When Parliament rewrote India's consumer law in 2019, it did something the 1986 Act had never attempted: it embedded a permanent, court-annexed mediation infrastructure inside the redressal machinery itself. Section 74 commanded the creation of a consumer mediation cell — a standing office attached to each District Commission, State Commission, the National Commission and its regional Benches — to hold a panel of trained mediators and run settlements as a structured alternative to adjudication. For three years the cell was the statutory heart of Chapter V. Then the Mediation Act, 2023 arrived, omitted the entire Chapter V (Sections 74 to 81), and rerouted consumer mediation through a single substituted Section 37. This article reconstructs the original Section 74 scheme, explains how the cell was meant to work, and maps exactly what the 2023 overhaul changed — a sequence judiciary and CLAT-PG aspirants are routinely tested on.
Why the 2019 Act created a statutory mediation cell
The repealed Consumer Protection Act, 1986 contained no statutory mechanism for mediation. Consumer fora could, and sometimes did, encourage parties to settle, but there was no dedicated institution, no panel of accredited neutrals and no codified procedure. Settlement, where it happened, was improvised. The 2019 Act — part of a wider redesign that also introduced the Central Consumer Protection Authority and a tightened definition of consumer rights — treated alternative dispute resolution as a structural answer to the chronic docket backlog that had crippled the older fora. The policy logic was simple: many consumer grievances are small in value but emotionally charged, and a facilitated conversation can resolve them faster and more durably than a contested adjudication that may take years and produce a winner who has effectively lost on time and cost.
Chapter V (Sections 74 to 81) was the vehicle. Its architecture had three layers: an institution (the consumer mediation cell, Section 74); a roster of neutrals (empanelment of mediators, Section 75) and the rules governing them (Sections 76 to 78); and a process (Sections 79 to 81) carrying a dispute from referral through settlement to a binding order. The cell was the physical and administrative anchor on which the other seven sections hung. Without it, empanelment had nowhere to register, proceedings had nowhere to be held, and settlement reports had no office to issue from. Understanding the cell therefore unlocks the whole of Chapter V — which is exactly why examiners use it as the entry point to the mediation topic.
Section 74: the establishment provision, sub-section by sub-section
Section 74, headed “Establishment of consumer mediation cell”, had five sub-sections, each allocating a distinct responsibility. Read together they tell you who builds the cell, where it sits, who staffs it, what it must keep and to whom it answers.
Section 74(1) placed the State Government under a duty to establish, by notification, a consumer mediation cell attached to each District Commission and to the State Commission of that State. The verb is mandatory — “shall establish” — leaving the State no discretion on whether to set up a cell, only on its detailed composition. The phrase “attached to” is deliberate: the cell was an adjunct of the Commission, not an independent tribunal, drawing its referrals from and reporting back to the very forum that would ultimately record the settlement.
Section 74(2) mirrored this for the Centre: the Central Government “shall establish, by notification, a consumer mediation cell to be attached to the National Commission and each of the regional Benches.” Sub-sections (1) and (2) together produced a cell at every level of the three-tier hierarchy, so that a complainant at any tier had a mediation option without travelling to a different forum.
Section 74(3) provided that a cell “shall consist of such persons as may be prescribed” — delegating composition to delegated legislation rather than fixing numbers in the statute. This is a recurring drafting technique in the 2019 Act: the legislature fixes the institution and its duties but leaves headcount and qualifications to rules and regulations that can be revised without amending the parent Act.
Section 74(4) imposed record-keeping duties: every cell had to maintain (a) a list of empanelled mediators; (b) a list of cases handled; (c) a record of proceedings; and (d) any other information specified by regulations. These four heads turned the cell into a transparent, auditable office rather than an informal settlement room — the list of empanelled mediators tied directly to Section 75, the list of cases and the record of proceedings created the evidentiary trail behind every settlement report, and the residual head (d) gave regulators room to add disclosure requirements over time. Section 74(5) required each cell to submit a quarterly report to the Commission to which it was attached, in the manner specified by regulations — the accountability loop that fed back to the parent forum and allowed the Commission to monitor mediator performance, caseload and disposal rates.
Commencement and the National Commission's cell
Section 74, together with the rest of Chapter V, was brought into force with effect from 20 July 2020 by notification S.O. 2351(E) dated 15 July 2020. The cell was therefore an operative reality, not merely a paper provision.
The most prominent cell was established at the apex. By notification S.O. 3083(E) dated 29 July 2021, the Central Government, exercising power under Section 74(2), established a Mediation Cell in the National Consumer Disputes Redressal Commission, New Delhi. That notification specified that the cell would be attached to the National Commission and headed by the President of that Commission; it would have a panel of mediators selected on the recommendation of a selection committee consisting of the President and a Member; and it would have such supporting staff as the President decided in consultation with the Central Government, which was obliged to provide administrative assistance and infrastructure. The same pattern — cell, panel, selection committee, supporting staff — was to be replicated at State and District level. For the wider institutional map of these fora, see the note on the consumer disputes redressal commissions.
Empanelment of mediators: Section 75 and the regulations
Section 75 governed who could sit on the panel the cell maintained. Under Section 75(1), for the purpose of mediation the National, State or District Commission was to prepare a panel of mediators — maintained by the consumer mediation cell attached to it — on the recommendation of a selection committee consisting of the President and a Member of that Commission. Section 75(2) delegated the qualifications, empanelment procedure, training, fees, terms, code of conduct and grounds for removal to regulations. Section 75(3) fixed the panel's validity at five years, with eligibility for re-empanelment for a further term on prescribed conditions.
The detail was supplied by the Consumer Protection (Mediation) Regulations, 2020, framed by the NCDRC, and the Consumer Protection (Mediation) Rules, 2020 framed by the Central Government. These prescribed eligibility and disqualification criteria — for instance, persons against whom charges involving moral turpitude had been framed, or who had been convicted by a criminal court, were disqualified — and mandated that empanelled mediators complete a minimum of 40 hours of training before accreditation. The training requirement signalled that mediation was to be a skilled, professionalised function rather than an honorary appointment, and the disqualification grid protected the integrity of the panel from the outset.
The interlock between Sections 74 and 75 is worth stressing for examination purposes. Section 75 created the panel; Section 74(4)(a) required the cell to maintain the list of that panel; and Section 74(5) required the cell to report on it quarterly, including the experience and qualifications of each empanelled mediator. Empanelment, custody and reporting were thus distributed across the two sections, with the cell acting as the permanent custodian of a roster that the selection committee periodically refreshed. A candidate who can articulate this division — committee selects, cell maintains, Commission receives the report — demonstrates a structural grasp that mere section-recitation cannot.
Nomination, disclosure and replacement: Sections 76 to 78
Three short sections governed the integrity of the individual mediator. Section 76 required the Commission, while nominating any person from the panel, to consider his suitability for resolving the particular consumer dispute — a fit-for-purpose check rather than a mechanical roster pick.
Section 77 imposed a duty of disclosure: the mediator had to disclose (a) any personal, professional or financial interest in the outcome; (b) any circumstance giving rise to a justifiable doubt about his independence or impartiality; and (c) such other facts as regulations specified. This is the classic conflict-of-interest safeguard that runs through all modern mediation law.
Section 78 provided the remedy when that safeguard was triggered: where the Commission was satisfied — on information from the mediator, or from any other person including the parties, and after hearing the mediator — it was to replace that mediator with another. Together Sections 76 to 78 ensured the neutrality that gives mediation its legitimacy; a mediator with an undisclosed stake would corrupt the entire process the cell existed to house.
Procedure for mediation: Section 79
Section 79 located the process physically inside the cell. Section 79(1) was unambiguous: “The mediation shall be held in the consumer mediation cell attached to the District Commission, the State Commission or the National Commission, as the case may be.” The cell was thus not a registry alone but the venue.
Section 79(2) directed the nominated mediator to have regard to the rights and obligations of the parties, the usages of trade, the circumstances giving rise to the dispute and any other relevant factor, and to be guided by the principles of natural justice throughout. The express reference to natural justice is notable: although mediation is not adjudication, the legislature insisted that the process remain fair, that both sides be heard, and that the mediator not act on one party's case behind the other's back. Section 79(3) required the mediation to be conducted within such time and manner as regulations specified, importing a discipline of timeliness so that mediation did not become a parking lot for stalled complaints. The model preserved the essence of mediation — a facilitated, party-driven negotiation in which the neutral has no power to impose an outcome — while bolting it to a statutory neutral, a statutory venue and a statutory timeline. That fusion of informality and structure is the defining character of court-annexed mediation under the 2019 scheme.
Settlement and the binding order: Sections 80 and 81
Section 80 handled the output of a successful mediation. Under Section 80(1), if agreement was reached on all or some issues, the terms were to be reduced to writing and signed by the parties or their authorised representatives. Section 80(2) required the mediator to prepare a settlement report and forward the signed agreement with it to the Commission. Section 80(3) covered failure: where no agreement was reached within time, or the mediator opined settlement was impossible, he prepared a report to that effect.
Section 81 converted a settlement into an enforceable order. Section 81(1) required the Commission, within seven days of receiving the settlement report, to pass a suitable order recording the settlement and dispose of the matter. Section 81(2) addressed partial settlement — record the settled issues, continue hearing the rest — and Section 81(3) provided that where the dispute could not be settled, the Commission would continue to hear all issues. A first proviso to the appeal provisions also barred any appeal from an order passed under Section 81(1) pursuant to a settlement under Section 80, reflecting the consensual, non-adversarial nature of a mediated outcome.
The referral gateway: original Section 37
The cell could only function once a dispute reached it, and the gateway sat in Chapter IV. The original Section 37 (“Reference to mediation”) provided that at the first hearing after admission, or at any later stage, if it appeared to the Commission that elements of a settlement existed which might be acceptable to the parties — except in such cases as may be prescribed — it could direct the parties to give written consent within five days to settle by mediation under Chapter V. Where the parties consented in writing, the Commission, within five days, referred the matter for mediation, whereupon Chapter V applied.
Two features stand out. First, referral required the parties' written consent — mediation was always voluntary, never compelled. The Commission could identify “elements of a settlement,” but it could not order parties into mediation against their will. Second, certain categories of dispute could be carved out by regulations as unsuitable for mediation, recognising that some matters — fraud allegations, questions of public importance, or disputes requiring an authoritative ruling — are intrinsically ill-suited to a consensual process. This consent-based architecture aligns with the Supreme Court's broader insistence that consumer remedies are not to be ousted by private agreement: in M. Hemalatha Devi v. B. Udayasri (2024) the Court held that consumer disputes are non-arbitrable and a consumer cannot be forced into arbitration by a pre-dispute clause — even where a sale agreement contained an arbitration clause, the consumer's election to approach the consumer forum prevailed and the forum's jurisdiction was not ousted. The consumer's choice of forum and process is thus protected, a principle that resonates directly with the consent-gated referral under Section 37: just as a consumer cannot be pushed out of the forum into arbitration, a consumer could not be pushed out of adjudication into mediation without consent.
The Mediation Act, 2023: omission of Chapter V
The decisive development — and the point most likely to trip up an unprepared candidate — is that the entire Chapter V apparatus has been repealed. The Mediation Act, 2023, by Section 65 read with its Tenth Schedule (dated 14 September 2023, with effect from 15 September 2023), amended the Consumer Protection Act, 2019 to fold consumer mediation into the new general mediation regime.
The Tenth Schedule made a coordinated set of changes: it omitted clauses (25) and (26) of Section 2 (the definitions of “mediation” and “mediator”); it substituted Section 37; it inserted new Sections 37A and 37B; it modified Section 38 and omitted a proviso to Section 41; and — most significantly for this topic — it omitted the whole of Chapter V (Sections 74 to 81), including Section 74's consumer mediation cell. Consequential omissions followed in the rule-making and regulation-making powers under Sections 101, 102 and 103, which had previously carried entries for the persons in the consumer mediation cell and the empanelment of mediators.
The substituted Section 37 and new Sections 37A, 37B
After the 2023 overhaul, the gateway and the settlement machinery survive in compressed form inside Chapter IV. The substituted Section 37 provides that the District, State or National Commission may, at any stage of proceedings, refer the disputes for settlement by mediation under the Mediation Act, 2023 — not under the now-deleted Chapter V.
The new Section 37A reproduces the old Section 80 logic: on a successful mediation the agreement is reduced to writing and signed, the mediator prepares a settlement report and forwards the signed agreement to the Commission, and a failure report is prepared where no agreement is reached. The new Section 37B reproduces the old Section 81: the Commission, within seven days of the settlement report, passes an order recording the settlement and disposing of the matter, with partial-settlement and failed-mediation fall-back rules intact. The substance of settlement and order thus migrated upward into Chapter IV, while the institutional shell — the cell, the panel, the empanelment regime — was deleted and replaced by the Mediation Act's own Mediation Council of India and registered mediators.
What survives — and what it means for the cell today
The practical effect is a shift in locus. Under the original scheme, mediation was held in a consumer-specific cell, by a consumer-specific panel, governed by consumer-specific regulations. After 15 September 2023, a Commission's referral is to mediation “under the Mediation Act, 2023,” which channels the dispute into the Act's general framework of registered mediators, mediation service providers and the Mediation Council of India. The bespoke consumer infrastructure was, in effect, absorbed into a unified national mediation regime, so that a consumer dispute is now mediated by the same class of registered neutrals and under the same procedural backbone as any other civil or commercial matter.
It is worth being precise about what was retained versus what was deleted. The settlement-to-order machinery survived almost verbatim — old Section 80 became Section 37A and old Section 81 became Section 37B, both inside Chapter IV. What was deleted was the institutional shell: the cell (Section 74), the empanelment regime (Section 75), the disclosure, suitability and replacement rules (Sections 76 to 78) and the venue-and-procedure provision (Section 79). The legislature kept the consequences of a successful mediation but handed the machinery of conducting it to the general Act.
For aspirants, the safest formulation in an answer is therefore historically layered: Section 74 created the consumer mediation cell as the institutional core of Chapter V; that cell operated from 20 July 2020; cells were notified, including the NCDRC cell by S.O. 3083(E) of 29 July 2021; and Chapter V (Sections 74–81) was omitted by the Mediation Act, 2023 (Tenth Schedule, w.e.f. 15 September 2023), with consumer mediation now flowing through substituted Section 37 and new Sections 37A–37B. Stating the omission is what distinguishes a current answer from a stale one, and it signals to the examiner that the candidate is tracking legislative developments rather than reciting a frozen syllabus.
Comparison with the 1986 Act and the wider scheme
The 1986 Act had nothing resembling Section 74. There was no statutory cell, no empanelled panel, no codified settlement-to-order route; fora relied on ad hoc conciliation. The 2019 Act's innovation was to institutionalise ADR within consumer redressal, signalling a deliberate policy preference for negotiated outcomes over contested litigation — a preference the Mediation Act, 2023 has since generalised across all civil and commercial disputes.
Within the 2019 Act, the cell sat alongside the other pillars of the redesign: the regulatory and enforcement muscle of the CCPA's powers and functions, the three-tier adjudicatory hierarchy of the Commissions, and the expanded substantive protections traced in our Consumer Protection Act hub. The mediation cell was the Act's quiet bet that many consumer grievances are better resolved by facilitated agreement than by years of adjudication — a bet the Mediation Act, 2023 has now scaled up nationally while retiring the bespoke cell.
Exam pointers and common traps
Three traps recur. First, do not state that Chapter V or Section 74 is currently in force without flagging the 2023 omission; the cleanest answers acknowledge both the original provision and its repeal. Second, keep the section map precise: establishment of the cell is Section 74; empanelment is Section 75; disclosure is Section 77; procedure is Section 79; settlement is Section 80; recording the order within seven days is Section 81. Third, remember that referral always required the parties' written consent — mediation under the consumer scheme was never mandatory, consistent with the Supreme Court's protection of the consumer's choice of forum in M. Hemalatha Devi v. B. Udayasri. For the definitional groundwork underlying these provisions, revisit the notes on definitions and the introduction to the Act.
Frequently asked questions
What is a consumer mediation cell under Section 74?
It was a statutory office created by Section 74 of the Consumer Protection Act, 2019, attached to each District Commission, the State Commission, the National Commission and its regional Benches. It maintained a list of empanelled mediators, a list of cases, a record of proceedings, hosted mediations, and submitted quarterly reports to the parent Commission. Note that Section 74 was omitted by the Mediation Act, 2023, w.e.f. 15 September 2023.
Is the consumer mediation cell still operative in 2026?
No, not as a distinct statutory body. The entire Chapter V (Sections 74 to 81), including Section 74's consumer mediation cell, was omitted by the Mediation Act, 2023 (Section 65 read with the Tenth Schedule) with effect from 15 September 2023. Consumer disputes are now referred to mediation under the Mediation Act, 2023 through the substituted Section 37.
Who selected the mediators on a cell's panel?
Under Section 75(1), the panel was prepared on the recommendation of a selection committee consisting of the President and a Member of the relevant Commission. The panel was valid for five years under Section 75(3), with eligibility for re-empanelment. The Consumer Protection (Mediation) Regulations, 2020 required empanelled mediators to complete at least 40 hours of training.
Was mediation under the Consumer Protection Act compulsory?
No. Under the original Section 37, referral required the parties' written consent within five days; mediation was voluntary. This mirrors the Supreme Court's position in M. Hemalatha Devi v. B. Udayasri that consumer disputes are non-arbitrable and a consumer cannot be forced out of the consumer forum by a private clause — the consumer's choice of process is protected.
What happened to a settlement reached through mediation?
Under Section 80, the agreed terms were reduced to writing, signed by the parties, and the mediator prepared a settlement report sent to the Commission. Under Section 81, the Commission had to pass an order recording the settlement within seven days and dispose of the matter. These rules now survive as new Sections 37A and 37B after the 2023 amendment.
How did the Mediation Act, 2023 change the consumer mediation scheme?
By its Tenth Schedule (under Section 65), effective 15 September 2023, it omitted the definitions in Section 2(25) and (26), substituted Section 37, inserted new Sections 37A and 37B, and omitted the whole of Chapter V (Sections 74 to 81). Consumer mediation now flows through the general Mediation Act, 2023 framework rather than a dedicated consumer mediation cell.