CCPA has
jurisdiction to initiate proceeding suo moto against enterprise
Case title:
Cloudtail India Private Limited.Versus Central
Consumer Protection Authority
CCPA Appeal No. 4 Of
2022
(Against the Order dated 04/11/2022 in
Complaint No. J-25/72/2021 of the CCPA DELHI)
CCPA directs Cloudtail
India Private Limited to recall 1033 pressure cookers, sold by the company in
the country, refunding its price to the consumers, within 45 days and imposed a
penalty of Rs.100000/-, for selling the pressure cooker, in violation of
Quality Control Order, 2020.
This is the first order
of its kind by CCPA after CP Act 2019 enforced
which has been challenged before the apex consumer commission questioning
the jurisdiction of CCPA.Since this is the new entity established under the Act
2019 ,this order holds significant importance.
Dr
Prem Lata ,Legal Head
Issue -Mandatory BIS Mark
Bureau of Indian
Standards Act, 2016, issued Notification dated 21.01.2020, making it mandatory
for domestic pressure cooker to bear Standard Mark under a licence from Bureau
of Indian Standards
Facts ;
1.
Cloudtail India Private Limited was
doing e-commerce through Amazon website and listed ‘Amazon Basics Stainless
Steel Outer Lid Pressure Cooker, 4 Litre’ on above website and sold 1033
pressure cookers in India after 01.02.2021. These pressure cookers were
manufactured by “Zhejiang Supor Company Limited, Damaiyu Economic Investment
Zone, Yuhuan, Taizhou, Zhjiang, China” and bears “European Commission Standard”
mark as established in the European Union and were imported into India, prior
to issue of the Order.
2.
Central Consumer Protection Authority is
a statutory authority constituted under Section 10 of the Consumer Protection Act,
2019 and under the power Section 18 of the Act, issued notice dated 29.11.2021
to the company to show cause as it were selling pressure cooker in violation of
the Order, which was liable to be held as defective, violative of consumer
right and amounts to unfair trade practice, within the meaning of the Act.
3.
The Cloudtail India Private Limited submitted
its reply dated 11.01.2022, stating
·
That the pressure cookers in question
were manufactured by “Zhejiang Supor Company Limited, Damaiyu Economic
Investment Zone, Yuhuan, Taizhou, Zhjiang, China” and conforms to the “European
Commission Standard” mark as established in the European Union
Directives-2014/68/EU granted by TUV SUD, valid up to 13.12.2030 and holds a
valid certification of conformance
·
That the product is of requisite
quality, pre-shipment inspection by a nominated third party inspection agency
is carried out and product is imported after satisfaction There was no
complaint, related to safety of the pressure cooker, since its introduction in
the market.
·
That import of this product in India was suspended prior
to 01.02.2021, i.e. enforcement of the Order.
·
The Order mandates domestic pressure
cooker to bear BIS mark by the manufacturer and is not applicable for an importer.
·
Frequently Asked Questions, as answered
by Bureau of Indian Standard (uploaded in February, 2019 and (uploaded on
14.11.2019) clearly provided that if product had been imported to India before
last date of implementation or manufactured by domestic manufacturers before
the last date of implementation, then such product can be sold
·
The pressure cooker is neither
‘defective’ within the meaning of Section 2(10) nor the appellant has committed
any ‘unfair trade practice’ within the meaning of Section 2(47) of the Act. The
product meets all objective criteria of Bureau of Indian Standards Act, 2016
and Consumer Protection Act, 2019 and the notice is liable to be discharged.
·
That a Test Report dated 15.02.2022,
from Delhi Test House, (a National Accreditation Board for Testing and
Calibration Laboratory) and Certificate of the “European Commission Standard”
mark as established in the European Union Directives2014/68/EU granted by TUV
SUD. T
Action by CCPA -.
Authority Called for
reports in connection with sold cookers without BIS Mark
·
Director
General Investigation, vide its report dated 04.07.2022 confirmed that product
sold without mark after enforcement of the Order, manufacture, import, sell,
distribution, hire, lease, store or exhibit for sale is violative of Section 17
of Bureau of Indian Standards Act, 2016.
·
Department for Promotion of
Industry and Internal Trade, vide its report dated.
28.09.2022 confirmed that no such
exemption was issued by it, permitting sale of pressure cooker in the country,
imported prior to the date of enforcement of the Order, which has no BIS mark.
Order by CCPA –
· Central Consumer Protection Authority, vide its order dated 04.11.2022, held that after enforcement of the Order on 01.02.2021, any domestic pressure cooker, offered for sale in India, is required to conform IS 2347 :2017
·
The pressure cookers which do not
conform IS 2347 :2017 are liable to be held as defective within the meaning of
Section 2(10) of the Act and violative of the consumer’s right as defined under
Section 2(9) of the Act.
· Admittedly, the appellant had sold 1033 pressure cookers after 01.02.2021, which did not conform IS 2347 :2017. The Cloudtail India Private Limited is directed to recall 1033 pressure cookers, sold by the company in the country, refunding its price to the consumers, within 45 days and a penalty of Rs.100000/-, has been imposed upon it for selling the pressure cooker, in violation of Quality Control Order, 2020
Hence
the present appeal has been filed before Apex Commission (NC) for adjudication
Stand of appellant
company before NC
Company reiterated its
stand in appeal as stated above However
appellant company also added Finding of Central Consumer Protection Authority
that pressure cooker was ‘defective’ raising presumption due to not having ISI
mark is illegal. In any case, violation of Domestic Pressure Cooker (Quality
Control) Order, 2020 may attract the provisions of Bureau of Indian Standards
Act, 2016 and not the Consumer Protection Act, 2019..
Analysis by National
Commission
“consumer rights” as defined under Section 2
(9) includes,—
(i)
the right to be protected against the
marketing of goods, products or services which are hazardous to life and
property;
(ii)
(ii) the right to be informed about the
quality, quantity, potency, purity, standard and price of goods, products or
services, as the case may be, so as to protect the consumer against unfair
trade practices;
(iii)
(iii) the right to be assured, wherever
possible, access to a variety of goods, products or services at competitive
prices;
(iv)
(iv) the right to be heard and to be assured
that consumer's interests will receive due consideration at appropriate fora;
(v)
(v) the right to seek redressal against unfair
trade practice or restrictive trade practices or unscrupulous exploitation of
consumers; and
(vi) (vi) the right to consumer awareness.
“defect” as defined under Section 2(10) of the
Act is quoted below:
"defect"
means any fault, imperfection or shortcoming in the quality, quantity, potency,
purity or standard which is required to be maintained by or under any law for
the time being in force or under any contract, express or implied or as is
claimed by the trader in any manner whatsoever in relation to any goods or
product and the expression "defective" shall be construed
accordingly.”
Observations
by Commission :
1. Section 16 of the Bureau of Indian Standards Act, 2016 directs compulsory use of standard mark. Since the Quality Control Order, 2020 has been enforced, then it has become compulsory for using the standard mark. In spite of the fact that it bears the European Commission Standard Marks or in any subsequent test report it has satisfied the norms of Bureau of Indian Standard. The right of the consumer has also to be looked into. The consumer has right to purchase the product bearing BIS mark only after 01.02.2021. If BIS mark is not fixed or certified and the product is sold then the right of the consumer has been violated and Standard mark after enforcement of the Domestic Pressure Cooker (Quality Control) Order, 2020, it was mandatory.
Supreme Court verdict
Various earlier judgments
on the issue :
Sumat
Prasad Jain vs. Sheojanam Prasad (Dead) & Ors (1973) 1 SCC 56
Delhi
High Court in Bottled Water Processor Association vs. Union of Inida, 2010 SCC
Online Delhi 2038 and Andhra Pradesh High Court in Sri Seetharamanjaneya
Swamyvari Seva Sangam vs. Superintending Engineer, APSPDCL, 2015 SCC Online
Hyd. 335
Above
judgments Highlighted the significance
of BIS standards and held that people at large will be put to risk and public
interest would be jeopardised if the safety standards are not complied with.
CCPA holds power under
Section 18 of the Consumer Protection Act, 2019 and Authority can exercise its power suo moto and
to protect the consumers’ interest it can pass any suitable order. It cannot be
said that it was without jurisdiction.
No procedural
irregularity is found in passing the order by CCPA. After
initiation of the proceeding, report dated 04.07.2022 has been obtained from
Director General (Investigation). The appellant has been given full opportunity
of hearing by giving the notice as well
as the report.
Order
by CCPA confirmed
Dr Prem Lata
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