District, State, and National Forums have been re-designated as District and State Commissions with pecuniary jurisdiction limits of 1 Crore, 10 crores, and above 10 Crores respectively.
The overall system will be run by a Central Consumer Protection Council, which consists of 35 members, led by the Union Minister for Consumer Affairs and Minister of State as Vice-Chairperson, and 34 other members from different fields.
Who can file a complaint? A lawful customer!
Any ‘Lawful Customer’ has the power to raise a complaint about any deficiency in any product or service with a seller, and if not adequately addressed by the seller within 15 days the buyer can record a complaint with the appropriate Commission online without having to hire a lawyer first. Of course, once the consumer had made his decision he/she could hire a lawyer if they see the need.
This brings us to the interesting part.
The liability that the consumer could claim would most likely be a handsome amount that will more than compensate any extra effort invested by the complainant. Given the fact that courts are also very supportive of consumer needs, the chances of a favorable settlement only go up. This now takes us into the world of Professional Indemnity Insurance and Product Liability Insurance.
A business opportunity for Insurance providers and legal counsels:
Professional Indemnity Insurance would provide insurance covers to both something that is done or omitted by a professional in the course of his or her work (also frequently called E&OE, or Errors and Omissions Liability Insurance) and Product Liability Insurance would protect business organizations from the burdens of claims for personal injury or property damage.
The door would also open for insurance of endorser liability to cover the risk faced by celebrities inadvertently endorsing products that run into trouble. Even if the penalty imposed on the endorser by the authority is paid by the Insurer, it may be noted that the prohibition of the celebrity from more endorsements for the embargoed duration would still remain which the celebrity cannot avoid.
Another business opportunity is the cover of legal costs in defending proceedings including damages arising from out-of-court settlements.
To favour a quick settlement the law also provides for settlement by mediation, with the compulsory participation of qualified mediators when directed by the authority where the complaint is being considered. Even if not specifically mentioned in the law as it now stands, it is expected that mediation would not be applicable in any case involving a fatality.
Rules regarding appeals have also been made very stringent so that for a ruling to be appealed, 50% of the total compensation allowed has to be deposited by the defendant before raising an appeal. The earlier ceiling of Rs 25,000 has now been removed so that now the amount deposited has to be 50% of whatever damages have been ordered to be compensated.
A law in favor of the Consumer
The law now is clearly in favour of the customers and the days have gone that we should hesitate to claim full compensation for any losses we suffer due to the casual and careless attitude of big business houses and manufacturing organizations. This should change the way we spend money and the way we recover the full worth of what we spend when dealing with any organization, big or small.
Doubts and criticism still prevail and always will!
Still, doubts have been expressed about this new law. moneylife.in says that a sudden surge in cases because of the opportunities in the new law could cause the whole setup to become weighed down and collapse whether at the district, state, or the central level.
About mediation, a view has been expressed that the option to mediate being dependant on the direction of the district, state, or central authority could provide scope for misuse by vested interests. While this might have been possible in a different era, online recording, and monitoring of the happenings in the organization should eliminate any such possibilities.
What's the situation on the ground?
Even though these provisions are now in force, the functioning of the consumer commissions in Mumbai have come to a halt since March, when the pandemic struck. "The new Act only provides for e-filing, with no provisions for (a) virtual hearing. We were expecting the State and the Central government to come with rules regarding this," said Uday Warunjikar, the president of the Consumer Courts Advocates Association.
Similarly, a concern has been voiced, that the filing of even one high value or prominent case would cause other cases to take a back seat, and these' others' would mostly include cases involving 'smaller people', about the purchase or service of mobiles or household appliances like mixers, washing machines, fridges televisions, etc by more ordinary people.
The problem would be more severe in the case of Fast-moving consumer goods (FMCG), products that are sold quickly and at a relatively low cost. Examples include non-durable household goods such as packaged foods, beverages, toiletries, candies, cosmetics, over-the-counter drugs, dry goods, and other consumables. Cases involving such items should not get elbowed out to accommodate a dramatic or very high-value case.
One more concern expressed is about the DG attached to the Central Authority – this DG and his team would have the authority to raid suspected activities or locations and seize incriminating evidence found. It is hoped that rules would define how this power would work vis-a-vis similar responsibilities of other local and state authorities and how that interface could be maintained without 'turf wars' between different government departments spinning out of control.
So now, at last, the doors look like they have opened for the Indian Citizen to demand compensation that is rightfully his, and the business sector will have to pull up its socks and get its act together and provide the best or face it.
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