Class-action suits, mediation set to give teeth to consumer laws
Consumers in India will be able to initiate class-action lawsuits and also opt for mediation under the new Consumer Protection Act 2019, which gives legal teeth to claims for damages over defective products or poor services.
Class-action suits, a legal tool widely used in western consumer markets such as the US, enable one individual complaint of a faulty product or service to be treated as an “interest group” of other people in similar circumstances.
This type of legal suit can be invoked to recall an entire batch of faulty products based on a single complaint. If one lot of a consumer item, such as mobile phones or cars, has a common defect, a single complaint can trigger the recall through “class action”.
consumer affairs ministry is in the process of finalising an apex investigative authority under an agency called the Central Consumer Protection Authority (CPPA), which will take up class action suits exclusively.
“The agency will start functioning in first week of April. Most of the set up is almost ready,” said a government official who asked not to be named.
“A faulty medicine causing damage to a large section of people is a fit case for class-action suits. Instead of multiple of claims coming to court, a single case can be a more efficient way of dealing with the problem,” said Sriram Panchu, a Chennai-based lawyer, who specialises in mediation.
“The new law expands the scope of consumer protection by introducing two new concepts, namely product liability and product recall. Moreover, it defines the consumer and manufacturer for the first time. It also covers online transactions,” said Maurice Fernandez of the Bangalore-based Citizens’ Collective for a Safer Marketplace.
Feb 25, 2020, Zia Haq, Hindustan Times, New Delh
Industry specific Regulatory Authorities in India : RBI(Banking), CCI(Monopoly & Oligopoly), RERA( real estate), TRAI ( telecom rates)
REAL ESTATE REGULATORY AUTHORITY ( RERA)
Below are the major provisions of the new law which will rein in errant builders:
1. The RERA makes it mandatory for a state to establish a State Real Estate Regulatory Authority. This government body could be approached for redressal of grievances against any builder.
2. Every ongoing and underconstruction project is supposed to come under the regulator's ambit. Registration is mandatory for all commercial and residential real estate projects where the land is over 500 sq m or includes eight apartments. Failure to do so will attract a penalty which may be up to 10% of the project cost, and a repeat offence could land the developer in jail.
3. The developer will have to place 70% of the money collected from a buyer in a separate account to meet the construction cost of the project. This will put a check on the general practice by a majority of developers to divert the buyer's money to start a new project, instead of finishing the one for which money was collected. This will ensure that construction is completed on time.
4. Buyers of apartments which are typically offered for sale before the launch of the project often get ensnared. But not any more. Under the Act, every such phase will be considered a standalone real estate project, and the promoter will have to obtain registration under this Act for each phase separately.
5. The RERA makes it mandatory for developers to post all information on issues such as project plan, layout, government approvals, land title status, sub contractors to the project, schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass this information on to the consumers.
6. The current practice of selling on the basis of ambiguous super builtup area for a real estate project will come to a stop as this law makes it illegal. Carpet area has been clearly defined in the law.
7. Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.
8. The maximum jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine.
9. The buyer can contact the developer in writing within one year of taking possession to demand after sales service if any deficiency in the project is noticed.
10. The developer cannot make any changes to the plan that had been sold without the written consent of the buyer. This puts paid to a common and unpopular practice by developers to increase the cost of projects.
Regulation of airfares through CCI
The ministry, which will soon make operational an economic cell to monitor domestic airlines' pricing mechanism, is looking at forwarding reports to CCI to take corrective action in the event of discrepancies in airfares.
Civil Aviation Minister Ajit Singh said: "The airfare monitoring cell is ready and will soon be commissioned under the aegis of the ministry. The economic cell would analyse data on tickets sold by airlines under different price buckets and make the information public to bring in transparency in airfare pricing. In case there are discrepancies, it would be referred to CCI."
He clarified the ministry would not attempt to regulate fares and would continue to allow airlines to determine fares based on market dynamics. However, if discrepancies surface in ticket prices from an analysis of data by the economic cell, it would be reported to CCI for commensurate evaluation and action.
The ministry would access data on all the tickets sold by different carriers under various price brackets and then analyse the data to give an indication of exactly how many tickets were sold under each price slab. The airfare monitoring cell will help keep in check random increases in fares and predatory pricing in the aviation industry by making it mandatory for airlines to disclose data on fuel charge and taxes being levied on tickets. This will help the government keep a tab on the correlation between seats available, prices offered, taxes levied and the final pricing of air tickets to consumers.
Available data would be made public to inform consumers of how airlines arrived at the final pricing of an air ticket.
Senior ministry officials said, though airlines claimed to follow a dynamic pricing model at present, there was no mechanism to know whether the tickets in the lower price band had been sold or not. Besides, there were no set criteria to determine the price bands under which tickets were sold. The economic regulator would closely monitor the parameters in ticket pricing, they added.
Currently, there is no regulatory mechanism to monitor pricing mechanism of airlines. The Directorate General of Civil Aviation asks airlines to disclose the components in airfare structure on receiving complaints of predatory pricing but does not have the power to take corrective action.
Consumer Protection in Real Estate