Consumer Protection Bill: Overlap of jurisdictions may lead to litigation

The Consumer Protection Bill, 2019 was introduced in the Lok Sabha on July 8, 2019. An earlier draft had lapsed with the dissolution of the 16 th Lok Sabha. The 2019 Bill, if it becomes law, will replace the outdated Consumer Protection Act, 1986. The proposed law seeks to bring about far reaching changes in the consumer protection framework in the country. However, with multiplicity of legislation governing different sectors, there is a likelihood of overlap of jurisdictions which might give rise to conflicts and more litigation.

For instance, despite the fact that the Real Estate (Regulation and Development) Act (RERA), 2016 already exists, the 2019 Bill includes housing construction within the definition of service. 

The RERA was brought in as a special act to primarily achieve the dual purpose of regulating the real estate sector and for establishing an adjudicatory mechanism for speedy redressal of grievances. “All disputes relating to the real estate project in question must lie before the authority under the RERA. This will help in achieving uniformity in decisions and better regulation of the real estate projects,” noted lawyer Shobit Phutela.

Whether the consumer fora could still be approached for cases that also fall within RERA’s purview is a question that is pending decision before the Delhi High Court. Phutela points out: “The mere inclusion of housing construction in the definition of ‘service’ cannot be interpreted as being in derogation of the provisions of RERA”.
 

Experts said even if RERA is a complete code for disputes relating to real estate projects and bestows exclusive jurisdiction on matters, there still would be disputes relating to housing and construction where RERA is not applicable.

For instance, an issue with an architect or a contractor who is carrying out construction, repair, and renovation work in one’s personal property is not a ‘real estate project’ falling within RERA. Such disputes would invariably fall within the jurisdiction of the consumer fora.

Another conflict may arise with respect to e-commerce marketplaces, like Amazon and Flipkart, which have been brought within the scope of the 2019 Bill.

“E-commerce matters should be dealt with by the Information Technology (IT) Act, 2000, with respect to intermediary liabilities as defined under that Act. I don’t think the Consumer Protection Bill should supersede the IT Act,” said Kazim Rizvi, founding director of The Dialogue, a research and public policy think tank.

The provision in the 2019 Bill which gives the Central government power to prevent unfair trade practices in e-commerce is vague and leaves room for misuse, he added.

Shishir Vayttaden, partner at law firm Cyril Amarchand Mangaldas pointed out that the 2019 Bill does not attribute liability to e-commerce marketplaces for goods sold on their platforms and they are recognised as electronic service providers. Since e-commerce marketplaces provide only platforms for buying or selling products, the liability with respect to products vests with the product manufacturer or a product seller. The obligations of an e-commerce marketplace are limited to sharing information with the relevant authority in an investigation, and designate a nodal officer to accept notices.

Healthcare is another area where there is a possibility of conflict as the government plans to re-introduce the National Medical Commission Bill.

Among other things, this Bill seeks to cover cases of professional misconduct by doctors. However, MS Kamath, general secretary, Consumer Guidance Society of India is of the view that even if the National Medical Commission Bill is passed, it should not bar the remedy for consumers to approach consumer commissions. “Professional bodies like MCI are often politicised and havenothing to do with public interest,” he added. The Consumer Protection Bill, 2018 which was passed by the Lok Sabha earlier explicitly included the term healthcare; within the definition of service but the 2019 Bill deleted it. According to Kamath this deletion has absolutely no impact on consumers’ ability to approach consumer commissions for the deficiency in services provided by healthcare professionals.

Experts point out that the judgment of the Supreme Court in the VP Shantha case brings the medical profession within the framework of the Consumer Protection Act and the new Bill does not change that.

One hopes Parliament resolves the issues around the areas of overlapping jurisdiction before the Bill is enacted.

KEY CHANGES PROPOSED BY THE BILL	IMPACT
Constitution of a Central Consumer Protection Authority, tasked with protecting and vindicating consumer rights	CCPA can file class action claims on behalf of consumers and investigate complaints of violation of consumer rights.
Increase in pecuniary jurisdictions of the Consumer Disputes Redressal Commissions at the District (< Rs 1 crore), State (Rs 1 crore to 10 crore) and Central (> Rs 10 crore) levels	Increases the ambit of cases that can be heard by the District and State Commissions and will reduce the workload of the National Commission
E-commerce brought within the framework of the Bill.	Unfair trade practices by e-commerce companies can now be regulated by the Central government
Punishment for misleading advertisements with imprisonment up to five years and fine up to Rs 50 lakh	Will deter celebrities from endorsing sub-standard products
Introduction of product liability for harm caused by a defective product	Manufacturers, product service providers and product sellers can easily be sued for defects in their products
Introduction of mediation as a dispute redressal mechanism; establishment of consumer mediation cells at district, state and national levels	Faster resolution of disputes. Finality since no appeal lies after parties agree to a mediated settlement
No mention of healthcare in the definition of ‘service’ under the Bill	People can still approach Consumer Disputes Redressal Commissions for deficiency in doctors’ services