Delhi High Court: RERA Relief Does Not Bar Arbitration Protection
Court sets aside Commercial Court’s order on doctrine of election
Homebuyers can seek both RERA remedies and arbitration safeguards
By Our Legal Reporter
New Delhi: December 25, 2025:
In a landmark judgment, the Delhi High Court has clarified that relief under the Real Estate (Regulation and Development) Act, 2016 (RERA) does not bar parties from seeking interim protection under the Arbitration and Conciliation Act, 1996. The ruling, delivered by a Division Bench of Justice Prathiba M. Singh and Justice Shail Jain on 24 December 2025, set aside a Commercial Court’s order that had misapplied the doctrine of election.
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The Court emphasized that remedies under RERA and arbitration are contemporaneous and not mutually exclusive, meaning homebuyers and investors can pursue both avenues without being forced to choose one over the other.
Background of the Case
- The dispute arose from the Neo Square project in Gurugram, developed by M/S Neo Developers Pvt Ltd.
- Homebuyers, including Rahul Bhargava, had entered into Builder-Buyer Agreements in 2015.
- When disputes arose, buyers approached RERA for relief but also sought interim protection under Section 9 of the Arbitration Act.
- The Commercial Court rejected their arbitration plea, citing the doctrine of election, which suggests that once a party chooses one remedy, they cannot pursue another.
The buyers challenged this decision before the Delhi High Court.
Court’s Observations
The High Court made several critical points:
- Doctrine of Election Misapplied: The Commercial Court wrongly applied the doctrine of election. The High Court clarified that choosing RERA does not prevent parties from seeking arbitration remedies.
- Concurrent Remedies: RERA and arbitration remedies can coexist. The Court noted that “the mere fact that a party has availed a statutory remedy under a special enactment does not, by itself, denude the Court of jurisdiction to grant interim protection.”
- No Overlap in Reliefs: The Court stressed that the reliefs sought under RERA and arbitration did not overlap in substance or effect.
- Arbitration Validity: Disputes arising from Builder-Buyer Agreements are arbitrable, even if RERA remedies are available.
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Impact of the Ruling
This judgment has wide implications:
- For Homebuyers: Provides clarity that they can seek both RERA remedies and arbitration protection, strengthening their legal options.
- For Developers: Reinforces accountability, as arbitration clauses in agreements remain enforceable despite RERA proceedings.
- For Judiciary: Sets a precedent that courts must avoid misapplying the doctrine of election in real estate disputes.
- For Real Estate Sector: Encourages confidence among investors and buyers by ensuring multiple avenues of redress.
Broader Context
- The RERA Act, 2016 was enacted to protect homebuyers and ensure transparency in the real estate sector.
- The Arbitration Act, 1996 provides a mechanism for speedy resolution of disputes through arbitration.
- Legal experts note that this ruling harmonizes the two laws, ensuring that parties are not forced into a rigid choice.
- Previous Delhi High Court rulings have also held that disputes involving refund of payments under Builder-Buyer Agreements are arbitrable.
Reactions
- Legal Community: Lawyers welcomed the judgment as a progressive step that balances statutory remedies with contractual rights.
- Homebuyers: Many see it as a relief, as they can now pursue arbitration without fear of losing RERA protections.
- Developers: Some expressed concern that dual remedies could increase litigation but acknowledged that it ensures fairness.
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Conclusion
The Delhi High Court’s ruling that RERA relief does not bar arbitration protection is a landmark in real estate law. By setting aside the Commercial Court’s order, the Court has ensured that homebuyers and investors retain access to both statutory and contractual remedies.
This judgment strengthens consumer rights, clarifies the scope of arbitration in real estate disputes, and reinforces judicial commitment to fairness and transparency.
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