Dealer and Manufacturer Jointly Liable for Faulty Vehicle; Refund is an Alternative to Repair and Fresh Warranty: Chhattisgarh State Consumer Commission - 2025-07-28

State Consumer Commission Modifies Order, Makes Manufacturer and Dealer Jointly Liable for Faulty Scooter

Raipur, Chhattisgarh – The Chhattisgarh State Consumer Disputes Redressal Commission has modified a District Commission order, holding both the vehicle dealer and the manufacturer jointly responsible for a faulty scooter sold to a consumer. The Commission ruled that if a complete repair and a new engine warranty cannot be provided, both parties must jointly refund the full purchase price with interest.

The bench, comprising Justice Gautam Chourdiya (President) and Pramod Kumar Verma (Member) , partially allowed an appeal filed by the dealer, Director Kombo Auto Corp, against an order that had placed the entire liability for the refund solely on them.

Case Background

The case originated from a complaint filed by Smt. Vilsingha Masih, a government employee who purchased a Vespa SXL125 CBS scooter from Kombo Auto Corp on November 24, 2020, for ₹1,15,811. Shortly after purchase, the vehicle began experiencing engine problems, frequently stalling while in use.

Smt. Masih took the scooter for repairs, and on August 19, 2021, left it with the dealer. However, the vehicle was never repaired and returned to her, prompting her to file a complaint with the District Consumer Disputes Redressal Commission, Bastar-Jagdalpur.

On August 7, 2024, the District Commission found the dealer, Kombo Auto Corp, guilty of deficiency in service and ordered them to refund the full vehicle price with 7% annual interest, along with ₹10,000 for mental agony and ₹3,000 for litigation costs. The manufacturer, Piaggio, was absolved of liability. Aggrieved by this order, the dealer appealed to the State Commission.

Arguments Presented

Appellant's Arguments (Kombo Auto Corp - Dealer): * The dealer argued that they were merely an agent for the manufacturer, Piaggio, and that warranty claims are the manufacturer's responsibility. * They contended that the complainant voided the warranty by failing to bring the vehicle for its first service within the stipulated period (within 1 month or 750 km). The first service was performed after 9 months. * The dealer claimed the engine issues arose from the complainant's negligence, such as not maintaining engine oil levels, and that the vehicle had been repaired and was ready for collection.

Respondent's Arguments (Piaggio - Manufacturer): * The manufacturer argued that there was no proof of a manufacturing defect, as the complainant failed to provide an expert report as required under the Consumer Protection Act, 2019. * They asserted that any fault was due to the complainant's improper maintenance and delayed servicing, for which they could not be held responsible.

Commission's Analysis and Ruling

The State Commission observed that the dealer's claim of customer negligence was unsubstantiated. It noted, "the appellant/opposite party no. 1 (dealer) has not presented any credible document such as an affidavit from the service engineer or an expert opinion to prove that the fault in the vehicle arose from the complainant's negligence or error."

The Commission found a clear deficiency in service by the dealer, who failed to either permanently fix the recurring problem or provide a satisfactory resolution to the customer. It highlighted that since the complainant's direct transaction was with the dealer, the dealer was primarily responsible for addressing the technical faults that arose.

However, the State Commission also found the District Commission's order to be erroneous in two aspects:

1. Absolving the Manufacturer: The Commission held that for faults occurring within the warranty period, especially manufacturing-related defects, the manufacturer shares liability with the dealer.

2. Ordering Replacement/Refund Instead of Repair: The Commission deemed that the primary relief should be the repair of the vehicle.

Modifying the original order, the State Commission issued a revised directive:

"The Appellant (dealer) and Respondent No. 2 (manufacturer) are directed, within one month from the date of the order, to completely repair the vehicle in question... and provide a new warranty for the engine from the date of repair."

The Commission further stipulated an alternative:

"In the event this is not possible, the appellant and respondent no. 2 shall jointly refund the purchase price of ₹1,15,811/-... along with simple interest at 7% per annum from the date of filing the complaint (10-03-2022)."

The dealer was separately ordered to pay the compensation of ₹10,000 for mental harassment and ₹3,000 for litigation costs, as awarded by the District Commission. This landmark decision reinforces the principle of joint liability between manufacturers and dealers for product defects and prioritizes repair as the primary remedy under warranty.