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A 3-judge bench of the Supreme Court has clarified that the applications to condone the delay of more than 45 days in filing the submissions by the opposite party in consumer cases, pending as of March 4, 2020, will not be impacted by the ruling of the Constitution Bench in the case New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Limited.

In New India Assurance, the top court had held that the limitation period under Section 13(2) of the Consumer Protection Act 1986 could not be extended beyond the statutorily prescribed period of forty-five days.

An appeal was filed by Diamond Exports against the judgment of the National Consumer Disputes Redressal Commission wherein while entertaining an IA it had condoned the delay of 100 days in filing a written statement subject to the respondent paying costs of Rs 50,000.

Diamond Exports had filed a consumer complaint before the NCDRC in 2018 based on two insurance policies.

The petitioners while relying on New India Assurance Company Limited argued that 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.

It was further argued that the provisions of Section 13 were made applicable to proceedings before the NCDRC by Section 22.

In the present case, the NCDRC had exercised its discretion on February 25, 2020 to condone the delay prior to the decision of the Constitution Bench, thus the issue in the present appeal pertained 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.

With regard to this issue of condonation of delay, there were the divergent views that were brough before the court as given in Daddy Builders Private Ltd v. Manisha Bhargava and Dr. A Suresh Kumar v. Amit Agarwal.

In Daddy Builders, a two-judge bench comprising Justices DY Chandrachud and MR Shah held that the delay condonation applications which were pending as on March 4, 2020, will be impacted by the Constitution Bench judgment and the prospective application of the Constitution Bench judgment will only save delay condonation applications that were already decided before the date of the said judgment.

In Dr. A Suresh Kumar, a bench comprising Justices Vineet Saran and Dinesh Maheshwari took the view that even the delay condonation applications which are pending as on the date of the Constitution Bench judgment will remain unaffected and would be decided on merit.

A three judge bench comprising of Justices DY Chandrachud, Surya Kant and Vikram Nath in the instant case affirmed that the prospective application of the Constitution Bench will save the delay applications which were pending on the date of that decision, and they will have to be decided on merits.

It added,

"Strictly speaking, the observations in Daddy’s Builders (supra) were not necessary for its decision since, even on merits, no case for condonation 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 Court was further of the opinion that the discretion for condonation of delay under Section 13 of the Consumer Protection Act was specifically circumscribed by the statute and the Act of1986 and its successor are social welfare legislations designed to protect the interests of consumers. 

"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....", observed the Bench.

Since the delay was condoned by the NCDRC in the instant case by furnishing reasons for the exercise of such discretion, the Court was of the considered view that no case for interference was made in the order of the NCDRC allowing the application for condonation of delay on merits.

Cause Title: Diamond Exports & Anr. v United India Insurance Company Limited & Ors