Consumer Protection Bill: Strengthening voice of the buyer

It is said that a consumer is the king, but without a kingdom. Given the various forms through which consumers are exploited, there is an urgent need to have a relook at all the legislations which directly intend to protect the interests of the consumers. The king needs to get back his authority over the marketplace. The approval accorded by the Union Cabinet to the Consumer Protection Bill 2015, intends to do that.

The Bill seeks to establish a Consumer Protection Authority (CPA) in place of the Central/ State and District Consumer Protection Councils. The Authority will be headed by a Commissioner and assisted by five Deputy Commissioners who are experts in the areas of safety of goods and services, unfair trade practices, quality, unfair terms in contracts and enforcement.

The Authority is supposed to inquire into violation of consumer rights, on its own or on a complaint received and to intervene in any proceedings where consumer rights are alleged to be violated. It can recommend remedial measures, study existing laws and suggest changes, undertake research and also take a lead in consumer promotional activities.

The Bill envisages establishment of mediation cells, consisting of experts in mediation including retired judicial officers, academicians, experts and institutions. The objective of these is to mediate disputes attached to the existing redressal forums. This may not be necessary. The Consumer Redressal Forums are supposed to be quasi-judicial bodies without the trappings of a civil court, and try to resolve disputes through mediation. 

There are mediation centres under the alternative disputes redressal system. Besides, the Central government has spent crores of rupees on setting up consumer helplines with a similar objective. It is understood that the chair on consumer protection in various law schools/universities are being considered for setting up mediation cells.

The bill intends to widen the scope of some of the definitions with a view to plug the existing loopholes in the CPA. The Bill seeks to include the word ‘unfair contracts’ to protect consumers who are placed in an unequal bargaining capacity. Unilateral contracts/agreements like in the case of credit cards, loan agreements etc are common which go against consumer interest.

There are many instances where the manufacturer or seller keeps the consumers in the dark by not specifying the defects in a product. The consumer as well may not recognise it while buying. To stop this exploitation, the word ‘includes’ has been added while defining ‘defect’ and ‘deficiency’ thereby making it exhaustive in its reach. Henceforth, withholding any information from the consumers will be treated as defect or deficiency.

It is not uncommon for sellers and service providers, particularly real estate firms, to include penalty clauses in the agreement. Very often, it is unilateral and the agreements are loaded heavily against consumers. The Bill seeks to mitigate this anomaly to a certain extent. Accordingly, contracts which require paying excessive security deposits to be given by a party to the contract for the performance of contractual obligations are considered unfair.

Besides, if the contract imposes any penalty which is wholly disproportionate to the loss occurred due to such breach to the other party of the contract, it is considered unfair. Similarly, a consumer can repay any debt earlier than contemplated in the contract and if the lender doesn’t accept it, it will be considered unfair and the consumer can approach the forum. Even terminating contracts without reasonable cause is considered unfair.

Another major change in the CPA relates to privacy of the consumers. Back in 1964, Vance Packard published a seminal book ‘Naked Society’ in which he documented the explosive facts behind the hidden campaign to deprive consumers of their right to privacy. Today, the situation is much worse with every data of the consumers being traded. The bill tries to protect consumers data privacy by making such disclosure an unfair trade practice, unless such disclosure is agreed to by the consumers and in public interest.

Online facilities

The bill seeks to allow online filing of cases as well, as make it mandatory for the consumer forums to publish the data regarding filing, disposal of complaints etc on their respective website. Similarly, it envisages bringing e-commerce within the purview of the CPA. Most of the online shopping sites refuse to take back the defective product though they promise to do so.

The bill includes a provision which enables the consumer to file a complaint against those sellers who sell their products and services through e-commerce and telemarketing etc who do not take back the goods or services if found defective by the consumers on its receipt in as much as the products and services are not seen/inspected or examined by them and simply purchased through advertisements.

A novel feature of the bill is introduction of a separate chapter on ‘Product Liability’. If a consumer suffers any personal injury, death or if there is damage to property due to defects in the manufacture, construction, design, formula, preparation, assembly, testing, service, warning, instruction, marketing, packaging, or labelling of any product, the manufacturer or producer of such product shall be liable.

Most of the consumers fail to get justice from the consumer forums due to their inability to prove that they are the real purchasers. In the absence of receipts, consumer forums are helpless. To help consumers get over this problem, the bill says that refusal on the part of the seller or provider of services to issue a receipt constitutes an ‘unfair trade practice’.

There are other amendments relating to the functioning of the forums, qualifications for being appointed as members of the forum etc.

(The writer is Member, Central Consumer Protection Council, Government of India)