Singal Udyog v. National Insurance Company Ltd. And Others, Supreme Court Of India, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Appeal No. 9161 of 2019 (Arising out of Special Leave Petition (Civil) No. 23697 of 2019)

Disposition

allowed

Judges

Uday Umesh Lalit
Vineet Saran, JJ.
Uday Umesh Lalit
Vineet Saran, JJ.

Acts

Section 73(1) of the Finance Act, 1994

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Smart Summary

Factual and Procedural Background

The matter arose from an order dated 11.06.2019 of the National Consumer Disputes Redressal Commission, New Delhi (National Commission), which rejected First Appeal No. 610 of 2019 at the admission stage. The National Commission found a delay of 150 days in filing the first appeal and declined to condone it, resulting in dismissal of the appeal. While dismissing it as time-barred, the National Commission also recorded an additional observation that the appeal suffered from an apparent lack of merit.

The petitioner (M/s. Singal Udyog) approached the Supreme Court by way of a petition for special leave to appeal arising out of the said order. Leave was granted, and the Supreme Court heard counsel for the parties and perused the record.

Legal Issues Presented

Whether a tribunal/forum, after concluding that a matter is barred by limitation, can proceed to consider the merits of the matter.
Whether the delay of 150 days in filing the First Appeal ought to have been condoned in the circumstances of the case.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State Bank Of India v. B.S Agriculture Industries (I) . (2009) 5 SCC 121	Consumer fora must decide complaints on merits only if filed within limitation; if time-barred and delay is not condoned with reasons recorded, deciding on merits would be an illegality warranting setting aside.	Used to hold that once the National Commission found the appeal barred by limitation, it could not have proceeded to assess merits (i.e., could not dismiss on both limitation and “apparent lack of merit”).
Commissioner, Customs, Central Excise and Service Tax v. Monsanto Manufacture Pvt. Ltd. (2014) 45 GST 699 (Allahabad), 2014 [35] S.T.R. 177 (All), (2014) 71 VST 269 (All)	Once a demand is held to be time-barred, the adjudicatory body acts outside jurisdiction if it enters into merits; there is no occasion to examine merits after concluding limitation defeats the claim.	Cited as supporting authority reinforcing the limitation-first approach and the jurisdictional impropriety of deciding merits after holding the matter time-barred.

Court's Reasoning and Analysis

The Supreme Court focused on the legal consequence of a finding on limitation. Relying on its earlier decision in State Bank Of India v. B.S Agriculture Industries (I), the Court reiterated that a forum can enter upon merits only if the matter is within limitation, or if delay beyond limitation is condoned upon sufficient cause with reasons recorded. If a matter is time-barred and yet decided on merits, it amounts to an illegality.

The Court noted that this principle had also been relied upon by the Allahabad High Court in Commissioner, Customs, Central Excise and Service Tax v. Monsanto Manufacture Pvt. Ltd., which emphasized that once limitation bars the action, there is no occasion to go into merits, and doing so would be beyond jurisdiction.

Applying these principles, the Supreme Court held that the National Commission, having found the appeal barred by time, could not have dealt with the merits and dismissed the appeal on both grounds.

Separately, on condonation of delay, the Court found that a delay of 150 days, in the present circumstances, was not so alarming as to warrant rejection solely on that ground. The Court therefore decided to condone the delay, but made it conditional upon payment of costs.

Holding and Implications

ALLOWED: The Supreme Court allowed the appeal, condoned the delay of 150 days in preferring the First Appeal, set aside the view taken by the National Commission, and restored First Appeal No. 610 of 2019 to the file of the National Commission to be disposed of in accordance with law.

The condonation of delay was made subject to the appellants paying costs of Rs. 25,000/- to the respondent, to be deposited in the Registry of the National Commission within four weeks. Upon deposit, the parties were directed to appear before the National Commission on 20.01.2020. The direct effect is that the first appeal stands revived for adjudication by the National Commission; the opinion does not state any broader implications beyond reaffirming the limitation-based constraint on examining merits once a matter is held time-barred.

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Singal Udyog v. National Insurance Company Ltd. And Others

1. Leave granted.

2. This appeal challenges the order dated 11.06.2019 passed by the National Consumer Disputes Redressal Commission, New Delhi (for short, ‘the National Commission’) rejecting First Appeal No. 610 of 2019.

3. There was delay of 150 days in preferring the First Appeal which was not condoned by the order under appeal and consequently the First Appeal stood dismissed. However, the National Commission also observed that there was apparent lack of merits in the matter and finally passed order as under:—

“11. In view of the detailed discussion above, this appeal is at the stage of admission itself, dismissed on grounds of both an inordinate delay of 150 days as well as on an apparent lack of merit.”

4. We have heard learned counsel for the parties and have perused the record.

5. The issue whether a Tribunal or a Forum, after having come to the conclusion that the matter was barred by limitation, could consider merits of the matter, was gone into by this Court in State Bank of India v. B.S. Agriculture Industries (I) (2009) 5 SCC 121 as under:—

“12. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside.”

6. The aforesaid view was relied upon by the Division Bench of the Allahabad High Court in Commissioner, Customs, Central Excise and Service Tax v. Monsanto Manufacture Pvt. Ltd. (2014) 45 GST 699 (Allahabad), 2014 [35] S.T.R. 177 (All), (2014) 71 VST 269 (All) to observe as under:—

“21. The Tribunal came to the conclusion that the demand by the Revenue was beyond the period of limitation of one year prescribed under Section 73(1) of the Finance Act, 1994 and that the period of five years could not have been invoked. That part of the judgment of the Tribunal has been confirmed in the companion appeal. Once that be the position and the Tribunal having came to the conclusion that the extended period of limitation could not have been validly applied, the Tribunal, in our view, acted outside its jurisdiction in entering upon the merits of the dispute on whether the demand for duty should be confirmed. Once it is held that the demand is time-barred, there would be no occasion for the Tribunal to enquire into the merits of the issues raised by the Revenue.”

7. In the circumstances, the National Commission, having found that the appeal was barred by time, could not have dealt with merits of the matter.

8. In any case, the delay of 150 days, in the present circumstances, was not so alarming that the matter should have been rejected on the ground of delay.

9. In the circumstances, subject to the appellants paying a sum of Rs. 25,000/- by way of costs to the respondent, we condone the delay of 150 days in preferring the First Appeal. Let the amount be deposited in the Registry of the National Commission within four weeks from today.

10. Upon deposit of the amount, the parties shall appear before the National Commission on 20.01.2020.

11. We thus allow the appeal, set aside the view taken by the National Commission and restore the First Appeal No. 610 of 2019 to the file of the National Commission to be disposed of in accordance with law.

SUPREME COURT OF INDIA

RECORD OF PROCEEDINGS

Petition for Special Leave to Appeal (C) No. 23697/2019

(Arising out of impugned final judgment and order dated 11-06-2019 in FA No. 610/2019 passed by the National Consumers Disputes Redressal Commission, New Delhi)

M/s. Singal Udyog.….Petitioner(s)

v.

National Insurance Company Ltd. & Ors.….Respondent(s)

(FOR ADMISSION)

Date : 02-12-2019 This petition was called on for hearing today.

(Before Uday Umesh Lalit and Vineet Saran, JJ.)

For Petitioner(s) Mr. Anil Kumar Gautam, AOR

Mr. V.K. Sharma, Adv.

For Respondent(s) Mr. Zorawar Singh, Adv.

Mr. Ankur Tuli, Adv.

Mr. Vivek Kishore, AOR

UPON hearing the counsel the Court made the following

12. Leave granted.

13. The appeal is allowed, in terms of the Signed Order.

14. Pending application(s), if any, shall stand disposed of.

Singal Udyog v. National Insurance Company Ltd. And Others

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Singal Udyog v. National Insurance Company Ltd. And Others

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