The National Consumer Disputes Redressal Commission (NCDRC), along with the state commissions and district forums, was set up with an aim of providing inexpensive, speedy and summary redressal of consumer disputes. Clearly demarcated timelines have been set out in order to achieve the NCDRC’s objective to deliver prompt justice and to expedite the hearing of cases.
Section 13 of the Consumer Protection Act, 1986 (CPA), provides that on receipt of a complaint, the consumer forum concerned must provide the target with a copy of the complaint and give the target up to 45 days to reply. Similarly, order VIII rule 1 of the Civil Procedure Code, 1908, allows a defendant 90 days to file a written statement of defence.
Judgments over the past 10 years stemming from various courts in India demonstrate diverse approaches while dealing with the time limits mentioned above. For example, in the case of Topline Shoes Ltd v Corporation Bank (2002) the Supreme Court held that the time limits prescribed in procedural laws for filing replies are “directory” and not mandatory in nature and no substantive right is created in favour of the complainant. Consequently, a consumer forum had the power to condone the delay in filing a reply beyond 45 days.
Taking a contrary stand, the Supreme Court in the case of JJ Merchant v Shrinath Chaturvedi (2002) held that in order to have a speedy trial, it was essential to adhere to the 45-day time limit to submit the written statement to a consumer forum or else the legislative mandate of disposing of the cases within three to five months would be defeated.
In subsequent cases, for example, Shailaja A Sawant v Sayajirao Ganpatrao Patil, decided by Bombay High Court in 2003, the courts seemed to follow the line of reasoning taken in the Topline Shoes case. In Kailash v Nanhku (2005), the Supreme Court stated that the opinion laid down in the JJ Merchant case was not binding in the circumstances of the case and no reference to the Topline Shoes case was made. It was further stated that the courts had the power to condone delay, however the extension of time sought by the defendant from the court should not be granted just as a matter of routine but only by way of an exception and for valid reasons.
Lately the NCDRC has been refusing to condone delays in the filing of replies to complaints, and has taken a tougher stance by relying on the decision in JJ Merchant. As a result of this difference of opinion regarding the power of the NCDRC to condone delay in light of the contradictory judgments, the issue has now been taken up the Supreme Court, combining two separate appeals: New India Assurance v Hilli Multipurpose Cold Storage and New India Assurance v DY Patil Sports Academy.
The main question the Supreme Court will have to decide is whether the law is directory or mandatory in nature. Recent statistics show that out of 89,495 cases that have been filed before the NCDRC since its inception, only 11,725 are pending. In other words, 86.9% have been disposed of. Similarly, there has been 85.9% disposal of cases in the state commissions and 92.3% disposal of cases in the district forums. While the main objective behind the formation of the consumer forums is the speedy disposal of cases, undoubtedly the Supreme Court will take into account that the forums have also been created to protect the rights of consumers.
Courts will undoubtedly consider as a matter of importance the necessity to avoid granting unnecessary adjournments, which can prolong matters for years. It is not uncommon for defendants to use delaying tactics to postpone cases, but whether the target of a consumer complaint is adopting such a strategy is for a consumer forum to consider in light of the facts and circumstances of the case.
While Section 13 of the CPA does not impose any penalty in case of a delay beyond 45 days (thus making it directory and not mandatory), to fulfil the requirements of natural justice and uphold the intent of the legislature, the Supreme Court may impose strict mandates on the forums to assess the authenticity of the explanations provided by the targets rather than exercising no discretion and dismissing condonation applications even in genuine cases.
Although it is unlikely that the court will completely bar the consumer forums from condoning any delay, we will have to wait and watch for the final decision.
Khaitan Sud & Partners is a fast growing law firm providing specialist legal services to both domestic and international clients. Riddhi Sancheti is an associate at the firm.
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