Applications To Condone Delay In Filing Version In Consumer Cases Pending On 04.03.2020 Not Impacted By CB Judgment : SC Clarifies

Update: 2021-12-14 06:49 GMT

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Settling a conflict between two division bench judgments, a 3-judge bench of the Supreme Court on Tuesday clarified that the applications to condone the delay of more than 45 days in filing the version of the opposite party in consumer cases, which were pending as of March 4, 2020, will not be impacted by the ruling of the Constitution Bench judgment in the case New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Limited, which had held that Consumer Forum cannot condone the delay of more than 45 days in filing the version of the opposite party.

It may be noted that March 4, 2020, is the date of the said Constitution Bench judgment.

In the instant case Diamond Exports and another versus United India Insurance Co Ltd and others, a three judgment bench comprising Justices DY Chandrachud, Surya Kant and Vikram Nath settled the divergent views expressed in the judgments in Daddy Builders Private Ltd vs Manisha Bhargava LL 2021 SC 78 and Dr. A Suresh Kumar vs. Amit Agarwal LL 2021 SC 290.

The Constitution Bench judgment had declared that it will operate prospectively. The prospective impact of this judgment was understood differently in Daddy Builders and Dr.A Suresh Kumar cases. In Daddy Builders, a two-judge bench comprising Justice 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. According to Daddy Builders, 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.

However, a contrary view was taken by another 2-judge bench in the case Dr. A Suresh Kumar vs. Amit Agarwal LL 2021 SC 290. In this case, 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. According to this bench, such pending delay condonation applications should also be decided on merit. In other words, this bench interpreted "prospectively" to mean that the Constitution Bench judgment will apply only to delay condonation applications filed after March 4, 2020.

Now, this three bench led by Justice Chandrachud has in effect overruled the view in Daddy Builders. The three-judge bench held that the observations in Daddy Builders regarding pending delay applications were unnecessary. It 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.

The three-judge bench also noted that last week another two-judge bench had referred to the larger bench the issue in view of the divergence between Daddy Builders and Dr A Suresh Kumar. That reference happened in the case Bhasin Infotech and Infrastructure Private Ltd versus Neema Agarwal and others, which was heard by a two-judge bench comprising Justice Vineet Saran and Aniruddha Bose.

Today, while pronouncing the order of the three-judge bench, Justice Chandrachud orally remarked "we have also noticed the reference order passed by Justice Saran last week... we are of the same view. With this judgment, it may not be necessary to decide the reference".

Justice Chandrachud further remarked that this decision will settle the confusion in various applications before National and State Consumer Commissions.

The relevant observations from the three-bench judgment are given below:

"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 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"

"...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 Gen eral Insurance Company Limited (supra) which directed consumer fora to render a decision on merits"

The reference order authored by Justice Saran in Bhasin Infotech noted that in 2017, in the Reliance General Insurance Company Limited case, the Supreme Court had allowed written statements to be accepted beyond the period of 45 days pending the decision of the Constitution Bench. In this backdrop, the bench expressed the view that even the delay condonation applications which were pending as on March 4, 2020, should get unaffected and should be decided on merits.

The reference order went on to observe :

"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 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".

Case Title : Diamond Exports and another versus United India Insurance Co Ltd and others

Citation : LL SC 736

Click here to read/download the judgment

Applications To Condone Delay In Filing Version In Consumer Cases Pending On 04.03.2020 Not Impacted By CB Judgment : SC Clarifies

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