2013 (9) TMI 1207 - SC - Companies Law

Summary

Issues involved: Delay condonation, rejection of reference to arbitrator, jurisdiction of consumer forums, mandatory nature of Section 8 of the Arbitration and Conciliation Act, 1996.

Delay Condonation and Rejection of Reference to Arbitrator: The appeal was filed against the National Commission's order rejecting the Appellant's prayer for making a reference to the arbitrator. The Supreme Court termed the appeal as frivolous and dismissed it with exemplary costs. The National Commission held that consumer forums are not bound to refer disputes to an Arbitral Tribunal based on the arbitration clause in the agreement between parties. The Court emphasized that the existence of an arbitration clause does not exclude the jurisdiction of consumer forums, and they are not obligated to make a reference to the arbitrator.

Jurisdiction of Consumer Forums: The Appellant argued that once an application is filed under Section 8 of the 1996 Act, the consumer forum is duty-bound to refer the matter to the arbitrator. However, the Court disagreed, stating that the remedy of arbitration is optional, and the consumer forum can provide relief under the Consumer Protection Act even if an arbitration clause exists in the agreement. The Court highlighted that the Consumer Protection Act's remedy is in addition to other laws in force.

Mandatory Nature of Section 8 of the Arbitration and Conciliation Act, 1996: The Court rejected the argument that Section 8 of the 1996 Act is mandatory and emphasized that consumer forums are not obligated to refer matters to the Arbitral Tribunal based on this section. Previous judgments cited by the Appellant were deemed irrelevant to the issue at hand, as they did not interpret the provisions of the 1996 Act in light of the 1986 Act. The Court affirmed that the consumer forums have the discretion to proceed with matters under the provisions of the Consumer Protection Act.

Conclusion: The appeal was dismissed, and the Court expressed disapproval of tactics used to delay consumer dispute resolution. The Appellant was directed to pay exemplary costs within one month to the Supreme Court Legal Services Committee.