IMPORTANT POINT
Though the District Forum, State Commission and National Commission constituted under the Consumer Protection Act are judicial authorities for the purpose of Section 34 of the Arbitration Act, but in view of the object of the Act and by operation of Section 3 thereof, it would be appropriate that these forums are at liberty to proceed with the matters rather than relegate the parties to an arbitration proceedings pursuant to contract entered between the parties.

Headnote:(i) Consumer Protection Act, 1986-Sections 3, 10, 16, 20 & 25 -Arbitration Act, 1940-Section 34 -Contract for installation of centrally air-conditioned plant in residential house-Complaint before Consumer Forum for compensation for alleged deficiency in service in carrying out the work-Arbitration clause in the agreement-Whether the proceedings of the forums created under the Consumer Protection Act are legal proceedings and the authorities have the trappings of judicial authorities within the meaning of Section 34 of the Arbitration Act ? Yes, but in view of the object of the Act and by operation of Section 3 thereof, it would be appropriate that forums created under the Act are at liberty to proceed with the matters in accordance with provisions of the Act.
       Held : 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 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 the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act. Considered from this perspective, we hold that this dispute need not be referred to arbitration under clause (12) of the agreement and the matter could be decided on merits by the State Commission itself. (Paras 15 & 16)
       (ii) Consumer Protection Act, 1986-Sections 3, 10, 16, 20 & 25 -Arbitration Act, 1940-Section 34 -Contract for installation of centrally air-conditioned plant-Arbitration clause in the agreement-Complaint claiming compensation for deficiency in service in execution of work-Respondent appellant was alleged to have taken five adjournments to file counter and thus acquiesced to jurisdiction of the State Commission-Question was not argued before National Commission-Question cannot be gone into in this appeal. (Para 6)

ORDER

Leave granted.

We have heard learned counsel on both sides.

2. This appeal by special leave arises from the order dated November 13, 1992 of the National Consumer Disputes Redressal Commission, New Delhi (the "Commission", for short) passed in First Appeal No. 62/1991.

3. The admitted facts are that the appellant had entered into a contract with the respondent to carry out installation of a centrally air-conditioned plant in the residential house of the respondent in New Delhi. Since he has committed breach of the contract, seeking to recover a sum of Rs. 3,75,000 as compensation for alleged deficiency in service on the part of the appellant in carrying out the work of installation of the centrally air-conditioned plant, the respondent laid the complaint before the State Commission which in its order dated October 30, 1990 had stayed the proceedings and relegated the parties to arbitration for seeking the remedy. The appellant carried the matter in appeal. By the impugned order the Commission has held that the proceedings before the forums created under the Consumer Protection Act, 1986 (Act 68 of 1986) (for short the "Act") is not a legal proceedings nor is the Commission a judicial authority; therefore, Section 34 of the Arbitration Act, 1940 is not available to stay the proceedings. Thus this appeal by special leave.

4. Shri. R.S. Suri, learned counsel for the appellant contended that the scheme of the Act, in particular Sections 3, 10, 16 and 20 provides or constitution of District Forum, State Commission and National Commission which conduct proceedings as per the procedure prescribed in Section 13; finality is attached to the order of the forums under Section 24. The orders are enforceable at law by operation of Section 25 and the penalties for contravention get sanctions under Section 27. The hierarchy of appeals provided under Section 19 et al does indicate that the proceedings before the authorities under the Act are legal proceedings and the authorities are judicial authorities within the meaning of Section 34 of the Arbitration Act, 1940. The Commission, therefore, was in error in its conclusion that proceedings before the authorities are not legal proceedings nor is the Tribunal a judicial authority. Ms. Binu Tamta, learned counsel appearing for the respondent contended that there is no consensus ad idem between the parties on the point of reference to an arbitration; pursuant to a quotation given by the appellant, the respondent agreed only on the conditions enumerated and communicated by the respondent to which the appellant had agreed thereunder. No arbitration clause emerged by consensus ad idem. Therefore, there is no arbitration agreement for reference of the dispute for arbitration. It is also contended that the respondent, after issuance of the notice by the State Commission, had appeared and taken five adjournments to file the counter; thereby, it had acquiesced to the jurisdiction of the State Commission. Thereby, the appellant, having participated in the proceedings before the State Commission, is not entitled to avail of the remedy of stay of further proceedings under Section 34, pending reference to an arbitration. It is also contended that the Tribunals constituted under the Act are Special Tribunals. Though they are invested with the powers of the civil Court in a limited way it is not conferred with trappings of the Court. Therefore, it is neither legal proceedings nor is the Tribunal a judicial authority under Section 34. Thereby, the remedy of Section 34 is not available to the appellant. It is further contended that the Act being a special statute having given exclusive jurisdiction to the forums created under the Act to provide inexpensive and expeditious remedy. Relegating the parties to the arbitration defeats the purpose of the remedy through summary trial which is provided under the Act. Therefore, the Court would be slow to relegate the parties to the process of arbitration under the Arbi

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1996 Supreme(SC) 1289

Cases Referred (3)