Consumer Protection Law to change - More power to the Consumer

Published on 02 Jan 2018 by Tushar

The newly approved Consumer Protection Bill, 2017 is set to be tabled in the current winter session of the Parliament. Given its importance for consumers, we are running a series of blogs to help you understand more your rights as a consumer. 

The Bill provides for a dual remedy mechanism. A consumer can file a complaint with the:

  1. Newly introduced regulatory body- Central Consumer Protection Authority; or
  2. Take the conventional route and file the complaint with the appropriate Consumer Grievance Redressal Forum set up at District level, State level and National level.

Enhanced Pecuniary Jurisdiction & Residence Jurisdiction Concept

Although a three tier system was prescribed in the previous Act as well, the pecuniary jurisdictions of the District, State and National Commissions have been enhanced with a view to enable local filing of cases.

The ideology is that the enabling provision of Residence Jurisdiction or filing a case where the consumer resides no matter where the transaction may have originally taken place will supplement a proper three tier consumer grievance redressal system.

The increase in Pecuniary Jurisdiction will enable someone to file a case in their own district for easy access to justice in consumer cases without having to travel to State Capitals or New Delhi to the National Commission.

Penalty for Non-Compliance with Orders

The District, State and National Commission have all been vested with powers of a Judicial Magistrate thereby allowing these quasi-judicial bodies to pass orders with criminal liability as well as fine wherever the deemed fit by the Chairman (Judge) of the respective Commission.

Where anyone against whom a complaint is made and an Order Is passed by the District, State or National Commission fails to comply with the points of the Order, would be punishable with

  1. Imprisonment for at least a month extendable to three years,
  2. Or fine of Rs. 10,000 at least extendable to Rs. 50,000
  3. Or with both imprisonment and fine

All offences under this Act can be tried summarily by the District Commission or the State Commission or the National Commission, as the case may be

Revised Jurisdiction of District, State and National Commission

Hierarchy

Consumer Protection Act, 1986

Consumer Protection Bill, 2017

District Commission

Rs. 20 lakhs or below

Rs. 50 lakhs or below

(Proposed amendments may increase value to Rs. 1 cr.)

State Commission

Rs. 20 lakhs – Rs 1 Cr.

Rs. 50 lakhs – Rs. 10 Cr.

National Commission

Rs.  1 Cr. and above

Rs. 10 Cr. and above

admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint was filed.

Newly introduced Concept of ‘Unfair Contracts’

The concept of 'unfair contract' has been included to protect the consumers who are placed in an unequal bargaining capacity. The definition of the term "Unfair trade practices" is being widened to make it an inclusive clause to cover various types of unfair trade practices.

The following situations although not exhaustive provide for when can a contract be deemed unfair-

  1. Requiring manifestly excessive security deposits
  2. Imposing any penalty wholly disproportionate to the loss occurred due to any breach
  3. Refusing acceptance of early repayment of debts on payment of an applicable penalty
  4. Entitling any party to terminate contract unilaterally without cause
  5. Permitting clauses which assign the contract to the detriment of the other party without that other party's consent;
  6. imposing any unreasonable charge, obligation or conditions which puts the consumer at disadvantages.

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