Agencies created for Consumer Redressal: Overview

By | June 23, 2020
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Agencies created for Consumer Redressal | Overview

The Agencies created for Consumer Redressal are the platforms to obtain justice for aggrieved consumers.  Countries all over the world have adopted laws in order to protect the rights and interests of the Consumers. Consumers are an important stakeholder as well as a contributing force to the economy of any nation, and it is in the best interests of the Government to provide a safeguard for them.

Consumer Protection is a key issue of our times. In order to enforce the laws that have been drafted to protect consumers, the government establishes agencies for Consumer Dispute Redressal. The aggrieved customer who has faced fraud or deceit, or other similar problems from a company or brand can approach these Consumer Courts and demand compensation. In order for Consumer Dispute Redressal Agencies to dispense justice, they need to be inclusive, accessible and the procedure should be affordable.

Introduction

Consumer Redressal Agencies are the consequence of the Consumer Protection Act, 1986. There are essentially three Consumer Dispute Redressal Agencies, with a defined hierarchy amongst them. The 1986 Act has defined the regulations and directions for the functioning of these agencies. This is covered under Chapter III of the Consumer Protection Act of 1986.

Section 9 of the 1986 Act defines the structure for establishing the following agencies. –

  1. The District Forum is instituted by the State Government for every district of that State. It is done through notification.  If one particular district covers a larger area or has a greater population, the government is free to set up more than one District Forum in that district.
  2. The State Disputes Redressal Commission is instituted by the State Government. This is done by notification, as well. This is the responsibility of the State Government.
  3. The National Disputes Redressal Commission is the responsibility of the Central Government, it is established by notification.

I. District Redressal Forum

The local institute for consumer dispute redressal is the District Forum, which is at the lowest position in this hierarchy. It is governed by Sections 10, 11, 12, 13, and 14 of the Consumer Protection Act, 1986. The State government allocates the salary of the people working in District Forum. In order to resign, they need to send a letter to the State Government.

Section 10(1) of the 1986 Act explains the structure of the District Forum. The legal structure is as follows –

  1. It requires a President. The President has the same qualifications as that of a District Judge.
  2. There are two more members, beside the President. One of them has to be a woman.
  3. The eligibility for the position of those two members is based upon them being older than 35 years of age. They also need to possess a degree from a known university. They also require at least ten years of experience in fields related to law, economics, administration, commerce and public affairs.
  4. Qualities of integrity, ability and standing are emphasized.
  5. The duration of the term is five years for every member.

It is also important to note the conditions that make someone ineligible to become a member or President of the District Redressal Forum –

  1. Someone who has been convicted and imprisoned is disqualified. The idea behind this is that he or she has violated a moral code and therefore is not fit for this job.
  2. Anyone who is an undischarged solvent is immediately disqualified for appointment,
  3. Anyone who has been declared to have an unsound mind, by any competent court.
  4. Anyone who has dismissed from a government service or an organization that is controlled or owned by the government is not considered suitable either.
  5. If the State government has reason to believe that the individual may have vested interests that may hinder him from performing in an objective and unbiased manner – they may be disqualified.
  6. If the candidate has any other conditions that may disqualify him from appointment, based on the State Government’s prescribed criteria.

As per Section 10 1(A), the committee that makes these appointments consists of the following –

  1. The President of the State Commission has the role of the Chairman of the Selection Committee.
  2. The Secretary of the Law Department of the State, and the Secretary dealing in consumer affairs are both Members of the Selection Committee.
  3. If the President of the State Commission is unable to take the responsibility as the Chairman of the Selection Committee, the Chief Justice of the High Court is asked to nominate a sitting judge from his court to take up the responsibility of the Chairman.

The Selection Committee can recommend a reappointment if it so intends.

Dismissal and Compensation

If the aggrieved consumer does not appear in court on the designated date of the hearing the Forum has the authority to dismiss the complaint.
The District Forum is empowered to provide certain remedies to the aggrieved consumer, as per Section 14 of the 1986 Act. The remedies include monetary compensation, mandating discontinuation of the unfair trade practice and putting an end to the sale of that product, etc.

The decision of the District Forum can be appealed with the State Commission, within 30 days of the verdict, as stated in Section 15 of the 1986 Act. Also, the petitioner should have paid either Rs. 25000 or 50% of the compensation decided by Court, whichever is less.

The procedure for registering a complaint is explained through Section 13 of the 1986 Act. The amendments brought through the 2019 Act provide the option of online registration of complaints. Now, an aggrieved consumer can file a complaint before the District Forum through electronic means. This makes the process easier and less time-consuming.[1] Consequently, the district forum has become more inclusive and accessible.

II. State Commission

The Consumer Disputes Redressal Commission, known simply as the State Commission, is at the second position in the hierarchy of the Consumer Courts. This Court handles the matter of appeals. It is governed by Sections 16, 17, 18 and 19 of the Consumer Protection Act, 1986.

The State Commission has the liberty to transfer a complaint from the District Forum to itself, at any stage of the proceeding.  The State Commission may be outside its usual place in the capital of the State. These are known as Circuit Benches.

Section 16 of the 1986 Act explains the structure of the State Commission. It is as follows-

  1. It requires a President. The President has the same qualifications as that of a High Court Judge. It is essential to note that no appointment can be made without consulting the Chief Justice of the High Court.
  2. There are two more members, beside the President. One of them has to be a woman.
  3. The eligibility for the position of those two members is based upon them being older than 35 years of age. They also need to possess a degree from a known university. They also require at least ten years of experience in fields related to law, economics, administration, commerce and public affairs.
  4. Qualities of integrity, ability and standing are emphasized.
  5. The duration of the term is five years for every member.
  6. It is not permitted to have more than 50% of members from a judicial background.
  7. At no point can there be more or less than two members in the Commission.

It is also important to note the conditions that make someone ineligible to become a Member or President of the State Commission –

  1. Someone who has been convicted and imprisoned is disqualified. The idea behind this is that he or she has violated a moral code and therefore is not fit for this job.
  2. Anyone who is an undischarged solvent is immediately disqualified for appointment,
  3. Anyone who has been declared to have an unsound mind, by any competent court.
  4. Anyone who has dismissed from a government service or an organization that is controlled or owned by the government is not considered suitable either.
  5. If the State government has reason to believe that the individual may have vested interests that may hinder him from performing in an objective and unbiased manner – they may be disqualified.
  6. If the candidate has any other conditions that may disqualify him from the appointment, based on the State Government’s prescribed criteria.

As per Section 16 1(A), the committee that makes these appointments consists of the following –

  1. The President of the State Commission has the role of the Chairman of the Selection Committee.
  2. The Secretary of the Law Department of the State, and the Secretary dealing in consumer affairs are both Members of the Selection Committee.
  3. If the President of the State Commission is unable to take the responsibility as the Chairman of the Selection Committee, the Chief Justice of the High Court is asked to nominate a sitting judge from his court to take up the responsibility of the Chairman.
  4. The Selection Committee can recommend a reappointment if it so intends.

The State government allocates the salary of the people working in the State Commission. Section 18 states that the legal process for the State Commission and the District Forum are the same, as mentioned in Section 12, 13 and 14 of the Act.

III. National Commission

The National Consumer Disputes Redressal Commission, is at the top position in the hierarchy of consumer courts. However, obviously, it is subordinate to the Supreme Court. As per Section 19 of the Consumer Protection Act 1986, one can appeal the decision of the National Commission in the Supreme Court, within thirty days of the verdict.

However, the petitioner will be bound to pay either 50% of the compensation decided against him or Rs. 5000, whichever is less.
The National Commission deals with cases that have appealed against the decisions made by the State Commission. The Central Government allocates the salary structure for the members.

Section 20 of the 1986 Act explains the structure of the National Commission. It is as follows-

  1. The President is someone who is or has been a judge of the Supreme Court. The appointment is made by the Central Government.
  2. The Commission consists of four members, at least one of them being a woman.
  3. The eligibility for the position of those two members is based upon them being older than 35 years of age. They also need to possess a degree from a known university. They also require at least ten years of experience in fields related to law, economics, administration, commerce and public affairs.
  4. Qualities of integrity, ability and standing are emphasized.
  5. It is not permitted to have more than 50% of members from a judicial background.
  6. The President has the authority to select the Bench of the Commission as one or more.
  7. The decisions are based on a majority vote. If the vote is split equally, the President steps in as the tiebreaker.

In the interest of justice, the National Commission can receive a transfer of a complaint from the State Commission, during any point in the proceeding. It can happen on its own motion or be done through the application of the complainant. It is also key to note that Section 22 provides the National Commission with the unique authority to review any orders passed by itself, if there is any potential error on the record. The National Commission may be outside its usual place in New Delhi. These are known as Circuit Benches[2].

IV. Jurisdiction

The Jurisdiction of the District Forum, the State Commission and the National Commission is explained through Section 11, 17 and 21 of the 1986 Act respectively. However, the 2019 Act brought certain changes in the same.

  1. Territorial Jurisdiction
    The changes brought by the 2019 Act grant consumers more access to justice. Earlier, consumers faced difficulty if the business did not have an office in their state, because jurisdiction was restricted to the area where the seller lived or conducted business, as per Section 11(2) of the 1986 Act. The 2019 Act permits consumers to file a complaint based on where they live or work.[3] It has made the process more accessible.
  2. Pecuniary Jurisdiction
    The 2019 Act brought changes in this aspect for the District, State and National Commissions. Earlier the limit for District Commission was 20 Lakhs[4] but now it is Rs. 1 Crore[5]. The limit for State Commission used to be Rs. 1 Crore but is now extended till Rs. 10 Crore. Likewise, the limit for the National Commission has increased above and beyond Rs. 10 Crore[6]. As the 1986 Act, the limit for National Commission was restricted to Rs. 1 Crore.[7]

Conclusion

The Consumer Dispute Redressal Agencies ensure an effective, simple and quick process to address the grievances of consumers. The Consumer Protection Act 1986 introduced these agencies in order to provide an accessible, inclusive and affordable mechanism for justice. However, even today, the awareness levels amongst consumers are not as much as it should be. In order for these agencies to function to the best of their abilities, it is crucial for consumers to know their rights.


[1]Section 1(17) of The Consumer Protection Act 2019

[2] Section 17(B) of the Consumer Protection Act 1986

[3]Kanth G, ‘The Consumer Protection Act, 2019: An Overview – Consumer Protection – India’ (Mondaq.com, 2020), Available Here, accessed 15 June 2020

[4]Section 11(1) of The Consumer Protection Act 1986

[5]Section 34(1) of The Consumer Protection Act 2019

[6]Section 47(1)(a)(i) of The Consumer Protection Act 2019

[7]Section 17(1)(a)(i) of The Consumer Protection Act 1986


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  • Piyush Kaushal says:

    Very well written!