Mediation Under the Consumer Protection Act, 2019 — MCQs

All questions with answers and explanations

Read the full set here, or use the practice card above to test yourself one question at a time.

1. Which chapter of the Consumer Protection Act, 2019 introduces the formal mediation mechanism?

   • Chapter II
   • Chapter V (Sections 74-81) (correct answer)
   • Chapter III
   • Chapter I

   Explanation. Chapter V, Sections 74 to 81, introduces the formal statutory mediation mechanism under the 2019 Act.

2. Under Section 74, where are consumer mediation cells attached?

   • Only to the National Commission
   • To each District Commission, State Commission, the National Commission, and its regional Benches (correct answer)
   • Only to police stations
   • Only to private arbitration centres

   Explanation. Section 74 requires mediation cells attached to District Commissions, State Commissions, the National Commission, and its regional Benches.

3. How are mediators selected under Sections 75-76?

   • Each party hires their own private mediator informally
   • A panel of mediators is empanelled by the Commission, and a mediator is nominated from that panel for a specific dispute (correct answer)
   • Mediators are elected by public vote
   • The Central Government directly appoints one mediator for the entire country

   Explanation. Mediators are empanelled by the Commission, and for each dispute referred to mediation, one is nominated from that empanelled panel.

4. What must a mediator disclose under Section 77?

   • Their personal income tax returns
   • Any relationship or circumstance that might reasonably give rise to doubt about their independence or impartiality (correct answer)
   • Their political party affiliation
   • Nothing; disclosure is not required

   Explanation. Section 77 requires a mediator to disclose facts, such as relationships with a party, that could reasonably raise doubts about independence or impartiality.

5. Is mediation under the Consumer Protection Act, 2019 compulsory for a consumer dispute?

   • Yes, every complaint must first go through mediation before any hearing
   • No, mediation requires the consent of both parties and is voluntary (correct answer)
   • Yes, but only for disputes above a certain value
   • No, mediation is never used under the Act

   Explanation. Mediation is referred to only with the consent of both parties — it is a voluntary mechanism, not compulsory.

6. What happens if mediation does not result in a settlement?

   • The complaint is automatically dismissed forever
   • Either party retains the right to have the dispute adjudicated by the Commission through the ordinary process (correct answer)
   • The consumer is fined for wasting the Commission's time
   • The dispute must be restarted from a criminal court

   Explanation. If mediation fails, the parties retain their right to a full adjudication of the dispute by the Commission.

7. Under Section 81, within how many days of receiving the settlement report must the Commission pass an order recording the settlement?

   • Thirty days
   • Seven days (correct answer)
   • Ninety days
   • There is no fixed timeline

   Explanation. Section 81 requires the Commission to pass a suitable order within seven days of receiving the settlement report.

8. Can mediation result in a partial settlement, resolving only some issues in the dispute?

   • No, mediation must resolve the entire dispute or nothing at all
   • Yes, Section 81 expressly contemplates recording a settlement to the extent actually agreed, with the Commission adjudicating the rest (correct answer)
   • No, partial settlements are legally void under the Act
   • Yes, but only if both parties are represented by the same advocate

   Explanation. Section 81 allows for a partial settlement — the Commission records what was agreed and adjudicates whatever remains unresolved.

9. A retailer and a consumer agree that a washing machine had a minor defect but disagree only on the refund amount. Why would this dispute be well-suited to mediation?

   • Because mediation is mandatory for all electronics disputes
   • Because the underlying facts are undisputed and the parties only need help agreeing on the remaining figure (correct answer)
   • Because the retailer refuses to participate in any Commission proceeding
   • Because mediation is the only way to claim compensation under the Act

   Explanation. Mediation is well-suited to disputes where facts are largely agreed and the parties simply need facilitated negotiation to settle the remaining disagreement.

10. Why does the mediation chapter fit the broader philosophy of the Consumer Protection Act, 2019?

    • It replaces the need for Commissions entirely
    • It adds a fast, low-friction, voluntary route to resolution, consistent with the Act's aim of making consumer remedies quicker and more accessible than ordinary civil litigation (correct answer)
    • It makes consumer disputes take longer to resolve on purpose
    • It removes the consumer's right to a Commission hearing altogether

    Explanation. Mediation is one more tool supporting the Act's broader aim of fast, accessible, low-friction consumer remedies, consistent with e-filing and the Commission structure.

11. Which section of the Consumer Protection Act, 2019 allows the District Commission to refer a complaint to mediation?

    • Section 37 (correct answer)
    • Section 2
    • Section 100
    • Section 10

    Explanation. Section 37 lets the District Commission refer a complaint to mediation if there are elements of a settlement and the parties consent in writing.

12. Under section 75(3) of the Consumer Protection Act, 2019, a panel of mediators is valid for:

    • One year
    • Five years, with eligibility for re-empanelment (correct answer)
    • Ten years
    • The life of a single dispute

    Explanation. Section 75(3) makes the panel valid for five years. The empanelled mediators may be considered for re-empanelment for another term, on the conditions in the regulations.

13. Section 100 of the Consumer Protection Act, 2019 says that the Act is:

    • Superior to every other law
    • Applicable only if no arbitration clause exists
    • In addition to, and not in derogation of, any other law in force (correct answer)
    • Applicable only to goods and not to services

    Explanation. Section 100 keeps the Act alongside other laws, so the consumer remedy is additional.

14. Which ADR method does the Consumer Protection Act, 2019 itself provide for?

    • Mediation (correct answer)
    • Conciliation under Part III of the Arbitration and Conciliation Act
    • Arbitration by a retired judge
    • Lok Adalat awards

    Explanation. The 2019 Act itself provides for mediation (Section 37 and Chapter V). Conciliation is a voluntary process under the Arbitration and Conciliation Act, 1996.