Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 2019 Consumer Protection Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Issue for consideration:Whether the dispute between the parties is arbitrable, and once aparty has availed the remedy before a public forum under a specialbeneficial legislation, can it be compelled to go for arbitration.Consumer Protection Act, 2019 – Consumer Protection Act,1986 – Arbitration Act & Conciliation, 1996 – s.11(6A), 8(1) –Arbitrability of consumer dispute – Constructed house/villawas not handed over to the buyer/consumer-respondenton time – Later, builder terminated the agreement and theappellants-builders/owners filed application u/s.11(5), (6),Arbitration Act, 1996 before the High Court for appointment ofArbitrator, in terms of the arbitration clause in the agreement– Respondent filed complaint before the District Forum –Appellants’ application was dismissed, liberty was grantedto file a s.8 application before the District Forum whichwhen filed was dismissed – Review filed by the appellants,dismissed – Plea of the appellants that the High Court erred indismissing their application as under the amended provisionsof s.11, Arbitration Act, 1996 i.e. after insertion of sub-section6A to s.11, by way of an amendment in 2016, the High Courthad no choice but to refer the matter for arbitrationHeld: All disputes are not capable of being referred to arbitration– The exclusion of a dispute from arbitration may be expressor implied, depending upon the nature of the dispute, and aparty to a dispute cannot be compelled to resort to arbitrationmerely for the reason that it has been provided in the contract,to which it is a signatory – The arbitrability of a dispute has tobe examined when one of the parties seeks redressal under awelfare legislation, in spite of being a signatory to an arbitrationagreement – Consumer Protection Act is a piece of welfarelegislation with the primary purpose of protecting the interest ofa consumer – Consumer disputes are assigned by the legislatureto public fora, as a measure of public policy – Therefore, bynecessary implication such disputes will fall in the category ofnon-arbitrable disputes, and these disputes should be kept awayfrom a private fora such as ‘arbitration’, unless both the partieswillingly opt for arbitration over the remedy before public fora –In the present case, the application u/s.11, Arbitration Act, 1996filed by the appellants for appointment of an arbitrator, was notmaintainable – Impugned orders which held this position upheld– High Court adopted the right approach in its two impugnedorders, where it declined to interfere in the matter and appointan arbitrator – Reasoning given in Emaar MGF Land Ltd. v.Aftab Singh [2018] 14 SCR 791 (Emaar III) would be equallyapplicable to s.11 application before the High Court – Both theprovisions incorporated in s.8 and s.11 [i.e. sub-section (1) andsub-section 6A respectively], seemingly restrict the scope ofthe examination by the concerned courts, in their reference toarbitration, or appointment of arbitrator, as the case might be,and the language being common, “notwithstanding any judgment,decree or order” places a similar question before the two courts– Appeals dismissed. [Paras 9, 22, 23]Consumer Protection Act, 2019 – Arbitration Act, 1996 –ss.11,8 – Plea by the appellants that since it is the builder whofirst approached the “Court” by filing an application u/s.11for appointment of arbitrator, in terms of the agreement, theconsumer should have submitted before the jurisdictionof the Arbitration and Conciliation Act, as agreed betweenthe parties (in their agreement), rather than seeking remedybefore the Consumer Forum:Held: The question is of election, or of choice, and not of whichparty had approached the court first – More importantly it wouldbe the nature of the dispute, which would determine the forumfor its redressal – The law gives this choice to the consumerto either avail a remedy under the Consumer Protection Act,by filing a complaint before the Judicial Authority, or go forarbitration – This option is not available to the builder, as theyare not ‘Consumers’, under the 2019 Act – It is the respondenthere who had to make a “choice” between submitting before theprivate fora i.e., the Arbitration Tribunal or to make a complaintbefore the Consumer Forum, which is a public for a – Shechose to go to the latter – Her reply before the High Court onthe s.11 application of the builder was not her submission to thearbitration process – In her reply, she informed the High Courtof the complaint made by her as a consumer before the DistrictConsumer Forum, which is a ‘Judicial Authority’ and hence s.8 ofthe Arbitration Act would come into play and not an applicationu/s.11 of the Arbitration Act – Merely because the builder hadapproached a Court first (u/s.11, Arbitration Act, 1996) will itselfnot oust the jurisdiction of the Consumer Courts – The jurisdictionof a Court is not determined by the fastest finger first, but thenature of the dispute, the public policy in the matter, the will ofthe legislature, the election or choice of the consumer amongstvarious factors. [Para 10]Consumer Protection – Arbitration Act, 1996 – s.11(6A),8(1) – Doubt as regards a consumer pursuing his remedybefore Consumer Forums as against his going for arbitration,though being a party to an arbitration agreement, set torest by Supreme Court decision in Emaar MGF Land Ltd. v.Aftab Singh [2018] 14 SCR 791 (Emaar III) – It re-examinedthe issue afresh in the light of the insertion of sub-section6A to s.11 and sub-section 1 to s.8, Arbitration Act, 1996 –Legal position as it existed prior to the amendments and theeffect of the amendment on the legal position as examined,discussed.Consumer Protection Act, 2019 – Consumer Protection Act,1986 – Arbitration Act, 1996 – Consumer Protection Act, aspecial and beneficial legislation – Remedies provided arespecial remedies and a consumer cannot be deprived ofthem:Held: Being a special and beneficial legislation, the remediesprovided in Consumer Protection Act are special remedies anda consumer cannot be deprived of them should he choose toavail such a remedy, in spite of an arbitration agreement betweenthe parties – It is a remedy provided to the consumer where theconsumer finds a defect in either goods or services provided tohim and therefore seeks a redressal of his grievances beforethe consumer forum provided to him by the legislature. [Para 16] |
Judge | Hon'ble Mr. Justice Sudhanshu Dhulia |
Neutral Citation | 2023 INSC 870 |
Petitioner | Smt. M. Hemalatha Devi & Ors. |
Respondent | B. Udayasri |
SCR | [2023] 13 S.C.R. 258 |
Judgement Date | 2023-10-05 |
Case Number | 6500 |
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