Consumer Can Approach Consumer Forum Even If Agreement Provides For Arbitration

 

The Supreme Court recently reiterated that the arbitration clauses in an agreement would not override the consumer's choice to approach the consumer forum for adjudication of the dispute.

The Court said that a consumer cannot be forced to get the dispute adjudicated through Arbitration just because an arbitration clause is mentioned in an agreement. It added that the consumer has the exclusive right to decide whether to pursue arbitration or approach the Consumer Forum.

The Court noted that the arbitration clause could not be enforced against the consumer, as the choice of forum lies exclusively with the consumer.

"As vivid from Emaar MGF Land Ltd. v Aftab Singh, (2019) 12 SCC 751 and M Hemalatha Devi (supra), even in a consumer dispute under the Act, or for that matter, the Consumer Protection Act, 2019, arbitration, if provided for under the relevant agreement/document, can be opted for/resorted to, however, at the exclusive choice of the 'consumer' alone. As the appellant is not a 'consumer' in terms of the Act and the existence of the Tripartite Agreement is doubtful, we need not dwell further hereon."

In M. Hemalatha Devi v. B. Udayasri, the Court had observed :

“The exclusion of a dispute from arbitration may be express or implied, depending again 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 welfare legislation, in spite of being a signatory to an arbitration agreement. “The Consumer Protection Act” is definitely 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.”,

M/S CITICORP FINANCE (INDIA) LIMITED VERSUS SNEHASIS NANDA

The Supreme Court held that the respondent, who sold his flat to a borrower financed by the appellant, was not a 'consumer' of the appellant under the Act, 1986, due to the absence of a direct contractual relationship

 Consumer Protection Act, 1986 — Sections 2(1)(d) and 24-A — Contract Act, 1872 — A flat seller who is not a borrower or a party to the home loan agreement lacks privity of contract with the financing company and cannot be considered a 'consumer' under the Consumer Protection Act for claims related to the sale consideration — Supreme Court allowed the appeal, setting aside the order of the National Consumer Disputes Redressal Commission (NCDRC) which had directed the appellant to refund money and pay costs to the respondent (original flat owner) — The Supreme Court held that the respondent, who sold his flat to a borrower financed by the appellant, was not a 'consumer' of the appellant under the Act, 1986, due to the absence of a direct contractual relationship — The Court also noted the doubtful existence of a Tripartite Agreement imposing liability on the appellant towards the respondent, the non-joinder of the borrower as a necessary party, and the issue of limitation in filing the consumer complaint.

M/S CITICORP FINANCE (INDIA) LIMITED

Vs.

SNEHASIS NANDA

Not 'Consumer' Without Privity Of Contract : Supreme Court Rejects Flat Seller's Consumer Complaint Against Financier Of Buyer

he Supreme Court on Thursday (March 20) ruled that to qualify as a "consumer" under the Consumer Protection Act, there must be a direct contractual relationship between the parties.

The Court held that the respondent did not qualify as a "consumer" under the Consumer Protection Act, 1986, as there was no privity of contract between the respondent and the Appellant. The respondent was not a party to the Home Loan Agreement between the Appellant and the buyer.

“we find that the appellant, assuming any liability in this regard existed at all, taking the respondent's case at the highest, could not have been saddled with having to pay more than what was envisaged under the Home Loan Agreement between the borrower and the appellant. In any event, the appellant's liability under the Agreement for sale was restricted only to satisfying the dues of the complainant-respondent with ICICI Bank which sum was in fact quantified at Rs.17,87,763/- (Rupees Seventeen Lakhs Eighty Seven Thousand Seven Hundred Sixty-Three) and, in any view of the matter, could not have exceeded Rs.23,40,000/- (Rupees Twenty-Three Lakhs Forty Thousand). Thus, the NCDRC could not have, under any circumstance, taken a view that the appellant was liable to pay Rs.31,00,000/- (Rupees Thirty-One Lakhs) both to ICICI Bank as well as to the complainant-respondent, who was not a party to the ultimate sanction of the loan by the Home Loan Agreement, which was between the appellant and the borrower.”, the court observed.

Accordingly, the appeal was allowed, and the NCDRC's order was set aside.

Case Title: M/S CITICORP FINANCE (INDIA) LIMITED VERSUS SNEHASIS NANDA

NCDRC Asks Surgeon & Hospital To Pay Rs 75 Lakh Compensation To Patient Who Lost Leg Due To Medical Negligence

 

The National Consumer Disputes Redressal Commission recently directed a surgeon and a hospital to jointly and severally pay a compensation of Rs 75 lakhs to a patient who lost her right leg due to negligence in surgery.

The complaint was filed against Dr. Anirban Chatterjee and Nightingale Diagnostic & Medicare Centre Private Limited, Kolkata.

The surgery was carried out in the year 2015, when the patient was aged 17 years old. The procedure was conducted after the patient developed a lump in the right gluteal region. In 2015, a procedure known as vascular embolization was performed on the patient. However, during the surgery some amount of glue slipped into the main artery of the right leg. This subsequently led to the stoppage of blood circulation in the right leg of the patient and development of gangrene. Ultimately, the patient was shifted to Ganga Ram Hospital, New Delhi. Since the condition of the leg worsened, it had to be amputated to prevent further complications. She was subsequently certified to have 90% permanent disability.

In 2017, the patient, along with her father, filed the consumer complaint seeking a compensation of over Rs. 20 crores from the hospital and the doctor.

The Commission, after examining the evidence on record, found that negligence resulted in the slippage of N-Butyl Cyanoacrylate Glue entering into the artery of her right leg leading to stoppage of blood flow and amputation of her right leg. The Commission found that no informed consent was taken from the patient regarding the inherent risks in the surgical procedure. Since the patient had an Arterio-Venous Malformation (AVM), the doctor had the duty to specifically inform her about the inherent risks, rather than take a general consent in the stereotype format.

Jaita Mitra Basu and another v. Dr.Anirben Chatterjee and another | CC NO. 2644 OF 2017

Consumer Complaint—Arbitration Clause in agreement cannot oust the jurisdiction of consumer courts even after the amendments made in 2015 in Section 8 of Arbitration Act. Arbitration—Amendment of 2015—Scope of—Judicial authority can refuse reference to arbitration only on the ground that it prima facie finds that no valid arbitration agreement exists.

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Insurance Contract--An apprentice is not an employee in common parlance.

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Consumer Protection Act, 1986, S.12—Housing—Delay in Delivering Possession—Subsequent purchaser is entitled to maintain complaint against builder for delay in delivery of possession of flat.

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Consumer Protection Act, 1986, S.12~Consumer Complaint—Class Action--Notice--For filing 'Class Action' complaint u/s 12(l)(c) of the 1986 Act notice under 0.1 R.8(2) CPC is mandatory-Civil Procedure Code, 1908, 0.1R.8.

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Medical Negligence--As long as the doctors have performed their duties and exercised an ordinary degree of professional skill and competence, they cannot be held guilty of medical negligence.

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