State Consumer Disputes Redressal Commission
Roy Saldanha & Another vs M/S C.V. Naik Constructions & Another on 10 June, 2015
1
BEFORE THE GOA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
PANAJI - GOA
FA. No. 28/2015
1. Mr. Roy Saldanha
Age: 55 yrs, Occupation: Service,
2. Ms. Lorraine Saldanha,
Age: 27 yrs, Occupation: Physiotherapist,
both residents of House no. 452, Ponda Goa. ...Appellants
v/s.
1. M/s. C.V. Naik Constructions
Having its office at first floor,
Excelsior Chambers,
Opp. ING Vysya Bank,
Above Classic Business Centre,
M.G. Road, Panaji Goa.
2. Shri. Sandesh Naik,
Partner of M/s. C.V. Naik Construction,
Resident of H.No. 408,
Parvati Niwas,
St. Inez, Panaji Goa. ...Respondents
Appellants/Complainants are represented by Adv. Shri. P. Shetty.
Respondents/OPs are represented by Adv. Shri. N.G. Kamat.
Coram: Shri Justice N.A. Britto, President
Shri Jagdish Prabhudesai, Member
Dated: 10/06/2015
ORDER
[Per Shri Justice N.A. Britto, President] This is a complainants' appeal and is directed against order dated 6/4/15 which has been passed by the Lr. District Forum relying on an unreported decision of this Commission dated 27/3/14 in RP No. 22/13 in the case of Prabhakar B. Vernekar and anr.
2. The admitted facts are as follows:
23. The complainants entered into an agreement styled as an agreement for sale dated 25/4/11 with the OPs, for purchase of a flat for a sum of Rs. 22.5 lacs in their building to be known as Moonlight Apartments. The complainants on completion of the said building, inspected the same with a view to take possession, but found that the vitrified tiles which were fixed on the floor of the said flat, were stained. The complainants claim that there were some other discrepancies in the works done by the OP. The OP tried to remove the stains but without any success. The said tiles appear to have been manufactured and supplied by M/s. Vermora Granite Pvt. Ltd., who upon inspection found that the defects were not curable. Complainants, therefore, asked for replacement of the said tiles. The complainants also claim that no compound wall was constructed. Differences thus having a risen between the complainants and OPs, the complainants filed the complaint on 28/11/12 seeking direction to the OP for the replacement of the said tiles, replacement of the door, damages, etc.
4. The agreement between both the parties dated 25/4/11 had an arbitration clause, namely clause 9(j) which provided that all disputes which may arise between the parties would be referred to arbitration in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996. There is also no dispute that upon receipt of notice of the complaint, the OP filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, which in terms has been allowed by the Lr. District Forum, by the impugned order. There is no dispute that the predicates of Section 8 of the Arbitration and Conciliation Act, 1996 have been complied with by the OP; and the Lr. District Forum, by the impugned order, has directed the OP to appoint the arbitrator with the consent of the complainant 3 and the arbitrator so appointed has been directed to dispose off the complaint within a period of 3 months from the date of receiving the case papers from the parties.
5. Shri. Shetty, the lr. advocate of the complainants would submit that Section 3 of the C.P. Act, 1986 should prevail over Section 8 of the Arbitration and Conciliation Act, 1996. Shri. Shetty would submit that the C.P. Act, 1986 is beneficial piece of legislation and a remedy under the C.P. Act, 1986 is a better suited remedy for the consumers. Lr. Adv. Shri. Shetty has placed reliance on a decision of the National Commission in DLF Limited vs. Mridul Estate Pvt. Ltd., 2013 (2) CPR 76, Rosedale Developers Pvt. Ltd., vs. Aghore Bhattacharya (judgement dated 6/9/13 of the Hon. Supreme Court in Civil Appeal No. 20923 of 2013 and Skypak Couriers Ltd., AIR 2000 SC 2008.
6. On the other hand, Shri. N.G. Kamat, the lr. advocate of the OP would submit that the complainants are very much bound by clause 9(g) of the agreement for sale dated 25/4/11 and as such have no other option but to resort to arbitration as agreed upon. Shri. Kamat would further submit that the complainants cannot pick up and choose those clauses which are favourable to the complainants, in as much as it is not the case of the complainant that the said agreement dated 25/4/11 was entered into by them by coercion or under undue influence, etc. and as such the complainant are bound by clause 9(j) of the agreement and should go for arbitration.
7. We are not impressed with the submissions made by Shri. P. Shetty, the lr. advocate of the complainants. The complainants are bound by clause 9(g) of the agreement between them in the same manner as they would be bound by other clauses of the said agreement regarding which there is no challenge. It is now well settled law that Indian Contract Act applies to all including consumers as held by the Apex Court in Marine Container Services 4 South Pvt. Ltd., AIR 1999 SC 80. It is equally well settled that when a person signs a document which contains certain contractual terms, the party is bound by such contract; and it is for such party to establish exception (see Bharati Knitting Company, II 1996 CPJ 25). In our opinion, therefore, clause No. 9(j) is equally binding upon the complainants as well as on the OPs and the complainants cannot wriggle out of the same on the specious plea that the complainants had no choice but to sign the agreement which was offered by the OPs.
8. The decision in Skypak Couriers Ltd (supra) stood on its own facts. The observation that even if there is an arbitration clause in an agreement and a complaint is made by the consumer, in relation to certain deficiency in service, then the existence of arbitration clause will not be a bar to the entertainment of the complaint was made by the Apex Court without taking note of the mandate of Section 8 of the Arbitration and Conciliation Act, 1996 and therefore cannot be taken as a binding precedent. The decision in DLF Ltd., vs. Mridul Estate Pvt. Ltd., (supra) was rendered by the National Commission relying on National Seeds Corporation Ltd., vs. M. Madhusudhan Reddy and anr., 2013 (3) CPR 589, and the view held in DLF Ltd., vs. Mridul Estate Pvt. Ltd., has been approved in Rosedale Developers Pvt. Ltd., vs. Aghore Bhattacharya. Incidentally, it may be mentioned here that the judgements in M/s. National Seeds Corporation Ltd., vs. M. Madhusudhan Reddy and anr., (supra) and Rosedale Developers Pvt. Ltd., (supra) were authored by his Lordship Mr. Justice G.S. Singhvi ( as he then was). We have held in Prabhakar B. Vernekar & anr. (supra) that the decision of the Apex Court in M/s. National Seeds Corporation Ltd., vs. M. Madhusudan Reddy was rendered without considering two decisions referred to in para 13 of Prasad K. 5 Amonkar, 2012(4) CPR 15 i.e. Branch Manager, Magma Leasing and Finance Ltd., and anr., 2009 10 SCC 103 and Agri Gold Exims Ltd., 2007 (3) SCC 686, wherein the Apex Court has held that Section 8 of the 1996 Act is peremptory in nature and in case where there exists an arbitration agreement, the Court is under an obligation to refer the parties to arbitration in terms of the arbitration agreement, and two decisions referred in para 22 of Prabhakar B. Vernekar (supra) i.e. P. Anand Gajapathi Raju & ors., 2000 (4) SCC 539 and Smt. Kalpana Kothari, AIR 2001 SC 404. The decision in National Seeds Corporation vs. M. Madhusudhan Reddy (supra) is rendered without considering the mandate of Section 8 of the Act of 1996 and so also the principle that when there are two special enactments, C.P. Act, 1986 being one of them and the Act of 1996 being the other, the later enactment would prevail, and, as such the decision (in National Seeds Corporation Ltd.,) has got to be considered as per incuriam; and, in any event we had a choice to go by the said four decisions of the Apex Court which deal with Section 8 of the Act of 1996 in preference to the decision in M/s. National Seeds Corporation Ltd., (supra). This Commission further held that it is well settled that when there is a conflict between two judgements (here it is 4:1) delivered by co- ordinate benches of the Supreme Court, it is not necessary that the later judgement of the Supreme Court needs to be followed. We held that, we can follow, which in our view, is better in point of law.
9. In Prabhakar B. Vernekar and anr. (supra) this Commission has held as follows:
19. However, these are cases where the complainants had no choice or option but a mandate of law to be complied with, in view of Section 8 of the Act of 1996. It appears that the complainants were well aware of this position when they called upon the named arbitrator to enter 6 reference. When Parliament enacted the C.P. Act, 1986, Parliament wanted to give prominence to C.P. Act over the then existing laws in force. That's why it enacted Section 3. A decade later, when Parliament enacted the Act of 1996, Parliament gave prominence to arbitration as one of methods of dispute resolution (and later incorporated it in Section 89 of C.P.C. w.e.f. 1/7/2002) and for that reason created a mandate by way of Section 8 thereof. Arbitration proceeding were never meant to be cumbersome. That some of our retired judges and lawyers have made them cumbersome is entirely a different matter. The object of the Act of 1996, as stated by the Apex Court in P.V.G. Raju (died) and ors (infra) was to encourage resolution of disputes expeditiously and less expensively, when there is an arbitration agreement. Not that the object of C.P. Act, '86 was different but Parliament intented that arbitration had to be given more prominence. Hence Parliament created a mandate by enacting Section 8.
10. The decision dated 27/3/14 in the case of Prabhakar B. Vernekar and anr., has been subsequently followed by us in CC No. 13/14 filed by Mr. Elias Pereira and anr., by order dated 10/9/14 wherein we have held as follows:
22. The offshoot of the above discussion is this: Section 3 of C.P. Act will prevail over the laws which were then in force. The Arbitration Act of 1940 was in force when C.P. Act, 1986 came in force. Section 3 cannot prevail over the laws which were not in force, particularly the Act of 1996, which is also a special law. In case the predicates of this law i.e. Section 8 of Act of 1996 are complied with in a given case, the same will prevail over Section 3 of the C.P. Act. Section 8 of the Act of 1996 is mandatory.7
11. In view of the above discussion, we have no other option but to uphold the order of the Lr. District Forum and dismiss the appeal with costs of Rs. 2500/- to be paid by the complainants to the OP.
[Shri. Jagdish Prabhudesai] [Shri. Justice N.A. Britto]
MEMBER PRESIDENT
sp/-