This Writ Petition is filed for a Writ of Prohibition to prohibit the District Consumer Disputes Redressal Forum-III, Hyderabad (for short "the District Forum") from entertaining C.C.No.1026 of 2007 and to direct the District Forum to refer the dispute for Arbitration under Clause 15 of the Development Agreement dated 21-7-2005.

2. The facts lie in a narrow compass. The petitioner and respondent No.1 entered into a Development Agreement on 21-7-2005, whereunder respondent No.1 handed over 700 Sq. yards of open land for construction of a residential complex to the petitioner. The petitioner and respondent No.1 agreed to share the constructed area in the ratio of 55:45 respectively. On the ground that the petitioner failed to carry out its part of contractual obligations under the said agreement, respondent No.1 approached the District Forum by filing C.C.No.1026 of 2007 under Section 12 of the Consumer Protection Act, 1986 (for short "the 1986 Act") seeking the following reliefs:

" (a) To direct the opposite party to hand over the possession of the completed share of 45% to the complainant as per the agreed specification of the development agreement after obtaining the occupation certificate from the local authority;

(b) To direct the opposite party to pay agreed rent for alternate accommodation @ Rs.7000/- per month from March, 2006 to December, 2007 i.e., till the date of filing the present complaint, which is amounting to Rs.1,47,000/- and further direct the opposite party to pay same till the date of handing over of 45% furnished share of Flats to the complainant;

(c) To direct the opposite party to pay agreed damages @ Rs.25,000/- per month, which commence from January, 2006 is amounting to Rs.6,00,000/- till December, 2007 further direct the opposite party to pay same till the date of handing over the 45% furnished share of flats to the complainant;

(d) To award compensation of Rs.2,00,000/- (Two lakh only) for mental agony suffered by the complainant and her family; and

(e) To award the costs of the complaint and pass any such other order/orders as this Hon'ble Forum deems fit and proper in the interest of justice".

3. The petitioner filed I.A.No.41 of 2008 before the District Forum under Section 8(1) of the Arbitration and Conciliation Act, 1996 (for short "the 1996 Act") for referring the dispute for arbitration. In its application, the petitioner referred to and relied upon Clause 15 of the agreement, which provides for settlement of disputes arising out of the said agreement through arbitration under the provisions of the 1996 Act. The District Forum by order dated 26-2-2008 dismissed the said application. Assailing the same, the petitioner filed the present Writ Petition for the reliefs as mentioned above.

4. Heard Sri S.R.Sanku, learned counsel for the petitioner and perused the record.

5. The District Forum in its order, while rejecting the application for reference of the dispute for arbitration, held that under Section 3 of the 1986 Act the remedies made available under the said Act are in addition to and not in derogation of the remedies available under the other laws. The District Forum also relied on the judgments of the Supreme Court in FAIR AIR ENGINEERS PVT. LTD. Vs. N.K.MODI1, ORISSA LIFT IRRIGATION CORPORATION LTD. Vs. BIRRA KISHORE ROUT2 and NATIONAL INSURANCE COMPANY LTD. Vs, SATBHUSHAN JAIN3.

6. At the hearing, Sri S.R.Sanku contended that the District Forum erred in relying upon the judgment of the Supreme Court in FAIR AIR ENGINEERS (1 supra) on the ground that the said judgment was rendered in a case arising under Section 34 of the Arbitration Act, 1940 (for short "the 1940 Act"), the language of which is different from Section 8 of the 1996 Act. He further submitted that the language of Section 8 is couched in mandatory terms leaving no discretion for any judicial authority other than referri