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NCDRC says Real Estate Players can’t Compel buyers to go for Settlement
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The bench found that disputes that are to be judge and governed by statutory enactments, established for precise purpose to sub-serve a particular public policy are not arbitrable.

New Delhi, 18th July 2018: India’s apex consumer commission, National Consumer Disputes Redressal Commission (NCDRC) has announced that builders cannot compel buyers for arbitration rather than approaching consumer forums.

National Consumer Disputes Redressal Commission’s three-member bench has said that buyers cannot be forced in any manner for settlement even if the seller-buyer agreement specifies that disputes be settled via a private resolution mechanism.

Builders had mentioned changes made in the Arbitration and Conciliation Act in 2015 in order to point out that all cases of apartment buyers be referred to arbitration.

A judicial authority will refer for arbitration the cases where there is an arbitration agreement, and one of the parties files an application seeking arbitration before submitting their first statement on the dispute, says Section 8 of the amended Arbitration Act.

However, NCDRC president Justice D K Jain and the NCDRC bench rejected the real estate player’s argument.

“We unhesitatingly reject the arguments on behalf of the builder, and hold that the arbitration clause in the afore-stated kind of agreements (read builder-buyer agreements) between complainants and builder circumscribe the jurisdiction of a consumer forum, notwithstanding amendments made in the Arbitration Act,” the bench ordered.

After analyzing number of Supreme Court judgments, the NCDRC bench held consumer forums were not compelled to refer disputes to arbitration.

“Acceptance of the arguments on behalf of the builder would lead to another undesirable outcome – setting at naught the entire purpose and object of the Consumer Protection Act viz. to ensure speedy, just and expeditious resolution and disposal of consumer disputes,” the bench said.

The bench found that disputes that are to be judge and governed by statutory enactments, established for precise purpose to sub-serve a particular public policy are not arbitrable.

Advocate Sushil Kaushik, who challenged the case on behalf of buyers, said that as the arbitrator can settle a dispute within the structure of the contract agreement, it is a great success and big reliever for buyers.  It has been seen that in almost all the cases the agreements are tilted in favor of the real estate players, he added.

Akash Singh

Author: Akash Singh

Akash Singh is a passionate free lance writer based in Noida. He’s designed the content for various reputed online financial and real estate portals. He has completed his Bachelor’s in Management from Mumbai University and has earned his MBA International Business (HR) Degree from prestigious Amity University. He loves to invest his time in the laps of nature, and enjoys life to the fullest.