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A Critical Analysis of the Proposed the Consumer Protection Bill, 2018

The technology has changed tremendously the way of our lives especially shopping. To buy all of our basic necessities we usually allocate not only amount but also the day that need to go on a shopping spree before any festival/occasion. Digital transformation rooted now everyone by way of smartphones by tapping of our finger on the small screen , we can see and buy things of our choice any minute and to deliver at our doorstep.

The Concept of buying and selling definition also expand still law meant to protect the consumer and also say Caveat emptor is Latin for "Let the buyer beware".

This article analysis the recent consumer protection bill with the consumer protection act 1986 Brings out the important features.

Comparison of the 1986 Act with the 2018 Bill

The Bill introduces new provisions related to product liability, Mediation (Alternate Dispute resolution mechanism) ,Appointment of additional authority ,Investigation Wing, Powers to search and seizure and unfair contracts. It also creates a new regulatory body called the Central Consumer Protection Authority and permits mediation for settlement of consumer complaints.

Extended definitions
These below newly included definitions in the consumer protection bill 2018 in compare with the consumer protection act 1986

means any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents;

“Consumer rights” includes,-
(i) the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
(ii) the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
(iii) the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
(iv) the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;
(v) the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
(vi) the right to consumer awareness;

(i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
(ii) deliberate withholding of relevant information by such person to the consumer;

“Design”,in relation to a product, means the intended or known physical and material characteristics of such product and includes any intended or known formulation or content of such product and the usual result of the intended manufacturing or other process used to produce such product;

“Direct selling”means marketing, distribution and sale of goods or provision of services through a network of sellers, other than through a permanent retail location;
“e-commerce” means buying or selling of goods or services including digital products over digital or electronic network;

“electronicserviceprovider” means a person who provides technologies or processes to enable a product seller to engage in advertising or selling goods or services to a consumer and includes any online market place or online auction sites;

“endorsement”, in relation to an advertisement, means-
(i) any message, verbal statement, demonstration; or
(ii) depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or
(iii) depiction of the name or seal of any institution or organisation, which makes the consumer to believe that it reflects the opinion, finding or experience of the person making such endorsement;

“establishment” includes an advertising agency, commission agent, manufacturing, trading or any other commercial agency which carries on any business, trade or profession or any work in connection with or incidental or ancillary to any commercial activity, trade or profession, or such other class or classes of persons including public utility entities in the manner as may be prescribed;

“express warranty” means any material statement, affirmation of fact, promise or description relating to a product or service warranting that it conforms to such material statement, affirmation, promise or description and includes any sample or model of a product warranting that the whole of such product conforms to such sample or model.

“goods” means every kind of movable property and includes “food” as defined in clause (j) of sub-section (1) of section 3 of the Food Safety and Standards Act, 2006;

“harm”, in relation to a product liability, includes-
(i) damage to any property, other than the product itself;
(ii) personal injury, illness or death;
(iii) mental agony or emotional distress attendant to personal injury or illness or damage to property; or
(iv) any loss of consortium or services or other loss resulting from a harm referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii), but shall not include any harm caused to a product itself or any damage to the property on account of breach of warranty conditions or any commercial or economic loss, including any direct, incidental or consequential loss relating thereto;

“injury” means any harm whatever illegally caused to any person, in body, mind or property;

“manufacturer” means a person who-
(i) makes any goods or parts thereof; or
(ii) assembles any goods or parts thereof made by others; or
(iii) puts or causes to be put his own mark on any goods made by any other person;

“mediation”means the process by which a mediator mediates the consumer disputes;
“mediator” means a mediator referred to in section 75 “misleading advertisement” in relation to any product or service, means an advertisement, which-

(i) falsely describes such product or service; or
(ii) 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
(iii) 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
(iv) deliberately conceals important information;
“product”means any article or goods or substance or raw material or any extended cycle of such product, which may be in gaseous, liquid, or solid state possessing intrinsic value which is capable of delivery either as wholly assembled or as a component part and is produced for introduction to trade or commerce, but does not include human tissues, blood, blood products and organs;

“product liability" means the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto;

“product liability action” means a complaint filed by a person before a District Commission or State Commission or National Commission, as the case may be, for claiming compensation for the harm caused to him;

“product manufacturer” means a person who-
(i) makes any product or parts thereof; or
(ii) assembles parts thereof made by others; or
(iii) puts or causes to be put his own mark on any products made by any other person; or
(iv) makes a product and sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains such product or is otherwise involved in placing such product for commercial purpose; or
(v) designs, produces, fabricates, constructs or re-manufactures any product before its sale; or
(vi) being a product seller of a product, is also a manufacturer of such product;

“product seller”, in relation to a product, means a person who, in the course of business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains, or otherwise is involved in placing such product for commercial purpose and includes-
(i) a manufacturer who is also a product seller; or
(ii) a service provider,
but does not include-
(a) a seller of immovable property, unless such person is engaged in the sale of constructed house or in the construction of homes or flats;
(b) a provider of professional services in any transaction in which, the sale or use of a product is only incidental thereto, but furnishing of opinion, skill or services being the essence of such transaction;
(c) a person who-
(I) acts only in a financial capacity with respect to the sale of the product;
(II) is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service provider;

(III) leases a product, without having a reasonable opportunity to inspect and discover defects in the product, under a lease arrangement in which the selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor;

“product service provider”, in relation to a product, means a person who provides any service in respect of such product; “regulations” means the regulations made by the National Commission, or as the case may be, the Central Authority;

“unfair contract” means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, including the following, namely:-
(i) requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
(ii) imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; or
(iii) refusing to accept early repayment of debts on payment of applicable penalty; or
(iv) entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or
(v) permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent; or
(vi) imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage;

Unfair trade practice-
(i) making any statement, whether orally or in writing or by visible representation including by means of electronic record, which-

(ii) permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record,

(vii) not issuing bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed;

(viii) refusing, after selling goods or rendering services, to take back or withdraw defective goods or to withdraw or discontinue deficient services and to refund the consideration thereof, if paid, within the period stipulated in the bill or cash memo or receipt or in the absence of such stipulation, within a period of thirty days;

(ix) disclosing to other person any personal information given in confidence by the consumer unless such disclosure is made in accordance with the provisions of any law for the time being in force.

Establishment of New authority Central Consumer Protection Authority (CCPA) is to promote, protect and enforce the rights of consumers; make interventions when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class action including enforcing recall, refund and return of products, etc.

This fills an institutional void in the regulatory regime extant. Currently, the task of prevention of or acting against unfair trade practices is not vested in any authority. This has been provided for in a manner that the role envisaged for the CCPA complements that of the sector regulators and duplication, overlap or potential conflict is avoided.

Power of the Central Authority to recall of goods
20.Where the Central Authority is satisfied on the basis of investigation that there is sufficient evidence to show violation of consumer rights or unfair trade practice by a person, it may pass such order as may be necessary, including-
(a) recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe;
(b) reimbursement of the prices of goods or services so recalled to purchasers of such goods or services; and
(c) discontinuation of practices which are unfair and prejudicial to consumers’ Powers andfunctions of CentralAuthority.

(c) intervene in any proceedings before the District Commission or State Commission or National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices;
(d) review the matters relating to, and the factors inhibiting enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation;
(e) recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights;
(f) undertake and promote research in the field of consumer rights;
(g) spread and promote awareness on consumer rights;
(h) encourage non-Governmental organisations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies;
(i) mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest;
(j) issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services;
(k) advise the Ministries and Departments of the Central and State Governments on consumer welfare measures;
(l) issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

The District Collector (by whatever name called) may, on a complaint or on a reference made to him by the Central Authority or the Commissioner of a regional office, inquire into or investigate complaints regarding violation of rights of consumers as a class, on matters relating to violations of consumer rights, unfair trade practices and false or misleading advertisements, within his jurisdiction and submit his report to the Central Authority or to the Commissioner of a regional office, as the case may be.

Power of Central Authority to issue directions and penalties against false or misleading advertisements.

Provided that the Central Authority shall give the person an opportunity of being heard before passing an order under this section 21. (1) Where the Central Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order.

(2) Notwithstanding the order passed under sub-section (1), if the Central Authority is of the opinion that it is necessary to impose a penalty in respect of such false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees:
Provided that the Central Authority may, for every subsequent contravention by a manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees.

(3) Notwithstanding any order under sub-section (1) and (2), where the Central Authority deems it necessary, it may, by order, prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year:
Provided that the Central Authority may, for every subsequent contravention, prohibit such endorser from making endorsement in respect of any product or service for a period which may extend to three years.

(4) Where the Central Authority is satisfied after investigation that any person is found to publish, or is a party to the publication of, a misleading advertisement, it may impose on such person a penalty which may extend to ten lakh rupees.

(5) No endorser shall be liable to a penalty under sub-sections (2) and (3) if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.

(6) No person shall be liable to such penalty if he proves that he had published or arranged for the publication of such advertisement in the ordinary course of his business:
Provided that no such defence shall be available to such person if he had previous knowledge of the order passed by the Central Authority for withdrawal or modification of such advertisement.

(7) While determining the penalty under this section, regard shall be had to the following, namely: -
(a) the population and the area impacted or affected by such offence;
(b) the frequency and duration of such offence;
(c) the vulnerability of the class of persons likely to be adversely affected by such offence; and
(d) the gross revenue from the sales effected by virtue of such offence.

(8) The Central Authority shall give the person an opportunity of being heard before an order under this section is passed.

Power of Central Authority to issue directions and penalties against false or misleading advertisements.
Search and seizure.
After conducting an investigation after preliminary inquiry under sub-section (1) of section 19, the Director-General or any other officer authorised by him in this behalf, or the District Collector, as the case may be, may, if he has any reason to believe that any person has violated any consumer rights or committed unfair trade practice or causes any false or misleading advertisement to be made, shall,-

(a) enter at any reasonable time into any such premises and search for any document or record or article or any other form of evidence and seize such document, record, article or such evidence;

(b) make a note or an inventory of such record or article; or

(c) require any person to produce any record, register or other document or article.

(2) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure shall apply, as far as may be, for search and seizure under this Act.

(3) Every document, record or article seized under clause (a) of sub-section (1) or produced under clause (c) of that sub-section shall be returned to the person, from whom they were seized or who produce the same, within a period of twenty days of the date of such seizure or production, as the case may be, after copies thereof or extracts there from certified by that person, in such manner as may be prescribed, have been taken.

(4) Where any article seized under sub-section (1) are subject to speedy or natural decay, the Director-General or such other officer may dispose of the article in such manner as may be prescribed.

(5) In the case of articles other than the articles referred to in sub-section (4),
provisions contained
in clause (c) of sub-section (2) of section 38 shall mutatis mutandis apply in relation to analysis or tests.

Findings ofDistrict Commission. Compensation
District Commission shall have the power to grant punitive damages in such circumstances as it deems fit;
(e) to pay such amount as may be awarded by it as compensation in a product liability actionunder Chapter VI Minimum amount of sum so payable not lessthan 5% has increased to 25%
Period of District Forum to State commission appeal extendedfrom 30 days to 45 days
Appointment of President
State government to lose control over rules in framing Appointment, method of recruitment, procedure of appointment, term of
office, resignation and removal of the President and members of the State Commission. Only central Government may by notification have the power as such herein.

Pecuniary jurisdictionofState and National Commission.
It shall have jurisdiction-
(a) to entertain-
(i) complaints where the value of the goods or services and compensation, if any, claimed 5[exceeds rupees twenty lakhs but does not exceed rupees one crore which has increased to 10 crore rupees.
Service of notice, etc.-
Notice of service other than postal services such as Email (electronic service provider) is accepted Clause 65. (1) All notices, required by this Act to be served, shall be served by delivering or transmitting a copy thereof by registered post acknowledgment due addressed to opposite party against whom complaint is made or to the complainant by speed post or by such courier service, approved by the District Commission, the State Commission or the National Commission, as the case may be, or by any other mode of transmission of documents including electronic means.

(2) Without prejudice to the provisions contained in sub-section (1), the notice required by this Act may be served on an electronic service provider at the address provided by it on the electronic platform from where it provides its services as such and for this purpose, the electronic service provider shall designate a nodal officer to accept and process such notices.

Penalty Amount increased fornon-compliance of order.

Penalty amount increased from 10,000 which shall not be less than twenty-five thousand rupees, but which may extend to one lakh rupees, or with both

This bill covered most aspects basic rights of consumers concerning right to be protected against unfair trade practices in times of digital shopping. This Bill has put an end to the practice of not issuing bill or cash memo or receipt for the goods sold or services and refusing, after selling goods or rendering services, to take back . It is believed without any further amendments, if this bill becomes an act it will put the consumer in strong position.

Consumer Protection Act, 1986; Consumer Protection Bill, 2018; PRS.

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