ORDER
1.     This Revision Petition has been filed under Section 21(b) of The Consumer Protection Act, 1986, hereinafter referred to as the ‘Act’, challenging the Order dated 10.01.2014 passed by The State Consumer Disputes Redressal Commission, Goa, hereinafter referred to as the ‘State Commission’, in F.A. No. 90 of 2013 arising out of the Order dated 27.09.2013 in C.C. No. 91 of 2011 passed by The District Consumer Disputes Redressal Forum, North Goa, Goa, hereinafter referred to as the ‘District Forum’.

2.     The Petitioner herein, Tata Motors Ltd., was the Opposite Party No. 2 before the District Forum, and is hereinafter being referred to as the ‘Manufacturer’.

The Respondent No. 1 herein, Mr. Antonio Paulo Vaz, was the Complainant  before the District Forum, and is hereinafter being referred to as the ‘Complainant’.

The Respondent No. 2 herein, The Vistar Motor Goa Pvt. Ltd., was the Opposite Party No. 1 before the District Forum, and is hereinafter being referred to as the ‘Dealer’.

3.     Vide this Commission’s Order dated 30.04.2019, the Dealer has been proceeded against ex parte.

4.     Heard learned Counsel for the Manufacturer and the Complainant.

Perused the material on record.

5.     The short point in this case is that the Complainant paid the total consideration price for purchase of a new car in 2011 to the Dealer, after availing financial assistance from a bank; a used car of make 2009 was sold to him in place of a new car of make 2011, he requested for refund of the price paid or replacement with a new car of make 2011; the price was not refunded, replacement was not made. The Complainant did not take delivery of the used car of make 2009, attempted conciliation, sent a legal notice, and, on his grievance not being redressed, filed a Complaint before the District Forum.

6.     The District Forum heard the Complainant and the Manufacturer. The Dealer, despite service, remained absent, and was proceeded against ex parte. The District Forum determined ‘deficiency in service’ and fixed joint and several liability on the Manufacturer and the Dealer. The following extracts from the District Forum’s Order dated 27.09.2013 are noteworthy:

11.     On perusal of the records and considering the oral arg, it is seen that the Complainant approached OP1 to buy a TATA Xenon Crew Cab AX2 2.2 L DIC, and he was shocked when the O.P. 1 had delivered him old car of 2009 instead of brand new car. The said car had several defects such as the underneath portion of the car was fully corrugated and had scratch marks on the body. The alloy wheels were also corrugated inside and the car also travelled almost 622 km. Also some parts such as music system was not provided although agreed.

12.     That the O.P.2 denied the facts and stated that the O.P. made him aware about the old Tata Xenon car of 2009 stock where in a cash discount of Rs.80,000/- along with free music system, mud flap and matting was offered and the complainant after being fully satisfied with the offer and condition of the car made the final decision to purchase the car. But this statement of the O.P. seems to be incorrect. Because if the Complainant had agreed for such offer he would not have refused to take the delivery of the said car is still lying with O.P. and the music system was also not provided.

13.     Secondly, the customer when he buys new vehicle he is under the impression that a new vehicle would be defect free. And in the said case it is admitted that the said car is used vehicle, and make of 2009 but the registration was done for the 1^st time in the name of the Complainant in 2011. Also the car had travelled almost 622 kms. The O.P. 2 stated that there was pre delivery test. But for this test the car travelled 622 kms?

14.     That it is clear from the above facts that the old car is sold to the Complainant instead of new car without giving any information to the Complainant.

15.     In L(1) Jose Philip Mamphillil V/s M/s Premier Automobiles Ltd. & Anr. (Supreme Court) (2) Manager, Mehta Motors, V/s Rameshwar & ors (National Commission) it was held that “it is shameful that a defective car was sought to be sold on a brand new car. It is further regrettable that, instead of acknowledging the defects, the 1^st Respondent chose to deny liability and has contested this matter”.

16.     We are therefore of the opinion that there is deficiency in the service committed by O.P. 1 & 2. This is irresponsible and negligent behaviour of O.P. The O.P. even neglected for the request of Complainant to replace the car. The Complainant faced mental tension and hardship because of the negligence and irresponsible behaviour of O.P.’s. In the circumstances and for the reasons discussed above, we pass the following:

O R D E R

          The Complaint is allowed with following relief’s

1. The O.P.’s 1 & 2 jointly and severally to replace the car with new car of the same model or to refund the entire amount of the car with interest @10% from the date given of delivery.

2. The O.P. 1 and 2 are jointly and severally directed to pay Rs.20,000/- to the Complainant towards mental stress and agony.

3. The O.P. 1 & 2 are also directed to pay cost of Rs.5,000/-.

(paras 11 to 16 of the District Forum’s Order)

7.     The Manufacturer filed an Appeal under Section 15 of the Act before the State Commission. The State Commission heard the Manufacturer, the Dealer and the Complainant. It dismissed the Appeal with cost of Rs.5,000/-. The following extracts from the State Commission’s impugned Order dated 10.01.2014 are noteworthy:

14.     On behalf of OP No. 2, it is submitted that the complainant is not a consumer. The complainant had paid for the car and was awaiting its delivery. The complainant therefore is a consumer within a meaning of Section 2(d)(i) of the  C.P. Act, 1986 as the complainant had paid price and was awaiting delivery of the car. Who told the OP No. 2 that the complainant was buying the car for commercial use? None. Therefore the ratio of Cheema Eng. Services, 1997 (1) SCC 131 would be clearly inapplicable.  This is certainly not a case where the complainant was expected to produce an opinion of an expert as contended on behalf of OP No. 2. An expert report is not necessary for cases where the facts speak for themselves and the case at hand is one of such cases (see Anand Bahaguna, 2013 (2) CPR 35). We therefore need not refer to cases cited on this aspect by Lr. Advocate of OP No. 2. The plea of OP No. 2 that their relation with OP No. 1 is on principal to principal basis is not substantiated by any evidence on record except for the self serving statement made on behalf of OP No. 2.  OP No. 2 did not even produce the agreement, if any, between OP No. 1 and OP No. 2 by which OP No. 1 was to sell the cars manufactured by OP No. 2. OP No. 2 also did not produce the invoice No. 9010016851 dated 28/2/09. Shri Rodrigues, the lr. Advocate, would submit that OP No. 2 does not sell the cars directly to the consumers but sells them only through the dealers and maintains a network of dealers for the purpose of their repairs and as such OP No. 2 is also liable.

15.     We are of the view that since OP No. 1 sold to the complainant a defective car manufactured by OP No. 2 both would be liable for sale of the defective car. As observed by the Apex Court in Jose Philip Mampillil, AIR 2004 SC 1529, it is shameful that a defective car was sought to be sold as a brand new car and that instead of acknowledging the defects OP No. 2 chose to deny its liability.

16.     In the circumstances we find there is no merit in this appeal and consequently we proceed to dismiss the same with costs of Rs.5,000/- to be paid by OP No. 2 to the complainant.

(paras 14 to 16 of the State Commission’s Order)

8.     It has been determined by the two Fora below that a used car of make 2009 was sold in 2011, rather than a new car of make 2011, after obtaining the total consideration price for a new car in 2011, and after it was conveyed to and understood by the Complainant that the car being sold in 2011 was a new car of make 2011.

9.     Within the ambit and scope of Section 21(b), no crucial error in appreciating the evidence by the two Fora below is visible, as may cause to require de novo re-appreciation of the evidence in revision.

10.   It is a proven fact that a used car of make 2009 was sold in 2011.

It is reasonable and logical to say that a buyer when purchasing a car in a particular year from an authorised dealer of a Manufacturer would but buy a car of the make of the same year, as a matter of normal course the proposition conveyed by the dealer and understood by the buyer would be that a new car of the same make as the year of sale would be sold.

It is unreasonable and illogical to say that a buyer would purchase a used car of make 2009 from an authorised dealer of a Manufacturer while paying for a new car in 2011 (if that had to be so, the buyer could much rather have gone in for a second-hand re-sale car, which would have been substantially cheaper than the price for a new car).

11.   Two points were principally argued on behalf of the Manufacturer:

one: Having not taken delivery of the subject car from the Dealer, and the car being hypothecated to a bank, the Complainant was not a ‘consumer’.

two: The relationship of the Manufacturer with its Dealer was on ‘principal to principal’ basis. The deficiency was only on the part of the Dealer alone, and not on the part of the Manufacturer. The Manufacturer has since terminated the dealership of the Dealer. The Manufacturer is not jointly and severally liable along with the Dealer.

12.   In respect of the first question, it is to note that, having paid the consideration for the goods i.e. having paid the price for the new car, the Complainant was undisputedly a ‘consumer’ within the meaning of Section 2(1)(d)(i) of the Act. If delivery of a car paid for in 2011 is not taken for reason of the car being a used car of make 2009 rather than a new car of make 2011, and in the stead remedy under the Act is sought, it does not in any manner affect the fact of the Complainant is a ‘consumer’ under the Act. Also, the car being hypothecated is irrelevant, what is relevant is that the Complainant made the full payment of the price of the car to the Dealer, and whatever financial assistance he took from a bank is between him and the bank, the Dealer has no liability towards the bank on count of the said financial assistance (the liability is of the Complainant alone). The contention that the Complainant was not a ‘consumer’ is absurd and erroneous on the face of it.

13.   In respect of the second question, it may first be noted that whether the relationship between the Manufacturer and the Dealer was on ‘principal to principal’ basis has to be determined considering the facts and context. In this instant case the following is material and relevant:

[i]     Its dealers are appointed by the Manufacturer as per its own (due) diligence and wisdom, the sale of its goods is undertaken by the Manufacturer through its dealers, the Manufacturer exercises superintendence over its dealers including the right to terminate their dealerships.

[ii]    In this case the Manufacturer subsequently terminated the dealership of the Dealer herein vide letter dated 04.12.2012, which reads as below:

Sub: Termination of your Tata Motors dealership at Panaji, Goa.

Please refer to the dealership agreement dated 31^st, July 2008  executed between our Company and you, as per which you were appointed as Authorised Dealer of our Company for marketing, sales and service of the Passenger Vehicles manufactured by our Company.

As you are aware, for quite some time, we have been informing you of the serious short comings in the fulfilment of the obligations cast upon you under the said agreement. In spite of repeated follow ups, meetings, telecons and correspondence vide emails (copies enclosed) dated 18/5/12, 5/11/12, 8/11/12, 9/11/12, 15/11/12, 16/11/12, 19/11/12 and 21/11/12 by Area Manager, RCSM and others in the region explaining you the continuous drop in sales volume for last 18 months across all categories of products, non availability of vehicle stocks, inadequate manpower for Sales & After Sales, not adhering to the standard operating procedures on processes, non availability of Test Drive Vehicles, increasing number of customer complaints & inability/lack of effort in resolving them. There is no improvement in overall operations of the dealerships nor have we seen any efforts put by you for the same.

We, on a review, find that due to the aforesaid reasons you are in serious breach of the terms of the dealership agreement and are unable to continue business operations with Tata Motors Ltd., and there remains no chance to improve your performance and therefore the state of affairs does not justify continuance of dealership.

We are therefore constrained to issue you this 90 day notice of termination of your dealership. You shall cease to be the Tata Motors Passenger Cars dealer after 90 days from the receipt of this letter and all business pertaining to Tata Motors Passenger Vehicles, parts and accessories shall stand withdrawn.

You are requested to immediately take all the steps consequential upon termination as listed in the agreement mentioned above, more particularly, for settlement of your accounts and for submission of reports and statements and for return of records and assets of the Company such as WAN connectivity related equipments and other assets if any. You are also required to immediately remove all signage, Trademarks, Trade names, displays at all locations including workshops, branches, godowns etc. Further you will not be able to undertake warranty repairs and free after sales servicing in respect of the customer’s vehicles and you are required to direct such customers to the other authorised service facilities in the territory upon completion of 90 days of notice period.

[iii]    In its defence before the forum of original jurisdiction i.e. the District Forum, the Manufacturer filed its written version in which it inter alia explicitly stated that the relationship between the Manufacturer and its Dealer was on ‘principal to principal’ basis. One excerpt to this effect is quoted below:

G.      That the relationship exists between the opposite parties is on ‘principal to principal’ basis.

However, it did not file a copy of its agreement with the Dealer before the District Forum, which was required and necessary to substantiate its contention and to enable the District Forum to examine its said agreement while making its appraisal. The onus of filing its defence and evidence in their entirety before the forum of original jurisdiction was on the Manufacturer, which onus it failed to discharge.

However, notwithstanding the afore, while on the one hand contending that the relationship was on ‘principal to principal’ basis, on the other hand the Manufacturer did not make any categorical averment that the deficiency and (mis)acts were only on the part of the Dealer alone. On the contrary, it inter alia  also defended its Dealer.

That is to say, in the given facts of the case, and if in its opinion the deficiency and liability were only of the Dealer alone, it did not straightaway say so, but defended both itself and its Dealer. In this regard some excerpts from the written version filed by the Manufacturer before the District Forum are quoted below, which speak for themselves:

II.       This opposite party is ably supported by the excellent dealer ships/authorized service centres, like the 1^st opposite party, having excellent workshop setup for after sales servicing of the cars, which are manned by qualified and experienced personnel only. It is submitted that the customers of all passenger cars manufactured by the answering opposite party are provided services through a large network of around 119 authorized dealers, 245 Tata Authorized Service Centers (TASC), 219 Tata Authorised Service Points (TASP) and 222 Tata Authorised Service Outlets (TASO) workshops. The network of such workshops/service points is being continuously enhanced & widened in order to bring maximum and efficient services as closer to the customer’s doorsteps as far as possible. Presently, the answering opposite party has such workshops in excess of 800 in numbers across the country. - - - .

D.      It is submitted that the car, purchased by the complainant, is a well established product in the market and over a period of years, the consumers are using the product and the complainant had taken delivery of the car, after being satisfied with the condition of the car and its performance. It is submitted that the said car was delivered after carrying out of Pre-Delivery Inspect (in short, PDI) by the dealer. - - - .

F.       It is humbly submitted that this opposite party has been prompt and swift to attend to the alleged grievances reported by the complainant under the warranty as and when reported. Therefore, the prayers as made by the complainant for replacement of the car or refund of the price of the said car are untenable and unsustainable. - - -.

1.       As regards to the averments made at para 1 & 2 of the complaint, it is submitted that this opposite party, as a matter of business practice, does not deal with any customer for sale of the new car or vehicle, hence can not comment what transpired between the complainant and the other opposite party. However, this opposite party has been given to understand that the complainant himself approached the opposite party dealer intending to purchase the car, Tata Xenon and enquired about the same. The opposite party no. 1, in course of usual business, made him aware about the various aspects & features of the car. The opposite party no. 1 also informed him about an old Tata Xenon car of 2009 stock wherein a cash discount of Rs.80,000/- along with a free music system, mud flap & matting was being offered. It is germane to mention that said offer was given by the opposite party dealer where this opposite party no way involved. Subsequently, the complainant, after being fully satisfied with the offer & conditions of the car, made the final decision to purchase the car.

2.       - - -  However, it may be noted that all the cars manufactured by this opposite party undergo strict quality checks, certified and thereafter dispatched to the dealers across the country. The car sold at the dealership point also undergoes pre-delivery inspection and being satisfied with the condition and performance of the car, it is sold to the consumers and in this case also, the said process ought to have followed at the opposite party no. 1. This opposite party has been further given to understand that the complainant has purchased the subject car after fully knowing that vehicle is of old stock of year 2009 and has availed a discount of Rs.80,000/- towards this. A copy of the ledger account book maintained by the opposite party dealer is annexed herewith as Annexure – A. Further, the complainant, after being completely satisfied with condition of the car, has done the registration and insurance of the car on own its own, which implies his knowledge of year of manufacturing. A copy of the registration details & insurance cover note is annexed herewith as Annexure – B & C. The complainant has collected the Form 20, issued by the RTO department after passing of the car. It may be clarified that a car has to be passed from the RTO within 2-4 days once it reaches the dealership, here the opposite party, which concludes that it is a new car.  it is germane to mention here that vehicle registration details mentions the manufacturing date as 02/2009, which establishes the fact that the complainant was very well aware about the year of manufacturing of the car at the time of sale.

3.       - - - This opposite party has been made to understand that only problem in the car was of cleanliness and the same was resolved by the opposite party dealer by performing 3m treatment. Thus, it is apparent that whatever grievance has been brought by the complainant, the same was attended and rectified satisfactorily under the warranty policy free of costs by the workshop hence, there can not be any question of manufacturing defect or deficiency in service meriting replacement of the car.

If taking a defence of ‘principal to principal’ relationship with its Dealer, and if the deficiency and (mis)acts were only on the part of the Dealer alone, it was required of the Manufacturer to state so upfront before the District Forum and not to implicitly or explicitly defend its Dealer, moreso when it inter alia relied on information obtained from and supplied by its Dealer in framing its written version (as is evident from the extracts quoted above).

[iv]    In Appeal before the State Commission, again, the Manufacturer did not straightaway admit the deficiency and (mis)acts of the Dealer.

[v]    In Revision before this Commission, again still, the Manufacturer has not straightaway admitted the deficiency and (mis)acts of the Dealer. It has inter alia stated as below:

(vi)     Keeping in mind the above background and also the fact that there is no allegation that Respondent No. 2 dealer had misled Respondent No. 1/Complainant into believing that the vehicle was manufactured in the year 2011, the transaction between Respondent No. 2 dealer and Respondent No. 1 / Complainant with reference to the material documents is being examined.

The used car of make 2009 was sold on 25.01.2011, the Complaint was filed before the District Forum on 16.12.2011, the written version was filed by the Manufacturer on 02.04.2012, the Manufacturer inter alia framed its written version on information obtained from and supplied by the Dealer, the Manufacturer terminated the dealership of the Dealer on 04.12.2012, the Appeal was filed before the State Commission on 04.11.2013, the Revision Petition was filed before this Commission on 17.04.2014, and it is still being averred in its Petition that “- - the transaction between Respondent No. 2 dealer and Respondent No. 1 / Complainant with reference to the material documents is being examined.”.

[vi]    The Manufacturer cannot run with the hare and hunt with the hound.

14.   Irrespective of whether or not a phrase re ‘principal to principal’ relationship etc. was written in the agreement, the actual relationship, as really obtaining, in the present facts and context, does not in any manner absolve the Manufacturer from its liability along with that of its Dealer.

15.   The State Commission has succinctly summed-up the case in para 14 of its impugned Order (quoted in para 7 above).

16.   The State Commission’s Order is well-appraised and well-reasoned.

17.   The State Commission has concurred with the findings of the District Forum.

18.   ‘deficiency in service’ within the meaning of Section 2(1)(g) & (o) of the Act has been determined by the two Fora below, holding the Manufacturer and the Dealer jointly and severally liable.

19.   In addition, it may be noted that ‘unfair trade practice’ is a specific provision unique to The Consumer Protection Act, 1986.

Section 2(1)(r) says of “a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-”.

The list provided in Section 2(1)(r) is illustrative and not comprehensive.

That is to say, an unfair method or unfair or deceptive practice, as is judiciously determined, on fact and reason, on fair and objective appraisal of the evidence and material on record, would qualify as ‘unfair trade practice’ within the meaning of Section 2(1)(r).

In the instant case, obtaining the total consideration for a new car in 2011 and selling a used car of make 2009, when it was conveyed and understood that the car would be a new car of the make of the year of sale i.e. of make 2011, is decidedly unfair and deceptive within the meaning of Section 2(1)(r).

20.   Therefore, both, ‘deficiency in service’ within the meaning of Section 2(1)(g) & (o), and ‘unfair trade practice’ within the meaning of Section 2(1)(r) of the Act, are well and truly evident in this case.

21.   There is no dispute in respect of the Dealer’s liability. It chose to be ex parte before the District Forum and also before this Commission. However, it got fair opportunity when it was present before the State Commission. That being as it is, it was the Dealer who sold the used car of make 2009 to the Complainant rather than a new car of make 2011 after receiving the full consideration amount in 2011 and after conveying and making to understand that the car would be a new car of the make of the year of sale i.e. of make 2011.

22.   In respect of the Manufacturer’s liability along with that of its Dealer, the defence of ‘principal to principal’ relationship etc. fails in the facts and context of the case, having regard to what has been critiqued in paras 13 and 14 afore, irrespective of whether or not a phrase re ‘principal to principal’ relationship etc. was written in its agreement with its Dealer.

23.   ‘defect’ has been defined in Section 2(1)(f) of the Act:

“defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods

(emphasis supplied)

The definition of ‘defect’ is clear and comprehensive. Selling a used car of make 2009 in place of a new car of make 2011 after receiving the full consideration amount for a new car in 2011 and after conveying and making to understand that the car would be a new car of the make of the year of sale i.e. of the make 2011, qualifies as ‘defect’ within the meaning of Section 2(1)(f).

The factum of selling a used car of make 2009 was evident on the face of it. This did not require adopting the procedure prescribed under Section 13(1)(c) to (g) of the Act. Section 13 (1)(c) itself says “where the complainant alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, - - -”. That is to say, if the ‘defect’ cannot be determined without analysis or test, the procedure laid has to be followed. In this case, there was no question of any analysis or test through an appropriate laboratory, the factum of a used car of make 2009 being sold was writ on the face of it itself.

The contention that the provisions of Section 13(1)(c) to (g) of the Act were not followed is totally erroneous, there was no need therefor as no analysis or test through an appropriate laboratory was required.

24.   Irrespective of the afore, the mere factum of selling a car of make 2009 in place of a car of make 2011 after accepting the full consideration price in 2011 and after conveying and making to understand that the car would be a new car of the year of sale i.e. of  make 2011, constitutes ‘deficiency’ within the meaning of Section 2(1)(g) and ‘unfair and deceptive act’ within the meaning of Section 2(1)(r) of the Act.

25.   It may also be noted that this is one particular instance that has come to notice before the Consumer Protection Fora. The eventuality of other such instances, with other ‘consumer’(s), as an intermittent or regular practice, cannot be ruled out.

26.   All this is not viewed favourably.

27.   In the light of the above examination, the findings and Award are firmed-up as below:

[a]   The Award made by the District Forum, in respect of ‘deficiency in service’, vide its Order dated 27.09.2013, as upheld by the State Commission vide its Order dated 10.01.2014, is confirmed. The impugned Order dated 10.01.2014 of the State Commission is sustained.

[b](i) In addition, for ‘unfair trade practice’ per se, the Manufacturer company through its Chief Executive and the Dealer company through its Chief Executive are put to stern advice of caution with imposition of cost of Rs. 2 lakh, out of which Rs. 1 lakh shall be paid to the Complainant and Rs. 1 lakh shall be deposited with the Consumer Legal Aid Account of the District Forum within four weeks of the pronouncement of this Order. The liability shall be joint and several.

(ii)  The Manufacturer through its Chief Executive is ordered under Section 14(1)(f) of the Act to most immediately pass appropriate directions to all its dealers to discontinue such unfair and deceptive acts, and not to put ‘consumer’(s) to such loss and injury.

The Chief Executive is also advised to imbibe accountability and systemic improvements for future.

The Chief Executive shall furnish a report-in-compliance to the District Forum within four weeks of the pronouncement of this Order.

[c]   The amount deposited with the District Forum in compliance of this Commission’s Order dated 01.05.2014, along with interest if any accrued thereon, shall be utilized by the District Forum towards satisfaction of the Award, as firmed-up herein.

28.   Needless to say, the District Forum shall undertake execution as per the law for failure or omission in timely compliance of the Award in its entirety.

29.   It may be added that the liability qua the Complainant initiated the day he paid the full consideration amount for a new car to the Dealer, and it continues, as a continuing wrong.

The duties / responsibilities of Director are laid-down in The Companies Act, 2013.

The substantive principles of law as contained in Section 47 (‘Questions to be determined by the Court executing decree’) under Part II, Execution, of the CPC may also be noted.

The Director(s) of the Manufacturer company and of the Dealer company shall have to discharge the onus to show that they are not liable, along with the Manufacturer and the Dealer, jointly and severally, on the question being raised in the executing Forum in execution proceedings.

This observation is being made in reference to ‘Enforcement’ under Section 25(3) and ‘Penalties’ under Section 27 of the Act. 

30.   A copy each of this Order be sent by the Registry to [a] the District Forum and [b] the respective Chief Executives of the Manufacturer company and the Dealer company within three days of its pronouncement, in specific reference to paras 27, 28 and 29 above.