State Consumer Disputes Redressal Commission
M/S. Nakoda Transport Company Pvt.Ltd. vs M/S. Dhandha Pani Finance Limited on 9 May, 2014
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/12/588
Instituted on : 19.10.2012
M/s Nakoda Transport Company Pvt. Ltd.
Thrugh : Director, Niyalchand Jain,
R/o : 231, Malviya Nagar,
Durg, Tehsil & District Durg (C.G.) ... Appellant
Vs.
M/s Dhandha Pani Finance Limited,
Through : Regional Manager,
Door No.49-52-11/1, Shanti Puram Opposite
Fourth Town Police Station, Petrol Bankh National
Highway 5 Up Stair, Vishakha Co-operative Bank Limited,
Vishakhapatnam (Andhra Pradesh) ... Respondent
PRESENT :
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE MISS HEENA THAKKAR, MEMBER
COUNSEL FOR THE PARTIES :
Shri R.K. Bhawnani, for appellant.
Shri Sanjay Tiwari, for respondent.
ORAL ORDER Dated : 09/05/2014 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT.
This appeal is directed against the order dated 03.10.2012, passed by the District Consumer Disputes Redressal Forum, Durg (C.G.) (henceforth "District Forum") in Complaint Case No.167/2011. By the impugned order, learned District Forum, has dismissed the complaint of the appellant (complainant) holding that the transaction between the parties, is commercial transaction, therefore, the appellant (complainant) is not a consumer and there is an agreement between // 2 // the parties. There is a provision for the arbitration proceedings in the agreement executed between the parties, therefore, the District Forum, has no jurisdiction to hear the present matter.
2. Briefly stated the facts of complaint are that : that loan of Rs.1,75,00,000/- and Rs.75,00,000/- for purchase of the machine was obtained by the appellant (complainant) from the respondent (O.P.) and immovable property of the appellant (complainant), which is mentioned in the Schedule was mortgaged. The loan was to be deposited in 36 equal installments and the appellant (complainant) had already deposited entire amount and money receipt No.185841 dated 14.07.2010 was issued in favour of the appellant (complainant) by the respondent (O.P.). Due to financial irregularity and financial crisis, the respondent (O.P.) company was closed. After depositing all dues, the respondent (O.P.) did not return the documents relating to mortgage of immovable property as mentioned in the Schedule A to the appellant (complainant). The appellant (complainant) contacted the respondent (O.P.) several time, but respondent (O.P.) did not give any response and did not return the documents, then the appellant (complainant) sent legal notices to the respondent (O.P.) and thereafter filed consumer complaint before the District Forum.
3. The respondent (O.P.) filed its written statement before the District Forum and pleaded that the appellant (complainant) is not a // 3 // consumer, and the transaction between the parties is a commercial transaction, therefore, the dispute is not a consumer dispute and the complaint is not maintainable as per loan agreement and in clause 22 it is mentioned that in case of any dispute or claim that may arise, the same shall be referred to arbitration and be resolved by sole arbitrator nominated by the respondent (O.P.) and arbitration proceedings shall be conducted at Chennai, therefore, learned District Forum, has no jurisdiction to take cognizance in the matter and the complaint is liable to be dismissed.
4. After appreciation of material available in the record, learned District Forum, has dismissed the complaint vide order dated 03.10.2012, as mentioned in para 1 of this order.
5. On 29.01.2014, when the matter was taken up for final hearing, then Shri Sanjay Tiwari, learned counsel for the respondent (O.P.) submitted that the matter was referred to the Arbitrator and was pending before the Arbitrator. This Commission has directed both the parties to submit report whether the matter was referred to the Arbitrator and notice was sent to the appellant (complainant) regarding the arbitration proceedings.
6. The appellant (complainant) as well as respondent (O.P.) have filed application under Order 41 Rule 27 CPC and sought to file documents as additional evidence.
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7. We have heard counsel for both the parties on these applications.
8. Learned counsel for the appellant (complainant) as well as counsel for the respondent (O.P.) have not opposed the application filed by each other under Order 41 Rule 27 CPC, therefore, the said applications are allowed and documents are taken on record.
9. Shri R.K. Bhawnani, learned counsel for the appellant (complainant), argued that the appellant (complainant) had already deposited the amount of loan and only sought from the respondent (O.P.) to return the documents of the immovable property, which was mortgaged by the appellant (complainant) with respondent (O.P.) and the matter was not referred to the Arbitrator by the respondent (O.P.) and the appellant (complainant) filed this complaint on 01.06.2011 before the District Forum and the respondent (O.P.) could not establish that before filing the complaint, the matter was referred to the Arbitrator, therefore, the impugned order passed by the learned District Forum, is illegal and is not sustainable in the eye of law and is liable to be set aside.
10. Shri Sanjay Tiwari, learned counsel for the respondent (O.P.) agued that the matter was referred to the Arbitrator and the matter is still pending before the Arbitrator therefore, learned District Forum, has no jurisdiction to try the case and order of the District Forum, is just // 5 // and proper and does not suffer from any illegality or infirmity, therefore, the appeal filed by the appellant (complainant) is liable to be dismissed and the impugned order passed by the District Forum is impeccable.
11 We have heard learned counsel for both the parties and have perused the record of the District Forum.
12. The complaint was dismissed by the District Forum on the ground that the appellant (complainant) is not a consumer and in the agreement executed between the parties, there is provision for arbitration proceedings, therefore, the District Forum has no jurisdiction to decide the matter.
13. It appears that District Forum, has not decided the matter on its merits and simply opined that the appellant (complainant) is not consumer and the matter was not cognizable by it and the order passed by the District Forum, is apparently erroneous.
14. Section 3 of the Consumer Protection Act, 1986 makes the position clear. It reads thus :-
"3. Act not in derogation of any other law. - The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
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15. In the case of M/s National Seeds Corporation Ltd. vs. M. Madhusudhan Reddy, 2013 (3) CPR 589 (SC), Hon'ble Supreme Court has observed thus :-
"29. The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, filed complaint under the Consumer Act. However, if he 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 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In Fair Air Engineers (P) Ltd. v. N.K. Modi (supra), the 2 - Judge Bench interpreted that section and held as under :-
"the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words "in derogation of the provisions of any other law for the time being in force" would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded.
// 7 // Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.
It would, therefore, be clear that the legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer in automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act."
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16. Respondent (O.P.) filed document at appellate stage i.e. claim petition pending before the Sole Arbitrator in Claim Petition MG DFL No.1 of 2012 in which one Paras Jain and DVB Krishnam Raju are party and in another arbitration application MG/DFL No.2 of 2013, copy of arbitration application has also been filed in which Mr. Mahavir Prasad and Mr. Paras Jain are party. The respondent (O.P.) could not file any document, which indicates that dispute between the appellant (complainant) and respondent (O.P.) was referred to arbitrator and it appears that the dispute between the parties of the instant case has not referred to the arbitrator. Section 3 of the Consumer Protection Act, 1986 postulates that where a complaint has been admitted by the District Forum, it shall not be transferred to other Fora, Court or Tribunal or any Authority.
17. In the instant case the appellant (complainant) filed complaint before the District Forum on 01.06.2011 and the respondent (O.P.) could not prove that the matter was referred to the Arbitrator before filing the complaint case. Mere existence of arbitration clause in the agreement would not ousted the jurisdiction of the Consumer Forum.
18. On the basis of judgment passed by Hon'ble Supreme Court in the case of M/s National Seeds Corporation Ltd. vs. M. Madhusudhan Reddy (Supra), the District Forum has jurisdiction to try the case and therefore the order passed by the District Forum, is // 9 // erroneous and without jurisdiction and suffers from irregularity and is liable to be set aside.
19. In view of aforesaid discussion, the appeal of the appellant (complainant) is allowed and the impugned order dated 03.10.2012 of the District Forum is set aside and the case is remanded back to the District Forum with a direction to take into consideration the documents, which were filed by the appellant (complainant) and respondent (O.P.) before us during the course of haring of this appeal along with applications under Order 41 Rule 27 CPC. Parties may be granted liberty to lead further evidence on above documents and after providing opportunity of hearing to both the parties, the matter be decided afresh on its own merits. Record of the District Forum and applications filed by the appellant (complainant) & respondent (O.P.) under Order 41 Rule 27 CPC, along with documents be also sent to the District Forum henceforth. Parties are directed to appear before the District Forum, Durg (C.G.) on 31.05.2014. No order as to the cost of this appeal.
(Justice R.S. Sharma) (Ms. Heena Thakkar)
President Member
/05/2014 /05/2014