Amending the Consumer Protection Act, 1986

The political controversy over the land acquisition ordinance, which undoubtedly deserved centre stage, has overshadowed other legislative initiatives. The Ministry of Consumer Affairs, Food and Public Distribution has come up with a draft bill to amend the Consumer Protection Act (CPA), 1986 (GoI 2014). A reference to “consumer” conjures up the image of a small value transaction, and thus, a subject of marginal importance and not business reform. This would be a misleading perception for two reasons. One, the consumer transactions are of small value, but numerous. Thus, the total value of transactions is a staggering amount. Second, the consumer transactions being the end transaction, informs the entire business chain. It decides the quality of goods and services, and the relationship within the entire chain.

Within the CPA, a consumer is a person who contracts for goods or services. A contracting party has rights and obligations under the Indian Contract Act, 1872 and other laws. The CPA did not confer new rights on a consumer. It gave inexpensive and expeditious redressal of consumer grievance by creating a three-tiered quasi-judicial body of consumer forums. A consumer can approach a consumer forum for a defect in goods purchased, deficiency in service availed of, and unfair or restrictive trade practices indulged in by a trader. Enacted in the pre-liberalisation years, the CPA is set in a qualitatively different economy. Since, there has been expansion of goods and services, diversification in the means of reaching the consumer, proliferation of trade practices, coming in of e-commerce, vigorous sales promotion, and aggressive advertising. The persona of a consumer has undergone transformation. A review and amendment of the CPA has been long overdue. In this article, we will review some of the main proposals for amendment. This will include addressing the problem of unfairness in contracts, unfair trade practices, and e-commerce.