Arbitration clauses do not oust Consumer Forum jurisdiction, especially once a complaint is admitted.

The appellant, a member of the respondent housing society, was allotted Flat No. 232 and entered into an agreement on 27.02.2004.

In 2005, the appellant filed a complaint before the District Consumer Forum alleging deficiency in service due to a delay in handing over possession.

The respondent moved an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking to refer the matter to arbitration based on a clause in the agreement.

After a series of litigations reaching the High Court and Supreme Court on procedural grounds, the District Forum eventually allowed the Section 8 application and referred the parties to arbitration on 27.07.2009.

This order was upheld by the State Commission and subsequently by the National Consumer Disputes Redressal Commission (NCDRC).

The NCDRC further held that the appellant was not a "consumer" as he had taken possession of the flat without protest.

1. Whether a consumer complaint can be referred to arbitration solely on the basis of an arbitration clause in an agreement, especially after the complaint has been admitted.

2. Whether the NCDRC was justified in holding that the appellant ceased to be a "consumer" upon taking possession of the flat.

Section 3 of the Consumer Protection Act, 1986, which stipulates that the Act is in addition to and not in derogation of any other law.

Proviso to Section 12(4) of the 1986 Act, which prohibits the transfer of an admitted complaint to any other court or authority.

The existence of an arbitration clause does not oust the jurisdiction of consumer fora as they provide a special, additional remedy, as established in Fair Air Engineers Pvt. Ltd. v. N.K. Modi and Emaar MGF Land Ltd. v. Aftab Singh.

Definitions of "consumer" and "service" under Sections 2(1)(d) and 2(1)(o) were central to determining the nature of the grievance.

The Court reasoned that the 1986 Act is beneficial legislation intended for expeditious remedies, and Section 3 explicitly preserves the consumer’s right to seek redressal despite alternative forums.

Regarding Section 12(4), the Court noted a "statutory sequence": once a complaint is admitted, the proviso acts as a legislative restraint, preventing the forum from transferring the case to another authority, including an arbitral tribunal.

The Court found that a private contractual arbitration clause cannot defeat a statutory remedy.

The Court held that the grievance was for compensation for delay in possession, not just delivery; therefore, accepting possession does not automatically extinguish a claim for damages incurred during the period of delay.

Such factual determinations regarding waiver or deficiency must be decided on merits, not used to non-suit a party at the threshold.

The Supreme Court allowed the appeal and set aside the orders of the NCDRC, State Commission, and District Forum, restored Consumer Complaint No. 579 of 2005, and directed the District Consumer Disputes Redressal Commission, Dwarka, to decide the matter on merits within one year.