The complainant filed this complaint u/s 34(1) and 35 of the Consumer .Protection Act, 2019 for gross negligence and deficiency in services and unfair trade practices against OPs. The complaint case is running against the car dealer namely Sanei Motors Pvt. Ltd. (OP1) and the Original Equipment Manufacturer (OEM) cum OP2 namely Maruti Suzuki India Ltd. All the sides contested the case.The arguments were heard in full on 01.03.2023 when both sides filed BNA and pleaded as well.
The relevant fact of this complaint case is that the complainant booked a motor car on 26.09.2020 for Model no Alto VXI (silky silver) after paying booking amount of Rs. 11,000/- against receipt for an agreed consideration price of Rs. 3,63,100/- per invoice price, apart from other incidental costs which was paid to the OP1 dealer namely Sanei Motors Pvt. Ltd. (OP1). At thetime of purchase, complainant availed vehicle loan from State Bank of India for Rs. 2,50,000/-.Balance payments were made by complainant on various dates and finally on 29/09/2020totaling to Rs.4,29,000/- against chequeswhen receipts were issued.On 14.10.2020 while complainant turned up to take delivery of the new car, discovered defects in the form of lot of dents and scratches on the roof, bonnet and bumper. The complainant requested dealer for refund of the price paid or replacement of the car with anew one. But the OP1 dealer, though conceded the alleged defects, but requested the complainant to accept the said car on 17.10.2020 after completing repair work by the dealer. The complainant refused to take delivery of that repaired car. However, neither theprice was refunded nor was the car replaced.The complainant had already informed the dealer that he had obtained financial assistance from the Bank to purchase the said car and the entire amount of the said car has been fully paid to dealer. However, till then, the complainant had not received the delivery of the replacement car due to the afore reasons. The dealer has not made any efforts to replace the said car with a new car. On the contrary the dealer has tried carrying repair works of the said car with the said defect. Due to the negligence on the OP No.1, the complainant had to undergo mentalagony, hardship and financial loss.The complainant has thereafter by way of a various emails and letters (duly served) called upon the OPs to replace the said car with a new car or refund of the entire amount, which is the amount spent by him. .As the Complainant did not get refund or replacement, attempted a resolution of his concern to the dealer as well as before theOP2 company on the grievancesthat remaining unaddressed and thereafter preferred a complaint before this commission. Complainant exhibited copies of documents on Registration, Tax, Insurance, extended warranty, Add-onsetc.In the light of these facts and observations, complainant alleged that there isa deficiency in services committed by the dealer and filed prayer by holding the dealer and OEM liable toreplace the car with a brand new defect free vehicle of same model or to refund the entire amount alongwith a direction to pay 2,00,000/- to Complainant towards mental stress and agony in addition to a litigation costs of 30,000/-.
The Ld.counsel for the OP1 opposed the move and contended through petition that the complainant is not qualified for being considered as consumer under the Consumer Protection Act 2019. OP1 also argued that even if complainant alleged deficiency of service, but the OP1 agreed to remove those minor defects, as pointed out by the complainant. The dealer also contends that during the period of warranty, the complainant could have notified the manufacturer of any latent or obvious defect in the product. In such an event, if the manufacturer, i.e. the OP2, were to not take adequate action to repair the car or replace it, then, it could have been held liable.The OP1 mentioned in their exhibited email replies to complainant and Brief Note of Arguments that being the vehicle already registered with statutory authorities, the ownership of vehicle already got recorded and the responsibility of the car dealer is limited to delivery of unregistered vehicle and they are not liable as per Act as the dealer is only a facilitator which they took up to mitigate the sufferings of the buyer of the vehicle while going through the registration process.
The Original equipment manufacturing company OP2 pleaded that it’s relation with the dealer is on a principal-to-principal basis. OP2 had exhibited documentary evidence in support of it’s claim by attaching 2 pages of excerpt of relevant portion of standard agreement format with their dealers and argued that it’s relationship with the OP1 dealer is on principal-to-principal basis and therefore no liability could be fastened upon it. OP2 filed W/V and BNA in which it is inter alia stated that the relationship between the Manufacturer and it’s dealer is on 'principal to principal' basis. No direct sale was undertaken by the OP2. The OP2 therefore, urged that there was neither averment, nor allegation by Complainanton the basis of which any liability could be pinned upon OP2,being a third party to the entire transaction, merely because it was the manufacturer. It was submitted that the complainant never alleged or proved that any one of OP2 was privy to the transaction in question or had led Complainant to purchase the car in question from the dealer. It was urged that unless the complainant, could establish that there was a defect in the product, i.e. the car, the manufacturer could not be fastened with liability. OP2 stated orally during final arguments that if it gets established that the OP1 sold to Complainant, the defective car,then the dealer OP1 is solely liable for sale of the defective car. Materials placed on record, such as the invoice or purchase of the car, as well as a registration certificate clearly lends support to that effect that the model and make of the car tallies having been sold by OP1.
Refuting the OP’s arguments, it is urged on behalf of Complainant that the consumer, i.e.,Complainant was not informed at the time of the vehicle’s booking that it had deficiencies in accordance with the specifications required by a new vehicle buyer. At times, he was never informed that the vehicle in question had been under defects. The defects at the point of sale were apparent and well known to dealer. When the complainant reported to the showroom on17.10.2022 for taking delivery, discovered that the car had several defects including scratches and dents on bonnet, roof and bumper. These flaws were immediately pointed out to the dealer and the dealer was also requested to replace the vehicle. However, they refused to accept the same. It is urged that the purchaser of the car always expects that the product would be free from all defects. In case, the consumer consistently refuses to take delivery because the car had defects; it was not in accordance with rules, having several drawbacks and at the top of it, had tarnished the brand sentiment. It was also argued on behalf of Complainant that the dealer nowhere stated that a car with defects being sold to him, but in fact held out that it was brand new, and furthermore in the email replies, the OP1 insisted that the vehicle had no defects as manufactured by OEM and not by dealer. The Ld. counsel for Complainanthighlighted that in the written statement before the District Forum the OPs denied to replace the car or refund money despite highlighting the lacunas. This deliberate misrepresentation, as emphasisedby Ld.counsel for Complainant, was squarely attributable to the OP2, i.e. the manufacturer as well as its dealer (OP1), and this amounted to unfair trade practice and deficiency in service within the meaning of the expression under Sections of the Consumer Protection Act. The Ld. counselorally submitted that even if the dealership agreement were to be taken into account, it is apparent that the commercial relationship between the OP2 and its dealer remains that of a principal and agent. It was argued that the OP1 dealer exclusively sells cars manufactured by the OP2 OEM.
The submissions so put forth by both sides were gone through and the materials on records were examined along with pleading of both the parties with rival contentions. Also heard the Complainant and Opposite parties and perused BNAs of both sides.
The points that arise for determination in this case are :-
- Whether the complaint is maintainable before this Commission ? If yes, the complainant is consumer of whom ? Dealer or OEM or both.
- Whether there was any deficiency in service from the part of the opposite parties as alleged ?
- Reliefs and Costs, if any.
Decisions with reasoning :
-First of all, for just and proper adjudication of the case, relevant portion of Consumer Protection Act,2019 is referred hereunderwhich states inter-alia that a ‘consumer’ means any person who buys goods or hires or avails of any services 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 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.
In the case in hand, the complainant booked for a new vehicle for personal use and paid full consideration money in advance. This isas per the documents and exhibits, This carries an impeccable evidentiary value which could not be contested by OPs with any cogent reason.
In order to satisfy the requirement as per definition of "Consumer" as contemplated under Consumer Protection Act, there must be a transaction for a consideration amountunder the said Act. The prime consideration here is whether the petitioner is a "consumer" within the meaning of Consumer Protection Act 2019 so as to attract the provisions of the said Act, otherwise not. In view of the statutory provisions mentioned above, it is clear that the Act is made to deal with the rights of the consumers wherein ‘goods’ or ‘services’ have been defined under the said Act. In the case in hand, the 3 no of payment proofs and purchase receiptswere issued by the OP1 on the complainant including registration, tax, extended warranty etc.Hence the complainant is very much a consumer of the OP Company, under the scopes and meaning of Consumer Protection Act 2019.
Before proceeding further, it is essential to recapitulate the facts. Complainantapproached the dealer to purchase a car; he was informed about the availability.Thereafter, he appears to have been told to have the car registered (after payment ofthe consideration), which he did. The vehicle delivery note and invoice were generated. Then, he discovered in the showroom, that the car had several defects as detected by him visually like scratches, dents etc .clearly pointing to its defects. The vehicle registration document,hypothecation, invoice and gate pass issued, as well as the vehicle delivery document,all shows that the car was of admitted make and model that was not contested by either side. The Complainant refused to take delivery and insistedupon delivery of a new car or refund thereof. The dealer refused. The matter stood thus. On 14.10.2020 onwards, Complainant wrote several emails and letters to the dealer in which hepointed out the deficiencies in the said car but without remedies.
It is further observed from the standard format undertaking taken by the dealer from the purchaser with heading as ‘vehicle registration process and undertaking’, wherein it is stated inter-alia that the dealership would facilitate the registration of the car, all payments duly cleared by customer, all necessary documents regarding vehicle registration are duly furnished by customer in the respective forms of the RTO and duly signed by the customer. As per this undertaking the same was signed by customer on 14.10.2020 against an invoice date of 03.10.2020. The gate pass is dated 14.10.2020 though the invoice date is 03.10.2020.The invoice shows that sales order was booked on 26.09.2020 and the invoice is dated 03.10.2020 for a value of 3,63,100/-including all taxes. A discount of Rs 13,953/- is getting reflected in this invoice. The tax receipt was issued for an amount of Rs. 42,240/- which is dated 08.10.2020. A first party insurancew.e.f 04.10.2020was also issued to the purchaser for a premium of Rs. 16,911/-. The extended warranty was issued as per another invoice dated 10.10.2020 for Rs. 5,864/-. These sequel of documents depicts that the dealer OP1 took all advance actions in a hurried manner to complete the sale process even before completing the Pre Delivery Inspection, duly signed by customer or even observing Standard Operating Procedures as per OEM guidelines or even demonstrating the ‘goods’ , that was being sold to the intended recipient i.e. the consumere.g. joint photographs before the vehicle with keys being handed over. All these led to gross latchesand deviations from SOP framed by the OEM were adopted by OP1.The aforeundertaking in standard format is also unilateral and therefore not tenable.
The Complainant is a consumer as defined under the Act and that he was awaiting delivery of the new car. It is also ruled that an expert report is not necessary for cases where the facts speak for themselves, and the present case was one such.This reasons caused him to refuse to take delivery. On 17.10.2020, the dealer denied Complainant’s notice and no corrective actions were made. Upon no further response,Complainantcaused many mails to OP1 and OP2 immediately, without delay. The OP2 entered appearance, contested its liability and alleged that itsrelationship with the dealer was not one of agent principal, but rather, principal toprincipal and that it could not be held liable.The dealership agreement in this case, as observed, isnot produced (except only 2 pages) before this commission. But the Judgements cited by the Ld. Advocate of the OEM cum OP2 lends support to such contentions of the OP2 equivocally.
It it is apparent that the complainant had not produced any evidence to show that the car sold to him had dents and scratches at bonnet, bumper or roof. There was no reported manufacturing defect either.There is also no material on record to support the claim of complainant except his own testimony to substantiate the claim. The onus to prove the deficiency lies with the complainant with cogent proof. Petitioner also did not examine any witness or expert.to show that the carwas defective at the time of delivery. But the said vehicle appears to be not accessible to the complainant as he did not take delivery. Further, OP1 at the first place itself admitted by email dated 17.10.2020 and also during arguments and W/V and BNA that there were some defects during delivery of new car, as alleged. Simultaneously the submission of OP1 was that there was no manufacturing defect and even if so, that could have taken care by OP2 company being manufacturer, had complainant been taken the delivery of the car .In our view, it is incorrect that a defective car, even if minor, was sought to besold as a brand new car.There is no doubt that there were defects in thegood sold. Also the OP1 dealer acknowledged the defects, but chose to deny liabilityand has contested this matter.Whenever a customer buys a new vehicle, he or she is under theimpression that a new vehicle would be defect free. And in the saidcase it is admitted that the said car has several defects. Furthermore, the car is over to the dealer since last 2 years. Therefore, it isdifficult to expect the complainant be aware of the physical conditionof the car, two years after. During that period, a number ofeventualities would have occurred; the dealer may have allowed people to use the caror used for demonstration or left with unused leftovers or under normal wear and tear due to dormancy. Also, the use of the car and prolongedidleness without proper upkeep could have resulted further defects. All these possibilities can’t be ruled out.The carby now would have deteriorated and in these circumstances, it is open to the Complainant to execute the order for alternative relief of refund, with interest if granted to him.
U/s 10 of the CP Act ‘Defect’ means any fault, imperfection or shortcoming in the quality, quantity, potency,purity or standard which is required to be maintained…….expression ‘ defective shall be construed accordingly.
Again u/s 11 of the said Act ‘deficiency’ means any fault , imperfection , shortcomings or inadequate quality, nature and manner of performance ……in pursuance of a contract or otherwise in relation to any service and interest.
Hon’ble Apex has held that delivering defective car against a booking for a new car made by a customer who has paid full sale consideration is an ‘unfair trade practices’.
The object of Consumer Protection Act, 2019 is to provide better protection of interest of consumers relating to goods, unfair trade practices, redressal against unscrupulous exploitation etc. The claim of the complainant on account of new vehicle purchase with defects that got established which has not been denied by the OP1, although they accepted to repair the same, but without replacement.
Hence the deficiency in extending services by OP1 gets established. The OP1 has failed to render satisfactory services which caused harassment of the complainant due to deficiency in services.
Thus the complaint case is decided in favour of the Complainant and against the OP1. Unless the manufacturer’s knowledge is proved, a decision fastening liability upon the manufacturer would be untenable under the given relationship with the dealer, in the facts of this case, as principal -to-principal basis.The charges against OP2is thus not proved and the Judgements cited by the Ld. Advocate of the OP2 is much of relevance in the subject matter of dispute.
In the result, the complaint case succeeds against OP1 dealer.
ORDERED
That the instant case be and the same is allowed on contest.
The OP 1 is liable and hence directed to pay a refund of Rs. 4,29,000/- (Rupees Four Lac Twenty Nine Thousand) only within 45 days from the date of passing of this Final Order. Incidental costs for disposal of existing vehicle, if any, to be borne or written off by the OP1
The OP1 is also liable and directed to pay a simple interest @ 8% per annum since date of last payment as compensation for the mental pain and agony that the complainant suffered and a litigation cost of Rs. 10,000/- (Rupees Ten Thousand only) within 45 days from the date of passing the Final Order otherwise a simple interest @ 9% per annum will be levied on the entire decretal amount from the date of this order.
A cost of Rs.10,000/- is also imposed on OP1 dealer which is to be paid at the ‘Consumer Legal Aid account ‘ within 45 days of passing this order. This should act as a deterrent to curb the menace by errant dealers in case of similar latches towards consumers in similar cases.
The complainant is at liberty to put this order into execution after expiry of 45 days from the date of this Final Order, in case the Order is not complied with.
Let a copy be sent/supplied free of cost to both the parties. The Final Order also to be hosted in the public domain at
Dictated and corrected by
[HON'BLE MR. Partha Kumar Basu]
MEMBER
