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Supreme Court Clears The Air On The Section 13(2) Of The Consumer Protection Act As Being Mandatory Or Directory

Avinash K. Sharma & Ankit Tripathi
29 May 2020 5:00 AM GMT
Supreme Court Clears The Air On The Section 13(2) Of The Consumer Protection Act As Being Mandatory Or Directory
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A Constitution Bench of the Supreme Court recently in the case of New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd. MANU/SC/0272/2020 held that the time period to file the reply within forty five (30 days or such extended period, not exceeding 15 days) under Section 13 (2) of the Consumer Protection Act, 1986 (Act) is mandatory and there cannot be any extension beyond the said period.

The issue whether the time period as prescribed under Section 13 (2) of the Act for the filing the reply is mandatory or directory was referred to Constitution Bench in the case of Bhasin Infotech & Infrastructure (P) Ltd. v. Grand Venezia Buyers Assn., (2018) 17 SCC 255) because of the following reason:

  • The Hon'ble Supreme Court in this case observed that there is an apparent conflict between the decisions of this Court in Topline Shoes Ltd. v. Corporation Bank , Kailash v. Nanhku, Salem Advocate Bar Assn. (2) v. Union of India on the one hand and J.J. Merchant v. Shrinath Chaturvedi and New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd. on the other, insofar as the power of the courts to extend time for filing of written statement/reply to a complaint is concerned.

  • The Supreme Court in the case of Topline Shoes Ltd. v. Corpn. Bank, (2002) 6 SCC 33 held that the provision of Section 13 of the Consumer Protection Act, as framed, does not indicate that it is mandatory in nature. In case, the extended time exceeds 15 days, no penal consequences are prescribed therefore. The period of extension of time "not exceeding 15 days," does not prescribe any kind of period of limitation. The provision appears to be directory in nature, which the consumer forums are ordinarily supposed to apply in the proceedings before them. Thus, the Court held that, the reply of the respondent could be taken on record beyond the period of 45 days. The provision is more by way of procedure to achieve the object of speedy disposal of such disputes.

  • However, the Supreme Court in the same year in the case of J.J. Merchant (Dr) v. Shrinath Chaturvedi, (2002) 6 SCC 635, held that the National Commission or the State Commission is not empowered to extend the time period of 45 days as prescribed under Section 13 of the Act. Further, it was noted that for speedy disposal, this legislative mandate of not giving more than 45 days in submitting the written statement or the version of the case is required to be adhered to. If this is not adhered to, the legislative mandate of disposing of the cases within three or five months would be defeated.

  • Then in the case of New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd., (2015) 16 SCC 20, a two judge bench of Justice Jasti Chelameswar and Justice H.R. Gokhale in the first order pronounced on November 29, 2013 condoned the delay of more than 45 days and allowed the appeal in view of the fact that J. Merchant v. Shrinath Chaturvedi has been re-considered and a different view has been taken in Kailash v. Nanhku on the issue of limitation. Also, noting the contradiction, this bench observed that as this point of law requires being resolved, it requested the Hon'ble the Chief Justice to place these appeals before a larger Bench, thus the matter was referred to a three-judge bench. Subsequently, the matter was placed before the three judge bench so as to ascertain whether the law laid down in J.J. Merchant still holds the field or whether the law has been changed in view of the later judgment delivered by this Court in Kailash v. Nanhku. Thereafter, on December 04, 2015 the said three judge bench comprising of J Anil R Dave, J Vikramajit Sen and J Pinaki Chandra Ghose ruled that no party will get more than 45 days for replying to a complaint in a consumer forum. The court emphasized that this period cannot be extended under any circumstances. The court expressed its opinion that the view expressed by the three-Judge Bench of this Court in J.J. Merchant should prevail and holds the field and therefore, reiterated the view that the District Forum can grant a further period of 15 days to the opposite party for filing his version or reply and not beyond that.

Then finally, in the case of Bhasin Infotech case, a two judge bench of the Supreme Court observed that there is an apparent conflict between the decisions of this Court in Topline Shoes Ltd. v. Corporation Bank , Kailash v. Nanhku, Salem Advocate Bar Assn. (2) v. Union of India on the one hand and J.J. Merchant v. ShrinathChaturvedi and New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd. on the other insofar as the power of the courts to extend time for filing of written statement/reply to a complaint is concerned. Therefore, the court observed that it would be more appropriate if the conflict were resolved by an authoritative judgment. Further, since the conflict was between conflicting judgments of co-equal benches i.e. comprising three Judges, they deem it fit to refer these appeals to a five-Judge Bench to resolve the conflict once and for all. They also noted that while they refer this to three judge bench they are mindful of the fact that in the ordinary course, a two-Judge Bench ought to make a reference to a three-Judge Bench in the first place but in the facts and circumstances of the case and keeping in view the fact that the conflict is between coordinate Benches comprising three Judges, a reference to three-Judge Bench may not suffice. Therefore, the matter shall be referred to five-judge bench.

The Supreme Court in the instant case has held that Section 13 (2) of the Act is mandatory and no extension of time can be granted over and above the time period of 45 days. The following points briefly encapsulate the reasoning given by the five judges to arrive at the following conclusion:

  1. Sub-section (2)(b)(ii) of Section 13 of the Act clearly provides for the consequence of the complaint to be proceeded ex parte against the opposite party, if the opposite party omits or fails to represent his case within the time given. Therefore, since a provision has been provided that on failure of the Respondent to file its reply within the stipulated time, the party would be proceeded ex-parte. Therefore, this provision is to be read as mandatory and not directory.
  2. The Court has also relied on Section 13 (3) of the Act which is being reproduced herein below:

(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.

It has been noted that by specifically enacting a provision under Sub-section (3) of Section 13, with a specific clarification that violation of the principles of natural justice shall not be called in question where the procedure prescribed under Sub-sections (1) and (2) of Section 13 of the Act has been followed or complied with, the intention of the legislature is clear that mere denial of further extension of time for filing the response (by the opposite party) would not amount to denial or violation of the principles of natural justice. Thus this provision of Section 13(3) reinforces the time limit of 45 days specified in Section 13(2)(a) of the Act.

  1. The difference in the language of Section 15 and 13 (2)(a) of the Act has also been used to show as to how no further extension can be provided beyond 45 days. Section 15 of the Act has been reproduced herein below:

15. Appeal.—Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed:

Section 15 of the Act provides for filing of an appeal from the order of the District Forum to the State Commission within a period of 30 days.

However, it leaves discretion with the State Commission to entertain an appeal filed after the expiry of the said period of 30 days, if it is satisfied that there was sufficient cause for not filing it within the stipulated period. Similarly, discretion for filing anappeal before the National Commission beyond the period of 30 days has also been provided under Section 19 of the Act. There is a clear departure in the language of Section 13(2)(a), 15 and 19 of the Act. It is evident that discretion has been provided to the forum in cases of appeal. However, no such discretion has been provided when it comes to filing the reply by the opposite party beyond the specified period of 45 days.

Though the Court has settled the law here, one point which comes to our mind which should have been considered by the bench is the fact that although Sub-section (2)(b)(ii) of Section 13 of the Act talks about ex-parte proceedings, the entire Act does not explicitly give an impression of forfeiture of the right of the Opposite party to file its reply when we compare this with the language which has been used in the Commercial Courts Act. Detailed consideration of this point would have been necessary because of the fact that under the Commercial Courts Act, no extension beyond the statutory time period is possible as the Court do not have the power to grant an extension as the Parliament has deliberately provided that in case of failure to file the Written Statement, the right of the Defendant to file its Written Statement is forfeited and even the Court cannot allow the Written Statement to be taken on record. The relevant provision has been reproduced herein below:

"Provided further that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record"

Therefore, in the absence of such a provision which curtails the power of the forum to given any further extension can we really say that Section 13 (2)(a) of the Act is mandatory or directory?

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