The government plans to establish a consumer court in the Kathmandu Valley as a pilot in the coming fiscal year 2024-25.

Finance Minister Barsha Man Pun made the announcement on May 28 while unveiling the budget for the fiscal year 2024-25. He said the necessary funds have been allocated for setting up the court. “The government will tackle issues like black-marketing and market syndicates will be controlled. A consumer court will also be set up, and I have allocated a budget for this purpose,” Pun said while presenting the budget.

"We had sought a budget of Rs10 million to establish at least one consumer court in a district inside the Kathmandu Valley. But we have yet to know how much has been allocated. The proposed Rs10 million will cover administrative and employment expenses of the court," said an official at the Ministry of Industry, Commerce and Supplies, wishing not to be named. "We aim to establish the court in the coming fiscal year."

The Consumer Protection Act, 2018 has a provision requiring the government to establish a consumer court. Based on this provision, the Ministry of Industry, Commerce and Supplies submitted a draft of legislation to the law ministry in September 2019. Although the draft reached the Ministry of Law and then to the Ministry of Industry, Commerce and Supplies. However, the process has been delayed due to frequent changes in the government.

Last year, the Industry Ministry cancelled the previous process and started a fresh process by forming a committee.

The committee recommended setting up a pilot consumer court in an appropriate location within the Valley, in coordination with or on the advice of the Judicial Council, considering the current condition of the country and available resources, the official said. Based on financial resources, more consumer courts will be set up gradually in other districts also, according to officials.

The draft report has been submitted to the Law Ministry, which has forwarded it to Judicial Council for its suggestions.

According to the proposed draft, the government, in an effort to minimise the financial burden on state coffers, will deploy the district judge and staffers of the respective district to the consumer court, according to the official. “If there is space in the district court, the consumer court will be established there, or else a separate building will be rented for the purpose,” the official said.

In September 2019, the Ministry of Industry, Commerce and Supplies submitted draft legislation to establish a consumer court to the Ministry of Law, which then forwarded it to the Judicial Council. As the process was delayed, the Supreme Court on February 20, 2022 ordered the government to establish consumer courts in all provinces to protect buyers' interests amid repeated cases of unfair market practices.

A division bench of justices Bam Kumar Shrestha and Nahakul Subedi issued the order after the Forum for Protection of Consumer Rights Nepal moved the court. But there isn’t any indication yet of such a court being established in any of the country's seven provinces.

The Industry Ministry official said they realised that setting up one consumer court per province would not be practical as people will have to travel long distances for their cases, so the draft has proposed setting up consumer courts in each district gradually.

A consumer court is a specialised court which primarily deals with consumer-related disputes, conflicts, and grievances. The court holds hearings to adjudicate these issues.

The public has long been demanding a consumer court to bring unscrupulous traders under a legal framework within a fast-track system.

Since consumers do not want to get involved in complex court cases, particularly at the Supreme Court, this has emboldened unscrupulous traders, observers say. They believe that once consumer courts are established, filing complaints will become easier and there will be fewer hassles.

Consumer rights activists said that they are hopeful that the government will follow through on its announcement made in the annual budget and set up consumer courts.

“With the policies and programmes for upcoming fiscal year 2024-25 mentioning the formation of consumer courts and the government allocating budget for it, we are hopeful that the court will be established in the coming fiscal year despite the long delay,” said Bishnu Prasad Timilsina, the general secretary of the Forum for Consumers' Rights.

The Law Minister and Industry Minister have also committed to establishing consumer courts, and the Supreme Court has already issued an order to this effect, therefore it is expected that this time it will be implemented, Timilsina said. “And just setting up the courts alone will not be enough, they have to be effective.”

"Consumer courts need to be digitised so that consumers who have become victims can easily file their cases through applications, ensuring quick processing, and track the proceedings through digital mediums," Timilsina said.