Back
IN THE HIGH COURT OF CALCUTTA
Harish Tandon, J.
M/s. Auro Developers & Ors.
Vs
Mala Mukherjee & Ors.
C.O. No. 2828 of 2010
Decided on : 23.12.2011
ARBITRATION - CONSUMER PROTECTION ACT - JURISDICTION - WHETHER ARBITRATION AND CONCILIATION ACT APPLIES TO CONSUMER FORUM - WHETHER DISTRICT FORUM HAS JURISDICTION TO REFER DISPUTE TO ARBITRATION - WHETHER DISTRICT FORUM CAN APPOINT ARBITRATOR - WHETHER APPLICATION UNDER ARTICLE 227 OF THE CONSTITUTION IS MAINTAINABLE.
Fact of the Case:
The petitioners entered into an agreement with the opposite parties for the purchase of a flat. A dispute arose regarding the measurement of the flat and the opposite parties initiated a proceeding under Section 12 of the Consumer Protection Act before the District Consumer Disputes Redressal Forum. The petitioners filed an application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to an Arbitral Tribunal. The District Forum allowed the application and directed the parties to appoint an arbitrator from the panel of Civil Engineers of Kolkata Municipal Corporation. The opposite parties challenged the order before the State Consumer Dispute Redressal Commission, which set aside the order of the District Forum and remitted the matter back for reconsideration on merit.
Finding of the Court:
The High Court held that the Arbitration and Conciliation Act applies to a proceeding initiated before the Consumer Forum provided the subject matter before the Forum is within the ambit of the arbitration agreement. The Court further held that the District Forum had jurisdiction to refer the dispute to arbitration but erred in appointing the arbitrator. The Court also held that the application under Article 227 of the Constitution was maintainable as the orders of the District Forum and the State Commission were wholly without jurisdiction.
Issues: 1. Whether the Arbitration and Conciliation Act applies to a proceeding initiated before the Consumer Forum? 2. Whether the District Forum has jurisdiction to refer a dispute to arbitration? 3. Whether the District Forum can appoint an arbitrator? 4. Whether an application under Article 227 of the Constitution is maintainable?
Ratio Decidendi: 1. The Arbitration and Conciliation Act applies to a proceeding initiated before the Consumer Forum provided the subject matter before the Forum is within the ambit of the arbitration agreement. 2. The District Forum has jurisdiction to refer a dispute to arbitration if the subject matter of the dispute is covered by an arbitration agreement and a party applies for such reference not later than submitting his first statement on the substance of the dispute. 3. The District Forum cannot appoint an arbitrator. The power to appoint an arbitrator is vested exclusively with the Chief Justice of the High Court under Section 11 of the Arbitration and Conciliation Act. 4. An application under Article 227 of the Constitution is maintainable even if there is an alternative remedy, if the orders of the lower court or tribunal are wholly without jurisdiction.
Final Decision: The Court set aside the order of the State Commission and the portion of the order of the District Forum by which it directed the parties to approach the Commissioner, Kolkata Municipal Corporation, who was requested to appoint an arbitrator.
HARISH TANDON, J.:
This revisional application is directed against a judgment and order dated 9.7.2010 passed by State Consumer Disputes Redressal Commission, West Bengal in S.O. Case No RC/44/2010 by which the original complaint application is directed to be heard afresh.
Briefly stated the facts are that the Opposite Party Nos. 1 and 2 entered into an agreement dated 17.11.2005 with the petitioners and other opposite parties for purchase of a flat No. 4A, measuring more or less 1917 square fit super built up area comprising of the entire fourth floor together with an open terrace measuring 278 square fit and one car parking space measuring 135 square fit on the ground floor at premises No 487, Keyatala Road, Calcutta-700 029 at a consideration of Rs. 48,00,000/- (Forty Eight laks).
Thereafter they were intimated about the issuance of the completion certificate by the Kolkata Municipal Corporation with further demand for payment of the balance consideration money. The possession of the said flat was taken in the year 2007.
In the year 2009 the opposite party No. 1 and 2 initiated a proceeding under Section 12 of the Consumer Protection Act before the District Consumer Disputes Redressal Forum, Unit 1, Calcutta being CDF Case No. 91/2009 and prayed for an order of refund of a sum of Rs. 7,70,000/- (Rs. Seven Laks and Seventy Seven Thousand) being the price of the difference in the measurement of the area and a further sum of Rs. Five laks towards the damages and compensation. It is alleged in the said petition that in terms of the said agreement dated 17.11.2005 the petitioner along with other opposite parties agreed to sell a flat measuring more or less 1917 square feet of super built up area but on verification it is found that they have given lesser area of above 344 square feet and thus have departed from the agreement dated 17.11.2005.
The petitioners appeared before the Consumer District Disputes Redressal Forum (hereinafter referred to as District Forum for sake of brevity) and filed an application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to an Arbitral Tribunal.
The opposite party No. 1 and 2 opposed the said application but the District Forum vide Order No 12 dated 18.12.2010 directed the opposite party Nos. 1 and 2 to make necessary arrangements to send the matter to the competent arbitrator to resolve the disputes and such arbitrator is to be engaged from the panel of Civil Engineers of Kolkata Municipal Corporation with other consequential directions.
The opposite party No. 1 and 2 assailed the said order before the State Consumer Dispute Redressal Commission (hereinafter referred to as the State Commission for the sake of convenience) and by the impugned order the State Commission after setting aside the order passed by the District Forum remitted the matter back to the District Forum for reconsideration on merit and dismissed the application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 filed by the petitioner.
Assailing the said order passed by the State Commission the petitioners have filed the instant revisional application under Article 227 of the Constitution.
It would be noteworthy that neither the District Forum nor the State Commission entertained the matter on merit but have considered the maintainability of an application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 and as such the parties have not addressed on merit in this revisional application.
The points, in my view emerged in this revisional application, are:
Firstly, whether an application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 is maintainable before the District Forum, exercising its power under the Consumer Protection Act, 1986.
Secondly, whether the District Forum, while allowing an application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 was competent to name the arbitral tribunal in cont
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
