Summary
The Supreme Court upheld refusal to appoint an arbitrator for a builder–homebuyer dispute where the buyer chose the consumer remedy. The amendments limiting scrutiny under Sections 8 and 11 of the Arbitration Act did not displace special consumer protection or require referral of a non-arbitrable dispute. The builder’s earlier Section 11 application did not override the buyer’s election. Both appeals were dismissed, leaving the pending consumer appeal undetermined.
Issues
- Whether Section 11(6A) compelled appointment despite the buyer’s election of the consumer remedy.
- Whether the builder’s earlier arbitration application displaced consumer jurisdiction.
- Whether the post-amendment reasoning concerning Section 8 also governed Section 11.
Provisions considered
- Sections 8(1) and 11(5), (6) and (6A), Arbitration and Conciliation Act, 1996The limited examination provisions did not require arbitration of a dispute assigned to a special consumer forum whose remedy the consumer had chosen. Sections 8 and 11 were complementary for this purpose. (¶¶ 4, 5, 9, 11, 21, 22, 23)
- Section 2(3), Arbitration and Conciliation Act, 1996Part I preserves other laws under which disputes may not be submitted to arbitration, supporting protection of the elected special remedy despite an arbitration clause. (¶¶ 17, 21)
Held
- The consumer legislation provides a special beneficial remedy which an arbitration clause does not oust. A consumer choosing that remedy cannot be compelled to arbitrate; this does not prevent a person entitled to the special remedy from consciously choosing arbitration instead. (¶¶ 9, 15, 16, 21)
- The decisive considerations were the nature of the dispute and the consumer’s election, rather than which party first approached a court. The builder’s prior Section 11 application did not defeat consumer jurisdiction, and the buyer’s reply drawing attention to her consumer complaint was not submission to arbitration. (¶ 10)
- The amendments restricting court intervention did not override the regime governing non-arbitrable disputes or special consumer remedies. Emaar MGF’s reasoning on amended Section 8 applied equally to Section 11(6A); a High Court considering appointment could also consider arbitrability. (¶¶ 17, 19, 20, 21, 22)
- The Section 11 application was not maintainable in these circumstances. The High Court’s dismissal and refusal of review were upheld. The Court refrained from addressing the underlying consumer merits because the builders’ statutory appeal remained pending before the State Commission. (¶¶ 22, 23, 24)
Result
Both appeals dismissed. High Court orders dated 19 May and 25 November 2022 upheld. The underlying dispute remained pending in the consumer statutory appeal; its merits were not decided here.