Diamond Exports & Anr. vs United India Insurance Company Limited & Ors.

HELD: 1.1 In Reliance General Insurance Company Limited v. Mampee Timbers and Hardwares Private Limited, 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 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 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 brightline 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 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 Infotech2018, 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.