ToxicsWatch, Journal of Earth, Science, Economy and Justice

Central Government is planning to get Consumer Protection Bill 2015 passed in the upcoming Budget Session of the Parliament. In August 2016, the government had introduced the Consumer Protection Bill 2015 in Lok Sabha, to repeal the 30-year-old Consumer Protection Act, 1986. 

A Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution had also submitted its recommendations in April, 2016. The Bill has incorporated some of the recommendations of the parliamentary committee. The Committee noted that several eminent public personalities or celebrities who are honoured with National Awards such as Padma Shri, Padma Bhushan and Bharat Ratna etc. for excelling in various walks of life are often engaged as Brand Ambassadors  for  promoting  various  products. Such  personalities  are deployed  to  make advertisements  which  are  often misleading  by  making unrealistic claims. The consumers tend to believe such advertisements promoted by eminent personalities or celebrities blindly. However, when the unfair trade practices are exposed the celebrities are quick to disassociate themselves with the products/companies they were hitherto representing. The Committee felt that misrepresentation of a product especially a food product should be taken very seriously considering the influence of celebrities and high net worth individuals  or  companies. The  existing  laws  are  not  deterrent enough  to  discourage  manufacturers  or  publishers  from  using  such  personalities  for misleading advertisements. The Committee has recommended that stringent provisions may be made in the Bill to tackle misleading advertisement, as well as to fix liability on endorsers/celebrities. The Committee recommended that for first time offence, the offender may be penalized with either of a fine of Rs. 10 lakhs and  imprisonment upto two years or both, for second time offence, a fine of Rs. 50 lakhs and imprisonment for five years and for subsequent offences, the penalties may be increased proportionately based on the value of sales volumes of such products or services.

The Committee noted that adulteration of food products is a major issue in the country and to tackle the issue effectively, quality checks of products at various  levels  is  a  must. Though  Food  Safety  and  Standards  Act  provides  for prevention of adulteration in Food, however, there is also urgent 

need for stringent provisions to prevent adulteration in other products like drugs, medicines, fertilizers, pesticides, seeds which are used as inputs by farmers for production of foodgrains etc. as well. The Committee is of the considered view that setting up well equipped laboratories with highly qualified/experienced staff in all parts of the country for  testing ingredients of all edible products would go a long way in addressing the issue of adulteration of products. 

The Committee desired that sufficient  well  equipped  laboratories with  qualified technicians for  checking the quality  of products should be provided right from Central Government level to district level of the respective State Government. 

The Committee recommended that severe penalties be imposed on offenders such as rigorous imprisonment of two years with a fine of Rs. 10 lakhs and suspension of license for a period of two years, rigorous imprisonment of five years with a fine of Rs. 50 lakhs and cancellation of license  for second time offence and for subsequent offences, the penalties may be increased proportionately based on the value of sales volumes of such products or services. 

The Committee desired that the Government may, in consultation with  all  concerned, consider  inserting  suitable  provisions  in  the  Bill  to  make  it mandatory for the Law Enforcement Agency

to take immediate action in cases where a consumer makes complaint of adulteration of products for human consumption by registering First Information Report (FIR) etc. and arrest the accused person(s). If for any reason, the FIR is not registered by the Law Enforcement Agency, it should be 

deemed to have been registered after a lapse of 21 days from the date of complaint. 

The  Committee  observed  that  definition  of  person  in  the  Bill  includes companies  etc.  but has  left  out  local  authorities.  Since  the  Bill  provides  for Product liability which includes service liability also, the Committee are of the view that inclusion of local authorities is necessary to protect consumer rights. The Committee recommended that Local Authority may be included in the appropriate place of the Bill.

The  Committee  noted  that  Bill  defines  'Product  Liability"  as  the responsibility of the manufacturer to provide compensation for any injury caused by defective products or deficiency in service. Thus, the definition of product liability covers  a consumer right to seek compensation for injury caused by deficiency  in  services too.  The  Committee  feel  that  there  is an ambiguity regarding inclusion of services under product liability in the Bill. The Bill lays down conditions for establishing a defect in a product in order to claim product liability. However, it does not specify conditions for establishing deficiency in service in order to claim product liability. 

In the absence of specified condition, it is not clear if the consumer can claim product liability for deficiency in service under the Bill. The Committee, therefore, strongly recommend that the Bill should specify conditions for establishing deficiency in services too, in order to claim product liability.

The Committee noted that the above clause of the Bill does not mention the rights of a consumer. Under the Sale of Goods Act. 1930, the buyer has certain rights to terminate the contract. The Committee, therefore, recommend that the Bill should give consumer a right to terminate the contract on the grounds of quality of goods or services received.

The Committee noted that there is shortage of laboratories to point out the defect/adulteration of products. The Committee is of the opinion that specific laboratories should be set up for specific industries and products preferably district-wise to  eliminate  adulteration  and  safeguard  the  interest  of  the consumers so that they get the right product. 

On invitation from the Committee, ToxicsWatch Alliance (TWA) had appeared before the committee  and shared its suggestions for safeguarding the rights of citizens and consumers. Among other submissions, it has suggested that the definition of advertisement under  Section  2(1)  should include  electoral  promises  by  political parties and Section 2(30) which defines "product", should include electronic database and  biometric database as a product. The 103 page long report is available at: 

http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affairs%20&%20Public%20Distribution/16_Food_Consumer_Affairs_And_Public_Distribution_9.pdf

Last date for suggestions to be sent to J C Diwakar Reddy headed Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution is November 21, 2015.  The 60 page long Consumer Protection Bill, 2015, was introduced in Lok Sabha on August 10, 2015 by Union Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan. It is supposed replace the Consumer Protection Act, 1986.  The Statement of Objects and Reasons of the Bill states that this is to widen the ambit and modernise the law on consumer protection due to the changes in the markets. Earlier, Consumer Protection (Amendment) Bill, 2011 was introduced on 16th December 2011. 

The 2015 Bill defines consumer as any person who buys a good or hires a service for a consideration.  This includes the user of such good or service, but not one who obtains the good for resale or commercial purposes.  It covers transactions through all modes including offline, online through electronic means, teleshopping, or multi level marketing.

 It provides for rights of consumers which includes the right to: (i) be protected against marketing of goods and services which are hazardous to life and property, (ii) be informed of the quality, quantity, potency, purity, standard and price of goods or services, (iii) be assured of access to a variety of goods or services at competitive prices, and (iv) to seek redressal against unfair or restrictive trade practices. 

As per the Bill the central government will set up the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.  The CCPA will carry out the following functions, among others: (i) inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum; (ii) passing orders for recall of goods, or withdrawal of services and reimbursement of the price paid, and pass directions for discontinuation of unfair trade practices; (iii) issuing safety notices and order withdrawal of advertisements; and (iv) declaring contracts that are unfair to a consumer as void.

If defects in the manufacture, construction, design, testing, service marketing etc. of a product results in any personal injury or property damage to a consumer, the manufacturer is liable in a product liability action.

Consumer Grievance Redressal Commissions is proposed to be set up at the district, state and national levels.  A consumer can file a complaint with these commissions, regarding:  (i) unfair or restrictive trade practices, (ii) defective goods or services, (iii) overcharging or deceptive charging, (iv) the offering of goods or services for sale which may be hazardous to life and safety, and (v) incurring loss due to an unfair contract. 

    The District Commission is empowered to issue the following orders regarding a complaint:  remove the defect, replace the good, return the price amount, stop the sale or manufacture of hazardous products, discontinue unfair trade practices or pay compensation for any loss suffered by the consumer.  Appeals from its decisions will be heard by the State Commission.  Further appeals may be filed before the National Commission, and then before the Supreme Court.

The Bill introduces mediation as a mode of consumer dispute resolution.   Consumer Mediation Cells will be established and attached to the redressal commissions at the district, state and national levels.

Any person who fails to comply with an order of either of the Commissions would be liable for imprisonment from one month to three years, or with a fine from 10,000 rupees to 50,000 rupees.