Blog Read

Dispute Resolution Mechanism In Consumer Law And ADR In India

Dispute Resolution Mechanism In Consumer Law And ADR In India

Dispute Resolution- The mechanism of resolving a dispute may differ from matter to matter. Just as there are different types of disputes, the methods to resolve them are also different. In today’s busy lifestyle, everyone avoids getting indulged in court cases because of time and money consumption. Hence most of the consumers have to be denied justice. But the situation in court is worse, due to the continuously increasing number of pending cases and time-consuming procedures.

The “WORLD ECONOMIC FORUM” has declared that by the year 2030 India, with GDP growth of 7.6%, tends to become the third 3rd largest Consumer Market in the world. Different aspects are to be taken into mind while calculating the ranks and the most important one of them is the satisfaction of the consumers, which mainly depends upon the existence of the laws supporting them. And one such major law is the Consumer Protection Act 1986.

Mechanism Of Dispute Resolution

The consumer protection act was enacted in 1986which provides various rights and duties of a consumer as well as a seller at the time of purchase, sell, and even after. The act also provides the provision regarding the need and delineates the various Centres of Consumer Redressal, both at the center and state level.

Section 9 of the Consumer Protection Act provides the establishment of consumer dispute redressal agencies which includes:-

  • District Forum:- The state government shall establish a district forum in every district of the state by notification.
  • State Commission:- The state government shall establish a state commission in the state by notification.
  • National Commission:– The central government shall establish a National Commission by a notification (1).

Detailed Explanation

District Forum:- As per section 10 of the act, the district forum shall consist of a President, who is, or has been, or is qualified to be a district judge and

two other members, one of them shall be a woman, with certain qualification given under the act. And it will entertain the complaints of value under 20 lakh, within the territorial local jurisdiction.

State Commission:- As per section 16 of the consumer protection act, the state commission shall consist of a President, who is, or has been a judge of High Court, shall be appointed by the state government. And minimum 2 members and

not more than as prescribed, out of which one shall be a woman, with qualification as per prescribed under the act.

The state commission shall have jurisdiction to entertain complaints of the value of goods, services, and

compensation of more than 20 lakhs and less than 1 crore. It shall also hear the appeals against the order of the district commission.

National Commission:- Section 20 and 21 of the consumer protection act provides the provision regarding the composition and jurisdiction of the National Commission. As per the provision, the National Commission shall consist of a President, who is or has been a judge of the Supreme Court, to be appointed by the Central Government. And there shall be at least 4 members and

as much as prescribed by the law, one of them shall be a woman.

The value of the goods or services and compensation to be entertain by the National Commission shall not be less than 1 crore and

appeals against the order of state commission shall also be hear by the National Commission.

Alternative Dispute Resolution

As diversity in the causes of disputes, settlement models are also diverse.  Alternative dispute resolution encompasses a wide range of practices, directed towards cost-effective and expeditious resolution of disputes. The ADR, as the name suggests, is an alternative to the traditional process of dispute resolution through the courts.  It consists of a set of practices and techniques for resolving disputes outside the courts. Since it actively involves the parties themselves to settle their disputes, this results in an amicable settlement of disputes, which is usually not possible for the courts. 

Therefore, these practices are avenues to avoid the exhausting supportive process. Many such practices have evolved to settle disputes with minimal adverse effects on the relationship between the parties. Mahatma Gandhi has said, “I realized that the real task of a lawyer was to unite the parties.” Therefore, the role of lawyers in promoting non-adversarial dispute settlement mechanisms is undoubtedly very important.  ADR techniques mainly include mediation, reconciliation, mediation, and negotiation.  In India, Lok Adalat is another additional form of ADR mechanism, which combines various techniques

such as reconciliation, arbitration, and negotiation.

The most common type of ADR system is

  • Mediation
  • Conciliation
  • Arbitration and
  • Adjudication.

There is no specifically recognize definition of arbitration.  Even, the Arbitration and Conciliation Act, 1996 does not provide any special definition of the term “arbitration”.  It merely states whether arbitration means to be administered by a permanent arbitral institution [section 2 (a) of the Act].  Arbitration is, in law, a method of ADR — specifically, an alternative to courtroom litigation whereby parties to a dispute agree to submit their respective positions (through agreement or hearing) to third parties  Which is a neutral party and is called a mediator to resolve the dispute between them.  The appointed arbitrator considers the evidence and arguments presented by both parties concerning

the cause of the dispute and then issue an award, enforceable by the courts.

Thus, arbitration can be describe as a process or a method of resolution of a dispute, according to an agreement

between the parties in a process that takes place in camera, unlike the court.  It is an efficient and alternative process of dispute resolution. A process of dispute resolution that is binding and governed by an act.  It is a traditional ‘alternative’ to court litigation.

Conclusion

The process and technique discuss above are the most commonly employe methods of ADR.  Negotiation plays an important role in each method, primarily or in another way.  However, there are countless other ADR methods, many of which modify or combine the above methods.  For example, it is not uncommon for disputes to initiate negotiations with an initial neutral assessment and then move toward non-binding arbitration.

  If the arbitration fails, the parties may proceed with binding arbitration.  With each type of ADR, the target is the most effective way for the parties to resolve their dispute without resorting to litigation.  The process has been criticize as a waste of time by some legal observers who believe that the same time can be spend advancing claims in civil court, where negotiations also play a major role and lead to lawsuits.  Formal rights are protect in terms of procedures.  And rules.  But many participants in unsuccessful ADR proceedings believe it is useful to determine

that their disputes are not liable for a settlement before commencing litigation.

ADR Not Suitable Option?

Despite its success over the last three decades, ADR is not a suitable option for all disputes or all legal disputes.  Many individuals and institutions still oppose the ADR because it lacks the basic, procedural, and explicit protections available in formal civil litigation.  For example, parties to ADRs typically waive their rights based on evidence that may be considered inappropriate under court rules.  The Hayes evidence is a common example of evidence consider by parties and intermediaries in ADR forums but is generally exclude from the final trial.  If a disputant believes that by waiving the formalities of civil litigation, he is sacrificing many rights and

protections, then ADR will not be an appropriate method of dispute resolution.

Comments

Drop your comment