T.K.A. Padmanabhan vs Abhiyan Cooperative Group Housing Society Ltd.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 10724/2016
T.K.A. PADMANABHAN …APPELLANT

VERSUS

ABHIYAN COOPERATIVE
GROUP HOUSING SOCIETY LTD,
THROUGH ITS SECRETARY …RESPONDENT

O R D E R
VIKRAM NATH, J.

1. Permission to appear and argue in person is granted to the
appellant.
2. The present civil appeal arises from the judgment and
order dated 04.01.2016 passed by the National Consumer
1
Disputes Redressal Commission, New Delhi in Revision
Petition No. 1942 of 2013.
3. The appellant, T.K.A. Padmanabhan, had instituted
Consumer Complaint No. 579 of 2005 before the District
2
Consumer Forum-VII, New Delhi against the respondent,
Abhiyan Cooperative Group Housing Society Limited,
alleging deficiency in service on account of delay in
handing over possession of Flat No. 232.

1
In short “National Commission”
2
In short “District Forum”
Civil Appeal No(s). 10724/2016 1

4. The District Forum, by order dated 27.07.2009, referred
the parties to arbitration. The said order was affirmed by
the Delhi State Consumer Disputes Redressal
3
Commission by order dated 26.02.2013. The appellant’s
revision petition against the same came to be dismissed
by the National Commission by the impugned order dated
04.01.2016.
5. The facts giving rise to the present appeal are as follows:
5.1. The appellant became a member of the respondent
society in January 2003. He claims to have paid
the full amount towards allotment of a flat in the
respondent society.
5.2. Flat No. 232 was allotted to the appellant and an
agreement was entered into between the parties on
27.02.2004.
5.3. On 08.08.2005, the appellant filed Consumer
Complaint No. 579 of 2005 before the District
Forum claiming compensation for the alleged delay
in handing over possession of the flat.
5.4. The complaint was admitted and notice was issued
to the respondent. Thereafter, the respondent filed
an application under Section 8 of the Arbitration
and Conciliation Act, 1996, seeking reference of
the dispute to arbitration.

3
In short “State Commission”
Civil Appeal No(s). 10724/2016 2

5.5. By order dated 21.09.2005, the District Forum
rejected the said application, inter alia, on the
ground that the remedy under the Consumer
Protection Act, 1986, was in addition to any other
remedy available to an aggrieved party.
5.6. The respondent challenged the said order before
the High Court of Delhi in C.M.(M) No. 2405 of
2005. By order dated 30.03.2007, the High Court
set aside the order dated 21.09.2005 and directed
the District Forum to reconsider the issue by
passing a reasoned order.
5.7. The respondent thereafter approached this Court
in Special Leave Petition (Civil) No. 9962 of 2007,
which was dismissed on 28.07.2008.
5.8. Upon reconsideration, the District Forum, by order
dated 27.07.2009, allowed the respondent’s
application under Section 8 of the Arbitration and
Conciliation Act, 1996, and referred the parties to
arbitration.
5.9. The appellant challenged the said order before the
State Commission in First Appeal No. 680 of 2009.
By order dated 26.02.2013, the State Commission
dismissed the appeal and affirmed the order
passed by the District Forum.
Civil Appeal No(s). 10724/2016 3

5.10. The appellant then filed Revision Petition No. 1942
of 2013 before the National Commission. By the
impugned order dated 04.01.2016, the National
Commission dismissed the revision petition.
Hence, the present appeal.

6. We have heard the appellant, who appears in person, and
learned counsel appearing for the respondent society.
7. The appellant has submitted that the consumer complaint
could not have been referred to arbitration merely on the
basis of an arbitration clause in the agreement between
the parties. According to him, the complaint had already
been admitted and notice had been issued to the
respondent. It is therefore submitted that the District
Forum ought to have decided the complaint on merits in
accordance with the Consumer Protection Act, 1986.

8. Learned counsel for the respondent, on the other hand,
has supported the orders passed by the District Forum,
the State Commission and the National Commission. It is
submitted that the agreement between the parties
contained an arbitration clause and, therefore, the
consumer fora committed no error in relegating the parties
to arbitration.
9. In view of the above, the question which arises for our
consideration is whether the consumer complaint filed by
the appellant could have been referred to arbitration
Civil Appeal No(s). 10724/2016 4

without adjudication on merits, and whether the National
Commission was justified in dismissing the revision
petition on the ground that the appellant was not a
consumer.

RELEVANT STATUTORY FRAMEWORK

10. Before we examine the correctness of the orders passed by
the consumer fora, it is necessary to state the relevant
4
provisions of the Consumer Protection Act, 1986
applicable to the present case.
11. Section 2(1)(d) of the 1986 Act defines the term
“consumer”. Insofar as the present case is concerned, the
relevant part of the provision reads as under:

““consumer” means any person who hires or
avails of any services for a consideration which
has been paid or promised or partly paid and
partly promised, or under any system of
deferred payment, and includes any
beneficiary of such services other than the
person who hires or avails of the services for
consideration paid or promised, or partly paid
and partly promised, or under any system of
deferred payment, when such services are
availed of with the approval of the first
mentioned person.”


4
In short “the 1986 Act”
Civil Appeal No(s). 10724/2016 5

12. Section 2(1)(o) of the 1986 Act defines the term “service”.
The said provision, insofar as relevant, has been
reproduced hereunder:

““service” means service of any description
which is made available to potential users and
includes, but is not limited to, the provision of
facilities in connection with banking, financing,
insurance, transport, processing, supply of
electrical or other energy, board or lodging or
both, housing construction, entertainment,
amusement or the purveying of news or other
information, but does not include the rendering
of any service free of charge or under a contract
of personal service.”

13. Section 3 of the 1986 Act expressly declares the nature of
the remedy under the Act. It reads as follows:
“Act not in derogation of any other law.—The
provisions of this Act shall be in addition to and
not in derogation of the provisions of any other
law for the time being in force.”

14. Section 12 of the 1986 Act assumes particular significance
in the present case. It deals with the manner in which a
complaint may be made before the District Forum. Sub-
section (4) thereof is material and reads as under:

“Where a complaint is allowed to be proceeded
with under sub-section (3), the District Forum
may proceed with the complaint in the manner
provided under this Act.

Civil Appeal No(s). 10724/2016 6

Provided that where a complaint has been
admitted by the District Forum, it shall not be
transferred to any other court or tribunal or any
authority set up by or under any other law for
the time being in force.”

15. The respondent had invoked Section 8 of the Arbitration
and Conciliation Act, 1996, on the ground that the
agreement between the parties contained an arbitration
clause. The question, therefore, is whether the existence
of such an arbitration clause could have displaced the
statutory jurisdiction of the consumer forum in the facts
of the present case.

ANALYSIS

16. At the outset, we must emphasize that the 1986 Act is a
beneficial legislation intended to provide a simple,
inexpensive and expeditious remedy to a consumer who
complains of defect in goods or deficiency in service.
Section 3 of the 1986 Act makes the position explicit by
providing that the remedy under the Act is in addition to
and not in derogation of any other remedy available under
law. The existence of another forum or another mode of
adjudication, therefore, does not by itself exclude the
jurisdiction of the consumer fora.
Civil Appeal No(s). 10724/2016 7

17. This principle has been consistently recognised by this
5
Court. In Fair Air Engineers Pvt. Ltd. v. N.K. Modi ,
this Court held that the remedy under the 1986 Act is an
additional remedy and that the existence of an arbitration
clause would not automatically oust the jurisdiction of the
consumer forum. The same principle was reiterated in
Secretary, Thirumurugan Cooperative Agricultural
6
Credit Society v. M. Lalitha , where this Court held that
the remedy under the 1986 Act is available
notwithstanding the existence of remedies under the
cooperative societies law. Again, in National Seeds
7
Corporation Ltd. v. M. Madhusudhan Reddy , this
Court emphasised that the availability of an alternative
statutory remedy is not a bar to the maintainability of a
consumer complaint.
18. The position has been put beyond doubt in Emaar MGF
8
Land Ltd. v. Aftab Singh . In the said decision, this
Court held that even where an agreement contains an
arbitration clause, the consumer forum is not denuded of
its jurisdiction to entertain and decide a consumer
complaint. The reason is that the 1986 Act creates a
special and additional remedy for consumers and the

5
(1996) 6 SCC 385
6
(2004) 1 SCC 305
7
(2012) 2 SCC 506
8
(2019) 12 SCC 751
Civil Appeal No(s). 10724/2016 8

jurisdiction so conferred cannot be displaced merely by
reference to an arbitration agreement between the parties.
19. The legal position upheld in the precedents above is of
direct relevance in the present case. The appellant’s
complaint was not a civil suit simpliciter. It was a
complaint under the 1986 Act alleging deficiency in
service on account of delay in handing over possession of
a flat. The fact that the agreement between the parties
contained an arbitration clause could not, by itself, be
treated as sufficient to non-suit the appellant before the
consumer forum.
20. The matter must also be examined in the light of Section
12(4) of the 1986 Act. Section 12 of the 1986 Act
contemplates a statutory sequence. At the threshold, the
District Forum is required to consider whether the
complaint deserves to be admitted or rejected. Once the
complaint is admitted and allowed to be proceeded with,
the forum is required to deal with it in the manner
provided under the Act. The proviso to Section 12(4)
contains a clear legislative restraint. It provides that where
a complaint has been admitted by the District Forum, it
shall not be transferred to any other court, tribunal or
authority set up by or under any other law for the time
being in force.
Civil Appeal No(s). 10724/2016 9

21. The significance of the proviso lies not merely in its text,
but also in the statutory policy which it reflects. The 1986
Act creates a special adjudicatory mechanism for
consumer disputes. Once that mechanism is validly
invoked and the complaint is admitted, the consumer
cannot be driven out of that forum merely because the
agreement between the parties contains an arbitration
clause. A private contractual clause cannot be permitted
to defeat the continued operation of a statutory remedy
which Parliament has expressly made additional to other
remedies under Section 3 of the 1986 Act.
22. Section 12(4) therefore has to be read harmoniously with
Section 3 of the 1986 Act. Section 3 preserves the
additional character of the consumer remedy. Section
12(4), after admission of the complaint, gives procedural
effect to that protection by requiring the consumer forum
to proceed under the Act and by preventing diversion of
the complaint to another forum. The provision is intended
to ensure that a consumer complaint, once admitted, is
not rendered illusory by compelling the consumer to begin
afresh before another forum or authority.
23. In the present case, the complaint had been admitted and
notice had been issued to the respondent. The respondent
thereafter filed an application under Section 8 of the
Arbitration and Conciliation Act, 1996. The District Forum
Civil Appeal No(s). 10724/2016 10

initially rejected the application by noticing that the
remedy under the 1986 Act is in addition to other
remedies. However, after the matter was remitted by the
High Court for reconsideration, the District Forum
referred the parties to arbitration. The State Commission
affirmed that view. In our opinion, this approach did not
give due effect to the scheme of the 1986 Act and to the
settled principle that an arbitration clause does not, by
itself, oust the jurisdiction of the consumer forum.
24. The order of the National Commission suffers from an
additional infirmity. The principal issue before the
National Commission was whether the District Forum and
the State Commission were justified in referring the
complaint to arbitration. The National Commission,
however, dismissed the revision petition on the ground
that the appellant was not a consumer at the time of filing
of the complaint, since he had already taken possession of
the flat without protest. In doing so, the National
Commission failed to address the central jurisdictional
question arising from the orders passed by the District
Forum and the State Commission.
25. The reasoning adopted by the National Commission
cannot be sustained. The appellant’s complaint was not
for delivery of possession simpliciter. His grievance was
that there had been delay in handing over possession of
Civil Appeal No(s). 10724/2016 11

the flat and that he was entitled to compensation for such
delay. A claim for compensation for delayed possession
necessarily arises from the period prior to the actual
delivery of possession. The subsequent receipt of
possession cannot, by itself, extinguish the right of the
allottee to seek adjudication of a claim for compensation
for the alleged delay.
26. Whether there was in fact any delay, whether such delay
was attributable to the respondent, whether the appellant
had accepted possession unconditionally, and whether
any compensation is payable are all matters which require
adjudication on merits. The consumer complaint has not
been adjudicated on merits at any stage. The claim of the
appellant for compensation on account of alleged delay in
handing over possession has neither been accepted nor
rejected after evidence. Equally, the defence of the
respondent society has also not been examined on merits.
These issues could not have been concluded at the
threshold by holding that the appellant ceased to be a
consumer merely because possession had been delivered
before the complaint was filed. In such circumstances, it
would not be appropriate for this Court to record any
finding on the factual controversy between the parties.
27. The proper course, therefore, is to restore the consumer
complaint for adjudication on merits. The parties must be
Civil Appeal No(s). 10724/2016 12

afforded due opportunity of hearing and of leading
evidence. All questions relating to deficiency in service,
delay, waiver, acceptance of possession, entitlement to
compensation, and all other issues on merits shall remain
open to be considered by the competent consumer forum
in accordance with law.
28. During the intermediary period, the District Consumer
Disputes Redressal Commission has been set up at
Dwarka. It is also stated before us that both parties are
staying in Dwarka. In view of the same, and in order to
avoid any further inconvenience and delay, it would be
appropriate to direct that the complaint be placed before
the District Consumer Disputes Redressal Commission,
Dwarka.

CONCLUSION

29. For the reasons recorded above, the appeal is allowed.
30. The judgment and order dated 04.01.2016 passed by the
National Commission in Revision Petition No. 1942 of
2013, the order dated 26.02.2013 passed by the State
Commission in First Appeal No. 680 of 2009, and the order
dated 27.07.2009 passed by the District Forum are set
aside.
31. Consumer Complaint No. 579 of 2005, stated to have been
renumbered as Complaint No. 712 of 2007, is restored and
Civil Appeal No(s). 10724/2016 13

shall be placed before the District Consumer Disputes
Redressal Commission, Dwarka, for decision on merits.
32. The District Consumer Disputes Redressal Commission,
Dwarka, shall decide the complaint after affording due
opportunity of hearing and of leading evidence to both
parties.
33. Since the complaint is of the year 2005, the District
Consumer Disputes Redressal Commission, Dwarka,
shall make an endeavour to decide the same preferably
within a period of one year from the date of receipt of a
copy of this order.
34. Pending application(s), if any, shall stand disposed of.


…………………………….J.
[VIKRAM NATH]

……………………………..J.
[V. MOHANA]

NEW DELHI;
JUNE 04, 2026
Civil Appeal No(s). 10724/2016 14