The practice of safeguarding buyers of goods and services against unfair practices in the market is known as consumer protection. In India, the protection of the rights of the consumers is administered by the Consumer Protection Act, 2019 and the Rules and Regulations made thereunder. The Consumer Protection Act, 2019(hereinafter referred to as CPA, 2019) was introduced to replace the Consumer Protection Act, 1986. The new Act contains various provisions which incorporate the challenges faced by modern and technology-dependent consumers. The Act also contains various provisions for the protection and promoting the rights of the consumers. A striking feature of the new Act relates to the establishment of “Consumer Mediation Cells” for settlement of consumer disputes through settlement mechanism. According to Section 2(25) of CPA, 2019, “mediation means the process by which a mediator mediates the consumer disputes”.  

 

CONSUMER MEDIATOR CELLS 

Chapter V of the Act, 2019 has introduced the provision of mediation as an Alternate Resolution Mechanism. The said Chapter V contains various provisions relating to the establishment and working of Consumer Mediation Cells. According to Section 79(1) of CPA, 2019, these Mediation Cells are attached to each tier of Consumer Redressal Commission such as:  

  1. On District Level- District Consumer Mediation Cell. 
  2. On State Level- State Consumer Mediation Cell. 
  3. On National Level- National Consumer Mediation Cell. 

It is to be noted that these mediation cells do not have appellate jurisdictions and on each stage the decision of Consumer Mediation Cells is final, and it is not allowed to raise any dispute against order passed by Mediation Cells. Their order will be considered as final and same will be followed by both complainant and the respondent.  

 

REFERENCE TO MEDIATION 

What kind of disputes can be referred to mediation? 

According to Rule 4 of Consumer Protection (Mediation) Rules, 2020, all the consumer disputes can be referred for mediation, except the matters relating to proceedings in respect of medical negligence resulting in grievous injury or death or cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion among other matters mentioned in the said rules.  

When can a dispute be referred to mediation? 

According to Section 37(1) of CPA, 2019, Consumer Commission may refer a consumer dispute for mediation at the first hearing of the complaint after its admission, or at any later stage, if it appears to the Consumer Commission that there exists any element of a settlement which may be acceptable to the parties.  

Who can refer a dispute to mediation? 

According to Section 37, section 49 and Section 59 of CPA, 2019, if it appears to the respective Consumer Dispute Redressal Commissions as the case may be, that there exists elements of settlement which may be acceptable to the parties, it may direct the parties to give in writing, within five days, consent to have their dispute settled by mediation.  

Further, according to Section 37(1) of CPA, 2019, in a consumer dispute, parties may also file an application requesting reference of their dispute to the mediation. On such application by any/all of the parties, consented by all the parties, the respective Consumer Commission may consider to refer the matter for mediation as provided in Section 37(2) of CPA, 2019. 

 

MEDIATORS 

For the purpose of the mediation in consumer disputes, mediator will be a person among the panel of the mediators. The Panel of the mediators will be prepared by the respective Consumer Dispute Redressal Commissions as the case may be; the mediation cell attached to the respective commission will maintain such panel on the recommendation of a selection committee consisting of the President and a member of that Commission. The panel of mediators shall be valid for a period of five years.  

Fees of Mediators-  

According to Regulation 11 of the Consumer Protection (Mediation) Regulations, 2020, the fee payable to mediator shall be affixed by the President of the respective Consumer Commission and payable by the parties in equal share. In case of an unsuccessful mediation, only half of the aforesaid fees shall be payable. The fee shall be deposited in advance with the Mediation Cell by the parties. 

Code of conduct- 

According to Regulation 10 of the Consumer Protection (Mediation) Regulations, 2020, Mediators have to follow a conduct of conduct which includes the following- 

  1. Mediator shall not communicate, directly or indirectly with any of the parties or their associates, affiliates, promoters, holding companies, subsidiaries companies, directors, partners or employees during pendency of the mediation proceedings, except during the course of the mediation, in the presence of the parties or their counsel. 
  2. The empanelled mediator shall not accept any gift or hospitality from any of the parties or their  associates, affiliates, promoters, holding companies, subsidiaries companies, directors, partners or  employees or any of their counsel 
  3. Mediator shall disclose the information regarding any past or current personal, business or professional relationship or connection with the parties to the dispute before the commencement of the mediation or whether there exists any circumstance which may give rise to be reasonable doubts as to his independence and impartiality.  

 

PROCESS OF MEDIATION 

The following are the functional stages of the mediation process as mentioned in ‘Consumer Handbook on Mediation, 2021’ by Ministry of Consumer Affairs, Food and Public Distributors, Government of India and Chair on Consumer Law & Practice, NLSIU, Bangalore. The first is ‘Introduction and Opening Statement’ where the mediator develops rapport with the parties to gain confidence and trust. Further, he motivates the parties for an amicable settlement of the dispute. The second stage is the ‘Joint session’ where there is common hearing of all the parties of the dispute. In this stage the mediator gathers information, provides an opportunity to the parties to hear the perspectives of the other parties. In the third stage that is ‘Separate Session’ the mediator try to understand the dispute at a deeper level and the underlying interests of the parties individually. The concluding stage is the ‘Closing’ when the parties come up with the terms of settlement; the mediator orally confirms the terms of settlement and reduced such terms in writing in a document called settlement agreement which will be signed by all parties to the dispute.  

According to Regulation 11 of the Consumer Protection (Mediation) Regulation, 2020, the following are the guidelines for mediation proceedings- 

  1. Presence of parties– The mediation shall be conducted in the presence of the parties or their authorised representatives or counsel. 
  2. Time period for mediation– The mediation shall stand terminated on expiry of three months from the date of first appearance before the mediator unless the time for completion of mediation is extended by the Consumer Commission, in which case it shall stand terminated on expiry of such extended time. 
  3. Appearance before mediator– The parties shall be entitled to appear before the mediator in person or through their respective counsel or authorized representatives. 
  4. Principe of natural justice to be followed– The mediator shall be guided by the principles of natural justice and fair play but shall not be bound by the provisions of the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 
  5. Consequence of non-participation– If a party does not participate in the mediation proceedings, the Consumer Commission may direct such a party to participate in the proceedings.  
  6. Information provided– The parties shall provide all such information to the mediator as may be reasonably required by him for conducting the mediation proceedings. 
  7. Record of proceedings– The record of the proceedings shall be prepared by the mediator on every date and shall be signed by the parties or their Counsel, authorized representatives or Attorneys.  
  8. Agreement executed– The agreement executed between the parties shall be submitted by the mediator, to the Consumer Commission, in a sealed cover, with a forwarding letter.  
  9. Agreement not reached– If no agreement is executed between the parties, within the time prescribed in these regulations, the mediator shall intimate so, to the Consumer Commission, without in any manner disclosing as to what transpired during the mediation proceedings, what was the stand taken by the parties or why the agreement could not be reached.