Parliamentary panel headed Divakar Reddy suggested fine, jail for celebrities of misleading ads

Apr 27, 2016 12:12 IST

Divakar_ReddyParliamentary Standing Committee’s report on the Consumer Protection Bill 2015 was tabled in Parliament on 26 April 2016.

The committee headed by Telugu Desam Party MP J C Divakar Reddy in its report recommended holding celebrities accountable for misleading advertisements and stringent provisions including jail term up to five years and penalty up to 50 lakh rupees.

Highlights of the Recommendations

• It suggested legal teeth to Advertising Standards Council of India (ASCI) to curb misleading ads besides proposing severe penalties, jail and cancellation of license of those involved in food adulteration.

• Advocates empowering Department of Consumer Affairs to make laws to regulate e-commerce, direct selling and multi-level marketing where consumer complaints are on the rise.

• For first time offence, the offender may be penalised with either a fine of 10 lakh rupees or imprisonment up to two years or both.

• For second time offence, it recommends a fine of 50 lakh rupees and imprisonment of five years.

• For subsequent offences, the penalties may be increased proportionately based on the value of sales volumes of such products or services.

• Government should clearly and comprehensively define the word 'endorsement' in the bill so that there is no room for any misinterpretation or ambiguity.

• Government should insert suitable provisions in the bill to make it mandatory for the Law Enforcement Agency to take immediate action in cases where a consumer makes complaint of adulteration of products for human consumption by registering an FIR and arrest the accused.

• If for any reason, the FIR is not registered by the agency then it should be deemed to have been registered after lapse of 21 days from the date of complaint.

• The liability provisions should be extended to any or all parties involved in the chain, right from the manufacturer to retailer for any damage caused by that product. At present, the bill provides for liability only to manufacturer.

• The Central Consumer Protection Authority (CCPA) should function independently and proposed suitable provision in the bill to ensure that the chief commissioner and commissioners and officials of the CCPA are provided protection for action taken in good faith.

The Union Government introduced the Consumer Protection Bill 2015 in the Lok Sabha in August 2015 to repeal the 30-year old Consumer Protection Act, 1986. The panel's report will be studied before final passage of the bill.

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