Compensation in consumer cases: what the consumer court can award

People who approach the consumer court often ask how much they can claim. The answer depends on what went wrong, what it cost you and what you can prove. Section 39 of the Consumer Protection Act, 2019 sets out what the Commission can order once it finds a complaint proved.

What the Commission can order

• Remove the defect in the goods, or the deficiency in the service
• Replace the goods with new goods of a similar description, free from defect
• Refund the price or charges paid, with interest at a rate it decides
• Pay compensation for loss or injury caused by the opposite party’s negligence
• Pay compensation in a product liability claim, where a defective product or service caused harm
• Stop an unfair or restrictive trade practice, and issue a corrective advertisement
• Withdraw hazardous or unsafe goods from sale
• Pay adequate costs of the case

The Commission can combine these. A typical order for a defective car, for example, might direct a replacement or refund, a sum for the inconvenience caused, and costs.

Refund with interest

The Act does not fix an interest rate. The Commission decides it on the facts, usually from the date of payment until the refund is made. Where a builder-buyer agreement already fixes compensation for delay, Commissions generally start from that, though a clause that is one-sided can be set aside. The State and National Commissions can declare an unfair contract term void.

Compensation for loss, harassment and mental agony

Compensation is meant to put you back, as far as money can, where you would have been. Losses you can document carry the most weight:

• repair bills and the cost of hiring a replacement while the product was out of use
• medical expenses and lost earnings, where the deficiency caused injury
• travel and other expenses incurred in following up the complaint

Commissions also award a sum for harassment and mental agony in suitable cases, such as repeated visits to a service centre or years of waiting for a flat. These amounts are usually moderate and must be reasonable for the facts.

No double compensation for the same default

In DLF Homes Panchkula v. D.S. Dhanda (2019), the National Commission had awarded flat buyers interest, ₹1 lakh for each year of delay, and ₹1 lakh as costs. The Supreme Court set this aside, holding that awards under various heads for the same default are not sustainable. Where the agreement already provides compensation for delay, more is allowed only for exceptional and strong reasons, a test the Court applied again in 2025. It allowed interest at 9% a year, a rate the builder had accepted in connected cases, and a single sum of ₹50,000 for mental agony, litigation costs and all other heads.

Interest rates differ from case to case. In 2020 the Supreme Court awarded 6% a year for delay where the agreed compensation clause was one-sided, and in 2025 it held that the 8% rate fixed in the contract was adequate.

In practice, this means a claim should explain what each amount is for, and avoid asking for the same loss twice.

Punitive damages

The Act allows the Commission to award punitive damages “in such circumstances as it deems fit”. These go beyond compensating your loss and are meant to deter deliberate or gross misconduct. They are discretionary and are not awarded in every case.

When many consumers are affected

Where a large number of consumers who cannot easily be identified have suffered loss, the Commission can order the opposite party to pay a sum of at least 25% of the value of the defective goods sold or services provided to them.

Harm caused by a defective product

If a defective product or a deficient service causes personal injury, illness, death, or damage to other property, a product liability claim can be made against the manufacturer, service provider or seller under Chapter VI of the Act, subject to the conditions and exceptions in Sections 84 to 87. A seller, for example, is liable only in the situations listed in Section 86. Damage to the product itself, and purely commercial or economic loss, are not “harm” for this purpose. A defect in the product itself is covered by the ordinary remedies of repair, replacement or refund.

How much to claim

• Itemise the claim: the price or charges paid, each expense with its bill, and a separate, reasonable sum for harassment.
• The forum depends on the amount you paid, not the compensation you claim, so a large claim does not by itself move the case to a higher Commission. See fees, time limits and appeals.
• Keep every bill, receipt, job card and message. Compensation follows proof.

Getting paid

An order of the Commission can be enforced like a civil court decree under Section 71. Not complying is an offence under Section 72, punishable with imprisonment from one month to three years, a fine from ₹25,000 to ₹1 lakh, or both. A party that appeals must first deposit 50% of the amount ordered.

Common questions