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How 'Developing' Infra Is Hampering Consumer Protection

How 'Developing' Infra Is Hampering Consumer Protection

How 'Developing' Infra Is Hampering Consumer Protection
(Dreamstime)

Several months have passed since the Centre notified the Real Estate (Regulation & Development) Act, 2016 ─ the law came into force in May last year. The Act was likely to change the rules of the real estate game, making the sector buyer friendly.  However, as is typical of law enforcement in India, the infrastructure required to let the law play is in a state of “progress”, that is to say not much has so far been achieved to build the infrastructure. In fact, some states have yet to notify the rules in this regard. By the look of it, we are still far from the point where buyer will have full confidence in the working of the regulatory system, and bring back to life India's real estate sector that is in the grip of a slump since 2014.

Similar problems are also hindering another consumer-friendly law from doing what it is intended to do.

Taking a serious note of the “infrastructural inadequacy” and other issues that failed the purpose of the consumer courts in India, the Supreme Court in November 2016 recommended a "systemic overhaul" to make sure the Consumer Protection Act did not become a "dead letter". The apex court on November 21 had asked the government to frame the model rules for adoption by states within four months.

"A systemic overhaul of the entire infrastructure is necessary if the Consumer Protection Act is not to become a dead letter. With the proliferation of goods and services in a rapidly growing economy, Parliament envisaged the enactment to be the corner-stone of a vibrant consumer movement. Reality has been distant from the aspirations of the law," it had said.

The apex court listed gross inadequate infrastructure, poor organisational set-up, absence of adequate and trained manpower and lack of qualified members in the adjudicating bodies as the key reasons behind the poor state of the consumer courts.

Even after a year, the Centre has not been able to formulate the model rules. In fact, in a hearing on January 30, it was greanted by the SC granted another four-weeks' time to come up with “comprehensive model rules”. The matter is now listed for further hearing on April 27.

It is worth mentioning here that the government is working out the details to replace the Consumer Protection Act of 1986 to bring it in line with the 2015 United Nations guidelines on consumer protection.

"Stringent provisions are proposed against misleading advertisements. A Central Consumer Protection Authority with executive powers will be constituted for quick remedial action," Prime Minister Narendra Modi said in October last year.

The setting up Central Consumer Protection Authority gives buyers of property the option to approach two channels in case of misleading advertisements—the Real Estate Regulatory Authority is already there. Under the provision of the real estate Act, developers would lose their registration if they tried to mislead consumers through advertisement.

In short, there is no lack of laws when it comes to consumer protection; it is the ever “in-progress” infrastructure development that is acting the spoil sport.

With inputs from Housing.com

Last Updated: Thu Feb 08 2018

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