Importance of Consumer Commissions, NCLT And NCLAT in Speedy Adjudication

Written by Vaishnavi Bandhakavi

Abstract:
In a country like India, where the market is flooded with various goods and services disputes often arise between the consumers and businesses. Consumers are often confused as to which forum has the proper jurisdiction to file their complaint. Despite the Consumer Protection Act, of 1986 containing special provisions. This Paper mainly focuses on the importance of Consumer protection and the role of NCLT and NCLAT in resolving company-related matters and constitutional validity

INTRODUCTION:
A consumer is a person who buys goods or services for personal use. Consumer protection laws prohibit unfair trade practices and provide assistance to those affected by such practices. The consumer protection laws also protect consumers from any kind of exploitation, deception or harassment while buying products and services. The laws vary from country to country but there is a common set of consumer protection laws. All countries have agreed upon these rules and have been designed to protect consumers from being misled by businesses.

CONSUMER RIGHTS IN INDIA ARE AS FOLLOWS:

• Right to be informed about the product or service offered by the company.
• Right to choose a product or service from the company
• Right to reject the offer of a product or service and right not to buy any product that is not desired by the consumers
• Right to refund if there is any defect in the product and write for replacement of damaged products.
• Right to get compensation if there is any financial loss caused due to negligence on the part of the organization.

Well, there are several laws that provide consumer protection. Disputes arising from these laws can be complex and time-consuming to ensure speedy and effective resolution of these disputes.

LEGISLATIONS FOR THE PROTECTION OF CONSUMER RIGHTS

• The Consumer Protection Act, CPA was introduced in 1986 to protect the interest of the consumers in India. The Purpose of the Consumer Protection Act was to solve customer disputes and to help establish consumer councils and other authorities for the settlement of these disputes.
• The government introduced a series of provisions for providing protection to consumers such as the Indian Contract Act, of 1872, the Sales of Goods Act, of 1930, the Standards of Weights and Measures Act, of 1976 etc. These measures provided some relief to the consumers but there was a risk for further reform to address adulterated and sub-standard goods, this is what the Consumer Protection Act 1986 sought to resolve and it was. It still had some drawbacks as well.
• Consumer Protection Act, 2019 was an improved version that replaced the Consumer Protection Act, of 1986.

CONSUMER COMMISSIONS:

Consumer protection is an essential part and India is no exception with an increasing number of goods and services being sold in the market it has become essential to protect the interest of consumers from fraudulent and unfair trade practices or any kind of exploitation while buying products and services. The Consumers Protection Act, 2019 which is an improvement to the Consumers Protection Act, 1986 provides for the establishment of consumer commissions at various levels. These commissions have played a significant role in protecting the rights of consumers and resolving disputes between consumers and businesses.

Consumer Commissions are quasi–judicial bodies established under the Consumer Protection Act, 2019 and the Consumer Protection Act 1986. These Commissions are established at three levels:
At the District Level – The District consumer disputes Redressal Commission
At the State Level- the State Consumer Disputes Redressal Commission
At National Level- National Consumers Disputes Redressal Commission.
The Jurisdictions of these commissions are determined by the value of the goods or services:
• The District Commissions has jurisdictions over disputes up to One crore
• The state commission has jurisdiction over disputes between one crore to 10 Crores.
• The National Commission has Jurisdiction over disputes exceeding 10 Crores.

Consumer Commissions play a crucial role in resolving disputes between consumers and businesses. They Provide a Platform for consumers to file complaints against businesses that violate their rights. These complaints can be related to any issues including defective goods or services, unfair trade practices, deficiency in services and overcharging. Once a complaint is filed, the commission sends a notice to the opposite party (The Business) against whom a complaint has been filed. The Opposite party is given an opportunity to file a reply and if necessary, a hearing is conducted after considering the evidence presented, the commission passes an order which can include compensation to the consumers. Refund of the purchased price or any other relief deemed appropriate.

The Consumer commissions have been given the wide range of powers to ensure the Speedy and efficient resolution of disputes.

• The Consumers Commission have the power to receive complaints from the consumers.
• To initiate proceedings on its own
• To make interim orders and ensure to pass its final orders.
• To provide consumers and safeguard against the promotion of goods that pose a risk to the human life.
• To Protect Consumers and provide information about the standard, purity and the price of the products.
• Making consumers aware of their rights
• The Right to fair compensation from the sellers if harmed.

Consumer Commissions are known for their speedy adjudication regarding the disposal of cases, which means that consumers can get relief quickly. The Consumers protection act 2019 is a friendly legislation that provides several reliefs to consumers. Consumer Commissions have been set up to ensure that these reliefs are made available to the consumers.

NATIONAL COMPANY LAW TRIBUNAL (NCLT)

The population explosion and the increase in litigation had greatly increased the burden of pendency in the high courts, hence the adoption of the theory of alternative institution mechanism would lead to speedy disposal of cases thereby reducing the burden of the high court and establishment of these tribunals are within the legislative competence of the parliament.

The Establishment and Constitution of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) are quasi-judicial bodies to handle all company-related disputes with the exemption of criminal prosecutions for the violation of the Companies Act. It led to the dissolution of the company law Board (CLB) and transferred all the company law-related matters to NCLT.

All matters arising out of the Companies Act will definitely reduce if not reduce the delay involved in the company law Proceedings, Avoid multiplicity of litigation and reduce the burden on high courts.
NCLT is considered a special Tribunal. Both courts and Tribunals are legally adjudicated bodies that deal with the settlement of disputes between the parties that are in their field of jurisdiction. The Idea of setting up NCLT AND NCLAT was proposed to examine issues related to insolvency and winding up of companies, given that there are already several different for dealing with company matters, it was recommended by the government for the establishment of NCLT as a solution to this problem.

Further, the introduction of NCLT has opened doors for professionals like chartered accountants. Cost Accountants, and company secretaries by making them eligible for appointment as technical members of the tribunal, if they have an experience of 15 years and also appear before the tribunal.

The Purpose of establishing NCLT is to :

• Minimize the duration period of disputes
• To minimize the litigation process
• The cases unresolved or unsettled in CLB will be transferred to NCLT so that the burden of high courts will be reduced.
• The NCLT will save time which automatically reduces the energy and money of the parties concerned likewise undue hardships of the parties will be reduced.

ROLE OF NCLT IN DISPUTE RESOLUTION:

• The Significant benefits of NCLT are, that the Tribunal decides on all proceedings under the Companies Act, including Arbitration, compromise, restructuring and winding up.
• It is in charge of matters involving corporate mismanagement and oppression. A case may also be filed by a former employee of a company.
• Dispute of conversion of a public company to a private company must be done only when NCLT has given its approval.
• It also deals with companies that commit fraud and firm refuses to register a transfer of their securities
• For a corporation to reduce its share capital, NCLT approval is required
• It has the authority to investigate and deregister a business that has been registered unlawfully or fraudulently.

NCLAT AND ITS POWERS
Appeals can be raised in the National Company Law Appellate Tribunal (NCLAT) a quasi-judicial body established under the Companies Act, 2013 for hearing appeals against the orders passed by the National Company Law Tribunal ( NCLT).
The tribunal has the power to hear and dispose of appeals against the orders of the NCLT relating to matters of :

• Orders passed under the Companies Act, 2013 and the Insolvency Bankruptcy Code, 2016.
• Orders related to Mergers and Amalgamations, demergers and any other restructuring of companies.
• Orders related to the winding up of companies and any other orders passed by NCLT.

CONCLUSION
Thus, In today’s fast-paced world, because of consumer awareness, Disputes between consumers and companies are increasing and it is essential that they have a speedy resolution to such disputes establishment of Consumer Commissions, NCLT and NCLAT will also reduce the burden of high courts.