Can District Consumer Forum Extend the Limitation Period Provided under Section 13(2)(a) of the Consumer Protection Act, 1986?
Table of Contents
- Introduction
- The Contrary Stands of Supreme Court before the Hilli Multipurpose Case
- New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (2020)
- Issues before the Court
- Observation of the Supreme Court on First Issue
- Ratio for the First Issue
- Observation and Ratio of the Supreme Court on Second Issue
- Conclusion
Introduction
The Constitutional Bench of Supreme Court, in the case of New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd,, cleared its stand with regards to the period of filing a reply to a complaint under the provision of Section 13(2)(a) of Consumer Protection Act, 1986 (hereafter referred to CP Act).
Section 13(2)(a) of the CP Act provides an opportunity for the opposite party to file a response in case the complaint of a consumer is admitted. The section requires the District Consumer Forum to refer a copy of the complaint to the opposite party to file a reply within thirty days or within an extended period as granted by the Forum. However, such an exceeding period should not be more than 15 days.
The provision holds importance from the point of view of the opposite party as it provides them with an opportunity to file their response to the consumer case as a similar opportunity to this would not be available to them at the appellate stage. So, it remains their only chance to file a reply. Thus, interpretation of section 13(2)(a) of the CP Act becomes crucial to the opposite party.
The Contrary Stands of Supreme Court before the Hilli Multipurpose Case
The Supreme Court has earlier taken different stands with regards to the power of the Court to extend the time for filing a written statement to a complaint.
In the case of Topline Shoes Limited v. Corporation Bank (hereafter referred as Topline case), a two-Judge Bench of the Apex Court considered the question of whether the District Consumer Forum under section 13(2)(a) of the CP Act has the power to extend the time of filing of a reply by the opposite party beyond the period of forty-five days. The Court opined that the said provision is procedural one that does not involve any consequences of its non-compliance. The Court further observed the Statement of Object and Reasons of the CP Act which states that while adjudicating consumer disputes, principles of natural justice have to be kept in mind.
Thus, section 13(2)(a) was held to be directory in nature by the Court. The Court further held that the District Consumer Forums are empowered with the power to grant time beyond a duration of forty-five days.
In contrast to the decision given by the Supreme Court in the above-mentioned Topline Shoe case, a three-judge bench of the Apex Court in the case of J.J. Merchant and others v. Shrinath Chaturvedi (hereafter referred as J.J. Merchant case), held section 13(2)(a) of the CP Act as of mandatory nature.
In the case of Kailash v. Nankhu (2005) (hereafter referred as Nankhu case), the Apex Court while addressing the nature of Order VIII Rule 1 of the Civil Procedure Code, 1908 (hereafter referred as Code) approved the decision given by the Court in the Topline case and considered the decision given by the Court in J.J. Merchant case as obiter dicta. The reasoning of the court, in this case, was borrowed from Topline. The Court observed that as Order VIII Rule 1 of the Code is a procedural provision that also does not provide any consequences of its non-compliance, thus, it is also a directory provision.
The Apex Court in the year 2005 observed in the case of Salem Bar Association v. Union of India that the object and purpose of any statute is responsible to determine the nature of any provision of that particular statute. The Court further observed that whether the provision provides a consequence for the non-compliance of the provision or not is an important factor to determine the nature of the provision. If the provision provides a consequence for its non-compliance, then the provision is mandatory. Whereas, if the provision does not provide any consequence for its non-compliance, then it is directory in nature.
If this is to be considered then section 13(2)(a) does not provide any consequence for its non-compliance, therefore it will be considered only as a directory provision and thus the concerned courts will have the power to extend the time for filing of a written statement.
In view of these conflicting decisions, a three-judge bench of the Supreme Court in New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd. was tasked to decide whether the view in J.J. Merchant is correct or whether the law has changed in light of Nankhu case with regards to the nature of section 13(2)(a) of the CP Act. The Court here held that the decision given in J.J. Merchant was rendered by a three-Judge bench whereas the decision in Topline’s case was rendered by a two-judge bench. Thus, the decision in the J.J. Merchant case holds more prominence than the Topline case.
The Court then further observed that the decision in Nankhu’s case related to whether the order limitation under Order VIII Rule 1 of Code was directory or mandatory with regards to an election case. The Court held that the decision in Nankhu’s case is an Obiterdicta as it was not directly in issue.
Despite of the observation of the Court in the Hilli Multipurpose case, the question of nature of section 13(2)(a) again came up before the Supreme Court in the Bhasin Infotech case. The contrariness of the above-stated decisions was again highlighted to the Apex Court in 2018 in the case of M/s Bhasin Infotech and Infrastructure Pvt. Ltd. v. M/s Grand Venezia Buyers Association (Reg) (hereafter referred as Bhasin case). Here, the conflict between the Topline, Nankhu, and Salem Bar Association case on one hand and the decisions of J.J. Merchant and Hilli Multipurpose on the other, again came in front of the Apex Court.
Here, the Court due to previous conflicting opinions made by benches of equal strength, thought it fit to refer the case to a bench of larger strength to resolve the issue. The matter was thus referred to a larger Bench by the Court and was finally settled in the case of New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (2020).
Case: New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd. (2020)
A. Issues before the Court
The 2 issues before the Supreme Court in Hilli Multipurpose case were: –
(i). Whether section 13(2)(a) of CP Act that provides for filing of a reply by the opposite party within thirty days or within such time not exceeding more than 15 days should be read as mandatory or directory?
(ii). Whether the limitation on an opposite party to file its response under section 13 would commence from the date of receipt of the notice of the complaint by the opposite party, or the receipt of notice accompanied by a copy of the complaint?
B. Observation of the Supreme Court on First Issue
Coram: Justice Arun Mishra, Justice Indra Banerjee, Justice Vineet Saran, Justice M.R. Shah, Justice S. Ravindra Bhat
The Supreme Court while deciding the first issue held that the time provided to the opposite party under Section 13(2)(a) of the CP Act should be considered as mandatory. Further, the Court held that the District Consumer Forum cannot extend the time granted to file a reply exceeding forty-five days.
The provision clears the intention of the Legislature that the opposite party’s limitation period is fixed to thirty days which could be extended to more 15 days by the discretion of the forum. There is no discretion provided to extend the time more than the period of 45 days.
C. Ratio for the First Issue
The Court to reach the said conclusion, juxtaposed section 13 of the CP Act with section 15 and section 19 of the same Act. The Court observed that section 13 which provides for filing of an appeal from the order of District Forum to State Commission beyond a period of 30 days at the discretion of the concerned authorities and section 19 provides for filing of an appeal from the order of the District Forum to National Commission beyond a period of thirty days at the discretion of the concerned authorities. The Court took the view that as the Legislature allowed exceeding the time beyond the period of thirty days in both section 15 and 19 of the CP Act, if the Legislature had the same intention in section 13 of CP Act, then it would have provided so. But, as such explicit discretion has not been granted by the Court, the period of 30+15 days is mandatory.
D. Observation and Ratio of the Supreme Court on Second Issue
While deciding the second issue, the Court held that Section 13 in its sub-section 2(a) and 2(b) specifies that a copy of a complaint is to be given to the opposite party to direct him to file its reply within thirty days or within a period not exceeding more than 15 days as may be granted by the District Forum.
The aforesaid provision itself clears that it is the copy of the admitted complaint which is to be served and it is after it that the period to file its response would commence.
Conclusion
It is after so many conflicting decisions that the Constitutional Bench of the Supreme Court finally in the case of New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd. (2020) decided its stand on the nature of section 13 of the CP Act. By holding the provision to be mandatory, the Court ensured that several interim appeals filed through written statements by the opposite parties beyond the limit provided by the provision will now not be entertained anymore.
Thus, it will be advantageous in resolving the consumer matters speedily. Further, it will be advantageous to make the dispute resolving process more affordable.