2000 (5) TMI 960 - SC - Companies Law

Propriety of the procedure followed by the National Consumer Disputes Redressal Commission Held that - As in all the cases the Commission has not considered the objections to the award or not allowed the parties to file objections therefore set aside the final orders of the Commission in all these matters and remit all these matters back to the Commission. Also direct that the Commission shall permit the parties who have not filed their objections to file their objections to the award within a period of 4 weeks from today.

Summary

Issues:
Jurisdiction of Consumer Disputes Redressal Commission to refer disputes for consensual adjudication by a retired Judge, Validity of orders passed by the Commission for consensual adjudication without parties' consent, Consideration of objections to awards by the Commission, Treatment of awards passed by third persons as Arbitration awards under the Arbitration Act, 1940 and Arbitration and Conciliation Act, 1996.

Jurisdiction of Consumer Disputes Redressal Commission:
The judgment clarifies that the Consumer Protection Act establishes Commissions as quasi-judicial bodies to provide speedy redressal to consumer disputes. The Act empowers the Commissions to give relief and award compensation. It emphasizes that the Commissions do not have the jurisdiction to refer disputes for consensual adjudication without a specific provision in the Act authorizing such referrals. Even if there is an arbitration clause in an agreement, the Consumer Protection Act's remedy is additional to other laws in force.

Validity of Orders for Consensual Adjudication:
The judgment highlights cases where the National Consumer Disputes Redressal Commission passed orders for consensual adjudication by a retired Judge, even if parties did not consent. It notes that such references are not arbitration but consensual adjudication. The Commission is directed to discontinue this practice as it delegates its adjudicatory function to third parties, which is deemed unwarranted and unjustified.

Consideration of Objections to Awards:
The judgment points out that objections to awards by third persons were not considered in several cases, and the Commission proceeded to pass orders based on these awards. It emphasizes that parties should be allowed to file objections, and the Commission must consider them before giving a decision. Final orders of the Commission in such matters are set aside, and the cases are remitted back to the Commission for proper consideration of objections.

Treatment of Awards as Arbitration Awards:
The judgment determines that since parties had consented to the reference to third persons, these references must be treated as arbitration under the Arbitration Act. The awards passed by third persons are to be considered as awards of arbitrators. Parties are given the right to challenge these awards under the Arbitration Act, 1940, and the Arbitration and Conciliation Act, 1996.

Conclusion:
The judgment concludes by setting aside final orders of the Commission in all matters and remitting them back for proper consideration of objections. Parties are allowed to file objections within a specified period, and the Commission is directed to consider these submissions before giving a decision. The judgment does not act as a precedent to reopen matters where parties have accepted the Commission's final decision or not challenged it.