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SUPREME COURT OF INDIA
N. Santosh Hegde & S.B. Sinha, JJ.
NEERAJ MUNJAL AND ORS.—Appellants
versus
ATUL GROVER MINOR AND ANR.—Respondents
Civil Appeal No. 3100 of 2005 from Judgment and Order dated 8.2.2005 of Delhi High Court in F.A.O. (OS) No. 177 of 2004—Decided on 5.5.2005

Counsel for the Parties:
For the Appellants :Mr. K.T.S. Tulsi, Senior Advocate with Mr. Rishi Malhotra and Mr. Prem Malhotra, Advocates.
For the Respondents:Mr. S.V. Deshpande, Advocate.

The complaint filed under Section 22 of the Consumer Protection Act requires the Commission to decide the matter and not refer it to an Arbitrator. The enforceability of the award under the provisions of the Arbitration and Conciliation Act, 1996, and the applicability of the 1940 Act and the 1996 Act in relation to arbitral proceedings were also key legal principles established in the judgment.

Headnote:

Consumer Protection Act - Arbitration - 22 of the Consumer Protection Act - 21 and 85 of the Arbitration and Conciliation Act, 1996 - The court held that the complaint filed under Section 22 of the Consumer Protection Act requires the Commission to decide the matter and not refer it to an Arbitrator. The court clarified that it will be open to the respondent to enforce the Award under the provisions of the Arbitration and Conciliation Act, 1996. The court also discussed the applicability of the 1940 Act and the 1996 Act in relation to arbitral proceedings.

Fact of the Case:

The case involved a complaint filed before the National Consumer Disputes Redressal Commission for recovery of compensation for deficiency in service. The matter was referred to consensual adjudication by arbitration, and an award was made. The appellants challenged the award, and the court clarified the jurisdiction of the Commission and the applicability of the Arbitration and Conciliation Act, 1996.

Finding of the Court:

The court found that the complaint under Section 22 of the Consumer Protection Act should be decided by the Commission and not referred to an Arbitrator. The court also clarified the enforceability of the award under the provisions of the Arbitration and Conciliation Act, 1996. Additionally, the court discussed the applicability of the 1940 Act and the 1996 Act in relation to arbitral proceedings.

Issues: Jurisdiction of the Commission, enforceability of the award, and applicability of the 1940 Act and the 1996 Act in relation to arbitral proceedings.

Ratio Decidendi: The complaint filed under Section 22 of the Consumer Protection Act requires the Commission to decide the matter and not refer it to an Arbitrator. The court clarified that it will be open to the respondent to enforce the Award under the provisions of the Arbitration and Conciliation Act, 1996. The court also held that the provisions contained in the 1940 Act would govern the proceedings arising out of the award and not the 1996 Act.

Final Decision: The appeal was allowed, and the matter was remitted to the High Court for considering the appellants’ objections under Sections 30 and 33 of the 1940 Act by a Bench having requisite determination thereover on its own merit. The parties were directed to bear their own costs.

JUDGMENT

S.B. Sinha, J.—Leave granted.

This appeal is directed against a judgment and order dated 8.2.2005 passed by a Division Bench of the High Court of Delhi in F.A.O. (OS) No. 177 of 2004 whereby and whereunder the parties herein had been asked to approach this Court for seeking clarification of an order dated 16.1.2003 passed in Civil Appeal No. 1920 of 1997 which is to the following effect:

“The respondent herein filed a complaint before the National Consumer Disputes Redressal Commission. New Delhi (in short `the Commission’) for recovery of compensation from the appellants herein for deficiency in service. It appears when the matter came up before the Commission, the appellant and the respondent agreed for a consensual adjudication by a Arbitrator. Consequently, the commission referred the matter to retired Judge of the High Court for arbitration. It is not disputed that the Arbitrator gave an Award and the same was remitted to the Commission. The Commission, in terms of the Award decided the complaint of the respondent. Aggrieved, the appellants have preferred this appeal.

We have heard learned Counsel for the parties and are of the view that this case stand covered by a decision of this Court in Skypak Couriers Ltd. v. Tata Chemicals Ltd., reported in 2000 (5) SCC 294, wherein it was held that the complaint filed under Section 22 of the Consumer Protection Act requires the Commission to decide the matter in accordance with the evidence, documents and the respective case of the parties including the submission made before it and not by referring the matter in accordance with the evidence, documents and the respective case of the parties including the submission made before it and not by referring the matter to an Arbitrator by giving an Award. In view of the said decision, this appeal deserves to be allowed. Consequently, the judgment under challenge is set aside. The appeal is allowed. There shall be no order as to costs.

We may clarify that it will be open to the respondent to enforce the Award under the provisions of the Arbitration and Conciliation Act, 1996. Any amount deposited by the appellants shall be refunded to them forthwith.”

The basic fact of the matter is not in dispute.

2. The appellant Nos. 2 and 3 herein had been working as stock brokers in the Delhi Stock Exchange Limited and governed by the rules and by Laws framed under the Securities Contract Regulations Act, 1956. In relation to trading in shares through the appellants by Shri Ramesh Grower, father of the first respondent, resulting in filing of a complaint by him through his mother Mrs. Amita Grower in National Consumer Disputes Redressal Commission which was marked as complaint No. 129 of 2004. The dispute at the request of the parties was referred for consensual adjudication by arbitration in terms whereof Shri Avadh Bihari Rohtagi, a former Judge of the Delhi High Court was appointed as the sole Arbitrator in terms of an order dated 19.5.1995. He made an award on 19.8.96. The said award was accepted by the National Commission by an order dated 23.10.1996, the correctness whereof came to be questioned by the appellants herein before this Court. By reason of an order dated 16.1.2003, the appeal preferred by the appellants herein was allowed on the premise that the question of law arising therefrom is covered by the judgment of this Court in Skypak Couriers Ltd. etc. v. Tata Chemicals Ltd. etc., II (2000) CPJ 6 (SC)=(2000) 5 SCC 294. This Court, however, issued directions which have been noticed hereinabefore.

3. The respondents herein filed an execution petition wherein a warrant of attachment was issued by an order dated 5.2.2003. The appellants herein filed their objections in respect of the award before the High Court of Delhi on 21.4.2003.

4. An interlocutory application being I.A. No. 4 in Civil Appeal No. 1920 of 1997 for clarification of the said order dated 16.1.2003 was moved in this Court by the appellants but in terms of an order dat

























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