Interestingly, the Delhi High Court, in proceedings instituted by Amazon, Flipkart, Snapdeal and others against the CCPA for their alleged role in sale of faulty pressure cookers, has sought answers from the Union on what it intends should be the jurisdiction, scope, ambit and width of the powers of the CCPA. The Union was also directed to explain whether it intended that the CCPA would be a parallel consumer forum. These proceedings are currently pending. Since there is lack of clarity on these aspects of the CCPA’s powers, it would be interesting to see the Union’s response on this issue and whether the Delhi High Court issues any ruling on these aspects.

Any authority which is entrusted with protecting interests of consumers as a class should necessarily have wide powers. However, the width of the powers should be well defined so as not to encroach upon powers of other sector specific regulators. From orders passed by the CCPA available on its website, it appears that on various occasions, CCPA has entered the regulatory domains of other authorities such as the Central Drug Standard Control Organisation, the Reserve Bank of India, the Food Safety and Standards Authority of India, etc. and issued orders against entities which come directly in the regulatory supervision of these authorities.

While the Consumer Protection Act does not bar parallel proceedings being initiated by the CCPA and the sectoral regulators, oftentimes, the issues being probed by the CCPA originate from the alleged violations of laws other than the Consumer Protection Act. Such instances can cause clashes amongst CCPA and the regulators and lead to inconsistent outcomes in parallel proceedings. One of the unintended consequences of such clashes or parallel proceedings is greater hardships for the market players, who face the brunt of two regulators for the same alleged wrongdoings.

Since the ultimate objective of these sector specific laws as well as the Consumer Protection Act is to protect and further the interest of consumers, it is imperative that these regulatory authorities work in tandem. It must also be remembered that for appropriately addressing many of these issues, the sectoral expertise and knowledge of specialised regulators is crucial. The regulatory authorities are better equipped to probe issues requiring specialised knowledge leading to more meaningful and sustainable outcomes for all stakeholders.

The Consumer Protection Act recognises that certain matters require reference to other regulators to be dealt with by them. The Act therefore provides that after undertaking a preliminary inquiry, if the CCPA prima facie finds any wrongdoings, it may refer the matter to the sectoral regulator to be dealt with by such regulator. Thus, rather than the CCPA instituting its own proceedings in all cases, it can, where appropriate, refer matters to the concerned regulators for a meaningful and holistic resolution. This would not just protect consumer interests, but also be beneficial for the industry players. A collaborative and balanced approach between the CCPA and sectoral regulators will go a long way in achieving the objectives of consumer protection and ease of doing business.

This article was originally published in Bar & Bench on 20 November 2024 Co-written by: Vaibhav Singh, Partner; Radhika Indapurkar, Principal Associate. Click here for original article

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