Effectiveness of Consumer Courts

With the rapid advancement of technology along with the cumulative efforts of the Government to make India digital, a new era of e-commerce and digital branding has been ushered giving birth to easy access, myriad choices, convenient payments, and services as well as escalated consumer expectations. But amidst the rapid boom of the e-commerce industry, challenges faced by the consumers were not being satisfactorily addressed by the Consumer Protection Act of 1986. The Parliament took this into account, opening the way for a new and enhanced Consumer Protection Act in 2019 which focuses on timely and operative administration and settlement of novel consumer disputes.

Who is a consumer?

With the advent of the Consumer Protection Act of 2019, a consumer is defined as a person who purchases goods or avails services for a consideration, for his consumption, and not for resale or any commercial purposes. This definition in this Act has been expanded in comparison to the Act of 1986 to bring consumers involved in online transactions through electronic devices, teleshopping, and multi-level marketing in its ambit.

Does the 2019 Act enhance the efficacy of Consumer Courts?

The 2019 Act undoubtedly gives leverage to consumer rights over the monopoly of sellers and manufacturers, and thus empowering the courts to ensure that justice is served. By introducing the concept of ‘unfair contracts’ in Section 2(46) which include contracts leaning in favor of the manufacturers or service providers, leaving consumers at a disadvantage, the aggrieved consumer can now file a complaint against such unreasonable and unilaterally skewed contracts.

Moreover, courts can now hold manufacturers and sellers liable for their products or services which have turned out to be defective or have caused any harm to a consumer under Section 2(34) of the Consumer Protection Act 2019 defining ‘product liability’. In such circumstances, the courts adjudge such manufacturer or seller to pay compensation to the aggrieved consumer, safeguarding consumer rights and thus effectively curbing manufacturers from rolling defective products in the market or providing misleading and deficient services.

In the Act of 1986, appeals were the only available option which further lengthened the process of adjudication, dragging the cases form one court to another, pricking no fear in the minds of the manufacturers. But now, the efficacy of consumer courts is refined by the introduction of judicial review; which is an integral part of our Constitution; allowing the consumer commissions to review their orders, giving an option to the masses to avoid the tedious journey of appeals, at the same time reducing the burden of the courts and facilitating in their proper functioning.

The initial procedures of the consumer courts are time restrained to prevent the delay of the hearings. The courts have to decide the admissibility of a complaint within 21 days. If such an issue of admissibility of the complaint is not decided within the specified time slot, the complaint shall be deemed to be admitted. Thus, the courts have no opportunity to leave the complaints languished before the pre-trial stage, honing the efficacy of initial stages to prevent unnecessary delays.

Further, Section 38 of the Act states that after the admission of a complaint, it must be disposed of within 3 months of the date of receipt of notice by the opposite party where the complaint does not require analysis or testing of commodities and within 5 months where analysis or testing is required, at the outset looks quite stringent. But it is rather a cruel joke in black words as Indian adjudication takes much longer than the specified period which can be inferred from the ground reality. According to the data disclosed by the National Consumer Disputes Redressal Commission, a total of 4,88,009 cases are pending cumulatively in all three commissions[1]. Most of the backlogs are in the District court forums. But the problem does not end here. Around 20% posts i.e, 383 posts out of 1884 posts are vacant in over 500 district court forums as of 2nd August 2020.[2] While the pendency of cases in the courts has been increasing since their inception, the grants flowing from the Government to strengthen these courts have reduced. In 2015-16 the government had released Rs. 2331.08 lakh for the upkeep of consumer courts, it released only Rs. 965.75 lakh in 2016-17.[3]

This Act has expanded the pecuniary jurisdiction of the District, State, and National Commissions. The District Commissions can entertain cases up to 1 crore, where it entertained 20 lakhs in the 1986 Act.  The pecuniary limit for the State Commission has been increased from 1 crore to 10 crores and for the National Commission it has been increased to over and above 10 crores as against 1 crore in the 1986 Act. Moreover, the pecuniary jurisdiction for filing the complaint will be determined by the value of goods or services paid as consideration as against clubbing of the value of goods or services along with the compensation claimed enumerated in the 1986 Act. Though this is prima facie to prevent overestimation of compensation to avoid the jurisdiction of a particular Commission, this clause hampers the functioning of the courts. The legal maxim ‘lex prospicit non respicit’ meaning the law looks forward and not backward applies to any statute where it is not specified that the law is to have a retrospective operation.  It is well settled that procedural laws operate retrospectively. Thus, the pecuniary jurisdiction clause of the new Act falling under the procedural domain will apply retrospectively. Consequentially, as pecuniary jurisdiction is falling under the procedural domain, there would be a mass transfer of cases from the National Commission to the State Commission and from the State Commission to the District Commission, overburdening the District forum. This will further cause a delay of proceedings in the courts burgeoning with newly transferred cases, massively hampering the effectiveness of consumer courts.

Conclusively, though the 2019 Act has empowered the courts there still are a few loopholes to be filled. Unless there are enough judges and enough courts to hear matters, delay of justice will persist, hampering the whole essence of the new Act. Also, the effectiveness and speedy redressal mechanism of the consumer courts along with other issues can only be appropriately judged once the Central Consumer Protection Authority created by the 2019 Act is established filling the big picture.

[1] http://ncdrc.nic.in/stats.html.


[3] Ibid.

This article is authored by Venkata Moksha, Second-Year, B.A. LL.B (Hons.) student at National University of Study and Research in Law, Ranchi.

Also Read – Salient Features Of New Consumer Protection Bill 2018

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