28 February 2025 Civil Appeals >> Civil & Consumer Law   |   Consumer Complaints >> Civil & Consumer Law  

The Supreme Court of India has set aside a ruling by the National Consumer Disputes Redressal Commission (NCDRC), emphasizing the concept of a "continuing cause of action" in consumer disputes, particularly in real estate redevelopment cases. The apex court's decision reinstates a consumer complaint that was dismissed by the NCDRC on grounds of limitation.

The case of Pushpa Jagannath Shetty & Others v/s M/s. Sahaj Ankur Realtors & Others., involved a Mumbai-based partnership firm, the respondents, who were redeveloping a building named "Madhav Baug." The appellants, tenants in the old building, had entered into a Permanent Alternate Accommodation Agreement in 2013, which stipulated the allotment of new flats. However, due to delays, a subsequent "Indemnity-cum-Undertaking" was executed in 2015, offering alternative flats or compensation.

The NCDRC dismissed the appellants' complaint, filed in 2019, citing that the cause of action arose in July 2015, six months after the 2015 undertaking, and therefore exceeded the two-year limitation period under the Consumer Protection Act, 1986.

The Supreme Court, however, disagreed with this assessment. The court noted that the parties had been engaged in continuous efforts to resolve the issue, including correspondence, meetings, and interactions with an escrow agent. The escrow agent, holding the flat documents, had communicated with both parties, indicating ongoing attempts to fulfill the agreement.

"In our considered view, considering the consistent efforts back and forth, inter se the parties, with regard to the implementation of the terms of the contract, there was no question of dismissal of the complaint on the issue of limitation. It was a continuing cause of action," the Supreme Court stated.

The court emphasized that the appellants' complaint was not merely seeking the original alternative flats, but also seeking to secure their title to the flats they eventually received from the escrow agent. This, the court argued, constituted a separate and continuing cause of action.

"Limitation, while important as a feature of law, is not meant to defeat a substantive right. Efforts, in earnestness, to secure possession of the flats cannot be discounted in order to compute the applicable limitation," the court observed.

The Supreme Court criticized the NCDRC for failing to take a holistic view of the situation, highlighting that the commission should have considered the ongoing negotiations and the subsequent actions of the parties.

"The NCDRC ought to have taken a holistic view of the situation and then proceeded to examine whether the relief as claimed may be granted in favour of the appellants," the court stated.

Consequently, the Supreme Court quashed the NCDRC's order, reinstating the appellants' complaint and directing the commission to decide the matter on its merits, excluding the issue of limitation. The court also clarified that its observations were limited to the issue of limitation, leaving all other contentions open for the NCDRC to decide.

This decision underscores the importance of considering the continuous nature of disputes and the ongoing efforts of parties to resolve them, rather than strictly adhering to initial timelines, especially in complex real estate redevelopment cases.