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whether consumer forum has jurisdiction to hear parties who have entered arbitration agreement.

Page no : 2

adv. rajeev ( rajoo ) (practicing advocate)     31 March 2009

Yes consumer court can entertain the case in case there is an agreement of arbitration.

Swami Sadashiva Brahmendra Sar (Nil)     01 April 2009

does cosumer act overrides arbitration act?

jayaveladvocate (Lawyer)     05 April 2009

There is one Madras High court Judgement reported in year 2000 which says that jursidction of conusmer fora is not ousted by Arbitration agreement , i think the contra is true

Rajneesh Malhotra (Advocate)     09 April 2009

Here is the Judgment of National Commission>>>>>

Rajneesh Malhotra (Advocate)     09 April 2009


(Equivalent Citation:- 2008 (2) CPR 102 (NC))

II (2008) CPJ 177 (NC)



Hon’ble Mr. Justice S.N. Kapoor, Presiding Member & Mr. B.K. Taimni, Member

S. KUMARS COM LTD.—Petitioner



Revision Petition No. 2987 of 2003 (From the order dated 30.4.2003 in Appeal No. 870/2002 of the State Commission, Orissa)—Decided on 9.1.2008

Consumer Protection Act, 1986 — Sections 2(1)(d), 2(1)(f) — Goods — Defective — Franchise Agreement — Rs. 2,03,600 paid for purchase of equipment — Incomplete/defective system supplied — VSAT and Web Camera not provided — Contention, complainant not consumer, not acceptable — Complainant entered into franchise agreement for earning livelihood, is consumer — Jurisdiction of Fora not barred in view of arbitration clause in franchise agreement — Additional remedy provided under Section 3 of Consumer Protection Act — OP failed to supply equipment valued Rs. 1,40,000, liable to pay Rs. 1,40,000 and activation fee in view of supply of incomplete system along with interest — Award of State Commission upheld in revision.

V.V.RAMDAS (Advocate)     09 April 2009

Dear Satish,

The party has got option  and he can chose either of the forums (either consumer forum or the help of the arbittration . Even party has entered arbitration agreement , the consumer forum has got jurisdiction to hear parties .

V.V.RAMDAS (Advocate)     09 April 2009

 Yes the consumer forum has got jurisdiction to hear parties even though have entered arbitraton agreement.

R.D. Rajan (Advocate & ADR Practitioner)     13 April 2009

Dear Satish Verma,


The following is the answer for your question:


Consumer disputes arise out of sale of goods or services between the supplier (manufacturer or trader) and consumer (buyer or hirer). Consumer dispute means a dispute where the supplier against whom a complaint has been made, denies or disputes the allegations contained in the complaint. Consumer disputes include disputes over consumer goods such as toiletries, packaged food products and drinks, pharmaceuticals, paper and plastic products, consumer electronics such as mobile phones, MP3 players, digital cameras, GPS Systems and PCs and Laptops, electrical appliances, internet provision, home improvements and utilities such as electricity, gas and water, and services provided by banks, insurance companies, schools, hospitals, etc. In India, the Consumer Protection Act 1986 has created ‘Consumer Disputes Redressal Agencies’ such as District Forum, State Commission and National Commission for settlement of consumers’ disputes.

Sec. 3 of the Consumer Protection Act clearly lays down that the provisions of the Act are in addition to but not in derogation of the provisions of any other law for the time being in force. The expression ‘any other law’ includes the Arbitration and Conciliation Act 1996.

Sec.2(3) of the Arbitration and Conciliation Act 1996 provides that Part I of the Act which deals with domestic arbitration shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration.

The combined effect of the above provisions of the two Acts is that the matters covered by the social welfare legislation i.e. the Consumer Protection Act are not arbitrable under the present arbitration law. Why are consumer disputes not suitable for arbitration? The reasons are not far too seek. Consumer disputes are not suitable for arbitration for reasons of urgency, cost, confidentiality and state policy.

Thus, in India, under the present Arbitration Law consumer disputes cannot be referred to arbitration. A consumer having a complaint against the supplier of goods or services can invoke only the Consumer Protection Act 1986 for speedier redressal of his complaint.

I hope your doubts are cleared now.

R.D. Rajan,


Vaibhav Dang (Lawyer)     01 May 2009

yes. under the consumer protection act, the juisdiction of a consumer forum is in addition to remedy available under any other law for the time being in force

Prakash Yedhula (Lawyer)     04 May 2009

Even if there exists an arbitration clause in an agreement, and a complaint is made by the consumer in relation to certain deficiency of service then the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Re dressal Agency, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force.


That was the point decided by the Supreme Court in Skypak Couriers Ltd. vs. Tata Chemicals Ltd. (Civil Appeal No. 2500 of 1994 decided on May 12, 2000). It was judgment by a three-Judge Bench comprising Mr. Justice G.B. Pattanaik, Mr. Justice Doraiswamy Raju and Mr. Justice S.N. Variava.


Ravish Kumar (Manager, legal Dept)     10 May 2009

Though District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Consumer Protection Act and by operation of Section 3 thereof, it is appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that Consumer Protection Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on their own and on the peculiar facts and circumstances of the particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Consumer Protection Act. Vide "M/s. Fair Air Engineers Pvt. Ltd. and another Vs. N.K. Modi Regards, Ravish Kumar

Ramakrishnan.V (Lawyer)     02 July 2009

I trust the whole bunch ow lawyers who participated in this discussion are wrong or irrelevant to the point.  In the presence of an arbitral agreement, the judicial body whioch tries the lis has no other choice to refer the matter to arbitration beofre it delivers its defence to the main proceeding.  If the party to the arbitration does not voice the presence of the arbitral agreement, the party makes his waiver, where he cannot reagitate and the National comission's judgement cited is on thios point alone

Ramakrishnan.V (Lawyer)     02 July 2009

There is a 2002 judgement wehich does not support my answer but the decision opf the National commission is not coreect and the judgement is

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION                                                   NEW DELHI


M/s. Diamond Overseas                                                                        …            Complainant


M/s. All Cargo Movers (India ) Pvt. Ltd.                                                 …            Opposite Party


                        HON’BLE MR. JUSTICE D.P. WADHWA,


                        HON’BLE MR. JUSTICE J.K. MEHRA, MEMBER.



Section  29 of the  Multimodal Transportation of Goods Act, 1993 (MTOG Act) - to supersede provisions of the Consumer Protection Act, 1986 (CP Act)  which are  inconsistent  - Section 24  of MTOG Act provides different period of limitation than  that  of under the provisions of Section 24A of CP Act. - Section 24 of MTOG Act and Section 24A of CP Act  are inconsistent - Section 24of MTOG Act fixing period of limitation will apply - However, jurisdiction of CP Act not barred.

For the complainant                  :            Mr. Ashok K. Sadhukhan,  Dr. Surendra Kumar

and Mr. Jitendra K. Sharma, Advocates

For the opposite party              :            Mr. Rishi Agarwala, Advocate

                                                O R D E R

DATED THE    4th   April,  2002.


                        Alleging deficiency in service on the part of the opposite party- a carrier, complainant has sought the following reliefs;

“It is , therefore, MOST RESPECTFULLY prayed  that your lordship may graciously be pleased”-

1.     To direct the respondent/opposite party to pay a sum of Rs.39,14,600.10 (Rs. Thirty Nine Lacs Fourteen Thousand Six Hundred Ten Paise only) to the petitioner/complainant on account of losses suffered by them as on 24.9.2001.

2.     Entire cost of the petition may also be awarded in favour of   petitioner/complainant and against the respondent/opposite party.

3.     Any other relief which the Hon’ble Commission thinks fit in the facts and circumstances of the case in favour of the petitioner/complainant.

                        When we issued notice in the complaint a preliminary objection  which went to the root of the  very maintainability of the complaint was raised and that was to the effect that  the Multimodal Transportation of Goods Act, 1993 ( ‘MTOG  Act’ for short) bar the jurisdiction of a Forum under the Consumer Protection Act, 1986 (‘CP Act’ for short) as the former Act overrides the later Act

                        We have examined the matter.    Complainant  an export oriented company sent a consignment to the  Republic of Armenia  and  for that it engaged services of the opposite party.   The invoice value of the goods was US $ 36029.40 and the invoice is dated 7.3.2001.   Complaint, in fact,  is that  though the opposite party said that the goods had been delivered on 28.5.2001 yet it had not satisfied whom these were delivered and there was no endorsement in all the three original multimodal transport documents.  In these documents place of issue is mentioned at New Delhi.   and date is 23.3.2001.  With these documents there are certain conditions  stated to have been issued in accordance with the  MTOG Act.   Clause 25 under the heading ‘Arbitration’ reads as under:

                        “25.  Arbitration:

The contract evidenced hereby  or contained herein shall be governed by and  construed  according to Indian laws.  Any difference of opinion or dispute thereunder can be settled by arbitration in India  or a place mutually agreed with each party appointing an arbitrator.”

                        MTOG Act, is later Act than the Consumer Protection Act, 1986.  Section 29 of MTOG Act provides that   “ The provisions of this Act shall have effect notwithstanding anything  inconsistent herewith contained in any other law for the time being in force or in any

instrument having effect by virtue of any law other than this Act.”   Sections 24, 26 and 26 of MTOG Act would also be relevant and we quote:

“24.   Limitation on action.-    The multimodal transport operator shall not be liable under any of the provisions of this Act unless action against him is brought within nine  months of -

(a)   the date of delivery of the goods, or

(b)  the date  when the goods should have been delivered, or

(c)   the date on and from which the party entitled to receive delivery of the goods has the right to treat the goods as lost under sub-section (2) of section 13.

25. Jurisdiction for instituting action. -    Any party to the multimodal transport contract may institute an action in a court which is competent and within the jurisdiction of  which is situated one of the following places, namely -

(a)  the principal place of business, or in the absence thereof, the habitual residence, of the defendant; or

(b)  the place where the multimodal transport contract was made, provided  that the defendant  has a place of business branch or agency at such place; or

(c)   the place of taking charge of  the goods for multimodal transportation or the place of delivery thereof; or

(d)  any other place specified in the multimodal transport contract and evidenced in the multimodal transport document.

26. Arbitration.-  (1)  The parties  to a multimodal transport contract may provide therein that any dispute which may arise in relation to multimodal transportation under the provisions of this Act shall be referred  to arbitration.

(2)  The arbitration proceeding may be instituted at such place or in accordance with such procedure as may be specified in the multimodal transport document.

                        MTOG Act will nullify those provisions of  CP Act  which are inconsistent with the provisions of MTOG Act.  That would be the effect of Section 29 of MTOG Act.  Section 24 of MTOG Act provides different period of limitation than that under the CP Act.  If complaint is filed under CP Act which is in contravention of Section 24 of MTOG Act then a Forum under CPA will have no jurisdiction to try the complaint.  Section 25   entitles a party to  file a civil suit.  Section 26 also entitles a party to go for arbitration.   There is nothing in the provision of Section 25 and 26 which can be said  to inconsistent with Section 3 of CP Act under which Section the provisions of CPA shall be in addition and not in derogation  of any other law for the time being in force.

                        We have quoted clause 25 of the terms and conditions of the Multimodal Transportation of  Document.  It only provides that when there is an arbitration  agreement then it shall be considered according to Indian laws and that when there is any difference of opinion or dispute under the contract that can be settled by arbitration in India or  a place mutually agreed  with each party  appointing  an arbitrator.  This clause cannot be held to be an arbitration agreement.

                        We are, therefore, of the view  that  present complaint is certainly maintainable and  the Multimodal Transportation of Goods Act, 1993  does not bar    jurisdiction  of a Forum under the Consumer Protection Act.   Copy of this order shall be sent to both the parties and the matter  to be listed on  11th July, 2002   for further direction and   proceedings.











Ramakrishnan.V (Lawyer)     02 July 2009

The judgement is not correct because section 3 of the act says that the act provide only additional remedy.  Thus when the parties have made an agreeement to resolve the dispute by arbitratrion where the 3 acts discussed by the national commission were enacted in India purely because opf the ECSOC the UNO''s wing.  Further section 8 ot the arbitrtration and concilation act of 1996 reads as

Power to refer parties to arbitration where there is an arbitration agreement.

8. (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, and arbitration may be commenced or continued and an arbitral award made.

aruntrivedi (lawyer)     03 November 2009

yes can be easily - it is not necessary that partnership firm should be registered you can have unregistered partnership firm and group of individuals can form company under Companies Act.

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