Consumer Protection Act, 1986 – Consumer disputes, whether arbitrable or not – Appellant-company was developing an integrated township – Respondent submitted an application for allotment of villa – In Buyer’s agreement, there was an arbitration clause providing for settlement of disputes between the parties under Arbitration and Conciliation Act, 1996 – Respondent filed complaint before the National Consumer Disputes Redressal Commission (NCDRC) – Appellant filed an application u/s.8 of the 1996 Act for referring the matter to the Arbitration – NCDRC rejected the application u/s.8 of the 1996 Act and held that in the light of the Consumer Act and Court-evolved jurisprudence, amended subsection (1) of s.8 cannot be construed as a mandate to the Consumer Forums, constituted under the Act, to refer the parties to Arbitration in terms of the Arbitration agreement – Propriety of – Held: Proper – Amendments u/s.8 of the 1996 Act were aimed to minimize the scope of judicial authority to refuse reference to arbitration and only ground on which reference could have been refused was that it prima facie finds that no valid arbitration agreement exists – But, amendment in s.8 cannot be given such expansive meaning and intent so as to inundate entire regime of special legislations where disputes were held to be non-arbitrable – However, in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition in disputes being proceeded in arbitration – It is only the case where specific/special remedies are provided for and which are opted by an aggrieved person that judicial authority can refuse to relegate the parties to the arbitration – Thus, complaint under Consumer Protection Act being a special remedy, despite there being an arbitration agreement the proceedings before Consumer Forum have to go on – No error committed by the NCDRC in rejecting application filed by appellant u/s.8 – Arbitration and Conciliation Act, 1996 – Amended s.8 by the Arbitration and Conciliation (Amendment) Act, 2015.
Dismissing the review petitions, the Court
HELD: 1. This Court in the series of judgments considered the provisions of Consumer Protection Act, 1986 as well as Arbitration and Conciliation Act, 1996 and laid down that complaint under Consumer Protection Act being a special remedy, despite there being an arbitration agreement the proceedings before Consumer Forum have to go on and no error committed by Consumer Forum on rejecting the application. There is reason for not interjecting proceedings under Consumer Protection Act on the strength of an arbitration agreement by Act, 1996. The remedy under Consumer Protection Act is a remedy provided to a consumer when there is a defect in any goods or services. The complaint means any allegation in writing made by a complainant has also been explained in Section 2(c) of the Act. The remedy under the Consumer Protection Act is confined to complaint by consumer as defined under the Act for defect or deficiencies caused by a service provider, the cheap and a quick remedy has been provided to the consumer which is the object and purpose of the Act. [Para 25][809-E-H]
National Seeds Corporation Limited v. M. Madhusudan Reddy and Another (2012) 2 SCC 506 : [2012] 2 SCR 1065 ; Duro Felguera, S.A. v. Gangavaram Port Limited (2017) 9 SCC 729 : [2017] 10 SCR 285 ; A. Ayyasamy v. A. Paramasivam and Others (2016) 10 SCC 386 : [2016] 11 SCR 521 ; Lucknow Development Act v. M.K. Gupta, (1994) 1 SCC 243 : [1993] 3 Suppl. SCR
615 ; Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (dead) Through LRs. And others, (2004) 1 SCC 395 ; Fair Air Engineering Pvt. Ltd. and another v. N.K. Modi, (1996) 6 SCC 385 : [1996] 4 Suppl. SCR 820 ; Skypak Couriers Ltd. v. Tata Chemicals, (2000) 5 SCC 294 : [2000] 1 Suppl. SCR 324 ; Rosedale Developers Private Limited v. Aghore Bhattacharya And Others (2018) 11 SCC 337 – referred to.
2. Not only the proceedings of Consumer Protection Act, 1986 are special proceedings which were required to be continued under the Act despite an arbitration agreement, there are large number of other fields where an arbitration agreement can neither stop or stultify the proceedings. [Para 26][810-A-B]
Booz Allen and Hamilton Inc. v. SBI Home Finance Limited and others (2011) 5 SCC 532 : [2011] 7 SCR
310 – relied on.
3. What is the legislative intent and object in bringing the amendment to Section 8 is the main question to be answered in this case. Amendments under Section 8, were aimed to minimise the scope of judicial authority to refuse reference to arbitration and only ground on which reference could have been refused was that it prima facie finds that no valid arbitration agreement exists. Notwithstanding any prior judicial precedents referred to under Section 8(1) relates to those judicial precedents, which explained the discretion and power of judicial authority to examine various aspects while exercising power under Section 8. The Legislative intent and object were confined to only above aspects and was not on those aspects, where certain disputes were not required to be referred to arbitration. Can it be said that after amendment under Section 8(1), the law laid down by this Court in reference to Section 2(3), where large number of categories have been held to be non-arbitrable has been reversed or set at naught. Neither any such Legislature intendment was there nor any such consequence was contemplated that law laid down by this Court in context of Section 2(3) has to be ignored or reversed. [Paras 36, 49 and 50][815-G; 823-G-H; 824-A-C]
4. The amendment in Section 8 cannot be given such expansive meaning and intent so as to inundate entire regime of special legislations where such disputes were held to be not arbitrable. Something which legislation never intended cannot be accepted as side wind to override the settled law. The words “notwithstanding any judgment, decree or order of the Supreme Court or any Court” were meant only to those precedents where it was laid down that the judicial authority while making reference under Section 8 shall be entitled to look into various facets of the arbitration agreement, subject matter of the arbitration whether the claim is alive or dead, whether the arbitration agreement is null and void. The words added in Section 8 cannot be meant for any other meaning. [Para 52][824-F-H; 825-A] P. Anand Gajapathi Raju and Others v. P.V.G. Raju (Dead) and Others, (2000) 4 SCC 539 : [2000] 2 SCR
684 ; Vimal Kishor Shah and others v. Jayesh Dinesh Shah and others (2016) 8 SCC 788 : [2016] 7 SCR
102 ; Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Another (2003) 5 SCC 531 : [2003] 3 SCR 558 ; Ameet Lalchand Shah and Others v. Rishabh Enterprises and Another, AIR 2018 SC 3041 : [2018] SCR 1001 – referred to.
5. However, in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition in disputes being proceeded in arbitration. It is only the case where specific/special remedies are provided for and which are opted by an aggrieved person that judicial authority can refuse to relegate the parties to the arbitration. Thus, no error has been committed by the NCDRC in rejecting the application filed by the appellant under Section 8. [Paras 55, 56][827-A-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.