Continuous cause of action

Legal provision

• Consumer Protection Act, 2019, section 69(1): a Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
• Section 69(2): a complaint may be entertained after that period if the complainant shows sufficient cause, and the Commission records its reasons for condoning the delay.
• Consumer Protection Act, 1986, section 24A: the same two-year rule in the earlier Act.
• Limitation Act, 1963, section 22: in the case of a continuing breach of contract or a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or the tort continues.

Meaning and definition

A cause of action is the set of facts that gives a person the right to sue. A continuous cause of action arises when the wrong is not complete in one act but goes on, so that the right to sue renews as long as the wrong continues.

Detailed explanation

Step 1: The general rule of limitation

• The period of two years runs from the date the cause of action arose, and not from the date of purchase.
• For a defective product, the cause of action ordinarily arises when the defect appears and the seller refuses to cure it.
• For a deficiency in service, it arises when the service falls short.

Step 2: Condonation of delay

• A late complaint can be admitted if the complainant satisfies the Commission that he had sufficient cause.
• The Commission must record its reasons for condoning the delay (section 69(2)).
• Illness, being misled by the opposite party's promise to repair, or pursuing a wrong remedy in good faith are the kinds of causes that may be shown.

Step 3: Continuing wrong

• Where the wrong is a continuing one, the cause of action does not end with the first default.
• Examples: a builder who has not delivered possession and keeps the buyer's money; a developer who has not obtained the legally required completion or occupation certificate; a continuing refusal to refund a deposit after a demand.
• Under section 22 of the Limitation Act, each day of the continuing wrong gives a fresh period of limitation.
• In Samruddhi Co-operative Housing Society v. Mumbai Mahalaxmi Construction (2022), the Supreme Court held that failure of a builder to obtain the occupancy certificate is a continuing wrong, so the complaint was not barred by limitation.

Step 4: Wrong that is complete at one moment

• If the wrong is complete in a single act with continuing effects, the cause of action arises once. A sale of a defective product that is rejected on one day is an example.
• The effect of the wrong continuing, such as continued loss, does not make the wrong itself continuing.

Step 5: Housing delay and the cause of action

• In Lucknow Development Authority v. M.K. Gupta, an allottee deposited money for a flat, and the Authority failed to give possession within the promised time. The Supreme Court held the Authority liable for deficiency, with interest, possession or refund, and compensation.
• Failure to deliver possession is not a one-time event. The default continues until possession is given, or the money is refunded.

Step 6: Insurance and notice

In Om Prakash v. Reliance General Insurance Co. Ltd., an insurer rejected a genuine theft claim for notice given eight days late. The Supreme Court held that a satisfactorily explained delay is not a ground to reject a genuine claim. The cause of action for the complaint arose from the repudiation of the claim.

Step 7: Practice points

• Note the date when the defect or deficiency first appeared and the date of each refusal.
• File promptly. Continuing wrong is a safety net, and not a reason to wait.
• State in the complaint why the cause of action is continuing, or why there is sufficient cause for delay.

Don't confuse: a continuing wrong and a completed wrong

Common mistakes

• Counting two years from the date of purchase and not from the cause of action.
• Treating every default as a continuing wrong. Only a wrong that goes on qualifies.
• Forgetting that a late complaint can be admitted with reasons recorded.
• Waiting because the wrong is continuing, and then losing evidence.
• Forgetting that section 69 uses the same wording as section 24A of the 1986 Act.

Apply it

Leading case laws

• Samruddhi Co-operative Housing Society v. Mumbai Mahalaxmi Construction (2022)

  Facts. Flat owners took possession in 1997, but the builder never obtained the occupancy certificate. The society complained to the National Commission, which dismissed the complaint as time-barred (Civil Appeal No. 4000 of 2019, decided 11 January 2022).

  Principle. The builder's duty under the Maharashtra Ownership Flats Act, 1963 and its contract continued. The failure is a continuing wrong, so the complaint was not barred by limitation. The failure is also a deficiency in service.

  Significance. Leading case on continuing cause of action in housing disputes.

• Lucknow Development Authority v. M.K. Gupta (1994)

  Facts. An allottee deposited money for a flat and did not get possession on time.

  Principle. Delay in possession is a deficiency in service, with interest, possession or refund and compensation.

  Significance. Delay in housing is the usual source of continuing default.

• Om Prakash v. Reliance General Insurance Co. Ltd. (2017)

  Facts. An insurer rejected a genuine theft claim because notice was eight days late.

  Principle. An explained delay is not a ground to reject a genuine claim.

  Significance. The cause of action arose on the repudiation.

How to write this answer in the exam

Key points to remember

• Limitation is two years from the cause of action (section 69).
• Late complaints can be admitted with reasons recorded.
• A continuing wrong gives a fresh period every day.
• Non-delivery of possession and non-refund are common continuing wrongs.
• File promptly even when the wrong continues.

Quick self-test

Related topics

• Procedure for filing a consumer dispute
• Remedies
• Consumer Disputes Redressal Commissions: Jurisdiction and Powers