Section 24A Consumer Protection Act Prescribes Two Years Limitation Period; But Delay Can Be Condoned By Recording Its Reasons: Supreme Court
The appeal before the Apex Court was filed under Section 67 of the Consumer Protection Act, 2019, against the judgment of the National Consumer Disputes Redressal Commission.
The Supreme Court set aside an order of the National Consumer Disputes Redressal Commission whereby a complaint was dismissed on the ground of limitation and explained that the proviso to Section 24-A of the Consumer Protection Act, 1986, provides for the possibility of the Commission condoning delays beyond the period of 2 years by recording its reasons.
This appeal before the Apex Court was filed under Section 67 of the Consumer Protection Act, 2019, against the judgment of the National Consumer Disputes Redressal Commission, New Delhi.
The Division Bench, comprising Justice Sanjay Karol and Justice Manmohan, observed, “The application before the Commission was filed on 6th February 2019, hence the matter shall be governed by the Consumer Protection Act, 1986. Section 24-A of the Act prescribes the limitation period to be two years. The proviso thereto also provides for the possibility of the commission condoning delays beyond this point, but when doing so, it is to record its reasons.”
Factual Background
The Respondents are a partnership firm that owns the building named "Madhav Baug" in the village of Andheri, Mumbai. The complainants were tenants in two flats on the ground floor in Building A. The former decided to demolish this building and construct a new one and, in furtherance thereof, executed a Permanent Alternate Accommodation Agreement allotting a Flat on the 8th floor of the B-Wing of the new building. The proposed redevelopment, however, could not be completed in the stipulated time. The Vacant possession of the old flats was handed over in December 2014, and the necessary monetary consideration for alternative accommodation stood transferred to the appellants within time.
The respondent continued payment of rent of alternate accommodation of the appellants at the applicable rates till January 2019. The appellants wrote a letter to the solicitor and escrow agent, asking him to hand over the papers of the flats in escrow to them. Having received the said flats, the complaint case came to be filed.
The NCDRC noted that the complainants sought to enforce the "Indemnity-cum-Undertaking" under which the owner undertook to allot two Flats, free of cost, if the owner failed to obtain necessary approval of the plan within six months from the date hereof as mutually agreed by the parties in writing. The Commission noticed the cause of action for enforcement of the undertaking arose on July 10, 2015. The complaint was filed on February 19, 2019. The Commission dismissed the application for compensation, noting that the complaint was time-barred and no application for condonation of delay had been filed.
Reasoning
The Bench noted that according to the impugned order, six months were required to be counted from the date of the indemnity cum undertaking, i.e. January 10, 2015. The flats in escrow were to be given requisite permissions, which could not be obtained within six months; hence, the cause of action arose on July 10, 2015. It was also held in the impugned order that the complaint case came to be filed on February 19, 2019; as such, the same was barred by limitation.
The Bench explained that Section 24-A of the Consumer Protection Act, 1986 prescribes the limitation period to be two years, and as per the proviso, the commission can condone delay by recording its reasons. It was noticed that the parties agreed to keep the papers in escrow with a third party for the purpose of property implementation of the terms of the agreement.
“Considering the consistent efforts back and forth, inter se the parties, with regard to the implementation of the terms of the contract, there was no question of dismissal of the complaint on the issue of limitation. It was a continuing cause of action, and, only when escrow expressed helplessness that the complainant was forced to file the complaint”, the Bench said.
As per the Bench, the stand of the NCDRC defeated the ends of justice. The initial cause of action indeed arose in July 2015 after the six-month period expired, however, the Court the parties had been pursuing the matter with the respondent by way of letters, meetings, and even with the escrow agent, who, in turn, did his own back and forth with the owner, before finally releasing the flats in escrow in favour of the appellants. The complaint case had not been filed seeking the flats in escrow for which the cause of action did arise on July 10, 2015, and hence the same limitation couldn’t be applied to a subsequent situation, which was that the appellants already had the flats with them. They only sought that the same be registered in their name and not alienated to any third party henceforth.
“Limitation, while important as a feature of law, is not meant to defeat a substantive right. Efforts, in earnestness, to secure possession of the flats cannot be discounted in order to compute the applicable limitation. The NCDRC ought to have taken a holistic view of the situation and then proceeded to examine whether the relief as claimed may be granted in favour of the appellants”, it added.
Finding the view taken by the NCDRC to be ex-facie erroneous, the Bench quashed the impugned order and held that the complaint filed by the appellant was within time. Restoring the complaint to its status and number, the Bench held, “We direct the parties to appear before the NCDRC on 17th March 2025. We request that the matter be decided expeditiously and preferably within six months from today.”
Cause Title: Pushpa Jagannath v. M/s. Sahaj Ankur Realtors & Ors. (Neutral Citation: 2025 INSC 294)
