ALTERNATIVE DISPUTE RESOLUTION

DM
26/09/2018
 Contents
■ Hierarchy of courts in India

■ Why ADR

■ Advantages of ADR

■ Types of ADR

1. Arbitration

2. Conciliation

3. Mediation

4. Lokpal and Lokayukta

5. Tribunals

6. Consumer Redressal Forums

7. Lok Adalat
Adjudicatory system in India
 What is ADR?
■ “Justice delayed is justice denied”.

■ As on May 2018, the reports says there were 54013 matters pending before the SC and 4.2 million cases pending
before the High Courts.

■ Alternative Dispute Resolution (ADR) is the procedure for settling disputes outside the courts amicably.

Types of ADR

1. arbitration,

2. Conciliation

3. mediation, or negotiation

4. Lokpal and Lokayukta

5. Tribunals

6. Consumer Dispute Redressal Agencies

7. Lok Adalat
 Why ADR?
1. In order to reduce the work load of the courts and to provide for speedy disposal of
cases.

2. Speedy disposal of disputes

3. Economical

4. Best Approach

5. Flexibility, more cooperative and less competitive

6. Choice of decision maker with expertise

7. Simple modus operandi

Arbitration And Conciliation Act 1996: an overview
■ Arbitration is the mechanism to settle disputes between parties to a contract, determined in a
quasi-judicial manner.

■ It is an arrangement agreed upon by the parties concerned to refer the disputes to a neutral third
party for settlement.

■ The Arbitration and Conciliation Act 1996 provides legal frame work for settlement of disputes by
mutual settlement out side the court.

■ The act is based on the Model Laws on International Commercial Arbitration adopted by UN
commission on International Trade Law (UNCITRAL).

■ The act aims at ensuring smooth settlement of domestic and international disputes.

■ Central Government may make rules for carrying out the provisions of this act subjected to the
approval of the Parliament.
 History of Arbitration In India
■ Arbitration has a long history in India. In ancient times, people often voluntarily submitted their
disputes to a group of wise men of a community—called the Panchayat—for a binding resolution.

■ The first Arbitration law in India was the Arbitration Act 1899 which was based on the English
Arbitration Act 1899.

■ Thereafter, the Arbitration Act, 1940 was enacted in India to consolidate and amend the law
relating to arbitration effective from 1 July 1940.

■ The Arbitration and Conciliation Act was again modified in 1996 with the aim and the objective to
give effect to the UNCITRAL Model Laws as adopted by the United Nations Commission on
International Trade Law on 21 June 1985.
 Objectives of the Arbitration Act
■ To cover both international & domestic arbitration & conciliation.

■ To make provisions for an arbitral procedure which is fair, efficient and capable of meeting the needs
of the arbitration.

■ To permit an arbitral tribunal to use mediation & conciliation to encourage settlement of disputes.

■ To provide that a settlement reached by the parties as a result of conciliation proceedings will have
the same status and affect as an arbitral award.

■ To provide that the arbitral tribunal gives reasons for its arbitral award.

■ To provide that every arbitral award is enforced in the same manner as if it were a decree of the
court.
 Advantages of Arbitration
■ Choice of Decision Maker (Arbitrator)

■ Cost Effective & Efficient

■ Privacy

■ Court intervention is minimum

■ Convenience

■ Strict rules of CPC and Evidence Act are not required to be followed, the Arbitrator is free to frame
his own procedure to conduct arbitration proceedings

■ Finality of Decision
Arbitration Agreement and its Essential Elements
■ According to Section 2(1)(b) and 7 of the Act “Arbitration agreement is an agreement by the parties to
submit to arbitration all or certain disputes which have arisen or which may arise between them in
respect of a defined legal relationship and has following essential elements.”

1. It must be in writing.

2. It must have all the essential elements of valid contract.

3. It must be to refer a dispute, present or future, to arbitration.

4. It may be in the form of an arbitration clause in a contract or in the form of a separate agreement or
in the form of a reference in a written contract containing an arbitration clause.
 Arbitrator
■ The person who is appointed to determine the disputes is called the arbitrator. Arbitrator(s) can be
appointed by any of the following manners:

1. By the parties as per agreed procedure

2. Each party may appoint one arbitrator and then the third arbitrator is appointed by the two arbitrators

3. Appointment by the court

■ Challenge to appointment of an Arbitrator- an appointment of the arbitrator can be challenged on the

grounds of:

• his incapacity or impartiality; or

• He does not possess the requisite qualifications

■ The appointment of the arbitrator can be challenged by submitting a written statement before the
arbitration tribunal.
 Appointment of Arbitrator
■ Section 10(1) Act provides that the parties are free to determine the number of arbitrators, provided that such number
shall not be an even number. However, if the parties fail to do so, the arbitral tribunal shall consist of a sole arbitrator.

■ The procedure in relation to appointment of arbitrators is provided under Section 11 of the Act.

 A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

 The aforesaid section also deals with the contingency wherein the parties fail to appoint an arbitrator mutually. In such
a situation, the appointment shall be made, upon request of a party, by the Supreme Court or any person or institution
designated by such Court, in the case of an International Commercial arbitration or by High Court or any person or
institution designated by such Court, in case of a domestic arbitration.

■ Before the appointment of arbitrator is made, the concerned Court or the person or institution designated by such
Court is required to seek a disclosure in writing from the prospective arbitrator in terms of Section 12(1) of the Act and
also give due regard to any qualifications required for the arbitrator by the agreement of the parties and the contents
of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial
arbitrator.
 Powers and duties of an Arbitrator
Powers Duties
1. Pass Interim Orders. 1. To see his appointment is in order.

2. Decide the procedure of the arbitration 2. Adjudicate the matter timely.

proceedings.
3. Act judicially & impartially.
3. Termination of Proceedings.
4. Declare in writing any circumstances likely to
4. Appoint an Expert. give rise to doubts as to his impartiality.

5. Seek Court assistance in taking evidence. 5. Encourage settlement.

6. Correction in errors in, and interpretation 6. Shall not misconduct.

of, award.
7. Pass a final award.
 Process of Arbitration Proceedings
 Initiating Arbitration

 Appointment of Arbitrator

 Preliminary Meeting

 Filing of Statement of Claims & other Pleadings

 Hearings

 Framing of Issues for determination

 Interchange of Evidence by way of Affidavits

 Deposition of the Witnesses

 Passing of Award
 Types of Arbitration
1. Ad hoc Arbitration: Ad hoc arbitration is an arbitration which is not administered by an institution providing
arbitration facilities and it is left to the parties to determine all aspects of the arbitration like appointment
of arbitrators, manner in which appointment is made, procedure for conducting the proceedings and for
designation of rules, applicable law, procedures and administrative support. Ad hoc arbitration is mainly
governed by the provisions of Arbitration and conciliation Act 1996 (‘Act’) and parties are free to determine
the procedure.

2. Institutional Arbitration: In institutional arbitration, a specialized institution with a permanent character

intervenes and assumes the functions of aiding and administering the arbitral process, as provided by the
rules of that institution. The institution only facilitates and administers the process and the tribunal is
appointed either by the parties or the institution. Often, the contract between the parties will contain an
arbitration clause which will designate an institution as administrator by stating that the arbitration would
be conducted as per the party designated institutional rules. For administering and facilitating the
arbitration and providing secretarial services and facilities for conducting the arbitration proceedings, the
institution normally levies administrative charges on the parties. E.g. International Arbitration Courts,
Indian Council for Arbitration, International Centre for Alternate Dispute Resolution Etc.
3. Statutory Arbitration: “Statutory Arbitrations” are arbitrations conducted in accordance with the
provisions of certain special Acts which provide for arbitration in respect of disputes arising on matters
covered by those Acts. There are about 24 such Central Acts. Among them are the Cantonments Act,
1924, the Indian Electricity Act, 1910, the Land Acquisition Act, 1894, the Railways Act, 1890 and the
Forward Contracts Regulation Act, 1956. Many State Acts also provide for arbitration in respect of
disputes covered by those Acts, including Acts relating to co-operative societies. The provisions of the
Arbitration Act, 1940 generally apply to those arbitrations unless they are inconsistent with the particular
provisions of those Acts, in which case the provisions of those Acts will apply (Sections 46 and 47,
Arbitration Act, 1940).

4. Contractual Arbitration: Based on the arbitration clause in a Contract.

5. Domestic Arbitration: The term “Domestic Arbitration” denotes arbitration which takes place in India,
when the subject matter of the contract, the merits of the dispute and the procedure for arbitration are
all governed by Indian law or when the cause of action for the dispute has arisen wholly in India or where
the parties are otherwise subject to Indian jurisdiction.

6. International Arbitration: International Arbitration” has a foreign ingredient. Arbitration becomes

“International” when at least one of the parties involved is resident or domiciled, outside India or the
subject matter of the dispute is abroad. The law applicable to an arbitration proceedings may be the
Indian law or a foreign law, depending on the terms of the contract in this regard and the rules of conflict
of laws.
 Arbitral Award & Types
■ An arbitration award is the award granted by the arbitrator in their decision. This award can be
compensation/ monetary award one party has to pay to the other party. It can also be a non-financial
award, such as stopping a certain business practice or adding an employment incentive.

1. Interim Award :– This is a temporary award until the tribunal has given its final decision. A provisional award
can only be made if the parties have agreed that “the tribunal may have the power to order on a provisional
basis any relief which it would have power to grant in a final award” (s.39 Arbitration Act 1996).

■ This includes; making a provisional order for the payment of money or the disposition of property as
between the parties; or an order to make an interim payment on account of the costs of the arbitration.

2. Final Award :– This should usually be in writing and signed by all the arbitrators. The award must contain
reasons and state where the arbitration took place. It must also be dated (this is important for calculating
interest on payments). Once the final award is made this ends proceedings.
 Appeal Against Arbitral Award
■ The following are some reasons that will permit you to appeal a binding arbitration award:

1. The arbitrator went beyond their powers outlined in the arbitration clause of the contract.

2. There was some prejudicial misconduct on the arbitrator’s part.

3. The contract containing the arbitration clause is unconscionable or otherwise void, meaning that the
arbitration clause is unenforceable.

4. The winning party used fraud or corruption to obtain the positive decision.

5. The arbitrator made a mathematical error when calculating the wining party’s financial award.
Conciliation
 Conciliation under the Act
■ The UNCITRAL Rules on Conciliation, 1980 recognized “the value of conciliation as a method of
amicably settling disputes arising in the context of international commercial relations” and that
adoption of uniform conciliation rules by “countries with different legal, social and economic systems
would significantly contribute to the development of harmonious international economic relations.”

■ Accordingly, these rules were closely followed by the Indian legislators to formulate conciliation rules
under Part III of the Act (S.61-81).

■ The term conciliation is not defined in the Act. However, simply put conciliation is a confidential,
voluntary and private dispute resolution process in which a neutral person helps the parties to reach
a negotiated settlement. This method provides the disputing parties with an opportunity to explore
options aided by an objective third party to exhaustively determine if a settlement is possible.

■ Like arbitration, the Act covers both domestic and international disputes in the context of
conciliation.
 International commercial conciliation
■ Accordingly, the Act defines international commercial conciliation as conciliation proceedings relating to
a dispute between two or more parties where at least one of them is a foreign party.

■ The foreign party may be

a) an individual who is foreign national,

b) a company incorporated outside India, or

c) the government of a foreign country.

■ Appointment of Conciliator

a. There can be Single conciliator appointed by Both the parties jointly,

b. 2 conciliators appointed by each parties,

c. Three conciliators, each parties may appoint 1 conciliator and they may agree upon another to act as
the presiding Conciliator.
 The role of a conciliator
■ Per section 80 of the Act, the conciliator does not decide for the parties, but strives to support them
in generating options in order to find a solution that is compatible for both of them, thereby fulfilling
the mandate of section 67 of the Act under which the main function of the conciliator is to assist the
parties to reach an amicable settlement.

■ For achieving this, a conciliator is obliged to;

a) act in an independent and impartial manner, and

b) abide by the principles of objectivity, fairness and justice.

■ Section 67(4) specifically enables the conciliator to “make proposals for settlement of the dispute
at any stage of the conciliation proceedings.”

■ The above provisions make it clear that the conciliator, apart from assisting the parties to reach a
settlement, is also permitted and empowered to make proposals for a settlement and
formulate/reformulate the terms of a possible settlement.
 Conciliation Proceedings
■ Initiation of Conciliation Proceedings.

■ Appointment of Conciliator

■ The conciliator may request each party to submit to him a brief written statement describing the
general nature of the dispute and the points at issue.

■ The conciliator may request each party to submit to him a further written statement of his position
and the facts and grounds in support thereof, supplemented by any documents and other evidence
that such party deems appropriate.

■ Arriving at an agreement by parties.

 Advantages of conciliation
■ It is more flexible, inexpensive and informal.

■ Parties are directly engaged in negotiating a settlement.

■ Conciliation enhances the likelihood of the parties continuing their amicable business relationship
during and after the proceedings. The reason is that the parties are in a conciliatory mode, away
from the hostile environment of a court or an arbitral tribunal where exhaustive arguments take
place and reach a mutually acceptable settlement done volitionally, and in a congenial manner.
Thus, the end result of a conciliation proceeding is that both parties are relatively pleased with the
final outcome.

■ The chances of an appeal after the conclusion of conciliation proceedings are considerably lower as
a mutual settlement is arrived at between the parties.
 Difference between Arbitration and Conciliation
Arbitration Conciliation
1. In case of Arbitration Arbitral Board 1. In Conciliation, Conciliator does not pass any

delivers Arbitral Award of Judgement after Award. He is neutral and independent facilitator

hearing parties after consideration of helping parties to reach their own settlement

facts and evidences with reference to through process of listening and creating

statutory provisions. understanding between parties to come to their

own settlement.
2. The result of Arbitration is legally
reasoned award. 2. The result in case of conciliation may or may not
reach a mutually acceptable settlement.
3. Arbitrator generally decides after contest
between the parties. 3. In conciliation, final results depend upon the will
of parties. Therefore, emotional harmony may not
suffer in case of conciliation.
Mediation
 Mediation
■ The term mediate is derived from the Latin word ‘mediare‘ which means to be in the middle‘. Mediation is a process
that employs a neutral/impartial person or persons to facilitate negotiation between the parties to a dispute in an
effort to reach a mutually accepted resolution.

■ The mediator’s help the parties think in new and innovative ways, to avoid the pitfalls of adopting rigid positions
instead of looking after their interests, to smooth discussions when there is animosity between the parties that
renders the discussions futile, and in general to steer the process away from negative outcomes and possible
breakdown towards joint gains.

■ Unlike the process of facilitation, where the third party merely hosts the parties and encourages them to continue
negotiating in a neutral, welcoming environment, the mediator plays a more active role. The mediator not only
facilitates but also designs the process, and assists and helps the parties to get to the root of their conflict, to
understand their interests, and reach a resolution agreed by all concerned.

■ Because the participation of the parties and the mediator is voluntary, the parties and/or the mediator have the
freedom to leave the process at any time. The mediator may decide to stop the process for ethical or other reasons,
and the parties may decide that they are not satisfied with the process. The agreement, which is reached between the
parties, is voluntary; the parties own it and are responsible for implementing it. The agreement is validated and
ratified by the courts.
Difference between Arbitration and Mediation
Mediation Arbitration
1. Mediation refers to a process of resolving 1. Arbitration is a substitute of public trial, with no
disputes wherein an independent third party, need of going court, wherein an independent

assist the parties involved in arriving at third party analyses the entire situation and

solution, agreeable to all. makes a decision binding on the parties.

2. Meeting between the parties concerned and 2. Only evidentiary hearings, no private meetings
the counsel takes place jointly and with the arbitrator.

separately. 3. The decision of the arbitrator is final and binding

3. The mediator does not pass any judgement, upon the parties.

but makes settlement only with the approval 4. Concludes with the Arbitrary award.
of parties.

4. Ends with the agreement between parties.

 Difference between Mediation And Conciliation
Mediation Conciliation
1. The process of dispute resolution in which a third
1. Conciliation implies a process of settling the
party intervenes in an attempt to resolve it, by
dispute between the parties, in which a neutral
enabling communication and negotiations
between parties is called mediation.
third party acts as a facilitator to resolve the issue.

2. Mediation is governed by Code of Civil Procedure 2. Arbitration and Conciliation Act, 1996 regulates
Act, 1908. conciliation.

3. The confidentiality relies on the trust. 3. The law determines the extent of confidentiality.

4. In mediation, the role of the third party is a 4. In conciliation, the role played by the third party is
facilitator, who facilitates interaction between the beyond facilitator, who not only facilitate
parties. communication but also provide solutions to their
problem as an expert.
5. The contract of agreement between the parties
under mediation is enforceable by law. 5. The settlement agreement between the parties is
binding upon parties like an arbitral award.
Lokpal and Lokayukta
 Lokpal
■ The word is derived from the Hindi word Lok means people and pal means protector. Thus the term
‘Lokpal’ means protector of the people.

■ Lokpal Bill was first introduced in parliament in 1968. Later it has been brought before the parliament 8
times but has never been passed by the parliament.

■ Lokpal is an anti-corruption authority or ombudsman who represents the public interest. The concept of
an ombudsman is borrowed from Sweden.

■ The Lokpal has jurisdiction over all Members of Parliament and central government employees in cases of
corruption.

■ The Lokpal and Lokayukta Act was passed in 2013 with amendments in parliament, following the Jan
Lokpal movement led by Anna Hazare.

■ The bill is drafted by Justice Santosh Hegde, Prashant Bhushan and Arvind Kejriwal.

■ The Lokpal is responsible for enquiring into corruption charges at the national level while the Lokayukta
performs the same function at the state level.
 Features of the Jan Lokpal Bill
1. An institution called Lokpal at the centre and Lokayukta in each state will be set up.

2. Like the Supreme Court and Election Commission, they will be completely independent of governments. No minister or
bureaucrat will be to influence their investigations.

3. Cases against corrupt people will not linger on for years anymore: investigations in any case will have to be completed in one
year. Trial should be completed in the next one year, so that the corrupt politician, officer or judge is sent to jail within two
years.

4. The loss that a corrupt person caused to the government will be recovered at the time of conviction.

5. If the work of any citizen is not done in a prescribed time, in any government office, Lokpal will impose a financial penalty on
the guilty officers, which will be given as compensation to the complainant.

6. The entire functioning of Lokpal/ Lokayukta will be completely transparent. Any complaint against any officer of Lokpal will be
investigated and the officer dismissed within two months.

7. Other anti-corruption agencies like CVC, the departmental vigilance and anti-corruption branch of the CBI, will be merged into
Lokpal so that Lokpal will have complete powers and machinery to independently investigate and prosecute any officer, judge
or politician.
 Members of Lokpal
■ The members are appointed by the president on the recommendation of a selection committee. The selection
committee is composed of the Prime Minister who is the Chairperson; Speaker of Lok Sabha ,Leader of Opposition in
Lok Sabha ,Chief Justice of India or a Judge nominated by him / her, and One eminent jurist.

■ Lokpal is a multimember body, made up of one chairperson and maximum of 8 members.

■ The chairperson of the Lokpal should be either the former Chief Justice of India Or the former Judge of Supreme Court
Or an eminent person with impeccable integrity and outstanding ability, having special knowledge and expertise of
minimum 25 years in the matters relating to anti-corruption policy, public administration, vigilance, finance including
insurance and banking, law and management.

■ Out of the maximum eight members, half will be judicial members. Minimum fifty per cent of the Members will be from
SC / ST / OBC / Minorities and women. The judicial member of the Lokpal should be either a former Judge of the
Supreme Court or a former Chief Justice of a High Court.

■ The non-judicial member should be an eminent person with impeccable integrity and outstanding ability, having special
knowledge and expertise of minimum 25 years in the matters relating to anti-corruption policy, public administration,
vigilance, finance including insurance and banking, law and management.
 Powers of Lokpal
1. It has powers to superintendence over, and to give direction to CBI.

2. If it has referred a case to CBI, the investigating officer in such case cannot be transferred without
approval of Lokpal.

3. Powers to authorize CBI for search and seizure operations connected to such case.

4. The Inquiry Wing of the Lokpal has been vested with the powers of a civil court.

5. Lokpal has powers of confiscation of assets, proceeds, receipts and benefits arisen or procured by
means of corruption in special circumstances.

6. Lokpal has the power to recommend transfer or suspension of public servant connected with
allegation of corruption.

7. Lokpal has power to give directions to prevent destruction of records during preliminary inquiry.
 Lokayukta
■ The Lokayukta is also an anti-corruption ombudsman organization in the Indian states.

■ Once appointed, Lokayukta can not be dismissed nor transferred by the government, and can only
be removed by passing an impeachment motion by the state assembly.

■ The Lokayukta, along with the Income Tax Department and the Anti Corruption Bureau, mainly
helps people publicise corruption among the Politicians and Government Officials.

■ Maharashtra was the first state to introduce the institution of Lokayukta through The Lokayukta and
Upa-Lokayuktas Act in 1971. This was followed by similar acts that were enacted by the states of
Odisha, Rajasthan, Bihar, Uttar Pradesh, Karnataka, Madhya Pradesh, Andhra Pradesh, Gujarat,
Kerala, Tamil Nadu and the union territory of Delhi.

■ The Maharashtra Lokayukta is considered the weakest Lokayukta due to lack of powers, staff,
funds and an independent investigating agency. On the other hand, the Karnataka Lokayukta is
considered the most powerful Lokayukta in the country.
Tribunals
 Tribunals
■ There are tribunals for settling various administrative and tax-related disputes, including Central
Administrative Tribunal (CAT), Income Tax Appellate Tribunal (ITAT), Customs, Excise and Service Tax
Appellate Tribunal (CESTAT), National Green Tribunal (NGT), Competition Appellate Tribunal (COMPAT) and
Securities Appellate Tribunal (SAT), among others.

■ In several states, Food Safety Appellate Tribunals have been created to hear appeals against orders of
adjudicating officers for food safety.

■ Armed Forces Tribunal (AFT) is a military tribunal in India. It was established under the Armed Forces
Tribunal Act, 2007.

■ Provisions for Administrative Tribunals were added in the Constitution by Constitution (Forty-second
Amendment) Act, 1976 as Part XIV-A, which has only two articles viz. 323-A and 323B.

■ An administrative Tribunal is a multimember body to hear on cases filed by the staff members alleging
non-observation of their terms of service or any other related matters and to pass judgments on those
cases.
 Other facts about Tribunal
■ Its function is to adjudicate the disputes with respect to recruitment and conditions of service of persons appointed to public
services and posts in connection with the affairs of the Union or state or other local authorities within the territory of India or
under the control of Government of India. In addition to Central Government employees, the Government of India has notified
45 other organizations to bring them within the jurisdiction of the of the Central Administrative Tribunal. The provisions of the
Administrative Tribunals Act, 1985 do not apply to the following:

1. Members of paramilitary

2. Armed forces of the Union

3. Officers or employees of the Supreme Court

4. Persons appointed to the Secretariat Staff of either House of Parliament or the Secretariat staff of State/Union Territory
Legislatures.

■ The CAT is headed by a chairman who must be either a sitting or a retired Judge of a High Court.

■ Other than Chairman, there are 16 Vice-Chairmen and 49 Members. The principle bench is located at New Delhi.

■ Central Administrative Tribunal enjoys the status and powers of a High Court. However, Government employees not satisfied
with CAT orders on their service matters can appeal in High Courts, followed by appeal in Supreme Court.
Powers and Functions of Administrative Tribunals
1. A Tribunal shall not be bound by the procedure laid down in the Code of Civil Procedure, 1908, but
shall be guided by the principles of natural justice and subject to the other provisions of this Act
and of any rules made by the Central Government, the Tribunal shall have power to regulate its
own procedure including the fixing of places and times of its inquiry and decided whether to sit in
public or in private.

2. A tribunal shall decide every application made to it as expeditiously as possible and ordinarily
every application shall be decided on a perusal of documents and written representations and
after hearing such oral arguments as may be advanced.

3. A Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers
as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in
respect of the following matters, namely :
a) Summoning and enforcing the attendance of any person and examining him on oath;

b) requiring the discovery and production of documents;

c) receiving evidence on affidavits;

d) subject to the provisions of section 123 and 124 of the Indian Evidence Act, 1872, requisitioning
any public record or document or copy of such record or document from any office;

e) issuing commissions for the examination of witnesses or, documents;

f) reviewing its decisions;

g) dismissing a representation for default or deciding it ex parte;

h) setting aside any order of dismissal of any representation for default or any order passed by it ex
parte; and

i) any other matter which may be prescribed by the Central Government.

Consumer Redressal Forums
 Objectives
■ Regulated by Consumer Protection Act, 1986.

■ Consumer Court is the special purpose court, in India, that deals with cases regarding consumer disputes and
grievances. These are judiciary hearings set up by the government to protect the consumer rights.

■ Its main function is to maintain the fair practices by the sellers towards consumers. Consumers can file a case
against a seller if they are harassed or exploited by sellers.

■ The court will only give a verdict in favour of the consumers if they have proof of exploitation, i.e., bills or other
documents. If a consumer does not have the proper documents required for filing a case then it would be very
difficult for the consumer to win or even file a case.

■ Submitting complaint is very simple and a consumer has no need to hire any lawyer. Approaching a consumer court
is very simple and extremely cheap as you can represent yourself without having to hire a lawyer and not required to
pay any court fee but just a nominal fee.

■ There are District Consumer Redressal Commissions, State Consumer Redressal Commissions and National
Consumer Redressal Commission.
 The National Consumer Disputes Redressal Commission
■ The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in
India which was set up in 1988 under the Consumer Protection Act, 1986. Its head office is in New Delhi.
The commission is headed by a sitting or retired judge of the Supreme Court of India. The present head is
Justice R K AGRAWAL, former judge of the Supreme Court of India.

■ Section 21 of Consumer Protection Act, 1986 describes, the NCDRC shall have jurisdiction:-

a) to entertain, complaints where the value of the goods or services and compensation, if any, claimed
exceeds rupees one crore; and

b) appeals against the orders of any State Commission; and

c) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has
been decided by any State Commission where it appears to the National Commission that such State
Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so
vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

■ Section 23 of Consumer Protection Act, 1986, provides that any person aggrieved by an order of NCDRC,
may prefer an Appeal against such order to Supreme Court of India within a period of 30 days.
 ■ Supreme Court

■ National Consumer Redressal Forum

■ State Consumer Redressal Forum(20 Lakhs -1 Crore)

■ District Consumer Redressal Forum(up to 20 lakhs)

Lok Adalat in India
 Lok Adalat
■ Lok Adalat is one of the Alternative dispute resolution mechanisms in India, it is a forum where cases pending or at pre
litigation stage in a court of law are settled. They have been given statutory status under the Legal Services Authorities
Act, 1987.

■ Under this Act, the award made by the Lok Adalats is deemed to be a decree of a civil court and is final and binding on
all parties and no appeal against such an award lies before any court of law. If the parties are not satisfied with the
award of the Lok Adalat, they are free to initiate litigation by approaching the court of appropriate jurisdiction.

■ The Members of Lok Adalat have the role of statutory conciliators only and do not have any judicial role, therefore they
can only persuade the parties to come to a conclusion.

■ Main condition of the Lok Adalat is that both parties in dispute should agree for settlement.

■ There is no court fee and if a matter pending in the court of law is referred to the Lok Adalat and is settled
subsequently, the court fee originally paid in the court on the complaints is also refunded back to the parties.

■ The procedural laws and the Evidence Act are not strictly followed while assessing the merits of the claim by the Lok
Adalat.
■ The decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal
process.

■ It consists of a Chairman and two other members. Chairman can be a sitting or retired judge and members a lawyer and a
social activist.

■ Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can
also be easily settled before Lok Adalat, as the scope for compromise through an approach of give and take is high in these
cases. A Lok Adalat can take up civil cases (including marriage, and family disputes) and compoundable criminal cases.

■ National Level Lok Adalats are held for at regular intervals where on a single day Lok Adalats are held throughout the country.

■ The other type of Lok Adalat is the Permanent Lok Adalat, organized under Section 22-B of The Legal Services Authorities Act,
1987. Permanent Lok Adalats have been set up as permanent bodies with a Chairman and two members for providing
compulsory pre-litigative mechanism for conciliation and settlement of cases relating to Public Utility Services like transport,
postal, telegraph etc. Further, the Award of the Permanent Lok Adalat is final and binding on all the parties. The jurisdiction of
the Permanent Lok Adalats is up to Rs. Ten Lakhs.

■ Mobile Lok Adalats are also organized in various parts of the country which travel from one location to another to resolve
disputes in order to facilitate the resolution of disputes through this mechanism.

■ As on 30.09.2015, more than 15.14 lakhs Lok Adalats have been organized in the country since its inception. More than 8.25
crore cases have been settled by this mechanism so far.

■ There are Lok Adalats at Taluk Level, District Level. High Court Level and also State Level.
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