corporate law – consumer law – real eastate law – Whether the arbitration caluse mentioned in the purchase agreement between the town ship builders company and individual/consumer bars to file a complaint before consumer forum ?


Hon’ble Mr. Justice Ashok Bhushan

The appellant is a company  set up to develop an integrated township. – The respondent submitted an application to the appellant for allotment of a villa . – A Buyer’s agreement was entered  between the appellant and the  respondent. In the Buyer’s agreement, there was an arbitration clause providing for settlement of disputes between parties under the 1996 Act.-  the respondent filed a Complaint before the NCDRC against the appellant-The appellant also filed an application under Section 8 of the 1996 Act for referring the matter to arbitration for and on behalf of the appellant as per Clause 43 of the Buyer’s agreement, which according to appellant would constitute a valid arbitration agreement in terms of Section 7(2) of the 1996 Act. –

 Three Members Bench presided by President

of the NCDRC held that  we unhesitatingly reject the arguments on behalf of the Builder and hold that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.”- rejcted the application filed by appellant – apex court dismissed the appeal also – now review application – Apex court held that  If the grower opts for the remedy of arbitration, then it may be

possible to say that he cannot, subsequently, file complaint under the Consumer Protection

Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 -We may, however, hasten to add that in the event a

person entitled to seek an additional special remedy provided under the statutes does not opt for the

additional/special remedy and he is a party to an arbitration agreement, there is no inhibition in

disputes being proceeded in arbitration. It is only the case where specific/special remedies are provided for and which are opted by an aggrieved person that judicial authority can refuse to relegate the parties to the arbitration.- We, thus, do not find that any error has been committed by the NCDRC in rejecting the application filed by the appellant under Section 8. No exception can be taken to the dismissal of the appeals by this Court against the judgment of NCDRC. No ground is made out to review the order dated 13.02.2018. The review petitions are dismissed.