Sri Shyamal Gupta, Member

Challenging the Order dated 19-01-2016 passed by the Ld. District Forum, Kolkata, Unit-I (North) in C.C. No. 277/2015, whereof the complaint has been dismissed, this Appeal has been moved by the Complainant of complaint case, i.e., Sri Biman Chakraborty.

Brief facts of the complaint case are that, OP No. 1 sanctioned loan worth Rs. 5,00,000/- in favour of the Complainant which was repayable in 180 months.  Owing to some financial constrains, he could not pay some of the EMIs in time.  Later on, the OPs offered to settle the matter on payment of a sum of Rs. 9,00,000/- at one go.  However, the Complainant could manage to pay only Rs. 6,000,000/- within the scheduled time.  Thereafter, the OP No. 2 on 26-08-2014 again asked the Complainant to square off the loan on payment of Rs. 3,80,000/- at one shot and acting on such offer, the Complainant paid the said amount on 30-08-2014 and the OPs encashed the said cheque on 03-09-2014.  Then, the Complainant asked the OPs to return all the mortgaged documents, but the OPs did not return the same alleging non-clearance of entire outstanding dues.  Hence, the complaint.

OPs moved a maintainability petition contending inter alia that the loan agreement executed in between the parties contained an arbitration clause.  Accordingly, when the Complainant defaulted making timely payment of EMIs, due arbitration proceedings was drawn up against the Complainant before the Ld. Arbitrator.  Although due notice of that proceedings was served upon the Complainant, he did not turn up before the Ld. Arbitrator and accordingly, an ex parte order was passed.  The Complainant, however, did not obey the said order.  The OP No. 1 then preferred an execution application under Order 21 of the Civil Procedure Code, 1908 before the Hon’ble High Court at Madras when the Ld. Asstt. Registrar transferred the execution application to the Alipore Judges’ Court, at South 24 Parganas.  On or about 25-09-2012, OP No. 1 out of good grace made an offer to the Complainant of a one-time settlement of Rs. 9,00,000/- and agreed to waive the remaining dues.  However, the Complainant could not pay the full amount.  Thereafter, the OP No. 1 made no further settlement offer.  Although the Complainant made some ad hoc payments to the OP No. 1, substantial amount remaines unpaid.    Contending that since arbitral award has already been passed, the same is binding on both sides and accordingly, the Ld. District Forum cannot reopen the issue afresh.

Decision with reasons

We have heard the averments of Ld. Advocates of the parties and gone through the material on record carefully.

It appears that the instant complaint was dismissed on maintainability ground.  In the opinion of the Ld. District Forum, since the matter has already been adjudicated and disposed of by the Ld. Arbitrator, it lacked jurisdiction to entertain the self-same matter. 

On thoughtful consideration of the dispute in its entirety, we, however, find that the same was dismissed out of a totally flawed notion. 

Be it mentioned here that the relief sought for under the arbitration proceedings vis-à-vis Consumer Protection Act are totally different.  While the arbitration proceedings was drawn up by the Respondents for the purpose of recovering outstanding dues from the Appellant, the complaint case was filed by the Appellant for recovery of the mortgaged documents from the Respondents. Thus, we find that the nature of relief sought for under the above proceedings is altogether different. 

Further, we find that, deviating from the arbitration award, the Respondents themselves suo mottu proposed an out of court settlement at a discount.  Therefore, they cannot blow hot and cold in the same breathe.   

Nowhere in the petition of complaint, the Appellant challenged/disputed the rationale of arbitration award.  He merely claimed return of the mortgaged documents from the Respondents. Therefore, the short question remained to be decided in the complaint case firstly was whether the Respondents at all issued any one-time settlement offer of Rs. 3,80,000/-  on 26-08-2014 to the Appellant or not; secondly, on payment of Rs. 3,80,000/- to the Respondents, whether the Appellant exonerated himself from all liabilities in respect of the subject loan and lastly, whether reluctance on the part of the Respondents to handover the mortgaged documents was an act of deficiency in service or not.

Needless to say, adjudication of the aforesaid points cannot have any adverse/unwarranted bearing on the arbitration proceedings particularly when the Respondents themselves have not pursued beyond a certain point/pressed hard to implement the said order and therefore, there was no valid reason for the Ld. District Forum to retreat from adjudicating the case.

Accordingly, the Appeal succeeds.

Hence,

O R D E R E D

The Appeal stands allowed on contest against the Respondents.  The impugned order is hereby set aside.  Parties are directed to appear before the Ld. District Forum on 12-03-2018 and then the  District Forum shall decide the case on merit.