No Proof, No Refund: UP Consumer Commission Holds Customer Must Prove Payment Beyond Booking Amount in Dealer Fraud Case - 2025-07-17

UP Consumer Commission Limits Dealer's Liability to Proven Amount in Employee Fraud Case

Bareilly, UP – The Uttar Pradesh State Consumer Disputes Redressal Commission has modified a District Commission order, ruling that a vehicle dealership is only liable to refund the amount for which the customer can provide concrete proof of payment, in a case involving fraud by a dealership employee. The Commission underscored that a customer's claim for a larger sum, without supporting evidence beyond a self-attested statement, cannot be upheld.

The bench, comprising Justice Ajai Kumar Srivastava (President) and Mrs. Sudha Upadhyay (Member), partially allowed the appeal filed by Rishabh Suri, owner of M/s Suri Sales Pvt. Ltd., against an order directing him to refund ₹1,44,000 to a customer.

Background of the Dispute

The case originated from a complaint filed by Rehan Ahmad before the District Consumer Commission, Bareilly. Mr. Ahmad alleged that on February 29, 2016, he booked a Bullet motorcycle at Suri's dealership by paying ₹5,000, for which he received a receipt. He claimed that a few days later, the dealership's manager, R.S. Kushwah, called him and asked him to deposit the full amount for prompt delivery. Mr. Ahmad stated he paid an additional ₹1,44,000 but neither received the motorcycle nor a refund. He further alleged that the dealership owner acknowledged this payment on the initial receipt.

The District Commission had accepted Mr. Ahmad's version and ordered the dealership to refund the entire ₹1,44,000 with 6% annual interest and ₹3,000 as litigation costs.

Arguments Before the State Commission

The dealership, in its appeal, contested the District Commission's order. Their primary arguments were:

• Employee Fraud: The dealership's manager, R.S. Kushwah, had defrauded multiple customers of approximately ₹20-22 lakhs by issuing forged documents and had subsequently absconded. An FIR was filed against him.
• Lack of Proof: The appellants argued that while the initial booking amount of ₹5,000 was undisputed and supported by a receipt, Mr. Ahmad failed to provide any credible evidence for the payment of the additional ₹1,44,000.
• Vicarious Liability: While they acknowledged Kushwah was their employee, they contended that they could not be held liable for his fraudulent criminal acts, especially when the money was never deposited into the firm's accounts.

Commission's Findings and Ruling

The State Commission, after reviewing the case file and hearing the appellant's counsel, found merit in the dealership's arguments regarding the burden of proof. The Commission noted a critical gap in the complainant's evidence.

In its judgment, the Commission observed:

"The Commission is of the considered opinion that the respondent/complainant has presented the receipt for the booking amount of ₹5,000 before the District Consumer Commission. Regarding the remaining amount of ₹1,44,000, no other credible evidence has been presented against his sworn statement, which has been denied by the appellants/opposite parties. Therefore, the statement regarding the deposit of the remaining amount is not supported by credible evidence. Hence, such a statement is not worthy of belief. The acceptance of the complaint by the District Consumer Commission for an amount exceeding ₹5,000 is unlawful."

The Commission, while acknowledging the principle that an employer is responsible for the acts of their employee, highlighted that this liability is not absolute. The claimant must first establish the fundamental facts, including the actual transaction and payment, with reliable proof.

Final Order

The State Commission partially allowed the appeal and modified the District Commission's order. It directed the appellants, Rishabh Suri and another, to:

1. Refund the proven booking amount of ₹5,000 to the complainant, Rehan Ahmad.
2. Pay 6% simple annual interest on this amount from the date of filing the original complaint until the date of payment.
3. Pay ₹3,000 towards litigation costs.

The Commission mandated that the payment be made within six weeks, failing which the entire amount would attract an interest rate of 9% per annum.