The Union Cabinet has approved new
Consumer Protection Bill, 2017 (Bill) to amend the existing Consumer Protection
Act, 1986. The Bill will substitute the initial Consumer Protection Bill
introduced in August, 2015.

The underlying intent of passing the Bill
is that to establish consumer protection authority for quick disposal of
consumer cases, to impose strict punishment for misleading advertisements and
food adulteration, to provide for product liability action and to
stimulate the object of consumer empowerment.

The Bill lays great emphasis on
guarding the rights of consumers and meritoriously dealing with the misleading
advertisements as such advertisements having bad influence on life of the
consumers.

Glimpse of proposed key
amendments in the Bill

·    Establishment
of Central Consumer Protection Authority (Authority) to shield consumers from
unfair trade practices with the object of serving quick justice.

·    Empowerment
of Authority to recall the products, order refunds, initiate class action against
a firm and to take compulsory action in consumers’ privacy violation cases.

·    E-commerce
companies are fetched under the scanner of the Act. Any action may be brought
against E-commerce company in the court for sharing consumers personal data for
its commercial purposes and liable to be punished for such conduct.

·    The
manufacturers, producers and even the sellers may have to bear the
responsibility for the personal damages or the injuries of consumers. For
manufacturers and companies, penalty is up to Rs 10 lakh and up to two years’
jail term for the first offence. The fine will be up to Rs 50 lakh and five
years’ jail term for subsequent offence.

·    For
misleading advertisements, endorsers and the brand ambassadors may be held
accountable and responsible for damages suffered by consumer. The fine will be
up to Rs 10 lakh and a one-year ban on any endorsement for first offence. The
fine will be up to Rs 50 lakh and up to three years’ ban for the second
offence.

·    The Act
imposes punishment of life term jail sentence in food adulteration cases.

·    Service
providers like airlines can also face legal action due to unsatisfactory
service rendered to the consumer.

·    The Act has
proposed increasing penalty from Rs. 10,000 to Rs. 50,000 for false and the
baseless complaints by consumers.

·    Introduction
of e-filing process of complaints by consumers from anywhere without assistance
of a lawyer, unlike earlier process allows consumer to file complaints at place
of purchase.

It is evident that with the serious
implementation of proposed amendments to the Act will result in quick disposal
of consumer cases, impose strict punishment on companies (for damages of
consumers) and consumers (for initiating fabricated cases on companies), make
companies and celebrities more accountable and responsible for their acts and
ultimately achieve the objective of consumer empowerment (Consumer is the
king).  

Research and inputs by Paruchuri
Baswanth Mohan

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Bhumesh Verma is a lawyer with over 2 decades of experience in advising domestic and international clients on corporate transactions (M&A, Venture Capital, Private Equity, Startups, corporate advisory, etc.) and features in “The A-List – India’s Top 100 Lawyers” by India Business Law Journal. He keeps writing frequently on FDI, M&A and other corporate matters and is a guest faculty as well. He can be reached at [email protected].