After the enactment of the Real Estate (Regulation and Development) Act, the interest of the homebuyers is largely protected. The act safeguards the rights of the buyers in case of false promises or delay in possession and provides a substitute to begin legal proceedings against the builder. The conflict in the case is whether arbitration can overthrow the Jurisdiction of Consumer forums or any other Statues?
An agreement containing an arbitration clause providing for the settlement of the dispute was entered into, by both the parties under Section 8 of the Arbitration and Conciliation Act, 1996. The Appellants failure to deliver the possession of the Villa to the Respondent led him to file a complaint before the National Consumer Dispute Redressal Commission in the year 2015.
The legal question and outcomes involved in deciding the application, the matter on August 31, 2016, was referred to a larger bench of 3 members of the NCDRC. A judgement was subsequently passed on July 13, 2017, holding the clause of Arbitration which cannot sidestep the Consumer Foras Jurisdiction, despite the amendments done to Section 8 of the Arbitration and Conciliation Act. The Appellant’s application was rejected by an order dated August 28, 2017. Thereupon, the Appellant before the Delhi High Court filed pertained appeals, but the Court did not consider it for want of jurisdiction. Thereafter a review plea was filed before the Supreme Court questioning the order and the judgement of NCDRC which was ousted by the Delhi High Court and the Supreme Court as well.
Contentions by Appellant:
The Appellant had contended that the issue should be decided by the Arbitration Tribunal as noted in the agreement. It is impalpable for NCDRC to intervene or simply it has no jurisdiction over the matter. The Appellant also contents to confide the amendment of 2015 under Section 8 of the Arbitration and Conciliation Act which allows the groups to relegate dispute to Arbitration Tribunals lest there is no credible arbitration clause that is present in the Buyer’s agreement.
Contentions by Respondent:
The Respondent, on the other hand, contended that the provision of Arbitration after the amendment of 2015 under Section 8 of the Arbitration and Conciliation Act does not provide it with any authority over the Consumer Protection Act and the jurisdiction of Consumer forums are accessible to all the buyers by the virtue of this act or any other statute which is incompatible to the landmark judgements viz. A Ayyasamy v. Paramasivam & Ors. and Booz Allen Hamilton Inc v. SBI Home Finance Limited & Ors.
Principles laid down:
- The two Judges bench held that the existence of an arbitration clause in the agreement after amendment under Section 8 of the Arbitration and Conciliation Act, does not debar a Complainant/consumer to reach a consumer forum under the Consumer Protection Act or any other statute.
- The bench also elucidated that the amendment of 2015 which added ‘notwithstanding any judgement, decree or order of the Supreme Court or any other Court,’ has the intention to lessen the limitation of any intervention by any statutory authority where both the bodies have the arbitration as a remedy if any dispute originates and this cannot be bestowed any wide definition or understanding.
The Hon’ble Supreme Court validated the National Consumer Dispute Redressal Commission’s judgement of repudiating the Appellant’s request under Section 8 of the Arbitration Act and ousted the Review Petitions. I opine in favour of the judgement passed by the Hon’ble Supreme Court, as it provides a wider ambit to the understanding of Section 8 of The Arbitration and Conciliation Act and also, it indirectly states the accessibility of remedies present in other statutes as well.
Judge’s Name: A Bhushan J. & U. U. Lalit J.
Judgement Date: December 10, 2018.
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