New Consumer Protection Bill to get delayed, panel's term extended

New Delhi: The passage of a bill which seeks to set up a regulatory authority having powers to recall products, cancel licences of defaulting companies and initiate class action suit, is set to be delayed with the Parliamentary panel examining it being given extension till Budget session next year.

The Parliamentary Committee on Food, Consumer Affairs and Public Distribution has been given extension to submit its report on the Consumer Protection Bill, 2015 "upto the first week of Budget Session of Parliament, 2016," a Rajya Sabha bulletin issued on Thursday said.

A class action is a type of lawsuit in which one or several persons can sue on behalf of a larger group of persons. Under the existing law, affected consumers separately approach the authorities seeking redress of grievances. The new legislation would ensure prompt action against errant companies.

The Bill was referred to the Committee on August 25.

The new law on consumer protection assumes importance as the move comes against the backdrop of the controversy over Maggi instant noodles after some labs found it to be carrying lead beyond permissible limits.

After the standing committee tables its report, the Department of Consumer Affairs will have to approach the Union Cabinet again with the recommendations made by the panel.

Moving amendments, if any, based on the recommendations of the panel and pushing for the passage of the bill in both Houses during the session could prove to be a daunting task for the government as Budget sessions usually have a heavy legislative agenda.

"I want to strengthen the bill further to protect the interests of the consumer. Therefore, the Committee decided to seek an extension. To get into minute details, we will have to talk to a lot of people, consult many more experts. It is a very, very important bill for which we need to work more to ensure that the recommendations help to improve the content of the bill," Committee Chairman J C Divakar Reddy told PTI.

Reddy said since adulteration of products is a major

issue, he would like to recommend criminal action against sellers and manufacturers of such products. "For such a big recommendation, we need to work hard with all facts," he said defending the extension.

The bill, introduced in the Lok Sabha in August, seeks to create a Consumer Protection Authority which will also have the power to initiate class suit against defaulting companies to fast-track the redress of consumer grievances.

The legislation will eventually replace a 29-year-old law.

The new bill, approved by the Cabinet on July 28, provides for a comprehensive framework for protection of consumer interest and will replace the Consumer Protection Act, 1986.

The bill comes against the backdrop of emergence of complex products and services in the era of growing e-commerce in India that has rendered consumers vulnerable to new forms of unfair trade and unethical business practices.

A recent research paper on the bill by Indian Institute of Management-Ahmedabad (IIM-A) has stated that it needs a 'detailed revision'.

In the research paper, professor Akhileshwar Pathak of IIM-A critically analysed the Consumer Protection Bill-2015, and suggested that it should be rested on foundation of contract law and law of sale of goods.

The paper titled 'The Consumer Protection Bill, 2015: (Lack of) Rights of the Consumer to Terminate Sale Contract', stated that the law should have a specific provision for termination of contract from buyer's side.

On termination of the contract, the research suggested that a consumer should be allowed to replace the goods within 30 days from the date of delivery if it is found faulty. Even after the replacement, if the good is not found upto the mark, a consumer must have the right to get it replaced within 10 days.