Critical Analysis of Mediation in Consumer Dispute Redressal

Critical Analysis of Mediation in Consumer Dispute Redressal

Critical Analysis of Mediation in Consumer Dispute Redressal. The following is the data recorded by Consumer Dispute Redressal Commission for the year 2019:-

Sl. No. Name of Agency Cases filed since inception Cases disposed of since inception Cases Pending % of total Disposal
1 National Commission  132596 111597 20999 84.16%
2 State Commissions 943620 818719 124901 86.76%
3 District Forums 4301258 3959149 342109 92.05%
  TOTAL 5377474 4889465 488009 90.92%

Though the following forums have performed tremendously well in terms of disposing of consumer disputes, what goes behind such an impressive rate of case disposal is a lot of paperwork and unsolicited botheration, both to the seller as well as the buyer. Moreover, there have been occurrences when the National Commission has taken over five years to choose cases.

Given the fact that the ultimate motive of a buyer in a market is to sell his products and earn profit and that of the seller is to find the good that best fits his needs, the lawmakers have evolved one of the most commonly used Alternate Dispute Resolution methods in Consumer Disputes-Mediation. Mediation has proved beneficial in promoting sustainable relationships between both parties, which is an important factor in all business practices. It is noteworthy that incorporation of ADR in consumer protection has also been iterated by the Hon’ble Supreme Court in M/s Afcons Infra Ltd. v. M/s Cherian Varkey Construction Company Ltd. and Others[1], wherein all consumer disputes, especially where the actors in a market, namely trader, supplier, manufacturer or a service provider are keen to maintain their professional reputation and credibility or popularity of the product can be referred to ADR.

As per the recent trend, Mediation is being preferred over Arbitration because unlike Arbitration, Mediation is less formal in terms of applicability of laws, place of arbitration and enforceability of awards.[2]

Advancement of the idea

The ‘Digital India’ Programme, approved by the Hon’ble Prime Minister Narendra Modi in August 2014 aims to transform the country into a digitally empowered society and knowledge economy. 437With developments at the grass-root level, it will, and has indeed been possible for a common consumer to access online mediation from any corner of the country. Farmers and self-employed consumers have been empowered enough to resolve their disputes from remotest of areas irrespective of jurisdictional issues, thereby beating the clock in terms of time incurred in traveling to the nearest consumer redressal agency. Confidentiality, flexibility, economy, and elimination of jurisdictional issues are some of the added advantages.

On 9th August 2019, the Indian Parliament passed the Consumer Protection Bill 2019 which explicitly provides for effective and quick settlement of disputes and establishing authorities for the same, including consumer mediation cells.

Section 37 of the act provides that-

37. (1) At the first hearing of the complaint after its admission, or at any later stage, if it appears to the District Commission that there exists elements of a settlement which may be acceptable to the parties, except in such cases as may be prescribed, it may direct the parties to give in writing, within five days, consent to have their dispute settled by mediation…”

Why Mediation in Consumer Disputes Falls Through

Despite the innumerable benefits, the procedure of Mediation falls short of achieving the purpose because of the following reasons:

  • Normally, a complainant goes to consumer court only after he/ she has resorted to all the other methods of finding a solution to the problem- including the concerned grievance cells of the company or reaching out to an Ombudsman. Only on being disappointed by these authorities does a consumer go to court. In such a case, the rationale behind introducing another round of mediation seems inconsistent.
  • The process of mediation may not always succeed in securing compensation for aggrieved complainants. A mediator can only suggest compensation, but history provides that the opposing party always wants better bargaining power and, therefore, might not pay the compensation.
  • As per the aforementioned bill, a mediator is to be solely guided by the principles of natural justice. The principle of Audi alteram partem(let both sides be heard) is a primary rule of natural justice and one corollary of the rule is that the judge should hear them in presence of each other. A Judge hearing a party in the absence of the other would be at odds with judicial propriety. On the other hand, Mediation law recognises on the other hand that a mediator is not a judge and must possess at his command a procedure which is flexible enough to hear parties separately, wherever it might be necessary


The essence of mediation lies in the role of the mediator as a facilitator. The Consumer Protection Act, 2019 leaves mediation more at the disposal of district commissions. Thus, at the present stage, there can be no gainsaying the fact that Legislation and Judiciary have to work hand in hand to fulfill important responsibilities towards achieving the goal of creating a viable mediation strategy with respect to consumer protection.

[1] Civil Appeal No.6000 of 2010.

[2]Mirèze Philippe, “ODR Redress System for Consumer Disputes – Clarifications, UNCITRAL Works & EU Regulation on ODR”, International Journal of Online Dispute Resolution, Eleven International Publishing, Volume I, Issue I, 2014, p. 69.

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