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India to get own version of class action lawsuits

Postby anuj_bansal » Thu May 21, 2015 1:26 pm ... 364396.cms

NEW DELHI: India is set to have a stronger consumer protection law with its own version of class action suits. As the term is usually defined, a class action suit is one in which one or several persons sue on behalf of a larger group of persons, referred to as "the class". However, the Indian version will not allow individuals to sue on behalf of a larger group, but will empower an authority to make rulings applicable to larger groups.

The new rules will incorporate a product liability clause to recall items that are unsafe and hazardous.

An informal group of ministers has cleared a proposal to establish a consumer protection authority, which will have the power to order recall of such items or recommend action against the companies to existing sector-specific regulators, and incorporate fresh provisions to make the grievance redress mechanism more consumer-friendly.

As per the proposal, the companies/producers would also have to pay compensation for damage to the consumers. TOI in November had first reported the proposal to set up consumer protection authority with sweeping powers, including taking up cases suo motu besides those referred to the agency. Moreover, it can investigate the cases and order action.

Sources said finance minister Arun Jaitley, who is heading the inter-ministerial group, has suggested to the consumer affairs ministry that to avoid any overlap among independent regulators, the proposed consumer protection authority should refer investigation report to the sector-specific regulator like Food Safety and Standards Authority (FSSAI), Competition Commission of India (CCI) for packaged food items and the proposed Vehicle Regulation and Road Safety Authority of India for issues relating to the automobile sector.

Consumer affairs minister Ram Vilas Paswan said many new suggestions have been made to make the law more consumer-friendly. Jaitley has suggested that consumers should be allowed to argue their case at every level irrespective of the amount. "He (Jaitley) has suggested it should be on the lines of civil procedure code (CPC) where a complainant can argue his case even up to the Supreme Court. The proposal floated by the consumer affairs ministry was not to allow advocates in cases involving an amount less than Rs 20 lakh," said a source.

TOI has learnt that the FM has also asked the ministry to include a provision where affidavit by a witness should be treated as enough evidence to avoid harassment of consumers. A provision will now be added minimizing cross examination. Similarly, the number of appeals will also be restricted to two.

Paswan said the informal GoM will meet again next week to finalize the bill.

"The consumer protection authority will fill the gap, which is missing now to deal with unfair trade practices except those covered under the CCI Act. The authority can conduct search, seizure of documents, articles and records. It can also summon delinquent manufacturers and advertisers and order withdrawal of false or misleading advertisements. It can also impose administrative fine on those found violating the law," said a government official.
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Re: India to get own version of class action lawsuits

Postby dheerajjain » Tue Jun 02, 2015 9:53 am ... 53798.aspx

Power to buyer: Class action suits to be part of new consumer protection laws

A botched online purchase, a disappointing holiday or an exploding cellphone -- the country’s two main consumer laws are set for an overhaul to give buyers larger protection and improved services in a changed economy.

The Ram Vilas Paswan-headed consumer affairs ministry has finalised a set of amendments for creating a national consumer protection authority that will, for the first time, extend “class-action suits”, a legal tool, to consumer laws.

This means one individual complaint of a faulty product or service could be treated as that of a larger group of people, or “class”, in similar circumstances. “There will be clear rules for recall of product, refund of product and return of product,” an official said.

The proposed changes would reflect the larger constitutional requirement envisaged in articles 301 and 307 that talk of a “common national market”, another official said. ... metro1.jpg

Given the scope of the amendments, there won’t be a business that won’t be affected. An empty file for a song that was paid for or a cellphone blowing up due to poor circuitry -- the changes will cover all.

Firms might even be required to overhaul their systems, processes and interaction with consumers.

The Bureau of Indian Standards Act, 1980, which enforces quality, will be amended to lay down standards for specific paid services, not just products. Typically, services include hotel amenities, bus journeys, holiday packages and beauty clinics.

The BIS act covers just 90 products, most of which are bought by bulk buyers, rather than individual consumers, such as steel. This basket will be expanded to include 2,000 items of common consumption, such as driving helmets, for which quality standards are not laid out.

A review by the consumer ministry showed there was no “authority of a federal nature” to deal with unfair trade practices.

At present, buyers take their complaints to consumer courts but these do not have investigation powers. The proposed regulator will plug the gap.

“The necessity for a national consumer protection authority has also arisen because there is no authority which can independently investigate charges of unfair trade practices in so far as consumer protection is concerned,” said Pradip Mehta, the secretary general of consumer advocacy group CUTS International.
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Re: India to get own version of class action lawsuits

Postby kbmalhotra » Wed Jun 03, 2015 10:37 am

Dear Mr Jain,
Thank you very much for this article of Hindustan Times. You have been feeding very important information on this site. Salute to you.

It seems very pleasant to read such articles / news that things are changing. One day good systems will prevail in our country for which we will feel proud.

However, I am afraid, things are advertised to get publicity but do not happen in reality. To quote some examples, Real state bill is still pending, could not be passed till date. Controlling of prices for life saving medicines could not be implemented. Medicine prices are shooting up day by day. Daily new private colleges are opening. It has become impossible for poor children to get proper education. Teacher's standard in schools is so low that any one will be shocked to think as to how they became teacher. In villages teachers remain absent but their salaries are passed.Builders have swallowed our hard earned savings, entire provident but no hope. My entire PF and whole life saving has been spent in Heritage cottages ( Ozone Square ) Sector 89. Greater Faridabad and I am feeling helpless.

This is all due to our corrupt politicians. Bills do not pass in parliament because industrialist offer suitcases to keep them mum and to keep things pending. For every appointment in govt. dept whether it is teacher, police or other dept. open bribe is taken. Politicians send their list of candidates to selection committees.

Any how, we have not lost the hopes. My humble prayers to GOD to save this country.

With warm regards.

K B Malhotra
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Re: India to get own version of class action lawsuits

Postby ssp142000 » Wed Jun 03, 2015 11:24 am

Dear Malhotraji,

Deeply saddened to hear your situation. We too are suffering in the hands of the corrupt.

Hope we will be able to join hands one day and come up with permanent solution to all this.


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