Consumer Protection Bill 2018: State machinery to take on might of traders, manufacturers if they fleece customers

A lot of water has flown down the bridge since the Consumer Protection Act, 1986 was enacted. E-commerce now is a serious contender for market share alongside brick and mortar stores and mom and pop stores that the Indian landscape is replete with. Sophistication and sophistry also provides a serious challenge to consumer courts. The Narendra Modi government has therefore done well to junk the old Act and introduce a new Consumer Protection Bill, 2018 which received the imprimatur of the Lok Sabha last week.

Under the earlier law, the district forum could take on consumer complaints for compensation up to a maximum of Rs 20 lakh. The state forum not only heard appeals against verdict of the district forum but also had original jurisdiction on claims involving more than Rs 20 lakh but not exceeding Rs 1 crore. The National forum not only heard appeals from the state forums but also had original jurisdiction on claims exceeding Rs 1 crore.

Under the new law, the district forum limit is up to Rs 1 crore and state forum threshold is more than Rs 1 crore but not more than Rs 10 crore and the national forum would entertain claim exceeding Rs 10 crore. As before, the state and national forum would also entertain appeals.

 Consumer Protection Bill 2018: State machinery to take on might of traders, manufacturers if they fleece customers

Representational image. Reuters

The heightened limits are not as much a commentary on inflation as they are on the might of the manufacturers and traders -- both online and offline. They are the Goliaths and consumers are more often than not poor, tiny Davids. The new law therefore contemplates its own Goliath, a mighty state machinery to take on the might of the well-heeled manufacturers and traders. You cut a diamond with diamond. T

The Central Consumer Protection Authority (CCPA) being created will be the Goliath that would take on the rapacious manufacturers and traders whom the small consumer cannot and couldn’t. That explains the new heightened limits. If there is a deficiency in product or service or a product is found to be harmful or causing hurt, obviously a small consumer would be found out of her depths and a more powerful petitioner would be required to plead for her.

The CCPA would take up cudgels for her and thousand of others similarly placed. The pharmaceutical major Johnson & Johnson (J&J) with its footprints across the globe including India has been taking Indian patients for granted all these years by supplying substandard knee caps and hip implants without our officialdom having a clue. Whereas the more enlightened and alert nations like Australia had brought it to its knees and made it to cough up huge compensations running into billions of US dollars.

The Indian government has woken up not only to pursue compensation claims on behalf of poor patients done in by J&J’s negligence but also to put in place a robust regime for pursuing class action suits in future against the likes of J&J.

Accordingly, in future, when the new law takes wings, the likes of J&J would quake in their boots. The CCPA would swing into action on behalf of the consumers at large. If the claim is up to Rs 10 crore, it would move the State forums but it is more likely that the claim would exceed Rs 10 crore in which case it can straightaway move the national forum.

Indeed, it is a good omen that the higher forums would be largely dealing with class action suits. In any case, the individual consumer will not have claims exceeding Rs 1 crore much less exceeding Rs 10 crore so as to move the state and national forum respectively unless she has been palmed a defective house by another rapacious category of businessman, the builder. Even against builders, the common man would have no case before the national forum because a Rs 10 crore house is the stuff of legend, talked about in awe in the context of film stars and industrialists. But Amrapali builders and Jaypee Infra the two builders that have been receiving attention at the highest level---the apex court---as well as others would now be squirming at the grim possibility of CCPA coming down on them like a truckload of bricks. Not only will the builders have to deliver on time but also mind the quality.

(The author is a senior columnist and tweets @smurlidharan)


Updated Date: Jan 14, 2019 18:51:01 IST