New consumer protection bill: Keeping up with times

Globalization and the growth of the internet has led to a drastic shift in consumer behaviour. It has also made consumers more vulnerable to new forms of unfair trade practices. To address these emerging issues the government of India passed the Consumer Protection Bill, 2018 (bill), in December last year. The key highlights of the bill are:

• Section 2(5): The definition of complainants has been amended to include a “minor”, by stating that if the consumer is a minor, then the parent or legal guardian can also be a complainant.
• Section 2(7): An explanation has been added to the definition of consumer to include people who transact online and through electronic means, teleshopping, multi-level marketing or direct selling.
• Section 2(16): E-commerce has been defined as buying or selling of goods or services, including digital products over a digital network.
• Section 2(17): An electronic service provider has been defined as a person who provides technologies or processes to enable a seller to engage in advertising or selling of goods or services to a consumer and includes any online marketplace or online auction sites.
• Section 2(34) and 82-87: Product liability has been defined to mean the responsibility of a manufacturer or a seller of a product or service to compensate for the harm caused to consumers by defective products, or due to the deficiency in services. Additionally, sections 82 and 83 provide for action on product liability. Section 84 provides for liability of the manufacturer, section 85 of the service provider and section 86 of the product seller, who is not a manufacturer. Section 87 provides for exceptions to product liability.
• Sections 3(1), 6(1), 8(1) and 10: Create central, state and district consumer protection councils and a central authority. The councils and the authority will promote, protect and enforce the rights of consumers. The consumer authority will have an investigation wing, headed by a director general, which may conduct inquiries, regulate matters related to violation of consumer rights, unfair trade practices and misleading advertisements.
• Sections 74-81: A provision for mediation and the establishment of mediation centres attached to consumer forums has been brought in .
• Sections 40, 50 & 60: The bill provides for the power to review an order passed by the forums if there is an error, either of their own motion or on an application made by any of the parties within 30 days of an order.
• Sections 2(28) and 89: Contain provisions for imposing penalties on manufacturers or service providers who make misleading advertisements. It defines misleading advertisements as those which – falsely describe a product or service; give false guarantees about a product or service; make representations that, if made by the manufacturer, seller or a service provider would constitute an unfair trade practice; and deliberately conceal important information.

Deepak Sabharwal is the managing partner of Deepak Sabharwal & Associates.