# M/S. EMAAR MGF LAND LIMITED v. AFTAB SINGH

- **Citation:** [2018] 14 S.C.R. 791
- **Court:** Supreme Court of India
- **Decided:** 2018-12-10
- **Case number:** Civil Appeal Nos. 23512-23513 of 2017
- **Bench:** Uday Umesh Lalit, Ashok Bhushan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-emaar-mgf-land-limited-v-aftab-singh-32730
- **Pages:** 37

## Headnote

Consumer Protection Act, 1986 - Consumer disputes, whether
arbitrable or not - Appellant-company was developing an integrated
township - Respondent submitted an application for allotment of
villa - In Buyer's agreement, there was an arbitration clause
providing for settlement of disputes between the parties under
Arbitration and Conciliation Act, 1996 - Respondent filed complaint
before the National Consumer Disputes Redressal Commission
(NCDRC) - Appellant filed an application u/s.8 of the 1996 Act for
referring the matter to the Arbitration - NCDRC rejected the
application u/s.8 of the 1996 Act and held that in the light of the
Consumer Act and Court-evolved jurisprudence, amended subsection (1) of s.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 - Propriety of - Held: Proper
- Amendments u/s.8 of the 1996 Act were aimed to minimize the
scope of judicial authority to refuse reference to arbitration and
only ground on which reference could have been refused was that
it prima facie finds that no valid arbitration agreement exists - But,
amendment in s.8 cannot be given such expansive meaning and
intent so as to inundate entire regime of special legislations where
disputes were held to be non-arbitrable - However, in the event a
person entitled to seek an additional special remedy provided under
the statutes does not opt for the additional/special remedy and he is
a party to an arbitration agreement, there is no inhibition in disputes
being proceeded in arbitration - It is only the case where specific/
special remedies are provided for and which are opted by an
aggrieved person that judicial authority can refuse to relegate the
[2018] 14 S.C.R. 791
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parties to the arbitration - Thus, complaint under Consumer
Protection Act being a special remedy, despite there being an
arbitration agreement the proceedings before Consumer Forum have
to go on - No error committed by the NCDRC in rejecting application
filed by appellant u/s.8 - Arbitration and Conciliation Act, 1996 -
Amended s.8 by the Arbitration and Conciliation (Amendment) Act,
2015.
Dismissing the review petitions, the Court
HELD: 1. This Court in the series of judgments considered
the provisions of Consumer Protection Act, 1986 as well as
Arbitration and Conciliation Act, 1996 and laid down that
complaint under Consumer Protection Act being a special remedy,
despite there being an arbitration agreement the proceedings
before Consumer Forum have to go on and no error committed
by Consumer Forum on rejecting the application. There is reason
for not interjecting proceedings under Consumer Protection Act
on the strength of an arbitration agreement by Act, 1996. The
remedy under Consumer Protection Act is a remedy provided to
a consumer when there is a defect in any goods or services. The
complaint means any allegation in writing made by a complainant
has also been explained in Section 2(c) of the Act. The remedy
under the Consumer Protection Act is confined to complaint by
consumer as defined under the Act for defect or deficiencies
caused by a service provider, the cheap and a quick remedy has
been provided to the consumer which is the object and purpose
of the Act. [Para 25][809-E-H]
National Seeds Corporation Limited v. M. Madhusudan
Reddy and Another (2012) 2 SCC 506 : [2012] 2 SCR
1065 ; Duro Felguera, S.A. v. Gangavaram Port Limited
(2017) 9 SCC 729 : [2017] 10 SCR 285 ; A. Ayyasamy
v. A. Paramasivam and Others (2016) 10 SCC 386 :
[2016] 11 SCR 521 ; Lucknow Development Act v.
M.K. Gupta, (1994) 1 SCC 243 : [1993] 3 Suppl. SCR
615 ; Secretary, Thirumurugan Cooperative Agricultural
Credit Society v. M. Lalitha (dead) Through LRs. And
others, (2004) 1 SCC 395 ; Fair Air Engineering Pvt.
Ltd. and another v. N.K. Modi, (1996) 6 SCC 385 :
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[1996] 4 Suppl.

## Text

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M/S. EMAAR MGF LAND LIMITED
v.
AFTAB SINGH
(Review Petition (C) Nos. 2629-2630 of 2018)
in
(Civil Appeal Nos. 23512-23513 of 2017)
DECEMBER 10, 2018
[UDAY UMESH LALIT AND ASHOK BHUSHAN, JJ.]
Consumer Protection Act, 1986 - Consumer disputes, whether
arbitrable or not - Appellant-company was developing an integrated
township - Respondent submitted an application for allotment of
villa - In Buyer's agreement, there was an arbitration clause
providing for settlement of disputes between the parties under
Arbitration and Conciliation Act, 1996 - Respondent filed complaint
before the National Consumer Disputes Redressal Commission
(NCDRC) - Appellant filed an application u/s.8 of the 1996 Act for
referring the matter to the Arbitration - NCDRC rejected the
application u/s.8 of the 1996 Act and held that in the light of the
Consumer Act and Court-evolved jurisprudence, amended subsection (1) of s.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 - Propriety of - Held: Proper
- Amendments u/s.8 of the 1996 Act were aimed to minimize the
scope of judicial authority to refuse reference to arbitration and
only ground on which reference could have been refused was that
it prima facie finds that no valid arbitration agreement exists - But,
amendment in s.8 cannot be given such expansive meaning and
intent so as to inundate entire regime of special legislations where
disputes were held to be non-arbitrable - However, in the event a
person entitled to seek an additional special remedy provided under
the statutes does not opt for the additional/special remedy and he is
a party to an arbitration agreement, there is no inhibition in disputes
being proceeded in arbitration - It is only the case where specific/
special remedies are provided for and which are opted by an
aggrieved person that judicial authority can refuse to relegate the
[2018] 14 S.C.R. 791
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parties to the arbitration - Thus, complaint under Consumer
Protection Act being a special remedy, despite there being an
arbitration agreement the proceedings before Consumer Forum have
to go on - No error committed by the NCDRC in rejecting application
filed by appellant u/s.8 - Arbitration and Conciliation Act, 1996 -
Amended s.8 by the Arbitration and Conciliation (Amendment) Act,
2015.
Dismissing the review petitions, the Court
HELD: 1. This Court in the series of judgments considered
the provisions of Consumer Protection Act, 1986 as well as
Arbitration and Conciliation Act, 1996 and laid down that
complaint under Consumer Protection Act being a special remedy,
despite there being an arbitration agreement the proceedings
before Consumer Forum have to go on and no error committed
by Consumer Forum on rejecting the application. There is reason
for not interjecting proceedings under Consumer Protection Act
on the strength of an arbitration agreement by Act, 1996. The
remedy under Consumer Protection Act is a remedy provided to
a consumer when there is a defect in any goods or services. The
complaint means any allegation in writing made by a complainant
has also been explained in Section 2(c) of the Act. The remedy
under the Consumer Protection Act is confined to complaint by
consumer as defined under the Act for defect or deficiencies
caused by a service provider, the cheap and a quick remedy has
been provided to the consumer which is the object and purpose
of the Act. [Para 25][809-E-H]
National Seeds Corporation Limited v. M. Madhusudan
Reddy and Another (2012) 2 SCC 506 : [2012] 2 SCR
1065 ; Duro Felguera, S.A. v. Gangavaram Port Limited
(2017) 9 SCC 729 : [2017] 10 SCR 285 ; A. Ayyasamy
v. A. Paramasivam and Others (2016) 10 SCC 386 :
[2016] 11 SCR 521 ; Lucknow Development Act v.
M.K. Gupta, (1994) 1 SCC 243 : [1993] 3 Suppl. SCR
615 ; Secretary, Thirumurugan Cooperative Agricultural
Credit Society v. M. Lalitha (dead) Through LRs. And
others, (2004) 1 SCC 395 ; Fair Air Engineering Pvt.
Ltd. and another v. N.K. Modi, (1996) 6 SCC 385 :
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[1996] 4 Suppl. SCR 820 ; Skypak Couriers Ltd. v.
Tata Chemicals, (2000) 5 SCC 294 : [2000] 1 Suppl.
SCR 324 ; Rosedale Developers Private Limited v.
Aghore Bhattacharya And Others (2018) 11 SCC 337
- referred to.
2. Not only the proceedings of Consumer Protection Act,
1986 are special proceedings which were required to be continued
under the Act despite an arbitration agreement, there are large
number of other fields where an arbitration agreement can neither
stop or stultify the proceedings. [Para 26][810-A-B]
Booz Allen and Hamilton Inc. v. SBI Home Finance
Limited and others (2011) 5 SCC 532 : [2011] 7 SCR
310 - relied on.
3. What is the legislative intent and object in bringing the
amendment to Section 8 is the main question to be answered in
this case. Amendments under Section 8, were aimed to minimise
the scope of judicial authority to refuse reference to arbitration
and only ground on which reference could have been refused
was that it prima facie finds that no valid arbitration agreement
exists. Notwithstanding any prior judicial precedents referred
to under Section 8(1) relates to those judicial precedents, which
explained the discretion and power of judicial authority to examine
various aspects while exercising power under Section 8. The
Legislative intent and object were confined to only above aspects
and was not on those aspects, where certain disputes were not
required to be referred to arbitration. Can it be said that after
amendment under Section 8(1), the law laid down by this Court
in reference to Section 2(3), where large number of categories
have been held to be non-arbitrable has been reversed or set at
naught. Neither any such Legislature intendment was there nor
any such consequence was contemplated that law laid down by
this Court in context of Section 2(3) has to be ignored or reversed.
[Paras 36, 49 and 50][815-G; 823-G-H; 824-A-C]
4. The amendment in Section 8 cannot be given such
expansive meaning and intent so as to inundate entire regime of
special legislations where such disputes were held to be not
arbitrable. Something which legislation never intended cannot be
M/S. EMAAR MGF LAND LIMITED v. AFTAB SINGH
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accepted as side wind to override the settled law. The words
"notwithstanding any judgment, decree or order of the Supreme
Court or any Court" were meant only to those precedents where
it was laid down that the judicial authority while making reference
under Section 8 shall be entitled to look into various facets of the
arbitration agreement, subject matter of the arbitration whether
the claim is alive or dead, whether the arbitration agreement is
null and void. The words added in Section 8 cannot be meant for
any other meaning. [Para 52][824-F-H; 825-A]
P. Anand Gajapathi Raju and Others v. P.V.G. Raju
(Dead) and Others, (2000) 4 SCC 539 : [2000] 2 SCR
684 ; Vimal Kishor Shah and others v. Jayesh Dinesh
Shah and others (2016) 8 SCC 788 : [2016] 7 SCR
102 ; Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya
and Another (2003) 5 SCC 531 : [2003] 3 SCR 558 ;
Ameet Lalchand Shah and Others v. Rishabh Enterprises
and Another, AIR 2018 SC 3041 : [2018] SCR 1001 -
referred to.
5. However, in the event a person entitled to seek an
additional special remedy provided under the statutes does not
opt for the additional/special remedy and he is a party to an
arbitration agreement, there is no inhibition in disputes being
proceeded in arbitration. It is only the case where specific/special
remedies are provided for and which are opted by an aggrieved
person that judicial authority can refuse to relegate the parties
to the arbitration. Thus, no error has been committed by the
NCDRC in rejecting the application filed by the appellant under
Section 8. [Paras 55, 56][827-A-C]
Case Law Reference
[2012] 2 SCR 1065
referred to
Para 9
[2017] 10 SCR 285
referred to
Para 9
[2016] 11 SCR 521
referred to
Para 9
[1993] 3 Suppl. SCR 615
referred to
Para 15
(2004) 1 SCC 395
referred to
Para 16
[1996] 4 Suppl. SCR 820
referred to
Para 17
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[2000] 1 Suppl. SCR 324
referred to
Para 18
(2018) 11 SCC 337
referred to
Para 21
[2000] 2 SCR 684
referred to
Para 42
[2003] 3 SCR 558
referred to
Para 44
[2018] SCR 1001
referred to
Para 48
[2011] 7 SCR 310
relied on
para 52
[2016] 7 SCR 102
referred to
Para 52
CIVIL APPELLATE JURISDICTION : Review Petition (C) Nos.
2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017.
From the Judgment and Order dated 28.08.2017 and 13.07.2017
of the National Consumer Dispute Redressal Commission at New Delhi
in Complaint Case No. 701 of 2015
Fali S. Nariman, Sr. Adv., Aditya Narain, Arnav Narain,
Ms. Anjana G. Bali, Arjun Jain, Ms. Anushree Narain, Kabir Dixit, Mishra
Rajshekhar, Naeemollahazeem, Waheb Hussaini, Ms. Aasita, Subhash
Sharma, Advs. for the Appellant.
Aditya Swarup, Dhruv Pall, Samarth Khanna, Ms. Aprajita
Mukherjee, Advs., for the Respondent.
The Judgment of the Court was delivered by
ASHOK BHUSHAN, J.
1. These review petitions have been filed seeking review of the
judgment dated 13.02.2018 of this Court by which civil appeals were
dismissed.
2. The Civil Appeal Nos. 23512-23513 of 2017 had been filed
challenging the order dated 13.07.2017 passed by Larger Bench of the
National Consumer Disputes Redressal Commission (hereinafter referred
to as "NCDRC") holding consumer disputes to be non-arbitrable. Prayer
was also made to set aside the subsequent order dated 28.08.2017 passed
by Single Member of the NCDRC dismissing the application filed under
Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as "1996 Act") by the appellant.
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3. Looking to the nature of the issue raised in these review
petitions, we have heard learned counsel for the parties on 27.11.2018 in
the review petitions after issuing notice on 17.09.2018. Delay in filing of
review petitions is condoned. Learned counsel for the parties have made
elaborate submissions, which we proceed to consider in these review
petitions.
4. Brief facts giving rise to civil appeals and the review petitions
need to be noted for appreciating the issues raised herein. The appellant
is a company which has acquired and purchased land in District Mohali,
Punjab with a view to set up and develop thereon an integrated township.
The respondent submitted an application to the appellant for allotment of
a villa in Sector 106, Mohali. A Buyer's agreement was entered dated
06.05.2008 between the appellant and the respondent. In the Buyer's
agreement, there was an arbitration clause providing for settlement of
disputes between parties under the 1996 Act. On 27.07.2015, the
respondent filed a Complaint No. 701 of 2015 before the NCDRC against
the appellant praying for following reliefs in Paragraph No.17 of the
complaint, which are as follows:-
"a.
The complainant prays for a direction to the opposite Parties
to deliver the possession of the built up villa No. 40, At Sector
106, GMADA, and
b.
to adjust the excess payment in terms of letter dated 2.2.2008,
Annexure C-5, which comes to Rs.2,63,165/- and
c.
to adjust the penalty @ Rs.1500/- per month in terms of
clause 8 of the Agreement, after 2011 for 55 months as on
date which comes to Rs.83,500/- and
d.
to adjust the final account after making the above deductions
of clause B and C and to refund the remaining/balance
payment back to the complainant at the earliest along with
interest @ 18% per annum from 6.2.2010 (i.e. 24 months
from the date of the Agreement); and
e.
the Hon'ble National Commission May be pleased to grant
compensation to the tune of Rs. 20,00,000 on account of
deficiency in service on the part of the opposite parties,
mental agony and harassment suffered by the complainant,
and
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f.
the cost of this complaint may be awarded from the opponent
to the complainant, and
g.
the Hon'ble National Commission may be pleased to grant
any other relief deemed in fit just and proper by the Hon'ble
National Commission in the Circumstances of the case."
5. Notice was issued to the appellant by the NCDRC on 09.11.2015
asking the appellant to appear on 11.01.2016. The appellant appeared
and made an application for extension of time for filing the written
statement. The appellant also filed an application under Section 8 of the
1996 Act for referring the matter to arbitration for and on behalf of the
appellant. In the application, appellant has referred to Clause 43 of the
Buyer's agreement, which according to appellant would constitute a
valid arbitration agreement in terms of Section 7(2) of the 1996 Act.
The appellant also filed a reply to the complaint. The application filed
under Section 8 of the 1996 Act was objected by the respondent with
the prayer that the said application be rejected. NCDRC heard the
complaint case of the respondent alongwith several other similarly
situated applications in the complaint case filed by the respondent and
other similarly situated applications filed under Section 8 for referring
the parties to the arbitration. A learned Single Member of the Commission
proceeded to consider the said applications and passed an order dated
31.08.2016. The learned Single Member had taken the view that
considering the vital importance and far reaching consequence of the
legal issue involved in these applications, it would only be appropriate
that these applications are considered and decided by a Larger Bench,
consisting of at least Three Members.
6. In pursuance of the order of the learned Single Member, a
Larger Bench of NCDRC was constituted and Consumer Complaint
No. 701 of 2015 with Interim Application No. 247 of 2016 as well as
interim applications filed by other complainants were heard and decided
by Three Members Bench presided by President of the NCDRC vide
its judgment dated 13.07.2017. The Three Members Bench have
considered the submissions of the parties in detail and arrived at following
conclusions in Paragraph Nos. 55 and 56:-
"55. In view of the afore-going discussion, we arrive at the
following conclusions: (i) the disputes which are to be adjudicated
and governed by statutory enactments, established for specific
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public purpose to sub-serve a particular public policy are not
arbitrable; (ii) there are vast domains of the legal universe that
are non-arbitrable and kept at a distance from private dispute
resolution; (iii) 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; (iv) Section 2(3) of the Arbitration Act recognizes schemes
under other legislations that make disputes non-arbitrable and (iv)
in light of the overall architecture of the Consumer Act and Courtevolved 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.
56. Consequently, we unhesitatingly reject the arguments on behalf
of the Builder and hold that an Arbitration Clause in the aforestated 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."
7. After the reference having been answered by Three Members
Bench, the Consumer Complaint No. 701 of 20156 alongwith other
applications was taken by a Single Member of the Commission and by
order dated 28.08.2017, the applications filed by the appellant under
Section 8 of the 1996 Act were rejected. After rejecting the application
under Section 8, the Commission directed the parties to proceed further
with the complaint. The appellant filed F.A.O. No. 395 of 2017 in the
Delhi High Court challenging the orders dated 13.07.2017 and 28.08.2017
of NCDRC. The High Court held that appeals filed by the appellant
under Section 37(1)(a) of the 1996 Act have been wrongly brought before
the High Court. The High Court refused to entertain the appeals and
returned to be presented before the appropriate Appellate Court. After
the judgment of the Delhi High Court dated 07.11.2017, the appellant
filed Civil Appeal No. 23512-23513 of 2017 challenging the judgment of
Larger Bench of NCDRC dated 13.07.2017 as well as the consequential
order dated 28.08.2017 in this Court. Both the appeals were called for
hearing on 13.02.2018 and were dismissed by this Court. The appellant
has filed these review petitions to review the judgment of this Court. In
the review petitions, following prayers have been made by the appellant:-
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"(1) Allow the present review petition and review the Order dated
13.02.2018 passed by this Hon'ble Court in Civil Appeal
No. 23512-23513 of 2017;
(2)
Set aside the Order dated 13.07.2017 passed by the Larger
Bench of the Hon'ble National Commission in C.C. 701/2015
holding consumer disputes to be non-arbitrable amongst other
similar erroneous findings;
(3)
Set aside the Order dated 28.08.2017 passed by the Single
Judge of the Hon'ble National Commission in C.C. 701/2015
dismissing the Application u/S. 8 of the Arbitration and
Conciliation Act, 1996;
(4)
And pass such other or further order or orders as the Hon'ble
Court may deem fit and proper in the interest of justice."
8. We have heard Shri Fali S. Nariman, learned senior counsel
appearing for the appellant and Shri Aditya Swarup, learned counsel
appearing for the respondent No.1.
9. Shri Fali S. Nariman in his imitable style in support of review
petitions submits that substantial questions of law has been raised in the
present review petitions, which need to be addressed and decided by
this Court. Shri Nariman submits that after amendment of Section 8 of
1996 Act by the Arbitration and Conciliation (Amendment) Act, 2015
(Act 3 of 2016), by which Parliament had added the words
"notwithstanding any judgment, decree or order of the Supreme Court
or any Court" in Section 8 of the Arbitration Act w.e.f. 23.10.2015, the
Parliamentary intendment is clear that after the said amendment, the
judicial authority is mandated to refer a dispute for arbitration if there is
a valid arbitration agreement and parties apply not later than the date of
submitting his first statement on the substance of the dispute. He submits
that the above words cannot be treated as redundant while interpreting
the amended Section 8. It is further submitted that this Court acting as
an Appellate Court under Section 23 of Consumer Protection Act, 1986
read with Section 37(1)(a) of 1996 Act has duty to go into every fact
and law including the amendment made in Section 8 of the 1996 Act. It
is submitted that Constitution Bench of this Court has already held that
consumer fora are covered by the term "judicial authority" for the
purposes of Section 8 of the 1996 Act, hence, it was obligatory for the
Commission to refer the dispute to arbitration in view of the arbitration
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clause between the parties. NCDRC has wrongly termed consumer
disputes as non-arbitrable, which is contrary to the decision of this Court
in National Seeds Corporation Limited Vs. M. Madhusudan Reddy
and Another, (2012) 2 SCC 506. This Court had interpreted the words
"notwithstanding any judgment, decree or order of the Supreme Court
or any Court" as occurring in newly added Section 11(6A) of the 1996
Act in Duro Felguera, S.A. Vs. Gangavaram Port Limited, (2017)
9 SCC 729, which interpretation is equally applicable to Section 8 as
amended by Act 3 of 2016. NCDRC has erred in relying on judgment of
this Court in A. Ayyasamy Vs. A. Paramasivam and Others, (2016)
10 SCC 386. The amendment in Section 8 of Arbitration Act by Act 3
of 2016 now makes it obligatory to judicial authority to refer disputes to
arbitration notwithstanding any judgment, decree or order of the Supreme
Court or any Court. Judgments of this Court interpreting Section 8 prior
to 2016 amendment, thus, have become wholly irrelevant and have to be
disregarded while deciding the application under Section 8 filed after
2016 amendment.
10. Referring to Section 2(3) of the 1996 Act, it is submitted that
it cannot be said that by reason of provision of Consumer Protection
Act, consumer disputes cannot be submitted to arbitration. It is further
submitted that far from the Consumer Protection Act, 1986, providing
either expressly or by necessary implication that consumer disputes may
not be submitted to arbitration, the law as explained in the National
Seeds Corporation Limited (supra) and in Rosedale Developers
Private Limited (supra) clearly shows that arbitration of consumer
disputes is definitely envisaged and contemplated in the Consumer
Protection Act, 1986, itself, before the amendment by way of substitution
of Section 8(1) of the 1996 Act, it was at the option of the complainant
(under Section 8(1) as enacted) to either go to arbitration as provided
for in the arbitration agreement or to file a complaint under the Consumer
Protection Act, 1986. It is submitted that after the substitution of Section
8(1) even this option is no longer available, it being mandatory for the
judicial authority (NCDRC) to refer the parties to arbitration "unless it
finds that prima facie no valid arbitration agreement exists".
11. Shri Aditya Swarup, learned counsel appearing for the
respondent in his short and impressive submissions contends that the
Consumer Act, 1986 provides for an additional and beneficial remedy to
the consumer to avail of the speedy, expeditious disposal of his or her
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dispute. The consequences of allowing the present petition and setting
aside the impugned order would, inter alia, be that every consumer, no
matter how small or big the dispute, would now be forced to adjudicate
his dispute before an arbitral tribunal and not avail of the beneficial remedy
provided to him or her. Under the 1986 Act. Accepting the interpretation
placed by the appellant on the 1996 Act will mean collapsing of entire
edifice of consumer jurisprudence but also jurisprudence relating to trusts,
tenancy disputes, industrial disputes, telecom disputes, intellectual property
disputes and other non-arbitral disputes. Repeating the words of
NCDRC, it is submitted that "the ripples of the amendment to Section
8(1) cannot be so large as to inundate the domains of other legislations
and jurisprudence, painstakingly built by the Legislators and Courts,
especially without any engagement, debate and critique with the
foundations of these related laws". Section 2(3) of the Arbitration Act
expressly states that Part I of the Arbitration Act "shall not affect any
other law for the time being in force by virtue of which certain disputes
may not be referred to arbitration". Under this Section, if any law
provides, either expressly or by necessary implication that specified
disputes may not be submitted to arbitration, then, in spite of the non
obstante provision in Section 5 of the Arbitration Act, the law will be
saved by Section 2(3) of the Arbitration Act. Section 2(3) of the
Arbitration Act restricts the overriding effect apparent in Section 5 of
the Arbitration Act. The Consumer Act being a beneficial legislation
enacted to give an additional remedy for the settlement of disputes, the
same cannot be taken away by Section 8 of the 1996 Act. This Court in
jurisdiction cases have already held that Arbitration Act does not exclude
the jurisdiction of the Consumer Forum to decide disputes under the
Consumer Act. The amendment to Section 8(1) of the Arbitration Act
by Act 3 of 2016 was never intended to interfere with the jurisdiction of
Consumer Forum to decide consumer disputes. He submits that
amendment in Section 8(1) is being read in a manner which was never
the intention of the Parliament. He submits that the NCDRC has rightly
rejected the application under Section 8 filed by the appellant and no
error has been committed by this Court in dismissing the appeal, hence,
the present petitions are liable to be dismissed.
12. From the submissions of the learned counsel for the parties
and pleadings of the parties following are the principal issues which
arise for consideration in these petitions:
M/S. EMAAR MGF LAND LIMITED v. AFTAB SINGH
[ASHOK BHUSHAN, J.]
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(i) Whether NCDRC committed error in rejecting the application
of the appellant filed under Section 8 of 1996, Act praying for
reference to the arbitrator as per Arbitration clause in the
builders agreement?
(ii) Whether after the amendments made in Section 8 by the
Arbitration and Conciliation (Amendment)Act, 2015 the
application filed under Section 8 by the appellant could not
have been rejected in view of substantial changes brought in
the statutory scheme by inserting the words "notwithstanding
any judgment, decree or order of the Supreme Court or any
Court" in sub-section (1) of Section 8?
(iii)Whether NCDRC as well as this Court committed error in not
adverting to the above statutory amendment which completely
changed the legal position as was earlier existing prior to the
aforesaid amendment?
(iv)Whether by the insertion of words "notwithstanding any
judgment, decree or order of the Supreme Court or any Court"
under Section 8(1) by the (Amendment) Act, 2015 legislature
intended to do away with the decision of judgments of Supreme
Court laying down that Consumer Protection Act being special
remedy can be initiated and continued despite there being any
arbitration agreement between the parties?
13. All the issues being interconnected are being taken together.
The main emphasis of Shri Fali S. Nariman, learned senior counsel for
the petitioner is that entire legal regime pertaining to the 1996, Act in
relation to Consumer Protection Act when seen after the amendment
fully supports the interpretation put by the petitioner which has not at all
adverted by the NCDRC and this Court.
14. Before we come to the amendments made by the 2015, Act
and its real intent and consequences, it is necessary to look into the law
as was existing prior to the said amendment in relation to proceedings
under Consumer Protection Act in reference to arbitration agreement
under 1996 Act.
15. The Consumer Protection Act, 1986 has been enacted to
provide for better protection of the interests of consumers and for the
purpose, to make provision for the establishment of Consumer Councils
and other authorities for the settlement of consumer disputes and for
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matter connected therewith. This Court had occasion to consider the
object and purpose of the Act in Lucknow Development Act vs. M.K.
Gupta, (1994) 1 SCC 243, this Court elaborately noticed the object
and purpose of the Act in the following words:
"To begin with the preamble of the Act, which can afford useful
assistance to ascertain the legislative intention, it was enacted, 'to
provide for the protection of the interest of consumers'. Use of
the word 'protection' furnishes key to the minds of makers of the
Act. Various definitions and provisions which elaborately attempt
to achieve this objective have to be construed in this light without
departing from the settled view that a preamble cannot control
otherwise plain meaning of a provision. In fact the law meets long
felt necessity of protecting the common man from such wrongs
for which the remedy under ordinary law for various reasons has
become illusory. Various legislations and regulations permitting
the State to intervene and protect interest of the consumers have
become a haven for unscrupulous ones as the enforcement
machinery either does not move or it moves ineffectively,
inefficiently and for reasons which are not necessary to be stated.
The importance of the Act lies in promoting welfare of the society
by enabling the consumer to participate directly in the market
economy. It attempts to remove the helplessness of a consumer
which he faces against powerful business, described as, 'a network
of rackets' or a society in which, 'producers have secured power'
to 'rob the rest' and the might of public bodies which are
degenerating into storehouses of inaction where papers do not
move from one desk to another as a matter of duty and responsibility
but for extraneous consideration leaving the common man helpless,
bewildered and shocked. The malady is becoming so rampant,
widespread and deep that the society instead of bothering,
complaining and fighting against it, is accepting it as part of life.
The enactment in these unbelievable yet harsh realities appears
to be a silver lining, which may in course of time succeed in
checking the rot."
16. Section 3 of the Act provided that the provisions of this Act
shall be in addition to and not in derogation of the provisions of any other
law for the time being in force. Noticing the object and purpose of the
Act as well as Section 3, this Court in Secretary, Thirumurugan
M/S. EMAAR MGF LAND LIMITED v. AFTAB SINGH
[ASHOK BHUSHAN, J.]
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Cooperative Agricultural Credit Society vs. M. Lalitha (dead)
Through LRs. And others, (2004) 1 SCC 395, laid down following
in paragraph 11 and 12:
"11. From the Statement of Objects and Reasons and the scheme
of the 1986 Act, it is apparent that the main objective of the Act is
to provide for better protection of the interest of the consumer
and for that purpose to provide for better redressal, mechanism
through which cheaper, easier, expeditious and effective redressal
is made available to consumers. To serve the purpose of the Act,
various quasi-judicial forums are set up at the district, State and
national level with wide range of powers vested in them. These
quasi-judicial forums, observing the principles of natural justice,
are empowered to give relief of a specific nature and to award,
wherever appropriate, compensation to the consumers and to
impose penalties for non-compliance with their orders.
12. As per Section 3 of the Act, as already stated above, the
provisions of the Act shall be in addition to and not in derogation
of any other provisions of any other law for the time being in
force. Having due regard to the scheme of the Act and purpose
sought to be achieved to protect the interest of the consumers
better, the provisions are to be interpreted broadly, positively and
purposefully in the context of the present case to give meaning to
additional/extended jurisdiction, particularly when Section 3 seeks
to provide remedy under the Act in addition to other remedies
provided under other Acts unless there is a clear bar."
17. This court had occasion to consider the provisions of Section
34 of Arbitration Act, 1940 in reference to the Consumer Protection
Act, 1986 in Fair Air Engineering Pvt. Ltd. and another vs. N.K.
Modi, (1996) 6 SCC 385. This Court in the said case held that
consumer fora is a judicial authority. In the above case, the appellant
had entered into a contract with the respondent to carry out installation
of a centrally air-conditioned plant in the residential house of the
respondent. The respondent filed a complaint before the State
Commission under the Consumer Protection At, 1986 which proceedings
were stayed by the State Commission and it relegated the parties to
arbitration proceedings. The NCDRC held that the proceedings before
the Consumer fora is not a legal proceedings and Commission is not a
judicial authority, therefore, Section 34 of the Arbitration Act, 1940 is not
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available to stay the proceedings. The said order of NCDRC was
challenged in this Court. This Court reversed the order of the State
Commission and remitted the matter to the State Commission to decide
the matter on merits according to law. This Court held that the Parliament
was well aware of the Arbitration Act, 1940 when the Consumer
Protection Act was enacted providing for additional remedy. In paragraphs
15 and 16 following has been laid down:
"15. Accordingly, it must be held that the provisions of the Act
are to be construed widely to give effect to the object and purpose
of the Act. It is seen that Section 3 envisages that the provisions
of the Act are in addition to and are not in derogation of any other
law in force. It is true, as rightly contended by Shri Suri, that the
words "in derogation of the provisions of any other law for the
time being in force" would be given proper meaning and effect
and if the complaint is not stayed and the parties are not relegated
to the arbitration, the Act purports to operate in derogation of the
provisions of the Arbitration Act. Prima facie, the contention
appears to be plausible but on construction and conspectus of the
provisions of the Act we think that the contention is not well
founded. Parliament is aware of the provisions of the Arbitration
Act and the Contract Act, 1872 and the consequential remedy
available under Section 9 of the Code of Civil Procedure, i.e., to
avail of right of civil action in a competent court of civil jurisdiction.
Nonetheless, the Act provides the additional remedy.
16. It would, therefore, be clear that the legislature intended to
provide a remedy in addition to the consentient arbitration which
could be enforced under the Arbitration Act or the civil action in a
suit under the provisions of the Code of Civil Procedure. Thereby,
as seen, Section 34 of the Act does not confer an automatic right
nor create an automatic embargo on the exercise of the power by
the judicial authority under the Act. It is a matter of discretion.
Considered from this perspective, we hold that though the District
Forum, State Commission and National Commission are judicial
authorities, for the purpose of Section 34 of the Arbitration Act, in
view of the object of the Act and by operation of Section 3 thereof,
we are of the considered view that it would be appropriate that
these forums created under the Act are at liberty to proceed with
the matters in accordance with the provisions of the Act rather
M/S. EMAAR MGF LAND LIMITED v. AFTAB SINGH
[ASHOK BHUSHAN, J.]
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806 SUPREME COURT REPORTS [2018] 14 S.C.R.
than relegating the parties to an arbitration proceedings pursuant
to a contract entered into between the parties. The reason is that
the Act intends to relieve the consumers of the cumbersome
arbitration proceedings or civil action unless the forums on their
own and on the peculiar facts and circumstances of a particular
case, come to the conclusion that the appropriate forum for
adjudication of the disputes would be otherwise those given in the
Act."
18. This Court had occasion to consider the provisions of Consumer
Protection Act as well as the Arbitration Act, 1996. In Skypak Couriers
Ltd. v. Tata Chemicals, (2000) 5 SCC 294, this Court laid down the
following:
"Even if there exists an arbitration clause in an agreement and a
complaint is made by the consumer, in relation to a certain
deficiency of service, then the existence of an arbitration clause
will not be a bar to the entertainment of the complaint by the
Redressal Agency, constituted under the Consumer Protection
Act, since the remedy provided under the Act is in addition to the
provisions of any other law for the time being in force."
19. Another judgment which is relevant for the present issue is
National Seeds Corporation Limited vs. M. Madhusudhan Reddy
and another, (2012) 2 SCC 506. In the above case, the respondent
filed a complaint in the District Consumer Redressal Forum that they
had suffered loss due to failure of the crops/less yield because the seeds
sold/supplied by the appellant were defective. The compensation was
awarded against which appeal was dismissed. The appellant challenged
the order of the Commission and main contention was that the District
Forum has no jurisdiction to entertain the complaint, in view of the
provisions of Seeds Act, 1966 it was contended that there was arbitration
clause contained in the agreement and the only remedy available to the
respondent is an appropriate arbitration and the District Forum has no
jurisdiction to entertain the complaint. This Court repelled the submission
and dismissed the appeal. In paragraph 64 this Court had noticed the
contention of the appellant which is to the following effect:
"64. According to the learned counsel for the appellant, if the
growers had applied for arbitration then in terms of Section 8 of
the Arbitration and Conciliation Act the dispute arising out of the
arbitration clause had to be referred to an appropriate arbitrator
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and the District Consumer Forums were not entitled to entertain
their complaint. This contention represents an extension of the
main objection of the appellant that the only remedy available to
the farmers and growers who claim to have suffered loss on
account of use of defective seeds sold/supplied by the appellant
was to file complaints with the Seed Inspectors concerned for
taking action under Sections 19 and/or 21 of the Seeds Act."
20. The contention was dealt with in paragraph 66 where following
was laid down:
"66. The remedy of arbitration is not the only remedy available to
a grower. Rather, it is an optional remedy. He can either seek
reference to an arbitrator or file a complaint under the Consumer
Protection Act. If the grower opts for the remedy of arbitration,
then it may be possible to say that he cannot, subsequently, file
complaint under the Consumer Protection Act. However, if he
chooses to file a complaint in the first instance before the
competent Consumer Forum, then he cannot be denied relief by
invoking Section 8 of the Arbitration and Conciliation Act, 1996.
Moreover, the plain language of Section 3 of the Consumer
Protection Act makes it clear that the remedy available in that
Act is in addition to and not in derogation of the provisions of any
other law for the time being in force."
21. Another judgment where this Court reiterated the position of
law is Rosedale Developers Private Limited Vs Aghore
Bhattacharya And Others, (2018) 11 SCC 337 (decided on
06.09.2013). In the above case, a complaint was filed by the respondent
before NCDRC. An application was filed by the appellant praying for
making reference to the arbitrator in view of the arbitration agreement.
The issue has been noticed in paragraphs 1 and 2 which are to the
following effect:
"1. Delay condoned. This appeal filed against order dated 13-52013 (2013 SCC OnLine Ncdrc 486, DLF Ltd. v. Mridul Estate
(P) Ltd.338b) passed by the National Consumer Disputes
Redressal Commission (for short "the National Commission")
whereby the appellant's prayer for making a reference to the
arbitrator was rejected can appropriately be termed as a frivolous
piece of litigation which merits nothing but dismissal at the threshold
with exemplary costs.
M/S. EMAAR MGF LAND LIMITED v. AFTAB SINGH
[ASHOK BHUSHAN, J.]
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808 SUPREME COURT REPORTS [2018] 14 S.C.R.
2. The respondents filed complaint alleging deficiency in service
on the appellant's part and claimed compensation to the tune of
Rs 17,41,09,000 with costs of Rs 1,00,000.