Arbitration Can Be Invoked By Party, Despite Availability Of Alternative Remedy Provided Under RERA Act: Gauhati HC
The Gauhati High Court held that an arbitration can be invoked by a party, despite the availability of an alternative remedy provided under the provisions of Real Estate (Regulation and Development) Act, 2016 (RERA Act).
The Court held thus in an application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (A&C Act) for appointment of an Arbitrator, inasmuch as, in terms of the Arbitration Clause executed between the parties, an Arbitral Tribunal made up of 3 Arbitrators were to be constituted.
A Single Bench of Justice Michael Zothankhuma observed, “As can be seen from the various judgements of the Supreme Court, arbitration is not the only remedy available to a consumer and that they can either seek reference to arbitration or file complaint under the Consumer Protection Act. The judgments of the Delhi High Court and Patna High Court are more specific to the issue to be decided in the present case, i.e., the Arbitration Act is not inconsistent or in derogation of the RERA Act. Thus, arbitration can be invoked by a party, in spite of the availability of the alternative remedy provided under the provisions of the RERA Act.”
Advocate S. Mitra appeared for the petitioners while Advocate R.J. Das appeared for the respondents.
Brief Facts -
The petitioners’ case was that they appointed an Arbitrator, however, despite receipt of the Arbitration Notice from the petitioners by the respondents, the respondents till date not appointed their Arbitrator. The claim of the petitioners was only with respect to the interest on the amount that was paid by them for their apartment, from December 21, 2020 till handing over possession of the apartment.
The parties had executed an agreement for sale of an apartment in 2017 and as per the terms and conditions of the said agreement, the respondent company was to deliver possession of the apartment in 2020. The petitioners had accordingly paid 95% of the total consideration amount of the apartment and the remaining 5% was to be paid at the time of handing over possession of the said apartment. However, as the apartment was not been handed over to the petitioners, the petitioners were claiming interest as per the provisions of Section 18 of the RERA Act and Clause 11.3 of the Agreement.
The High Court in view of the above facts noted, “In the present case, the petitioners have opted for arbitration, as per the arbitration clause, for settling the dispute between them. In view of the above reasons, this Court is of the view that the arbitration clause which had been agreed to by the parties for resolution of their disputes can be chosen by the petitioners for deciding the present dispute, instead of taking recourse to the RERA Act.”
The Court further noted that though the petitioners appointed an Arbitrator, the question arises as to whether the court should appoint the second Arbitrator for the respondents, on account of the respondents not having appointed an Arbitrator in terms of the arbitration clause made in the contract agreement.
“At this juncture, the learned counsel for the petitioners submits that due to the cost factor payable as Arbitrators fees, which may become burdensome if three Arbitrators are to be given payments, only one Arbitrator may be appointed by this Court, to decide the dispute between the parties. The same is however objected by the counsel for the respondents, who submits that an Arbitral Tribunal consisting of three Arbitrators would have to decide the dispute, in terms of the arbitration clause”, it added.
The Court also observed that there is a dispute between the parties which is arbitrable and though the petitioner has appointed an Arbitrator from his side, a single Arbitrator can be appointed by the court, for settlement of the dispute between the parties, as the respondents have waived their right to appoint an Arbitrator.
“In view of the reasons stated above, the Hon’ble Mr. Justice (Retired) H.N. Sarma is appointed as an Arbitrator. Any disclosures to be made by the Hon’ble Mr. Justice (Retired) H.N. Sarma, in terms of Section 12(5) of the Arbitration Act and 7th Schedule of the Arbitration Act should be made known to the parties”, it ordered.
Accordingly, the High Court disposed of the petition.
Cause Title- Pallab Ghosh and Anr. v. Simplex Infrastructures Limited and Anr.
