Clearing up ambiguity over jurisdiction of consumer fora in complaints where there is an arbitration clause in the agreement between two parties, the State Consumer Disputes Redressal Commission has said the consumer was well within his rights to move the forum.
The decision provides major relief to hundreds of consumers seeking physical and mental harassment from builders, besides other cases. Approaching a consumer forum is much more cost-effective, as filing a case costs between Rs 2,000 and Rs 4,000. Going to an arbitrator, however, is generally far more and could run into lakhs of rupees. Under the Consumer Act, 1986, the complaint is supposed to be decided within three months, from the date of service of summon to the opposite party.
“If a consumer opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent consumer forum, then he cannot be denied relief, “ said the commission.
The commission held that though the realtors had been claiming that the fora did not have any power to entertain consumers’ complaints, in cases where agreement for settlement of disputes was provided through arbitration, it was not the only remedy for the consumer, rather it was an optional remedy.
Consumers can now directly approach the consumer courts in cases — mostly against realtors — involving handing over possession and lack of basic amenities development of the project as promised in the agreement. The commission refuted the stand taken by realtors — Puma Realtors Pvt Limited, Emaar MGF Land Limited, Unitech Limited and Sushma Buildtech Limited — that consumer forums had no jurisdiction over such cases.
“A consumer can either seek reference to an arbitrator or file a complaint under the Consumer Act,” the forum added.
What it means
Litigation in forums in cost-effective as a complaint by making payment between Rs 2,000 and Rs 4,000.
Under the Consumer Act, 1986, the complaint is supposed to be decided within three months, from the date of service of summon to the opposite party. In cases where more study is needed, a decision has to be given within six-seven months
Arbitration expenses could run into lakhs of rupees, the court order has said. Normally, the arbitrator is permitted to decide the case within one year