In the contemporary business landscape, transactions frequently fall under the purview of several distinct legal frameworks. For instance, an individual purchasing a home might benefit from the safeguards of the Consumer Protection Act, 2019, while also being subject to an arbitration agreement and eligible for recourse under the Real Estate (Regulation and Development) Act, 2016.

Furthermore, financing aspects of such a transaction could involve the Insolvency and Bankruptcy Code, 2016, along with specific banking laws. This scenario leads to a seemingly straightforward yet significant query: in situations where both contractual provisions and statutory rights offer avenues for resolution, which authority is best positioned to adjudicate the ensuing disagreements?

Consumer protection as an additional remedy

This doctrine is rooted in the nature of consumer legislation as a remedial legislation. As per Section 100 of the Consumer Protection Act, 2019, “The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law.”

However, this doctrine existed prior to the passage of this statute. For example, in Fair Air Engineers (P) Ltd. v. N.K. Modi, (1996) 6 SCC 385, the Supreme Court has held that arbitration clause cannot automatically exclude the jurisdiction of consumer fora. Similarly, in Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305, it was held that existence of an alternative remedy as per Cooperative Societies Act did not prevent consumer proceedings.

The very same doctrine has been applied in National Seeds Corporation Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC 506 wherein it was argued that the special procedure prescribed under the Seeds Act automatically excluded consumer remedy. The Court did not agree with this contention, especially in view of the fact that special procedure did not contain provision for compensation. Arbitration too was regarded as an alternative method of dispute resolution. Therefore, what needs to be appreciated here is that this principle does not mean that consumer remedy will prevail in all cases.

Arbitration cannot automatically displace the consumer forum

The controversy became particularly important in builder-buyer disputes, where provisions for arbitration have been made as part of the standard form of the contract. In Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751, the Supreme Court decided that the presence of arbitration agreement will not act as a bar to consumer approaching the consumer fora. It was noted that there is a difference between contractual arbitration and statutory right granted to consumers.

The concept of non-arbitrable matters became more clear in Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1. Supreme Court laid down certain categories of disputes that may become non-arbitrable like in rem disputes, which affect rights of third parties with erga omnes consequences, sovereign functions or statutory exceptions to arbitration. Consumer disputes stand out as an important dispute under the last category since CPA establishes a welfare-based adjudicatory system.

From contractual consent to consumer choice

The jurisprudence coming after this takes the position to a different level altogether. In the case of M. Hemalatha Devi v. B. Udayasri, (2024) 4 SCC 255, the Supreme Court acknowledged the possibility of exclusion from arbitration being either express or implied, and the fact that the very presence of an arbitration agreement does not mean that the party can be compelled to arbitrate. However, there was always an option to arbitrate if the parties so wished.

M/s Citicorp Finance (India) Ltd. v. Snehasis Nanda, 2025 INSC 371 introduces yet another aspect – the determination of whether a person is the consumer. Here, the complainant did not have a contractual relationship with the financier to be able to be called his/her consumer. Thus, the decision illustrates the futility of determining the issue of arbitration without considering the applicability of the consumer protection act on the case.

The latest decision is in the case of T.K.A. Padmanabhan v. Abhiyan Cooperative Group Housing Society Ltd., 2026 INSC 649. The appellant had filed the complaint against delay in possession, and that had been sent to arbitration. The Supreme Court held that the consumer complaint would be allowed to proceed and that the orders transferring the matter to arbitration were set aside. The importance of the decision is procedural and substantive at once: once a consumer complaint has been instituted properly, the private arbitration agreement cannot substitute that procedure.

RERA and concurrent statutory remedies

The clearest example of concurrent remedies is real estate disputes. Concurrent remedies under the IBC, RERA and Consumer laws were noted in the Supreme Court’s decision in Pioneer Urban Land & Infrastructure Ltd. v. Union of India, (2019) 8 SCC 416. The same principle was applied in Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783. According to the Court, RERA had not ousted the consumer remedy for a true consumer. Section 79 of RERA ousts the jurisdiction of civil courts in respect of subject matter within the purview of RERA Authorities, but just because RERA is a special statute, it has not ousted the consumer jurisdiction.

Similarly, Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna, (2021) 3 SCC 241 has reiterated the availability of consumer remedies in disputes involving home buyers, warning consumer forums not to re-write the terms of the contract in the garb of consumer law. Concurrent remedies therefore do not mean infinite parallel proceedings. Election of remedy, res judicata, abuse of process and judicial restraint continue to be the limits.

The commercial-purpose threshold

There is, however, a crucial caveat to the consumer-oriented approach; not all commercial purchasers can be classified as consumers. According to Section 2(7) of the CPA, a person obtaining goods or services “for a commercial purpose” cannot be considered a consumer unless the said person’s livelihood from self-employment is exempted under the statutory exception.

In the case of Laxmi Engineering Works v. P.S.G. Industrial Institute, (1995) 3 SCC 583, the Supreme Court observed that the expression “commercial purpose” had to be interpreted based on the factual scenario rather than through a rigid formula.

The procedural steps would thus be as follows:

Determine whether the claimant qualifies as a consumer

Determine whether the claim falls under the ambit of CPA

Determine whether the competing legislation establishes an exclusive forum explicitly or implicitly

Finally, determine whether the arbitration clause is valid

The judicial pronouncements have practical implications for litigators and transactional lawyers alike.

First, the arbitration clause in business-to-consumer transactions does not serve as a complete jurisdictional shield. It will only be effective depending on the claimant’s statutory position and the nature of the dispute.

Second, forum selection strategy has to be dispute-specific rather than contract-specific. A contract may give rise to an arbitrable dispute between two commercial counterparties but could also result in a consumer dispute if a bona fide consumer is involved.

Third, contracts governed by sector-specific statutes like RERA should be drafted assuming the possibility of overlapping remedies.

Conclusion

The jurisprudence has transcended the black-and-white dichotomy of “consumer forum or arbitration?”.

The important point of consideration here should be: who can exercise the right to use the forum, what statute provides protection and whether Parliament has indeed made the alternative remedy exclusive? In cases such as Fair Air Engineers, National Seeds Corporation, Emaar MGF, Vidya Drolia, Imperia Structures, Ireo Grace Realtech, Citicorp Finance and even the recent T.K.A. Padmanabhan, the evolving position of the Supreme Court indicates a move from an approach of exclusivity to harmonization.