The recent Consumer Protection Act, 2019 (“the Act”) has ushered in an added array of protections for consumers of expanding non-traditional market places such as e-commerce portals, online sales, direct selling, multi-level marketing etc. Newly evolved concepts like ‘product liability’ and ‘unfair contracts’ have also been introduced to strengthen and protect the interests of consumers.
Section 10(1), in Chapter III of the Act, provides for the establishment of a ‘Central Consumer Protection Authority’ (“CCPA” or “Central Authority”) to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of the public and consumers and to promote and enforce the rights of consumers as a class. Section 10(2) provides that the Central Authority would consist of a Chief Commissioner and such number of other Commissioners as may be prescribed, to be appointed by the Central Government.
On 23 July 2020, the Central Government notified in the Official Gazette that Chapter III of the Act would come into force on 24 July 2020. Simultaneously, in exercise of powers conferred by Section 10 of the Act, the Central Government notified the establishment of a CCPA as a body corporate having perpetual succession and a common seal with effect from the same day, i.e. 24 July 2020.
The Central Authority enjoys sweeping and wide-ranging powers under the Act and can discharge functions which are regulatory, investigative or adjudicatory in nature. These include the power to:
It may be recalled that in Brahm Dutt vs. Union of India (2005) 2 SCC 431, the Supreme Court, in the context of the Competition Act, 2002, observed that if an expert body is to be created, it might be appropriate to create two separate bodies, one vested with advisory and regulatory expertise and the other with adjudicatory expertise. However, the Court left such action to the wisdom of the legislature in that case. Although the Competition Act was amended subsequently, the observations of the Supreme Court to create two separate bodies were not given heed to.
In the context of the present Act, the question why Parliament did not deem it appropriate to vest the adjudicatory functions presently entrusted to the Central Authority upon the Commissions constituted under the Act will be raised, and rightly so, since the Commissions would have been more appropriately equipped to discharge such functions as well.
Additionally, Section 11 of the Act provides that the Central Government may, by notification, make rules to provide for qualifications for appointment of such Chief Commissioner and Commissioners, method of recruitment, procedure for appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of their service. In other words, the Act itself does not afford any clarity on important aspects such as the qualifications for appointment of its Chief Commissioner and Commissioners, their conditions of service, the constitution of the Selection Committee for making such appointments etc. These rules are yet to be notified.
It is noteworthy that although the Central Authority is vested with adjudicatory powers (including the power to direct search and seizure, pass cease and desist orders and even restrain endorsements by persons) and its orders are appealable to the National Commission, the Act does not contain even a minimum prescription that the Central Authority’s members (or at least some of them) should be drawn from areas of expertise in law and be competent to discharge judicial functions. Rather, Section 13(2) merely provides that the Central Authority may engage experts and professionals of integrity and ability having special knowledge and experience in areas of consumer rights and welfare, consumer policy, law, medicine, food safety, health, engineering, product safety, commerce, economics, public affairs and administration. This could be taken to mean that the engagement of a person having a background, qualification or experience in law is merely optional.
It is likely that these deficiencies in the Act are crafted in this form by design, rather than through legislative inadvertence, considering that even the qualifications and conditions of service of the President and members of the District Forum (Section 29), the State Commission (Section 43) and the National Commission (Section 55) constituted under the Act have been left to be determined by executive fiat. Incidentally, on 15 July 2020, the qualifications for appointment of President and members of the State Commission and the District Commission were notified by the Central Government and brought into effect on 20 July 2020.
This approach is in contrast to, for example, the Competition Act, 2002 where the statute itself provides for appointment, as members, of at least two experts of repute to the Competition Commission who have special knowledge of and professional experience in domains including law. Similarly, the Petroleum and Natural Gas Regulatory Board Act, 2006 provides that the Board constituted thereunder shall consist of a Chair Person, a Member (Legal) and three other members to be appointed by the Central Government.
Having said that, this is not an isolated instance. Recently, certain amendments were effected to the Right to Information Act, 2019, vesting absolute power in the Central Government to fix the term of office, salaries and service conditions of Information Commissioners, ostensibly (in that case) to ‘rationalise’ their service conditions and make them distinct from service conditions of election commissioners. This resulted in the amended Right to Information Act, 2019 and the Right to Information Act (Term of Office, Salaries, Allowances and other Terms and Conditions of Service) Rules, 2019 being challenged as unconstitutional by Member of Parliament, Shri Jairam Ramesh, before the Supreme Court of India, on the ground, amongst others, that the rule making power confers “unbridled and uncanalised discretionary power” upon the Central Government which will lead to loss of independence and impartiality of such appointees. The matter is presently under the scrutiny of the Supreme Court of India.
Some discernible threads from the pronouncements of the Supreme Court regarding appointments to tribunals and bodies having the “trappings of the court” and exercising judicial power are worth noticing, including the following:
The Central Government, while giving effect to the above provisions of the Consumer Protection Act 2019 in exercise of its executive power, would be well advised to take note of the above noted judicial principles. Otherwise, the validity of these provisions and rules framed thereunder could well come under the judicial scanner and stall or delay the implementation of the Act.
 State of Gujarat and others vs. Utility Users Welfare Association and others (2018) 6 SCC 21; Tamil Nadu Generation and Distribution Corporation vs. PPN Power Generating Co. (P) Ltd. (2014) 11 SCC 53
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