Consumer Protection Bill 2015-Some thoughts-3

(This is a continuation of the series of articles on this subject)

Article1 : Article 2 : Article 3: Article 4 : Article 5

The Dispute Resolution Mechanism

The main objective of CPB 2015 is to ensure that the Consumer has an effective means of redressal of his grievance. For this purpose, the Act tries to establish a comprehensive dispute resolution mechanism.

In the Consumer Protection Act 1986, the following Dispute Resolution system existed.

Central Consumer Protection Council
State Consumer Protection Councils
District Forum (Consumer Disputes Redressal Forum at the District level)
State Commission (Consumer Disputes Rederessal commission at the State level
National Consumer Disputes Redressal Commission

In the CPA2015, the Dispute Resolution System has been significantly expanded and includes the following

Central Consumer Protection Council
State Consumer Protection Council
District Consumer Protection Council
Central Consumer Protection Authority
Central Consumer Protection Authority
District Commission
State Commission
National Commission
Consumer Mediation Cell

The objectives and constitution of the Central Council and State Council are similar to the present set up.

Additionally, a District level Consumer Protection Council has now been proposed with the Collector as the Chairman. It will have objectives similar to the other councils at the district level, which will be to promote and protect the rights of Consumers.

The Central Consumer Protection Authority (CCPA)

Another new feature of the CPA2015 is the proposal to establish the office of a “Central Consumer Protection Authority” (CCPA) which will have the objective to promote, protect and enforce the rights of consumers. A Commissioner in the rank of the Secretary to the Government would be appointed. He will be assisted with five Deputy Commissioners.

There is a provision in the proposed law for a person of eminence in public or social life with requisite credentials and professional experience of not less than 15 years in the areas related to consumer’s rights and welfare, consumer’s policy, law, economics, business,commerce or industry to be appointed as the commissioner or Deputy Commissioner.

It is expected that at least for some of the posts of Deputy Commissioners, a non Government persons could be appointed But it is unlikely that the post of the Commissioner would go to some body other than an existing or former Secretary of the Government. However, the thought that this post is kept open for an eminent person if available is considered good.

The office of the CCPA will be located in Delhi.

The CCPA will have authority to

(i) to inquire suo motu or on a complaint or a direction from the Government into violations of consumer rights enumerated in this Act and shall launch prosecution in an appropriate court or District Commission or State Commission or National Commission, as the case may be;

(ii) to intervene in any proceeding in any allegation of violation of consumer rights before a court, with the permission of such a court or District Commission or State Commission or National Commission, as the case may be;

(iii) to review factors that inhibit the enjoyment of consumer rights and recommend appropriate remedial measures;

(iv) to review safeguards provided under any law for the time being in force for the protection of consumers and recommend measures for their effective implementation;

(v) to make recommendations for adoption of international covenants and best international practices on consumer rights for to ensure effective enforcement of consumer rights;

(vi) to undertake and promote research in the field of consumer rights;

(vii) to spread and promote awareness about the rights of consumers and consumers’ literacy;

(viii) to encourage of non-governmental organisations and other institutions working in the field of consumer rights and cooperate and work with consumer protection agencies;

(ix) to conduct investigations, either suo motu or on a complaint or on a reference made by any Consumer Disputes Redressal Agency under Chapter IV, into violations of consumers’ rights, conduct search and seizure of documents or records or articles and other forms of evidence, summon delinquent manufacturers, advertisers and service providers and to record oral evidence and direct production of documents and records as may be prescribed by the Central Government;

(x) to pass orders, on the basis of such investigations for recall of goods found to be unsafe or withdrawal of services found to be unsafe or hazardous and direct, on the basis of its investigations, for discontinuation of practices found to be unfair and prejudicial to consumer interest and order reimbursement of the price of the goods (or services) so recalled, to purchasers of such goods or services;

(xi) to mandate the use of unique and universal goods identifiers (GTIN’s) in such goods, as may be necessary to prevent unfair trade practices and protect consumer interests;

(xii) to issue safety notices and alert consumers against unsafe goods or services held to be unsafe; (xiii) to order withdrawal of advertisements found to be false or misleading and direct issuance of corrective advertisements, wherever necessary;

(xiv) to declare as null and void, terms of contracts found to be unfair to the consumer;

(xv) to impose fine which may extend to fifty thousand rupees and while imposing fine, the following factors shall be taken into account by the Central Authority in determining the amount of fine:

(A) the impact of the violation with respect to population and area affected;

(B) the frequency and duration of the violation;

(D) the gross revenue from sales effected by the conduct.

(xvi) to take cognizance of misleading advertisements;

(xvii) to enforce its orders against conduct of the industry, manufacturers or traders or service provider for exploiting consumers’ interests;

(xviii) to advise Ministries and Departments on Consumer Welfare measures;

(xix) to frame regulations and guidelines to prevent unfair trade practices and to protect consumer’s interest.

The Central Authority may, either suo motu or on a complaint made or a direction given by the Government, after investigation into such violations of consumer rights or any unfair trade practice, or any advertisement prejudicial to the public interest, or to the interest of any consumer or consumers in general or any advertisement in contravention of the rights of the consumers, enumerated in this Act, shall forward the matter to the concerned Regulator, if any, with its recommendations: Provided that the concerned Regulator may take cognizance of the matter referred to it and pass necessary directions as it deems fit.

As we can appreciate, the powers of CCPA are vast. Considering the scope of the CCPA which will affect the entire Consumer industry including Banking, E Commerce, the FinTEch Companies etc, the role is extremely critical and the entire set of officials who will function as Commissioner and Deputy Commissioners will shoulder a great resposnibility and hopefully the right persons will be found for filling up this crucial positions.

Consumer Disputes Redressal Agencies

There will be the National Consumer Dispute Rederessal Commission to be appointed by the Central Government along with the State and District Consumer Disputes Redressal commissions which will be simliar to the current set up.

In the constitution of the District as well as the State Commissions an attempt has been made for representation of eminent educated persons from the public including women which should also be considered as a welcome step.

The jurisdiction of the District commission will be upto Rs 50 lakhs (as against the present Rs 20 lakhs)

State Commission will be the first appeal authority followed by the National Commission and the Supreme Court. It will also have the original jurisdcition where the dispute value is higher than Rs 20 lakhs and upto Rs 10 crores.

The National Commission will be the appeal authority for the State Commission and have the original jurisdiction for disputes above Rs 10 crores or as otherwise may be fixed.

Mediation

A significant step in providing a good dispute resolution mechanism is in the proposal that

-the State Government shall, establish for the purposes of this Act, by notification a District Consumer Mediation Cell attached to the District Commission in each district of the State and

-a Consumer Mediation Cell attached to the State Commission

– The Central Government shall, establish for the purposes of this Act, by notification a National Consumer Mediation Cell attached to the National Commission

The mediation cell will keep a list of empannelled trained mediators who can settle the disputes through mediation.

The establishment of “Mediation” as an alternate dispute resolution mechanism at all the three levels should speed up the dispute resolutions and reduce the pendency.

More details on the procedures of complaints handling at all levels will be covered in a subsequent article.

We may in summary state that some significant changes have been made to the dispute resolution mechanism which will make the law more effective.

Naavi

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