Ikshita Parihar and Shruti Dutt from Aureus Law Partners
Mediation allows parties to look at mutual interests and rights, and helps arrive at amicable solutions with the help of a mediator, who facilitates the whole process. Therefore, the introduction of mediation process in the Consumer Protection Act, 2019 (“Act”) is a beneficial step since early settlement of cases not only serves the interest of the consumers but is instrumental in unburdening the Commissions. The advent of Alternative Dispute Resolution (“ADR”) happened in the midst of a litigation crisis. In 1996, settlement of disputes by mediation amongst other means was introduced by way of an amendment in the Code of Civil Procedure, 1908.
Mediation under the Consumer Protection Act, 2019:
The suitability of ADR in consumer disputes has also been reiterated by the Hon’ble Supreme Court of India in M/s Afcons Infra Ltd. v. M/s Cherian Varkey Construction Company Ltd. and Others.
The Act incorporates mediation in its redressal procedure under Chapter V. The Act further provides for establishment and attachment of Mediation Cells to all the Commissions. Each cell is required to carry out certain functions to facilitate the process of mediation like, empanelling and training the mediators, maintaining records of proceedings etc. The process of mediation can be summarized as follows:
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Upon the filing of a consumer complaint under the provisions of the Act, if the Commission is of the view that there are elements of settlement in the dispute, it may direct the parties to give their consent in writing within 5 days. The Commission will refer the dispute for mediation within 5 days from receipt of consent. Reference to mediation cannot be made only at the first hearing of the complaint after it is admitted, but can also be made at any later stage.
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Mediation shall be conducted in the Consumer Mediation Cell of the Commission. The parties or their authorized representatives or counsel shall be present for the mediation. The parties are required to furnish all such information as the mediator may require for conducting the mediation. The mediator shall be guided by the principles of natural justice and fair play.
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The record of the proceedings is required to be maintained by the mediator on every date and it is also meant to be signed by the parties.
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Where the parties decide to settle, the settlement agreement so executed between them is to be submitted in a sealed cover, with a forwarding letter by the mediator to the Commission.
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In the event where no agreement is arrived at between the parties, within 3 months or the time extended by the Commission, the mediator shall intimate the same to the Commission. However, he cannot disclose the details of the proceedings including what stand was taken by the parties or why there was no agreement. This would allow the Commission to subsequently decide the dispute/complaint without any prejudice.
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The fee of the mediator is to be shared equally by the two sets of parties. In the event the mediation is unsuccessful, half of the actual fee would be paid to the mediator. The fee is to be deposited in advance, with the Mediation Cell.
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The Consumer Protection (Mediation) Rules, 2020, provide a list of matters that cannot be referred to mediation. These cases are as follows:
(a) the matters relating to proceedings in respect of medical negligence resulting in grievous injury or death;
(b) matters which relate to defaults or offences for which applications for compounding of offences have been made by one or more parties;
(c) cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion;
(d) cases relating to prosecution for criminal and non-compoundable offences;
(e) cases which involve public interest or the interest of numerous persons who are not parties before the Commission:
Upon the completion of the above process, the Commission shall pass an order of settlement within 7 days from the receipt of settlement report. Further, no appeal can be preferred against such a settlement order passed by the Commission. In the event where no settlement is reached the Commission shall continue to hear the dispute in accordance with the provisions of the Act.
The inclusion of mediation in the Act attempts to fasten the dispute resolution process while allowing the parties to preserve a healthy business relationship. Further, the Act endeavours to reduce the pressure on Commissions, who already have several cases pending for adjudication before them. However, the efficacy of the mediation process will be adjudged upon its implementation. Till then we can hope for some reprieve for the consumers as well as the Commissions.
