Polity and Governance

The Consumer Protection Bill 2019 passed by Parliament

Introduction
•The Consumer Protection Bill, 2019 was passed by the Parliament.
•The Bill replaces the Consumer Protection Act, 1986.
•The Bill seeks to strengthen rights of consumers and provides a mechanism for redressal of complaints regarding defects in goods and deficiency in services.
 
Definition of consumer
•A consumer is defined as a person who buys any good or avails a service for a consideration. 
•It does not include a person who obtains a good for resale or a good or service for commercial purpose. 
•It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.
 
Rights of consumers
•The right to be protected against marketing of goods and services which are hazardous to life and property;
•The right to be informed of the quality, quantity, potency, purity, standard and price of goods or services;
•The right to be assured of access to a variety of goods or services at competitive prices; and
•The right to seek redressal against unfair or restrictive trade practices.
 
Central Consumer Protection Authority
•The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. 
•The CCPA will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. 
•The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.
 
Functions of CCPA
(i) inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum;
(ii) passing orders to recall goods or withdraw services that are hazardous, reimbursement of the price paid, and discontinuation of the unfair trade practices, as defined in the Bill;
(iii) issuing directions to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher to either discontinue a false or misleading advertisement, or modify it;
(iv) imposing penalties, and;
(v) issuing safety notices to consumers against unsafe goods and services.
 
Penalties for misleading advertisement
•The CCPA may 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. 
•In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
•The CCPA can also prohibit the endorser of a misleading advertisement from endorsing that 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. 
 
Consumer Disputes Redressal Commission
•Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels. 
•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.
•Complaints against an unfair contract can be filed with only the State and National  Commissions.
•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.
 
Jurisdiction of CDRCs
•The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore. 
•The State CDRC will entertain complaints when the value is more than Rs one 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.
 
Product liability
•Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service. 
•A manufacturer shall be liable for providing defective or inferior goods or services
•The new law recognises that sharing of personal information of consumers shall also be treated as unfair trade practice.
 
Other Important provisions
•A complaint can be forwarded to District Collector or Commissioner or to the Consumer Protection Authority for class action for consumer rights, unfair trade practices or misleading advertisements
•The hearings can be done by video conferencing
•The commission can’t reject an application without hearing the consumer.
•If Commissioner fail to reject or admit the petition within 21 days, it is deemed to be admitted.



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