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Emaar MGF Land Ltd. and Ors. Vs. Aftab Singh - (High Court of Delhi) (07 Nov 2017)

Orders passed by NCDRC in exercise of its jurisdiction are subject to appeal before the Supreme Court



Present appeals have been brought before this Court invoking Section 37(1)(a) of the Arbitration and Conciliation Act, 1996, as amended by Arbitration & Conciliation (Amendment) Act, 2015, to assail two orders of the National Consumer Disputes Redressal Commission (NCDRC), thereby dismissing the identical applications of the Appellants seeking a reference under Section 8 of Arbitration and Conciliation Act, 1996 of the disputes which are the subject matter of consumer complaints of the Respondents against the Appellants, presently pending consideration.

The consumer complaints were instituted by the respective Respondents before the NCDRC with reference, to similar buyer's agreements that had been entered upon by the parties wherein said complainants have raised consumer disputes primarily on the ground of failure on the part of the Appellants to deliver timely possession of the residential villas (flats/plots, etc.) being developed by it in Mohali (and other places) seeking directions either for immediate delivery and possession or, in the alternative, for other reliefs including compensation. The foremost issue that needs to be considered at the threshold is as to whether these appeals can be maintained before this Court.

NCDRC is a forum established by the Central Government under Section 9(c) of the Consumer Protection Act, 1986. It exercises jurisdiction envisaged in Section 21 wherein it may, entertain complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore. The orders passed by NCDRC in exercise of such jurisdiction are subject to appeal before the Supreme Court.

Section 8 of the Arbitration and Conciliation Act, 1996, provides that, a judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists. While conferring the jurisdiction to refer the parties to a dispute to arbitration, the law refers to the forum as a "judicial authority", and not a "Court". It is trite that the expression "judicial authority", also used in Section 5, may encompass within its fold not only a court but also a tribunal.

After 2015 amendment, when the reference or refusal to make over to arbitration has been additionally made subject to appeal, the words "the court passing the order" appearing in Section 37(1) acquire new dimension and need to be properly construed so as to harmonise them with Section 8 which confers the jurisdiction to pass the order that may be challenged in appeal. Since Section 8 does not restrict such a power to a "court" but extends it to every "judicial authority", the forum conceived by the expression "the court passing the order" under the amended law - Section 37(1)(a) - has to be read contextually and understood to connote "the judicial authority" which passed the order making or refusing the reference. The reference to "original decrees" in the opinion of this Court, is meant to convey a decision taken by a court of first instance in exercise of its original jurisdiction.

Appeal against the order of NCDRC (making or) refusing the reference of the dispute to arbitration cannot be brought before this Court since, appeals against orders of said forum lie before the Supreme Court. NCDRC is a tribunal and not a Court. This Court is not authorised by the law to hear appeals from the orders passed by NCDRC in exercise of its original jurisdiction. By virtue of Section 23 of the Consumer Protection Act, 1986, such appeal is available under the said law, only before the Supreme Court. Therefore, the words "the Court authorised by law to hear appeals" in present cases essentially mean "the Supreme Court". Present appeals under Section 37(1) of the Arbitration and Conciliation Act, 1996 have been wrongly brought before this Court. The same, therefore, cannot be entertained here and are consequently returned to be presented before the appropriate appellate Court.


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