Arbitration and Consumer Dispute Resolution are two distinct yet interconnected concepts within the realm of Legal Proceedings. While arbitration usually involves the resolution of disputes through a private and neutral third party rather than a court, Consumer Dispute Resolution pertains specifically to conflicts arising between consumers and businesses. In cases where consumer agreements include arbitration clauses, Individuals may find themselves obligated to pursue dispute resolution through arbitration rather than traditional legal avenues.

A like for like legal proposition came up for adjudication before the National Consumer Disputes Redressal Commission (‘NCDRC’) in its recent judgment. What transpired thereafter?

A Consumer Complaint came to be filed before the NCDRC in 2016 by a homebuyer seeking possession of an apartment that was part of the project proposed to be built by the Opposite Party i.e., Jai Prakash Associates Limited (‘OPs’) and its sister concern. In the alternative of being handed over the possession of the apartment, the Complaint sought a refund of the entire amount deposited along-with interest and payment of delay compensation along-with such other consequential reliefs.

The OPs  right at the inception had advertised for development of an integrated megacity project of a sporting lifestyle and featuring premium residential and commercial spaces spread over 2500 acres in the name of “Jaypee Greens Sports City”, at Sector – 25, Yamuna Expressway, Gautam Budh Nagar in the year, 2009 and subsequently launched a group housing project in the township of “Jaypee Greens Sport City” in 2010 and upon believing the assurances by the OPs, the Complainant booked an apartment and deposited a sum of Rs. 4 Lakhs and was accordingly provided with a Provisional Offer Letter. The Complainant made further payments in the subsequent years in furtherance of the consideration amount, however, the OPs failed to deliver the possession to the Complainant, despite surpassing the middle of 2015. Resultantly, the Complainant issued a letter seeking cancellation of the allotment and sought refund of the money paid along-with interest. Despite being served with mails and legal notice(s), the OPs failed to afford any reason for such a delay and thus, the Consumer Complaint was brought before the NCDRC.

The OPs contested the claims sought by the Complainant by arguing that, the Complainant were investors in real estate and thus fell outside the ambit of Consumer Protection Laws. Further, the OPs contended that, the Complaint does not fall within pecuniary jurisdiction of NCDRC and lastly, the Standard Terms and Condition contains an arbitration clause as such the dispute be referred to an Arbitrator as per Section 8 of Arbitration and Conciliation Act, 1996 and the delay in handing over possession of the project to the Complainant was pegged back due to many unforeseen events and agitation in the state of Uttar Pradesh, resulting into Force Majeure like circumstances. 

Both the parties filed their respective submissions as well as having tendered evidence affidavits heavily contested the present legal dispute where the main consideration for NCDRC to decide was whether the presence of Arbitration Clause in the agreement entered between the parties ousted the jurisdiction of NCDRC?

After duly considering the materials on record and analysing the numerous judicial precedents, the NCDRC on the said issue concluded that, “Section 21 of the Consumer Protection Act, 1986 provides that where value of the goods together with the compensation claimed exceeds Rs. One crore, the complaint is maintainable before National Commission. In the present case, value of service together with compensation claimed in this complaint, exceedsRs.one crore. Supreme Court in Emaar MGF Land Limited Vs. Aftab Singh, (2019) 12SCC 751, held that consumer forum exercises jurisdiction in addition and not in derogation of Arbitration and Conciliation Act, 1996, as such, in spite of arbitration clause in the agreement, consumer complaint is maintainable.”

Furthermore, the OPs over the years, realized amounts time to time and also charged interest as such defence of force majeure is not liable to be accepted and taking cue from numerous decisions of the Hon’ble Supreme Court where it was held that, “buyer cannot be made to wait for indefinite period for possession.” And accordingly allowed the Consumer Complaint and directed OPs to refund the entire amount deposited by the Complainant along-with interest calculated at the rate of 9% p.a.