India is set to have a stronger consumer protection law with its own version of class action suits. As the term is usually defined, a class action suit is one in which one or several persons sue on behalf of a larger group of persons, referred to as “the class”. However, the Indian version will not allow individuals to sue on behalf of a larger group, but will empower an authority to make rulings applicable to larger groups.
The new rules will incorporate a product liability clause to recall items that are unsafe and hazardous.
An informal group of ministers has cleared a proposal to establish a consumer protection authority, which will have the power to order recall of such items or recommend action against the companies to existing sector-specific regulators, and incorporate fresh provisions to make the grievance redress mechanism more consumer-friendly.
As per the proposal, the companies/producers would also have to pay compensation for damage to the consumers. TOI in November had first reported the proposal to set up consumer protection authority with sweeping powers, including taking up cases suo motu besides those referred to the agency. Moreover, it can investigate the cases and order action.
Sources said finance minister Arun Jaitley, who is heading the inter-ministerial group, has suggested to the consumer affairs ministry that to avoid any overlap among independent regulators, the proposed consumer protection authority should refer investigation report to the sector-specific regulator like Food Safety and Standards Authority (FSSAI), Competition Commission of India (CCI) for packaged food items and the proposed Vehicle Regulation and Road Safety Authority of India for issues relating to the automobile sector.
Consumer affairs minister Ram Vilas Paswan said many new suggestions have been made to make the law more consumer-friendly. Jaitley has suggested that consumers should be allowed to argue their case at every level irrespective of the amount. “He (Jaitley) has suggested it should be on the lines of civil procedure code (CPC) where a complainant can argue his case even up to the Supreme Court. The proposal floated by the consumer affairs ministry was not to allow advocates in cases involving an amount less than Rs 20 lakh,” said a source.
it has learnt that the FM has also asked the ministry to include a provision where affidavit by a witness should be treated as enough evidence to avoid harassment of consumers. A provision will now be added minimizing cross examination. Similarly, the number of appeals will also be restricted to two.
Paswan said the informal GoM will meet again next week to finalize the bill.
“The consumer protection authority will fill the gap, which is missing now to deal with unfair trade practices except those covered under the CCI Act. The authority can conduct search, seizure of documents, articles and records. It can also summon delinquent manufacturers and advertisers and order withdrawal of false or misleading advertisements. It can also impose administrative fine on those found violating the law,” said a government official.