Delhi High Court - Orders
Extramarks Education India Private ... vs Vks Academy on 25 July, 2022
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 78/2022
EXTRAMARKS EDUCATION INDIA PRIVATE
LIMITED ..... Petitioner
Through: Mr. Zeeshan Hashmi, Mr. Ankit
Parashar and Ms. Anuja, Advs.
versus
VKS ACADEMY ..... Respondent
Through: Mr. C. Adhikesavan, Proxy Counsel.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
ORDER
% 25.07.2022
1. This petition has been filed by the petitioner seeking appointment of an Arbitrator.
2. The facts, as noted from the petition and so contended by learned counsel for the petitioner are, the petitioner and the respondent entered into an Agreement for sale, implementation, installation of hardware, software and multimedia system accessories for setting up of 10 Smart Learn Classes for a period of sixty months. It is the case of the petitioner that the last payment with regard to the contract in question was made by the respondent on October 07, 2015. It is also the case of the petitioner that an outstanding amount of ₹13,62,268/- is due to be paid by the respondent.
3. The petitioner had issued a legal notice dated March 20, 2015 to the respondent seeking payment of the outstanding amount. The same was not paid, resulting in a final reminder dated February 02, 2016 issued to the respondent. The respondent sent reply to final reminder on February 29, Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45 2016 and counter reply to the final reminder on April 28, 2016. It is also noted that the respondent has filed a consumer complaint being No. 56/2016 before the District Consumer Redressal Forum, Madurai, Tamil Nadu against the petitioner wherein the petitioner has also filed a reply on July 04, 2016, which is still pending for consideration before the Consumer Forum.
4. The petitioner had invoked the arbitration clause by issuing a notice dated December 06, 2021, in terms of Clause 13.1, which is reproduced as under:-
"13.1 Governing Law, Jurisdiction and Dispute Resolution:
This Agreement shall be governed by the laws of India. Any disputes arising out of this Agreement shall be referred to a sole arbitrator to be appointed by EM The School agrees that the fact that the sole arbitrator shall be appointed by EM shall not be used by the School to raise pleas of bias or prejudice against the sole arbitrator.
The courts situated at Delhi alone shall exercise exclusive Jurisdiction."
5. It is the case of the petitioner that the petitioner has not received any reply to the same. On January 21, 2022, notice was issued to the respondent. On the next date of hearing i.e. February 22, 2022, it was conveyed to the Court that the respondent had approached the petitioner to settle the disputes and accordingly an adjournment was sought. On April 20, 2022 i.e., the adjourned date Mr.C. Adhikesavan entered appearance for the respondent and sought time to take instructions.
6. Today though Mr. Adhikesavan states that he be given time to take instructions. I am not inclined to accept the request of Mr. Adhikesavan seeking instructions. No reply to the petition has been filed. The only issue Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45 which arises for consideration is, whether the petitioner is entitled to appointment of an Arbitrator. I have already reproduced the arbitration clause governing the parties. The said clause clearly contemplates the adjudication of disputes between the parties through the process of arbitration. The petitioner had issued legal notice to the respondent. The respondent has not sent reply to the legal notice issued by the petitioner dated March 20, 2015.
7. The case of the respondent is primarily that the supplies made by the petitioner are defective and hence the respondent is not entitled to make any payment and it has filed a complaint before the Consumer Forum, Madurai seeking damages against the petitioner.
8. The first issue that needs to be decided is, whether in view of the complaint filed by the respondent before the Consumer Forum, Madurai seeking damages against the petitioner, this petition before this Court is not maintainable.
9. I must, at this stage, note the position of law with regard to an issue wherein the parties though have agreed for adjudication of their dispute through arbitration but one of the parties approached a specialized forum. The Supreme Court in M/s Emaar MGF Land Limited v. Aftab Singh Review Petition(C) Nos.2629-2630/2018 in Civil Appeal Nos.23512- 23513/2017 decided on December 10, 2018 has held that the special or specific remedy available to a consumer / aggrieved party under the Consumer Protection Act, 1986, if invoked and availed, such remedy cannot be taken away or abrogated by the provisions of Arbitration Act specially under Section 8 of the said Act. Suffice to state that this position of law has been noted by various judgments of this Court as well.
Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:4510. So, it follows that the initiation of proceedings by the respondent before the Consumer Forum, Madurai as valid/maintainable.
11. The grievance of the respondent in his complaint before the Consumer Forum is primarily of deficiency in service, whereas the grievance of the petitioner herein as noted from the petition is primarily non-payment of the invoices. In that respect, the claims of the petitioner and of the respondent are at variance. It can be said that the Consumer Forum shall only decide the complaint / grievance of the respondent before it, inasmuch as whether the service rendered by the petitioner were deficient in nature and the respondent is entitled to damages. To put it in a perspective, the Consumer Forum would not decide whether the petitioner herein is entitled to be paid the invoices as raised by it for the simple reason that the claim before the Consumer Forum is not that of the petitioner herein but of the respondent. It can also be said that the petitioner herein cannot approach the Consumer Forum being not a consumer as per the Consumer Protection Act. So, the only remedy available for the petitioner is to invoke the arbitration clause in the agreement for adjudication of dispute as agreed to by the parties. It means, that this Court can appoint an Arbitrator for adjudication of dispute between the parties.
12. A Division Bench of this Court in a considered opinion in the case of Hindustan Motors Ltd. v. Amardeep Singh Wirk & Ors. LPA No.204/2009 decided on May 14, 2009 has in paragraphs 15 and 16 held as under:-
"15. On the contrary, the judgments of the Supreme Court, as noticed above, clearly state that as per Section 3 of the Act the provisions of the Act are in addition to and not in derogation of any other provision of any other law for the time being enforced. Having due regard to the scheme of the Act and the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45 purpose sought to be achieved to protect the interest of the consumers better, the provisions are to be interpreted broadly, positively and purposefully to give meaning to additional/extended jurisdiction, particularly when Section 3 seeks to provide remedy under the Act in addition to other remedies provided under other Acts unless there is a clear bar.
16. In the light of the judgments discussed hereinabove, there is no room for any doubt that proceedings under the Consumer Protection Act and in a Civil Court can simultaneously go on, even if the issues involved in the two proceedings are substantially similar. The remedies are independent of each other. The existence of parallel or other adjudicatory Forums cannot take away or exclude the jurisdiction created under the Consumer Protection Act. It is also pertinent to mention that in the present case, the proceedings in the Civil Court and those in the Consumer Forum have been initiated by two different parties though, admittedly, their grievances relate to the same incident as also the fact that the two parties are related. However, the fact remains that they are two independent parties who have initiated independent and separate proceedings before this High Court and the Consumer Forum." (emphasis supplied)
13. The aforesaid judgment has been followed by a Coordinate Bench of this Court in the case of Safmarine Container Lines N.V. v. Amita Enterprises and Ors. MANU/DE/6256/2012, wherein the Coordinate Bench has in paragraphs 22 and 27 held as under:-
"22. On the same aspect, the decision of a Division Bench of this Court in Hindustan Motors Ltd. vs. Amardeep Singh Wirk & Ors., 161 (2009) DLT 88 (DB) is also relied upon. Paragraphs 16 and 17 of the said judgment are apposite, which read as under:-Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45
16. In the light of the judgments discussed hereinabove, there is no room for any doubt that proceedings under the Consumer Protection Act and in a Civil Court can simultaneously go on, even if the issues involved in the two proceedings are substantially similar. The remedies are independent of each other. The existence of parallel or other adjudicatory Forums cannot take away or exclude the jurisdiction created under the Consumer Protection Act. It is also pertinent to mention that in the present case, the proceedings in the Civil Court and those in the Consumer Forum have been initiated by two different parties though, admittedly, their grievances relate to the same incident as also the fact that the two parties are related. However, the fact remains that they are two independent parties who have initiated independent and separate proceedings before this High Court and the Consumer Forum.
17. The learned Single Judge has rightly declined to grant the relief to the appellants in the writ petition filed by them. We see no infirmity in the order of the learned Single Judge to warrant any interference by us. The appeal must fail. Accordingly, the appeal is dismissed. The pending application stands disposed of.
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27. After carefully considering the rival contentions of the parties and the precedents relied upon by them, this Court is of the opinion that the trend of decisions of the Hon'ble Supreme Court and of this Court placing reliance upon the aforesaid decisions of the Supreme Court is that the proceedings before the Consumer Protection Act and the Civil Court can simultaneously go on, even if the issues involved in the two proceedings are substantially similar."
14. Even in its latest opinion, the learned Single Judge of the Calcutta Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45 High Court in the case of Universal Consortium of Engineers Pvt. Ltd. v. Sri Kanak Mitra & Anr. AP 279/2020 decided on April 07, 2021, considering an application under Section 11 of the Act of 1996 wherein one of the contentions as noted by the Court is in paragraph 3 in the following manner:-
"3. The respondents opposed the application primarily on two grounds. Firstly, it was argued that no notice under Section 21 of the Act of 1996 was given by the petitioner to the respondents. In the absence of such a notice, the present application is premature and not maintainable. Secondly, the respondents have filed a complaint against the petitioner before the National Consumer Forum, New Delhi, in relation to disputes arising out of the said Agreement. It was submitted that initiation of an arbitration proceeding by appointment of an arbitrator would mean that there will be parallel proceedings which ought not to be permitted. Although a third ground has been indicated in the written notes of argument filed by the respondents, i.e., the said Agreement is not registered as required under Section 17 of the Registration Act, this point was not argued when the matter was heard. In any event, this point can be rejected at the threshold since the said Agreement being of the year 2006, there was at that time no requirement for registering the said Agreement.
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16. With reference to the second contention of the respondents regarding pending of proceedings between the parties hereto before the National Commission, the same is wholly meritless. The petitioner is a Developer and contends that it has mistakenly handed over more constructed area to the respondents than they were entitled to under the Development Agreement. On that account, the petitioner has a money claim against the respondents. This cannot be adjudicated by the National Commission under the Consumer Protection Act. The petitioner, by no stretch of imagination can be considered to be a 'Consumer' within the meaning of the Consumer Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45 Protection Act. Hence, pendency of the proceedings before the National Commission cannot be a ground for disallowing the present application." (emphasis supplied)
15. In view of the aforesaid position of law, this Court is of the view that there being an arbitration clause and the dispute having arisen, this Court is of the view that this petition need to be accepted and the parties should be referred for adjudication of their disputes through the process of arbitration. Accordingly, this Court appoints Mr. Amiet Andlay, Advocate (Mobile No.9811151686) who is on the panel of Delhi International Arbitration Centre as the learned Arbitrator, who shall adjudicate the disputes between the parties.
16. The appointment of the learned Arbitrator shall be as per Rules framed by the Delhi International Arbitration Centre including the aspect of fee and also the disclosure to be given by the learned Arbitrator in terms of Section 12 of the Arbitration and Conciliation Act, 1996.
17. It is made clear that all the contentions of the parties are left open to be decided by the learned Arbitrator.
18. The petition is disposed of.
V. KAMESWAR RAO, J JULY 25, 2022/ak Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:08.08.2022 14:31:45