News By/Courtesy: Alden D'Souza | 21 Apr 2020 12:44pm IST


  • The Consumer Protection Act was introduced in 2019
  • The new Act brings in vast changes
  • Mediation is introduced in the new Act.

Markets have greatly transitioned not just merely in terms of the way they carry out their daily activities but, also in terms of the principles that guide them. Over time persons have acknowledged the upper hand the trader often has in terms of nature of control over the quality, quantity, purity and concentration of the particular product being sold. The Industrial revolution drove in a more consumer centric approach to business and with it came the necessity to protect the consumer from being befooled. The Consumer Protection Act, 1986 was enacted to provide for better protection of the interests of the consumers and for the purpose of making provisions for establishment of consumer protection councils and other authorities for the settlement of Consumerdisputes. However, with the further transformation that the Consumer markets have undergone including the Digitisation of trade, the Parliament passed the Consumer Protection Act, 2019 to further protect consumers from the vulnerabilities of Misleading advertisements, Tele-Marketing, multi-level marketing and E- Commerce. The Act further Envisaged the creation of a Central Consumer Protection Authority to promote, protect and enforce the rights of consumers and to furthermore make necessary interventions to prevent unfair trade practices and to also initiate class action including enforcing recall, refund and the return of products. The Act also provides for simplifying the adjudication process of the consumer dispute redressal agencies along with provisions for mediation of disputes by Alternate Dispute Resolution mechanisms.

The goal of the 1986 legislation was to ensure that the interest of consumers is upheld and to ensure the Right to Seek redressal is protected. The Sec 9 of the Consumer Protection Act, 1986 provides for three tier redressal of consumer disputes at the district, state and national level. Consumer Dispute Redressal Agencies were provided for in the Consumer Protection Act, 1986 in order to address the right to seek redressal. According to India Today, it takes an average of six years for a civil suit to decided in an Indian court, excluding the time taken for appeals and when it comes to a consumer dispute, the time taken would be ridiculous. The existing redressal seeking mechanism in itself was not satisfactory. A survey conducted by the Centre for Consumer Studies, Indian Institute of Planning showed the true understanding of the consumers towards the existing redressal systems.  The results of this survey showed that 71.9% of the people involved in the survey were dissatisfied with the functioning of the redressal system at the various levels and only 28.1% were satisfied with its functioning. The consumer complaints to the redressal mechanism continuously increased however, the data on the same was not properly maintained.

The main criticism of the redressal system was the delay in the disposal of cases. A problem that is prevalent throughout the Indian judicial system. Motilal C Setalvad once said, “A burning problem which the citizens, lawyers and judges face alike is that of the congestion of courts of law and the consequent inordinate delays in the administration of justice.” The act provides time periods during which the complaint can be provided and the time period within which the complaint needs to be addressed. Despite the same, the time taken for addressing the consumer issues took a long time.

To address this problem, the 2019 Act provided for an alternative which was most needed in the Indian system. The A.D.R mechanism in the 2019 act provided for mediation as solution to disputes and quick provision of justice. Chapter V of the Consumer Protection Act of 2019 provides for a mediation process for consumers to avail. The Act provides for the the establishment of mediation cells at three levels - National, State and District with all three being attached to the respective commissions.

The mediation cells are mandated to create a panel of mediators and this panel is updated on a regular basis. The Act lays down the duties and responsibilities of the mediator in the process of mediation in Section 77 particularly with regards to the duty to disclose necessary information to either parties. The Act further lays down the procedure for mediation and how the settlement for the same would be possible. It also requires the recording of the said settlements by the respective commissions.

The entire process itself is new to the consumer protection realm in India and is step up from the 1986 Act in terms of quicker provision of justice. The inclusion of mediation as an alternative mechanism follows the recent shift in the legal system to ensure faster addressing of cases and faster provision of justice.

Section Editor: Pushpit Singh | 21 Apr 2020 15:18pm IST

Tags : consumer protection, India, Mediation, Alternate Dispute Resolution

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