New Consumer Protection Bill approved by Union Cabinet

Celebrities endorsing misleading ads are also liable for fine and ban of up to three years.

New Delhi, Dec 20: The Union Cabinet on Wednesday 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.

Celebrities endorsing misleading ads are also liable for fine and ban of up to three years. According to sources, the Cabinet has approved introduction of the Consumer Protection Bill, 2017, which will result in withdrawal of a bill brought in 2015.

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. A Parliamentary Standing Committee had also submitted its recommendations in April last year. The consumer affairs ministry has brought this bill as there were many amendments to the bill introduced in 2015.

On misleading ads, the bill provides for fine and ban on celebrities. In case of first offence, the fine will be up to Rs 10 lakh and a one-year ban on any endorsement. For the second offence, the fine will be up to Rs 50 lakh and up to three years' ban. However, for manufacturers and companies, penalty is up to Rs 10 lakh and up to two years' jail for the first offence. The fine will be up to Rs 50 lakh and five years' jail for subsequent offence. The bill also provides for penalty and up to life term jail sentence in case of adulteration.

"The Bill has provisions for misleading ads and e-commerce trade," Food and Consumer Affairs Minister Ram Vilas Paswan had recently said.

Sources said the new bill seeks to enlarge 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. It has provisions for post-litigation stage mediation as an alternate dispute resolution mechanism. The bill also provides for product liability action. Prime Minister Narendra Modi had recently said that consumer protection is the government's priority.

"We are in the process of bringing a new law on consumer protection keeping in mind the need of the country and business practices here," he had said.

He had announced that a Consumer Protection Authority would be formed with executive powers for immediate redressal. The stress is being given on consumer empowerment. Strict provisions are being contemplated against misleading advertisements, Modi had said.

PTI