DIAMOND EXPORTS & ANR. versus UNITED INDIA INSURANCE COMPANY LIMITED & ORS.
[2021] 9 S.C.R. 993, Supreme Court of India, 2021
Outcome: Disposed off
Segment: Ratio
A
B
C
D
E
F
G
H
993
   [2021] 9 S.C.R. 993
993
DIAMOND EXPORTS & ANR.
v.
UNITED INDIA INSURANCE COMPANY LIMITED & ORS.
(Civil Appeal No. 7546 of 2021)
DECEMBER 14, 2021
[DR DHANANJAYA Y CHANDRACHUD, SURYA KANT
AND VIKRAM NATH, JJ.]
Consumer Protection Act, 1986 – s.13(2) – Limitation period
under – Vide order dtd.25.02.20, National Consumer Disputes
Redressal Commission (NCDRC) condoned the delay of 100 days
in filing respondent’s written statement, subject to cost –
Subsequently, Constitution Bench of Supreme Court vide judgment
dtd.04.03.20 in New India Assurance Company Limited v. Hilli
Multipurpose Cold Storage Private Limited held that the limitation
period u/s.13(2) could not be extended beyond the statutorily
prescribed period of 45 days – On appeal, held: Judgment of the
Constitution Bench in New India Assurance Company Limited was
given prospective effect – It did not make a distinction between
applications for condonation which were decided and those which
were pending on the date of the decision – Thus, decision in Daddy’s
Builders Private Limited v. Manisha Bhargava (rendered after the
judgment of the Constitution Bench) would not affect applications
for condonation pending or decided before 04.03.20 – Further,
orders of Supreme Court in Reliance General Insurance Company
Limited v. Mampee Timbers and Hardwares Private Limited and in
Bhasin Infotech and Infrastructure Private Limited v. Grand Venezia
Buyers Association (Bhasin Infotech-2018) recognized an element
of
discretion pending the reference before the Constitution Bench – In
the present case, before the decision of the Constitution Bench, the
delay was condoned by the NCDRC by furnishing reasons for the
exercise of such discretion – No case for interference is made in the
order of NCDRC allowing the application for condonation of delay
on merits – Arbitration and Conciliation Act, 2015 – Insolvency
and Bankruptcy Code, 2016 – Consumer Protection Act, 2019.
Disposing of the appeal, the Court
HELD: 1.1 In Reliance General Insurance Company Limited
v. Mampee Timbers and Hardwares Private Limited, a two-Judge
A
B
C
D
E
F
G
H
994
SUPREME COURT REPORTS
[2021] 9 S.C.R.
Bench of this Court had, on 10 February 2017, issued directions
to the consumer fora as regards applications for condonation
during the pendency of the reference to the Constitution Bench
in New India Assurance Company Limited v. Hilli Multipurpose
Cold Storage Private Limited. Similarly, during the pendency of
the reference to the Constitution Bench, on 11 February 2016, a
two-judge Bench of this Court in Bhasin Infotech and Infrastructure
Private Limited v. Grand Venezia Buyers Association [Bhasin
Infotech-2018] had permitted parties to file written statements
beyond the prescribed limitation period, subject to payment of
appropriate costs. [Para 10][1000-C, E]
Reliance General Insurance Company Limited v. Mampee
Timbers and Hardwares Private Limited (2021) 3 SCC
673: 2021 (2 ) SCALE 451; Bhasin Infotech and
Infrastructure Private Limited v. Grand Venezia Buyers
Association (2018) 17 SCC 255 – relied on.
New India Assurance Company Limited v. Hilli
Multipurpose Cold Storage Private Limited (2020) 5 SCC
757: 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 after
the judgment of the Constitution Bench in New India Assurance
Company Limited), this Court refused to interfere in a decision
of the NCDRC which had affirmed the judgment of the SCDRC
rejecting the application for condonation. The application for
condonation had not
been entertained on merits. However, there
are observations in Daddy’s Builders, based on the decision of
the Constitution Bench, which state that a delay beyond the outer
limit prescribed by Section 13 could not have been condoned.
While this is the position which emerges from the decision of the
Constitution Bench, the decision has been made prospective. In
Daddy’s Builders the application for condonation had been filed
before the decision of the Constitution Bench and had been
rejected on merits. The observations in Daddy’s Builders were
not necessary for its decision since, even on merits, no case for
condonation had been found by the NCDRC in that case. This
Court in Daddy’s Builders after noticing the decision in Reliance
A
B
C
D
E
F
G
H
995
General Insurance Company held that it left the discretion to be
exercised by the fora during the pendency of the reference to
the Constitution Bench and in that case, the NCDRC found no
reason to condone the delay. The subsequent observation of this
Court in Daddy’s Builders which implies that the principle laid
down by the Constitution Bench will even apply to applications
for condonation filed prior to the decision of the Constitution
Bench were unnecessary (once it had been held that even on
merits there was no case for condonation). Moreover, those
observations are not consistent with the legal position that
the 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 Section
13 of the Consumer Protection Act 1986 is specifically
circumscribed by the statute. The Consumer Protection Act 1986
and its successor are social welfare legislations designed to
protect the interests of consumers. The welfare of litigating
consumers has been the guiding principle for interpreting several
procedural and substantive questions arising out of the Consumer
Protection Act 1986. Given the conflicting decisions concerning
the nature of the discretion, the Constitution Bench in New India
Assurance Company Limited considered it appropriate to give
prospective effect to the decision. It did not
make a distinction
between applications for condonation which had been decided
and those which were pending on the date of the decision. Thus,
the decision in Daddy’s Builders would not affect applications that
were pending or decided before 4 March 2020. Such applications
for condonation would be entitled to the benefit of the position in
Reliance General Insurance Company Limited which directed
consumer fora to render a decision on merits. This Court has
expounded on the above principles in order to adopt a bright-
line standard which obviates uncertainty on the legal position
before the consumer fora and obviates further litigation. In the
present case, before the decision of the Constitution Bench, the
delay was condoned by the NCDRC by furnishing reasons for the
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS.
A
B
C
D
E
F
G
H
996
SUPREME COURT REPORTS
[2021] 9 S.C.R.
exercise of such discretion. Having regard to the prospective
effect of the judgment of the Constitution Bench in New India
Assurance Company Limited and the orders of this Court in
Reliance General Insurance Company Limited and Bhasin Infotech-
2018, which had recognized an element of discretion pending the
reference, no case for interference is made in the order of the
NCDRC allowing the application for condonation of delay on
merits. [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 SC
1186; J.J. Merchant v. Shrinath Chaturvedi (2002) 6
SCC 635 : [2002] 1 Suppl. SCR 469; Topline Shoes
Ltd. v. Corporation Bank (2002) 6 SCC 33 : [2002] 3
SCR 1167; Kailash v. Nanhku (2005) 4 SCC 480 :
[2005] 3 SCR 289; Salem Advocate Bar Assn. v. Union
of India, (2005) 6 SCC 344 : [2005] 1 Suppl. SCR 929;
New India Assurance Co. Ltd. v. Hilli Multipurpose Cold
Storage (P) Ltd. (2015) 16 SCC 20 – referred to.
Case Law Reference
[2002] 1 Suppl. SCR 469
referred to
Para 9
[2002] 3 SCR 1167
referred to
Para 9
[2005] 3 SCR 289
referred to
Para 9
[2005] 1 Suppl. SCR 929
referred to
Para 9
CIVIL APPELLATE JURISDICTION : Civil Appeal No.7546
of 2021.
From the Judgment and Order dated 25.02.2020 of the National
Consumer Disputes Redressal Commission, New Delhi in Consumer
Complaint No.2645 of 2018.
Salil Paul,
Sahil Paul, Ms. Manjeet Chawla, Advs. for the
Appellants.
Amit Kumar Singh, Mrs. K. Enatoli Sema, Ms. Chubalemla Chang,
Advs. for the Respondents.
A
B
C
D
E
F
G
H
997
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
1. This appeal arises from a judgment dated 25 February 2020 of
the National Consumer Disputes Redressal Commission1.
2. While entertaining IA Nos 15390 of 2019, 15391 of 2019 and
18307 of 2019 in Consumer Complaint No 2645 of 2018, the NCDRC
has condoned the delay of 100 days in filing a written statement. The
order of the NCDRC was a few days before the judgment of a Constitution
Bench dated 4 March 2020, in New India Assurance Company
Limited v. Hilli Multipurpose Cold Storage Private Limited2 which
held that the limitation period under Section 13(2)3 of the Consumer
Protection Act 1986 could not be extended beyond the statutorily
prescribed period of forty-five days.
3. The appellants filed a consumer complaint before the NCDRC
on 3 December 2018 based on two insurance policies. The claim is on
the 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 12
relates to goods in respect of which the procedure specified in sub-section (1) cannot be
followed, or if the complaint relates to any services,—
(a) refer a copy of such complaint to the opposite party directing him to give his
version of
the case within a period of thirty days or such extended period not exceeding
fifteen days as may be granted by the District Forum;
(b) where the opposite party, on receipt of a copy of the complaint, referred to him
under clause (a) denies or disputes the allegations contained in the complaint, or omits
or fails to take any action to represent his case within the time given by the District
Forum, 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 opposite
party, where the opposite party denies or disputes the allegations contained in the
complaint, or
(ii) ex parte on the basis of evidence brought to its notice by the complainant where the
opposite party omits or fails to take any action to represent his case within the time
given by the Forum;
(c) where the complainant fails to appear on the date of hearing before the District
Forum, the District Forum may either dismiss the complaint for default or decide it on
merits.”
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS.
A
B
C
D
E
F
G
H
998
SUPREME COURT REPORTS
[2021] 9 S.C.R.
Issue notice to Opposite Parties under Section 13(2) of the
Consumer Protection Act, 1986 making it clear that if the Opposite
Parties wish to contest the allegations in the Complaint, they may
file the Written Statements within 30 days of the receipt of notice
in the Complaint, failing which their right to file Written Statement
may be closed.”
4. The respondent received the summons on 20 May 2019 together
with the order of the NCDRC and a complete set of papers consisting
of the consumer complaint and documents. The respondent filed its
written statement on 23 September 2019 together with IA No 15390 of
2019 for condonation of a delay of 100 days. The appellant filed IA No
15391 of 2019 for the dismissal of the complaint.
5. On 26 September 2019, the NCDRC permitted the appellants
to file their reply to the respondent’s application for condoning the delay.
The appellants contested the respondent’s application for condonation
of delay. The NCDRC, by its order dated 25 February 2020, condoned
the delay subject to the respondent paying costs of Rs 50,000.
6.Mr Salil Paul, learned counsel appearing on behalf of the
appellant, has submitted that given the judgment of the Constitution Bench
in New India Assurance Company Limited (supra), a delay in excess
of the period which is stipulated in Section 13(1)(a) read with Section
13(2)(a) of the Consumer Protection Act 1986, i.e. thirty days extendable
by fifteen days, could
not have been condoned. The provisions of Section
13 are made applicable to proceedings before the NCDRC by Section
22.
7. On the other hand, it has been urged on behalf of the respondent
that (i) the decision in New India Assurance Company Limited (supra)
has been given prospective effect; (ii) before the decision in New India
Assurance Company Limited (supra) and during the pendency of the
reference to the Constitution Bench, a two-judge bench of this Court in
Reliance General Insurance Company Limited v. Mampee
Timbers and Hardwares Private Limited4  held the field in pursuance
of which the consumer fora were permitted to accept written statements
filed beyond the stipulated time of 45 days in an appropriate case on
suitable terms; and (iii) in the present case, the NCDRC has exercised
its discretion while condoning the delay, prior to the decision of the
4 (2021) 3 SCC 673 [“Reliance General Insurance Company Limited”]
A
B
C
D
E
F
G
H
999
Constitution Bench; (iv) hence, the order would not merit interference in
appeal.More so because the NCDRC noted that the delay was
occasioned due to the respondent filing a criminal case alleging fraud
and forgery against the second surveyor.
8. The judgment of the Constitution Bench in New India
Assurance Company Limited (supra) has held that the outer limit of
time for filing a written statement in Section 13 of the Consumer
Protection Act 1986 is binding. The conclusion in the decision of the
Constitution Bench is extracted below:
“62. To conclude, we hold that our answer to the first question
is that the District Forum has no power to extend the time for
filing the response to the complaint beyond the period of 15 days
in addition to 30 days as is envisaged under Section 13 of the
Consumer Protection Act; and the answer to the second question
is that the commencing point of limitation of 30 days under Section
13 of the Consumer Protection Act would be from the date of
receipt of the notice accompanied with the complaint by the
opposite party, and not mere receipt of the notice of the complaint.
63. This judgment to operate prospectively. The referred questions
are answered accordingly.”
Significantly, in paragraph 63, it has been clarified by the
Constitution Bench that the judgment would operate prospectively.
9. Prior to the judgment of the Constitution Bench in New India
Assurance Company Limited (supra), there was a judgment of a three-
judge
Bench of this Court in Dr J J Merchant v. Shrinath Chaturvedi5
which held that to ensure a speedy trial, the legislative mandate of not
granting more than forty-five days to submit the written statement requires
adherence, failing which the purpose of the statute would not be fulfilled.
Several conflicting decisions of this Court6 led to a reference to the
Constitution Bench. Eventually, as noted above, the Constitution Bench
in New India Assurance Company Limited (supra) held that the
District 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.
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
1000
SUPREME COURT REPORTS
[2021] 9 S.C.R.
period of fifteen days, in addition to thirty days as envisaged in Section
13 of the Consumer Protection Act 1986. However, given the conflicting
decisions which previously held the field, the judgment has been made
prospective.
10. The issue in the present appeal pertains to a situation where
prior to the decision of the Constitution Bench, the NCDRC had condoned
a delay for a period beyond the prescribed statutory outer limit. In the
present case, the NCDRC had exercised its discretion on 25 February
2020 to condone the delay prior to the decision of the Constitution Bench
on 4 March 2020. In Reliance General Insurance Company Limited
(supra), a two-Judge Bench of this Court had, on 10 February 2017,
issued directions to the consumer fora as regards applications for
condonation during the pendency of the reference to the Constitution
Bench. The Court observed thus:
“5. We consider it appropriate to direct that pending decision of
the larger Bench, it will be open to the Fora concerned to accept
the written statement filed beyond the stipulated time of 45 days
in an appropriate case, on suitable terms, including the payment
of costs, and to proceed with the matter.”
Similarly, during the pendency of the reference to the Constitution
Bench, on 11 February 2016, a two-judge Bench of this Court in Bhasin
Infotech and Infrastructure Private Limited v. Grand Venezia
Buyers Association7 had permitted parties to file
written statements
beyond the prescribed limitation period, subject to payment of appropriate
costs:
“4. Stay of the proceedings before the National Commission would
in our opinion not only result in procrastination but also cause
prejudice to the complainant. The proper course in our opinion is
to permit the appellant Company to file its response, which was
delayed by just about one day. We accordingly permit the appellant
to file its reply before the National Commission within two weeks
from today subject to payment of Rs 50,000 as costs to be paid to
the opposite party. The Commission can upon deposit of costs
proceed with the trial of the complainant on merits after receiving
the reply filed by the respondent. The pendency of present
proceedings shall not be an impediment for the Commission to do
7 (2018) 17 SCC 255[“Bhasin Infotech-2018”]
A
B
C
D
E
F
G
H
1001
so. This however is subject to the condition that the respondent
complainant is ready and willing to take the proceedings forward
on the conditions aforementioned. In case the respondent
complainants have any objection to the continuance of the
proceedings before the Commission they shall be free to seek
stay of such proceedings pending disposal of these appeals in
which event the proceedings shall remain stayed till disposal of
the present appeals.”
11. Subsequently, there was another judgment of a two-judge
Bench of this Court in Daddy’s Builders Private Limited v. Manisha
Bhargava8. The decision was rendered on 11 February 2021 after the
judgment of the Constitution Bench in New India Assurance Company
Limited (supra). That was a case where the NCDRC in a judgment
dated 4 September 2020, had confirmed the order of the Karnataka
State Consumer Disputes Redressal Commission dated 26 September
2018 rejecting an application seeking condonation of delay in filing the
written statement. The decision of the two-judge Bench in Reliance
General Insurance Company Limited (supra) was cited before the
Court. Referring to the said decision, this Court observed that in the
order dated 10 February 2017 pronounced in Reliance General
Insurance Company Limited (supra), it was specifically stated that it
would be open to the fora concerned to accept written statements filed
beyond the stipulated period of 45 days in an appropriate case on suitable
terms including the
payment of costs. Referring to the above order, this
Court in Daddy’s Builders (supra) observed that ultimately it was left
to the concerned fora to accept written statements beyond the stipulated
period of 45 days in an appropriate case. The Court held that the NCDRC
had found no reason to condone the delay on its merits:
“6. Now so far as the reliance placed upon the order passed by
this 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, the
same has been dealt with in detail by the National Commission by
the impugned order [Daddy’s Builders (P) Ltd. v. Manisha
Bhargava, 2020 SCC OnLine NCDRC 697] while deciding the
first appeal. As rightly observed by the National Commission, there
was no mandate that in all the cases where the written statement
8 (2021) 3 SCC 669 [“Daddy’s Builders”]
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
1002
SUPREME COURT REPORTS
[2021] 9 S.C.R.
was submitted beyond the stipulated period of 45 days, the delay
must be condoned and the written statement must be taken on
record. In order dated 10-2-2017 [Reliance General Insurance
Co. Ltd. v. Mampee Timbers & Hardwares (P) Ltd., (2021) 3
SCC 673] , it is specifically mentioned that it will be open to the
Fora concerned to accept the written statement filed beyond the
stipulated period of 45 days in an appropriate case, on suitable
terms, including the payment of costs and to proceed with the
matter. Therefore, ultimately, it was left to the Fora concerned to
accept the written statement beyond the stipulated period of 45
days in an appropriate case.”
The Court also referred to the decision of the Constitution Bench
in the following terms:
“7. As observed by the National Commission that despite sufficient
time granted the written statement was not filed within the
prescribed period of limitation. Therefore, the National
Commission has considered the aspect of condonation of delay
on merits also. In any case, in view of the earlier decision of this
Court in J.J. Merchant [J.J. Merchant v. Shrinath Chaturvedi,
(2002) 6 SCC 635] and the subsequent authoritative decision of
the Constitution Bench of this Court in New India Assurance Co.
Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd. [New India
Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd.,
(2020) 5 SCC 757 : (2020) 3 SCC (Civ) 338] , Consumer Fora
have no jurisdiction and/or power to accept the written statement
beyond the period of 45 days, we see no reason to interfere with
the impugned order [Daddy’s Builders (P) Ltd. v. Manisha
Bhargava, 2020 SCC OnLine NCDRC 697] passed by the learned
National 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 Kumar
v. Amit Agarwal9 considered a factual situation where the NCDRC
summarily dismissed an application for condonation of delay filed before
the decision of the Constitution Bench in New India Assurance
Company Limited (supra). The Court in Dr A Suresh Kumar (supra)
held that since the decision of the Constitution Bench was to operate
9 (2021) 7 SCC 466 [“Dr. A Suresh Kumar”]
A
B
C
D
E
F
G
H
1003
with prospective effect, applications for condonation of delay filed before
4 March 2020 ought to be considered on merits:
“2. In our view, since the application for condonation of delay
was filed prior to the judgment of the Constitution Bench, which
was 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 delay
ought to have been considered on merits and should not have
been dismissed on the basis of the Constitution Bench judgment
in 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 operate
prospectively and the written statement as well as the application
for condonation of delay had been filed much prior to the said
judgment. Accordingly, the impugned order [Amit Agrawal v. A.
Suresh Kumar, 2020 SCC OnLine NCDRC 927] of Ncdrc
deserves to be, and is, hereby set aside.”
The decision in Dr A Suresh Kumar (supra) did not notice the
observation 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 prospective
effect of the decision of the Constitution Bench in New India Assurance
Company Limited (supra)was recently noticed on 6 December 2021
by a two-judge Bench of this
Court in Bhasin Infotech and
Infrastructure Private Ltd. v. Neema Agarwal and Others10. The
Court was considering a consumer complaint and an application for
condonation of delay which were filed before 4 March 2020 but decided
after the decision of the Constitution Bench. The Court noted the
conflicting positions in the following terms:
“9. Two contrary views have emerged as regards what would be
meant by the phrase….. “This judgment to operate prospectively”
mandated in the Constitution Bench judgment. In the case of
Daddy’s Builders Private Limited (supra), the application for
condonation of delay had been rejected by the State Commission
prior to the Constitution Bench opinion on the aspect of power
10 2021 SCCOnLine SC 1186 [“Bhasin Infotech-2021”]
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
1004
SUPREME COURT REPORTS
[2021] 9 S.C.R.
and jurisdiction of the consumer fora to condone delay beyond
the stipulated 45 days in filing written submission/reply. The appeal
against that decision was rejected by the NCDRC on 4th
September, 2020, following the Constitution Bench decision. On
prospective operation of the Constitution Bench Judgment, opinion
of the Coordinate Bench in the case of Daddy’s Builders Private
Limited (supra) was that the prospective operation of the judgment
would apply only in cases where delay stood condoned on a date
prior to 4th March, 2020. In expressing this view, the Coordinate
Bench noted that one of the members of the Bench was also a
party to the said Constitution Bench decision. The position, as
regards composition of the Bench is similar in the case of Dr. A.
Suresh Kumar (supra) and in that judgment, a more liberal
approach has been adopted. The prospectivity of the Constitution
Bench decision has been held to cover cases where an application
for condonation of delay was filed prior to the judgment of the
Constitution Bench, but whose outcome was yet to be determined
at the time the Constitution Bench judgment was delivered.”
The two-judge Bench in Bhasin Infotech-2021(supra) followed
the line of precedent in Dr A Suresh Kumar (supra) and noted that the
prospective effect of the Constitution Bench would preserve the benefit
of the position laid down in Reliance General Insurance Company
(supra) concerning applications
for condonation that had been pending
or decided as of 4 March 2020:
“10. In our view, the prospective operation of the Judgment in the
case of New India Assurance Company Limited (supra) ought to
cover both sets of the cases in which delay in filing written reply
stood condoned after accepting the application for condonation of
delay in filing written statement/reply as well as the cases where
the decision on condonation of delay in filing written replies were
pending on 4th March, 2020. Once an application is filed for
condonation of delay, there may be cases where such applications
are decided upon on dates earlier than applications already filed
but yet to be determined. We do not have any laid down
administrative mechanism to decide in what manner applications
of this nature would be decided and the consumer fora or the
Courts apply their own discretion on the basis of various relevant
factors involved in individual cases, to prioritise their hearing. In
A
B
C
D
E
F
G
H
1005
our opinion, it would be artificial distinction to distinguish between
applications for condonation of delay already decided before 4th
March, 2020 and the applications for condonation of delay pending
on that date. So far as persons with pending applications for
condonation of delay in filing written replies are concerned, their
right to have their applications for condonation of delay in filing
written replies to be considered, would stand crystallised on 4th
March, 2020. Such right has also been recognised in the case of
Reliance General Insurance Company Limited (supra). Such right
could be extinguished only by specific legal provisions. In the event
the Constitution Bench judgment had altogether negated the right
to have delay in filing written statement condoned beyond the
period of 45 days, the right of such applicants could stand
extinguished. But as the judgment of the Constitution Bench is to
operate prospectively, in our understanding of the said judgment,
those with pending applications for condonation of delay would
retain their right to have their applications considered. But we
refrain from expressing any definitive opinion on this point as the
two Benches of equal strength have taken differing views on the
manner in which the prospective application of the Constitution
Bench judgment would be affected. In our opinion, this issue ought
to 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) sought
the reference of the matter to a larger bench.
14.To recapitulate, in Daddy’s Builders (supra), this Court
refused to interfere in a decision of the NCDRC which had affirmed the
judgment of the SCDRC rejecting the application for condonation. The
application for condonation had not been entertained on merits. However,
there are observations in Daddy’s Builders (supra), based on the
decision of the Constitution Bench, which state that a delay beyond the
outer limit prescribed by Section 13 could not have been condoned. While
this is the position which emerges from the decision of the Constitution
Bench, the decision has been made prospective. In Daddy’s Builders
(supra) the application for condonation had been filed before the decision
of the Constitution Bench and had been rejected on merits. Strictly
speaking, the observations in Daddy’s Builders (supra) were not
necessary for its decision since, even on merits, no case for condonation
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
1006
SUPREME COURT REPORTS
[2021] 9 S.C.R.
had been found by the NCDRC in that case. As noted above, this Court
in Daddy’s Builders (supra) after noticing the decision in Reliance
General Insurance Company (supra) held that it left the discretion to
be exercised by the fora during the pendency of the reference to the
Constitution Bench and in that case, the NCDRC found no reason to
condone the delay. The subsequent observation of this Court in Daddy’s
Builders (supra) which implies that the principle laid down by the
Constitution Bench will even apply to applications for condonation filed
prior to the decision of the Constitution Bench were unnecessary (once
it had been held that even on merits there was no case for condonation).
Moreover, those observations are with respect not consistent with the
legal position that the Constitution Bench gave prospective effect to its
decision.
15. The discretion for condonation of delay under Section 13 of
the Consumer Protection Act 1986 is specifically circumscribed by the
statute. Similar statutory provisions exist in the Arbitration and Conciliation
Act 2015 and the Insolvency and Bankruptcy Code 2016 though in a
different statutory context – facilitating the sanctity of the arbitral process
in the former and the legislative intent of ensuring timely disposal and
corporate rehabilitation in the latter. The Consumer protection Act 1986
and its successor are social welfare legislations designed to protect the
interests
of consumers. The Constitution Bench had thus noted:
“28. It is true that “justice hurried is justice buried”. But in the
same breath it is also said that “justice delayed is justice denied”.
The legislature has chosen the latter, and for a good reason. It
goes with the objective sought to be achieved by the Consumer
Protection Act, which is to provide speedy justice to the consumer.
It is not that sufficient time to file a response to the complaint has
been denied to the opposite party. It is just that discretion of
extension of time beyond 15 days (after the 30 days’ period) has
been curtailed and consequences for the same have been provided
under Section 13(2)(b)(ii) of the Consumer Protection Act. It may
be that in some cases the opposite party could face hardship
because 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 consumer
protection legislation, which essentially seeks to protect the rights of
A
B
C
D
E
F
G
H
1007
consumers who avail of myriad goods and services. The welfare of
litigating consumers has been the guiding principle for interpreting several
procedural and substantive questions arising out of the Consumer
Protection Act 1986. Recently, a two-judge Bench considered the effect
of the Consumer Protection Act 2019 which amended the pecuniary
jurisdiction of consumer fora, on pending proceedings. In arriving at its
decision, the Court noted:
“82. It would be difficult to attribute to Parliament, whose purpose
in enacting the Act of 2019 was to protect and support consumers
with an intent that would lead to financial hardship, uncertainty
and expense in the conduct of consumer litigation….”
A similar principle is inherent in the decision of the Constitution
Bench 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 effect
to the decision. It did not make a distinction between applications for
condonation which had been decided and those which were pending on
the date of the decision. Thus, the decision in Daddy’s Builders (supra)
would not affect applications that were pending or decided before 4
March 2020. Such applications for condonation would be entitled to the
benefit of the position in Reliance General Insurance Company
Limited (supra) which directed consumer fora to render a decision on
merits. We have
expounded on the above principles in order to adopt a
bright-line standard which obviates uncertainty on the legal position before
the consumer fora and obviates further litigation.
16. In the present case, before the decision of the Constitution
Bench, the delay was condoned by the NCDRC by furnishing reasons
for the exercise of such discretion. Having regard to the prospective
effect of the judgment of the Constitution Bench in New India
Assurance Company Limited (supra) and the orders of this Court in
Reliance General Insurance Company Limited (supra) and Bhasin
Infotech-2018 (supra), which had recognized an element of discretion
pending the reference, we are of the considered view that no case for
interference is made in the order of the NCDRC allowing the application
for condonation of delay on merits.
17. Learned counsel for the appellant states that the payment of
costs of Rs 50,000 could not be effected because of the lockdown, but a
DIAMOND EXPORTS & ANR. v. UNITED INDIA INSURANCE COMPANY
LIMITED & ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
H
1008
SUPREME COURT REPORTS
[2021] 9 S.C.R.
demand draft is ready. The amount shall be transmitted into the account
stipulated by the NCDRC within two weeks.
18. Liberty is granted to the appellants to file their replication
within a period of four weeks.
19. The appeal is accordingly disposed of.
20. Pending applications, if any, stand disposed of.
Divya Pandey
Appeal disposed of.