Consumer Forum Cannot Assume Jurisdiction When Special Statue Prescribes Arbitration; Calcutta High Court Set Aside West Bengal State Commission Order

Brief Facts:

Jyotish Chandra Sarkar (“Complainant”) filed a complaint alleging that despite the completion of loan repayments before his retirement in September 2007, dues of Rs. 12,608/- were not disbursed to him. E & NF Railway Junior Co-operative Credit Society Limited (“Petitioner”) cited several reasons such as overdue interest, including interest from April 1991 for the first loan and from October 2007 for the second loan. Additionally, the Petitioner claimed non-clearance of the loan amount by Sashodhar Roy, for whom the Complainant stood as a guarantor. The Petitioner contended that a clearance certificate for Sashodhar Roy was issued, and the dues were not released despite notice to the Petitioner. An ex-parte order was issued by the District Consumer Disputes Redressal Forum, Kolkata, directing the Petitioner to pay Rs. 12,608/- with interest and Rs. 3000/- as compensation to the Complainant.

The Petitioner appealed the District Forum's decision to the West Bengal State Consumer Disputes Redressal Commission (SCDRC), which, upheld the District Forum's order. Feeling aggrieved, the Petitioner filed a revision petition in Calcutta High Court (“High Court”). Dissatisfied with SCDRC's and District Forum's decision, the Petitioner argued that its registration under the Multi-State Co-operative Societies Act, 2002, necessitates arbitration for disputes related to the society's constitution, management, or business, as stipulated in Section 84(1)(b) of the Act.

Observations by the High Court:

The High Court, referred to Section 84 of the Multi-State Co-operative Societies Act, 2002, and held that the dispute between the Petitioner co-operative society and Complainant should have been referred to arbitration as per the specific provision of the Act. The High Court observed that both the District Forum and State Commission failed to take into account the statutory provisions, specifically overlooking the jurisdictional limitations imposed by the Multi-State Co-operative Societies Act.

The High Court held that emphasizing that a special law takes precedence over a general law. It held that the consumer forum cannot assume jurisdiction when a special forum is designated by a special law for adjudication.

Furthermore, the High Court noted that the State Commission did not address the issue of jurisdiction concerning the arbitration clause under the Multi-State Co-operative Societies Act, 2002, in its order. It found that the State Commission dismissed the appeal based on the Petitioner's failure to initiate arbitration proceedings under Section 84 of the Act, but failed to adequately address the core question of jurisdiction.

Consequently, the High Court found illegality and material irregularity in the impugned order of the State Commission and allowed the revisional application.

Case Title: The Secretary, E & NF Railway Junior Co-operative Credit Society Limited, Eastern Railway vs Sri Jyotish Chandra Sarkar & Anr.

Case Number: C.O. No. 3243 of 2013.

Advocate for the Petitioner: Kishore Mukherjee.

Advocate for the Complainant: Soumyajit Mukherjee.

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