TaxTMI 
TaxTMI 
2023 (10) TMI 1510
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.... been filed by the other party to the agreement, who is a consumer and therefore the Appellants have the option to move an application Under Section 8 of the Arbitration Act, 1996 for reference before Arbitration. Consequently, the Appellants moved an application for referring the dispute for arbitration. The District Consumer Forum dismissed this application on the ground that the complainant has invoked a public law remedy before a "Judicial Authority", under a beneficial legislation for consumers, which is the Consumer Protection Act, 2019 (hereinafter referred to as 'The 2019 Act") and therefore under the facts and circumstances of this case, the dispute is non-arbitrable. Consequent to the dismissal of their application Under Section 8 of the Arbitration Act, 1996, the Appellants filed a Review Application before the High Court for review of its earlier order dated 19.05.2022. This Review Application was dismissed vide the second order of the High Court dated 25.11.2022, (which is again impugned before this Court), on the ground that the Appellants had already acted upon the order dated 19.05.2022, and therefore is now estopped from seeking review of the order dated 19.05.....
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.... the price is nothing but restrictive practice by the opposite parties. Further, the act of the opposite parties amounts to deficiency of service and unfair trade practice. Hence, point no. a is answered in favour of the complainant. 10. Point No. b: Homebuyers put their hard-earned savings into the real estate projects with a hope that they will own their dream house one day. However, their dreams get shattered when the builders fail to deliver the possession of their houses even after a prolonged delay. In the present case, the obligation of the opposite party no. 3 (who is the land owner and developer) to deliver the Villa on the time mentioned in the agreement of sale was not fulfilled despite receipt of payment of amount as per the said agreement. The receipt of part payment towards transfer of the plot by the opposite parties without discharging their obligations for the construction of the Villa and finally cancelling the agreement of sale unilaterally on the pretext that the prices have gone up for the subject property is nothing but commission of deficiency of service and adoption of unfair trade practice on the part of the opposite parties. T....
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..... The total area of the land on which the residential house/villa was to be constructed was 357 sq. yards in Kokapet Village, Rajendra Nagar Mandal, Ranga Reddy District, Telangana, and the total construction was 4,000 sq. feet for a total sale consideration of Rs.49,42,000/- (Rupees Forty Nine Lakhs and Forty Two Thousand Only). 6. As per the agreement, the mode of payment was to be done as per clauses 9.1, 9.2 and 9.3 which read as under: 9.1 Mode: The purchaser paid to the Developer, the total consideration mentioned in Clause 8.1 above, in the following manner: S.No. Date Chq. No. Bank Amount 1. 29/08/2013 303650 ING, Vysya Bank, Hyderabad 4,94,200 Total 4,94,200 9.2 The balance of Rs.44.47,800/- (Rupees Forty Four Lakhs Seven Thousand Eight Hundred Only) shall be paid by the vendee at the time of registration of sale deed in favour of purchaser or her nominee/s. 9.3 Essence: timely payment of the total consideration is the essence of this contract. The possession of the house was to be given as per clauses 10.1 and 10.1.1 of the agreement which reads as under: ....
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....o a consumer, as defined under the 2019 Act, moved a complaint before the District Consumer Forum. At the same time, having received notice of Section 11 application, the Respondent filed her reply before the Court. In her reply, the Respondent apprised the High Court that she being a consumer has moved a complaint before a Judicial Authority, which is District Consumer Forum, where an application Under Section 8 of the Arbitration Act, 1996 for appointment of Arbitrator is always available to the Appellants. Vide the impugned order dated 19.05.2022, the application of the present Appellants was dismissed by the High Court, and the Appellants were granted liberty to move a Section 8 application of the Arbitration Act, 1996 before the District Consumer Forum. This application (Under Section 8 of the Arbitration Act, 1996), as we have already referred to above, was later dismissed by the District Consumer Forum on the ground that the legislature had purposely provided a remedy under the 2019 Act in addition to any other remedy which may be available to the consumer and although there is an Arbitration clause between the parties but that itself will not oust the jurisdiction of a Cons....
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.... adjudication by public fora (courts and tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, Under Section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes. 36. The well-recognised examples of non- arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. The exclusion of a dispute from arbitration may be express or implied, depending again upon the nature of the di....
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.... otherwise those given in the Act. Again, the question which came up before this Court was whether existence of Arbitration clause in the agreement would exclude the jurisdiction of the Consumer Courts and whether the Consumer Court is bound to refer the matter for reference to arbitration. This was in the case of National Seeds Corporation Limited v. M. Madhusudhan Reddy and Another (2012) 2 SCC 506 and it was answered thus: 64. According to the learned Counsel for the Appellant, if the growers had applied for arbitration then in terms of Section 8 of the Arbitration and Conciliation Act the dispute arising out of the arbitration clause had to be referred to an appropriate arbitrator and the District Consumer Forums were not entitled to entertain their complaint. This contention represents an extension of the main objection of the Appellant that the only remedy available to the farmers and growers who claim to have suffered loss on account of use of defective seeds sold/supplied by the Appellant was to file complaints with the Seed Inspectors concerned for taking action Under Sections 19 and/or 21 of the Seeds Act. 65. The consideration of this issue needs to ....
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....h party had approached the court first. More importantly it would be the nature of the dispute, which would determine the forum for its redressal. The law gives this choice to the consumer to either avail a remedy under the Consumer Protection Act, by filing a complaint before the Judicial Authority, or go for arbitration. This option is not available to the builder, as they are not 'Consumers', under the 2019 Act. It is the Respondent here Smt. B. Udayasri who has to make a "choice" between submitting before the private fora i.e., the Arbitration Tribunal or to make a complaint before the Consumer Forum, which is a public fora. She has chosen to go to the latter. Her reply before the Telangana High Court on the Section 11 application of the builder is not her submission to the arbitration process. In her reply, she informs the High Court of the complaint made by her as a consumer before the District Consumer Forum, which is a 'Judicial Authority' and hence Section 8 of the Arbitration Act, 1996 would come into play and not an application Under Section 11 of the Arbitration Act, 1996. Now merely because the builder had approached a Court first (Under Section 11 o....
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....laiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists. (2) The application referred to in Sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration Under Sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that court. (3) ...... Section 11: Appointment of arbitrators.- (1) ........ (2) ....... (3) ...... (4) If the appointment procedure in Sub-section (3) applies and-....
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....rocedure provides other means for securing the appointment. (6A) The Supreme Court or, as the case may be, the High Court, while considering any application under Sub-section (4) or Sub-section (5) or Sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement. (6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court. Now post amendment, the newly incorporated Sub-section (1) to Section 8 has the words "notwithstanding any judgment, decree or order of the Supreme Court or any court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists". When complaints were filed before the consumer forum, such matters were referred to a larger three-member bench of NCDRC. The question referred was whether the judicial authority i.e., the consumer forum had any option (post amendment), but to refer the dispute to arbitration when an application Under Section 8 is mov....
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....aised on behalf of the consumer (in Emaar MGF Land Ltd. case), was that the Consumer Protection Act is a beneficial legislation for the consumers, which gives a speedy, and expeditious remedy for redressal of consumer disputes. If the argument of the review Petitioners were to be accepted then it would amount to setting at naught the beneficial legislation i.e., Consumer Protection Act. It would also have similar effect in cases relating to trusts, tenancy disputes, industrial disputes, IPR and other non-arbitrable disputes. It was for this reason that the three-member Bench of NCDRC in Emaar I (supra) had said "the ripple of the amendment to Section 8(1) cannot be so large as to inundate domains of other legislations and jurisprudence, painstakingly built by the Legislators and Courts, especially without any engagement, debate and critique with the foundations of these related laws." 14. This court then examined the legal position as it existed prior to the amendments and the effect of the amendment on the legal position. The preamble of the 1986 Act was examined.^3 The 1986 Act was enacted to provide better protection of consumer interest and to have level playing field for....
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....ive of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi- judicial forums are set up at the district, State and national level with wide range of powers vested in them. These quasi-judicial forums, observing the principles of natural justice, are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers and to impose penalties for non-compliance with their orders. 12. As per Section 3 of the Act, as already stated above, the provisions of the Act shall be in addition to and not in derogation of any other provisions of any other law for the time being in force. Having due regard to the scheme of the Act and purpose sought to be achieved to protect the interest of the consumers better, the provisions are to be interpreted broadly, positively and purposefully in the context of the present case to give meaning to additional/extended jurisdiction, particularly when Section 3 seeks to provide r....
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.... it was observed...... (SCC pp. 534-35, paras 64-66). 5................... 6. The judgments relied upon by Shri Ghose do not have any bearing on the issue raised in this appeal. In neither of those cases, has this Court interpreted the provisions of the 1996 Act in the light of the provisions contained in the 1986 Act. Therefore, the propositions laid down in those judgments that Section 8 of the 1996 Act is mandatory cannot lead to an inference that the consumer forum is bound to make a reference to the Arbitral Tribunal. 7. In view of the abovestated legal position, the National Commission did not commit any error by holding that the remedy of arbitration available to the complainant does not bar the jurisdiction of the consumer forums and the consumer forums are not under an obligation to refer the matter to the Arbitral Tribunal. With the above observation, the appeal is dismissed. 16. This Court in a series of decisions, while considering both the provisions in the Consumer Protection Act, 1986 and the Arbitration Act, 1996, has held that the Consumer Protection Act being a special and beneficial legislation, the remedies provided therein are spec....
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....agraphs. This Court in Emaar III (supra), after a change in the provisions post amendment, referred to Section 2(3) of the Arbitration Act, 1996, which reads as under: 2. (3) This Part shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration. Thus, it was clear that this part of the Arbitration Act, 1996 (i.e., Part I) shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration. Those disputes which cannot be submitted for arbitration have already been referred to above and have been discussed in detail in Booz Allen and Hamilton Inc. (supra). For the sake of repetition and in order to just make an illustration, these disputes would be: (i) patent, trademarks and copyright; (ii) anti-trust/competition laws; (iii) insolvency/winding up; (iv) bribery/corruption; (v) fraud; (vi) criminal matter. In A. Ayyasamy v. A. Paramasivam and Ors. (2016) 10 SCC 386, this Court in para 35 had held as under: 35. Ordinarily every civil or commercial dispute whether based on contr....
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..... v. SBI Home Finance Ltd., (2011) 5 SCC 532 : (2011) 2 SCC (Civ) 781], namely, disputes relating to trusts, trustees and beneficiaries arising out of a trust deed and the Trust Act. 18. This Court in Emaar III (supra) then considered the scope and effect of Section 5 of the Arbitration Act, 1996 which reads as under: 5. Extent of judicial intervention. - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. 19. What were then the factors which necessitated an amendment, inter alia, in Sections 8 and 11 of the Arbitration Act, 1996 and what was the purpose behind these amendments? This aspect again has been examined in detail in Emaar III (supra). Such amendments were recommended by the Law Commission in its 246th Report, paragraph 33 of the 246th Report of the Law Commission stated as under: 33. It is in this context, the Commission has recommended amendments to Sections 8 and 11 of the Arbitration and Conciliation Act, 1996. The scope of the judicial intervention is only restricted to situations where the court/judicial ....
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....g to the court to call upon the other party to produce the original arbitration agreement or its duly certified copy before the court. On amendment to Section 11 by inserting Sub-section (6-A), the following was stated: "Clause 6 of the Bill seeks to amend Section 11 of the principal Act to provide that appointment of arbitrator shall be made by the Supreme Court or the High Court, as the case may be, instead of the Chief Justice of India or the Chief Justice of the High Court. Sub-section (6-A) is inserted to provide that the Supreme Court or the High Court while considering application under Sub-sections (4) to (6) shall confine to the examination of an arbitration agreement. 20. The amendment which was made in Section 8 of the Arbitration Act, 1996 came up for consideration before this Court in Ameet Lalchand Shah v. Rishabh Enterprises, (2018) 15 SCC 678, where in paras 28 and 30, it was stated as under: 28. 'Principally four amendments to Section 8(1) have been introduced by the 2015 Amendments - (i) the relevant "party" that is entitled to apply seeking reference to arbitration has been clarified/amplified to include persons claiming "through....
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....nt inter alia in Sections 8 and 11 of the Arbitration Act, 1996 was to minimise the scope of judicial authority, which was to refuse reference to arbitration only on the ground when it prima facie finds that there was no valid arbitration agreement. The legislative intent for the amendment was confined to limiting judicial intervention, and once the Court finds that there is a valid arbitration agreement, it has no option but to refer the matter for arbitration. But this would not mean that where the matter itself is non-arbitrable, or is covered by a special legislation such as the Consumer Protection Act, it still has to be referred for arbitration. In Para 59 of Emaar III (supra), it was stated as under: 59. 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 submission of the Petitioner that after the amendment the law as laid down by this Court in National Seeds Corpn. Ltd. [National Seeds Corpn. Ltd. v. M. Madhusudhan Reddy, (2012....