Redressal Machinery under the Consumer Protection Act

The agencies that settle consumer disputes: three Commissions, mediation cells and the regulator

In one minute

The Consumer Protection Act, 2019 sets up a three-tier machinery for consumer disputes: the District Commission in each district, the State Commission in each State and the National Commission. It adds mediation cells and a regulator, the Central Consumer Protection Authority.

In exams, this topic is asked as "explain the redressal machinery under the Act", and as a problem on where to file and how to appeal. The usual trap is to mix the composition, the value limits and the appeal periods of the three tiers.

Exam focus

Frequency: Rarely asked
Usually asked as: Long answer (10 to 15 marks)

Legal provision

Section 28: a District Commission in each district, with a President and not less than two members.
Section 42: a State Commission in each State, with a President and not less than four members.
Section 53 and 54: the National Commission, with a President and not less than four members.
Sections 34, 47 and 58: jurisdiction of the three Commissions.
Section 38: procedure and powers of a Commission, including interim orders and the powers of a civil court.
Sections 40, 50 and 60: review of orders.
Sections 41, 51 and 67: appeals.
Sections 71 and 72: enforcement of orders and penalty for non-compliance.
Sections 74 to 81: mediation.

Meaning and definition

The redressal machinery means the set of agencies that the Act creates to hear and decide consumer disputes. A "consumer dispute" is a dispute in which the person against whom a complaint is made denies or disputes the allegations (section 2(8)).

Detailed explanation

Step 1: The District Commission

Established by the State Government in each district. More than one may be established in a district (section 28).
Consists of a President and not less than two members.
Jurisdiction depends on the consideration paid, and the value limit is prescribed under the 2021 Rules (see the note on the Act).
It is the first forum for most complaints. Its orders are appealed to the State Commission within 45 days.

Step 2: The State Commission

Established by the State Government for the State, ordinarily at the State capital, with power to set up regional benches (section 42).
Consists of a President and not less than four members.
Hears complaints in its value band, complaints against unfair contracts up to the limit, and appeals against orders of the District Commissions in the State (section 47).
It can call for the records of any District Commission case and pass appropriate orders where the District Commission has exceeded or failed to exercise its jurisdiction, or has acted illegally or with material irregularity.
It can declare any term of a contract that is unfair to a consumer to be null and void (section 49(2)).

Step 3: The National Commission

Established by the Central Government, ordinarily at the National Capital Region, with power to set up regional benches (section 53).
Consists of a President and not less than four members.
Hears complaints in its value band, complaints against unfair contracts above the State limit, appeals against State Commission orders, and appeals against orders of the Central Authority (section 58).
Its orders are appealed to the Supreme Court within 30 days (section 67).

Step 4: Powers common to the Commissions

The powers of a civil court in summoning and examining witnesses on oath, requiring discovery and production of documents, receiving evidence on affidavits, requisitioning laboratory reports, and issuing commissions for examination (section 38(9)).
Power to pass interim orders that are just and proper while a proceeding is pending (section 38(8)).
Every proceeding is a judicial proceeding, and the Commission is treated as a criminal court for the limited purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure (section 38(10)).
Power to review its own order for an error apparent on the face of the record, on its own motion or on an application made within 30 days (section 40).
Power to transfer cases (sections 48 and 62).
Orders are enforced as decrees of a civil court under Order XXI of the Code of Civil Procedure (section 71).
Failure to comply with an order is punishable under section 72, and the Commission has the powers of a Judicial Magistrate of the first class to try it.

Step 5: Mediation

Chapter V creates consumer mediation cells attached to each Commission, with a panel of mediators. A Commission may refer the parties to mediation where they consent in writing. A settlement is recorded as an order, and no appeal lies against it. See the note on mediation.

Step 6: The Central Consumer Protection Authority

Besides the Commissions, the Authority acts for consumers as a class. It can investigate, file complaints, intervene in proceedings, recall goods and penalise false advertisements (sections 18 to 22). Orders of the Authority are appealed to the National Commission (section 24).

Step 7: How a dispute travels

File the complaint, electronically if wished, before the right District Commission.
The opposite party replies. Goods may be tested, and the parties are heard.
The Commission decides under section 39.
Appeal to the State Commission (45 days), the National Commission (30 days) and the Supreme Court (30 days), each with a deposit of 50 per cent.
Execution of the order, with penalty for disobedience.

Redressal machinery under the 2019 ActHow to read: start at the top box and follow the lines down. Each box gives its members and appeal route.

Supreme CourtAppeal from the National Commission within 30 days
- National CommissionPresident and not less than four members; hears appeals from State Commissions and the Authority
  - State CommissionPresident and not less than four members; appeals from District Commissions in 45 days
    - District CommissionPresident and not less than two members

Don't confuse: the three Commissions

Point	District Commission	State Commission	National Commission
Established by	State Government	State Government	Central Government
Members	President and at least two members	President and at least four members	President and at least four members
Section	28	42	53
Appeal to	State Commission, 45 days	National Commission, 30 days	Supreme Court, 30 days

First instance. A buyer in Nizamabad, who paid Rs 30,000 for a defective washing machine, files before the District Commission at Nizamabad.

Appeal. The seller loses and wishes to appeal. He goes to the State Commission within 45 days, and deposits 50 per cent of the amount ordered.

Common mistakes

Saying that a District Commission has four members. It has at least two.
Giving the appeal period as 30 days for all appeals. The first appeal is 45 days.
Forgetting that the Authority's orders are appealed to the National Commission.
Forgetting that a mediation settlement cannot be appealed.
Forgetting that the State Commission can declare unfair contract terms void.

Apply it

Problem

A District Commission in Kakinada orders a builder to refund Rs 8 lakh to a flat buyer with interest. The builder files an appeal after 60 days without paying anything.

Question. Will the appeal be heard?

Rule. An appeal to the State Commission lies within 45 days, and may be heard late on sufficient cause (section 41). The appellant must deposit 50 per cent of the amount ordered.

Application. The appeal is 15 days late and needs a sufficient cause. No deposit has been made.

Conclusion. The State Commission will not entertain the appeal unless the builder deposits 50 per cent of the amount ordered, and shows sufficient cause for the delay.

Leading case laws

Lucknow Development Authority v. M.K. Gupta (1994)
Facts. A statutory housing authority argued that it was exercising a sovereign function and could not be taken to a consumer forum.

Principle. The Supreme Court disagreed and held that the Act applies to its services.

Significance. The machinery reaches public bodies as well.
SpiceJet Ltd. v. Ranju Aery (2017)
Facts. An airline cancelled a connecting flight, refused a refund and offered no alternative. The consumer fora, in turn, found for the family.

Principle. Three fora up to the National Commission held that this was a deficiency in service.

Significance. The tiers work as a ladder of review.

How to write this answer in the exam

5-mark answer

Name the three Commissions.
State who establishes each and its members.
State the jurisdiction in brief.
Give the appeal route.

10-mark answer

Meaning and structure.
Each Commission in detail.
Powers common to all.
Review, ex parte orders and transfer.
Mediation and the Authority.
Appeals and enforcement.
Comparison table.

Key points to remember

Three tiers: District (sections 28, 34), State (sections 42, 47), National (sections 53, 58).
Members: President and at least two (District), at least four (State and National).
Appeals: 45 days to the State Commission, then 30 days each, with 50 per cent deposit.
Commissions have civil court powers and can pass interim orders.
Mediation cells and the Authority add to the machinery.

Quick self-test

1. Who establishes the National Commission?

The Central Government.

2. How many members does a State Commission have?

A President and not less than four members.

3. Where is an appeal from the National Commission filed?

In the Supreme Court within 30 days.