--- title: "SC: Consumer Complaint Cannot Be Referred To Arbitration After Admission; Arbitration Clause Does Not Oust Consumer Forum Jurisdiction" date: 2026-06-27 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/consumer-complaint-referred-to-arbitration/ --- # SC: Consumer Complaint Cannot Be Referred To Arbitration After Admission; Arbitration Clause Does Not Oust Consumer Forum Jurisdiction Posted On - 27 June, 2026 • By - King Stubb & Kasiva **BEFORE THE HON’BLE SUPREME COURT OF INDIA** ***T.K.A. Padmanabhan v. Abhiyan Cooperative Group Housing Society Ltd.*** **Civil Appeal No. 10724 of 2016** **Judgment Dated: June 04, 2026** ## Summary The Supreme Court held that a **consumer complaint, once admitted by a Consumer Forum, cannot be referred to arbitration** merely because the underlying agreement contains an arbitration clause. The Court reiterated that the Consumer Protection Act, 1986 provides an additional statutory remedy. The Court held that the jurisdiction of consumer fora is not ousted by private arbitration agreements. It further clarified that an allottee who has already received possession of a flat may still maintain a claim for compensation arising from delayed possession. ## Facts of the Case 1. The appellant became a member of the respondent housing society and was allotted **Flat No. 232**. 2. An agreement dated 27.02.2004 was executed between the parties. 3. Alleging delay in handing over possession, the appellant filed a consumer complaint seeking compensation. 4. The respondent invoked **Section 8 of the Arbitration and Conciliation Act, 1996**, relying on the arbitration clause in the agreement. 5. The District Forum initially rejected the application, holding that the remedy under the Consumer Protection Act was in addition to other remedies. 6. Following proceedings before the Delhi High Court, the matter was remanded for reconsideration, after which the District Forum referred the parties to arbitration. 7. The State Commission and National Commission affirmed the referral to arbitration, leading to the present appeal before the Supreme Court. ## Issues Before the Court 1. Whether a **consumer complaint can be referred to arbitration** solely on the basis of an arbitration clause contained in the agreement between the parties. 2. Whether the jurisdiction of consumer fora stands excluded by the existence of an arbitration agreement. 3. Whether an allottee who has taken possession of a flat can still pursue a claim for **compensation for delayed possession**. ## Judgment ### Consumer Remedy Is Additional in Nature Relying on **Section 3 of the Consumer Protection Act, 1986** and precedents including *Fair Air Engineers*, *Thirumurugan Cooperative Agricultural Credit Society*, *National Seeds Corporation*, and *Emaar MGF Land Ltd.*, the Court reiterated that consumer remedies exist in addition to other statutory or contractual remedies. ### Arbitration Clause Does Not Oust Consumer Jurisdiction The existence of an **arbitration agreement cannot deprive a consumer** of the statutory remedy available under the Consumer Protection Act. ### Effect of Section 12(4) of the 1986 Act Once a consumer complaint has been admitted, it **cannot be transferred to another court, tribunal, or authority**. The statutory scheme requires the consumer forum to adjudicate the complaint in accordance with the Act. ### Private Contracts Cannot Override Statutory Rights An arbitration clause **cannot defeat a legislative remedy** specifically created for consumer protection. ### National Commission Erred The **National Commission failed to decide the central issue** relating to referral to arbitration and instead dismissed the complaint on the ground that the appellant was not a consumer after taking possession. ### Possession Does Not Extinguish Compensation Claims A claim arising from **delayed possession survives even after possession has been handed over**. Whether compensation is payable must be determined on merits. ### Matter Restored for Adjudication The Supreme Court **set aside the orders of all three consumer fora** and restored the complaint for adjudication on merits before the District Consumer Disputes Redressal Commission, Dwarka. ## Analysis This judgment reinforces the settled principle that **arbitration clauses cannot be used to dilute consumer rights** under the Consumer Protection Act. Significantly, the Court has relied not only on earlier precedent but also on the statutory bar contained in Section 12(4), emphasizing that once a complaint is admitted, the consumer forum must carry the matter through to adjudication. The decision further protects homebuyers by clarifying that acceptance of possession does not automatically extinguish claims for compensation arising from delay. The ruling therefore strengthens consumer remedies and limits attempts to divert consumer disputes into private arbitral proceedings after the statutory consumer jurisdiction has already been invoked. *Last Updated on 27 June, 2026* --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)