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SANJAY KISHAN KAUL, SUDHANSHU DHULIA
M. Hemalatha Devi – Appellant
Versus
B. Udayasri – Respondent
What are the rights of a consumer regarding the choice between arbitration and public forums under the Consumer Protection Act? What is the arbitrability of consumer disputes under the Arbitration and Conciliation Act, 1996 post-2016 amendments? How to determine if a dispute falls under non-arbitrable categories reserved for public fora?
Key Points: - Consumer disputes are non-arbitrable and must be addressed by consumer forums as per the Consumer Protection Act, 2019 (!) (!) . - The existence of an arbitration clause does not bar the jurisdiction of consumer forums when a consumer opts for the public remedy (!) (!) . - Amendments to Section 11(6A) and Section 8(1) of the Arbitration Act do not mandate referral to arbitration for non-arbitrable disputes (!) (!) . - Consumer protection legislation provides additional remedies that cannot be ousted by an arbitration agreement if the consumer chooses the public forum (!) (!) . - Consumer disputes are assigned to public fora as a matter of public policy, excluding them from private arbitration tribunals (!) . - The High Court correctly dismissed the application for arbitration as the dispute was pending before a Judicial Authority (District Consumer Forum) (!) (!) . - A consumer has the option to choose between arbitration or the Consumer Forum, but cannot be forced into arbitration once they avail the public remedy (!) (!) . - The remedies under the Consumer Protection Act are in addition to and not in derogation of other laws for the time being in force (!) .
JUDGMENT :
SUDHANSHU DHULIA, J.
1. Leave granted.
2. The appellants before this Court have challenged two orders of the Telangana High Court. The first is the order dated 19.05.2022, dismissing the application of the appellants filed for the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘Arbitration Act 1996’). It was dismissed by the High Court on the ground that the dispute was pending before a Judicial Authority, which is the District Consumer Disputes Redressal Forum (for short ‘District Consumer Forum’), where a complaint has been filed by the other party to the agreement, who is a consumer and therefore the appellants have the option to move an application under Section 8 of the Arbitration Act, 1996 for reference before Arbitration. Consequently, the appellants moved an application for referring the dispute for arbitration. The District Consumer Forum dismissed this application on the ground that the complainant has invoked a public law remedy before a “Judicial Authority” under a beneficial legislation for consumers,
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