India’s consumer laws set for revamp

India’s market is thought to be a sellers’ market, where consumers are challenged and have almost no recourse for addressing their grievances. But this is set to change. The new Indian government has decided to make major overhaul of the existing consumer laws to keep pace with the changing market place.

Amendments to the Consumer Protection Act 1986 will create a National Consumer Protection Authority, which aims to update the country’s consumer protection in a market that has moved online and is technology and service driven.

The new changes will reportedly affect all business, while some firms might even have to completely overhaul their systems and processes.

“Class-action suits”, a legal tool, that allows individual complaint of a faulty product or service to be treated as an interest group of people in similar circumstances, will be extended to consumer laws.

According to official sources, “there will be clear rules for recall of product, refund of product and return of product” and reimbursements. This under the proposed Consumer Protection (Amendment) Act, 2014, authorities can impose penalties against trader violating the law. Authorities will also have the right to investigate, either suo-motu or on a complaint, violations of consumer rights and conduct search and seizure of documents/records/articles, summon offending manufacturers, advertisers and service providers to record oral evidence and direct production of documents and records.

While there is no change to the three-tier consumer court system, it will we upgraded and made more efficient.

Under the current system the district forum deals with consumer disputes where the value of the goods or the compensation claimed is less than Rs. 5 lakh and the state commission hears cases for claims exceeding Rs. 500,000 but not exceeding Rs. 2000000. The national commission hears claims exceeding Rs. 2000000 and also decides cases challenging lower court verdicts.

The ambit of the Bureau of Indian Standards – the country’s watchdog for product quality – will also be expanded to include benchmarks for around 2000 items from the current list of 90.

Currently, there are 621 district consumer fora, 35 state consumer commissions and the National Consumer Disputes Redressal Commissions at the apex level. In July 23, 2014, a total of 41,69,564 cases had been filed of which 38,01,037 cases have been disposed in all these consumer for a.

Experts says that with investments in the retail and service sector expected to increase in the future, these changes to enhance protection was much overdue, and will bolster the confidence of the consumer.

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