Failure to raise an objection with regard to arbitration clause in the reply filed before the Consumer Forum does not debar the raising of the issue in a civil suit if there is an arbitration clause in the agreement.

JUDGMENT

Avneesh Jhingan, J. - The issue involved in present petition is whether failure to raise an objection with regard to arbitration clause in the reply filed before the District Consumer Disputes Redressal Forum (hereinafter described as 'the Consumer Forum') will debar the raising of the issue in civil suit?

2. The facts giving rise to the present petition are summarized below:

3. The respondent-plaintiff (hereinafter described as 'the respondent') availed a loan facility from the petitioners-defendants (hereinafter described as 'the petitioners') for purchasing a truck. The respondent was aggrieved of charging of exorbitant rate of interest, a consumer complaint was filed for rendition of accounts. In the reply filed before the Consumer Forum, the petitioners never raised an issue that as per the agreement, there was an arbitration clause. The Consumer Forum dismissed the complaint holding that the issue involved is complex and cannot be decided by the Consumer Forum. Thereafter, the respondent filed a civil suit for rendition of accounts regarding loan account of truck bearing registration No. PB-06-E-2110 with a prayer to place the entire statement of account of the respondent after calculating the entire principal amount, interest and profit or loss. Further relief of mandatory injunction was prayed for.

4. On notice, the petitioners filed an application under section 8 of the Arbitration and Conciliation Act, 1996 (for short, 'the 1996 Act') relying upon Clause 15 of the agreement stating that all the disputes and differences arising out of the agreement shall be settled by arbitration to be held at Ludhiana. The application was dismissed by the Civil Judge (Senior Division), Gurdaspur (for short, 'the Civil Court') vide order dated 18.5.2015, hence, the present revision petition.

5. The challenge is to dismissal of the application that the Civil Court erred in holding that objection with regard to arbitration clause was not taken in the reply filed before the Consumer Forum and same cannot be raised in civil suit.

6. Learned counsel for the respondent relies upon Section 8 of the 1996 Act and argues that the petitioners failed to raise the objection at the first instance i.e. in the reply filed before the Consumer Forum.

7. Before dealing with the contentions raised, relevant clause of the agreement and relevant provisions of the 1996 Act and Consumer Protection Act, 1986 (for short, 'the 1986 Act') are reproduced below:

"Clause 15 of the agreement

15. ARBITRATION:

All disputes, differences and/or claims arising out of these presents or as to the construction, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to be held in Ludhiana in accordance with the provision of the Arbitration and Conciliation Act, 1996 or any statutory amendments thereof or any statute enacted for replacement thereof and shall be referred to the sole arbitration of a person to be nominated/appointed by Shriram. In the event of death, refusal, neglect, inability or incapability of the persons so appointed to act as an arbitrator, Shriram may appoint a new arbitrator. The award including the interim award/s of the arbitrator shall be final and binding upon all parties concerned. The arbitrator may lay down from time to time the procedure to be followed by him in conducting arbitration proceedings and shall conduct arbitration proceedings in such manner as he considers appropriate. Any proceedings to be initiated in any court of law in pursuance of this arbitration shall be instituted and held in the Court at Ludhiana only.

Sections 5 and 8 of the 1996 Act:

5. Extent of judicial intervention.

-Notwithstanding anything contained in any other law for the time being in force, in matter governed by this Part, no judicial authority shall intervene except where so provided in this Part.

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8. Power to refer parties to arbitration where there is an arbitration agreement. -(1) A