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 The Bill was withdrawn and replaced with the Consumer Protection Bill, 2018.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.
| This month, PRS Legislative Research is 5 years old! The objective when we started out was to make the legislative process in India better informed, more transparent and participatory. From what started off as an idea, we believe we have made some progress towards our objective. - About 250 MPs across political parties have reached out to PRS for inputs on a range of issues that have come up in Parliament. In addition, there are a number of MPs who use PRS material for their preparation in Parliament, even though they have not contacted PRS for further inputs. - PRS has increasingly become a resource for the media as well. Over the past year, PRS has been cited on nearly 400 occasions by leading newspapers and websites as the source of information about legislation and Parliament. These are some of the milestones that we feel happy to have reached. But I want to really share are some of the learnings that we have had over these years. The first thing that we have learned is that many of us carry so many wrong perceptions about our MPs. Most of us don’t know that more than 80 percent of our MPs have college degrees. Most of us don’t know that the average attendance rate in Parliament is close to 80 percent in the past year. Most of us don’t know that Parliament has worked for more than 90 percent of the scheduled time in recent sessions, despite the undesirable disruptions in Parliament. There is a lot that is wrong with our politics, but we hope that some of these facts throw light about some lesser known aspects about our MPs. Laws are made for the really long term! That seems obvious, when we see examples such as our Indian Penal Code which was made in 1860, and the Land Acquisition Act that has haunted our country in recent years was passed in 1894. And these are just some examples. The fact is that if we do not debate our laws when they are being made, and citizens do not engage and provide inputs to this process, then we will be stuck with any issues that these laws might have for the next 100 years or more. So it is critical to get the laws as close to ‘right’ as possible when they are being passed. It is not obvious to most people that so many MPs put in significant effort to engage effectively in Parliament. Clearly, there is a selection bias, statistically speaking – I am talking of MPs who have reached out to us. Despite this selection bias, the point is that there are a number of MPs who take their work in Parliament seriously, even though they know that much of the work they do in Parliament has almost no bearing on their re-election prospects. (By the way, in most informal polls that I have done when I meet with groups of people, most do not know the role of an MP – even amongst some of the well educated groups.) Why do so many MPs still work hard to prepare for their work in Parliament, despite knowing that this work has no bearing on their re-election prospects? On this, we can only hypothesize. There are many MPs who understand their role as legislators and take it very seriously. There are MPs who feel that making a good point on an issue on the floor of Parliament is a way to establish their grasp of a certain issue to their colleagues in Parliament, but also to the larger world. For some others, it is a signalling device to their party colleagues about their interest and expertise in a certain subject area. And we have had MPs who have said, that they feel very good when other MPs, especially from other parties, compliment them for making a good point. All of these sound like good positive reasons for many MPs to want to be well prepared to speak in Parliament. We have begun to appreciate that the role of the MP in Parliament is very challenging. I can point to at least three reasons, which are independent of how educated or capable an MP might be: (a) The range of subjects in Parliament is so wide that no individual, however intelligent, can be fully conversant with all the subjects being discussed. (b) MPs have no research staff whatsoever, and are expected to do all of their preparatory work on their own, and (c) The constituency pressure on the MPs is often very high, making it difficult for them to pay adequate attention to their work in Parliament. We most certainly want more from our MPs and our Parliament. We want our MPs to meet for more days, find better ways to raise issues in Parliament than to disrupt proceedings, debate in more detail the laws that they pass. But what we have learned is that we cannot throw the baby out with the bath water. So, I am not suggesting that we can’t do better or that our MPs or our Parliament are perfect. The only way we will have a better Parliament is if we engage. And more people engage – from all walks of life. Policy making is not the exclusive preserve of either the expert or the policy maker. The policy process can be greatly strengthened if we participate in the process and ensure that our MPs know that we want effective laws to govern us and our children. Parliament can be made more effective by addressing some of the current bottlenecks. And some of these issues are not even difficult to fix. For example, can we have more people in the committee staff to support the work of the standing committees in Parliament so they can cover more ground in any given year? Can we have qualified research staff working for MPs so that they can go better prepared for Parliament? (Our Legislative Assistants to MPs – LAMPs programme has shown that it is hugely rewarding for young legislative assistants and the MPs if such a platform is created.) Can we have recorded voting on all legislative votes, instead of voice votes – the electronic button system is already in place to do this! These are just some examples… and we at PRS have a laundry list of ideas for strengthening Parliament – with varying degrees of difficulty. We have raised some of these issues in our Annual Conference of Effective Legislatures, and will continue to do so in the years ahead. A very BIG thanks to each of you for making PRS possible over these past five years… We hope that you will continue to bless and support us in the years ahead to help shape a more robust policy making process in India. | PRS PRODUCTS The Legislative Briefs are our flagship product. Each Brief analyses one Bill pending in Parliament. These are no longer than 6 pages and are sent to all MPs. We then get calls from MPs asking for more information/ clarification. Since earlier this year PRS has begun a Wednesday morning Policy Dialogue series exclusively for MPs. These are widely attended by MPs across parties. PRS is the knowledge partner to brief MPs in the Thursday morning Bill briefing sessions organised by the Constitution Club. PRS has reached out to about 1000 journalists across the country, through journalist workshops and direct engagement. PRS has started the Legislative Assistants to MPs (LAMPs) programme as a pilot initiative. Under the programme, participating MPs get a trained legislative assistant for a period of three Parliament sessions. PRS produces Primers to demystify Parliamentary process for citizens. These are widely used in our interactions with civil society groups. The Vital Stats series is a crisp two page document that often highlights interesting aspects of Parliament. They are very popular with journalists. PRS has nearly 1000 fans on Facebook and 2000 followers on Twitter, including some MPs. PRS has a Session Alert at the beginning of each session of Parliament. On the last day of each session, PRS releases two reports on the just concluded session: Parliament Session Wrap and Plan vs. Performance. PRS hosts an Annual Conference of Effective Legislatures each year to highlight certain aspects of the functioning of Parliament. PRS has compiled a free online database of all state laws across the country. This effort www.lawsofindia.org is the first effort of its kind in India. The PRS website www.prsindia.org has become an important resource for anyone tracking the Indian Parliament both within the country and abroad. |
