KHUSI RAM Vs. THE ORIENTAL INSURANCE CO.LTD.

JUDGEMENT

(1.) SHRI Khushi Ram, the owner of truck registered as HIS 544 had insured it in an amount of Rs. 1,75,000 with Oriental Insurance Company Limited, Shimla (Respondent No 1). The policy was valid when the said truck met with an accident on 8 -1 ? -!98v Thereupon a claim in satisfaction of the policy was filed with the Respondent. The loss was assessed at Rs. 70,000 only The offer to pay this amount was made on 6th April, 1993 vide letter appended to the complaint as Annexure P -2 As the offer to accept the above amount as full and final payment, was not acceptable to the complainant, he moved tbe jurisdiction of this Commission on tbe 26th April. 1993 On the first appearance, the learned Counsel for the Respondent No 1 expressed his intention to move an application under section 34 of the Arbitration Act, which he actually presented on the 7th June, 1993 praying stay of the proceedings on the complaint before the Commission for the reasons reproduced here below: - "That as per the conditions of the insurance policy in case of dispute regarding the quantum of compensation, the matter is to be decided by the Arbitrator and as such the present complaint filed before this Commission is not competent as the Commission while dealing with the complaint is exercising ths powers of a Civil Court The proceedings before this Court are liable to be stayed under section 34 of the Arbitration Act and the matter be referred in accordance with the Arbitration Agreement to the Arbitrator. Tbe applicant is ready and willing to do all things necessary to the proper conduct of the Arbitration." 2, This application has been resisted by the Complainant. After hearing the learned Counsel for the parties, we are of the view that tbe prayer of respondent No ! seeking stay of proceedings cannot legally be granted and accordingly the application is dismissed Incoming to this conclusion, we have relied on the law laid down by the National Commission in N. K Modi v M/s Fair Air Engineers Pvt. Ltd and another, (1993) 1 CPR 486 (NC), while answering in the negative, the question whether a proceedings before the Consumer Forum constituted under the Consumer Protection Act is liable to be stayed under section 34 of the Arbitration Act In this context, we deem advantageous to reproduce the rationals underlining the law so settled : - "Section 34 of the Arbitration Act is in the following terms: - "Section 34 of Arbitration Act - Power to stay legal proceedings where there is an arbitration agreement i -Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings s and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced and until remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings." In order to attract the applicability of Section, there should be a legal proceeding - pending before a judicial authority". Even if it is to be assumed that the proceeding for adjudication of the complaint before the Consumer Forum is a "legal proceeding", we are clearly of opinion that a Consumer Forum is not a judicial authority", as contemplated by the section. In order to be a "Judicial Authority", it is necessary that at least some part of the judicial power of the State should be transferred to and vested in said authority Under the Constitution of India the judicial power of the State has been invested in the regular hierarchy of Civil and Criminal Courts of the land and also in certain Special Courts specifically established for the purpose under special Enactments. In our view it is not possible to hold that any part of the judicial power of the State has been transferred in favour of the Forums constituted under the Act. Though these forums are vested with the function of adjudicating disputes concerning certain categories of the grievance of consumers, they are to function in an informal manner conforming only to the principles of natural justice. We are unable to agree with the view expressed by the State Commission that these Forums have the "trappings of a Court". As we see it, the endeavour of Parliament has been to ensure that these Forums function in a totally informal manner free from the shackles and trappings of Courts The proceedings before the Forum are not governed by the Evidence Act or the Civil Procedure Code (except certain provisions enumerated in section 13 (4) of the Act which relate only to the summoning and enforcing the attendance of any witness, taking evidence on oath, the reception of evidence on affidavits, requisitioning of the report of analysis from any appropriate laboratory and the issuing of any commission for the examination of any witness). The provisions of Limitation Act are also not, in terms, applicable to proceedings before the Consumer Forums and it is only by virtue of the decisions of this Commission that stale claims which have become unenforceable in Courts under the General Laws are not entertained by Consumer Forums. Such being the situation, it is wrong to say as the State Commission has stated that the Consumer Forum "has got trappings of a Court" and hence it is included in the term "judicial authority". We reverse the said finding of the State Commission and hold that section 34 of the Arbitration Act has no applicability to proceedings before Consumer Forums." In the light of the foregoing conclusion, the trial of the complaint would proceed as per the procedure. Application dismissed; complaint to proceed on merits