Arbitration Clause Cannot Oust Consumer Forum's Jurisdiction Once Complaint is Admitted – A Critical Legal Analysis

Case Snapshot

• Case Name: T.K.A. Padmanabhan v. Abhiyan Cooperative Group Housing Society Ltd.

• Citation: [Not specified in the provided judgment text]

• Bench: Justice Vikram Nath & Justice V.Mohana

• Date of Judgment: June 04, 2026

• Area of Law: Consumer Protection Law, Arbitration Law, Civil Procedure

Judgment in Brief

In a significant ruling, the Supreme Court held that a Consumer Forum cannot refer a complaint to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, once the complaint has been admitted and notice has been issued to the opposite party. The Court clarified that the remedy under the Consumer Protection Act, 1986, is an additional remedy and not in derogation of any other law. The existence of an arbitration clause in an agreement does not automatically oust the jurisdiction of consumer forums. The Court further held that the National Commission erred in dismissing the revision petition on the ground that the complainant was not a "consumer" merely because possession had been delivered, without adjudicating the core issue of deficiency in service on merits. The complaint was restored for fresh adjudication.

Relevant Facts

• The appellant became a member of the respondent cooperative housing society in January 2003 and paid the full amount for allotment of a flat.

• Flat No. 232 was allotted to him and an agreement was executed on 27.02.2004, which contained an arbitration clause.

• On 08.08.2005, the appellant filed a consumer complaint before the District Forum alleging deficiency in service due to delay in handing over possession of the flat.

• The complaint was admitted and notice was issued to the respondent.

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