GOVIND NARAIN GUPTA VS. SUDHAKAR NATH, 4TH JUNE 2024
FACTS- The Appellant acquired a plot for Rs. 55 lakhs and subsequently entered into a Builder's Buyer Agreement with the Respondent. Under this agreement, the Respondent undertook to develop a four-story residential complex on the land at his expense in exchange for a 50% share in each floor. The agreement mandated completion within 24 months. Disputes arose, prompting the Appellant to initiate a civil suit seeking injunctions against the Respondent. During the proceedings, the Respondent invoked the Arbitration Clause, leading to the suit's termination. Following unresolved issues, the Appellant filed a consumer complaint with the State Commission. Despite clarifications that the civil suit had been disposed of, the State Commission dismissed the complaint. A subsequent review application met the same fate. Consequently, the Appellant appealed to the National Commission.
ISSUE- The issue of whether an arbitration clause precludes a consumer complaint under the Consumer Protection Act arises due to the Act's supplementary nature to existing laws.
While arbitration clauses typically redirect disputes to arbitration instead of litigation, the Consumer Protection Act provides additional avenues for consumers seeking redress. However, the enforceability of such clause’s hinges on various factors, including their validity and compliance with consumer protection principles.
OBSERVATION- Section 100 of the Consumer Protection Act highlights the supplementary nature of its provisions in relation to existing laws. The National Commission emphasized the coexistence of multiple legal remedies and noted that the State Commission had erred in dismissing the complaint on grounds of a pending civil suit. The National Commission pointed out the flawed reasoning behind the State Commission's decision. Consequently, the National Commission allowed the appeal and overturned the State Commission's order.
