JUDGMENT :

1. Delay condoned.

2. This appeal filed against order dated 13.5.2013 passed by the National Consumer Disputes Redressal Commission (for short, 'the National Commission') whereby the appellant's prayer for making a reference to the arbitrator was rejected can appropriately be termed as a frivolous piece of litigation which merits nothing but dismissal at the threshold with exemplary cost.

3. The respondents filed complaint alleging deficiency in service on the appellant's part and claimed compensation to the tune of Rs. 17,41,09000/- with cost of Rs. 1,00,000/-.

4. On being noticed by the National Commission, the appellant filed a written statement to contest the complaint. It also filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (for short, 'the 1996 Act') for making a reference to the arbitrator.

5. A two Member Bench of the National Commission referred the matter to the larger Bench. After considering the relevant statutory provisions and adverting to several judgments including the judgments in Fair Air Engineers (P) Ltd. v. N.K. Modi (1996) 6 SCC 385; Skypay Couriers Limited v. Tata Chemicals Limited (2000) 5 SCC 294; National Seeds Corporation Limited v. M. Madhusudhan Reddy and another (2012) 2 SCC 506, the larger Bench of the National Commission held that the consumer forums constituted under the Consumer Protection Act, 1986 (for short, 'the 1986 Act') are not bound to refer the dispute raised in the complaint to an Arbitral Tribunal in terms of the arbitration clause contained in the agreement entered into between the parties.

6. Shri Sanjay Ghose, learned counsel for the appellant relied upon the judgment of the Constitution Bench in SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 as also the judgments in Agri Gold Exims Ltd. v. Sri Lakshmi Knits and Wovens and others (2007) 3 SCC 686 and Branch Manager, Magma Leasing and Finance Limited and another v. Potluri Madhavilata and another (2009) 10 SCC 103 and argued that once an application is filed under Section 8 of the 1996 Act, the consumer forum is duty bound to make a reference to the arbitrator because that section is mandatory in character.

7. In our opinion, there is no merit in the submission of the learned counsel. The question whether the existence of an arbitration clause contained in the agreement executed between the parties excludes the jurisdiction of the consumer forum and on an application made by either party, the consumer forum is duty bound to make a reference to the arbitrator was extensively considered in National Seeds Corporation Limited v. M. Madhusudhan Reddy and another (supra) and it was observed:

"According to the learned counsel for the appellant, if the growers had applied for arbitration then in terms of Section 8 of the Arbitration and Conciliation Act the dispute arising out of the arbitration clause had to be referred to an appropriate arbitrator and the District Consumer Forums were not entitled to entertain their complaint. This contention represents an extension of the main objection of the appellant that the only remedy available to the farmers and growers who claim to have suffered loss on account of use of defective seeds sold/supplied by the appellant was to file complaints with the Seed Inspectors concerned for taking action under Sections 19 and/or 21 of the Seeds Act.

The consideration of this issue needs to be prefaced with an observation that the grievance of a farmer/grower who has suffered financially due to loss or failure of crop on account of use of defective seeds sold/supplied by the appellant or by an authorised person is not remedied by prosecuting the seller/supplier of the seeds. Even if such person is found guilty and sentenced to imprisonment, the aggrieved farmer/grower does not get anything. Therefore, the so-called remedy available to an aggrieved farmer/grower to lodge a complaint with the Seed Inspector concerned for prosecution of the seller/supplier of the seeds