Case study: M/S Emaar MGFI Land Limited &Anr. Vs. Aftab Singh
This case was mainly related to the jurisdiction of consumer forums if there is and arbitration clause in the agreement entered into by both parties. Supreme Court ruled in the favour of the consumer forum.
Facts of the case
M/S Emaar MGFI Land Limited was a company involved in the business of setting up of township and selling the villas built by the company under the township. In the present petition M/S Emaar MGFI Land Limited is the appellant and aftab is the respondent who bought villa in the township built by appellant’s company. Both the parties entered into the buyer’s agreement which contained the clause related to arbitration which says that in case of any dispute between the parties it will be settled according to The Arbitration Act of 1996. Some dispute arose between the parties regarding the deficiency and services by the appellant. Aftab (respondent) filed complaint with NCDRC (National Consumer Disputes Redressal Commission) for deficiency in services by the appellant. Appellant filed application under section 8 for referring the dispute to the arbitration tribunal and under section 48. Single judge bench of NCDRC clubbed all the application received under section 8(1() and referred it to three member bench of NCDRC.
Whether arbitration can oust the jurisdiction of consumer forums?
Contentions of the parties
Appellant contended that the buyer’s contract contained arbitration clause and because of the arbitration clause the matter shall be resolved by the arbitration tribunal. He also contended that NCDRC dis not have jurisdiction over the matter. The amendment introduced in 2015 enables the party to refer dispute to arbitration tribunal unless it finds that prima facie no valid arbitration agreement exists under section 8 of the Arbitration and Conciliation Act.
On the other hand Respondents contended against referring the dispute to arbitration, its main contention was that amendment to section 8 by amendment act 2015 does not give power to The Arbitration and Conciliation Act, 1996 over Consumer Protection Act.
Decision of The Supreme Court
The Two Judge Bench of Supreme Court held that amendment introduced in 2015 in which amends section 8(1) and adds "nothwithstanding any judgement, decree or order of The Supreme Court or any Court", here the intention was not to bar the jurisdiction of consumer forum or any other Court or tribunal instead the intention of the Legislature was to reduce the burden of judicial intervention in the dispute where arbitration clause is given in the contract. Court also siad that the objective of The Consumer Protection Act was to enable Consumer to provide with the remedy in case of defect in goods and the intention to introduce amendment in section 8 in The Arbitration and Conciliation Act was not to bar the jurisdiction of any court or law under which the parties can claim any remedy and similarly if a person is entitled to seek and additional remedy provided under the statutes and does not opt for that additional/special remedy and he is a party to an arbitration agreement, there is nothing which can prevent him from disputes being proceeded in arbitration. Finally, the court answering the issue in the case held that amendment in 2015 in section 8 does not bar the jusrisdiction of the consumer forum.