Punjab

StateCommission

CC/60/2014

Raj Kumar Singal - Complainant(s)

Versus

M/s Puma Realtors Pvt. Ltd. & another - Opp.Party(s)

Sourabh Goel

02 Feb 2015

ORDER

2^nd Additional Bench

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB

DAKSHIN MARG, SECTOR 37-A, CHANDIGARH

 

Misc. Application Nos. 1226 & 1227 of 2014

in/and

Consumer Complaint No. 60 of 2014

                                                           

                                    Date of institution: 27.3.2014  

                             Date of Decision:    2.2.2015

 

Raj Kumar Singal son of Sh. Ram Parkash, Resident of H. No. 147, Sector 28-A, Chandigarh.

…..Applicant/Complainant

                                      Versus

1. M/s Puma Realtors Private Limited, SCO 6-8, First and Second Floor, Sector 9-D, Madhya Marg, Chandigarh 160009 through its Managing Director.
2. Managing Director, M/s Puma Realtors Private Limited, SCO 6-8, First and Second Floor, Sector 9-D, Madhya Marg, Chandigarh 160009

…..Opposite Parties

 

Misc. Applications for framing preliminary issues and dismissal of complaint as well as for resolving the issue through Arbitration.

                                      in/and

 

Consumer Complaint under Section 17 of the Consumer Protection Act, 1986.

 

Quorum:-

 

              Shri Gurcharan Singh Saran, Presiding Judicial Member

              Shri Jasbir Singh Gill, Member

 

Present:-

 

          For the complainant         :         Sh. Sourabh Goel, Advocate

          For the opposite parties   :         Sh. Ramneek Gupta, Advocate

Gurcharan Singh Saran, Presiding Judicial Member

ORDER

                   This order will dispose of two applications moved by opposite parties(in short ‘Ops’), one is for framing of the issue and dismissal of the complaint and another application under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996 (in short ‘Arbitration Act’) referring the parties to resolve their matter through Arbitration in terms of Clause 33 of the Plot Buyer Agreement dated 28.9.2011 entered into between the parties.

3.                In the application for framing preliminary issue and dismissal of the complaint, it has been submitted that the Ops have filed the written statement in which preliminary objection has been taken, inter-alia, on the ground of non-applicability of the Consumer Protection Act, 1986 (in short ‘Consumer Act’) and applicability of the provisions of Arbitration Act, 1996 in view of the agreed Arbitration Clause and agreement between the parties that the issue relating to deciding the jurisdiction of the Consumer Forum has to be decided first. A reference has been made to judgment “K. Sagar, Managing Director, Kiran Chit Fund Vs. A. Bal Reddy & Anr.” (2008) 7 SCC 166. It was further followed in “M/s Moran Plantation Pvt. Ltd. Vs. M/s Ambience Pvt. Ltd.” Consumer Complaint No. 307 of 2012 and in “Jagmittar Sain Bhagat Vs. Director, Health Services, Haryana and others”, (2013) 10 SCC 136. Accordingly, it was submitted that the plea of jurisdiction be taken as a preliminary issue and the same be decided before taking the complaint on merits.

4.                In the second application for referring the parties to resolve their matter through Arbitration in terms of Clause 33 of the Buyer’s Agreement. It has been submitted that the present complaint is not maintainable and the dispute warrants to be adjudicated through Arbitration in view of the mandate laid down in Section 8 read with Section 5 of Arbitration Act and in support of that a reference has been made to the 7 Judges Bench judgment in “SBP and Co. Vs. M/s Patel Engineering Ltd. & Anr.” AIR 2006 SC 450 that in case an application alongwith required documents is brought before the judicial authority, then the judicial authority should refer the dispute to Arbitration and Judicial Authority includes Consumer Forum also. It was further followed in the judgment “Auro Developers Vs. Mala Mukerjee” and in case CO No. 223 of 2009 titled as “Indusind Bank Ltd. Vs. Ganhadhar Banerjee”, therefore, in view of the specific provisions under the Arbitration Act, the parties are required to be referred to the Arbitration.

5.                Complainant filed reply to the application for framing preliminary issue and dismissal of the complaint taking preliminary objections that the application has been filed only to delay the proceedings. Hon’ble Commission has a pecuniary as well as territorial jurisdiction to entertain the complaint and that there is relationship of ‘consumer’ and ‘service provider’, therefore, the complaint is maintainable. The clause of Arbitration is a matter of record and the remedy before the Consumer For a is in addition to and not in derogation of the provisions of any other law for the time being enforced. A reference has been made to “M/s Puma Realtors Pvt. Ltd. Vs. Union of India and others”.

6.                In reply to the application under Section 8 of the Arbitration Act referred the parties to the Arbitration, similar preliminary objections have been taken. On merits, it has been again reiterated that according to Section 33 of the Act, remedy before the Consumer Fora is in addition and not in derogation of any other Act and has relied upon judgment of the Hon’ble Supreme Court 2012(2) SCC 506 “M/s National Seeds Corporation Ltd. v. M. Madhusudan Reddy”. Accordingly, it was submitted that there was no merit in the application and it be dismissed.

7.                We have heard the learned counsel for the parties. Firstly taking the preposition whether the point of jurisdiction can be taken as a preliminary issue. To support this preposition, the counsel for the applicant/OP has relied upon the judgment (2008) 7 SCC 166 K. Sagar, Managing Director, Kiran Chit Fund Vs. A. Bal Reddy & Anr.” And in para No. 8 of the judgment, it was observed that they are of the view that issue relating to jurisdiction has to be decided by the Forums first, accordingly, the order passed by the Hon’ble National Commission was set-aside and case was remanded back to the State Commission to consider the question of jurisdiction.  

8.                Another judgment of the Hon’ble Apex Court has been referred (2013) 10 SCC 136 “Jagmittar Sain Bhagat Vs. Director, Health Services, Haryana and others”, wherein it was observed that if the Court having no jurisdiction over a matter passes a decree, it would amount to nullity and a reference of the order of the Hon’ble National Commission passed in Consumer Complaint No. 307 of 2012 decided on 2.9.2013 and after discussing various judgments and orders and after relying upon the judgment of the Hon’ble Apex Court reported in (2008) 7 SCC 166 K. Sagar, Managing Director, Kiran Chit Fund (supra), it was observed that the question of jurisdiction has to be decided first of all. No contrary judgment has been referred by the counsel for the complainant that the question of jurisdiction has to be decided by the Forums first by taking it as a preliminary issue. Accordingly, this application stands disposed off.

9.                The next question which arises from the second application for referring the parties to the Arbitration, a reference has been made to Clause 33 of the Buyer’s Agreement, which reads as under:-

“33.   Dispute Resolution by Arbitration

          All or any disputes arising out of or touching upon or in relations to the terms of this agreement or its termination including the interpretation and validity to the terms hereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussions failing which the same shall be settled through reference to a sole Arbitrator to be appointed by the resolution of the Board of Directors of the Company, whose decision shall be final and binding upon the Parties. The Allottee hereby confirms that it shall have no objection to the appointment of such sole Arbitrator even if the person so appointed, is an employee or advocate of the Company or is otherwise connected to the Company and the Allottee hereby accepts and agrees that this alone shall not constitute a ground for challenge to the independence or impartiality of the said sole Arbitrator to conduct the arbitration. The arbitration shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereto and shall be held at the company’s offices or at a location designated by the said sole Arbitrator in Chandigarh. The language of arbitration proceedings and the Award shall be in English. Both the Parties will share the fees of the Arbitrator in equal proportion.”

10.              He has also referred to Section 5 & 8 of the Arbitration Act, 1996, which reads as under:-

“5.     Extent of Judicial Intervention. – Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.

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 be 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.”

Accordingly, it has been argued by the counsel for the applicant/OP that in view of the provisions under Section 8 of the Act, that in case a fact is brought before the judicial authority that there is an Arbitration Clause and parties are to resolve their dispute according to the Arbitration Clause, then that Judicial Authority is bound to refer the parties to the Arbitration. In support of this preposition, the counsel for the applicant has relied upon a basic judgment delivered by 7 Judges Bench of the Hon’ble Supreme Court i.e. 2005 (8) SCC 618 “SBP and Co.” (Supra) wherein it was observed by the Hon’ble Supreme Court that the expression used in Section 8 is ‘shall’ and Judicial Authority is bound to refer the matter to the Arbitration once the existence of the Arbitration Clause is established. A Judicial Authority as such is not defined in the Act. It would certainly include the Court as defined under Section 2(e) of the Act and would also in their opinion include other Courts and may even include a special Tribunal like a Consumer Forum as observed in “Fair Air Engineers Pvt. Ltd. and Another Vs. N.K. Modi” (1996) 6 SCC 385. In that judgment, it was observed by the Hon’ble Supreme Court that Forums created under the Act is District Forum, State Commission and National Commission are Judicial Authorities and proceeding before them are ‘legal proceedings’ within the meaning of Section 34 of the Arbitration Act. Under Section 34 of the said Act, there was provision to stay the proceedings, which was different than the proceedings under Section 8 of the Act. Whereas in the Judgment 2013 (1) CALT 546, Hon’ble Calcutta High Court held that once the parties agreed to resolve their dispute by the arbitration, the jurisdiction of the Civil Court is clearly ousted by reason of Section 5 of the Arbitration Act, 1996 keeping in view the law laid down in “SBP and Co.” (Supra). Another judgment relied upon by the counsel for the applicant is 2012(1) CHN 543 i.e. in C.O. No. 2828 of 2010 decided on 23.12.2011 “Auro Developers Vs. Mala Mukerjee”, the view of the Hon’ble Supreme Court expressed in “SBP & Co. (supra) was fortified and it was observed that they were required to refer the parties to the Arbitration and that the Judicial Authority includes Consumer Forums also. The same view was taken by the same High Court in other Judgment “Indusind Bank Ltd. Vs. Ganhadhar Banerjee” i.e. CO No. 223 of 2009 decided on 1.4.2010 and then in another judgment 2013 (1) CALT 546 “Sudarshan Vyapara Pvt. Ltd. & Anr. Vs. Madhusudan Guha & Anr.” and against the judgment passed by the Hon’ble Calcutta High Court Madhusudan Guha was challenged before the Hon’ble Supreme Court in SLP (CC) No. 10450 of 2013 decided on 2.7.2013 in which the Hon’ble Apex Court did not find any reason to interfere in this matter. Synopsis filed before the Hon’ble Supreme Court against the judgment of the Hon’ble Calcutta High Court in “Sudarshan Vyapara Pvt. Ltd. & Anr.” (supra) have also been placed on the record in which the petitioner had referred to the judgment “National Seeds Corporation Limited Vs. M. Madhusudan Reddy” 2012(2) SCC 506 and despite that the said SLP was dismissed. Whereas counsel for the complainant has relied upon the judgment of the Hon’ble Supreme Court given in the case “National Seeds Corporation Limited Vs. M. Madhusudan Reddy” (Supra) whereas this judgment has been passed by two Judges Bench whereas the applicant has referred to the judgment of the 7 Judges Bench and the judgment “SBP and Co. Vs. M/s Patel Engineering Ltd. & Anr.” AIR 2006 SC 450 has not been referred in that judgment. Moreover, in the latest judgment, the SLP against the judgment of Hon’ble Calcutta High Court in 2013 (1) CALT 546 “Sudarshan Vyapara Pvt. Ltd. & Anr. Vs. Madhusudan Guha & Anr.” was dismissed on 2.7.2013 and the judgment of the larger Bench is to be followed and to support this preposition, the counsel for the applicant has relied upon the judgment of the Hon’ble Supreme Court i.e. (2011) 1 SCC 694 “Sidharam Satilingappa Mhetre Vs. State of Maharshtra and another” and in para No. 140 of the judgment it was held that in case of judgment of Constitution Bench in Sibia’s case that is to be followed in preference to the other judgment of the smaller Benches. The counsel for the complainant has not referred any judgment contrary to the 7 Judges Bench in “SBP and Co.” (Supra), therefore, we are bound to follow the dictum given in that judgment and keeping in view the provisions of under Section 8 of the Arbitration Act, 1996, the parties are referred to the arbitration in view of Clause 33 specifically entered into between the parties in the buyer’s agreement.

11.              In view of the above observation, both the applications are hereby accepted and taking the jurisdiction of the Consumer Commission as a preliminary issue, we observe that in view of Arbitration Clause No. 33 of the Buyer’s Agreement, the Consumer Commission at the first stage when the Ops had moved the application alongwith required documents that the parties be referred to arbitration, we have no other alternative but to refer the parties to settle their claim before the Arbitration in view of Clause 33 under the Buyer’s Agreement. Accordingly, the applications are allowed.

MAIN CASE

12.              As held in the applications that the complaint before this Commission is not maintainable, therefore, the same is hereby dismissed with no order as to costs.

13.              The arguments in these applications were heard on 21.1.2015 and the orders were reserved. Now the order be communicated to the parties as per rules.

14.              The Consumer Complaint could not be decided within the statutory period due to heavy pendency of Court cases.

 

 (Gurcharan Singh Saran)

Presiding Judicial Member

 

February 2, 2015.                                                                                                                                                         (Jasbir Singh Gill)

as                                                                                                                                                                                               Member