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Empowering the consumer

Published: 10 Feb 2018

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


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 bhumesh.verma@corpcommlegal.com.

Firm: Addleshaw Goddard

Practice Area: Trade & Customs

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