Are proceedings before consumer forums equivalent to “civil proceedings”, and the time spent bona fide before them can be excluded while computing limitation? The Delhi High Court rules in affirmation. The Court answered against Emaar MGF and held that the consumer forums possess the trappings of a court, and therefore, the proceedings before them clearly fall within the scope of Section 14 of the Limitation Act.
The Court explained that, when viewed as a whole, the appellant’s conduct demonstrated a continuous, bona fide, and diligent effort to pursue his claim before forums that were subsequently found to lack jurisdiction. Therefore, the Commercial Court’s interpretation and application of Section 14 for denying the benefit of time exclusion to the appellant, who has been running from all consumer forums to the commercial courts, is grossly wrong.
Reference was made to the Apex Court’s ruling in P. Sarathy v. State Bank of India [(2000) 5 SCC 355], where it was held that the term “court” under Section 14 of the Limitation Act is not confined to civil courts, and any authority or tribunal possessing the trappings of a court, that is, one empowered to summon witnesses, examine evidence, and deliver binding decisions, would fall within its ambit.
The Division Bench comprising Justice Harish Vaidyanathan Shankar and Justice Anil Kshetarpal observed that the underlying equity of Section 14 of the Limitation Act requires that time spent diligently pursuing a remedy before a wrong forum should be excluded when computing the limitation. The Bench pointed out that the protection under Section 14 applies to suits, appeals, and revisions, and even to a fresh suit filed with court permission after the earlier one failed due to jurisdictional defects. Further, ‘good faith’ under Section 14 does not depend on the result of the proceedings, but on whether the litigant acted honestly, reasonably, and without negligence.
After reviewing the findings of the Commercial Court and the legal principles under Section 14 of the Limitation Act, the Bench observed that while the lower court had concluded that the appellant lacked due diligence and good faith in pursuing the case before the NCDRC, such a conclusion was not sustainable in light of the true scope and intent of Section 14, which is meant to protect bona fide litigants acting diligently before a forum lacking jurisdiction.
The Bench found that the District Consumer Forum’s decision favoured the appellant, and it was the respondents who appealed before the SCDRC. After the order was reversed, the appellant approached the NCDRC by exercising a statutory remedy under the Consumer Protection Act. The NCDRC, after hearing both parties, allowed withdrawal of the revision petition and granted liberty to pursue remedies before the proper forum. Thus, the Bench concluded that had the appellant acted with mala fides, such liberty would not have been granted, indicating the appellant’s bona fide conduct.
The Bench also noted that no consumer forum found any negligence or bad faith on the appellant’s part. Thus, accepting the Commercial Court’s view would imply that a litigant must forgo their statutory right to appeal to avoid being labelled as acting in bad faith. The Court also noted that since the appellant had succeeded before the District Consumer Forum, he had a genuine and bona fide belief that the matter was rightly pursued before the consumer fora.
Lastly, the Bench held that the appellant’s decision to file a civil suit before the District Court was based on legal advice and in pursuit of a legitimate remedy. Since the appellant is not a lawyer and lacks a legal background, his reliance on such advice, even if erroneous, cannot be construed as a lack of bona fides. The Bench emphasised that pursuing a statutory remedy on legal counsel’s advice does not indicate bad faith or negligence.
Further, there was no evidence indicating that the appellant’s actions were vexatious or intended to harass the respondents. On the contrary, the Bench observed that the delay in adjudication had been more detrimental to the appellant’s interests. Accordingly, the Bench restored the suit to the file of the Commercial Court for further proceedings in accordance with the law.
Briefly, the appellant had booked a commercial unit in the project titled “The Palm Square” at Gurgaon, Haryana, developed by the respondents (Emaar MGF), in 2007, by paying a booking amount of Rs. 15.50 lacs through cheque. When the appellant sought cancellation of the booking citing personal reasons, the respondents refused to same, and rather issued an acknowledgement and an allotment letter for Unit No. 1008 on the 10th floor of the project. Despite several requests, the respondents refused the refund the booking amount, stating that such cancellations would affect the project’s completion.
When the appellant filed a consumer complaint in 2009, the State Consumer Disputes Redressal Commission held that the appellant did not qualify as a “consumer” under the Consumer Protection Act, 1986. Further, the National Consumer Disputes Redressal Commission (NCDRC) allowed the appellant to withdraw the petition with liberty to seek appropriate remedies before a competent forum.
Pursuant to the liberty granted by the NCDRC, in 2015, the appellant filed a civil suit seeking recovery of the booking amount along with interest. However, the plaint was returned for lack of territorial jurisdiction. Thereafter, in 2021, the appellant approached the Commercial Court seeking recovery, which dismissed the suit as time-barred and held that the appellant had not prosecuted earlier proceedings with due diligence or in good faith.
Appearances:
Advocate Pallavi Singh, for Appellant
Advocate Arjun Jain, Anushree Narain, Naman Choula, and Yamit Jetley, for the Respondent
