The new Bill, which the Lok Sabha has passed in December and is now in Rajya Sabha, aims brings significant changes to the existing laws. It has provisions against adulteration; misleading advertisements; it sets liability for defective products; and talks of setting up a watchdog and mediation mechanisms.
Limits enhancement for forums: The new Bill enhances the jurisdiction of the consumer forums. Cases that have dispute amount of up to Rs 1 crore will have to approach district forum. At present, a consumer approaches a district forum if the value of good or service in dispute up to Rs 20 lakh. For state commission, the new limit will be above Rs 1 crore to Rs 10 crore. State commissions’ jurisdiction currently is for an amount exceeding Rs 20 lakh and up to Rs 1 crore. National commission’s jurisdiction is enhanced to an amount exceeding Rs 10 crore. At present, it is an amount exceeding Rs 1 crore.
The enhancement has its benefits and drawbacks. At present, consumers who have houses exceeding Rs 1 crore have to compulsorily approach the National Commission in Delhi for disputes with developers. Such individuals will now get to fight cases closer home – in their state – saving time and money. At the same time, the district forums are likely to be burdened with a higher number of cases if the jurisdiction is enhanced, which can further delay the time taken for cases to conclude.
Watchdog for proactive actions: If the Bill is passed in the Rajya Sabha, there will be Central Consumer Protection Authority (CCPA) which will promote, protect, and enforce the rights of consumers. The authority will issue safety notices, pass orders to recall goods, prevent unfair and restrictive trade practices, impose penalties for false and misleading advertisements, and so on.
But its role is yet to be clear. Based on the wording of the Bill, consumer organisations say that the new authority’s functions could overlap with the judiciary’s, which can lead to confusion. Shirish Deshpande, chairman of Mumbai Grahak Panchayat, questions: “If a person is the victim of false advertising or unfair trade practices, should it approach the watchdog or judiciary? And, what relief can he expect from the authority?”
Under the provisions of the new Bill, if a consumer suffers an injury from a defect in a good or a deficiency in service, he would be able to file a claim of product liability against the manufacturer, the seller, or the service provider. This provision can come in handy for cases such as Johnson and Johnson's faulty hip implants. There are also high penalties for adulteration of food.
The Bill also includes provisions on unfair contracts, which are rampant in real estate purchase. The state and National Commission can declare such terms to be null and void if the terms of a contract are unfair. It also labels e-commerce firms as service providers, thus increasing liability in case of an error by them. Any celebrity or renowned individual misleading customers through false advertisements can also get into trouble. The new bill proposes to hold such personalities accountable and imposes fine on them.
To save consumers from fighting lengthy cases in forums, the Bill proposes to set up consumer mediation cell at all commissions. The district, state or national commission can refer matters for mediation if the parties consent to settle their dispute. Consumer organisations say that lawyers may not agree for mediation and let the case resolve early. “But if consumers opt for mediation, they can get a resolution much faster. We are conducting mediations between buyers and developers at Maharashtra real estate regulator. About 87 per cent cases are successfully resolved with it,” says Deshpande.
Consumer activists feel that the government could have done more with the new Bill. “At present, if a person gets free service or product, he cannot take the manufacturer or service provider to court. The new Bill should have tackled this problem. Patients getting treatment in government hospitals, for example, do not have an adequate remedy in case there are medical issues due to the negligence of doctors or hospitals,” says Gai. Others
feel that for speedy disposal of cases, there could have been performance-linked payment for presidents.