DIAMOND EXPORTS & ANR. versus UNITED INDIA INSURANCE COMPANY LIMITED & ORS. on 14 December 2021

DIAMOND EXPORTS & ANR.

v.

UNITED INDIA INSURANCE COMPANY LIMITED & ORS.(Civil Appeal No. 7546 of 2021)

DECEMBER 14, 2021

[DR DHANANJAYA Y CHANDRACHUD, SURYA KANTAND VIKRAM NATH, JJ.]

Consumer Protection Act, 1986 – s.13(2) – Limitation periodunder – Vide order dtd.25.02.20, National Consumer DisputesRedressal Commission (NCDRC) condoned the delay of 100 daysin filing respondent’s written statement, subject to cost –Subsequently, Constitution Bench of Supreme Court vide judgmentdtd.04.03.20 in New India Assurance Company Limited v. HilliMultipurpose Cold Storage Private Limited held that the limitationperiod u/s.13(2) could not be extended beyond the statutorilyprescribed period of 45 days – On appeal, held: Judgment of theConstitution Bench in New India Assurance Company Limited wasgiven prospective effect – It did not make a distinction betweenapplications for condonation which were decided and those whichwere pending on the date of the decision – Thus, decision in Daddy’sBuilders Private Limited v. Manisha Bhargava (rendered after thejudgment of the Constitution Bench) would not affect applicationsfor condonation pending or decided before 04.03.20 – Further,orders of Supreme Court in Reliance General Insurance CompanyLimited v. Mampee Timbers and Hardwares Private Limited and inBhasin Infotech and Infrastructure Private Limited v. Grand VeneziaBuyers Association (Bhasin Infotech-2018) recognized an element ofdiscretion pending the reference before the Constitution Bench – Inthe present case, before the decision of the Constitution Bench, thedelay was condoned by the NCDRC by furnishing reasons for theexercise of such discretion – No case for interference is made in theorder of NCDRC allowing the application for condonation of delayon merits – Arbitration and Conciliation Act, 2015 – Insolvencyand Bankruptcy Code, 2016 – Consumer Protection Act, 2019.

Disposing of the appeal, the Court

HELD: 1.1 In Reliance General Insurance Company Limitedv. Mampee Timbers and Hardwares Private Limited, a two-Judge

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ABench of this Court had, on 10 February 2017, issued directionsto the consumer fora as regards applications for condonationduring the pendency of the reference to the Constitution Benchin New India Assurance Company Limited v. Hilli MultipurposeCold Storage Private Limited. Similarly, during the pendency ofthe reference to the Constitution Bench, on 11 February 2016, aBtwo-judge Bench of this Court in Bhasin Infotech and InfrastructurePrivate Limited v. Grand Venezia Buyers Association [BhasinInfotech-2018] had permitted parties to file written statementsbeyond the prescribed limitation period, subject to payment ofappropriate costs. [Para 10][1000-C, E]

CReliance General Insurance Company Limited v. MampeeTimbers and Hardwares Private Limited (2021) 3 SCC673: 2021 (2 ) SCALE 451; Bhasin Infotech andInfrastructure Private Limited v. Grand Venezia BuyersAssociation (2018) 17 SCC 255 – relied on.

DNew India Assurance Company Limited v. HilliMultipurpose Cold Storage Private Limited (2020) 5 SCC757: 2020 AIR 1267 – referred to.

1.2 In Daddy’s Builders Private Limited v. Manisha Bhargava(Two-Judge Bench decision rendered on 11 February 2021 afterEthe judgment of the Constitution Bench in New India AssuranceCompany Limited), this Court refused to interfere in a decisionof the NCDRC which had affirmed the judgment of the SCDRCrejecting the application for condonation. The application forcondonation had not been entertained on merits. However, thereFare observations in Daddy’s Builders, based on the decision ofthe Constitution Bench, which state that a delay beyond the outerlimit prescribed by Section 13 could not have been condoned.While this is the position which emerges from the decision of theConstitution Bench, the decision has been made prospective. InDaddy’s Builders the application for condonation had been filedGbefore the decision of the Constitution Bench and had beenrejected on merits. The observations in Daddy’s Builders werenot necessary for its decision since, even on merits, no case forcondonation had been found by the NCDRC in that case. ThisCourt in Daddy’s Builders after noticing the decision in Reliance H

DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY

General Insurance Company held that it left the discretion to beexercised by the fora during the pendency of the reference tothe Constitution Bench and in that case, the NCDRC found noreason to condone the delay. The subsequent observation of thisCourt in Daddy’s Builders which implies that the principle laiddown by the Constitution Bench will even apply to applicationsfor condonation filed prior to the decision of the ConstitutionBench were unnecessary (once it had been held that even onmerits there was no case for condonation). Moreover, thoseobservations are not consistent with the legal position thatthe Constitution Bench gave prospective effect to its decision.[Paras 11, 14][1001-C; 1005-F-H; 1006-A-C]

Daddy’s Builders Private Limited v. Manisha Bhargava(2021) 3 SCC 669 – explained.

1.3 The discretion for condonation of delay under Section13 of the Consumer Protection Act 1986 is specificallycircumscribed by the statute. The Consumer Protection Act 1986and its successor are social welfare legislations designed toprotect the interests of consumers. The welfare of litigatingconsumers has been the guiding principle for interpreting severalprocedural and substantive questions arising out of the ConsumerProtection Act 1986. Given the conflicting decisions concerningthe nature of the discretion, the Constitution Bench in New IndiaAssurance Company Limited considered it appropriate to giveprospective effect to the decision. It did not make a distinctionbetween applications for condonation which had been decidedand those which were pending on the date of the decision. Thus,the decision in Daddy’s Builders would not affect applications thatwere pending or decided before 4 March 2020. Such applicationsfor condonation would be entitled to the benefit of the position inReliance General Insurance Company Limited which directedconsumer fora to render a decision on merits. This Court hasexpounded on the above principles in order to adopt a bright-line standard which obviates uncertainty on the legal positionbefore the consumer fora and obviates further litigation. In thepresent case, before the decision of the Constitution Bench, thedelay was condoned by the NCDRC by furnishing reasons for the A

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Aexercise of such discretion. Having regard to the prospectiveeffect of the judgment of the Constitution Bench in New IndiaAssurance Company Limited and the orders of this Court inReliance General Insurance Company Limited and Bhasin Infotech-2018, which had recognized an element of discretion pending thereference, no case for interference is made in the order of theBNCDRC allowing the application for condonation of delay onmerits. [Paras 15, 16][1006-C-E; 1007-A, C-G]

Dr A Suresh Kumar v. Amit Agarwal (2021) 7 SCC 466;Bhasin Infotech and Infrastructure Private Ltd. v.Neema Agarwal and Others 2021 SCC OnLine SCC1186; J.J. Merchant v. Shrinath Chaturvedi (2002) 6SCC 635 : [2002] 1 Suppl. SCR 469; Topline ShoesLtd. v. Corporation Bank (2002) 6 SCC 33 : [2002] 3SCR 1167; Kailash v. Nanhku (2005) 4 SCC 480 :[2005] 3 SCR 289; Salem Advocate Bar Assn. v. UnionDof India, (2005) 6 SCC 344 : [2005] 1 Suppl. SCR 929;New India Assurance Co. Ltd. v. Hilli Multipurpose ColdStorage (P) Ltd. (2015) 16 SCC 20 – referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No.7546Fof 2021.

From the Judgment and Order dated 25.02.2020 of the NationalConsumer Disputes Redressal Commission, New Delhi in ConsumerComplaint No.2645 of 2018.GSalil Paul, Sahil Paul, Ms. Manjeet Chawla, Advs. for theAppellants.

Amit Kumar Singh, Mrs. K. Enatoli Sema, Ms. Chubalemla Chang,Advs. for the Respondents.

The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

1. This appeal arises from a judgment dated 25 February 2020 ofthe National Consumer Disputes Redressal Commission[1].

2. While entertaining IA Nos 15390 of 2019, 15391 of 2019 and18307 of 2019 in Consumer Complaint No 2645 of 2018, the NCDRChas condoned the delay of 100 days in filing a written statement. Theorder of the NCDRC was a few days before the judgment of a ConstitutionBench dated 4 March 2020, in New India Assurance CompanyLimited v. Hilli Multipurpose Cold Storage Private Limited[2 ]whichheld that the limitation period under Section 13(2)[3 ]of the ConsumerProtection Act 1986 could not be extended beyond the statutorilyprescribed period of forty-five days.

3. The appellants filed a consumer complaint before the NCDRCon 3 December 2018 based on two insurance policies. The claim is onthe ground of an alleged fire that took place at the factory of the appellant.On 6 December 2018, the NCDRC passed the following order:

“Heard. Complaint is admitted, subject to just exceptions.

1 “NCDRC”

2 (2020) 5 SCC 757 [“New India Assurance Company Limited”]

3 “13 (2) The District Forum shall, if the complaint 54[admitted] by it under Section 12relates to goods in respect of which the procedure specified in sub-section (1) cannot befollowed, or if the complaint relates to any services,—

(a) refer a copy of such complaint to the opposite party directing him to give hisversion of the case within a period of thirty days or such extended period not exceedingfifteen days as may be granted by the District Forum; (b) where the opposite party, on receipt of a copy of the complaint, referred to himunder clause (a) denies or disputes the allegations contained in the complaint, or omitsor fails to take any action to represent his case within the time given by the DistrictForum, the District Forum shall proceed to settle the consumer dispute, —

(i) on the basis of evidence brought to its notice by the complainant and the oppositeparty, where the opposite party denies or disputes the allegations contained in thecomplaint, or

(ii) ex parte on the basis of evidence brought to its notice by the complainant where theopposite party omits or fails to take any action to represent his case within the timegiven by the Forum;

(c) where the complainant fails to appear on the date of hearing before the DistrictForum, the District Forum may either dismiss the complaint for default or decide it onmerits.”

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AIssue notice to Opposite Parties under Section 13(2) of theConsumer Protection Act, 1986 making it clear that if the OppositeParties wish to contest the allegations in the Complaint, they mayfile the Written Statements within 30 days of the receipt of noticein the Complaint, failing which their right to file Written Statementmay be closed.”B

4. The respondent received the summons on 20 May 2019 togetherwith the order of the NCDRC and a complete set of papers consistingof the consumer complaint and documents. The respondent filed itswritten statement on 23 September 2019 together with IA No 15390 of2019 for condonation of a delay of 100 days. The appellant filed IA NoC15391 of 2019 for the dismissal of the complaint.

5. On 26 September 2019, the NCDRC permitted the appellantsto file their reply to the respondent’s application for condoning the delay.The appellants contested the respondent’s application for condonationof delay. The NCDRC, by its order dated 25 February 2020, condonedDthe delay subject to the respondent paying costs of Rs 50,000.

6. Mr Salil Paul, learned counsel appearing on behalf of theappellant, has submitted that given the judgment of the Constitution Benchin New India Assurance Company Limited (supra), a delay in excessof the period which is stipulated in Section 13(1)(a) read with SectionE13(2)(a) of the Consumer Protection Act 1986, i.e. thirty days extendableby fifteen days, could not have been condoned. The provisions of Section13 are made applicable to proceedings before the NCDRC by Section22.

7. On the other hand, it has been urged on behalf of the respondentFthat (i) the decision in New India Assurance Company Limited (supra)has been given prospective effect; (ii) before the decision in New IndiaAssurance Company Limited (supra) and during the pendency of thereference to the Constitution Bench, a two-judge bench of this Court inReliance General Insurance Company Limited v. MampeeGTimbers and Hardwares Private Limited[4 ]held the field in pursuanceof which the consumer fora were permitted to accept written statementsfiled beyond the stipulated time of 45 days in an appropriate case onsuitable terms; and (iii) in the present case, the NCDRC has exercisedits discretion while condoning the delay, prior to the decision of the

Constitution Bench; (iv) hence, the order would not merit interference inappeal.More so because the NCDRC noted that the delay wasoccasioned due to the respondent filing a criminal case alleging fraudand forgery against the second surveyor.

8. The judgment of the Constitution Bench in New IndiaAssurance Company Limited (supra) has held that the outer limit oftime for filing a written statement in Section 13 of the ConsumerProtection Act 1986 is binding. The conclusion in the decision of theConstitution Bench is extracted below:

“62. To conclude, we hold that our answer to the first questionis that the District Forum has no power to extend the time forfiling the response to the complaint beyond the period of 15 daysin addition to 30 days as is envisaged under Section 13 of theConsumer Protection Act; and the answer to the second questionis that the commencing point of limitation of 30 days under Section13 of the Consumer Protection Act would be from the date ofreceipt of the notice accompanied with the complaint by theopposite party, and not mere receipt of the notice of the complaint.

63. This judgment to operate prospectively. The referred questionsare answered accordingly.”

Significantly, in paragraph 63, it has been clarified by theConstitution Bench that the judgment would operate prospectively.

9. Prior to the judgment of the Constitution Bench in New IndiaAssurance Company Limited (supra), there was a judgment of a three-judge Bench of this Court in Dr J J Merchant v. Shrinath Chaturvedi[5]which held that to ensure a speedy trial, the legislative mandate of notgranting more than forty-five days to submit the written statement requiresadherence, failing which the purpose of the statute would not be fulfilled.Several conflicting decisions of this Court[6] led to a reference to theConstitution Bench. Eventually, as noted above, the Constitution Benchin New India Assurance Company Limited (supra) held that theDistrict Forum has no power to condone a delay beyond a discretionary 5 (2002) 6 SCC 635 [“Dr. J J Merchant”]

6 Topline Shoes Ltd. v. Corporation Bank, (2002) 6 SCC 33; Kailash v. Nanhku, (2005)4 SCC 480; Salem Advocate Bar Assn. (2) v. Union of India, (2005) 6 SCC 344; J.J.Merchant v. Shrinath Chaturvedi, (2002) 6 SCC 635; New India Assurance Co. Ltd. v.Hilli Multipurpose Cold Storage (P) Ltd., (2015) 16 SCC 20.

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Aperiod of fifteen days, in addition to thirty days as envisaged in Section13 of the Consumer Protection Act 1986. However, given the conflictingdecisions which previously held the field, the judgment has been madeprospective.

10. The issue in the present appeal pertains to a situation whereBprior to the decision of the Constitution Bench, the NCDRC had condoneda delay for a period beyond the prescribed statutory outer limit. In thepresent case, the NCDRC had exercised its discretion on 25 February2020 to condone the delay prior to the decision of the Constitution Benchon 4 March 2020. In Reliance General Insurance Company Limited(supra), a two-Judge Bench of this Court had, on 10 February 2017,Cissued directions to the consumer fora as regards applications forcondonation during the pendency of the reference to the ConstitutionBench. The Court observed thus:

“5. We consider it appropriate to direct that pending decision ofthe larger Bench, it will be open to the Fora concerned to acceptDthe written statement filed beyond the stipulated time of 45 daysin an appropriate case, on suitable terms, including the paymentof costs, and to proceed with the matter.”

Similarly, during the pendency of the reference to the ConstitutionBench, on 11 February 2016, a two-judge Bench of this Court in BhasinEInfotech and Infrastructure Private Limited v. Grand VeneziaBuyers Association[7 ]had permitted parties to file written statementsbeyond the prescribed limitation period, subject to payment of appropriatecosts:

“4. Stay of the proceedings before the National Commission wouldFin our opinion not only result in procrastination but also causeprejudice to the complainant. The proper course in our opinion isto permit the appellant Company to file its response, which wasdelayed by just about one day. We accordingly permit the appellantto file its reply before the National Commission within two weeksGfrom today subject to payment of Rs 50,000 as costs to be paid tothe opposite party. The Commission can upon deposit of costsproceed with the trial of the complainant on merits after receivingthe reply filed by the respondent. The pendency of presentproceedings shall not be an impediment for the Commission to do H7 (2018) 17 SCC 255[“Bhasin Infotech-2018”]

so. This however is subject to the condition that the respondentcomplainant is ready and willing to take the proceedings forwardon the conditions aforementioned. In case the respondentcomplainants have any objection to the continuance of theproceedings before the Commission they shall be free to seekstay of such proceedings pending disposal of these appeals inwhich event the proceedings shall remain stayed till disposal ofthe present appeals.”

11. Subsequently, there was another judgment of a two-judgeBench of this Court in Daddy’s Builders Private Limited v. ManishaBhargava[8]. The decision was rendered on 11 February 2021 after thejudgment of the Constitution Bench in New India Assurance CompanyLimited (supra). That was a case where the NCDRC in a judgmentdated 4 September 2020, had confirmed the order of the KarnatakaState Consumer Disputes Redressal Commission dated 26 September2018 rejecting an application seeking condonation of delay in filing thewritten statement. The decision of the two-judge Bench in RelianceGeneral Insurance Company Limited (supra) was cited before theCourt. Referring to the said decision, this Court observed that in theorder dated 10 February 2017 pronounced in Reliance GeneralInsurance Company Limited (supra), it was specifically stated that itwould be open to the fora concerned to accept written statements filedbeyond the stipulated period of 45 days in an appropriate case on suitableterms including the payment of costs. Referring to the above order, thisCourt in Daddy’s Builders (supra) observed that ultimately it was leftto the concerned fora to accept written statements beyond the stipulatedperiod of 45 days in an appropriate case. The Court held that the NCDRChad found no reason to condone the delay on its merits:

“6. Now so far as the reliance placed upon the order passed bythis Court dated 10-2-2017 in Reliance General Insurance Co.Ltd. [Reliance General Insurance Co. Ltd.v. Mampee Timbers& Hardwares (P) Ltd., (2021) 3 SCC 673] is concerned, thesame has been dealt with in detail by the National Commission bythe impugned order [Daddy’s Builders (P) Ltd. v. ManishaBhargava, 2020 SCC OnLine NCDRC 697] while deciding thefirst appeal. As rightly observed by the National Commission, therewas no mandate that in all the cases where the written statement 8 (2021) 3 SCC 669 [“Daddy’s Builders”]

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Awas submitted beyond the stipulated period of 45 days, the delaymust be condoned and the written statement must be taken onrecord. In order dated 10-2-2017 [Reliance General InsuranceCo. Ltd. v. Mampee Timbers & Hardwares (P) Ltd., (2021) 3SCC 673] , it is specifically mentioned that it will be open to theFora concerned to accept the written statement filed beyond theBstipulated period of 45 days in an appropriate case, on suitableterms, including the payment of costs and to proceed with thematter. Therefore, ultimately, it was left to the Fora concerned toaccept the written statement beyond the stipulated period of 45days in an appropriate case.”

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“7. As observed by the National Commission that despite sufficienttime granted the written statement was not filed within theprescribed period of limitation. Therefore, the NationalDCommission has considered the aspect of condonation of delayon merits also. In any case, in view of the earlier decision of thisCourt in J.J. Merchant [J.J. Merchant v. Shrinath Chaturvedi,(2002) 6 SCC 635] and the subsequent authoritative decision ofthe Constitution Bench of this Court in New India Assurance Co.ELtd. v. Hilli Multipurpose Cold Storage (P) Ltd. [New IndiaAssurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd.,(2020) 5 SCC 757 : (2020) 3 SCC (Civ) 338] , Consumer Forahave no jurisdiction and/or power to accept the written statementbeyond the period of 45 days, we see no reason to interfere withthe impugned order [Daddy’s Builders (P) Ltd. v. ManishaFBhargava, 2020 SCC OnLine NCDRC 697] passed by the learnedNational Commission.”

12. A few months after the decision in Daddy’s Builders (supra),on 8 July 2021, a two-judge Bench of this Court in Dr A Suresh Kumarv. Amit Agarwal[9 ]considered a factual situation where the NCDRCGsummarily dismissed an application for condonation of delay filed beforethe decision of the Constitution Bench in New India AssuranceCompany Limited (supra). The Court in Dr A Suresh Kumar (supra)held that since the decision of the Constitution Bench was to operate with prospective effect, applications for condonation of delay filed before4 March 2020 ought to be considered on merits:

“2. In our view, since the application for condonation of delaywas filed prior to the judgment of the Constitution Bench, whichwas delivered on 4-3-2020 [New India Assurance Co. Ltd. v.Hilli Multipurpose Cold Storage (P) Ltd., (2020) 5 SCC 757 : (2020)3 SCC (Civ) 338] , the said application for condonation of delayought to have been considered on merits and should not havebeen dismissed on the basis of the Constitution Bench judgmentin New India Assurance Co. Ltd. [New India Assurance Co. Ltd.v. Hilli Multipurpose Cold Storage (P) Ltd., (2020) 5 SCC 757 :(2020) 3 SCC (Civ) 338] because the said judgment was to operateprospectively and the written statement as well as the applicationfor condonation of delay had been filed much prior to the saidjudgment. Accordingly, the impugned order [Amit Agrawal v. A.Suresh Kumar, 2020 SCC OnLine NCDRC 927] of Ncdrcdeserves to be, and is, hereby set aside.”

The decision in Dr A Suresh Kumar (supra) did not notice theobservation of a prior bench of co-equal strength in Daddy’s Builders(supra).

13. The divergence between the positions in Dr A Suresh Kumar(supra) and Daddy’s Builders (supra) in interpreting the prospectiveeffect of the decision of the Constitution Bench in New India AssuranceCompany Limited (supra)was recently noticed on 6 December 2021by a two-judge Bench of this Court in Bhasin Infotech andInfrastructure Private Ltd. v. Neema Agarwal and Others[10]. TheCourt was considering a consumer complaint and an application forcondonation of delay which were filed before 4 March 2020 but decidedafter the decision of the Constitution Bench. The Court noted theconflicting positions in the following terms:

“9. Two contrary views have emerged as regards what would bemeant by the phrase….. “This judgment to operate prospectively”mandated in the Constitution Bench judgment. In the case ofDaddy’s Builders Private Limited (supra), the application forcondonation of delay had been rejected by the State Commissionprior to the Constitution Bench opinion on the aspect of power A

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Aand jurisdiction of the consumer fora to condone delay beyondthe stipulated 45 days in filing written submission/reply. The appealagainst that decision was rejected by the NCDRC on 4thSeptember, 2020, following the Constitution Bench decision. Onprospective operation of the Constitution Bench Judgment, opinionof the Coordinate Bench in the case of Daddy’s Builders PrivateBLimited (supra) was that the prospective operation of the judgmentwould apply only in cases where delay stood condoned on a dateprior to 4th March, 2020. In expressing this view, the CoordinateBench noted that one of the members of the Bench was also aparty to the said Constitution Bench decision. The position, asCregards composition of the Bench is similar in the case of Dr. A.Suresh Kumar (supra) and in that judgment, a more liberalapproach has been adopted. The prospectivity of the ConstitutionBench decision has been held to cover cases where an applicationfor condonation of delay was filed prior to the judgment of theConstitution Bench, but whose outcome was yet to be determinedDat the time the Constitution Bench judgment was delivered.”

The two-judge Bench in Bhasin Infotech-2021(supra) followedthe line of precedent in Dr A Suresh Kumar (supra) and noted that theprospective effect of the Constitution Bench would preserve the benefitof the position laid down in Reliance General Insurance CompanyE(supra) concerning applications for condonation that had been pendingor decided as of 4 March 2020:

“10. In our view, the prospective operation of the Judgment in thecase of New India Assurance Company Limited (supra) ought tocover both sets of the cases in which delay in filing written replyFstood condoned after accepting the application for condonation ofdelay in filing written statement/reply as well as the cases wherethe decision on condonation of delay in filing written replies werepending on 4th March, 2020. Once an application is filed forcondonation of delay, there may be cases where such applicationsGare decided upon on dates earlier than applications already filedbut yet to be determined. We do not have any laid downadministrative mechanism to decide in what manner applicationsof this nature would be decided and the consumer fora or theCourts apply their own discretion on the basis of various relevantfactors involved in individual cases, to prioritise their hearing. In H

our opinion, it would be artificial distinction to distinguish betweenapplications for condonation of delay already decided before 4thMarch, 2020 and the applications for condonation of delay pendingon that date. So far as persons with pending applications forcondonation of delay in filing written replies are concerned, theirright to have their applications for condonation of delay in filingwritten replies to be considered, would stand crystallised on 4thMarch, 2020. Such right has also been recognised in the case ofReliance General Insurance Company Limited (supra). Such rightcould be extinguished only by specific legal provisions. In the eventthe Constitution Bench judgment had altogether negated the rightto have delay in filing written statement condoned beyond theperiod of 45 days, the right of such applicants could standextinguished. But as the judgment of the Constitution Bench is tooperate prospectively, in our understanding of the said judgment,those with pending applications for condonation of delay wouldretain their right to have their applications considered. But werefrain from expressing any definitive opinion on this point as thetwo Benches of equal strength have taken differing views on themanner in which the prospective application of the ConstitutionBench judgment would be affected. In our opinion, this issue oughtto be decided by a larger Bench.”

However, in view of the conflicting position in Daddy’s Builders(supra), the two-judge Bench in Bhasin Infotech-2021 (supra) soughtthe reference of the matter to a larger bench.

14. To recapitulate, in Daddy’s Builders (supra), this Courtrefused to interfere in a decision of the NCDRC which had affirmed thejudgment of the SCDRC rejecting the application for condonation. Theapplication for condonation had not been entertained on merits. However,there are observations in Daddy’s Builders (supra), based on thedecision of the Constitution Bench, which state that a delay beyond theouter limit prescribed by Section 13 could not have been condoned. Whilethis is the position which emerges from the decision of the ConstitutionBench, the decision has been made prospective. In Daddy’s Builders(supra) the application for condonation had been filed before the decisionof the Constitution Bench and had been rejected on merits. Strictlyspeaking, the observations in Daddy’s Builders (supra) were notnecessary for its decision since, even on merits, no case for condonation AB

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Ahad been found by the NCDRC in that case. As noted above, this Courtin Daddy’s Builders (supra) after noticing the decision in RelianceGeneral Insurance Company (supra) held that it left the discretion tobe exercised by the fora during the pendency of the reference to theConstitution Bench and in that case, the NCDRC found no reason tocondone the delay. The subsequent observation of this Court in Daddy’sBBuilders (supra) which implies that the principle laid down by theConstitution Bench will even apply to applications for condonation filedprior to the decision of the Constitution Bench were unnecessary (onceit had been held that even on merits there was no case for condonation).Moreover, those observations are with respect not consistent with theClegal position that the Constitution Bench gave prospective effect to itsdecision.

15. The discretion for condonation of delay under Section 13 ofthe Consumer Protection Act 1986 is specifically circumscribed by thestatute. Similar statutory provisions exist in the Arbitration and ConciliationDAct 2015 and the Insolvency and Bankruptcy Code 2016 though in adifferent statutory context – facilitating the sanctity of the arbitral processin the former and the legislative intent of ensuring timely disposal andcorporate rehabilitation in the latter. The Consumer protection Act 1986and its successor are social welfare legislations designed to protect theinterests of consumers. The Constitution Bench had thus noted:E“28. It is true that “justice hurried is justice buried”. But in thesame breath it is also said that “justice delayed is justice denied”.The legislature has chosen the latter, and for a good reason. Itgoes with the objective sought to be achieved by the ConsumerProtection Act, which is to provide speedy justice to the consumer.FIt is not that sufficient time to file a response to the complaint hasbeen denied to the opposite party. It is just that discretion ofextension of time beyond 15 days (after the 30 days’ period) hasbeen curtailed and consequences for the same have been providedunder Section 13(2)(b)(ii) of the Consumer Protection Act. It mayGbe that in some cases the opposite party could face hardshipbecause of such provision, yet for achieving the object of the Act,which is speedy and simple redressal of consumer disputes,hardship which may be caused to a party has to be ignored.”

This was owing to the social welfare intention of the consumerHprotection legislation, which essentially seeks to protect the rights of consumers who avail of myriad goods and services. The welfare oflitigating consumers has been the guiding principle for interpreting severalprocedural and substantive questions arising out of the ConsumerProtection Act 1986. Recently, a two-judge Bench considered the effectof the Consumer Protection Act 2019 which amended the pecuniaryjurisdiction of consumer fora, on pending proceedings. In arriving at itsdecision, the Court noted:

“82. It would be difficult to attribute to Parliament, whose purposein enacting the Act of 2019 was to protect and support consumerswith an intent that would lead to financial hardship, uncertaintyand expense in the conduct of consumer litigation….”

A similar principle is inherent in the decision of the ConstitutionBench in New India Assurance Company Ltd. (supra). However,given the conflicting decisions concerning the nature of such discretion,the Constitution Bench considered it appropriate to give prospective effectto the decision. It did not make a distinction between applications forcondonation which had been decided and those which were pending onthe date of the decision. Thus, the decision in Daddy’s Builders (supra)would not affect applications that were pending or decided before 4March 2020. Such applications for condonation would be entitled to thebenefit of the position in Reliance General Insurance CompanyLimited (supra) which directed consumer fora to render a decision onmerits. We have expounded on the above principles in order to adopt abright-line standard which obviates uncertainty on the legal position beforethe consumer fora and obviates further litigation.

16. In the present case, before the decision of the ConstitutionBench, the delay was condoned by the NCDRC by furnishing reasonsfor the exercise of such discretion. Having regard to the prospectiveeffect of the judgment of the Constitution Bench in New IndiaAssurance Company Limited (supra) and the orders of this Court inReliance General Insurance Company Limited (supra) and BhasinInfotech-2018 (supra), which had recognized an element of discretionpending the reference, we are of the considered view that no case forinterference is made in the order of the NCDRC allowing the applicationfor condonation of delay on merits.

17. Learned counsel for the appellant states that the payment ofcosts of Rs 50,000 could not be effected because of the lockdown, but a A

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Ademand draft is ready. The amount shall be transmitted into the accountstipulated by the NCDRC within two weeks.

18. Liberty is granted to the appellants to file their replicationwithin a period of four weeks.

19. The appeal is accordingly disposed of.B

20. Pending applications, if any, stand disposed of.

Divya Pandey

Appeal disposed of.

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