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Lok Sabha passes Consumer Protection Bill, 2018

The Lok Sabha on December 20, 2018 passed the Consumer Protection Bill 2018. The bill calls for strict punishment, including jail terms and hefty fines for misleading advertisements and food adulteration. The bill will now go in the Rajya Sabha for discussion.

Dec 20, 2018 20:49 IST
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The Lok Sabha on December 20, 2018 passed the Consumer Protection Bill 2018. The bill calls for strict punishment, including jail terms and hefty fines for misleading advertisements and food adulteration.

The bill will now go to the Rajya Sabha for discussion. The bill seeks to replace the 2015 Consumer Protection Bill that was introduced to repeal the 30-year-old Consumer Protection Act, 1986. It was originally introduced in the Lok Sabha in January 2018.

Provisions of the new Bill

The Consumer Protection Bill, 2018 aims to protect consumers' interests through a redressal mechanism that would ensure timely and effective settlement of disputes.

It seeks to enlarge the scope of the existing law and make it more effective and purposeful.

It seeks to establish a Central Consumer Protection Authority (CCPA) to protect consumer rights and look into the issues related to false or misleading ads.

It has provisions for post-litigation stage mediation as an alternate dispute resolution mechanism. It also provides for product liability action.

Penalties

The bill provides for fine and ban on celebrities for endorsing misleading advertisements:

In case of the first offence, the penalty would include a fine of up to Rs 10 lakh and a one-year ban on any endorsement.

For the second offence, the penalty would include a fine of up to Rs 50 lakh and a three-year-ban on endorsements.

For manufacturers and companies, the penalty would be up to Rs 10 lakh and up to two years of jail term for the first offence.

For any subsequent offence, the manufacturers and companies would have to pay a fine of Rs 50 lakh and serve a jail term of 5 years.

The bill also provides for penalty up to life term jail sentence in case of adulteration.

Significance

The new bill will ensure faster dispute redressal for consumers and will allow the Central government to regulate e-commerce and direct selling among other important measures.

The bill also provides for product liability action, which means a complaint filed by a person before consumer court for claiming compensation for the harm caused to him on account of a defective product or service.

Background

In August 2015, the Centre had introduced the Consumer Protection Bill in the Lok Sabha to repeal the 30-year-old Consumer Protection Act, 1986.

The Consumer Protection Bill, 2018 was introduced by the consumer affairs ministry to replace the 2015 bill, as there were many amendments to the bill.

A Parliamentary Standing Committee had also submitted its recommendations on the same in April last 2016.

Following this, the Union Cabinet on December 20, 2017 approved a new Consumer Protection Bill that seeks to establish an authority to safeguard consumers' rights and has provisions for penalty and jail terms in case of adulteration and misleading ads by companies.

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