AFTAB SINGH VS EMAAR MGF LAND LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mr. D.K. Jain, President, Mr. Ajit Bharihoke, Member and Mr. V.K. Jain, Member
AFTAB SINGH - Appellant
Versus
EMAAR MGF LAND LTD. - Respondent
Consumer Case Nos. 701, 1373, 1423 of 2015 and Consumer Case Nos. 159, 423 to 433, 521 to 524, 553, 554, 555, 627, 666, 673, 728, 782, 900, 99 of 2016 with IA/247 of 2016, IA/505 of 2017, IA/7294 of 2015, IA/9570 of 2015, IA/11813 of 2016
Decided on : 13-07-2017

Advocates Appeared:
Mr. Ankur Talwar, Ms. Sonam Sharma and Ms. Srishty Kaul, Advocates, for the Complainants in CC No. 701 of 15; Mr. Sangram S. Saron, Advocate, for the Complainants in CC No. 1423 of 2015; Mr. Rahul Rathore and Ms. Kudrat Sandhu, Advocates Along with Mr. Arun Monga, Complainant in person, for the Complainants in CC No. 782 of 16; Mr. Sushil Kaushik and Ms. Himanshi Singh, Advocates, for the Complainants in CC Nos. 159, 423 to 433, 521 to 524, 665 and 666 of 16; Mr. Rajeev Kumar Jha and Mr. Rajiv Kumar Sharma, Advocates, for the Complainants in CC No. 99 of 2016; Mr. C.P. Sharma, Advocate, for the Complainants in CC No. 673 of 2016; Mr. Iggu Chitiappa, Advocate, for the Complainants in CC No.728 of 2016; Mr. Amarjit Singh Chandhioke, Senior Advocate with Mr. Aditya Narain, Mr. Arnav Narain, Ms. Anushree Narain, Mr. Arjun Jain, Mr. Mishra Raj Shekhar, Mr. Gaurav Sharma, Ms. Sweta Kakkad, Ms. Arveena Sharma and Mr. Anupam, Advocates, for the Opposite Party in CC No.728 of 2016

Headnote:
ARBITRATION - AMENDMENT TO SECTION 8 OF THE ARBITRATION AND CONCILIATION ACT, 1996 - REFERENCE TO ARBITRATION - CONSUMER DISPUTES - WHETHER THE NEWLY INSERTED SUB-SECTION (1) OF SECTION 8 OF THE ARBITRATION ACT MANDATES CONSUMER FORUMS, CONSTITUTED UNDER THE CONSUMER ACT, TO REFER PARTIES TO ARBITRATION IN TERMS OF VALID ARBITRATION AGREEMENT, NOTWITHSTANDING OTHER PROVISIONS OF THE ARBITRATION ACT AND THE PROVISIONS OF THE CONSUMER ACT - HELD, NO.
Fact of the Case:

The Opposite Party in the Original Complaints (for short, "the Builder") filed this set of captioned applications under Section 8 of the Arbitration Act praying therein that the parties be referred to Arbitration as per the Buyers' Agreements executed between them.
Finding of the Court:

The Court held that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.
Issues: Whether the newly inserted Sub-Section (1) of Section 8 of the Arbitration Act mandates Consumer Forums, constituted under the Consumer Act, to refer parties to Arbitration in terms of valid Arbitration Agreement, notwithstanding other provisions of the Arbitration Act and the provisions of the Consumer Act.
Ratio Decidendi: 1. Disputes which are to be adjudicated and governed by statutory enactments, established for specific public purpose to sub-serve a particular public policy are not arbitrable. 2. There are vast domains of the legal universe that are non-arbitrable and kept at a distance from private dispute resolution. 3. The subject amendment was meant for a completely different purpose, leaving status quo ante unaltered and subsequently reaffirmed and restated by the Hon'ble Supreme Court. 4. Section 2(3) of the Arbitration Act recognizes schemes under other legislations that make disputes non-arbitrable. 5. In light of the overall architecture of the Consumer Act and Court-evolved jurisprudence, amended sub-section (1) of Section 8 cannot be construed as a mandate to the Consumer Forums, constituted under the Act, to refer the parties to Arbitration in terms of the Arbitration Agreement.
Final Decision: The reference is answered accordingly. All the Complaints shall now be listed on 28.08.2017 before the Appropriate Bench(s), for adjudication on merits.

ORDER

1. These applications and the consequential reference to a larger Bench are triggered by the amendment to Sub-Section (1) of Section 8 of the Arbitration and Conciliation Act, 1996 (for short the "Arbitration Act") by Act 3 of 2016, with retrospective effect from 23.10.2015. The question for consideration before this Bench is profound, having seminal ramifications for the entire adjudicatory mechanism envisaged for settlement of consumer disputes, falling within the ambit of the Consumer Protection Act, 1986 (for short the "Consumer Act").

2. In order to bring into focus the issue involved in these hotly contested Applications, we deem it appropriate and expedient to reiterate the history and essence of the referral order dated 31.08.2016, passed by the Learned Single Member, especially since both sides have pressed into service certain observations from the said order, dated 31.08.2016, in support of their respective stands.

3. The Opposite Party in the Original Complaints (for short, "the Builder") filed this set of captioned applications under Section 8 of the Arbitration Act praying therein that the parties be referred to Arbitration as per the Buyers' Agreements executed between them. The complainants in these matters had booked residential villas/flats/plots in Projects of the Builder to be developed in Gurgaon/Mohali and accordingly executed Buyers' Agreements. The aggrieved Complainants allege that the Builder has failed to deliver possession of these villas/flats/plots by the date committed in the Buyers Agreement and hence, are seeking directions to the Builder for delivery and possession of the villas, etc. and/or, in the alternative, refund of the amounts deposited by them, along with compensation.

4. The Arbitration Clauses in the different Buyers' Agreements seem to follow a standard template and construction. The Arbitration Clause contained in one such set of Buyers Agreements, reads as under:

"This or any dispute arising out of or touching upon or in relation to the terms of this Agreement or its termination, including the interpretation and validity thereof and the respective rights and obligations of the Parties shall be settled amicably by mutual discussion, failing which the same shall be settled through arbitration. The arbitration proceedings shall be governed by the Arbitration & Conciliation Act, 1996, or any statutory amendment, modifications or reenactment thereof for the time being in force and shall be held at New Delhi. The High Court of Punjab & Haryana at Chandigarh and the Courts subordinate thereto having territorial jurisdiction over the Built up villa shall be to the specific exclusion of all other courts, alone have the exclusive jurisdiction in all matters arising out of / touching and / or concerning this Agreement".

The Arbitration Clause in another set of Buyers' Agreements is to the following effect:

"37. All or any dispute arising out of or touching upon or in relation to the terms of this Buyer's / provisional allotment letter or its termination, including the interpretation and validity thereof and the respective rights and obligations of, the parties shall be settled amicably by mutual discussion, failing which the same shall be settled through arbitration. The arbitration proceedings shall be governed by the Arbitration & Conciliation Act, 1996, or any statutory amendments, modifications or re-enactment thereof for the time being in force. A Sole Arbitrator, who shall be nominated by the Developer, shall hold the arbitration proceedings at the registered office of the Developer in New Delhi. The Allottee(s) hereby confirms that he shall have no objection to such appointment even if the person so appointed, as the Arbitrator, is an employee or advocate of the Developer or is otherwise connected with the Developer and the Allottee (s) confirms that notwithstanding such relationship / connection, the Allottee (s) shall have no doubts as the independence or impartiality of the sa

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