Madras High Court
Kasi Housing And Development Ltd. And ... vs M.M. Kalaiselvi on 22 March, 1999
Equivalent citations: AIR 2000 MADRAS 90, (1999) 37 ARBILR 406
ORDER P. Shanmugam, J.
1. Petitioners are respondents in application before Consumer Disputes Redressal Forum. They have preferred I.A. No. 11/99 before the forum for a reference to an arbitration under Section 8 of the Arbitration Act, 1996. The said application was dismissed. This civil revision is filed against that order under Article 227 of the Constitution of India.
2. The main contention raised by Mr. G. Subramaniam, learned counsel appearing on behalf of the petitioner is that Section 8 of the Arbitration Act obliges the forum with no alternative except to refer the dispute to the arbitration. In the discretion available to the Court under Section 34 of the Arbitration Act, 1940 is taken away under the new Act. Hence, the order of the forum is liable to be set aside by this Court. Learned senior counsel sought to distinguish the judgment of the Hon'ble Supreme Court in Fair Air Engineers Pvt. Ltd. v. N.K. Modi, on the ground that the Supreme Court did not consider the scope of Section 8 of the 1996 Act. He also relied on the decision in WIMCO Ltd. v. Sambhu Dayal Gupta, 1983 (3) RAJ 360 (Cal) in support of his contention.
3. I have heard the counsel and considered the matter carefully. The respondent had filed a complaint O.P. No. 228/98 before the District Consumer Disputes Redressal Forum seeking for a direction to the petitioners to refund an amount of Rs. 65,000/- with interest and for a sum of Rs. 2,50,000/-towards compensation for the loss sustained. The petitioners have filed their counter. They have also filed I.A. No. 11/99 to refer the matter to arbitration. In the counter to the said application, it is averred on behalf of the respondent that it is true that there is clause with regard to the reference to arbitration. But in spite of repeated demands, the petitioners have not taken any steps to refer the matter for arbitration and have been dragging on the matter at the considerable cost of the respondent. The present application for a reference is only another attempt to delay the rights of the respondent. The forum, after considering the application, held that the jurisdiction of the forum is in addition to any other law available for the redressal of the grievances, and further that the petitioners have not taken steps for referring the matter for arbitration and accordingly dismissed the application.
4. The legal question raised by the petitioners is no longer res integra. The question is covered and answered by the Supreme Court in M/s. Fair Air Engineers Pvt. Ltd. referred supra. The Supreme Court, after having referred to the power available under Section 8 of the Arbitration Conciliation III Ordinance, 1996, held that the Consumer Protection Act was enacted to provide for protection of the interests of the consumers. Their Lordships observed. "Accordingly, it must be held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act". .... .The Parliament is aware of the provisions of the Arbitration Act and the Contract Act, and the consequential remedy available under Section 8 of C.P.C. i.e. to avail of the right of Civil action in a competent Court of Civil Jurisdiction. Nonetheless, the Act provides the additional remedy". Their Lordships further observed. "We are of the considered view that it would be 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 delegating 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 for civil action, unless the forums, on their own and on the peculiar facts and circumstances of the particular case, come to the conclusion that the appropriate forums for adjudication of dispute would be otherwise, those given in the Act."
5. In the light of this categorical pronouncement of the Supreme Court, the attempt of the petitioners to distinguish the same will not be sustained. It is submitted that as for the 1996 Act, it becomes obligatory for a judicial authority to refer. Sub-section (1) of Section 8 of the Arbitration and Conciliation Act states that the action that is brought, must be the subject matter of arbitration agreement. The action in the complaint O.P. is for refund and compensation. There is no provision for deciding the compensation in the Arbitration Agreement. The provisions of the Consumer Act are in addition to the existing remedies available like a civil action under a Contract or Arbitration Act. In Lucknow Development Authority v. M.K. Gupta, the Supreme Court held that the Consumer Protection Act is a social benefit oriented legislation, and the provisions should therefore be construed in favour of consumer to achieve the purpose of enactment, as it is a social benefit oriented legislation. The primary duty of the Court, while considering the provisions of such an Act, is to adopt a constructive approach. In Indian Medical Association v. V.P. Shantha, , it was held by the Hon'ble Supreme Court that Section 3 of the Act, which prescribes that the provisions of the Act shall be in addition to, and not in derogation of provisions of any other law for the time being in force, preserve the right of the consumer to approach the civil Court for necessary relief and rejected the contention raised on behalf of the objectors that on the ground of procedure which is followed by the said agencies for determining the issues arising before them, the service rendered by medical practitioners are not intended to be included in the expression 'Service'. Therefore, the consumer forum is a forum available in addition to other remedies available and the right to the party to approach the forum cannot be precluded.
6. In view taken by the Hon'ble High Court in Wimco Ltd. Cited supra is distinguished. In that case, the Calcutta High Court took the view that since the Consumer forum found that the substance of the dispute is referable to arbitration, the same cannot be taken away on the ground of infraction of a technical procedure. The learned Judge of the Calcutta High Court had no occasion to consider the judgments of the Supreme Court referred to above and the principles laid down thereunder. In the facts of the present case, it could be seen that the forum not only found that the complaint is maintainable under Section 3 in spite of other remedies available, but also gave a categorical finding that the petitioner failed to take action for reference to an arbitration. The allegation contained in the counter of the respondents is that in spite of repeated demand, the petitioners had not come forward to constitute arbitration and intended to drag on the matter. In the light of this factual position also, lam not inclined to exercise discretionary jurisdiction under Article 227 in favour of the petitioner, apart from the legal position stated above.
7. For the above reasons, the C.R.P. fails and hence, it is dismissed. Consequently, C.M.P. No. 3989/99 is also dismissed. The petitioners are permitted to file their written statement and no adverse orders shall be passed on the complaint due to the delay in filing of the statement.