State Consumer Disputes Redressal Commission
M/S. Alfran Constructions Pvt. Ltd., vs M/S. K.V. Nadkarni & Assoc., on 7 December, 2012
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA RP No. 08/2012 M/s. Alfran Constructions Pvt. Ltd., A company duly incorporated, with its regd. Office At UG-1, Gomes Catao Complex, Near Cine Alankar, Mapusa, Goa, through Its M.D, Mr. Carlos Mauricio Fernandes Petitioner/O.P. No. 2 V/s. 1. M/s. K.V. Nadkarni & Assoc., A partnership firm with its office at L/45-46, Alfran Plaza 4th floor, M.G. Road, Panaji, Goa through its Mr. Kasmalnath V. Nadkarni 2. M/s. Venkatesh Narayan Prabhu Moni, Prop. of M/s. Prabhu Constructions, With office at 505/B, 5th floor, Dempo Trade Centre, EDC Complex, Patto Plaza, Panaji, Goa. .Respondent/O.P. No. 1 Petitioner/O.P. No. 2 is represented by Adv. Shri. N.G. Kamat. Respondent No.1/Complainant is represented by Adv. Shri. A. Thali. Respondent No. 2/O.P. No. 1 exparte. Coram: Shri Justice N.A. Britto, President. Shri Jagdish Prabhudessai Member. Dated: 07/12/2012. ORDER
[Per Shri Justice N.A. Britto, President] This Revision is directed against order dated 06/08/12 of the Lr. District Forum, North Goa at Porvorim by which the application dated 28/03/12 filed under section 8 of the Arbitration and Conciliation Act, 1996 has been dismissed.
2. Some facts are required to be stated to dispose off this Revision.
3. The parties hereto shall hereinafter be referred to in the names as they appear in the cause title of the complaint.
4. The complainant is a firm of four partners doing business of land development and construction. O.P. No. 1 is a proprietary concern of Shri. Venkatesh N. Prabhu Moni while O.P. No. 2 is a Company incorporated under the Indian Companies Act, 1956.
5. By virtue of an agreement dated 10/08/05 for construction cum sale between the parties, the complainants purchased office premises on the 4th floor for a sum of Rs. 9.25 lacs and possession of the same was handed over to the complainants on 09/08/06. According to the complainants, they had purchased the said premises because they were adjoining an open terrace. A dispute has arisen between the complainant and O.P. No. 2 on account of the complainant installing air conditioners on the walls abutting the open terrace. O.P. No. 2 has taken the stand that they will not execute the sale deed unless the air conditioners are removed.
6. The complaint was filed on 24/09/10 for a direction to the O.Ps for execution of the sale deed and for compensation of Rs. 5 lacs. O.P. No. 2 filed its written version on 23/11/10 while O.P. No. 1 filed the same on 20/11/11. Then it was realised that O.P. No. 1 had filed the written version beyond prescribed period. On 7/2/11 the complainant filed his affidavit in evidence and additional affidavit in evidence on 7/12/11. Earlier on 8/6/11 O.P. No. 2 was granted time to file affidavit in evidence. On 15/7/11 the complainant filed two applications.
Application for amendment was allowed by the Lr. District Forum on 22/9/11 and application for production of additional documents was allowed on 3/11/11.
7. The agreement dated 10/08/2005 had an arbitration clause which reads as follows:
35. All disputes which may arise between the parties to this agreement, whether in relation to the interpretation of the clauses and conditions of this agreement, or about the performance of these presents or concerning any act of commission of the other party to the disputes, or to any act which ought to the done by the parties in dispute, or in relation to any matter whatsoever concerning this agreement shall be referred to Arbitration in accordance with the provisions of the arbitration & Conciliation Act, 1996.
8. The O.P. No. 2 in its written version took two main preliminary objections, namely, that the complainant was not a consumer within the definition of the word consumer under Section (2)(d) of the C.P. Act, 1986 and that in terms of the agreement dated 10/08/2005 any dispute pertaining to the agreement was required to be referred to arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (Act of 1996, for short) and on that count the complaint was liable to be dismissed.
9. Then came the order of this Commission on 13/12/11 in the case of Ms. Alka Nayak, 2012(1)CCC 189(SS)and presumably on the basis of the same that O.P. No. 2 filed the application on 29/03/12 under Section 8 of the Act of 1996. The case of Ms. Alka Nayak was followed by this Commission in the case of Mr. Prasad K. Amonkar, (d/o 18/5/12) 2012(1) CCC 163. The impugned order makes no whisper to the case of Ms. Alka S. Nayak (supra) nor to the case of Prasad K. Amonkar (supra) also reported in 2012 (4) CPR 15.
10. The impugned order is passed on the basis of Skypack Courier Ltd., AIR 2000 SCC 2008/2000 (5)SCC 294.
11. Sub-Section (1) of Section 8 of the Arbitration and Conciliation Act, 1996 provides that a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. Sub-Section (2) further provides that 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. When O.P. No. 2 filed its written version the case of Agri Gold Exims Ltd., (2007) 3 SCC 686 was already holding the field under Section 8 of the 1996 Act and this Commission in Ms. Alka Nayak (supra) have only followed the law laid down by the Apex Court in the said case of Agri Gold Exims Ltd. (supra) as well as Magma Leasing & Finance Ltd., & anr.,(supra).
12. In the case of Mr. Prasad K. Amonkar, 2012(1)CCC 163(SS) this Commission has held as follows:
11. In the case of Mrs. Alka S. Nayak (supra) we had taken note of several later decisions of the Apex Court and that of Calcutta High Court in Indusind Bank Ltd., before coming to the conclusion that the mandate Section 8 of 1996 Act had to be followed, following the ratio of Indusind Bank Ltd. vs. Gadadhar Banerjee (unreported decision dated 1/4/10 in CO. No. 223/2009) and had directed the parties to act in terms of the said agreement between them by referring the present dispute to arbitration.
12. Sub Section (1) of Section 8 of the Arbitration & Conciliation Act, 1996 provides that a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. Sub-Section (2) further provides that 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.
13. In Branch Manager, Magma Leasing & Finance Ltd., & anr., (2009) 10 SCC 103, the Apex Court has held that Section 8 of 1996 Act is in the form of a legislative command to the court and once the prerequisite conditions are satisfied, the court must refer the parties to arbitration. In Agri Gold Exims Ltd., (2007) 3 SCC 686, the Apex Court has held that Section 8 of 1996 Act is peremptory in nature and in case where there exists an arbitration agreement, the court is under obligation to refer the parties to arbitration in terms of the arbitration agreement.
14. The C. P. Act 1986 is not in derogation of Section 8 of the 1996 Act. The 1996 Act being a special law and having been enacted later in point of time ought to prevail over the provisions of C.P. Act 1986. Section 8 of the 1996 Act is peremptory and casts an obligation on the judicial authority to refer the parties to arbitration. The prerequisites of Section 8 are satisfied in this case and the said prerequisites having been satisfied, this Commission has no other option but to refer the dispute to arbitration and this may have the effect of ousting the jurisdiction of the Commission by necessary implication.
15. The first choice of the parties, in the event of dispute, chosen by them is by way of a settlement through an arbitrator. The parties therefore, are required to adhere to their first choice.
13. Now, having heard the Lr. Advocates of the parties, two points arise for our consideration. The first is whether this Commissions decision in Mrs. Alka S. Nayak (supra) and followed in Mr. Prasad K. Amonkar (supra) requires reconsideration in view of the judgment of the Apex Court in M/s. National Seeds Corporation Ltd., vs. M. Madhusudhan Reddy & anr., AIR 2012 SC 1160.
13.1. Shri. A. Thali, the Lr. Advocate on behalf of the complainant seems to say so, relying on an observation made by the Apex Court in para 29 of the said Lr. Judgement which observation says that if a consumer chooses to file a complaint in the first instance before the competent consumer forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996.
13.2. We are unable to accept the said submission of Shri. A. Thali. This Commissions decisions in Ms. Alka S. Nayak as well as Mr. Prasad K. Amonkar are based on two judgments of the Apex Court referred to in para 13 in the case of Mr. Prasad K. Amonkar which judgments were not referred to nor relied upon in the case of M/s. National Seeds Corporation Ltd., (supra). On the contrary, the decision of the Hon. Supreme Court in M/s. National Seeds Corporation Ltd., proceeded on the basis of two judgments of the Apex Court in Fair Air Engineers Pvt. Ltd., (AIR 1997 SC
533) and Skypack Couriers Ltd., (AIR 2000 SC 2008) decisions which were rendered in the light of the Arbitration Act, 1940 and not with reference to the Act of 1996 which Act admittedly was not in force at the time when the C.P. Act, 1986 was enacted. Moreover, the said observation in para 29 of the Lr. judgment cannot be considered to be its ratio. We say so because in M/s.
National Seeds Corporation Ltd., there was no agreement between the parties much less an agreement with an arbitration clause. The facts of that case would further show that the farmers/consumers who had purchased the seeds from M/s. National Seeds Corporation Ltd., could have been granted certain reliefs under the Seeds Act, 1996, which Act otherwise did not provide for any compensation to be granted to the consumers whose seeds were found to be defective. It is in that context that the Apex Court observed that the plain language of Section 3 of the C.P. Act made it clear that the remedy available in that Act was in addition to and not in derogation of the provisions of any other law for the time being in force. Moreover, even assuming, and we repeat the word assuming, the said observation can be considered as a ratio of the said decision, it is always not necessary that a later decision of a co-ordinate Bench of the Apex Court needs to be followed. A decision which we consider right can also be followed and as already stated this Commissions decision in the case of Mrs. Alka S. Nayak followed in Mr. Prasad K. Amonkar is based on two decisions of the Apex Court which we are still inclined to follow.
14. The next point for our consideration is whether the requirements of Section 8 of the 1996 Act were complied with by O.P. No. 2. The observation of the Apex Court in Booz Allen and Hamilton Inc. vs. SBI Home Finance Ltd., AIR 2011 SC 2507, on which reliance is placed by Lr. Adv. Shri. Kamat, that Section 8 does not prescribe any time limit for filing an application under Section 8 or that it should be made at the earliest is an observation which would now be irrelevant w.e.f. 01/07/02 when time limit has been provided for filing a written statement in a suit. It was always irrelevant in proceedings under the C.P. Act, for a written version had always to be filed within 30 plus 15 days as contemplated by Clause (a) of subsection 2 of section 13 of the C.P. Act. The observations of the Apex Court in para 31 of RashtriyaIspat Nigam Ltd., AIR 2006 SC 2800, or for that matter the observations in para 19 of Booz Allen and Hamilton Inc. (supra) must be understood in that context.
15. The Apex Court in Branch Manager, Magma Leasing & Finance Ltd., & anr., vs. Potluri Madhavilata , AIR 2010 SC 488 has observed in para 22 that an analysis of Section 8 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c.) that the subject-matter of the suit is same as the subject-matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof.
15.1. Again, the Apex Court in P. Anand Gajapathi Raju & ors., 2000 (4) SCC 539 (as can be seen from Escorts Ltd., 2011 (5) ALL MR 222) has stated that the matter is not referred to the arbitral tribunal, if (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. The Apex Court has further noted that this would, therefore, mean that Arbitration Act does not oust the jurisdiction of the Civil Court to decide the dispute in a case where parties to the arbitration agreement do not take appropriate steps as contemplated under sub-sections (1) & (2) of Section 8 of the Act.
15.2. There can be no doubt, as observed in para 23 of the Branch Manager, Magma Leasing & Finance Ltd., & anr.,(supra) that Section 8 is in the form of legislative command to the Court. At the same time it is stated by the Apex Court that the prerequisite conditions are required to be satisfied and then only the Court must refer the parties to arbitration. The Apex Court further observed that as a matter of fact, on fulfillment of conditions of Section 8, no option is left to the Court and the Court has to refer the parties to Arbitration.
16. Admittedly, O.P. No. 2 did not file any application under Section 8 of the 1996 Act to refer the dispute to arbitration. Prior to 23/11/10 when O.P. No. 2 filed its written version, O.P. No. 2 did take a plea that as per the terms of the agreement dated 10/08/2005 the dispute was required to be referred to arbitration in accordance with the 1996 Act but it is interesting to note that the O.P. did not seek any relief in that regard but on the contrary sought for the dismissal of the complaint.
16.1. Admittedly, the application dated 29/03/12 for reference of the dispute in terms of Section 8 of the 1996 Act has been made belatedly after taking part in the proceedings of the complaint by filing written statement;
by applying for production of additional documents; for amendment, etc thereby waiving its right to seek a reference for arbitration.
The O.Ps application dated 29/3/12 does not satisfy the requirements enumerated under (d) and (e) of para 22 of Branch Manager, Magma Leasing & Finance Ltd., & anr. (supra) or (2) and (3) as mentioned in para 13 of Escorts Ltd., (supra) and therefore in our view application dated 29/03/12 filed by O.P. No. 2 was rightly dismissed by the Lr. District Forum but for wrong reasons.
17. In the circumstances and for reasons stated hereinabove, we find that there is no merit in this revision and the same is hereby dismissed and considering the facts with no order as to costs. The parties are hereby directed to remain resent before the Lr. District Forum on 20th instant at 10.30 a.m. On that day O.P. No. 2 shall file its affidavit-in-evidence for which opportunity was given to O.P. No. 2 on 06/08/12 and after considering the evidence produced by the parties, the Lr. District Forum is hereby directed to dispose off the complaint within 45 days thereafter including the plea taken by O.P. No. 2 that the complainant is not a consumer within a meaning of Section 2(1)(d) of the C.P. Act 1986.
[Shri. Jagdish Prabhudessai] [Shri. Justice N.A. Britto] (Member) (President)