Consumer Protection Bill 2015: Fails to define ‘E-commerce’ and the liability of e-platforms

News Mobile, August 11, 2017

By George Cheriyan and Jeetali Agnani

The Consumer Protection Bill 2015, which is still pending to be passed in the Parliament, intends to replace 31 years’ old Consumer Protection Act 1986. The bill brings online consumers in the ambit of Consumer Protection Bill, 2015 but it fails to give a proper definition of e-commerce.

The Consumer Protection Act, 1986 which came into force on April 15, 1987 can be considered as the milestone in the history of socio-economic legislations to protect the interest of consumers in India. The act was enacted to provide better protection of the interest of consumers and for settlement of the consumer disputes by establishing consumer fora and councils at district, state and national level. Since then the act has been amended three times in 1991, 1993 and 2002 to make it more effective and consumer friendly.

There was a time, when there were no super markets or Malls. People used to buy things from street vendors, who used to deliver things at the door step. The buyers did not have many options; they were bound to buy what was offered to them. The enactment of Consumer Protection Act, 1986 was a shift from the maxim “Caveat Emptor” which means “let the buyer be aware” to the maxim “Caveat Venditor “which means “Let the seller be aware”.

In the last few decades, the consumer market of goods and services has gone through drastic transformation. With the development of the technology, the form of buying and selling has also changed. Now for convenience consumers prefer to buy online by doing the e-transactions which has promoted e-commerce. Although this has made the life of seller and buyer both easy, but at the same time is has resulted in the increased number of consumer disputes with respect to the delivery of defected good and services.

To address the challenges of the new markets and to strengthen the grievance redressal mechanisms, the Consumer Protection Bill 2015 is introduced to replace the Consumer Protection Act 1986. The new Bill provides for the establishment of Central Consumer Protection Authority (CCPA) to protect the rights of the consumers, the authority will intervene whenever action has to be taken to prevent the consumer exploitation arising from unfair trade practices, including misleading advertisements. It can also order for recall and refund of products and can launch class action suit against the company. The CCPA has also been empowered to order withdraw the advertisement found to be false or misleading. The penalty, for misleading advertisements falsely describing the food or is likely to mislead nature or substance or quality of any food or gives any false guarantee or endorsing such products, shall extend to ten lakh rupees and imprisonment.

Another important provision of the Bill is that the consumer complaint can be filed at the place where the complainant resides which is a clear move from the “caveat emptor” to “caveat venditor”.

The Consumer Protection Bill 2015, also have newly included provision on ‘product liability” where any personal injury, death or property damage is caused to the consumer as a result of some defect in the good, the manufacturer, producer or the seller of such product shall be liable for the product in the product liability action but the Bill does not specifies services, hence the lacuna can be filled up by expressing the services in the section.

To claim the product liability the consumer has to prove all of the seven conditions which are proving the manufacturing defect, design defect, that product does not contain adequate usage instructions, no expressed warranty on product, the defendant was the actual manufacturer of the product and the dangers in the products was the proximate cause of harm suffered by claimant. The burden of proof lies on the complainant and s/he has to prove all the conditions for taking the benefit of product liability.

The bill also has provision for setting up of a “circuit bench” to facilitate quicker disposal of complaints and there is an enabling provisions for consumer to file complains electronically. To fasten the dispute redressal the provision of “Mediation” as an Alternate Dispute Resolution Mechanism has been added, which will be done under the supervision of the consumer fora.

In order to discourage the frivolous complaints, penalty has been increased for filing up of frivolous complaints from 10,000 to 50,000.

The bill will certainly bring changes to the current status of the consumers, and will make the complaint filing process easy, but in the era of developing technology it shall be more specific while defining the e-commerce and the liability of the e-platforms.

(George Cheriyan is Director and Jeetali Agnani is Programme Associate at CUTS International. Consumer Unity & Trust Society (CUTS) is an Indian origin International Consumer Organisation.)

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