, the session will also witness the election of a new Deputy Chairman for the Upper House. Former Deputy Chairman, P.J. Kurien’s term ended on July 1, 2018. The upcoming election has generated keen interest, and will be closely watched. The role of the Deputy Chairman is significant, as he quite frequently oversees the proceedings of the House. The Deputy Chairman is responsible for maintaining order in the house and ensuring its smooth functioning. The preceding Budget Session was the least productive since 2000 due to disruptions. Rajya Sabha spent only 2 hours and 31 minutes discussing legislative business, of which 3 minutes were spent on government Bills. In this context, the role of the Deputy Chairman is important in ensuring productivity of the house.
Another key player in ensuring productivity of Parliament is the Speaker of the Lower House. In Budget Session 2018, the Speaker was unable to admit a no confidence motion. This failure was based on her inability to bring the house in order. Repeated disruptions led to the passage of only two Bills in Lok Sabha. The same session also saw disruptions by certain MPs demanding special category status for Andhra Pradesh. Between the last session and the upcoming session, a key development includes the resignation of five YRSC members, reducing the strength of MPs from Andhra Pradesh to 20. In light of this, one has to wait to see whether the demand for special category status for Andhra Pradesh will be raised again.
Coming to the legislative agenda, of the six Bills that aim to replace Ordinances, key include: (i) the Fugitive Economic Offenders Bill, 2018, (ii) the Criminal Law (Amendment) Bill, 2018, (iii) the Insolvency and Bankruptcy Code (Amendment) Bill, 2018, and (iv) the Commercial Courts (Amendment) Bill, 2018. The Fugitive Economic Offenders Bill aims to confiscate the properties of people who have absconded the country in order to avoid facing prosecution for economic offences. The Fugitive Economic Offenders Bill, 2018 was introduced in Lok Sabha in March 2018. Subsequently, an Ordinance was promulgated on April 21, 2018. The Criminal Law (Amendment) Bill increases the punishment for rape of women, and introduces death penalty for rape of minor girls below the age of 12. The Insolvency and Bankruptcy (Amendment) Bill aims to address existing challenges in the Insolvency and Bankruptcy Code. It amends the Code to include homebuyers as financial creditors in the insolvency resolution process.
There are some Bills that have been passed by one house but are pending in the other, and some that are pending in both the houses. These cut across various sectors, including social reform, education, health, consumer affairs, and transport. Some key reformative legislation currently pending include the Transgender Persons (Protection of Rights) Bill, 2016, and the Triple Talaq Bill. The Triple Talaq Bill, passed on the day of introduction in Lok Sabha, is pending in Rajya Sabha. When introduced in Rajya Sabha, the opposition introduced a motion to refer the Bill to a Select Committee. In the forthcoming session, it remains to be seen whether the Bill will be sent to a Select Committee for detailed scrutiny or will be passed without reference to a Committee. Other pending legislation include the the National Medical Commission Bill, 2017, the RTE (Second Amendment) Bill, 2017, the Consumer Protection Bill, 2018 and the Specific Relief (Amendment) Bill, 2017.
Of the 18 new Bills listed for introduction, all have been listed for consideration and passage as well. These include the Trafficking of Persons Bill, 2018, the DNA Technology (Use and Application) Regulation Bill, and amendments to the RTI Act. Since they have been listed for passage, it remains to be seen whether these Bills are scheduled to be scrutinized by a Parliamentary Committee. In the 16th Lok Sabha, only 28% of the Bills introduced in Lok Sabha have been referred to Committees. This number is low in comparison to 60% and 71% of the introduced Bills being referred to Committees in the 14th and 15th Lok Sabha, respectively. Committees ensure that Bills are closely examined. This facilitates informed deliberation on the Bill, and strengthens the legislative process.
Besides taking up the legislative agenda, an important function of Parliament is to discuss issues of national importance and hold the government accountable. In the previous session, the issue of irregularities in the banking sector was repeatedly listed for discussion. However, due to disruptions, it was not taken up. Budget Session 2018 saw the lowest number of non- legislative debates since the beginning of the 16th Lok Sabha. In the upcoming session, it is likely that members will raise various issues for discussion. It remains to be seen whether Parliament will function smoothly in order to power through its agenda, and fulfil its obligation to hold the government accountable.
