Holding

The Supreme Court held that, in the absence of privity of contract and a valid Tripartite Agreement, the respondent is not a ‘consumer’ under the Consumer Protection Act, 1986 and the appellant’s liability is limited to the sanctioned foreclosure amount, rendering the NCDRC order unsustainable.

Summary

The respondent, Snehasis Nanda, bought a flat and entered into a sale agreement with a borrower, while Citicorp Finance (the appellant) granted a home loan to the borrower and transferred part of the loan amount to the bank to foreclose the borrower's existing loan. Nanda claimed that under a purported Tripartite Agreement the appellant was liable to pay the remaining consideration of Rs 13.20 million and filed a consumer complaint before the NCDRC, which allowed the complaint and ordered payment. The appellant contended that Nanda was not a ‘consumer’ under the Consumer Protection Act, 1986, that there was no privity of contract between them, that the Tripartite Agreement was doubtful, and that the borrower should have been joined as a necessary party. The Supreme Court examined the definition of ‘consumer’, the requirement of privity, the existence of the Tripartite Agreement, the limitation period under s.24A, and the need to join the borrower, concluding that Nanda could not be treated as a consumer and that the appellant’s liability was limited to the foreclosure amount sanctioned under the home loan. Consequently, the Court set aside the NCDRC order and allowed the appeal, directing the parties to bear their own costs.

Issues considered

Whether the respondent qualifies as a ‘consumer’ under the Consumer Protection Act, 1986
Whether the appellant is liable to pay the entire balance of Rs 13.20 million under the alleged Tripartite Agreement
Whether the Tripartite Agreement is valid and exists
Whether the borrower should have been impleaded as a necessary or proper party before the NCDRC
Whether the complaint is barred by limitation under s.24A of the Consumer Protection Act, 1986
Whether arbitration under the Arbitration and Conciliation Act, 1996 is applicable in a consumer dispute

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 8
Consumer Protection Act, 1986s. 2(1)(d), s. 24A
Consumer Protection Act, 2019

Headnote

Issue for Consideration Whether on facts, the complainant-respondent would come under the definition of ‘consumer’ in terms of the Consumer Protection Act, 1986; whether any liability rested on the appellant to disburse the entire amount of Rs.31,00,000/- i.e., the remaining of the flat payable to the complainant-respondent by the borrower; whether borrower should have been joined in proceedings before the NCDRC. Headnotes† Consumer Protection Act, 1986 – s.2(1)(d) – Respondent- complainant took a housing loan of Rs.17,64,644/- from ICICI Bank and

Subjects

Definition of ‘consumer’No privity of contractNot a ‘consumer’Housing loanBorrowerTripartite agreementIndemnity BondConsumerPrima facieHome loan agreementAgreement for saleMemorandum of understandingTransaction of saleForeclosureForeclosure amountProper partyNecessary partyNon-joinderCondoning delayDelay in filing complaintArbitrationPeriod of limitation

Judgment

[2025] 3 S.C.R. 866 : 2025 INSC 371

M/s Citicorp Finance (India) Limited
v.
Snehasis Nanda
(Civil Appeal No. 14157 of 2024)
20 March 2025
[Sudhanshu Dhulia and Ahsanuddin Amanullah,* JJ.]

Issue for Consideration
Whether on facts, the complainant-respondent would come under
the definition of ‘consumer’ in terms of the Consumer Protection Act,
1986; whether any liability rested on the appellant to disburse the
entire amount of Rs.31,00,000/- i.e., the remaining consideration
amount for sale of the flat payable to the complainant-respondent
by the borrower; whether borrower should have been joined in
proceedings before the NCDRC.

Headnotes†
Consumer Protection Act, 1986 – s.2(1)(d) – Respondent-
complainant took a housing loan of Rs.17,64,644/- from
ICICI Bank and purchased a flat – Respondent and the
borrower entered into an Agreement for the sale of the flat for
Rs.32,00,000/-, Rs.1 Lakh paid by borrower – Appellant and
the borrower entered into a Home Loan Agreement wherein
the appellant agreed to grant a loan of Rs.23,40,000/- to the
borrower – On request of the borrower, Rs.17,80,000/- were
transferred by the appellant to the Bank – Respondent filed
Complaint praying for directions to the appellant to pay
compensation due to the loss caused to him for non-payment
of the balance Rs.13,20,000/- under an alleged Tripartite
Agreement – NCDRC allowed the complaint – Sustainability:
Held: Impugned order not sustainable, set aside – A conjoint reading
of all the agreements concludes that the essential transaction of
sale was between the respondent and the borrower – Respondent,
having no privity of contract with the appellant, cannot be termed a
‘consumer’ under the Act – Even the purported Tripartite Agreement,
relied upon by the respondent himself, states that the appellant
would only pay the foreclosure amount, out of the total loan amount

* Author
[2025] 3 S.C.R. 867

M/s Citicorp Finance (India) Limited v. Snehasis Nanda

sanctioned to the borrower, to ICICI Bank for or on behalf of the
borrower towards foreclosure of respondent’s loan facility with it –
Appellant’s liability under the Agreement for sale was restricted
only to satisfying the dues of the respondent with Bank which sum
was in fact quantified at Rs.17,87,763/- and in anyway, could not
have exceeded Rs.23,40,000/- – NCDRC could not have held that
the appellant was liable to pay Rs.31,00,000/- both to the Bank
as well as to the respondent, who was not a party to the ultimate
sanction of the loan by the Home Loan Agreement between the
appellant and the borrower. [Paras 17, 19, 20]

Consumer Protection Act, 1986 – Non-joinder of borrower in
proceedings before NCDRC – Effect of:
Held: In the instant case, if the borrower had been arrayed as an
Opposite Party in the NCDRC, the question of whether a Tripartite
Agreement was duly executed and existed or not, could perhaps
have been answered – In view of the borrower being the purchaser
of the flat in question and party to the MoU, the Agreement for
Sale, the Home Loan Agreement and the purported Tripartite
Agreement, he was, at the very least a proper party, but looked at
from the lens where the appellant denied the very existence of the
Tripartite Agreement, the borrower being the sole link between the
respondent and the appellant, the borrower would be a necessary
party in the complaint. [Para 23]

Consumer Protection Act, 1986 – s.24A – Limitation period –
Discretion of NCDRC in condoning delay – Scope – On facts,
purported Tripartite Agreement was dated 09.02.2008 – Cause of
action statedly had arisen in/by April/May, 2008 – Respondent
filed complaint under the Act on 16.04.2018:
Held: NCDRC is competent to condone any period of delay in filing
a complaint beyond two years from the date when the cause of
action arises, the discretion is circumscribed by twin conditions:
(i) that the complainant satisfy the NCDRC that he had sufficient
cause for not filing his complaint within such period, and; (ii) that
the NCDRC record the reasons for condoning such delay – In the
present case, despite the appellant raising the issue of limitation,
the impugned order is silent on it – Respondent was agitating the
dispute before, inter alia, the Banking Ombudsman, Reserve Bank
of India and even the High Court – Thus, at the initial stage(s)
868 [2025] 3 S.C.R.

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of hearing, he ought to have satisfied/attempted to satisfy the
NCDRC on the delay and the NCDRC ought to have passed a
reasoned order condoning the delay or refusing to condone the
delay. [Para 22]

Consumer Protection Act, 1986 – Consumer Protection Act,
2019 – Arbitration and Conciliation Act, 1996 – Consumer
dispute – Arbitration, if provided under the agreement/
document, to be resorted to at the choice of the ‘consumer’
only:
Held: Even in a consumer dispute under the 1986 Act, or for that
matter, the 2019 Act, arbitration, if provided for under the relevant
agreement/document, can be opted for/resorted to, however, at
the exclusive choice of the ‘consumer’ alone. [Para 23]

Case Law Cited
Snehasis Nanda v. M/s Citicorp Finance (India) Limited (Formerly
Citi financial Consumer Finance India Limited), Civil Appeals
No.10408-10409 of 2018; Indian Oil Corporation v. Consumer
Protection Council, Kerala [1993] Supp. 3 SCR 884 : (1994) 1
SCC 397; Janpriya Buildestate Pvt. Ltd. v Amit Soni, 2021 SCC
OnLine SC 1269; Tata Motors Limited v. Antonio Paulo Vaz [2021]
1 SCR 625 : (2021) 18 SCC 545; Udit Narain Singh Malpaharia v.
Additional Member Board of Revenue, Bihar [1963] Supp. 1 SCR
676; M Hemalatha Devi v. B Udayasri [2023] 13 SCR 258 : (2024)
4 SCC 255; Emaar MGF Land Ltd. v. Aftab Singh [2018] 14 SCR
791 : (2019) 12 SCC 751 – referred to.

List of Acts
Consumer Protection Act, 1986; Consumer Protection Act, 2019;
Arbitration and Conciliation Act, 1996.

List of Keywords
Definition of ‘consumer’; No privity of contract; Not a ‘consumer’;
Housing loan; Borrower; Tripartite agreement; Indemnity Bond;
Consumer; Prima facie; Home loan agreement; Agreement for sale;
Memorandum of understanding; Transaction of sale; Foreclosure;
Foreclosure amount; Proper party; Necessary party; Non-joinder;
Condoning delay; Delay in filing complaint; Arbitration; Period of
limitation.
[2025] 3 S.C.R. 869

M/s Citicorp Finance (India) Limited v. Snehasis Nanda

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14157 of 2024
From the Judgment and Order dated 19.01.2023 of the National
Consumers Disputes Redressal Commission, New Delhi in CC
No. 919 of 2018

Appearances for Parties
Advs. for the Appellant:
Ritin Rai, Sr. Adv., Sanjay Kumar, Chanchal Kumar Ganguli.
Respondent-in-person.

Judgment / Order of the Supreme Court

Judgment

Ahsanuddin Amanullah, J.

The present appeal impugns the Final Judgment and Order dated
19.01.2023 [2023 SCC OnLine NCDRC 19] in Consumer Complaint
No.919 of 2018 (hereinafter referred to as the ‘Impugned Order’)
passed by the learned National Consumer Disputes Redressal
Commission, New Delhi (hereinafter referred to as the ‘NCDRC’),
whereby the complaint filed by the respondent was allowed and the
appellant was directed to refund Rs.13,20,000/- (Rupees Thirteen
Lakhs Twenty Thousand) with interest @ 12% per annum and pay
Rs.1,00,000/- (Rupees One Lakh) as litigation cost.

FACTUAL BACKGROUND:
2. The respondent-complainant purchased Flat No.701, B-Wing,
7th Floor, Riddhi Siddhi Heritage, Plot Nos.56 & 57, Sector-19, Airoli,
Navi Mumbai (hereinafter referred to as the ‘flat’) on 30.05.2006. The
respondent had availed a housing loan of Rs.17,64,644/- (Rupees
Seventeen Lakhs Sixty-Four Thousand Six Hundred Forty-Four) from
ICICI Bank, Malad, East Mumbai Branch. In February 2008, one
Mr. Mubarak Vahid Patel (hereinafter referred to as the ‘borrower’)
approached the respondent to purchase the flat for a consideration
of Rs.32,00,000/- (Rupees Thirty-Two Lakhs). On 09.02.2008,
the respondent and the borrower entered into a Memorandum of
Understanding (hereinafter referred to as the ‘MoU’) for sale of
870 [2025] 3 S.C.R.

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the flat. On the same day, a Tripartite Agreement was purportedly
entered into between the respondent, borrower and the appellant.
Subsequently, the respondent and the borrower entered into an
Agreement for Sale dated 12.02.2008 for the sale of the flat for a
consideration of Rs.32,00,000/- (Rupees Thirty-Two Lakhs). Out of
the total consideration of Rs.32,00,000/- (Rupees Thirty-Two Lakhs),
Rs.1,00,000/- (Rupees One Lakh) was paid through a post-dated
cheque dated 12.02.2008 and for the remaining Rs.31,00,000/-
(Rupees Thirty-One Lakhs), the borrower approached the appellant
for a housing loan.
3. The appellant and borrower entered into a Home Loan Agreement
dated 28.02.2008, by which the appellant agreed to grant a loan of
Rs.23,40,000/- (Rupees Twenty-Three Lakhs Forty Thousand) to
the borrower. As the flat was already mortgaged with ICICI Bank,
the borrower requested the appellant to disburse an amount of
Rs.17,80,000/- (Rupees Seventeen Lakhs Eighty Thousand) directly
to the respondent’s ICICI Bank account, in order to secure the release
of the flat. On 11.04.2008, the appellant granted in-principle approval
for the loan. The above payment was made by the appellant and
thereafter an amount of Rs.5,09,311/- (Rupees Five Lakhs Nine
Thousand Three Hundred Eleven) remained to be disbursed to the
borrower. The appellant issued a cheque for the balance sanctioned
amount of Rs.5,09,311/- (Rupees Five Lakhs Nine Thousand Three
Hundred Eleven) in favour of the borrower in 2009. However, the
borrower did not encash this cheque and closed the loan account.
4. On 16.04.2018, the respondent filed Consumer Complaint No.919
of 2018 before the NCDRC, inter alia, praying for directions to the
appellant to pay compensation due to the loss caused to him for
non-payment of the balance Rs.13,20,000/- (Rupees Thirteen Lakhs
Twenty Thousand) under an alleged Tripartite Agreement dated
09.02.2008. Vide Order dated 06.09.2018 [2018 SCC OnLine NCDRC
1416], the NCDRC, after hearing both parties, dismissed the complaint
at the pre-admission stage holding that the respondent cannot be said
to be a ‘consumer’ within the meaning of the Consumer Protection
Act, 1986 (hereinafter referred to as the ‘Act’). The respondent then
filed Review Application No.326 of 2018 in Consumer Complaint
No.919 of 2018, which came to be dismissed by the NCDRC vide
Order dated 20.09.2018. Thereafter, the respondent approached this
[2025] 3 S.C.R. 871

M/s Citicorp Finance (India) Limited v. Snehasis Nanda

Court by filing Civil Appeals No.10408-10409 of 2018.1 By Order
dated 06.09.2019, this Court allowed the said civil appeals and set
aside the Orders of the NCDRC. It restored the matter back to the
file of the NCDRC for the complaint to be decided on merits.
5. On remand, the NCDRC considered the matter and vide the Impugned
Order allowed the complaint filed by the respondent. The appellant
was directed to refund Rs.13,20,000/- (Rupees Thirteen Lakhs
Twenty Thousand) with interest @ 12% per annum from 14.04.2008
till the date of actual payment along with Rs.1,00,000/- (Rupees
One lakh) towards litigation cost. The respondent preferred Civil
Appeal No.1593 of 20232 in this Court against the Impugned Order
seeking enhancement of the amount awarded, which was dismissed
on 17.04.2023.

SUBMISSIONS BY THE APPELLANT:
6. Learned senior counsel Mr. Ritin Rai, for the appellant, submitted that
the Impugned Order suffers from several infirmities and ought to be
set aside. It was argued that the NCDRC failed to consider that the
respondent is not a ‘consumer’ of the appellant within the meaning of
Section 2(1)(d) of the Act. The MoU and the Agreement for Sale were
purportedly entered into between the respondent and the borrower.
The appellant is admittedly not a party to these and has undertaken
no obligations thereunder. Similarly, the respondent is not a party to
the Home Loan Agreement entered into between the appellant and
the borrower. It was submitted that no service was ever provided by
the appellant to the respondent and hence the respondent does not
fall under the definition of ‘consumer’ under the Act.
7. It was argued that in such scenario, the NCDRC had concluded,
without any evidence, that the appellant and the respondent were
‘possibly’ parties to a Tripartite Agreement under which the appellant
was directly responsible for paying the total sale consideration to
the respondent. The existence of such a ‘Tripartite Agreement’
has been denied by the appellant. Pertinently, no such ‘Tripartite
Agreement’ signed by the appellant was ever filed by the respondent.

1 Snehasis Nanda v M/s Citicorp Finance (India) Limited (Formerly Citifinancial Consumer Finance
India Limited).
2 Snehasis Nanda v M/s Citicorp Finance (India) Ltd.
872 [2025] 3 S.C.R.

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The respondent, as the party averring the existence of such
agreement, bears the burden of proving the existence of the same. The
NCDRC erred by presuming the existence of a Tripartite Agreement
and placing the burden of producing the same on the appellant.
8. It was further submitted that the appellant only had privity of contract
with the borrower. It is on the instruction of the borrower - Mr.
Mubarak Vahid Patel - that the appellant transferred an amount of
Rs.17,80,000/- (Rupees Seventeen Lakhs Eighty Thousand) to the
ICICI Bank for foreclosing the loan account of the respondent, as
part of the sale consideration for the flat. This payment does not
evidence the existence of any relationship between the appellant
and the respondent, as it was made on the request of the appellant’s
customer viz. the borrower.
9. Without prejudice to the aforesaid submissions, it was submitted
that the appellant also took an objection before the NCDRC that
the borrower was a necessary and proper party for the purpose of
adjudication of the complaint. The NCDRC in the Impugned Order
failed to adjudicate upon this objection raised by the appellant.
Further, the NCDRC allowed the complaint without any reasoning
on the appellant’s objection regarding the complaint being barred
by limitation. Prayer was made to allow the appeal by the learned
senior counsel.

SUBMISSIONS BY THE RESPONDENT-IN-PERSON:
10. Mr. Snehasis Nanda, respondent-in-person, submitted that the
Impugned Order has correctly taken note of the evidence and
materials on record and allowed the complaint, which does not require
any interference by this Court. It was submitted that the NCDRC, in
a well-reasoned order, has rightly found the appellant to be guilty
of deficiency in service and engaging in unfair trade practices, after
going into the entirety of the complaint and the supporting documents.
11. It was submitted that the Home Loan of the borrower was approved
by the appellant based on the Tripartite Agreement dated 09.02.2008
and the registered Agreement for Sale dated 12.02.2008, without
which the appellant was not supposed to process the home loan
application on the flat, as the said flat was mortgaged with another
bank, i.e., ICICI Bank. The NCDRC has rightly upheld the existence
of the Tripartite Agreement, after finding supporting evidence in the
[2025] 3 S.C.R. 873

M/s Citicorp Finance (India) Limited v. Snehasis Nanda

complaint. On the question raised by the appellant on the respondent’s
status as a ‘consumer’ under the Act, the submission is that this Court
in Order dated 06.09.2019 passed in Civil Appeals No.10408-10409
of 2018 held in his favour on this point.
12. It was argued that the appellant has deliberately misled all fora in order
to hide the existence of the Tripartite Agreement dated 09.02.2008
and to escape the liability to pay. Prayer was made to dismiss the
appeal by the respondent.

ANALYSIS, REASONING & CONCLUSION:
13. We have heard learned senior counsel for the appellant and the
respondent-in-person at length.
14. The lis before this Court basically can be broadly classified under
two distinct heads. Firstly, as to whether the complainant would come
under the definition of ‘consumer’ in terms of the Act. Secondly,
assuming the first question is answered in the affirmative, whether
any liability rested on the appellant to disburse the entire amount
of Rs.31,00,000/- (Rupees Thirty-One Lakhs) i.e., the remaining
consideration amount for sale of the flat payable to the complainant-
respondent by the borrower. Ancillary issues arising are considered
at the appropriate place infra. At the outset, it would be useful to
reproduce Section 2(1)(d) of the Act:
‘2. Definitions.—(1) In this Act, unless the context
otherwise requires,—
…
(d) “consumer” means any person who,—
(i) buys any goods for a consideration which has been
paid or promised or partly paid and partly promised, or
under any system of deferred payment and includes any
user of such goods other than the person who buys such
goods for consideration paid or promised or partly paid or
partly promised, or under any system of deferred payment
when such use is made with the approval of such person,
but does not include a person who obtains such goods
for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration
which has been paid or promised or partly paid and partly
874 [2025] 3 S.C.R.

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promised, or under any system of deferred payment and
includes any beneficiary of such services other than the
person who hires or avails of the services for consideration
paid or promised, or partly paid and partly promised, or
under any system of deferred payment, when such services
are availed of with the approval of the first mentioned
person but does not include a person who avails of such
services for any commercial purpose;
Explanation.—For the purposes of this clause, “commercial
purpose” does not include use by a person of goods bought
and used by him and services availed by him exclusively
for the purposes of earning his livelihood by means of
self-employment;’
15. The respondent contends that this Court vide Order dated 06.09.2019
passed in Civil Appeals No.10408-10409 of 2018 has held that he
is a ‘consumer’ under the Act. We reproduce the relevant discussion
from the said Order:
‘xxx
At this stage, we are considering whether prima facie there
is material available on record to support and substantiate
the plea that the appellant is a consumer within the
meaning of the Act.
The documents referred to above prima facie do show
and support the case of the appellant. The matter shall of
course be gone into and if there are submission(s) to the
contrary from the other side, they will also be considered
before arriving at the final decision. However, the National
Commission ought not to have disposed of the matter at
the admission stage.
We, therefore, allow these appeals, set-aside the orders
of the National Commission and restore the matter back
to the file of the National Commission, which shall be
decided in accordance with law.
We have considered the matter only from the perspective
whether prima facie it is evident that the appellant is a
consumer or not. The entire matter has to be gone into and
our prima facie view shall not debar any of the parties to
[2025] 3 S.C.R. 875

M/s Citicorp Finance (India) Limited v. Snehasis Nanda

submit material and prove it to the contrary. The entirety of
the matter shall be gone into by the National Commission
on merits at the appropriate stages.
xxx’
(emphasis supplied)

16. A bare glance at the Order dated 06.09.2019 passed in Civil Appeals
No.10408-10409 of 2018 makes it clear that this Court had nowhere
conclusively held that the respondent-complainant was a ‘consumer’
under the Act. All that this Court did was to observe, upon perusing
the documents produced before it, that it was of the prima facie view
that the appellant was a ‘consumer’; that such view was only prima
facie; that the other side could submit and show to the contrary;
that the NCDRC ought not to have disposed of the matter at the
admission stage; that the entirety of the matter be gone into, and; that
the NCDRC should decide in accordance with law. Even at that time,
the respondent had not produced a copy of the purported Tripartite
Agreement before this Court. That apart, usage of the term ‘prima
facie’ and its import is obvious – namely, that the NCDRC was left
free to decide the issue, after hearing the parties. The NCDRC in the
Impugned Order has offered no reasoning on how the respondent
was a ‘consumer’ under the Act. As per the complainant-respondent,
there was a Tripartite Agreement and an Indemnity Bond between the
appellant, the complainant-respondent and the borrower intervened
by a Home Loan agreement between the appellant and the borrower
as also a MoU and an Agreement for Sale between the complainant-
respondent and the borrower. Though the existence of the Tripartite
Agreement was specifically denied by the appellant, the NCDRC has
drawn an adverse inference against the appellant only because a
specific affidavit was not filed before it. Pausing here, we may note that
such statement re denial of the existence of the purported Tripartite
Agreement was made in the appellant’s reply only, in the NCDRC,
which was itself supported by an affidavit and thus, no separate/
special affidavit was required in this behalf. Moreover, and more
importantly, the onus is on the person who asserts a fact to prove
it. In the present case, where the respondent himself is a signatory
to the purported Tripartite Agreement, the presumption will be that
he has retained a copy of the same. Thus, non-production of the
(complete) Tripartite Agreement, if at all there was one, would lead
876 [2025] 3 S.C.R.

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to an adverse inference, and under normal circumstances as also
in the present case, against the complainant-respondent, and not
against the appellant. What the complainant produced before the
NCDRC was an unsigned, unstamped and partly blank document,
which he asserts is the Tripartite Agreement between the appellant,
the borrower and him.
17. Coming to the main merits, even if it is accepted that all the afore-
mentioned agreements were validly there, primarily the Tripartite
Agreement, as contended by the respondent, a conjoint reading of
all would lead to the obvious conclusion that the essential transaction
of sale was between the complainant-respondent and the borrower
who was the buyer of the flat of the complainant-respondent for an
agreed consideration of Rs.32,00,000/- (Rupees Thirty-Two Lakhs).
In the specific factual setting, the respondent, having no privity of
contract with the appellant, cannot be termed a ‘consumer’ under
the Act. This alone was sufficient to dismiss the complaint. In Indian
Oil Corporation v Consumer Protection Council, Kerala, (1994) 1
SCC 397, it was held that as there was no privity of contract between
the concerned parties therein, no ‘deficiency’ would arise and the
action (complaint) would not be maintainable before the concerned
Consumer Forum. In Janpriya Buildestate Pvt. Ltd. v Amit Soni,
2021 SCC OnLine SC 1269, the Court held:
‘25. We have indicated the scheme of the Act. A claim can
succeed in a case of this nature if the consumer establishes
deficiency of service. No doubt, the law giver contemplates
other elements as contemplated in the definition of the
word ‘complaint’. The word ‘deficiency’ has been widely
worded. Equally so, is the word ‘service’. A statute of this
nature must, indeed, if possible, be construed in favour of
the consumer. However, that is a far cry from holding that
if deficiency is not established, yet the opposite party must
bear the liability which cannot be thrust on its shoulders.
We would clarify that by making it clear that what we
intend to say is that when there is no privity between the
complainant and the opposite party, the opposite party
could not become liable under the Act. In other words,
if there is no law under which a person is to provide a
service and if it does not fall within the residuary clause,
namely, ‘otherwise’ as defined under the word ‘deficiency’,
[2025] 3 S.C.R. 877

M/s Citicorp Finance (India) Limited v. Snehasis Nanda

it is necessary for a consumer to succeed, that there must
be a contract. It is in that context, we indicated that the
existence of an obligation under a contract is a sine qua
non for a consumer to successfully prosecute a case
under the Act.’
(emphasis supplied)

18. Ultimately, the loan which was sanctioned by the appellant to the
borrower was only for a sum of Rs.23,40,000/- (Rupees Twenty-Three
Lakhs Forty Thousand). Thus, here also we find that the Impugned
Order of the NCDRC holding that the appellant was bound to pay
the entire amount of Rs.31,00,000/- (Rupees Thirty-One Lakhs)
and directing it to pay the balance consideration of Rs.13,20,000/-
(Rupees Thirteen Lakhs Twenty Thousand), appears to be wholly
without basis. In Tata Motors Limited v Antonio Paulo Vaz, (2021)
18 SCC 545, the Court stated:
‘28. The record establishes the absolute dearth of pleadings
by the complainant with regard to the appellant’s role, or
special knowledge about the two disputed issues i.e. that
the dealer had represented that the car was new, and
in fact sold an old, used one, or that the undercarriage
appeared to be worn out. This, in the opinion of this
Court, was fatal to the complaint. No doubt, the absence
of the dealer or any explanation on its part, resulted in a
finding of deficiency on its part, because the car was in
its possession, was a 2009 model and sold in 2011. The
findings against the dealer were, in that sense, justified
on demurrer. However, the findings against the appellant,
the manufacturer, which had not sold the car to Vaz,
and was not shown to have made the representations in
question, were not justified. The failure of the complainant
to plead or prove the manufacturer’s liability could not
have been improved upon, through inferential findings, as
it were, which the District, State and National Commission
rendered. The circumstance that a certain kind of argument
was put forward or a defence taken by a party in a given
case (like the appellant, in the case) cannot result in
the inference that it was involved or culpable, in some
manner. Special knowledge of the allegations made by
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the dealer, and involvement, in an overt or tacit manner,
by the appellant, had to be proved to lay the charge of
deficiency of service at its door. In these circumstances,
having regard to the nature of the dealer’s relationship
with the appellant, the latter’s omissions and acts could
not have resulted in the appellant’s liability.’
(emphasis supplied)

19. Further, the purported Tripartite Agreement, relied upon by the
complainant-respondent himself, states that the appellant would only
pay the foreclosure amount, out of the total loan amount sanctioned
to the borrower, to ICICI Bank for or on behalf of the borrower
towards foreclosure of respondent’s loan facility with it. No further
liability to pay any amount directly to the complainant-respondent
was even envisaged in the Tripartite Agreement. Thus, arguendo the
Agreement for Sale did mention that the loan amount of Rs.17,80,000/-
(Rupees Seventeen Lakhs Eighty Thousand) would be paid to ICICI
Bank towards foreclosure of the respondent’s loan account and
the remaining would be paid to the complainant-respondent by the
appellant, it cannot be lost sight of that such stipulation was only
mentioned in the Agreement for Sale, which is only between the
complainant-respondent and the borrower. This is clear even from
that fact that ultimately the amount which was sanctioned by the
appellant to the borrower was only Rs.23,40,000/- (Rupees Twenty-
Three Lakhs Forty Thousand) and not Rs.31,00,000/- (Rupees
Thirty-One Lakhs).
20. In the aforesaid background, we find that the appellant, assuming
any liability in this regard existed at all, taking the respondent’s case
at the highest, could not have been saddled with having to pay more
than what was envisaged under the Home Loan Agreement between
the borrower and the appellant. In any event, the appellant’s liability
under the Agreement for sale was restricted only to satisfying the
dues of the complainant-respondent with ICICI Bank which sum
was in fact quantified at Rs.17,87,763/- (Rupees Seventeen Lakhs
Eighty Seven Thousand Seven Hundred Sixty-Three) and, in any
view of the matter, could not have exceeded Rs.23,40,000/- (Rupees
Twenty-Three Lakhs Forty Thousand). Thus, the NCDRC could not
have, under any circumstance, taken a view that the appellant was
liable to pay Rs.31,00,000/- (Rupees Thirty-One Lakhs) both to ICICI
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Bank as well as to the complainant-respondent, who was not a party
to the ultimate sanction of the loan by the Home Loan Agreement,
which was between the appellant and the borrower. Hence, even
the second question is answered in the negative.
21. As has been discussed above, it is clear that the complainant-
respondent cannot be said to be a ‘consumer’ under the Act as it
had no privity of contract with the appellant, due regard being had to
the totality of the factual matrix. The purported Tripartite Agreement
is dated 09.02.2008. The cause of action statedly had arisen in/by
April/May, 2008. The respondent filed a complaint under the Act on
16.04.2018. The Act provides as under:
‘24-A. Limitation period.—(1) The District Forum, the
State Commission or the National Commission shall not
admit a complaint unless it is filed within two years from
the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub-section (1),
a complaint may be entertained after the period specified
in sub-section (1), if the complainant satisfies the District
Forum, the State Commission or the National Commission,
as the case may be, that he had sufficient cause for not
filing the complaint within such period:
Provided that no such complaint shall be entertained unless
the National Commission, the State Commission or the
District Forum, as the case may be, records its reasons
for condoning such delay.’
(emphasis supplied)

22. Therefore, while the NCDRC is competent to condone any period
of delay in filing a complaint beyond two years from the date when
the cause of action arises, the discretion is circumscribed by twin
conditions: (i) that the complainant satisfy the NCDRC that he had
sufficient cause for not filing his complaint within such period, and;
(ii) that the NCDRC record the reasons for condoning such delay.
We have perused the ordersheets of the NCDRC pertaining to the
complaint at hand. Neither reasons nor a formal order condoning delay
is forthcoming, either in the ordersheets or in the Impugned Order.
Despite the appellant raising the issue of limitation, the Impugned
Order is silent on the said score. On a probe into the pleadings, it
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transpires that the respondent was agitating the dispute before, inter
alia, the Banking Ombudsman, Reserve Bank of India and even the
High Court of Orissa by way of Writ Petition (Civil) No.18429 of 2017.
In this backdrop, at the initial stage(s) of hearing, the respondent
ought to have satisfied/attempted to satisfy the NCDRC on the delay,
and the NCDRC ought to have passed a reasoned order condoning
the delay or refusing to condone the delay. Be that as it may.
23. Another specific plea by the appellant, that the borrower should
have been joined in the proceedings before the NCDRC has also
gone unanswered. If the borrower had been arrayed as an Opposite
Party in the NCDRC, the question of whether a Tripartite Agreement
was duly executed and existed or not, could perhaps have been
answered. It is too late in the day to plug such non-joinder. In view
of the borrower being the purchaser of the flat in question and party
to the MoU, the Agreement for Sale, the Home Loan Agreement and
the purported Tripartite Agreement, he was, at the very least a proper
party, but looked at from the lens where the appellant denied the
very existence of the Tripartite Agreement, the borrower being the
sole link between the respondent and the appellant, the borrower
would be a necessary party in the complaint. We need only refer to
the dicta in Udit Narain Singh Malpaharia v Additional Member
Board of Revenue, Bihar, 1963 Supp (1) SCR 676, where the
Court explained:
‘7. To answer the question raised it would be convenient at
the outset to ascertain who are necessary or proper parties
in a proceeding. The law on the subject is well settled: it is
enough if we state the principle. A necessary party is one
without whom no order can be made effectively; a proper
party is one in whose absence an effective order can be
made but whose presence is necessary for a complete and
final decision on the question involved in the proceeding.
8. The next question is, what is the nature of a writ of
certiorari. What relief can a petitioner in such a writ obtain
from the Court. Certiorari. lies to remove for the purpose
of quashing the proceedings of inferior courts of record or
other persons or bodies exercising judicial or quasi-judicial
functions. It is not necessary for the purpose of this appeal
to notice the distinction between a writ of certiorari and a
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writ in the nature of certiorari: in either case the High Court
directs an inferior tribunal or authority to transmit to itself
the record of proceedings pending therein for scrutiny and,
if necessary, for quashing the same. It is well settled law
that a certiorari lies only in respect of a judicial or quasi-
judicial act as distinguished from administrative act. The
following classic test laid down by Lord Justice Atkin, as
he then was, in King v. Electricity Commissioners [(1924)
1 KB 171] and followed by this Court in more than one
decision clearly brings out the meaning of the concept of
judicial act:
“Wherever any body of persons having legal authority
to determine questions affecting the rights of subjects,
and having the duty to act judicially, act in excess of
their legal authority they are subject to the controlling
jurisdiction of the King’s Bench Division exercised in
these writs.”
Lord Justice Slesser in King v. London County Council
[(1931) 2 KB 215, 243] dissected the concept of judicial
act laid down by Atkin, L.J., into the following heads in
his judgment: “Wherever any body of persons (1) having
legal authority (2) to determine questions affecting rights
of subjects and (3) having the duty to act judicially (4)
act in excess of their legal authority — a writ of certiorari
may issue”. It will be seen from the ingredients of judicial
act that there must be a duty to act judicially. A tribunal,
therefore, exercising a judicial or quasi-judicial act cannot
decide against the rights of a party without giving him a
hearing or an opportunity to represent his case in the
manner known to law. If the provisions of a particular
statute or rules made thereunder do not provide for it,
principles of natural justice demand it. Any such order
made without hearing the affected parties would be void.
As a writ of certiorari will be granted to remove the record
of proceedings of an inferior tribunal or authority exercising
judicial or quasi-judicial acts, ex hypothhesi it follows that
the High Court in exercising its jurisdiction shall also act
judicially in disposing of the proceedings before it. It is
implicit in such a proceeding that a tribunal or authority
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which is directed to transmit the records must be a party
in the writ proceedings, for, without giving notice to it,
the record of proceedings cannot be brought to the High
Court. It is said that in an appeal against the decree of a
subordinate court, the court that passed the decree need
not be made a party and on the same parity of reasoning it
is contended that a tribunal need not also be made a party
in a writ proceeding. But there is an essential distinction
between an appeal against a decree of a subordinate court
and a writ of certiorari to quash the order of a tribunal or
authority: in the former, the proceedings are regulated by
the Code of Civil Procedure and the court making the order
is directly subordinate to the appellate court and ordinarily
acts within its bounds, though sometimes wrongly or even
illegally, but in the case of the latter, a writ of certiorari is
issued to quash the order of a tribunal which is ordinarily
outside the appellate or revisional jurisdiction of the court
and the order is set aside on the ground that the tribunal or
authority acted without or in excess of jurisdiction. If such
a tribunal or authority is not made party to the writ, it can
easily ignore the order of the High Court quashing its order,
for, not being a party, it will not be liable to contempt. In
these circumstances whoever else is a necessary party or
not the authority or tribunal is certainly a necessary party
to such a proceeding. In this case, the Board of Revenue
and the Commissioner of Excise were rightly made parties
in the writ petition.
9. The next question is whether the parties whose rights
are directly affected are the necessary parties to a writ
petition to quash the order of a tribunal. As we have seen,
a tribunal or authority performs a judicial or quasi-judicial
act after hearing parties. Its order affects the right or
rights of one or the other of the parties before it. In a writ
of certiorari the defeated party seeks for the quashing of
the order issued by the tribunal in favour of the successful
party. How can the High Court vacate the said order
without the successful party being before it. Without the
presence of the successful party the High Court cannot
issue a substantial order affecting his right. Any or that
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may be issued behind the back of such a party can be
ignored by the said party, with the result that the tribunal’s
order would be quashed but the right vested in that party
by the wrong order of the tribunal would continue to be
effective. Such a party, therefore, is a necessary party and
a petition filed for the issue of a writ of certiorari without
making him a party or without impleading him subsequently,
if allowed by the court, would certainly be incompetent. A
party whose interests are directly affected is, therefore,
a necessary party.
10. In addition, there may be parties who may be described
as proper parties, that is parties whose presence is not
necessary for making an effective order, but whose
persence may facilitate the settling of all the questions
that may be involved in the controversy. The question
of making such a person as a party to a writ proceeding
depends upon the judicial discretion of the High Court in
the circumstances of each case. Either one of the parties
to the proceeding may apply for the impleading of such a
parry or such a party may suo motu approach the court
for being impleaded therein.
11. The long established English practice, which the High
Courts in our country have adopted all along, accepts the
said distinction between the necessary and the proper
party in a writ of certiorari. The English practice is recorded
in Halsbury’s Laws of England, Vol. 11, 3rd Edn. (Lord
Simonds’) thus in para 136:
“The notice of motion or summons must be served on
all persons directly affected, and where it relates to
any proceedings in or before a court, and the object
is either to compel the court or an officer thereof to
do any act in relation to the proceedings or to quash
them or any order made therein, the notice of motion
or summons must be served on the clerk or registrar
of the court, the other parties to the proceedings, and
(where any objection to the conduct of the judge is
to be made) on the judge…”.
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In para 140 it is stated:
“On the hearing of the summons or motion for an
order of mandamus prohibition or certiorari, counsel
in support begins and has a right of reply. Any person
who desires to be heard in opposition, and appears
to the court or Judge to be a proper person to be
heard, is to be heard notwithstanding that he has not
been served with the notice or summons, and will be
liable to costs in the discretion of the court or Judge
if the order should be made …”.
So too, the Rules made by the Patna High Court require
that a, party against whom relief is sought should be named
in the petition. The relevant Rules read thus:
Rule 3. Application under Article 226 of the Constitution
shall be registered as Miscellaneous Judicial Cases or
Criminal Miscellaneous Cases, as the case may be.
Rule 4. Every application shall, soon after it is
registered, be posted for orders before a Division
Bench as to issue of notice to the respondents. The
Court may either direct notice to issue and pass such
interim order as it may deem necessary or reject the
application.
Rule 5. The notice of the application shall be served
on all persons directly affected and on such other
persons as the Court may direct.
Both the English rules and the rules framed by the Patna
High Court lay down that persons who are directly affected
or against whom relief is sought should be named in the
petition, that is all necessary parties should be impleaded
in the petition and notice served on them. In “The Law of
Extra-ordinary Legal Remedies” by Ferris, the procedure
in the matter of impleading parties is clearly described at
p. 201 thus:
“Those parties whose action is to be reviewed and
who are interested therein and affected thereby,
and in whose possession the record of such action
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remains, are not only proper, but necessary parties.
It is to such parties that notice to show cause against
the issuance of the writ must be given, and they are
the only parties who may make return, or who may
demur. The omission to make parties those officers
whose proceedings it is sought to direct and control,
goes to the very right of the relief sought. But in order
that the court may do ample and complete justice,
and render a judgment which will be binding on all
persons concerned, all persons who are parties to
the record, or who are interested in maintaining the
regularity of the proceedings of which a review is
sought, should be made parties respondent.”
xxx’
(emphasis supplied)

24. Further, the so-called Tripartite Agreement provides for the matter
being resolved by arbitration under the provisions of the (Indian)
Arbitration and Conciliation Act, 1996. In this context, we notice the
judgment in M Hemalatha Devi v B Udayasri, (2024) 4 SCC 255,
authored by one of us (Sudhanshu Dhulia, J.), where this Court
held, inter alia:
‘17. The exclusion of a dispute from arbitration may be
express or implied, depending again upon the nature of
the dispute, and a party to a dispute cannot be compelled
to resort to arbitration merely for the reason that it has
been provided in the contract, to which it is a signatory.
The arbitrability of a dispute has to be examined when
one of the parties seeks redressal under a welfare
legislation, in spite of being a signatory to an arbitration
agreement. “The Consumer Protection Act” is definitely
a piece of welfare legislation with the primary purpose
of protecting the interest of a consumer. Consumer
disputes are assigned by the legislature to public fora,
as a measure of public policy. Therefore, by necessary
implication such disputes will fall in the category of non-
arbitrable disputes, and these disputes should be kept
away from a private fora such as “arbitration”, unless both
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the parties willingly opt for arbitration over the remedy
before public fora.
xxx
22. The question, however, is of election, or of choice, and
not of which party had approached the court first. More
importantly it would be the nature of the dispute, which
would determine the forum for its redressal. The law gives
this choice to the consumer to either avail a remedy under
the Consumer Protection Act, by filing a complaint before
the judicial authority, or go for arbitration. This option is not
available to the builder, as they are not “consumers”, under
the 2019 Act. It is the respondent here Smt B. Udayasri
who has to make a “choice” between submitting before
the private fora i.e. the Arbitration Tribunal or to make a
complaint before the Consumer Forum, which is a public
fora. She has chosen to go to the latter. Her reply before
the Telangana High Court on the Section 11 application of
the builder is not her submission to the arbitration process.
In her reply, she informs the High Court of the complaint
made by her as a consumer before the District Consumer
Forum, which is a “judicial authority” and hence Section 8
of the Arbitration Act, 1996 would come into play and not
an application under Section 11 of the Arbitration Act, 1996.
xxx
35. It was held that the 1986 Act was enacted to provide
better protection of the interest of consumers and for
providing a redressal mechanism, which is cheaper,
easier, expeditious and effective. For this purpose, various
quasi-judicial forums were set up at district, State and
national level with a wider range of powers vested in these
Judicial Authorities. These Judicial Authorities were vested
with the powers to give relief of a specific nature and to
award compensation to the consumer wherever it was felt
necessary to impose penalty for non-compliance of their
orders, and the judicial authorities were vested with such
powers. Now compare this with the power of the arbitrator.
An arbitrator does not have the power to impose a penalty.
This is also one of the essential differences between
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the two forums. It was finally held that the provisions
given under the 1986 Act were in addition to, and not in
derogation to, any other provisions or any other law for
the time being in force.
xxx
38. This Court in a series of decisions, while considering
both the provisions in the Consumer Protection Act, 1986
and the Arbitration Act, 1996, has held that the Consumer
Protection Act being a special and beneficial legislation,
the remedies provided therein are special remedies
and a consumer cannot be deprived of them should he
choose to avail such a remedy, in spite of an arbitration
agreement between the parties. It is a remedy provided to
the consumer where the consumer finds a defect in either
goods or services provided to him and therefore seeks a
redressal of his grievances before the consumer forum
provided to him by the legislature.
xxx
47. This Court ultimately held that the main purpose of
bringing an amendment inter alia in Sections 8 and 11
of the Arbitration Act, 1996 was to minimise the scope
of judicial authority, which was to refuse reference to
arbitration only on the ground when it prima facie finds that
there was no valid arbitration agreement. The legislative
intent for the amendment was confined to limiting judicial
intervention, and once the Court finds that there is a
valid arbitration agreement, it has no option but to refer
the matter for arbitration. But this would not mean that
where the matter itself is non-arbitrable, or is covered by
a special legislation such as the Consumer Protection
Act, it still has to be referred for arbitration. In para 59 of
Emaar-3 [Emaar MGF Land Ltd. v Aftab Singh, (2019)
12 SCC 751: (2018) 5 SCC (Civ) 652], it was stated as
under: (SCC pp. 781-82)
“59. The amendment in Section 8 cannot be given such
expansive meaning and intent so as to inundate entire
regime of special legislations where such disputes
were held to be not arbitrable. Something which
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legislation never intended cannot be accepted as side
wind to override the settled law. The submission of
the petitioner that after the amendment the law as laid
down by this Court in National Seeds Corpn. [National
Seeds Corpn. Ltd. v M. Madhusudhan Reddy, (2012) 2
SCC 506: (2012) 1 SCC (Civ) 908] is no more a good
law cannot be accepted. The words ‘notwithstanding
any judgment, decree or order of the Supreme Court
or any court’ were meant only to those precedents
where it was laid down that the judicial authority while
making reference under Section 8 shall be entitled to
look into various facets of the arbitration agreement,
subject-matter of the arbitration whether the claim is
alive or dead, whether the arbitration agreement is
null and void. The words added in Section 8 cannot
be meant for any other meaning.”
Emaar-3 [Emaar MGF Land Ltd. v. Aftab Singh, (2019)
12 SCC 751: (2018) 5 SCC (Civ) 652] though ends with
a caveat, where it leaves the option with the party who
may have an option to choose between a public or private
forum, may consciously choose to go for private fora. This
is what it says: (SCC p. 783, para 63)
“63. We may, however, hasten to add that in the
event a person entitled to seek an additional special
remedy provided under the statutes does not opt
for the additional/special remedy and he is a party
to an arbitration agreement, there is no inhibition in
disputes being proceeded in arbitration. It is only the
case where specific/special remedies are provided
for and which are opted by an aggrieved person that
judicial authority can refuse to relegate the parties
to the arbitration.”’
(emphasis supplied)

25. As vivid from Emaar MGF Land Ltd. v Aftab Singh, (2019) 12 SCC
751 and M Hemalatha Devi (supra), even in a consumer dispute
under the Act, or for that matter, the Consumer Protection Act, 2019,
arbitration, if provided for under the relevant agreement/document,
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can be opted for/resorted to, however, at the exclusive choice of
the ‘consumer’ alone. As the appellant is not a ‘consumer’ in terms
of the Act and the existence of the Tripartite Agreement is doubtful,
we need not dwell further hereon.
26. On an overall circumspection of the facts and circumstances of
the case coupled with a survey of the precedents, we find that the
Impugned Order cannot be sustained. Accordingly, in view of the
discussions in the preceding paragraphs, the Impugned Order is
set aside.
27. The appeal is allowed. Parties to bear their own costs.
28. However, this Judgment shall not impact proceedings, if any, inter-se
borrower and respondent. This shall not ipso facto relax/extend any
period of limitation for resort to lawful remedies, as may be applicable.
29. In view of the appeal being allowed, no order is required to be passed
in I.A. No.117048/2023 and I.A. No.188226/2023.
30. I.A. No.166893/2023 is the respondent’s application seeking
permission to appear and argue in person; as we have already heard
him, hence this application is formally allowed.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Divya Pandey