NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONNEW DELHIFIRST APPEAL NO. 419 OF 2009
(Against the Order dated 20/08/2009 in Complaint No. 111/2009 of the State Commission Karnataka)
1. K.M. ACHAIAHRep. by his Power of Attor. Holder, Mr. Kiran Madaiah, S/o Mr. C.M. Kariappa, #462, 6th Cross, 2nd Block, R.T. Nagar, Bangalore-560064, S/o Late Muthanna, Managing Dir. FZC, P.O.Box No. 33296DubaiUnited Arab Emirates
...........Appellant(s)
Versus
1. MUNIANJINAPPA & ORS.Govt. School Road, JakkurBangalore - 560 0642. M.H. NAGARAJNagraj Complex, 2nd Main, 1st Cross, NarayanapuraDharawad - 580 0083. M.H. SHAMANNAChoudanahalli Village, Kundana Hobli, Heganahalli Post, Devanahalli PostBangalore4. M/S. MADHAVI ASSETS PVT. LTD.Rep. by its Managing Director, Having its Registered Office at No. 289, 1st Floor, 15th Main, R.M.V. ExtensionBangalore - 560 0805. M/S. METROCORPRep. by its Managing Partner, Mr. Deepak Krishn, Having its Office at No. 17, Jayamahal Main RoadBangalore - 560 046
...........Respondent(s)
BEFORE:
HON'BLE MR. JUSTICE R.C. JAIN ,PRESIDING MEMBERHON'BLE MR. ANUPAM DASGUPTA ,MEMBER
For the Appellant :
NEMO
For the Respondent :
NEMO
Dated : 12 Mar 2010
ORDER
PER JUSTICE R. C. JAIN, PRESIDING MEMBER (ORAL) Aggrieved by the dismissal of the complaint vide order dated 20.08.2009 passed by the Karnataka State Consumer Disputes -3- Redressal Commission, Bangalore (in short, the State Commission) in complaint case No. 111 of 2009, the complainant has filed the present appeal. The complaint before the State Commission was filed by the appellant seeking certain reliefs including refund of the amounts deposited by him as also compensation alleging certain deficiency in service on the part of the opposite parties in not handing over the possession of the plot despite having received the entire consideration. It would appear that the complaint was considered by the State Commission at the threshold and in order to decide whether it could entertain the complaint and finding that there are existed an arbitration agreement in clause 17 of the agreement of sale, the State Commission refused to entertain the complaint and dismissed the same with liberty to the complainant to take appropriate action against the opposite party before the appropriate authority. 2. We have heard Mr. Anizur Jaitley, learned counsel representing the appellant and Ms. Vaijayanthi Girish, learned counsel representing the respondent and have considered their respective submissions. 3. It is not disputed from the side of the complainant-appellant that the agreement to sell dated 27.12.2006 contains an arbitration agreement in clause 17 which is to the following effect:- In any event of breach of the terms of this agreement of sell or in the event of any differences or disputes arising between the parties in regard to this agreement or any matter relating thereto, the same shall be referred to a sole arbitrator appointed by the Vendor and his decision shall be final -4- and binding upon the parties and such arbitration shall be held in accordance with the provisions of the Arbitration and Conciliation Act, 1996. 4. Despite that being the position, the contention of the learned counsel for the complainant is that the State Commission by taking erroneous view of the legal position, has dismissed the complaint as beyond the purview of the State Commission. In support of his contention, he has relied upon a decision of the Supreme Court in the case of Fair Air Engineers Pvt. Ltd. & Anr. Vs. N. K. Modi, III (1996) CPJ 1(SC). The question came to be considered by the Supreme Court on similar facts and was answered thus : 16. 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 an 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 -5- 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 be conclusion that the appropriate Forum for adjudication of the disputes would be otherwise those given in the Act. 5. Besides this, the question was also considered by the Supreme Court (three judges bench) in the case of Skypark Couriers Vs. Tata Chemicals reported in 2000(5) SCC 294 wherein the Apex court held as under:- Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency, constituted under the Consumer Protection Act, since the remedy provided under the Act if in addition to the provisions of an other law for the time being in force. 6. Learned counsel for the respondent does not dispute the above legal position but on the strength of a recent judgment by the Supreme Court rendered in civil appeal No. 7687 of 2004 titled as General Manager, Telecom vs. M. Krishnan & Anr. submits that the -6- State Commission has done no wrong in dismissing the complaint on the face of the arbitration agreement existing between the parties for settlement of their disputes. In the said case, the Supreme Court considered the question with special reference to the provisions contained in Section 7-B of Indian Telegraph Act, 1951. On the strength of said provision, the Supreme Court ruled that if there is a special remedy provided under Section 7-B of Indian Telegraph Act, the dispute in respect of telephone bills then the remedy under the Consumer Protection is by implication barred. It appears that this decision came to be passed without noticing the judgments in the case of Fair Air Engineers Pvt. Ltd. & Anr. vs. N. K. Modi (supra) and Skypark Couriers vs. Tata Chemicals (supra). In any case, the application of this decision is to be restricted to the case where there is statutory provision for settlement of dispute through the mechanism of arbitration. In our view, the above referred decisions still hold the field and must be followed. 8. Having considered the matter, we are of the view that the impugned order passed by the State Commission is legally unsustainable and deserves to be set aside and the State Commission should be called upon to entertain and proceed with the complaint as a consumer dispute in accordance with law. 9. In the result, the appeal is allowed and the impugned order is hereby set aside. The complaint filed by the appellant before the State Commission shall be entertained by the State Commission and disposed of in accordance with law. The complainant is directed -7- to appear before the State Commission on 09.04.2010 for receiving further directions in the matter.
......................JR.C. JAINPRESIDING MEMBER ......................ANUPAM DASGUPTAMEMBER
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