SMT. M. HEMALATHA DEVI & ORS. versus B. UDAYASRI

Citation: [2023] 13 S.C.R. 258 · Decided: 05-10-2023 · Supreme Court of India · Bench: SANJAY KISHAN KAUL · Disposal: Dismissed

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Judgment (excerpt)

[2023] 13 S.C.R. 258 : 2023 INSC 870
258
CASE DETAILS
SMT. M. HEMALATHA DEVI & ORS.
v.
B. UDAYASRI
(Civil Appeal Nos. 6500-6501 of 2023)
OCTOBER 05, 2023
[SANJAY KISHAN KAUL AND SUDHANSHU DHULIA, JJ.]
HEADNOTES
Issue for consideration: Whether the dispute between the parties is 
arbitrable, and once a party has availed the remedy before a public forum 
under a special benefi cial legislation, can it be compelled to go for arbitration.
Consumer Protection Act, 2019 – Consumer Protection Act, 1986 
– Arbitration Act & Conciliation, 1996 – s.11(6A), 8(1) – Arbitrability 
of consumer dispute – Constructed house/villa was not handed over to 
the buyer/consumer-respondent on time – Later, builder terminated 
the agreement and the appellants-builders/owners fi led application 
u/s.11(5), (6), Arbitration Act, 1996 before the High Court for 
appointment of Arbitrator, in terms of the arbitration clause in the 
agreement – Respondent fi led complaint before the District Forum – 
Appellants’ application was dismissed, liberty was granted to fi le a s.8 
application before the District Forum which when fi led was dismissed 
– Review fi led by the appellants, dismissed – Plea of the appellants 
that the High Court erred in dismissing their application as under the 
amended provisions of s.11, Arbitration Act, 1996 i.e. after insertion of 
sub-section 6A to s.11, by way of an amendment in 2016, the High Court 
had no choice but to refer the matter for arbitration:
Held: All disputes are not capable of being referred to arbitration 
– The exclusion of a dispute from arbitration may be express or implied, 
depending upon the nature of the dispute, and a party to a dispute cannot 
be compelled to resort to arbitration merely for the reason that it has been 
provided in the contract, to which it is a signatory – The arbitrability of a 
dispute has to be examined when one of the parties seeks redressal under a 
259
welfare legislation, in spite of being a signatory to an arbitration agreement 
– Consumer Protection Act is a piece of welfare legislation with the primary 
purpose of protecting the interest of a consumer – Consumer disputes are 
assigned by the legislature to public fora, as a measure of public policy – 
Therefore, by necessary implication such disputes will fall in the category 
of non-arbitrable disputes, and these disputes should be kept away from 
a private fora such as ‘arbitration’, unless both the parties willingly opt 
for arbitration over the remedy before public fora – In the present case, 
the application u/s.11, Arbitration Act, 1996 fi led by the appellants for 
appointment of an arbitrator, was not maintainable – Impugned orders 
which held this position upheld – High Court adopted the right approach 
in its two impugned orders, where it declined to interfere in the matter and 
appoint an arbitrator – Reasoning given in Emaar MGF Land Ltd. v. Aftab 
Singh [2018] 14 SCR 791 (Emaar III) would be equally applicable to s.11 
application before the High Court – Both the provisions incorporated in s.8 
and s.11 [i.e. sub-section (1) and sub-section 6A respectively], seemingly 
restrict the scope of the examination by the concerned courts, in their 
reference to arbitration, or appointment of arbitrator, as the case might be, 
and the language being common, “notwithstanding any judgment, decree or 
order” places a similar question before the two courts – Appeals dismissed. 
[Paras 9, 22, 23]
Consumer Protection Act, 2019 – Arbitration Act, 1996 – ss.11,8 – 
Plea by the appellants that since it is the builder who fi rst approached the 
“Court” by fi ling an application u/s.11 for appointment of arbitrator, in 
terms of the agreement, the consumer should have submitted before the 
jurisdiction of the Arbitration and Conciliation Act, as agreed between 
the parties (in their agreement), rather than seeking remedy before the 
Consumer Forum:
Held: The question is of election, or of choice, and not of which party 
had approached the court fi rst – More importantly it would be the nature 
of the dispute, which would determine the forum for its redressal – The 
law gives this choice to the consumer to either avail a remedy under the 
Consumer Protection Act, by fi ling a complaint before the Judicial Authority, 
or go for arbitration – This option is not available to the builder, as they 
are not ‘Consumers’, under the 2019 Act – It is the respondent here who 
SMT. M. HEMALATHA DEVI & ORS. v. B. UDAYASRI
SUPREME COURT REPORTS 
[202

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