Parliament on Tuesday approved a new bill to revamp the process of administration and settlement of consumer disputes, with strict penalties including jail term for adulteration and misleading ads by companies.

The Consumer Protection Bill 2019, already passed by Lok Sabha, was approved in the Upper House by voice vote and will replace the Consumer Protection Act, 1986.

Amendments moved by Derek O’ Brien (TMC) and KK Ragesh (CPI) for sending the bill to a select committee of the Rajya Sabha for further scrutiny were rejected by the Upper House.

Members from Left parties, DMK and Trinamool Congress opposed the bill saying it takes away indirectly the powers of the state governments and should be referred to a select committee.

The bill piloted by Union Food and Consumer Affairs Minister Ram Vilas Paswan seeks to establish a Central Consumer Protection Authority (CCPA) to promote, protect and enforce consumer rights. It strengthen the rights of consumers and provides a mechanism for redressal of complaints regarding defects in goods and deficiency in services.

Under the Bill, celebrities endorsing misleading ads are also liable for fine.

Replying to a debate on the Bill, Paswan said that the suggestions given by members would be included in the rules framed by the Ministry under this legislation.

The Minister said if a product is found faulty, instead of earlier individual examination, the entire batch would be examined. He said the new bill seeks to take care of product liabilities and service, as well as action against publishers and celebrities of misleading advertisements.

Paswan said there are a number of cases, over 20,304 cases at national, 1,18,319 cases pending at state level and 3,23,163 cases are pending at the district level in the country. “Now we are naming District Commission, State Commission and National Commission, with the district and state commissions under state governments,” he said.

The minister lamented that still, in 118 districts out of 596 districts the posts of president of consumer commissions are not appointed and as many as 362 posts of members are lying vacant.

Responding to a point regarding celebrity endorsements raised by Samajwadi Party member Jaya Bachchan, Paswan said when the Bill was sent to a Standing Committee earlier, it set jail term as punishment for all. However, later when an assessment was conducted, it was found that world-wide there is no provision of serious punishment for celebrities.

Paswan observed that media and celebrities must only advertise what has been given in writing to them by manufacturers, else they will be responsible (for the misleading advertisements). The Minister was quick to add that celebrities were also endorsing Swachhta campaign and other social messages. He said the government will further examine rules regarding stunts in advertisements.

On maximum retail price (MRP), Paswan said many restaurants were overcharging but when it tried to intervene, the matter was challeged in court. He said MRP should be displayed prominently on products apart from date of expiry, date of manufacturing and complaints redressal mechanism. He observed that there is no concept of levying a service charge globally and the government advised restaurants to make it voluntary.

Paswan urged the state governments to pay more attention to consumer awareness programmes like ' Jaago Graahak Jaago ’. “Since 90 per cent of cases are coming to district consumer commissions, the compensation have been increased to Rs one crore and Rs 10 crore for state level commissions, while the compensation for above Rs 10 crore has been kept for national commission,” he said.

Participating in the debate, KC Ramamurthy (Congress) supported the bill but called for action against unfair trade practices as defined by the Bill and punitive measures thereof, saying the issue is being dealt by the Competition Commission also. “The bill is silent on promotion of false and misleading advertisements,” he said, demanding action against celebrities and those who promote such false advertisements.

Vijay Goel (BJP) suggested that a Ministry of Moral Responsibility or Moral Education be also set up to ensure that lawmakers follow certain rules. He cited the example of Ministry of Loneliness set up in UK and Ministry of Happiness in Bhutan. He said the long queues for essential items under the Congress rule are no longer there.

Goel said India is likely to cross China’s population by 2024 and consumerism is growing fast. He said this bill came in 2015 but could not be passed by Rajya Sabha even after Lok Sabha approved it. The Bill has also been sent to two Stranding Committees, he noted.

Derek O’Brien (TMC) said sending the bill to a select committee is not a delaying tactic by the opposition but for ensuring that legislations should be properly scrutinised. He alleged that through this bill, the central government is “snatching” away the rights of states. “All executive powers are retained by the Centre, but the financial burden of setting up consumer commissions lies with the states. The states’ federal powers have been taken away,” he noted.

O’Brien earlier quoted Dr BR Ambedkar who had stated that “there is a majority and there is a minority and the rights of minorities should be protected“.

Paswan earlier noted it is a long pending legislation and except five, all recommendations of a parliamentary standing committee have been included in the bill. He said the government had dropped health care from the bill as several members had objected to it.

He said this “non controversial” bill among other things, proposes setting up of Consumer Disputes Redressal Commission and forums at the district, state and national levels for adjudicating consumer complaints.

New authority

It also seeks to set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce consumer rights as a class. The CCPA would make interventions to prevent consumer detriment arising from unfair trade practices. The agency can also initiate class action, including enforcing recall, refund and return of products.

“This bill is a must in the current juncture but takes away the states’ powers. What is the reason for taking away the states’ powers indirectly in every bill?,” DMK member Tiruchi Siva questioned in Rajya Sabha. He pointed to to a provision in the bill wherein members of the state and district level consumer disputes redressal forums will be appointed by the central government, “usurping the powers of the state“.

While proposing that the bill be referred to a select committee, Siva said the disputes redressal forums proposed in the bill do not have members from judiciary. “How can it be called a quasi-judiciary body? It is a pseudo-judiciary body,” he said.

Echoing the views, CPI(M) member K K Ragesh said this a “sabotage of federalism and centralisation of powers” and added that even state’s powers to frame rules has been snatched away.

Supporting the bill, RJD member Manoj Kumar Jha noted, “In this session of Rajya Sabha, there was a pattern to reduce the position and powers of states. BJP has always been concerned about federalism. I don’t know where those concerns have gone now.”

He urged the government to take steps against advertisers on financial instruments and mutual funds to ensure the advertisements are clear to consumers.

Claming that the bill is not “foolproof” and has many “drawbacks”, TRS member K Keshava Rao said the government has not accepted the 11 recommendations of the Parliamentary Standing Committee that vetted the the draft law.

He also said it challenges the federalism as members of the state and district forums will be appointed in consulation with the central government. Rao also pointed that the bill has not been drafted in a “simple language” for the benefit of consumers. The definition of consumer rights is written in a complicated way, he said.

Speaking in favour of the bill, Ravi Prakash Verma (SP) demanded that the government create a consumer-friendly ecosystem in the country and create more awareness about consumer rights.

Amar Patnaik (BJD) said the bill is good but several things need to reconsidered, especially definition of consumer needs to be broadened and welcomed a provision a class action. Supporting the bill, Kahkashan Perween (JD-U) shared her bad experience of buying diabetes medicine from an online platform.