Zom entered into a buyer's agreement with EMANKI Land Developers Private Limited in the year 2015. As per the agreement the possession of flat was to be handed over in January 2018. The Company was deferring the handing

CS Professional · Multidisciplinary Case Studies · PYQS · December 2019
Zom entered into a buyer's agreement with EMANKI Land Developers Private Limited in the year 2015. As per the agreement the possession of flat was to be handed over in January 2018. The Company was deferring the handing over of flat for almost a year. In January 2019, Zom filed a consumer complaint before the NCDRC against the Company praying for delivery of possession of the flat, adjustment of excess payment and compensation for deficiency in service. As the agreement also provided for an arbitration clause providing for settlement of disputes between parties under the Arbitration and Conciliation Act, 1996, the Company filed an application under Section 8 of Act for referring the matter to arbitration. Will the Company be successful in having an arbitration in respect of said matter?

Answer & Explanation:

The present case is similar to the case of Emaar MGF Land Limited v. Aftab Singh [SC] Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017 . The Supreme Court in the series of judgments considering the provisions of Consumer Protection Act, 1986 as well as Arbitration and Conciliation Act, 1996 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 is committed by Consumer Forum on rejecting the application. There is reason for not interjecting proceedings under Consumer Protection Act on the strength an arbitration agreement by Arbitration and Conciliation 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 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. The amendment in Section 8 of the Arbitration and Conciliation Act, 1996 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 Corporation Limited is no more a good law cannot be accepted. 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 entitle to look into various facets of the arbitration agreement, subject matter of the arbitration whether the claim is alive or dead and whether the arbitration agreement is null and void. The words added in Section 8 of the Arbitration and Conciliation Act, 1996 cannot be meant for any other meaning. 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. Hence, no error has been committed by the NCDRC. Hence, it can be concluded that the consumer disputes are not arbitrable.

Topics: Consumer Protection Law

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