Shri Partha Kumar Basu, Hon’ble Member :
The complainant filed this complaint u/s 34(1), 34(2)(d), 35, 36 and 39 of the Consumer Protection Act, 2019 for deficiency in services against OPs in the matter of dispute in sale of a new vehicle. The complaint case is running against the car dealer namely M/s Fulcrum Agencies Pvt. Ltd (OP1) and the officials of Original Equipment Manufacturer (OEM) OP2 & OP3 company M/s Hyundai Motor India Ltd. (HMIL). Both sides contested the case. Arguments were heard in full on 30.01.2024 when both sides filed BNA and pleaded as well.
The case of the complainant as per amended complainant dated 17th March, 2022 against the OP-1 dealer and the OP-2 & OP3 OEM as averred is that on 11.07.2020 he visited the store of the car manufacturing company in order to purchase a car namely Hyundai Grand i10 NiOS 1.2 MT Kappa Sportz (Aqua Teal) model and paid Rs.6,08,946/- through online mode of payment. It is alleged by the complainant that he was assured by the OPs that the car would be containing many features that includes Arkamys Sound System, Cooled Glove Box, USB fast charging etc. would be available in the said car. But to his utter dismay such special features were found missing which was discovered after the delivery of the vehicle. Though complainant took delivery of the car but the same was not replaced till filing of the instant case by the dealer. Due to such negligence on the part of the OPs, the complainant had to undergo mental agony and hardship. The complainant thereafter by way of various e-mails called upon the OPs for proper installation of such special features or to refund the purchase price. As the Complainant did not get refund or installation of special features, attempted a resolution of his concern before the dealer as well as before the OP2/OP3 company but his grievances remained unaddressed and thereafter he preferred a complaint before this commission and hence the instant case is filed. The complainant alleges unfair trade practices for such deficiency in services on the part of the OPs holding the dealer and OEM liable to install the shortfall features in his car or to refund the entire amount of Rs 6,08,946 /- alongwith a direction to pay 50,000/- towards mental stress and agony with cost.
In the light of these facts and observations the complainant exhibited copies of documents on Order Booking form dated 29.06.2020, Calculation Sheet dated 29.06.2020, Tax Invoice dated 11.07.2020 for Rs. 6,08,946/-, certificate of registration dated 28.07.2020, Tax token dated 17.07.2020, e-mail complaint copies dated 03.09.2020, 11.09.2020, 18.09.2020 and 29.09.2020 alongwith OP’s reply e-mail dated 08.09.2020, legal notice dated 18.11.20200, key features’ list of the particular model with e-brochure alongwith covering email dated 29.09.2020 and 26.08.2020 from OP1 dealer (Page-16).
In their W/V, the OP-1 contested that the complaint is barred by limitation act. The Ld. Counsel for the OP1 further opposed the move and contended in their replies that the complainant is not qualified for being considered as consumer under the Consumer Protection Act 2019. The OP1 also contended that the detailed specifications of the car were shown to the complainant during his visit at showroom by inspection of model car kept at the show room that the complainant inspected. The complainant was handed over brochure containing all the relevant information regarding said variant of the car. As due to pandemic situation since the OP1 dealer did not have updated brochure hence advised the complainant to see the e-brochure in the website wherein it was mentioned that the said 3 features namely Arkayms sound system, Cooled Glove box& USB fast charger were not available in that particular variant of the car. It was further submitted that the said features had been discontinued in the Sportz variant of the car by the manufacturer which the complainant was aware of during purchasing the car and was satisfied with it. The OP1 exhibited in the customer satisfaction note dated 28.07.2020, that the customer rated his satisfaction as 10 out of 10 and recorded his receipt of free gifts related to Cooled Globe box and Arkanyms sound system that he receivedas gift in lieu thereof and hence the grievance was satisfactorily resolved & closed. The OPs claimed that the complainant acknowledged and signed the delivery get pass where it is clearly mentioned that the complainant had taken delivery of the car in worthy condition along with tools and equipments. The OP-1 dealer further submitted that regarding features of a product, it is the responsibility of the manufacturer to which they are not a party as dealer. The OP-1 also denied having committed at all to customer about availability of those 3 features during purchase. While the complainant pointed out about 3 missing features but the OP1 dealer, requested the complainant to accept the said car against some free gifts. OP1 also argued that even if complainant alleged deficiency of service, but the OP1 agreed to compensate the defects in the form of free gifts. The OP1 exhibited only the Delivery receipt and Gate pass both dated 13.07.2020 and Cust. satisfaction note dated 28.07.2020.
In their W/V, the OP-2 and OP-3 contested that being manufacturer of the vehicle they sold the car through independent dealership and hence not involved in direct selling of passenger car to the customer. In the dealership agreement dated 07.09.2020executed between the OP-2 OEM with the OP1 dealer the same can be viewed. The OP-2 company cited the reference order about having no control on the dealership of the OP-1, as perHon’ble NCDRC in the matter of Maruti Udyog Ltd. Vs Nagendral Prasad Sinha & Anr .in R.P. No.174/676/677 of 2004 -decided on 04.05.2009 and also by the Hon’ble Supreme Court in the matter of Indian Oil Corporation. Ltd. Vs Consumer Protection Council, Kerala decided on 07.12.1993 in support of the contention of theOP2 and OP3 that the relationship between the OP-2 / OP-3 Company (HMIL) and dealer OP-1 is on Principal to Principal basis. The OP-2/OP-3 also contended about the reportable Judgement of Hon’ble Apex Court in the matter of Indian Airlines Vs. Patel Ramubhai / Shankarlal reported at 1986-94 (NS) 437 that no privity of contract existed between the OEM and the Complainant and the OP-1 being the 3rd party seller as per the invoice and having taken the payment of consideration money is responsible for the sale and the OEM cannot be a party to it.
The Original equipment manufacturing company OP2 / OP3 further pleaded that it’s relation with the dealer OP1 is on a principal-to-principal basis. The OEM 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 OEM and therefore, urged that on such basis no liability could be pinned upon OEM,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 OEM 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/OP3 OEM stated orally during final arguments that if it gets established that the OP1 sold to the complainant a defective car,then the dealer OP1 is solely liable for sale of the defective car. Materials placed on record, such as the invoice or all related documents about purchase of the carlends support to that effect.
The OP2/OP3 OEM not preferred any document as exhibit though claimed so having annexed annexure no P-1, P-2 and P-3.
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 :
Point no (1)
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. The documents and exhibits carry impeccable evidentiary value which could not be contested by OP1 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 amount under 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 Invoice is issued by the OP1 dealer to the complainant including invoice, registration, tax etc.Hence the complainant is very much a consumer, under the scopes and meaning of Consumer Protection Act 2019. The Consumer Protection Act 2019 is a special act and once the payment proof for the ‘goods’ or ‘services’ as defined under the said Act is exhibited, the Complainant is covered as consumer.
As per the factum it is noted that the OPs were non-responsive on the customer’s grievance on his specific points. Hence there is a continuous cause of action and so the period barred under the limitation act is not overshoot in the instant matter.
Point no (2) and (3)
Both the points are taken up together for the sake of brevity and to avoid repititions.
Before proceeding further, it is essential to recapitulate the facts. Complainant approached the dealer to purchase a car. He was informed about the availability of it. Thereafter, he was shown another demo car of same or similar model. The customer has 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 that the car had subject mentioned shortcomings as detected by him physically. All the vehicle booking form, registration documents, invoice, calculation sheet, gate pass etc. shows that the car was of admitted make and model that was not contested by either side. The Complainant requested to give delivery of an appropriate model having the subject mentioned 3 features but the dealer could not comply. The matter stood thus. The complainant wrote several emails to the dealer in which hepointed out the deficiencies in the said car but without remedies.
It is further observed from the sequel of exhibited documents that possibly no Pre-Delivery Inspection was conducted, duly signed by customer by observing Standard Operating Procedures as per OEM guidelines or even demonstrating the ‘goods’ , that was being sold to the intended recipient i.e. the consumers. 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 of new goods where the facts speak for themselves and the present case is such one. But the dealer denied Complainant’s notice and no corrective actions were taken. Upon no further response, complainant filed this case. The OP2 and OP3 entered appearance, contested its liability and alleged that its relationship with the dealer is not one of Principal-Agent basis, but rather, Principal toPrincipal basis and that it could not be held liable. Though claimed by the OP2/OP3, but the dealership agreement was not found annexed as evidence or produced before this commission at any stage. Hence the Judgements cited by the Ld. Advocate of the OEM cum OP2/OP3 in the matter of Indian Oil Corporation. Ltd. Vs Consumer Protection Council, Kerala decided on 07.12.1993.is not corroborated relevant portion of which is quoted below :-
“14. In order to decide this question it is necessary for us to look at clause 1 (a) of Ex. R-2. That is the memorandum of agreement between Indian Oil Corporation and M/s Karthika Gas Agency. That establishes the relationship between Indian Oil Corporation, the appellant and Karthika Gas Agency as distributor of the Corporation, on principal to principal basis. (emphasis supplied) Clause 17 of the agreement is as under:
In order to decide this question it is necessary to look at clause that is the distributorship agreement between IOC and the distributor that establishes the relationship between themselves whether on Principal to Principal basis quoted below :-
Clause 17 of the agreement:
In all contracts or engagements entered into by the Distributor with the customers for sale of LPG and/or the sale and/or installation and/or repairs of appliances and/or connections thereof with LPG cylinders (filled or empty) and/or refills and/or pressure regulators and/or attached equipment the Distributor shall act and shall always be deemed to have acted as a principal and not as an agent or on account of the Corporation, and the Corporation shall not in any way be liable in any manner in respect of such contracts and/or engagements and/or in respect of any act or omission on the part of the Distributor, his servants, agents and workmen in regard to such installation, sale, distribution, connections, repairs or otherwise. The Distributor shall be bound to inform the customers in writing of this provision, through correspondence or at the time of enrolment, of the customer."
The OP2/OP3 OEM is conspicuous in not annexing any exhibit though claimed so having annexures numbered as P-1, P-2 and P-3 for reasons best known to themselves. Thus the relationship in the instant case though claimed citing the referral Judgement by OP2/OP3 OEM on Principal to Principal basis, is not established. Neither any such clause of the reseller’s agreement was quoted or exhibited by the OP2/OP3 in support of their claim. In absence of such vital document reliance in that circumstances cannot be placed regarding relationship status between Agent & the Principal. Moreover, there are several reseller channels in Indian Oil like Petrol pump or Direct petroleum productsale which are governed by respective terms of dealership agreements persisting between themselves on Principal to Agent basis unlike the extant case of LPG distributorship on Principal to Principal basis and hence all the reseller verticals of an organisation cannot be assumed on an identical basis in a straight jacket manner and hence varies from case to case.
Vicarious liability is imposed on the entity other than the wrongdoer which is an imputed liability. It occurs when a wrongful/ tortious act or omission is committed and there exists a relationship of control between the Principal and Agent. In a case of similar factum, Tata Motors Ltd. Vs Cargo Motors Pvt. Ltd. It was held on on 19-10-2006 that TML has Vicarious Liability for their omissions and commissions of it’s dealer when TML was held vicariously liable for before Hon’ble National Consumer Disputes Redressal Commission (NCDRC) when complainant purchased an Indigo car from the dealer Cargo Motors Pvt. Ltd.. After hearing the parties, Commission observed :-
“They (TML) did not take any action against the dealer. His agency was never cancelled. It is, thus, clear that the dealer and Tata Motors Ltd. were working in cahoots with each other.”
Hon’ble NCDRC also noted that it is the bounden duty of Tata Motors Ltd. to check the names of the customers particularly when it is called to change the most significant part like engine.
“However, the liability upon the Tata Motors Ltd. is on the lower/nominal side. The entire amount of the car as well as compensation and interest as ordered by the fora below would be paid by the Cargo Motors Pvt. Ltd. the dealer. However, watching the inaction, negligence and passivity on the part of the Tata Motors Ltd. we impose costs of Rs.1,00,000/- upon Tata Motors Ltd.” Relying upon the abovesiad Final orfer of the Hon’ble NCDRC, the OP2 and OP3 are held having vicarious liability in the instant case of irregularity.
It is also quite apparent that the complainant had produced evidences in the form of exhibits to show that the car sold to him was for the particular make and model of ‘Hyundai Grand i10 NiOS 1.2 MT Kappa Sportz (Aqua Teal)’ as per the Order Booking form, Calculation Sheet dated 29.06.2020 and Tax Invoice dated 11.07.2020which should have contained those 3 features namely Arkayms sound system, Cooled Glove box & USB fast charger as per Manufacturer’s Brochure exhibited in running page no 16. So there is material available on record to support or substantiate the claim of complainant. But the OP1 dealer could not exhibit any document to resist such claim of the other side that the said 3 features namely Arkayms sound system, Cooled Glove box & USB fast charger were discontinued in the Sportz variant of the car by the manufacturer, although claimed so. In our view, it is incorrect that a vehicle with shortfall of requisite facilities or with lower model, even if minor, was not ought to be sold as a brand new car for which money was taken for that particular model. There is no doubt that there were some deficiencies in the goods sold and the OP1 dealer acknowledged the defects which they tried to address by providing free gifts to obviate those proven case of deficiencies.
Now U/s 2 (10) of the CP Act 2019 ‘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 2(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 deficiencies or defects that got established which has not been denied by the OP1, although they accepted to address the same through free gifts, but without replacement by a new car.
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.
The control mechanism of the manufacturer over their resellers and having knowledge thereof can not be ignored and a decision fastening liability upon the manufacturer would be tenable under the given relationship with the reseller, in the facts of this case, which is not proved as Principal -to-Principal basis. The charges against OP2 / OP3 is thus partly proved as the Judgements cited by the Ld. Advocate of the OP2/OP3 is not of any relevance in the subject matter of dispute. This should act as a deterrent to curb the menace of inaction by the principals on the errant resellers in case of similar latches towards consumers.
In the result, the complaint case succeeds against all the OPs.
Hence, it is
ORDERED
That the instant case be and the same is allowed on contest.
The OP 1 is liable and hence directed to rectify those 3 special features by addition or retrofitting with original equipments
OR
to replace with a new vehicle of same / higher variant.
OR
Alternatively, the OP 1 is directed to pay a refund of Rs. 6,08,946/- (Rupees Six Lac Eight Thousand Nine Hundred and Forty Six) only within 60 days from the date of passing of this Final Order, after getting return of the sold vehicle from complainant. All incidental costs for disposal of existing vehicle, if any, to be borne 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 within 60 days from the date of passing the Final Order otherwise a simple interest @ 12% per annum will be levied on the entire decretal amount from the date of this order.
A cost of Rs.25,000/- (Rs. Twenty Five Thousand) only is also imposed jointly and/or severally on OP2 and OP3 OEM which is to be deposited in the ‘Consumer Legal Aid account ‘ within 60 days of passing this order. The complainant is at liberty to put this order into execution after expiry of 60 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 www.confonet.nic.in.
Dictated and corrected by me.
Member
