*THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY +WRIT PETITION No.4205 of 2008 % Dated 13-3-2008 #Between: M/s. Saipriya Estates, reptd., by its Managing Partner N.Ram Mohan Reddy, S/o. Mr.N.Bal Reddy, 55 yrs, Flat No.G-18, Alladin Mansion, Maxivision, Begumpet, Hyderabad. … Petitioner AND V.V.L.Sujatha and another. … Respondents !Counsel for the petitioners: Sri S.R.Sanku. ^Counsel for the respondents: ---- <Gist: >Head Note: ?Cases referred: [1]) (1996) 6 SCC 385 2) 1991 CPC 579 (NC) 3) 1993 CCJ 160. 4) (2003) 6 SCC 503 5) AIR 2006 SC 450. 6) (1994) 1 SCC 243 7) (2002) 2 SCC 388. IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY THURSDAY, THE 13TH DAY OF MARCH, TWO THOUSAND EIGHT ONLY WRIT PETITION No.4205 of 2008 Between: M/s. Saipriya Estates, reptd., by its Managing Partner N.Ram Mohan Reddy, S/o. Mr.N.Bal Reddy, 55 yrs, Flat No.G-18, Alladin Mansion, Maxivision, Begumpet, Hyderabad. … Petitioner AND V.V.L.Sujatha and another. … Respondents Counsel for the petitioners: Sri S.R.Sanku. Counsel for the respondents: ---- This Court made the following: ORDER: This Writ Petition is filed for a Writ of Prohibition to prohibit the District Consumer Disputes Redressal Forum- III, Hyderabad (for short “the District Forum”) from entertaining C.C.No.1026 of 2007 and to direct the District Forum to refer the dispute for Arbitration under Clause 15 of the Development Agreement dated 21-7-2005. The facts lie in a narrow compass. The petitioner and respondent No.1 entered into a Development Agreement on 21-7-2005, whereunder respondent No.1 handed over 700 Sq. yards of open land for construction of a residential complex to the petitioner. The petitioner and respondent No.1 agreed to share the constructed area in the ratio of 55:45 respectively. On the ground that the petitioner failed to carry out its part of contractual obligations under the said agreement, respondent No.1 approached the District Forum by filing C.C.No.1026 of 2007 under Section 12 of the Consumer Protection Act, 1986 (for short “the 1986 Act”) seeking the following reliefs: “ (a) To direct the opposite party to hand over the possession of the completed share of 45% to the complainant as per the agreed specification of the development agreement after obtaining the occupation certificate from the local authority; (b) To direct the opposite party to pay agreed rent for alternate accommodation @ Rs.7000/- per month from March, 2006 to December, 2007 i.e., till the date of filing the present complaint, which is amounting to Rs.1,47,000/- and further direct the opposite party to pay same till the date of handing over of 45% furnished share of Flats to the complainant; (c) To direct the opposite party to pay agreed damages @ Rs.25,000/- per month, which commence from January, 2006 is amounting to Rs.6,00,000/- till December, 2007 further direct the opposite party to pay same till the date of handing over the 45% furnished share of flats to the complainant; (d) To award compensation of Rs.2,00,000/- (Two lakh only) for mental agony suffered by the complainant and her family; and (e) To award the costs of the complaint and pass any such other order/orders as this Hon’ble Forum deems fit and proper in the interest of justice”. The petitioner filed I.A.No.41 of 2008 before the Dist Forum under Section 8(1) of the Arbitration and Conciliat Act, 1996 (for short “the 1996 Act”) for referring the dispute arbitration. In its application, the petitioner referred to and rel upon Clause 15 of the agreement, which provides settlement of disputes arising out of the said agreeme through arbitration under the provisions of the 1996 Act. T District Forum by order dated 26-2-2008 dismissed the s application. Assailing the same, the petitioner filed the prese Writ Petition for the reliefs as mentioned above. Heard Sri S.R.Sanku, learned counsel for the petition and perused the record. The District Forum in its order, while rejecting t application for reference of the dispute for arbitration, held t under Section 3 of the 1986 Act the remedies made availa under the said Act are in addition to and not in derogation the remedies available under the other laws. The Dist Forum also relied on the judgments of the Supreme Court FAIR AIR ENGINEERS PVT. LTD. Vs. N.K.MODI[1], ORISS LIFT IRRIGATION CORPORATION LTD. Vs. BIRR KISHORE ROUT[2] and NATIONAL INSURANCE COMPA LTD. Vs, SATBHUSHAN JAIN[3]. At the hearing, Sri S.R.Sanku contended that the Dist Forum erred in relying upon the judgment of the Supre Court in FAIR AIR ENGINEERS (1 supra) on the ground t the said judgment was rendered in a case arising und Section 34 of the Arbitration Act, 1940 (for short “the 19 Act”), the language of which is different from Section 8 of t 1996 Act. He further submitted that the language of Section is couched in mandatory terms leaving no discretion for a judicial authority other than referring the dispute brought befo it, which is the subject matter of arbitration agreement, arbitration in accordance with the arbitration agreement. F this purpose, he relied on the judgment of the Supreme Co in HINDUSTHAN PETROLEUM CORPN. LTD Vs. PINKCI MIDWAY PETROLEUMS[4] and the Constitution Ben judgment of the Supreme Court in M/s. S.B.P. & Co. Vs. M PATEL ENGINEERING LTD[5]. I have carefully considered the submissions of t learned counsel for the petitioner and perused the judgme cited by him. In FAIR AIR ENGINEERS (1 supra) one of t parties to the arbitration agreement filed an application befo the State Commission under the provisions of the 1986 A seeking stay of the consumer dispute raised by the other pa to the agreement under Section 34 of the 1940 Act. The Sta Commission stayed the proceedings and referred the disp for arbitration. The National Commission reversed the s order by holding that the proceedings before the Fora und the 1986 Act are not legal proceedings nor the Commission a judicial authority and, hence, application under Section 34 the 1940 Act was not maintainable. The said order w questioned in Civil Appeal by filing an application for Spec Leave before the Supreme Court. The Supreme Co reversed the finding that the proceedings before the Consum Fora are not judicial proceedings within the meaning of Sect 34 of the 1940 Act and held that these Fora are juridi authorities and the proceedings before them are judic proceedings as they have the trappings of a Civil Court. T Supreme Court, however, sustained the order of the Natio Commission in declining to refer the dispute for arbitration - holding that Section 3 of the 1986 Act envisages that provisions are in addition to and not in derogation of any oth law in force – and held that the legislature intended to prov a remedy in addition to the remedies, such as arbitration, a that in view of the object of the 1986 Act and the provisions Section 3 thereof it would be appropriate for the Fora creat under the said Act to proceed with the matters in accordan with the provisions of the said Act rather than relegating t parties to arbitration proceedings as provided by a contr entered into between the parties. To arrive at this conclusio the Supreme Court relied upon its judgment in LUCKNO DEVELOPMENT AUTHORITY Vs. M.K.GUPTA[6], wh considered the Scheme and object of the 1986 Act. It is true, as contended by the learned counsel for t petitioner, that there is a difference in the language of Sect 34 of the 1940 Act and Section 8 of the 1996 Act. While t former provision allowed discretion to the judicial authorities the matter of reference of disputes to arbitration, Section 8 couched in a peremptory language which gives no room fo judicial authority to decline to refer the dispute to arbitrat once it is satisfied that an arbitration agreement exists betwe the parties and the disputes raised before it are covered such an agreement. In HINDUSTHAN PETROLEUM CORPN. LTD (4 sup the Supreme Court held that Section 8 of the 1996 Act in cle terms mandates that a judicial authority before which an act is brought in a matter which is subject matter of an arbitrat agreement to refer such parties to arbitration, and that t language of the said Section is unambiguous. The Supre Court also held that the Civil Court discharges administrat function and, therefore, it cannot go into the question wheth the Arbitral Tribunal has jurisdiction to decide the said iss This conclusion is based on the Constitution Bench judgme of the Supreme Court in KONKAN RLY. CORPN. LTD. V RANI CONSTRUCTIONS (P) LTD.[7] A seven Judge Bench the Supreme Court in M/s. S.B.P. & Co. (5 supra), howev overruled the decision in KONKAN RLY. CORPN. LTD. supra) by holding that the power exercised by the Ch Justice of the High Court or the Chief Justice of India und Section 11(6) of the 1996 Act is not an administrative pow but it is a quasi judicial power and in case of designation o judge of the High Court or of the Supreme Court, the pow that is exercised by the designated judge would be that of t Chief Justice as conferred by the Statute. In HINDUSTHAN PETROLEUM CORPN. LTD (4 supr the question which arose for consideration was – whether the face of the mandatory provisions of Section 8 of the 19 Act, the Civil Court had the power to decide the dispute rais in a civil suit without relegating the parties to arbitration? In t case, the provisions of the 1986 Act did not fall consideration. Therefore, in my considered view, in decid the question raised by the petitioner, the said judgment will be of any help to the petitioner because in the absence o provision such as Section 3 of the 1986 Act a judicial autho is not left with any discretion except to refer the dispute arbitration in view of the peremptory language of Section 8 the 1996 Act. In LUCKNOW DEVELOPMENT AUTHORITY (6 sup the Supreme Court held that the object of the 1986 Act was secure social purpose to promote the facilities in comprehending manner for settlement of issues involved in t consumer complaints and to assess the damages; that construing the object of the Act, the interests of the consume which the Act seeks to protect, are given predominance; a that the Act has departed from the settled legal Fora provid under the Code of Civil Procedure. The Supreme Court furth held that the importance of the 1986 Act is to promote t welfare of the society by enabling the consumers to participa directly in the market economy and it attempts to remove t helplessness of a consumer which he faces against powe businessmen, described as ‘network of rackets’ or a society which ‘producers have secured power’ to rob the rest or as t might of public bodies which are degenerating i storehouses of inaction where papers do not move from o desk to another as a matter of duty and responsibility but extraneous consideration leaving the common man helple bewildered and shocked. The Supreme Court took note of t malady becoming so rampant, widespread and deep that t society, instead of bothering, complaining and fighting agai it, is accepting it as a part of life, and that the 1986 A therefore, intends to secure inexpensive and expeditio consumer service. In FAIR AIR ENGINEERS PVT. LTD (1 supra), wh considering the scope of Section 34 of the 1940 Act and t desirability of relegating the parties to arbitration, the Supre Court held as under: “Accordingly, it must be held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri. Suri, that the words "in derogation of any other law for the time being in force" would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well-founded. The Parliament is aware of the provisions of the Arbitration Act and the Contract Act and the consequential remedy available under Section 9 of the Code of Civil Procedure, i. e. , to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy”. In Para 13 of the judgment, the Supreme Court also noticed Section 8 of the 1996 Act, which at that time was in force in the shape of third Ordinance, 1996. Though there is a qualitative difference between the language of Section 34 of the 1940 Act and Section 8 of the 1996 Act and the case arose under the 1940 Act, the Supreme Court still referred to Section 8 of the 1996 Ordinance. Having regard to the interpretation given by the Supreme Court in FAIR AIR ENGINEERS PVT. LTD (1 supra) with regard to Section 3 of the 1986 Act and the ratio in LUCKNOW DEVELOPMENT AUTHORITY (6 supra), I am of the view that the 1986 Act, being a special enactment, which created an additional remedy in favour of the consumers by raising consumer disputes before the Fora constituted under the said Act, Section 8 of the 1996 Act does not have the effect of taking away such a remedy from the consumers as in the case of civil suits, which are in the nature of common law remedies. To my mind, the true purport of Section 3 of the 1986 Act is that if a party chooses to avail a remedy other than the consumer dispute, he shall be free to do so because the remedy under the 1986 Act is not in derogation of the other remedies available to such a party. But, conversely if he chooses to avail the remedy before the Consumer Fora, such a right cannot be denied to him on the ground of availability of an alternative remedy, such as arbitration. Put it briefly, Section 3 of the 1986 Act is intended to provide an additional remedy to a party and the same is not meant to deny such a remedy to him. In this view of the matter, in my opinion, the order passed by the District Forum does not suffer from any legal infirmity and it cannot be said that the District Forum has inherent lack of jurisdiction to entertain and adjudicate the complaint filed by respondent No.1 before it for issuing a Writ of Prohibition. For the aforementioned reasons, the Writ Petition is dismissed. --------------------------------------- C.V.NAGARJUNA REDDY,J 13-3-2008 MNR [1]) (1996) 6 SCC 385 [2]) 1991 CPC 579 (NC) [3]) 1993 CCJ 160. [4]) (2003) 6 SCC 503 [5]) AIR 2006 SC 450. [6]) (1994) 1 SCC 243 [7]) (2002) 2 SCC 388.