Whether a Judicial Authority under a special legislation such as Consumer Protection Act is bound to refer the dispute for arbitration upon an application u/s 8 of the Arbitration and Conciliation Act, 1996 – Smt. M. Hemalatha Devi & Ors. Vs. B. Udayasri – Supreme Court
October 30, 2023
Hon’ble Supreme Court held that:
(i) Merely because the builder had approached a Court first (under Section 11 of the Arbitration Act, 1996) will itself not oust the jurisdiction of the Consumer Courts.
(ii) The Court in a series of decisions, while considering both the provisions in the Consumer Protection Act, 1986 and the Arbitration Act, 1996, has held that the Consumer Protection Act being a special and beneficial legislation, the remedies provided therein are special remedies and a consumer cannot be deprived of them should he choose to avail such a remedy, in spite of an arbitration agreement between the parties.
(iii) Once the Court finds that there is a valid arbitration agreement, it has no option but to refer the matter for arbitration. But this would not mean that where the matter itself is non-¬arbitrable, or is covered by a special legislation such as the Consumer Protection Act, it still has to be referred for arbitration.
(iv) Both the provisions incorporated in Section 8 and Section 11 of the Arbitration Act, 1996 [i.e., sub-¬section (1) and sub¬section 6A respectively], seemingly restrict the scope of the examination by the concerned courts, in their reference to arbitration, or appointment of arbitrator, as the case might be, and the language being common, “notwithstanding any judgment, decree or order” places a similar question before the two courts.
(v) Both Section 8 and Section 11 of Arbitration Act, 1996 are complementary provisions.
