SYNOPSIS
The Consumer Protection Act, 1986 whose sole purpose was to protect the rights of the consumers and to provide speedy
redressal to them has become archaic and does not consider modern day consumer market challenges, especially those dealing
with online, teleshopping, product recall, unsafe contracts and misleading advertisements. Further consumer courts in India, are
burdened with more than 4.3 lakh pending cases and for petty amounts consumers have to wait for years to get justice. In order
to strengthen and empower consumer rights in India The Consumer Protection Bill, 2019 which is considered as a milestone in
protecting the rights of the consumers has been passed by the parliament. The New Consumer Protection law repeals and
replaces the CPA, 1986 and seeks establishment of Central Consumer Protection Authority, mediation, product liability, and
faster redressal by the consumer commissions. The author identifies important questions stemming from the discontinuities in
the Consumer Protection Act, 1986, the backlog and pendency of consumer cases and discusses how mediation as proposed in
the new law can be a game changer in consumer protection.
RESEARCH QUESTIONS ON consumer protection
1.Parties not mediating with “good faith” intent to work together to resolve the
dispute.
2.Parties not hearing what is said.
3.Parties not willing to separate the person from the problem.
4.Failure to have the right management representative present.
5.Parties remaining fixed in their positions.
OBJECTIVES
• Mediation1
is an out-of-court settlement where the parties can decide the
manner of the proceedings. It helps the speedy settlement of disputes.
• The Consumer Protection Act, 2019 has introduced the provision where the
relevant Commission can refer a consumer dispute for mediation, when there is
a scope of settlement between the parties2
. However, parties to the mediation
are given a time frame of 5 days to accept or reject the process of mediation,
as consent is vital for it3
. Once a dispute is referred to mediation, the fee paid
to the Commission for dispute redressal is refunded to the parties.
INTRODUCTION
• With the advent of digital technologies, increasing penetration of e-commerce,
smart phones, cloud and internet, global supply chains, have provided new
opportunities for consumers by providing easy access of products and services.
But on the other hand, today’s consumer is vulnerable to new forms of
challenges such as, online fraud, ATM data leak, getting defective, substandard,
duplicate, poor quality and unsafe products, predatory prices exploitative and
unfair trade and unethical business practices. Further, misleading advertisements
especially digital, tele-marketing, multi-level marketing, direct selling and e-tailing
are some other challenges which never existed in 1986.
• Since the consumer cannot check or verify the claimed features of the product or
service by the website it relies on the representations made on the e-portals and
many times makes advance payments before receiving or opening the product.
Lack of knowledge about the address or location of the website and how and
where to file a complaint if the seller dupes them are other problems faced by
consumers.
• The absence of effective and efficient consumer dispute redressal system can
result in lack of consumer confidence in the Justice Delivery System. Consumers
find it difficult and expensive to have their disputes settled because most of their
claims are of small value and some consumers are low-income earners. The
Consumer Protection Bill, 2019 seeks to empower consumers against above
mentioned challenges and replaces the three-decade old legislature.
• In a developing country like India, Alternative Dispute Resolution Mechanism can
be one of the best strategies for quicker resolution of consumer disputes and to
lessen the burden on the consumer forums and to provide suitable mechanism
for expeditious resolution of consumer disputes.
• The Consumer Protection Bill, 2019 envisages introducing the process of
mediation for speedy disposal of consumer disputes.
• The objectives of the study are as follows: 1. To understand the shortcomings in
the Consumer Protection Act, 1986, especially delay in consumer dispute
redressal and the challenges faced by consumers especially while buying online.
- To study innovative methods such as mediation in consumer dispute
resolution. - To examine the skills, constraints and dynamics of the negotiation process in relation to
consumer protection. - To discuss the provisions of Consumer Protection Bill, 2019 on mediation and its aceptance by
aggrieved consumers.
SHORTCOMINGS OF THE CONSUMER PROTECTION ACT, 1986.
After more than 30 years of implementing the Consumer Protection Act, it is time to reconsider
and rethink whether Consumer courts have been able to deliver as promised. Are the consumers
getting speedy redressal? Delay in disposal of consumer cases, non-disposal of cases, lack of
manpower and poor infrastructural facilities, are other problems related to Consumer courts.
There have been allegations that the lawyers have taken over the consumer forums as the
consumer is unaware of the legal procedures and processes and hesitates to plead its case in the
consumer courts. The threetier judiciary is totally dependent on the Department of Consumer
Affairs for each and everything including appointment of members and financial support. In
disputes between consumers and businesses. Alternative Dispute Redressal (ADR) is emerging as
a faster, cheaper and cost-effective method for timely disposal of consumer complaints. Since
justice delayed is justice denied, the consumer courts these days are facing the problems of huge
pendency and delays in disposal of cases.
• The consumer courts have been established with the twin objective for speedy
redressal of consumer complaints and to establish quasi-judicial authorities
unlike civil courts to provide compensation to consumers. But over the years
there have been heavy pendency of cases in various consumer courts. Some of
the lacuna of the Consumer Protection Act, 1986 are:
a) The Consumer Protection Act, 1986 although a benevolent legislature whose
sole purpose was to protect the rights of the consumers has become outdated and
does not consider rapid changes in consumer marketplaces, especially those
dealing with online, teleshopping product recall, unsafe contracts and misleading
advertisements.
b) Section 13 (3A) of CPA, 1986 states that “every complaint shall be heard
expeditiously as possible and endeavour made to dispose of complaint within a
period of three months from the date of notice by the opposite party and five
months if it requires testing of commodities.” But it is seen that due to heavy
pendency of cases and frequent adjournments delay in getting justice takes place
(The Consumer Protection Act, 1986).
c) The consumer courts have been overburdened with pending cases and the buyer-seller
contract is tilted in favour of the seller. Further the procedures are becoming expensive
and time consuming. Therefore, it is time that ADR and mediation process are being
adopted.
d) The Presidents and Members of the consumer courts constitute the backbone of the
consumer dispute redressal system. They play a major role in enhancing the faith of the
consumers in the redressal mechanism. But it has been seen that there are more than
400 posts of President and members in various consumer forums which are lying vacant.
The State governments do not show any interest in immediately filling up the vacant
posts and the issue of consumer protection is not a part of any political parties agenda.
e) Consumer courts are functioning with staff deputed from other departments who do
not have any experience in judicial practices. It is necessary to provide intensive training
to the members of the Consumer courts before putting them on the job. The present
practice is to provide training after assuming charge as a member.
f) Many times, it is seen that the award given by consumer courts is very meagre and
petty and the consumer has to run from pillar topost to get the orders implemented.
g) There has been lack of proper coordination among the President and members
of the consumer court, for timely adjudication of cases and many times around ten
or fifteen adjournments are allowed.
h) The President of the National Commission or State Commission are not
empowered to take up suo motu action in consideration of the damages affecting a
sizable number of populations e.g. misleading advertisements.
ANALYSIS OF THE CASES DISPOSED BY CONSUMER COURTS
According to the data available from the Department of Consumer Affairs more
than 4.3 lakh cases are pending in the various consumer courts, which is an
alarming figure. When the consumer courts were formed their main purpose was
to provide inexpensive and speedy redressal to consumers, where a consumer
could itself plead its case in the consumer courts (Aggarwal V.K., 2015). Since the
law was complex in nature, many consumers started hiring lawyers and there were
frequent adjournments which were given by these consumer courts which started
delaying the entire adjudicatory process.
NEED TO IMPROVE: MEDIATION AN
INNOVATIVE AND PRACTICAL METHOD
• As mentioned in earlier section, the growing number of pending cases in
consumer courts and delays in getting redressal requires some fast track
alternatives so that justice reaches to the aggrieved consumers immediately.
• There are huge challenges faced by online buyers such as breach of data privacy
and security, substandard and duplicate products, phishing, territorial
jurisdiction. In Indian Legal System, appropriate methods of disputes resolution
such as, arbitration, conciliation, mediation and Lok Adalat can be used for easy
consumer dispute resolution. These methods are less formal, encourage
disputants to communicate and participate in the search for solutions, focus
better on the root causes of the conflict, salvage relationships and have
significant savings in time and cost. A Mediator does not decide what is fair or
right, does not apportion blame, nor renders any opinion on the merits or
chances of success if the case is litigated. Rather, a mediator acts as a catalyst to
bring the two disputing parties together by defining issues and limiting obstacles
to communication and settlement. The Mediation Process consists of;
1.Structured Process
- neutral third party
- Facilitates resolution of disputes
- Mutually acceptable to parties 5. Specified negotiation and communication
techniques.
NEED FOR MEDIATION IN CONSUMER CASES.
The concept of mediation is ancient and deep rooted in our country. In olden days
disputes used to be resolved in a panchayat at the community level. Panch used to be
called Panch Parmeshwar i.e. were equated to God. Our judicial system is one of the best
in the world and is highly respected, but there is lot of criticism on account of long delays
in the resolution of disputes in civil court and consumer forums. Many times, consumers
are wary of approaching the consumer forums or civil courts for a decision of their
dispute. Mediation in comparison to a lawsuit is quick, private, fair and inexpensive. It is a
different paradigm and path from litigation which focuses on the past, establishing blame
and liability and a win-lose results. . In mediation the emphasis is on the future
cooperation and direct communication with objective of sustainable solutions with win-
win situation for all parties.
• It is a voluntary and flexible process where the parties participate in decision-making process
and are only bound when they enter into a written agreement. It works in disputes before they
are taken to court, to disputes pending in courts and even after a Court verdict has been given.
It is a strong tool in the hands of the parties to devise solutions which could be more effective
than judicial verdict.
• In Western countries the response to mediation is very successful. Courts of law have set up
Court Annexed Mediation Programmes. Lawyers have found that mediation is a new skill,
which aids their clients. Clients have realised that mediation is a cost and time effective process
and prefer lawyers who can suggest mediation before going to court. In USA ADR has been
practiced for about 30 years and 90% cases settled through ADR in USA whereas in UK,
Australia and other countries ADR has been practiced for about 20 years with huge success rate
(Panchu Sriram 2015).
• The process of adjudication of consumer disputes is adversarial in nature and is characterised
with numerous and complex rules of form and procedures. Filing a consumer complaint
comprises of many rules and procedures where the process of the issuance of legal notice to
the opposite party and adjudication through a three-tier consumer courts is very time
consuming. Many times, consumers face the situation of David and Goliath where the
consumers have to fight against big players such as MNC’s who engage a battery of lawyers ,
and are ready to fight the cases for years.
• The mediator through its expertise, thinking power and maturity generates
solutions for the parties to resolve disputes amicably. A good mediator possesses
active listening, communication skills, option generation, reframing the case by
avoiding harsh language used by one party, transposing, reality testing and
maintain confidentiality. Delhi Mediation Project is a unique model. It is a pilot
project and is running under the guidance of the Supreme Court of India since
- The first batch of Senior Additional District Judges were imparted
Mediation Training of 40 hours duration. A permanent Mediation Centre was
established at Tis Hazari court complex (Central Hall, 3rd Floor, Room No. 325) in
October, 2005 and other mediation centre are working at Karkardooma Court
Complex, Rohini, Dwarka, Saket and Patiala House Courts Complex.
• MEDIATION AS THE NEW TOOL (THE CONSUMER PROTECTION BILL,
2019)
• In SpiceJet Ltd. v. Ranju Aery10 the consumer had to fight its case from the
district forum to State Commission to National Commission and then finally to
the Supreme Court regarding the contract of service entered through internet
and the cause of action of the complaint. In order to accelerate the process of
adjudication, The Consumer Protection Bill, 2019 envisages establishment of
Central Consumer Protection Authority, mediation, product liability, and faster
redressal by the consumer commissions. Since the adjudication process in
consumer courts is slow, setting up of mediation centres at District, State and
National Commissions annexed to the consumer courts can play an important
role in delivering justice.
• Sec 74 of the New Consumer Protection law mentions that the State Government
would establish a consumer mediation cell which would be attached to the
consumer courts and each of the regional benches. Every consumer mediation
cell would submit a quarterly report to the District Commission, State
Commission or the National Commission to which it would be attached. Thus,
every consumer mediation cell would maintain:
(a) a list of empanelled mediators;
(b) a list of cases handled by the cell;
(c) record of proceeding;and
(d) any other information as may be specified by regulations.
The tenure of the panel of mediators would be valid for a period of five years, and the
empanelled mediators shall be eligible to be considered for re-empanelment for another term,
subject to such conditions as may be specified by regulations. The mediation shall be held in the
consumer mediation cell attached to the various consumer Courts (Clause 75).
Clause 76 provides that it shall be the duty of the mediators to disclose certain facts which may
likely to give rise to a justifiable doubt as to his independence or
Impartiality whereas Clause 78 provides for replacement of a mediator by the consumer courts
on the information furnished by the mediator or on the information received from any other
person including parties to the complaint and after hearing even the mediator. Further
procedure of mediation is discussed in Clause 79 and Clause 80 discusses provisions relating to
settlement through mediation and the role of mediator when an agreement is reached between
the parties with respect to all of the issues involved in the consumer dispute or with respect to
only some of the issues, and in the event where no agreement is reached between the parties.
CONCLUSION
• Growing backlog and delay in resolution of consumer disputes can erode the
consumers trust in the legal system where the claims are of small value.
Mediation can play an important role in consumer dispute resolution, especially
in cases which are pending for more than five years in the consumer courts. In
comparison to a complaint filed in a consumer court, mediation can take away a
lot of burden from the consumer courts and can be quick, private, fair and
inexpensive. Thus, increasing and strengthening consensual alternatives through
mediation would help in reducing backlog and improve the chances for the
resolution of consumer disputes, by providing justice in time and hence can play
a vital role in the economic growth of india.
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