Fi­nance min­is­ter pro­poses law­suits against er­rant e-sellers

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Ad­dress­ing the na­tional con­fer­ence on ef­fec­tive func­tion­ing of con­sumer fora, Fi­nance Min­is­ter Arun Jait­ley said they needed to be given pow­ers to file ‘class ac­tion’ suits against er­rant sellers, es­pe­cially in the wake of a grow­ing ecom­merce trade.

“The vol­ume of trade in e-com­merce is go­ing to in­crease... Un­der these cir­cum­stances, we need very pow­er­ful and ef­fi­cient con­sumer fo­rums,” Jait­ley had said. He pointed out that the con­cept of ju­ris­dic­tion was get­ting di­luted with goods be­ing traded on ecom­merce plat­forms and in this con­text some ju­di­cial pro­nounce­ment or leg­isla­tive in­ter­ven­tion would have to de­ter­mine those fac­tors.

“The man­ner in which rep­re­sen­ta­tions are made and the un­der­ly­ing prin­ci­ple of buyer be­ing aware of the na­ture of goods and ser­vices it­self will now have to be rewrit­ten,” said Jait­ley. With the in­crease in con­sumer spend­ing in view of the In­dian econ­omy trans­form­ing in the past 20 years, he said the Con­sumer Pro­tec­tion Act, 1986, needed to be taken to the next stage, giv­ing pow­ers to con­sumers to file class-ac­tion suits.

The fi­nance min­is­ter em­pha­sized that while the con­cept of class-ac­tion suit was there in the Act, it had never been used. Such suits can be filed by a group of peo­ple when there is a class or cat­e­gory of goods that is de­fec­tive and a very large num­ber of peo­ple have been de­ceived by it.

“Glob­ally the best prac­tice is you al­low a class ac­tion in these cases. You also have to reg­u­late the ex­tent of re­views and ap­peals and the grounds on which mul­ti­ple ap­peals can be filed,” Jait­ley said. “The 1986 Act has served us well... Now with the pas­sage of time, hav­ing learnt from that ex­pe­ri­ence, you go on to the next stage,” he added.

Amended con­sumer pro­tec­tion laws to cover ecom­merce

In a move to safe­guard the in­ter­est of con­sumers, in­clud­ing online shop­pers, the gov­ern­ment has an­nounced its de­ci­sion to amend the three-decade-old con­sumer pro­tec­tion laws to cover ecom­merce and prod­uct li­a­bil­ity.

Union Min­is­ter of Con­sumer Af­fairs, Food and Public Dis­tri­bu­tion Ram Vi­las Paswan said amend­ments to the Act had al­ready been fi­nal­ized. Apart from sim­pli­fy­ing pro­ce­dures to seek jus­tice, the gov­ern­ment wants to make it abreast with busi­ness and com­merce con­ducted in mod­ern times.

“The Act dates back to 1986, when the con­cept of ecom­merce was not in vogue. Now the bulk of busi­ness is in the cat­e­gory of ecom­merce,” Paswan said. The view in the min­istry is that the present laws are in­ad­e­quate to safe­guard con­sumers from du­bi­ous e-mar­ket­ing.

The grow­ing stature of ecom­merce is also con­firmed as per a re­cent As­socham-Deloitte study. It says the quan­tum of busi­ness was to the tune of Rs 87,000 crore in 2014. As per the same study, this is ex­pected to reach Rs 1.02 lakh crore by the end of this cal­en­dar year.

Un­der the Con­sumer Pro­tec­tion Act, prod­uct li­a­bil­ity will in­crease the com­pass of li­a­bil­ity on the goods and ser­vice providers. A cross-sec­tion of prod­ucts will be cov­ered by it. The goods providers will be li­able to penal­ties rang­ing from pos­si­ble for­fei­ture of his li­censes to re­call of prod­ucts.

Presently, the in­di­vid­ual gets com­pen­sa­tion, if any, from the prod­uct providers. In the new dis­pen­sa­tion, if a com­plainant’s charge is true, then it will be as­sumed that the en­tire assem­bly line of the prod­uct is faulty. Sim­ply put, if a con­sumer com­plaints of de­liv­ery of a faulty car and his charge is proved cor­rect, not only will he be com­pen­sated, all those who pur­chased the prod­uct from the assem­bly line will also be deemed to be ag­grieved par­ties.

Clar­i­fy­ing on how the gov­ern­ment would op­er­a­tional­ize this new mech­a­nism, Paswan said the pro­posed amend­ment to the Act sought to con­sti­tute an ‘au­thor­ity’ that would have the power to in­ves­ti­gate and make rec­om­men­da­tion to the Na­tional Con­sumer Dis­putes Re­dres­sal Com­mis­sion.

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