Orissa High Court: ‘Sufficient Cause’ Must Be Proven for Delay Condonation, holds ‘Law of Limitation Cannot Be Bent to Accommodate Inaction’ in Consumer Disputes
Isabella Mariam
The High Court of Orissa Single Bench of Justice Dr. Sanjeeb Kumar. Panigrahi in a single bench, dismissed a writ petition challenging an order by the National Consumer Disputes Redressal Commission (NCDRC) that refused to condone a delay in filing a revision petition in a consumer dispute case. The court stated that the petitioner failed to establish sufficient cause for the delay, upholding the principles of limitation law.
The dispute originated from a sale-purchase agreement executed on February 27, 2012, between the petitioner, M/s Kkreation Associates, and Opposite Party No. 2 for the purchase of a residential flat in 'The Country Side' Project, Bhubaneswar. The agreed total consideration was ₹32.76 lacs, out of which Opposite Party No. 2 made partial payments amounting to ₹18 lacs, which included a booking amount of ₹3 lacs and subsequent instalments.
To finance the purchase, a tripartite agreement was executed between the petitioner, Opposite Party No. 2, and Punjab & Sind Bank, securing a housing loan of ₹25 lacs. As per the agreement, Opposite Party No. 2 was responsible for contributing ₹7.76 lacs from personal funds, while the bank was required to disburse the loan amount directly to the petitioner. However, contrary to the agreement, the bank released the loan amount to Opposite Party No. 2 instead of the petitioner, leading to defaults in payment obligations.
Subsequently, Opposite Party No. 2 rescinded the agreement unilaterally, alleging deficiency in service and, through a legal notice dated April 22, 2013, demanded a refund of ₹20 lacs. The petitioner, in response, declared Opposite Party No. 2 a defaulter and issued a cancellation letter dated May 23, 2013, asserting that any refund would be subject to necessary deductions. In a letter dated May 28, 2013, the petitioner also informed the bank about the default by Opposite Party No. 2 and sought directions on terminating the agreement.
Further inquiries revealed that the bank had disbursed two loan instalments of ₹7 lacs on September 27, 2012, and ₹8 lacs on October 4, 2012. However, upon scrutiny, the petitioner found that these amounts had not been remitted to them, prompting a formal misappropriation complaint to the bank on June 4, 2013. The petitioner repeatedly sought details regarding Opposite Party No. 2’s loan transactions from the bank on June 11, June 22, and July 1, 2013, but the bank cited technical constraints in furnishing the information. Meanwhile, Opposite Party No. 2 reaffirmed his withdrawal from the transaction through a letter dated May 5, 2013.
Legal proceedings were initiated before the District Consumer Disputes Redressal Commission (DCDRC), which, in an order dated August 5, 2015, concluded that the dispute arose due to scheduled payment obligations and that no deficiency in service was attributable to the petitioner. It further noted that allegations regarding construction defects were unsubstantiated and found Opposite Party No. 2 in breach of both the Sale-Purchase Agreement and the Tripartite Agreement. However, the commission directed the petitioner to refund ₹12 lacs with interest from June 4, 2013, and imposed litigation costs of ₹1,000.
Opposite Party No. 2 appealed before the State Consumer Disputes Redressal Commission (SCDRC), which, on July 5, 2022, modified the refund amount to ₹10 lacs instead of ₹12 lacs but increased the interest rate to 12% per annum. It further directed that if payment was not made within 45 days, the interest rate would escalate to 18% per annum.
Aggrieved by the SCDRC judgement, the petitioner initially issued a demand draft for ₹13.40 lacs on September 12, 2022, requesting Opposite Party No. 2 to accept it as full and final settlement. However, Opposite Party No. 2 refused, leading the petitioner to file Miscellaneous Case No. 960/2022 before the SCDRC on December 30, 2022, seeking a directive for Opposite Party No. 2 to accept ₹18.40 lacs in compliance with the final order dated July 5, 2022. Later, the petitioner withdrew the case with liberty to approach the NCDRC.
On March 12, 2025, the petitioner filed a revision petition before the NCDRC challenging the SCDRC order. However, in an order dated May 3, 2024, the NCDRC dismissed the petition due to a delay of 428 days, rejecting the application for condonation of delay. The petitioner contended that the delay was due to procedural complexities and bona fide mistakes, arguing that the period spent litigating before the SCDRC should be excluded from the computation of limitation.
The opposite parties, represented by counsel, countered that the petitioner had failed to provide sufficient cause for the delay. They argued that legal recourse was pursued inconsistently and that statutory limitations under consumer law must be strictly adhered to.
The Orissa High Court reaffirmed the principle that limitation laws must be applied rigorously and cannot be diluted. The court observed that judicial discretion in condoning delays must be exercised judiciously, requiring a demonstrable and cogent reason preventing timely filing.
Citing Supreme Court precedents, the court referred to Basawaraj and Ors. v. The Special Land Acquisition Officer (2013) 14 SCC 81, stating that “sufficient cause means that the party should not have acted in a negligent manner or lacked bona fide intent.” Further, in Anshul Aggarwal v. New Okhla Industrial Development Authority (2011) 14 SCC 578, the Supreme Court held that “special limitation periods under the Consumer Protection Act are meant to ensure swift adjudication of disputes and should not be relaxed casually.”
The court noted that the petitioner’s procedural history revealed inconsistencies, such as withdrawing and refiling miscellaneous cases, which did not justify the delay. The NCDRC correctly concluded that the delay lacked merit and that the petitioner’s inaction precluded condonation.
The Orissa High Court dismissed the writ petition, stating:
“The law favours those who diligently pursue their rights within the prescribed time limits. The petitioner’s inconsistent conduct and failure to provide a justifiable explanation for the delay leave no room for condonation.”
The interim relief, if any, was vacated.
Advocates Representing the Parties
For the Petitioner: Mr. Biswajit Das, Advocate
For the Opposite Parties: Mr. P. K. Parhi, DSGI, along with Mr. G. K. Nayak, CGC, and Mr. R. K. Rout, Advocate
Case Title: M/s Kkreation Associates v. The Registrar, NCDRC & Anr.
Case Number: W.P.(C) No. 14583 of 2024
Bench: Justice Dr. Sanjeeb Kumar Panigrahi
[Read/Download order]
