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SUPREME COURT OF INDIA
UDAY UMESH LALIT, HEMANT GUPTA, S. RAVINDRA BHAT, JJ.
TATA MOTORS LIMITED - APPELLANT
VERSUS
ANTONIO PAULO VAZ AND ANOTHER — RESPONDENTS
Civil Appeal No. 574 of 2021 (Arising Out of SLP (C) No. 10220 of 2020)
Decided on : 18-02-2021
Consumer Protection Act, 1986 – Sections 2(1)(g), 2(1)(o) and 2(1)(r) – Automobile – Unfair Trade Practice – Supply of old model car in name of new one – Replacement/Refund and costs awarded by Fora below – Record establishes absolute dearth of pleadings by complainant with regard to appellant’s role, or special knowledge about two disputed issues, i.e. that dealer had represented that car was new, and in fact sold an old, used one, or that undercarriage appeared to be worn out – This was fatal to complaint – Failure of complainant to plead or prove manufacturer’s liability could not have been improved upon, through inferential findings – Special knowledge of allegations made by dealer, and involvement, in an overt or tacit manner, by appellant, had to be proved to lay charge of deficiency of service at its door – In these circumstances, having regard to nature of dealer’s relationship with appellant, latter’s omissions and acts could not have resulted in appellant’s liability – Unless manufacturer’s knowledge is proved, decision fastening liability upon manufacturer would be untenable – Findings of National Commission and lower Fora against appellant set aside – Car, by now would have deteriorated – It is open to respondent to execute order for alternative relief of refund with interest granted to him, by District Forum, as affirmed by State and National Commissions through District Forum concerned – Amounts deposited during pendency of appeal with interest accrued should be refunded to appellant. (Paras 26, 28 and 29)
Facts of the case:
Present special leave petition impugns an order of National Consumer Disputes Redressal Commission which affirmed order of Goa State Consumer Disputes Redressal Commission. National Commission issued several directions- firstly upholding the orders of the Fora below it and further declaring that the appellant had indulged in unfair trade practice for which it was imposed with costs of 2,00,000/- ? of which ? 1,00,000/- was to be made over to respondent and the balance to the Consumer Legal Aid Account of the District Forum within four weeks. The appellant was also ordered, through its Chief Executive under Section 14 (1) (f) of the Act to 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 and to imbibe accountability and systemic improvements for the future.
Findings of Court:
It is difficult to expect the appellant, a manufacturer, to be aware of the physical condition of the car, two years after its delivery to the dealer. During that period, a number of eventualities could have occurred; the dealer may have allowed people to use the car for the distance it is alleged to have covered. Also, the use of the car and prolonged idleness without proper upkeep could have resulted in the undercarriage being corrugated. All these are real possibilities. Unless the manufacturer’s knowledge is proved, a decision fastening liability upon the manufacturer would be untenable, given that its relationship with the dealer, in the facts of this case, were on principal-to-principal basis.
Result : Appeal allowed.
ORDER :
S. Ravindra Bhat, J.
This special leave petition was heard finally; Leave granted, it impugns an order of the National Consumer Disputes Redressal Commission1[Dated 09 January, 2020 in Revision Petition No. 1809 of 2014] (hereafter "Commission") which affirmed the order of the Goa State Consumer Disputes Redressal Commission (hereafter "State Commission").
2. The relevant facts are that that the first respondent, Antonio Paulo Vaz (hereafter "Vaz") bought a car after paying the agreed total consideration price in 2011 to the second respondent, Vistar Goa (P) Ltd, a dealer in cars (hereafter "the dealer"). At the time of purchase, Vaz availed bank credit. A 2009 model car which had run 622 kilometres was sold to him in place of a new car of 2011 make. Vaz, therefore, requested for refund of the price paid or replacement of the car with one of 2011. The price was however not refunded; neither was the car replaced. Vaz refused to take delivery of the 2009 model car. He attempted a resolution of his concern and thereafter, caused a legal notice to be issued to the dealer, as well as the appellant.
Upon his grievance remaining unaddressed, he preferred a complaint before the Goa District Consumer Redressal Forum (hereafter "the district forum").
3. The district forum heard the appellant, which was represented, and Vaz. Despite service of notice (of the complaint) the dealer was absent and was unrepresented; it was therefore proceeded against ex pane. The district forum determined 'deficiency in service' and held the dealer and the appellant (i.e. manufacturer of the car) to be jointly and severally liable. The district forum's order, (made on 27.09.2013) noted that the car had some defects; the undercarriage 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." The appellant denied the facts and alleged that Vaz, the customer had been informed that the car purchased by him was a 2009 model. The district forum observed that this averment (by the appellant) was apparently incorrect because if Vaz had agreed to such an offer, he would not have refused to take the delivery of the car which was even then with the dealer; he also urged that the music system was not provided. The district forum further stated that:
"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 1st 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?"
4. In the light of these facts and observations, the district forum held that there was deficiency in the service committed by the dealer and the appellant, and allowed Vaz's complaint, holding the dealer and the appellant jointly and severally liable to replace the car with a new one of the same model or to refund the entire amount of the car with interest @10% from the date given of delivery. Both were also jointly and severally directed to pay Rs. 20,000/- to Vaz towards mental stress and agony in addition to costs of Rs. 5,000/-.
5. Aggrieved, the manufacturer preferred an appeal to the State Commission under Section 15 of the Consumer Protection Act (hereafter "the Act"). The state commission dismissed the appeal with costs of Rs. 5,000/-. It held that Vaz was a consumer as defined under Section 2 (d) (i) of the Act; and that he was awaiting delivery of the car. It also ruled that an expert report was not necessary for cases where the facts speak for themselves, and the present case was one such. The appellant's plea that its relation with the dealer was on a principal-to-principal basis was unsubstantiated according to the state commis
Unless manufacturer’s knowledge is proved, decision fastening liability upon manufacturer would be untenable.
New vehicle with early repeated defects constitutes 'defect'; expert opinion not mandatory if cogent evidence; company director personal use qualifies as consumer; manufacturer-dealer jointly liable ....
(1) Commercial Use Admission – A categorical admission of commercial use in the pleadings creates a jurisdictional hurdle. The Commission reaffirmed that whether a party is a “Consumer” must be decid....
Manufacturing defect—Onus to prove manufacturing defect by way of inspection by an Expert would lie upon Complainant’s side—But this cannot be a water tight proposition in all cases.
The court concluded that a purchase made for business promotion does not exclude the purchaser from being classified as a 'consumer', and the allegations of misrepresentation were unsubstantiated.
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