State Consumer Disputes Redressal Commission
Mrs. Alka S. Nayak, vs Mr. Shivprasad R. Kakodkar, on 13 December, 2011
BEFORE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI GOA Complaint No. 04/11 Mrs. Alka S. Nayak, wife of Mr. Shanu T. Nayak, aged 56 years, bank employee, resident of Bungalow B-5/ 2351, Behind St. Sebastian Church, Aquem, Margao, Goa. ..Complainant V/s. 1. Mr. Shivprasad R. Kakodkar, son of Mr. Balkrishna S.S. Kakodkar, married, aged about 55 years, businessman, sole proprietor of M/s. S.B. Kakodkar & Co. having office at Sapana Chambers, behind Grace Church, Margao, Goa. 2. Mrs. Surendra S. Naik, major of age, and his wife 3. Mrs. Usha Surendra Naik, major of age, from Margao, Goa represented through their attorney Mr. Mahendra Kakule, major of age, civil engineer, Caculo House, Near Post Office, Aquem, Margao, Goa. .Opposite Parties Adv. Shri. K.N. Pai present for the Complainant. Adv. Shri. S.D. Padiyar present for the O.Ps. Coram: Shri. Justice N.A. Britto, President Smt. Vidhya R. Gurav, Member Dated: 13/12/2011 ORDER
[Per Justice Shri. N. A. Britto, President] This order shall be dispose off the preliminary objection taken and the application filed in support, by the O.Ps in relation to Section 8 of the Arbitration and Conciliation Act 1996.
2. Some bare facts may be stated to dispose off the said preliminary objection and the application.
3. The complainant had entered into an agreement with O.P. No. 1, the developer, for the construction of a bungalow in the property surveyed under Chalta No. 12 of P.T. Sheet No. 227 of City Survey of Margao, owned by O.P. Nos. 2 & 3.
The said bungalow, since then, has been completed and the possession has been handed over to the complainant and it has been allotted H.No. 5/2351 by Margao Municipal Council. What remains is the execution of the Sale Deed.
4. The Complainant addressed a notice dated 22/02/11 to the O.Ps calling upon them to execute the sale deed and as the O.Ps. did not execute the Sale Deed, the complainant filed the present complaint for direction to the O.Ps to execute the Sale Deed and for compensation of Rs. 30,000/- on account of delay in execution of the said Sale Deed.
5. The O.Ps do not seem to be averse to the execution of the Sale Deed but it is their contention that they will execute it only after the complainant removes the encroachment made by the complainant in the open land by way of construction of the compound walls and extension of the kitchen.
6. The agreement between the parties dated 28/05/05, inter-alia, stipulated that all questions and disputes regarding completion of stages of construction or final completion, etc would be settled by a certificate of completion issued by a qualified architect or R. C. C consultant. Clause 18 of the said agreement provided as follows:
18. Any dispute arising between the parties hereto and settlement of which is not otherwise provided in this agreement, shall be settled by way of Arbitration in accordance with the provision of the Arbitration and Conciliation Act 1996.
7. That should take us to section 8 of the Arbitration and Conciliation Act, 1996 (1996 Act, for short) which provides as follows:
8. Power to refer parties to arbitration where there is an arbitration agreement:-
(1) 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.
(2) The application referred to in sub-section (1) shall not to entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.
8. Shri. S. D. Padiyar the Learned Counsel appearing on behalf of the OPs has submitted that this Commission constituted under C.P. Act, 1986 is a Judicial Authority within the meaning of section 8 of 1996 Act and in support of the said submission, Shri. Padiyar has placed reliance on the Constitution Bench Judgement in the case of SBP & CO. vs. Patel Engineering Ltd. & Anr. (2005) 8 SCC 618) wherein the Constitution Bench has held that:
Section 8 of the Act contemplates a judicial authority before which an action is brought in a matter which is the subject to the arbitration agreement, on the terms specified therein, to refer the dispute to arbitration. A judicial authority as such is not defined in the Act. It would certainly include the Court as defined in Section 2(e) of the said Act and would also, in our opinion, include other Courts and may even include a special Tribunal like Consumer Forum
9. Learned Counsel next has referred to Kranti Associates V/s. Masood Ahmed Khan and ors (2010)9 SCC 496, and has submitted that this Commission has the trappings of a Civil Court and is a high powered quasi-judicial forum for deciding lis between the parties.
10. Learned Counsel has then referred to Rashtriya Ispat Nigam Ltd. Vs. Verma Transport Co (2006(7) SSC 275 and submitted that the 1996 Act makes a radical departure from the Arbitration Act 1940 (1940 Act, for short) and while Section 34 of the 1940 Act contemplates stay of the suit, Section 8 of the 1996 Act mandates a reference. Counsel submits that exercise of discretion by the judicial authority which was the hallmark of Section 34 of 1940 Act has been taken away by the 1996 Act and the direction to make a reference is not only mandatory but the arbitration proceedings to be commenced or continued and conclusion thereof by an arbitral award remain unhampered by such pendency . Counsel submits that the Commission being a judicial authority has no choice but to refer the parties to arbitration.
11. Learned Counsel has also placed reliance on Branch Manager, Magma Leasing & Finance Ltd., & Anr. (2009) 10 SCC 103, and has submitted that Section 8 of 1996 Act is in the form of legislative command to the court and once the prerequisite conditions are satisfied, the court must refer the parties to arbitration. Again, Learned counsel has placed reliance on Agri Gold Exims Ltd., (2007) 3 SCC 686, and has submitted 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.
12. Learned Counsel has further referred to Olympus Superstructures Pvt. Ltd., (1999) 5 SCC 651 and submitted that an arbitrator can grant specific performance of the contract relating to immovable property under an award. This view was earlier taken by Bombay, Calcutta and Punjab High Courts, as stated in para 33 of the said decision. Shri. Padiyar has also placed reliance on H. Srinivas Pai & Anr. Vs. H.V. Pai (2010) 12 SCC 521 and submitted that the 1996 Act applies to civil as well as to commercial disputes and reference to arbitration and arbitrability depends upon the existence of an arbitration agreement and not upon the question whether the dispute is civil or commercial.
13. Lastly, Learned counsel has placed reliance on the decision of Calcutta High Court in Indusind Bank Ltd Vs. Gadadhar Banerjee (unreported decision dated 1/4/10 in CO. No. 223/2009.
14. On the other hand, Shri. K. N. Pai, Learned Counsel on behalf of the Complainant, has submitted that it is the option of the complainant whether the complainant should go for arbitration or approach this Commission for the redressal of his grievance in the light of Section 3 of the CP Act, 1986. Learned Counsel has placed reliance on The Oriental Insurance C o Ltd V/s. New Jaipur Dyeing & Tents Works (1991 Consumer Protection Reporter 148) and State of Karnataka Vs. Vishwabarathi House Building Co-op. Soc. & Anr (2003(2) ALL MR 1091.
15. The case of Vishwabarathi House Building(Supra) essentially dealt with constitutionality of the C.P. Act, 1986 and it was, inter alia, observed by the Apex Court that the provisions of the said Act are required to be interpreted as broadly as possible. The Court further held:
46.
By reason of the provision of Section 3 of the Act it is evident that remedies provided thereunder are not in derogation of those provided under other laws. The said Act supplements and not supplants the jurisdiction of the civil Courts or other statutory authorities.
47. The said Act provides for a further safeguard to the effect that in the event a complaint involves complicated issues requiring recording of evidence of experts, the complainant would be at liberty to approach the civil Court for appropriate relief. The right of the consumer to approach the civil Court for necessary relief has, therefore, been provided under the Act itself.
48. The provisions of the said Act are required to be interpreted as broadly as possible. It has jurisdiction to entertain a complaint despite the fact that other forums/courts would also have jurisdiction to adjudicate upon the lis.
16. The case of New Jaipur Dyeing (supra) did not deal with Section 8 of the 1996 Act though there is an observation made therein that the Complainant has an option to seek redress either under C.P. Act or under the provisions of any other law including through arbitration as provided in the Contract of Insurance. In any event, the said observations made will have now to give way to the law laid down by the Apex Court Rashtrya Ispat Nigam Ltd (supra) and 2 other decisions referred to in para 10 and 11 hereinabove.
17. Section 3 of the C.P. Act states that 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. In other words, the provisions of this Act give the consumer an additional remedy which is expected to be summary, speedy and inexpensive besides those that may be available under other existing laws. As reiterated by the Apex Court in Vishwabarathi House Building Co-op. Society (supra):
The Consumer Protection Act is one of the benevolent pieces of legislation intended to protect a large body of consumers from exploitation. The Act provides for an alternative system of consumer justice by summary trial. The authorities under the Act exercise quasi-judicial powers for redressal of consumer disputes and it is one of the postulates of such a body that it should arrive at conclusion based on reason.
18. The C.P. Act does not derogate Section 8 of the 1996 Act. In any event, the 1996 Act being a special law and having been enacted later in point of time ought to prevail over the provisions of the C.P. Act. As stated by the Apex Court in decisions cited hereinabove, Section 8 of the 1996 Act is peremptory and casts an obligation on the judicial authority to refer the parties to arbitration or in other words Section 8 conveys a legislative command to refer the dispute to arbitration, once the prerequisites of Section 8 are satisfied. The prerequisites are satisfied in this case, and once prerequisites of Section 8 of the 1996 Act are satisfied, the Court will have no other option but to refer the dispute for arbitration and this may have the effect of ousting the jurisdiction of the Commission by necessary implication.
19. In a similar case i.e in General Manager Telecom v/s. M Krishnan and another in Civil Appeal No. 7687/04 by order dated 1.9.2009, the Apex Court referring to Section 7B of Indian Telegraph Act which provides for settlement of disputes concerning telegraph lines by arbitration, held that as Section 7B provided a special remedy, the remedy under C.P. Act was barred by implication. However, we need not go into that aspect, for the present, as it was not agued at the Bar.
20. The Calcutta High Court in Indusind Bank Ltd (supra) after taking note of SBP & Co v/s. Patel Eng. Ltd (supra) and Rashtrya Ispat (supra) held that when the dispute before the Forum is arbitrable under the 1996 Act as per arbitration agreement executed between the parties, the Forum has no option but to refer the said dispute to arbitration as Section 8 of the said Act is a mandatory provision which mandates a reference unlike the provision contained in Section 34 of the 1940 Act which simply contemplated stay of the suitwhen both the parties have decided for a particular forum, by agreement ..they should not have opted for a different forum by unilaterally giving a go bye to the bilateral agreement even though the forum chosen by one of them is competent to decide the dispute..The District Forum, therefore, was directed to refer the dispute to the arbitrator as per the agreement.
21. In view of the above discussion, considering the facts of the case, the mandate of Section 8 of the 1996 Act, and following the ratio of Indusind Bank (Supra) we hereby direct the parties to act in terms of the said agreement between them by referring the present dispute to arbitration.
22. Complaint is accordingly disposed off with no order as to costs.
[Smt. Vidhya R. Gurav] [Justice Shri. N. A. Britto] Member President