Despite there being an arbitration clause in a Builder Buyer agreement – the Buyer may prefer to move Consumer Court : Supreme Court.

In the Builder Buyer’s agreement, there was an arbitration clause providing for settlement of disputes between the parties under the 1996 Act. Nonetheless, the consumer filed a complaint before the National Consumer  Disputes  Redressal Commission (NCDRC) against the Builder praying for reliefs.

The Builder objected to the filing of the complaint before NCDRC citing Arbitration Clause in the Builder Buyer Agreement.  The matter finally reached to Supreme Court where the Supreme Court held that the disputes which are to be adjudicated and governed by statutory enactments, established for specific public purpose to sub-serve a particular public policy are not arbitrable.  Consequently, 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 Court, notwithstanding the amendments made to Section 8 of the Arbitration Act.

The Hon’ble Court further added 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.


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