The Consumer Protection Act, 1986 was made to aid in resolving the hardships faced by consumers caused by certain goods or services rendered to them. However, with the passage of time, the quantum of claims increased and the mechanism to deal with such claims continues to remain outdated till date. Therefore, with the aim to strengthening the rights of consumers as well as providing a mechanism for redressal of grievances relating to defects in goods and deficiency in services, the new Bill was passed in the Lok Sabha on 20th December 2018. The said Bill was introduced by Union Minister for Consumer Affairs, Mr. Ram Vilas Paswan.

The key highlights of the Bill are as follows:

Establishment of a Central Consumer Protection Authority (CCPA):

The CCPA would be an authority established at the national level to look into the violation of rights of consumers, unfair trade practices and false or misleading advertisements by the concerned manufacturers/service providers. The District Collector is responsible to report to the CCPA regarding any mass consumer complaints within its jurisdiction. The CCPA is further vested with powers to order recall of goods which are dangerous, hazardous or unsafe and to direct discontinuation of practises which are unfair and prejudicial to the interests of consumers. On the basis of the enquiry reports, the CCPA has power to file complaints before the relevant Consumer Dispute Redressal Forum. It is also vested with the powers to impose penalties on manufacturers and celebrity endorsers for misleading advertisements.

Misleading Advertisements:

The Bill defines what constitutes misleading advertisement under Clause 2(28) as follows:           

  • falsely describes such product or service; or
  • gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or
  • conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or
  • deliberately conceals important information.

It further impose a fine of upto Rupees Ten Lakhs from the CCPA and is an offence punishable with imprisonment which may extend to five years and with fine which may extend to fifty lakh rupees as per Clause 89 of the Bill.

Celebrity Endorser’s Liability:

Endorsement is defined under Clause 2(18) with a penalty of upto Rupees ten lakhs on the endorser by the CCPA for false and misleading advertisements, under Clause 21. However, the endorser would not be held if due diligence has been exercised by him towards such endorsement.

Expansion of Pecuniary Jurisdiction:

The pecuniary jurisdictional limits of the concerned forums have been expanded as follows:

  • District Forum: – From the previous amount of Rs. Twenty Lakhs to Rs. One Crore
  • State Commission: – From the previous amount of Rs. One Crores to Rs. Ten Crore
  • National Commission: – From the previous amount of Rs. One Crore to Rs. Ten Crore and above

The Bill further makes violation of consumer rights, misleading advertisement as well as manufacture, sale, storage of products mixed with adulterants as a punishable offence.

Image Link: