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IN THE HIGH COURT OF PUNJAB AND HARYANA
Paramjeet Singh, J.
Puma Realtors Pvt. Ltd. – Appellant
Vs.
Union of India & Others – Respondents
CWP 22121 of 2014
Decided On : 21-09-2015
Consumer Protection Act - Jurisdiction of Consumer Forum - Arbitration Act, 1996 - Section 8 - Section 2(1)(d) - Section 2(1)(o) - Section 3 - Section 9 - Section 11 - Section 12 - Section 34 - [Consumer Protection Act, 1986] - [District Consumer Forum] - [Arbitration Act, 1996, Section 8] - [Summary of Acts and Sections: The judgment discusses the jurisdiction of the Consumer Forum in relation to an arbitration clause contained in a 'plot buyer's agreement'. It analyzes the aims and objects of the Consumer Protection Act, 1986 and the definition of 'consumer' under Section 2(1)(d) and Section 2(1)(o). The judgment also delves into the provisions of the Arbitration Act, 1996, including Section 8, and the extent of judicial intervention under Section 5. It highlights the interplay between the two acts and the discretion of the Consumer Forum to proceed with the matter in accordance with the provisions of the Consumer Protection Act, 1986, rather than relegating the parties to arbitration proceedings pursuant to an agreement. The judgment emphasizes that the remedy available under the Consumer Protection Act, 1986 is in addition to and not in derogation of the provisions of any other law for the time being in force. The court also addresses the issue of jurisdiction of the High Court in entertaining writ petitions against the orders of the Consumer Forum, emphasizing that a statutory appeal lies to the Supreme Court under the provisions of the Consumer Protection Act, 1986. The judgment concludes by dismissing the writ petition as not maintainable before the High Court.
Fact of the Case:
The petitioner, a real estate development company, challenged the order of the District Consumer Forum in a consumer complaint filed by a plot buyer. The dispute arose from a 'plot buyer's agreement' containing an arbitration clause. The petitioner contended that the Consumer Forum had no jurisdiction due to the arbitration clause, while the respondent argued that the Consumer Protection Act, 1986 provided an additional remedy and the agreement was signed under duress. The court considered the aims and objects of the Consumer Protection Act, 1986, the definition of 'consumer', and the provisions of the Arbitration Act, 1996. It also addressed the issue of jurisdiction of the High Court in entertaining writ petitions against the orders of the Consumer Forum.
Finding of the Court:
The court found that the Consumer Forum was not bound to refer the dispute to arbitration, and the remedy available under the Consumer Protection Act, 1986 is in addition to and not in derogation of the provisions of any other law. It also held that the writ petition against the order of the Consumer Forum was not maintainable before the High Court.
Issues: The issues before the court included the jurisdiction of the Consumer Forum in relation to an arbitration clause, the aims and objects of the Consumer Protection Act, 1986, the definition of 'consumer', and the jurisdiction of the High Court in entertaining writ petitions against the orders of the Consumer Forum.
Ratio Decidendi: The court held that the Consumer Forum was not bound to refer the dispute to arbitration, and the remedy available under the Consumer Protection Act, 1986 is in addition to and not in derogation of the provisions of any other law. It also emphasized that the writ petition against the order of the Consumer Forum was not maintainable before the High Court.
Final Decision: The court dismissed the writ petition as not maintainable before the High Court.
Paramjeet Singh, J.
By way of the present writ petition, the petitioner has challenged the order dated 18.09.2014 (Annexure P-15) passed by the District Consumer Disputes Redressal Forum (in short, 'District Consumer Forum'), Phase-2 SAS, Nagar, Mohali in consumer complaint No. 455 of 2014 (Annexure P-10).
2. For the sake of brevity, I do not deem it necessary to mention averments in the writ petition, however, relevant averments are being referred to herein. Petitioner-company is in the business of real estate development and is developing a colony namely "IREO Hamlet" in Sector 98, SAS, Nagar Mohali. On 20th of October 2011, respondent No. 2 booked plot No. 269 measuring 307.77 square yards. In Clause 19 of the Schedule-I of the application Form filled-up by respondent No. 2, it has been clearly mentioned that he would be entitled to possession of the plot only after complete payment of sale consideration. On 17.11.2011, a provisional allotment letter was issued for plot No. 269 -IREO Hamlet, Sector 98, Mohali. On 24.11.2011, respondent No. 2-Vijeypal Singh Mann and the petitioner-company entered into a "plot buyer's agreement". The rights and obligations of the petitioner and respondent No. 2 are governed by the said agreement. Clause 33 of the agreement reads as under:
"33. Dispute resolution by arbitration
All or any disputes arising out or touching upon or in relation to the terms of this agreement or its termination including the integration and validity of the terms hereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussions failing which the same shall be settled through reference to a sole Arbitrator to be appointed by a resolution of the Board of Directors of the company, whose decision shall be final and binding upon the parties. The allottee hereby confirms that it shall have no objection to the appointment of such sole Arbitrator even if the person so appointed, is an employee or advocate of the company or is otherwise connected to the company and the allottee hereby accepts and agrees that this alone shall not constitute a ground for challenge to the independence or impartiality of the said sole Arbitrator to conduct the arbitration. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereto shall be held at Company's offices or at a location designated by the said sole Arbitrator in Chandigarh. The language of the arbitration proceedings and the award shall be in English. Both the parties will share the fees of the arbitrator in equal proportion."
Respondent No. 2 paid three instalments. These instalments were not at all linked to the development. It is the 4th instalment that was to be paid after initiation of development works which commenced on 1st of May 2013. Respondent No. 2 was called upon vide notice dated 30th of April 2013 to pay 4th instalment by 27th of May 2013. Thereafter, respondent No. 2 remained in continuous default and failed to make any payment towards the balance instalments of the plot in question. Respondent No. 2 served legal notice dated 27.11.2013 (Annexure P-6) upon the petitioner, who filed reply dated 20th of December 2013 (Annexure P-7). Respondent No. 2 failed to pay 4th instalment. As per Clause 19 of the agreement, after forfeiting the amount paid by respondent No. 2, the allotment was cancelled. Thereafter, respondent No. 2 filed a consumer complaint before District Consumer Forum and prayed for various reliefs. In pursuance of the notice in the complaint, the petitioner filed written statement (Annexure P-11) raising a preliminary objection as regards the maintainability of the consumer complaint and filed Miscellaneous Application No. 263 of 2014 (Annexure P-12) for dismissal of the complaint and also moved Miscellaneous Application No. 264 of 2014 (Annexure P-13) under Clause 8 of the Arbitration and Conciliation Act, 1996 (in short 'Arb
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