Section 37: Reference to mediation

Consumer Protection Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2019

Legal Commentary & Landmark Judgments: Section 37

Section 37 incorporates a groundbreaking statutory dispute resolution mechanism empowering the District Commission to refer consumer complaints to mediation at the first hearing after admission or at any later stage, where elements of an acceptable settlement exist, subject to written consent given by the parties within five days.

  • Stage of Reference and Identification of Settlement Elements: Under Section 37(1), at the first hearing of the complaint after admission or at any later stage, the Commission evaluates whether elements of settlement exist, except in prescribed excluded categories (e.g., serious fraud, medical negligence resulting in death).
  • Five-Day Written Consent Mandate: The Commission directs the parties to furnish written consent within five days if they agree to have their dispute settled by mediation in accordance with Chapter V.
  • Mandatory Five-Day Reference Order: Section 37(2) commands that upon receipt of written consent from both parties, the District Commission shall, within five days, refer the dispute to the Consumer Mediation Cell attached to the Commission.
Key Landmark Precedents:
  • Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd. (2010) 8 SCC 24: The Supreme Court laid down exhaustive guidelines governing statutory references to alternative dispute resolution (ADR), defining categories of disputes suitable for consensual mediation and emphasizing that consent of parties is paramount.
  • K. Srinivas Rao v. D.A. Deepa (2013) 5 SCC 226: The Supreme Court held that institutional mediation is an invaluable tool to relieve docket congestion and achieve speedy, durable, and win-win dispute resolution without prolonged litigation.
  • M.R. Krishna Murthi v. New India Assurance Co. Ltd. (2019) 13 SCC 211: Reiterated that statutory mediation mechanisms in specialized tribunals provide swift, cost-effective, and consensual closure to consumer and insurance disputes.
Courtroom Practice & Strategic Litigation Guidance:

In commercial, banking, insurance, or real estate consumer disputes, consider invoking Section 37 at the very first hearing. Prepare and tender a joint consent memo under Section 37(1) within five days. Crucial strategic point: Under the third proviso to Section 41, no appeal lies against an order passed pursuant to a mediated settlement under Section 80. Thus, a mediated settlement achieves absolute finality, completely eliminating appellate risk.