IMPORTANT POINT
The Commissions under the Consumer Protection Act do not have the jurisdiction to refer the dispute for a consensual adjudication and then make the said decision of the so-called consensual arbitrator, an order of the Commission itself. Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to 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 is in addition to the provisions of any other law for the time being in force.

Headnote:Consumer Protection Act, 1986 -Section 22-National Commission-Procedure before-Jurisdiction of-Reference of dispute for consensual adjudication-Commissions have no jurisdiction to refer dispute for consensual adjudication-Existence of arbitration clause not a bar to entertain complaint-National Commission referred disputed to consensual arbitrator-Order passed on basis of award of arbitrator-Objection to award not considered-Practice followed unhealthy-Commission abdicated its function and duties-Practice to be discontinued-Since award was on basis of reference by consent of parties award treated as award of arbitrator-Final order of Commission set aside-Commission to allow parties to file objections to award and give a decision after considering objection.
       The Commissions, under the Act, are quasi judicial bodies and they are supposed to provide speedy and simple redressal to consumer disputes and for that purpose, they have been empowered to give relief of a specified nature and in an appropriate way, to award compensation. On a detailed scrutiny of the different provisions of the Act and bearing in mind the powers conferred on the Commissions, it is indeed difficult to conceive that such Commissions would be authorised to refer the disputes for a consensual adjudication, merely because to arrive at a decision, it would be necessary to take evidence in the proceedings. In the absence of any provision in the Act itself, authorising the Commission to refer a pending proceeding before it, on receipt of a complaint from a consumer, for being settled through a consensual adjudication, the conclusion is irresistible that the Commissions under the Consumer Protection Act do not have the jurisdiction to refer the dispute for a consensual adjudication and then make the said decision of the so-called consensual arbitrator, an order of the Commission itself. Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to 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 is in addition to the provisions of any other law for the time being in force. (Para 2)
       Section 22 of the Consumer Protection Act provides that the Commission shall have the powers of a Court. These powers would include the power to call for documents and take evidence either by itself or on Commission. However, the final adjudication has to be by the Commission. For purposes of this Order we will presume, without laying down any law in this behalf, that the Commission may even refer disputes to Arbitration/Conciliation. However, such reference to Arbitration could only be under the provisions of the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996. There is no provision in law and we consider it an unhealthy practice for Courts/Commission/Tribunal to abdicate their duties and functions and to delegate adjudication of disputes before them to third parties. The adjudication can only be by the concerned Court/Commission/Tribunal. For an effective adjudication the Commission/Court must address itself to the evidence, documents, respective case of the parties, including submission on their behalf and then give a finding on that basis. Facts set out hereafter shows/suggests that that has not happened. (Para 5)
       There is no provision in law nor could any authority be shown to us, that adjudication of matters before a Court/Commission/Tribunal can be entrusted to a third party/individual and the decision of the third person then made a decree or Order of a Court/Commission/Tribunal. Of course, an Award made by an Arbitrator can be and is made a decree of a Court. But that is under the provisions of the Arbitration Act and not dehors the Act. As seen above the Commission is referring matters to third persons for consensual adjudication dehors the Arbitration Act. It is then making those awards the rule of the Court by passing Orders based on the award. The Commission is not applying its own mind or adjudication on the disputes. It is merely putting its impremanitive on decisions given by third parties. By doing this it is abdicating its own functions and duties. Such a procedure is unwarranted and unjustified. It cannot be allowed to continue. Accordingly the Commission is directed to forthwith discontinue with such a practice. (Para 7)
       In the instant case all parties have participated in the proceedings before the third persons. Awards have been passed. In our view, it would be inequitable to now set at naught all the awards and relegate the parties back to the original proceedings. In our view, the reference being by consent, must now be treated as reference to Arbitration under the Arbitration Act. The awards must be treated as awards of Arbitrators. In such a situation, it will be open for parties to challenge the awards on such grounds as are available under the Arbitration Act, 1940 and/or the Arbitration and Conciliation Act, 1996. Thus, in our view, it would not be correct for the Commission not to allow parties to file objections and/or not to consider objections which had been filed. As stated above, in all these cases, the Commission has not considered the objections to the award or not allowed the parties to file objections. We, therefore, set aside the final Orders of the Commission in all these matters and remit all these matters back to the Commission. We direct that the Commission shall permit the parties, who have not filed their objections, to file their objections to the award within a period of 4 weeks from today. Replies, if any, to the objections to be filed within 4 weeks thereafter. The Commission shall then consider the submissions/objections of the respective parties and then give a decision. (Paras 8 to 10)

ORDER

All these Civil Appeals are being disposed of by this common Order. It is clarified that at this stage this Court is not going into the facts of any case but is only dealing with the propriety of the procedure followed by the National Consumer Disputes Redressal Commission (hereinafter for sake of convenience called the Commission ) in all these matters.

2. With the Industrial Revolution and development in the International Trade & Commerce, there has been a substantial increase of business and trade, which resulted in a variety of consumer goods appearing in the market to cater to the needs of the consumers. The modern method of advertisement in media, influence the mind of the consumers and notwithstanding the manufacturing defect or imperfection in the quality, a consumer is tempted to purchase the goods. There has been possibility of deficiency in the services rendered. For the welfare of such consumer and to protect the consumers from the exploitation to provide protection of the interest of the consumers, the Parliament enacted the Consumer Protection Act, and the Act itself makes provision for the establishment of Commissions for settlement of the consumer disputes and matters connected therewith. The Commissions, under the Act, are quasi judicial bodies and they are supposed to provide speedy and simple redressal to consumer disputes and for that purpose, they have been empowered to give relief of a specified nature and in an appropriate way, to award compensation. On a detailed scrutiny of the different provisions of the Act and bearing in mind the powers conferred on the Commissions, it is indeed difficult to conceive that such Commissions would be authorised to refer the disputes for a consensual adjudication, merely because to arrive at a decision, it would be necessary to take evidence in the proceedings. In the absence of any provision in the Act itself, authorising the Commission to refer a pending proceeding before it, on receipt of a complaint from a consumer, for being settled through a consensual adjudication, the conclusion is irresistible that the Commissions under the Consumer Protection Act do not have the jurisdiction to refer the dispute for a consensual adjudication and then make the said decision of the so-called consensual arbitrator, an order of the Commission itself. Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to 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 is in addition to the provisions of any other law for the time being in force. Now let us see what procedure has been adopted by the Commission.

3. In all these matters the Commission has passed Orders referring the concerned matter to consensual adjudication by a retired Judge. For sake of convenience a typical Order (as passed in Civil Appeal No. 2500 of 1994) is reproduced below :-

"ORDER

After hearing both sides we suggested to parties that since evidence will have to be taken and the questions of facts determined after scrutiny of various documents and the oral evidence, it is best that both sides agree to the matter being adjudicated upon consensually by a retired Judge of the Supreme Court. Both parties have submitted before us that they are agreeable to the course suggested by us. Accordingly both sides consented before us that the dispute forming the subject matter of this Original Petition may be referred to Mr. Justice V.D. Tulzapurkar, retired Judge of the Supreme Court of India who is residing in Bombay. Both parties to this dispute have their offices in Bombay and so it would be convenient to have the adjudication conducted by a retired Judge who is in Bombay. The records of the case will be transmitted by the Registry to Mr. Justice V.D. Tulzapurkar at his address in

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