Challenges lie ahead as the new consumer law is now in force

Economic development of any country starts and ends with consumers. This stands true if we go by the present carnage of the Indian economy, which went into further doldrums because of the impact of Covid-19 led lockdowns.

The central government took almost one year for notifying the new consumer protection law of 2019 to implement its substantial provisions from July 20, 2020.

This article discusses the origin and development of the consumer regime, and the way forward.

Consumerism is traceable to Ecclesiastes 5:11 of the Old Testament in which it was said, “When possessions increase, so does the number of consumers, therefore what good are they to their owners, except to look at them?”

The modern consumer organisations sprung up in Denmark in 1947 and Great Britain in 1955, which led to creation of Consumer Councils to fight against unscrupulous producers and traders, but actual “consumerism” started in the United States, thanks to leaders like Ralph Nader.

The turning point, however, came on March 15, 1962, when the then US President, John F. Kennedy, addressed the US Congress, emphasising that, “If a consumer is offered inferior products, if prices are exorbitant, if drugs are unsafe or worthless, if the consumer is unable to choose on an informed basis, then his dollar is wasted, his health and safety may be threatened and national interest suffers.”

Then, he extolled four basic consumer rights — the right to safety, right to be informed, right to choose, and right to be heard.

On April 16, 1985, the United Nations General Assembly passed a resolution containing the United Nations Guidelines for Consumer Protection, recognising more consumer rights — the right to satisfaction of basic needs, the right to redress, the right to consumer education, and the right to healthy environment.

The Indian Parliament enacted the Consumer Protection Act in 1986 containing 31 sections and bestowing six consumer rights — the right to protection against hazardous goods and services, the right to be informed, the right to access to a variety of goods, the right to be heard, the right to get redressal and the right to consumer education.

To enforce these rights, the law provided for establishment of Consumer Councils and a three-tier redressal mechanism at the district, state and national levels. In all fairness, this law worked successfully, with the aid of the judiciary, to a large extent.

For providing more effective protection of consumers, the Union government enacted the new legislation in 2019 consisting of 107 provisions. The cardinal principles of speedy, inexpensive and informal justice appear to have been whittled down by the new legislation, notified recently.

Besides introduction of new concepts like product liability, protection against unfair trade practices in e-commerce and punishment for misleading advertisements, the new law envisages establishment of Consumer Protection Councils at central, state and district level to render advice on the protection of consumer rights.

The new law also mandates formation of a Central Consumer Protection Authority (CCPA) with extensive powers to investigate, penalise or refer to the Consumer Redressal Commissions, complaints against any trader for violating consumer rights, adopting unfair trade practices or publishing misleading advertisements.

The new law also stipulates establishment of Consumer Disputes Redressal Commission in each district for redressal of consumer disputes, where the value of goods or services is up to Rs 1 crore.

Similarly, the law also stipulates establishment of State Consumer Disputes Redressal Commissions to redress complaints valued between Rs 1 crore to Rs 10 crores and to decide appeals from the decisions of district commissions. The National Consumer Disputes Commission has the original jurisdiction to decide cases where the value of goods or services exceeds Rs 10 crores and to decide appeals from the decision of state commissions.

The unique provision in the new law is the establishment of the consumer mediation cells to be attached to each district, state and national commission for settlement of disputes through mediation, which is welcome.

However, the provisions relating to CCPA, supposed to be a superhero in consumer protection, direct selling, director general, e-commerce and punishment provision for false or misleading advertisements, and so on, are yet to be notified.

This non-enforcement could be because of the pressure from the industry, a large number of provisions in the new law and also because of concurrent rule-making power in multiple authorities. The consumer cannot be a king in real sense if above provisions are not implemented.

The lamentable thing is that the consumer affairs departments are still tied up with the food and public distribution department, which factor does not permit the authorities to have a determined focus to safeguard various rights of consumers.

A dedicated consumer affairs ministry is the need of the hour. Further in the age of false and puffed-up advertisements, penal provisions relating to misleading and false advertisements have to installed at the earliest.

Consumers International, a well-known international NGO, gave the theme  “sustainable consumerism” to this year’s World Consumer Day, envisaging “usage of products and services that have a minimal impact on the environment so that future generations can meet their needs”.

If we use products and services having less impact on the environment, probably, future generations might be safeguarded from deadly pandemics like Covid-19.

 

Dr G.B. Reddy is a professor at University College of Law, Osmania University. Akash Kumar Baglekar is a student at the same college.