Amended Section 8 of A&C Act does not inundate entire regime of special legislation in non-arbitrable cases: SC

Supreme Court: A Bench comprising of Uday U. Lalit and Ashok Bhushan, JJ. dismissed a review petition filed against Supreme Court’s judgment dated 13-02-2018 [Emaar MGF Ltd. v. Aftab Singh, 2018 SCC OnLine SC 2378 (order)] whereby the appeals filed by review petitioners were dismissed.

The appeals were filed challenging the order of National Consumer Disputes Redressal Commission (NCDRC) in Aftab Singh v. Emaar MGF Ltd., 2017 SCC OnLine NCDRC 1614 holding consumer disputes to be non-arbitrable. The respondent entered into a buyer’s agreement with the petitioner company for the purchase of a villa in the township to be developed by them. Dispute arose regarding the same. The respondent filed a complaint with NCDRC under Consumer Protection Act, 1986 for certain reliefs in the matter. The company relied on the arbitration clause provided in the agreement and filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to arbitration. This application filed was rejected NCDRC. The company filed appeals against NCDRC order which was dismissed by the Delhi High Court as well as the Supreme Court.

The Supreme Court discussed the object of the Consumer Protection Act as well as the A&C Act and also the position before and after the Arbitration and Conciliation (Amendment) Act, 2015. Reference was made to various decisions including, National Seeds Corporation Ltd. v. M. Madhusudan Reddy, (2012) 2 SCC 506. It was observed, “….complaint under Consumer Protection Act being a special remedy, despite there being an arbitration agreement the proceedings before Consumer Forum have to go on….”. The Court noted several categories of cases, which are not arbitrable. It is also said that “The words notwithstanding any judgment, decree or order of the Supreme Court or any Court added by amendment in Section 8 were with intent to minimise the intervention of judicial authority in the context of arbitration agreement… The Court cannot refuse to refer the parties to arbitration “unless it finds that prima facie no valid arbitration agreement exists.”

However, denying the contention that amended Section 8 is applicable even to cases which are themselves non-arbitrable, the Court held, “The amendment in Section 8 cannot be given such expansive meaning and intent so as to inundate entire regime of special legislations (like Consumer Protection Act) where such disputes were held to be non-arbitrable.” Something which legislation never intended cannot be accepted as side wind to override the settled law.” Thus, it was held that the Consumer Protection Act being special legislation, NCDRC was right in rejecting company’s application under Section 8 of Arbitration Act. Therefore, the review petition was dismissed. [Emaar MGF Land Ltd. v. Aftab Singh,2018 SCC OnLine SC 2771, decided on 10-12-2018]

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