Introduction

This commentary focuses on the Supreme Court of India’s decision in the case of Pushpa Jagannath Shetty & Ors v. Sahaj Ankur Realtors & Ors (2025 INSC 294). The dispute arose under the Consumer Protection Act, 2019 (though governed by the 1986 Act for reasons of timing), and pertains to a redevelopment project in Mumbai, wherein the appellants, vacationers of two flats, sought redress against the respondents (a partnership firm and others) for delay and non-fulfillment of contractual terms. The key legal issue addressed is the calculation of limitation under consumer legislation, especially when the parties have actively engaged in continuing negotiations that affect when the cause of action crystallizes.

The appellants were initially tenants in “Madhav Baug” in Andheri, Mumbai. In a redevelopment arrangement, the respondents executed agreements to deliver new flats in place of the older ones. When construction approvals and other obligations were delayed, supplemental indemnities were signed, promising alternative flats or, in case of default, monetary compensation. Over time, disputes arose about the time limit within which the appellants could file their complaint. The apex court has offered clarity on how consumer complaint limitation periods should be interpreted when attempts to settle are ongoing.

Summary of the Judgment

The Supreme Court overturned the decision of the National Consumer Disputes Redressal Commission (NCDRC), which had dismissed the appellants’ complaint as time-barred. The NCDRC reasoned that the six-month period referenced in the “Indemnity-cum-Undertaking” gave rise to a cause of action on July 10, 2015, and that the complaint filed on February 19, 2019, exceeded the two-year limitation period set out in Section 24-A of the Consumer Protection Act, 1986.

The Supreme Court disagreed, holding that the appellants and respondents had engaged in continuing negotiations and various actions (such as placing documents in escrow) well beyond July 2015. The Court found that the cause of action continued, particularly in light of the efforts made to execute the terms of the agreement and the delayed release of escrow documents. As a result, the Court deemed the complaint timely, restored it, and directed the NCDRC to decide the matter on its merits.

Analysis

A. Precedents Cited

While the Judgment references Section 24-A of the Consumer Protection Act, 1986, there is no explicit mention of older Supreme Court rulings on limitation. However, the Court’s rationale indirectly reflects earlier decisions on the doctrine of continuing cause of action, where ongoing negotiations and responsibilities can extend or renew the limitation clock.

The Supreme Court’s stand that “limitation should not defeat substantive rights” resonates with established Indian jurisprudence where courts have emphasized that procedural rules must not suppress substantial justice. Although not explicitly cited in the Judgment, principles from cases that interpret “continuing cause of action” (e.g., Balakrishna Savalram Pujari Waghmare v. Shree Dhyaneshwar Maharaj Sansthan) may be viewed as conceptually relevant.

B. Legal Reasoning

The Court’s primary legal reasoning turns on the interpretation of “cause of action” in a situation where contractual obligations remain partially unfulfilled. The respondents initially argued that the cause of action arose as soon as the six-month period in the “Indemnity-cum-Undertaking” lapsed in July 2015. However, the appellants provided evidence that both parties continued to negotiate, sign documents, and place relevant property papers in escrow in reliance on future approvals. According to the Supreme Court, these ongoing interactions prevented the cause of action from being permanently fixed to July 2015; instead, a “continuing cause of action” persisted.

Further, the appellants only fully crystallized their claims after the escrow agent communicated inability to accomplish what was directed in the agreement, at which point the appellants promptly filed a complaint. The Court observed that the consumer forum (NCDRC) should have considered these extended attempts at resolution when determining the limitations question.

C. Impact

The Judgment has the potential to influence future consumer disputes where redevelopments, delayed possession, or other construction-related contracts include continuously evolving negotiation processes. Courts and commissions are reminded to look beyond rigid start dates for limitation periods when the parties’ conduct and contractual documentation show continuous steps undertaken to fulfill the contract. This principle bolsters consumer rights, especially in real estate disputes where delays and negotiations are commonplace. It clarifies that attempts to rectify contractual breaches can, in certain circumstances, keep a claim alive, provided that there is a clear thread of communication and efforts spanning the entire period.

Complex Concepts Simplified

1. Cause of Action: In legal parlance, a “cause of action” is the bundle of facts or circumstances that afford the plaintiff a right to sue. While many assume it arises the moment a breach occurs, the notion of “continuing cause of action” recognizes that if negotiations or partial performances continue, the point at which legal rights become enforceable may shift or remain ongoing.

2. Limitation Period (Section 24-A of the Consumer Protection Act, 1986): Under this provision, a consumer complaint is ordinarily to be filed within two years of the cause of action. However, a proviso also allows forums to permit complaints beyond two years, if sufficient cause is shown for the delay. Here, the Supreme Court highlights that continuous or ongoing discussions can justify a later calculation of limitation.

3. Escrow Agreement: An escrow agreement is a specialized contract in which an independent third party holds and regulates payment and title documents on behalf of the parties involved in a transaction. In this case, the flats’ documents remained in escrow, demonstrating the parties’ intent to continue with the transaction and acting as a crucial factor in the Supreme Court’s decision that the cause of action was not definitively closed in July 2015.

Conclusion

The Supreme Court’s Judgment in Pushpa Jagannath Shetty v. Sahaj Ankur Realtors underscores the importance of discerning a continuing cause of action in consumer disputes involving evolving commitments and negotiations. By reinstating the appellants’ complaint, the Court reaffirms that limitation is not merely a technical barrier to justice but must be applied in light of the factual matrix where parties are actively attempting to honor their contractual obligations.

This ruling provides crucial guidance for tribunals and litigants alike. It reminds all stakeholders of the need to meticulously assess whether ongoing developments extend limitation periods. In real estate and redevelopment scenarios, especially, consumers may benefit from the Court’s stance that maintaining active communications and reasonable follow-ups can preserve their rights.

Overall, the Judgment strengthens consumer protection by ensuring that substantive entitlements are not quashed merely by mechanical adherence to limitation rules, thereby serving the broader goal of dispensing justice in complex, long-term projects.