Consumer Protection Bill 2019

PIB press release dated 30th July, 2019

The Lok Sabha today passed the Consumer Protection Bill 2019 after due consideration and discussion. The Union Minister for Consumer Affairs, Food and Public Distribution Shri Ram Vilas Paswan said that the bill aims at protecting the interests of consumers by establishing authorities for timely and effective administration and settlement of consumers’ dispute. Moving the Bill, Minister of State for Consumer Affairs, Food and Public Distribution, Shri Raosaheb Patil Danve said the Bill aims to simplify a number of rules. Shri Danve said consumers do not get quick redressal of their complaints and with the passage of the Bill, consumers will be able to get speedy justice. He said the government aims to simplify the entire process of redressal of consumer grievances.

Under the Bill, there is provision for central government to set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers and will be empowered to investigate, recall, refund and impose penalties. It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements. There is also a provision for class action law suit for ensuring that rights of consumers are not infringed upon. The authority will have power to impose a penalty on a manufacturer or an endorser of up to 10 lakh rupees and imprisonment for up to two years for a false or misleading advertisement. 

Salient Features of the Bill

1.         Central Consumer Protection Authority (CCPA): Executive Agency to provide relief to a class of consumers. The CCPA will be empowered to-

1. Conduct  investigations into violations of consumer rights and institute Complaints /Prosecution
2. Order recall of unsafe goods and services
3. Order discontinuance of Unfair Trade Practices and Misleading  Advertisements
4. Impose penalties on Manufactures /Endorsers /Publishers of Misleading Advertisements

2.         Simplified Dispute Resolution process

i) Pecuniary Jurisdiction enhanced to-

• District Commission –Up to Rs1 crore
• State Commission- Between  Rs1 crore and Rs 10 crore
• National Commission –Above Rs.10 crore

ii) Deemed admissibility after 21days of filing

iii) Empowerment of Consumer Commission to enforce their orders

iv) Appeals only on question of law after second stage

v) Ease of approaching consumer commission

• Filing from place of residence
• E-filing
• Videoconferencing for hearing 

3.         Mediation

• An Alternate Dispute Resolution (ADR) mechanism
• Reference to Mediation by Consumer Forum wherever scope for early settlement exists and parties agree for it.
• Mediation cells to be attached to Consumer Forum
• No appeal against settlement through mediation

4.         Product Liability

A manufacturer or product service provider or product seller to be responsible to compensate for injury or damage caused by defective product or deficiency in services

The Basis for product liability action will be:

• Manufacturing  defect
• Design defect
• Deviation from manufacturing specifications
• Not conforming to express warranty
• Failing to contain adequate instruction for correct use
• Services provided arefaulty, imperfect or deficient

New Bill- Benefit to Consumers

Presently Consumer only have a single point of access to justice, which is time consuming. Additional swift executive remedies are proposed in the bill through Central Consumer Protection Authority (CCPA)

Deterrent punishment to check misleading advertisements and adulteration of products

Product liability provision to deter manufacturers and service providers from delivering defective products or deficient services

Ease of approaching Consumer Commission and Simplification of Adjudication process

Scope for early disposal of cases through mediation

Provision for rules for new age consumer issues: e-commerce & direct selling

Direct Selling Legislation

PIB press release dated 27th July, 2019

Ministry of Consumer Affairs, Food & Public Distribution, Department of Consumer Affairs notified the Direct Selling Guidelines, 2016 in the Gazette of India on 26.10.2016 as guiding principles for State Governments to consider regulating the business of direct selling and multi-level marketing and strengthen the existing regulatory mechanism on direct selling and multi-level marketing for preventing fraud and protecting the legitimate rights and interests of consumers. State Governments/Union Territories, being enforcement agencies, may take necessary action to implement these guidelines. In terms of the Direct Selling Guidelines, 2016, State Governments will set up a mechanism to monitor/supervise the activities of direct sellers, direct selling entities regarding compliance with the guidelines. Besides, the Consumer Protection Bill, 2019 has been introduced in Lok Sabha on 8th July, 2019 which seeks to provide the measures to be taken by the Central Government to prevent unfair trade practices in direct selling.

In terms of the Direct Selling Guidelines, 2016, no person or entity will participate in money circulation scheme in the garb of direct selling business. Ministry of Finance, Department of Financial Services has intimated that there is no information available with them that law enforcement agencies are wrongfully booking genuine direct selling firms under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.

This information was given in a written reply by the Minister of State for   Consumer Affairs, Food & Public Distribution, Shri Danve Raosaheb Dadarao in the Rajya Sabha today.