Supreme Court: Consumer Can Approach Consumer Forum Even If Agreement Provides For Arbitration

The Supreme Court in the case M/S Citicorp Finance (India) Limited Versus Snehasis Nanda observed and has reiterated that the arbitration clauses in an agreement would not override the choice of consumer for approaching the consumer forum for adjudication of the dispute.

- TDG NETWORK

The court in the case stated that a consumer cannot be forced to get the dispute adjudicated through Arbitration just because an arbitration clause is being mentioned in an agreement.

Adding to it, the court also stated that the consumer has the exclusive right to decide whether to pursue arbitration or approach the Consumer Forum.

The bench comprising of Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah was hearing the present matter.

In the present matter, the dispute arose in relation to tripartite agreement contained an arbitration clause.

Facts of the Case: The respondent i.e., the complainant before the NCDRC had purchased a flat with a housing loan of Rs.17,64,644/- from the ICICI Bank. However, one Mubarak Vahid Patel i.e., the borrower expressed interest in buying the said flat for an amount of Rs.32,00,000/-.

The borrower and the appellant i.e., Citicorp Finance entered into a loan agreement for an amount of Rs.23,40,000/-. As the flat was already being mortgaged with ICICI Bank, the borrower requested the appellant to disburse an amount of Rs.17,80,000/- (Rupees Seventeen Lakhs Eighty Thousand) directly to the respondent's ICICI Bank account, in order to secure the release of the flat.