No jail term but ban celebrities endorsing misleading ads: GoM

The Union Minister is hoping to see the passage of the bill in the Winter Session beginning from Nov 16

Diluting proposed penalties on endorsement of misleading advertisements, a GoM headed by Finance Minister Arun Jaitley has dropped a panel's recommendation for jail term to celebrities found guilty and decided to ban such offenders for up to three years.

Now, the Consumer Affairs Ministry will move a cabinet note seeking approval for moving these additional amendments to the new Consumer Protection Bill 2015, which has already been introduced in Lok Sabha to repeal the 30-year-old Consumer Protection Act.

Consumer Affairs Minister Ram Vilas Paswan is hoping to see the passage of this bill in the Winter Session of Parliament beginning from November 16.

"In a recent meeting, the Group of Ministers discussed about the Parliamentary panel's recommendation to impose jail term for celebs endorsing misleading ads. Since no country has such a stringent penalty, the GoM decided that instead of imposing jail term, they should be banned from endorsements," a senior government official said.

The GoM recommended that the first time offenders should be fined Rs 10 lakh and banned for one year, while the second and subsequent offenders should be fined Rs 50 lakh and banned for up to three years, the official said.

A Parliamentary panel had recommended a fine of Rs 10 lakh and a jail term of up to two years for first time offence, while a fine of Rs 50 lakh and imprisonment of five years for second and subsequent offence.

"Incorporating the GoM suggestions, the ministry will soon move a cabinet note on the new bill," he said.

The GoM has also approved other recommendations of the panel to impose hefty penalty for adulteration besides license suspension/cancellation as well as inclusion of deficiency in services in product liability.

It has agreed to provide an enabling provision to make rules to regulate e-commerce and direct selling, and remove overlap of powers of Central Consumer Protection Authority (CCPA) and the Consumer Fora.

It has also removed a provision for penalty on consumers for frivolous complaints.