How Meagre Compensation by NCDRC and Courts Lets Big Companies Flaunt Rules Without Fear

Consumer protection laws in India were created with the promise of quick, inexpensive justice for ordinary citizens. The vision was simple: empower the common man, hold powerful companies accountable, and ensure fair treatment in the marketplace.

Consumer protection laws in India were created with the promise of quick, inexpensive justice for ordinary citizens. The vision was simple: empower the common man, hold powerful companies accountable, and ensure fair treatment in the marketplace.

Why? Because the compensation awarded by District Commissions, State Commissions, and even the National Consumer Disputes Redressal Commission (NCDRC) is so meagre, and the legal process so slow, that companies openly continue deficiency of service without hesitation. In many cases, they fight till NCDRC and even the Supreme Court — fully aware that even if they lose, the punishment will be insignificant compared to their profits.

1. Meagre Compensation: A System Designed to Fail Consumers

The number one problem is the extremely low compensation amounts typically awarded.

• Rs.10,000
• Rs. 20,000
• Rs. 50,000
• Rarely Rs. 1–2 lakh
• Only in exceptional cases Rs.10 lakh or more

These amounts are almost laughable for companies making hundreds of crores. When the penalty for wrongdoing is so small, companies calculate and continue deficiency of service. They know that even if a consumer files a case, it will take years—and at the end, the liability is minor.

In short, the cost of non-compliance is lower than the cost of compliance.

This single fact destroys the entire purpose of consumer law.

2. Big Companies Fight Till NCDRC and Supreme Court — Because They Can

Large corporations have full-time legal teams, experienced advocates, and unlimited resources. They have deep pockets and deeper patience.

Most of them follow the same strategy:

• Delay at every stage
• Contest every fact, even the obvious ones
• File multiple appeals
• Question jurisdiction, limitation, notices
• Take the matter to NCDRC
• If needed, escalate to the Supreme Court

This “fight till the end” model is not to prove innocence—it’s to exhaust the consumer.

Meanwhile, the ordinary complainant:

• pays one advocate
• believes his lawyer will “handle everything”
• cannot afford repeated dates, travel, or documentation
• may lose wages or time for every hearing
• becomes mentally exhausted
• often gives up midway
• For companies, this is a business strategy.
• For consumers, this is a life battle.

3. Consumers Depend on One Advocate — Who Often Cannot Match Corporate Legal Armies

A common man files a complaint thinking truth is enough. He hires one advocate, sometimes paying the maximum he can afford. But in reality:

• many advocates do not draft in-depth pleadings
• important grounds are left out
• arguments are not placed clearly
• cross-examination is weak
• paperwork is improper
• legal strategies are missing

Then, when the matter reaches higher forums, the court says:

• “This was not your prayer.”
• “This ground was not raised before the lower forum.”
• “You did not plead this aspect in your complaint.”

Does this mean justice? Or does this mean we are making fools of ordinary citizens who trusted the legal system but didn’t know every technicality?

• Lawyers for companies know every loophole.
• Consumers know only their suffering.
• The system, unfortunately, rewards technicality—not truth.

4. Even After Winning, Compensation Is Pathetic

What happens even if the consumer wins after years? Compensation is so meagre that it almost insults the victim. It often does not cover:

• rent paid during delay
• loss of opportunity
• mental agony
• legal fees
• travel expenses
• time wasted
• harassment faced

And then the newspapers write: “Justice Delivered”

But is Rs. 10,000 or Rs. 50,000 compensation after 6–10 years real justice? Or is it a mockery of the consumer’s suffering?

5. Real Examples: Low Compensation Even in Serious Cases

Here are examples showing how serious cases ended in disappointing outcomes:

Example 1 — 8-Year Legal Battle → ?4.95 lakh Compensation (NCDRC, 2023)

• A consumer fought a case for nearly 8 years.
• The compensation: Rs. 4.95 lakh.
• Legal expenses + stress + time would easily exceed this amount.

Example 2 — NCDRC Awards ?10 Lakh → Supreme Court Cancels It Entirely

• A private hospital was ordered by NCDRC to pay Rs.10 lakh.
• The Supreme Court reversed it, saying NCDRC added a “new cause of action”.
• Final result: Zero compensation.
• A complete loss after years of litigation.

Example 3 — Builder Delays Flats for 8–10 Years

NCDRC typically awards:

• Rs.50,000
• Rs. 1 lakh
• small interest amounts
• For a decade of suffering.
• Builders happily pay and continue business as usual.

Example 4 — Small Awards for Serious Harassment

Even cases involving fraud, cheating, or unfair practices often end with:

• Rs.10,000
• Rs.20,000
• Rs.30,000

What message does this send? That consumer rights are cheap.

6. Legal Loopholes Help Companies Escape Accountability

Courts often rely on technicalities such as:

• improper pleading
• missing prayers
• lack of specific relief wording
• non-joinder/mis-joinder of parties
• minor procedural defects
• Companies exploit these like experts.
• Consumers suffer because they don’t know the “magic words” needed to satisfy the court.

Justice should be based on truth, not on who has better drafting skills. But in India, drafting decides justice. Not facts. Not fairness. Not suffering.

7. The Result: Companies Keep Violating, Consumers Keep Suffering

Because:

• penalties are low
• delays are long
• appeals are unlimited
• lawyers for common people are limited
• loopholes are many

Companies know they can:

• cheat
• delay
• deny service
• mislead
• exploit
• harass
• And still emerge safe.

They may pay a tiny penalty after 10 years. They may escape on a technicality. They may settle for peanuts. Or the consumer may withdraw due to exhaustion. This is why deficiency of service continues unchecked in India.

8. Where Is the Deterrence? Where Is the Fear?

If a company making Rs. 500 crore a year pays Rs. 50,000 compensation after 10 years via appeal after appeal. This is not deterrence. This is encouragement. This is an invitation to do wrong again.

When legal costs exceed compensation, when truth loses to technicalities, when loopholes defeat justice, then the system is no longer a system for consumers. It becomes a system for corporations.

Final Reflection: Is This Truly “Justice for Consumers”?

When a common man:

• fights alone
• against a legal army
• for years and years
• spends more than he recovers
• loses peace, time, and health
• wins only a small amount
• or loses due to technicalities
• Can any court say with pride:
• “Justice is delivered.”

Or is it time to ask a serious question:

Is consumer law protecting citizens, or protecting companies from citizens?

Until compensation becomes realistic, until appeals stop being weapons of delay, until technicalities stop killing justice, and until companies fear the law— consumer justice will remain a dream, not a reality.