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No Jail Term But Ban On Celebrities Endorsing Misleading Ads

“Incorporating the GoM suggestions, the ministry will soon move a cabinet note on the new bill."

11/11/2016 4:27 PM IST | Updated 11/11/2016 4:31 PM IST
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Kim Kyung Hoon / Reuters

NEW DELHI -- Diluting proposed penalties on endorsement of misleading ads, a GoM headed by Finance Minister Arun Jaitley has dropped a panel's recommendation for jail term to celebrities found guilty and decided to ban such offenders for up to three years.

Now, the Consumer Affairs Ministry will move a cabinet note seeking approval for moving these additional amendments to the new Consumer Protection Bill 2015, which has already been introduced in Lok Sabha to repeal the 30-year-old Consumer Protection Act.

Consumer Affairs Minister Ram Vilas Paswan is hoping to see the passage of this bill in the Winter Session of Parliament beginning from 16 November.

"In a recent meeting, the Group of Ministers discussed about the Parliamentary panel's recommendation to impose jail term for celebs endorsing misleading ads. Since no country has such a stringent penalty, the GoM decided that instead of imposing jail term, they should be banned from endorsements," a senior government official said.

The GoM recommended that the first time offenders should be fined ₹ 10 lakh and banned for one year, while the second and subsequent offenders should be fined ₹ 50 lakh and banned for up to three years, the official said.

A Parliamentary panel had recommended a fine of ₹ 10 lakh and a jail term of up to two years for first time offence, while a fine of ₹ 50 lakh and imprisonment of five years for second and subsequent offence.

"Incorporating the GoM suggestions, the ministry will soon move a cabinet note on the new bill," he said.

The GoM has also approved other recommendations of the panel to impose hefty penalty for adulteration besides license suspension/cancellation as well as inclusion of deficiency in services in product liability.

It has agreed to provide an enabling provision to make rules to regulate e-commerce and direct selling, and remove overlap of powers of Central Consumer Protection Authority (CCPA) and the Consumer Fora.

It has also removed a provision for penalty on consumers for frivolous complaints.

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