KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAD, THIRUVANANTHAPURAM COMMON JUDGMENT IN APPEAL NOS.953/2004 AND 954/2004 JUDGMENT DATED: 3/8/2010 PRESENT SRI.M.V.VISWANATHAN :JUDICIAL MEMBER SRI.M.K.ABDULLA SONA : MEMBER APPEAL No.953/2004 1. M/s PSN Automobiles Pvt.Ltd., : APPELLANTS Narayana Vihar, Punkunnam, Trichur – 680 002. 2. M/s PSN Automobiles Pvt. Ltd., Branch Office, Sree Parvathy, 25/502, Unichira, Pookattupady Road, Kochin- 682 024. (By Adv.V.Krishna Menon) Vs. Jojo Thomas, Puthuparambil House, : RESPONDENT Chelachuvadu.P.O., Kattappana, Idukki District. (By Adv.Tom Joseph) APPEAL No.954/2004 1. M/s Eicher Motors Ltd., : APPELLANT 102, Industrial Areas No.1, Pithampur – 454 775, Dhar District, Madhya Pradesh. (By Adv.V.Krishna Menon) Vs. Jojo Thomas, Puthuparambil House, : RESPONDENT Chelachuvadu.P.O., Kattappana, Idukki District. (By Adv.Tom Joseph) JUDGMENT SRI.M.V.VISWANATHAN :JUDICIAL MEMBER The above appeals are preferred from the order dated 8th October 2004 of the CDRF, Ernakulam in OP.No.450/03. The complaint therein was filed by the respondent in these appeals as complainant alleging deficiency in service on the part of opposite parties 1 to 3(appellants) in effecting sale of a vehicle having manufacturing defects. He also alleged deficiency in service on the part of the opposite parties in their failure to rectify the defects of engine failure. The complainant claimed refund of the price of the vehicle amounting to Rs.6,46,600/- and also for refund of Rs.10,000/- collected from the complainant towards repairing charges and return of the cheque for Rs.20000/- and Rs.64500/- which the complainant paid towards the loan instalments. Thus, the complainant claimed a total of Rs.7,41,000/- with interest at the rate of 18% per annum and cost. 2. The 1st opposite party entered appearance and filed written version denying the alleged deficiency in service. It was contended that the complainant is not a consumer as he purchased the vehicle for commercial purpose. It is further contended that the engine failure happened due to over running of the engine which happened due to rash and negligent driving of the vehicle. 1st opposite party denied the alleged manufacturing defect. The complainant’s vehicle was ready for delivery after effecting repairs; but the complainant failed to take delivery of the vehicle by remitting the price of the replaced engine block amounting Rs.93475/- and to pay repairing charges. Thus, the 1st opposite party prayed for dismissal of the complaint. 3. The opposite parties 2 and 3 filed joint written version contending as follows:- the complainant is not a consumer as he purchased and plied the vehicle for commercial purpose; that the opposite parties 2 and 3 are the dealers of the 1st opposite party who manufactured the vehicle. The warranty given to the vehicle in respect of engine is 3 years from the date of purchase of the vehicle and the warranty shall not apply to damage due to the rash and negligent driving; that there was no manufacturing defect in the vehicle and the engine failure occurred due to over running of the vehicle. The complainant was told about his liability to meet the expenses for repairing the damaged vehicle including the price of the replaced engine block for Rs.93475/-. The complainant is liable to pay Rs.I,13,475/- to the opposite parties 2 and 3. Thus, the opposite parties 2 and 3prayed for dismissal of the complaint 4. Before the Forum below the complainant was examined as PW1. The service Engineer of the 1st opposite party was examined as DW1 and the Asst. Works Manager of the opposite parties 2 and 3 was examined as DW2. The expert Commissioner who submitted C1 commission report was examined as DW3. On the side of the complainant A1 to A5 and that of the opposite parties B1 to B4 were marked. The expert commission report was marked as Ext.C1. On an appreciation of the evidence on record, Forum below passed the impugned order directing the opposite parties to refund price of the vehicle amounting to Rs.6,46,600 and also to refund Rs. 10000 paid by the complainant towards repair charges and also to return the cheque for Rs.20000/-. The time stipulated to comply with the said order is 30 days from the date of receipt of copy of the order and failing which the price of the vehicle ie, Rs.6,46,600 will carry interest at the reat 9% per annum from the date of impugned order till payment. Aggrieved by the said order 1st opposite party filed appeal 954/04 and opposite parties 2 and 3 jointly filed A.953/04. 5. We heard both sides. The learned counsel for the appellants submitted his arguments based on the grounds urged in the memorandum of the present appeals. He much relied on C1 commission report and the evidence of DW3, the expert commissioner and argued for the position that the engine failure occurred due to over running of the engine and that the said defect occurred due to rash and negligent driving of the vehicle by the driver. Thus, the appellants prayed for setting aside the impugned order passed by Forum below. On the other hand, the learned counsel for the respondent/complainant supported the impugned order passed by the Forum below. He also pointed out the objection filed by the complainant to the commission report and also the evidence of the commissioner as DW3. He argued for the position that the vehicle was having warranty for 3 years and the engine failure occurred during the warranty period and so the opposite parties being the manufacturer and the dealers of the vehicle are bound to replace the defective engine and to rectify the defects in the vehicle free of charge. It is further submitted that the engine of the vehicle developed manufacturing defects and so the complainant/consumer lost confidence in the vehicle and thereby justified his claim for refund of the price of the vehicle with compensation and cost. Thus, the respondent/complainant prayed for dismissal of the present appeals. 6. The points that arise for consideration are:- i) Whether the respondent/complainant is a consumer as defined under section 2(1)(d) of the Consumer Protection Act, 1986? ii) Whether there was any deficiency in service on the part of the appellants/opposite parties in effecting sale of the vehicle covered by Ext.A4 invoice issued by the 2nd opposite party/authorized dealer of the said vehicle? iii) Whether the appellants/opposite parties can be justified in adopting the contention that the engine failure of the said vehicle occurred due to over running as the result of rash and negligent driving of the vehicle by its driver? iv) Whether the Forum below can be justified in directing the opposite parties to refund the price of the vehicle? v) Is there any sustainable ground to interfere with the impugned order dated 8th October, 2004 passed by CDRF, Ernakulam in OP.450/03? Point No.1 7. There is no dispute that the respondent/complainant purchased the Eicher Lory manufactured by the 1st opposite party M/s Eicher Motors Limited and that the said vehicle was supplied by opposite parties 2 and 3 as the dealers of the 1st opposite party manufacturer. Ext.A4 is copy of the invoice issued by the 2nd opposite party dealer evidencing sale of the said vehicle. Eventhough Ext.A4 invoice is dated 30.3.02 the delivery of the vehicle was effected on 4.4.02. Admittedly the said vehicle was purchased by the complainant on hire purchase agreement with financier Cholamandalam Investment and Finance Company Limited, Ernakulam. The opposite parties have also admitted the fact that the complainant took delivery of the vehicle on 4.4.02. 8. The opposite parties 1 to 3 admitted the fact that the said vehicle was having a warranty for 3 years from the date of purchase of the vehicle. The parties to the complaint have also admitted that the said vehicle abruptly stopped during journey and it was due to engine failure. The aforesaid engine failure occurred on 20.3.03 and the vehicle was entrusted with the 3rd opposite party dealer at Kochi. The entrustment of the said vehicle on 20.3.03 at the workshop of the 3rd opposite party dealer and that there was engine failure to the said vehicle are not in dispute. 9. The case of the respondent/complainant is that the engine failure occurred due to substantial manufacturing defect of the vehicle. On the other hand, appellants/opposite parties 1 to 3 would contend that the engine failure occurred due to over running as a result of the rash and negligent driving of the said vehicle. There can be no doubt about the fact that the aforesaid engine failure occurred during the warranty period. It is a settled position that warranty service is also service as defined under section 2(1)(o) read with section 2(1)(d)(ii) of the Consumer Protection Act,1986. It is to be noted that the purchase of the vehicle was on 30.3.02 and the vehicle was delivered on 4.4.02. The complainant purchased the said vehicle before the amendment of Section 2(1)(d) of the Consumer Protection Act. The aforesaid amendment came into force on 15.3.03. Thus, the complainant had the vested right of a consumer coming under the purview of the Consumer Protection Act, 1986. A person who availed the service for commercial purpose is to be treated as a consumer as it stood prior to the amendment which came into effect on 15.3.03. If that be so, the complainant who availed service of the opposite parties in connection with the purchase of the vehicle for commercial purpose can be considered as a consumer as defined under Section 2(1)(d) of the Consumer Protection Act, 1986. The Forum below is perfectly justified in holding that the complainant is a consumer coming within the ambit of the Consumer Protection Act, 1986. This point is found accordingly. Points 2 and 3:- 10. The vehicle purchased by the complainant from the opposite parties had engine failure on 20.3.03. The vehicle was entrusted with the 3rd opposite party/approved dealer. The 3rd opposite party agreed to effect the repairs to the engine by replacing the engine block. Admittedly, the 3rd opposite party provided stand by float engine and thereby permitted the complainant to ply his vehicle with that float engine. There is no dispute that the said float engine also developed problem and there was engine failure. Thereby the complainant brought the said vehicle to the 3rd opposite party on 22.5.03. The materials on record would show that the complainant was compelled to remit Rs.30,000/- towards repairing charges and that the complainant paid Rs.10,000/- in cash and a sum of Rs.20,000/- was paid by way of cheque. Subsequently, the complainant issued a stop memo to his bank and thereby the cheque for Rs.20000/- was dishonoured on presentation. The case of the complainant is that the opposite parties 1 to 3 are liable to rectify the defects in the engine free of cost as the engine failure occurred during the warranty period. It is also the case of the complainant/consumer that the demand for Rs.30,000/- towards repair charges would amount to deficiency in service and unfair trade practice. 11. On the otherhand, the opposite parties 1 to 3(appellants) would contend that the complainant agreed to pay cost of the engine block which was replaced and thereby he agreed to pay the cost of the engine block amounting Rs.93475/- and that the complainant had also agreed to remit repairing charges of Rs.30,000/- and thereby he paid Rs.10,000/- in cash and Rs.20,000/- by way of cheque. It is further contended by the opposite parties that after dishonouring of the said cheque the complainant is liable to pay Rs. 1,13,475/- to the opposite parties. 12. It is the definite case of the opposite parties 1 to 3 that the engine failure occurred not due to any manufacturing defect but due to the over running of the engine. It is also the case of the opposite parties that the over running occurred because of the rash and negligent driving of the vehicle by shifting down the gears without slowing down the speed of the vehicle. According to the opposite parties that the complainant is not entitled to get the benefits under the warranty. 13. The material issue that would merge in this case is regarding the reason or cause for the engine failure. The case of the complainant is that the engine failure occurred due to the defect in the engine. The complainant alleged manufacturing defects in the engine. On the other hand, the opposite parties 1 to 3 alleged negligence on the part of the complainant in using the vehicle in a rash and negligent manner and that the engine failure occurred due to over running of the engine as a result of rash and negligent driving. But one thing is crystal clear, that there occurred engine failure to the said vehicle. It can also be noted that the stand by engine provided for the vehicle also developed engine trouble and the said engine had also failed. Ext.B4 is the operator’s manual and Eicher vehicles with the warranty conditions. Ext.B4 warranty conditions would show that the complainant’s vehicle engine was having 3 years warranty. If that so, during the warranty period the manufacturer and dealers of the vehicle are bound to rectify the defects in the engine. It is true that Ext.B4 warranty conditions would also show that the manufacturer will not be liable for damage due to lack of proper maintenance as described in the owner’s handbook and that during the warranty period 1st opposite party/manufacturer’s obligations shall be limited to repairing or replacing free of charge such part or parts of the supplied Eicher vehicle, which, on examination shall be deemed defective in the opinion of Eicher Motors limited or its authorized representative. Such defective part or parts which have been replaced shall become the property of Eicher Motors Limited. It is further stated that the Eicher Motors Limited’s decision on all warranty claims shall be final and binding. 14. The mere stipulation that the decision of the manufacturer/dealers will be final cannot be accepted as such. The aforesaid decision regarding the warranty can not be unilateral or arbitrary. Thus, it can be concluded that the opposite parties were bound to rectify the defects in the vehicle engine by replacing the required parts. The fact that the engine fitted to the vehicle developed problems and the engine failed to function would make the opposite parties liable to rectify the engine defects. They were legally bound by the warranty conditions. They were bound to effect the repairs by replacing the defective parts. Thus, it was not just or fair on the part of the opposite parties in demanding repair charges or cost of the spare parts from the complainant. 15. The opposite parties have got a case that the engine failure occurred due to rash and negligent driving of the vehicle by the complainant’s driver and it resulted in developing over running of engine. Then, it is for the opposite parties to establish their contention that the engine failure occurred due to over running of the engine and that the over running developed on account of rash and negligent driving of the vehicle by the complainant’s driver. 16. The complainant filed an application as IA.812/03 before the Forum below to get an expert commissioner appointed and to get report about the working of the engine fitted to the vehicle which was purchased by the complainant from the opposite parties. On the basis of the said Commission application, the Forum below directed the complainant and opposite parties to submit panel of experts. Thereby the complainant and opposite parties submitted separate panel of experts. The Forum below was pleased to appoint Mr.N.E.Ithapriti from the panel of experts submitted by the opposite parties. The expert on inspection of the vehicle submitted C1 expert report. The expert inspected the vehicle on 5.2.2004 in the presence of both the complainant and representatives of the opposite parties. On inspection, it was found that the subject vehicle is in a satisfactory roadworthy condition and no defects can be found on the vehicle and no manufacturing defect can be detected. It is further reported that normal running repairs are required for further operation. It is also reported that the engine rebuilded with new cylinder block(same engine No. is found punched on the cylinder block) new connecting rods, new push rods and new tappets. Now the engine is working in satisfactory condition. Thus, C1 report would make it abundantly clear that the expert commissioner inspected the vehicle after effecting necessary repairs and replacing all defective parts. 17. The expert in his C1 report has also reported that “after dismantling I have observed that the stamping mark on the present used pistons head (photos attached). Hence the engine damage was may be due to the over running of the engine”. It is also reported that the cylinder block found cracked at the 4th piston area; that the 4th cylinder valve operating cam on the cam shaft found broken and deformed; connecting rod, push rod and tappets were bent. So, C1 report would make it abundantly clear that there was damage to main parts of the engine and it resulted in replacing of the engine parts. The expert was not definite on his opinion that the damage to the engine parts occurred due to over running of the engine. It is only opined that the engine damage may be due to over running of the engine. The important aspect to be noted at this juncture is that there is no opinion given by the expert commissioner that the over running of the engine developed due to rash and negligent driving of the said vehicle. Thus, C1 report would strengthen the case of the complainant that were defects in the vehicle engine. Whether the said defects were manufacturing defects or subsequent defects developed in the engine have no importance. But one thing is clear that during the warranty period the engine of the vehicle developed defects. If that be so, the opposite parties being the manufacturer and the dealer cum service center are bound to rectify the defects by replacing the defective parts. The case of the opposite parties that the aforesaid defects in the engine developed due to rash and negligent driving of the vehicle has not been substantiated. 18. The expert who submitted C1 commission report was examined before the Forum below as DW3. DW3 has deposed that the damage to the engine may be due to over running. He also explained as to how over running of engine develops. According to DW3 over running of the engine will be developed by shifting the gear without reducing the speed of the vehicle. It is also deposed that over running occurred due to negligent driving of the vehicle. DW3 in his cross examination has admitted the fact that there occurred engine failure on 2 occasions; but he failed to report that fact in his report. He also admitted that he inspected the rebuilded engine. DW3 is not sure about the fact whether he had occasion to inspect the damaged engine parts. DW3 in his cross examination has deposed his inability or inexperience to say about the manufacturing defect of the engine. But at the same time DW3 on inspection of the rebuilded engine has reported that there is no manufacturing defect to the present rebuilded engine. Thus, it can be seen that DW3 was not in a position to give an opinion as to whether there was any manufacturing defect to the damaged engine. It is pertinent to note at this juncture that DW3 does not remember whether he had any occasion to inspect the damaged engine. The evidence of DW3 that over running of the vehicle occurred due to negligent driving of the vehicle can not be accepted as such. A careful scrutiny of the testimony of DW3 would give an indication that he was reluctant in deposing the true and correct facts. A perusal of testimony of DW3 and its C1 report would show that the expert is not at all sure about the reason for causing damage to the vehicle engine. But his C1 report and oral testimony would make it clear that there were defects to the engine parts and those defective parts were replaced by the 3rd opposite party/dealer and service centre. Thus, in effect opposite parties 1 to 3 failed to substantiate their case that the engine failure occurred due to rash and negligent driving of the vehicle by the complainant’s driver. If that be so, the opposite parties are bound to rectify the defects or problems developed by the engine of the vehicle. 19. The opposite parties produced Ext.B3 copy of the report regarding engine over running. B3 is dated 15.5.03. This report would show the failure of the engine of the vehicle. The issuance of B3 report itself would make it clear that the engines fitted to Eicher vehicles were having the defect of over running. Unless there was such a common defect of over running of engine such report would not have been issued by the 1st opposite party/manufacturer. So, B3 report would give a clear indication that the engines fitted to this type of vehicles were having such defects of over running. It is too much to infer that all the drivers of Eicher vehicles were in the habit of driving the vehicles carelessly or negligently. It is categorically stated in B3 report that in last few months cases of engine over running are on increase. Thus, in fact B3 report would also give a clear indication about the common phenomenon of over running of the engines fitted to Eicher vehicles. This circumstance would strengthen the case of the complainant that the engine failure occurred due to manufacturing defects of the engine. 20. Ext.A2 is copy of relevant page of service and maintenance record of the vehicle. The genuineness and correctness of entries in A2 are not disputed by the opposite parties . It is also to be noticed that the works manager of the opposite parties affixed signature in A2 service and maintenance record. It would also show that the complainant’s vehicle maintained and serviced by the authorized service centre of the opposite party viz, opposite parties 2 and 3. 21. Ext.A2 service and maintenance record would show that on 20.3.03 the complainant’s vehicle was entrusted with the 3rd opposite party. In Ext.A2 remarks column, it is written as “engine failure”. There is nothing in A2 to indicate that the engine failure occurred due to over running or due to negligent driving of the vehicle. The case of the opposite parties that the engine failure occurred due to over running or due to negligent driving of the vehicle by the complainant’s driver can not be believed or accepted. The burden is heavily upon the opposite parties to substantiate their contention that the engine failure occurred due to over running as a result of negligent driving of the vehicle by its driver. But the opposite parties have not succeeded in establishing the aforesaid contentions raised in their written version. On the other hand, the available circumstances and evidence on record would support the case of the complainant that the engine developed defects during warranty period and it resulted in causing engine failure. So, it can very safely be concluded that opposite parties cannot be justified in demanding repairing charges and cost of the engine parts which are replaced. The aforesaid demand would amount to deficiency in service and unfair trade practice. It is established that the opposite parties supplied a vehicle with defective engine and that is why within a period of 1 year the said vehicle engine developed defects causing engine failure. As per the warranty provided for the vehicle. The opposite parties were liable to rectify the defects by replacing the defective parts. The Forum below is perfectly justified in finding deficiency in service and unfair trade practice on the part of the opposite parties 1 to 3. These points are answered accordingly. 22. Points 4 and 5:- C1 expert report would show that the opposite parties have rectified the defects in the engine of the vehicle and that the engine is working in a satisfactory condition. It would also show that the vehicle is in need of normal repairs for further operation. The aforesaid inspection was conducted on 5.2.04. Admittedly, the subject vehicle is in the possession and custody of the 3rd opposite party from 2003 onwards. The opposite parties were not ready to hand over the vehicle to the complainant after effecting necessary repairs. There can be no doubt that the complainant has suffered financial loss, inconvenience and mental agony on account of the adamant attitude adopted by the opposite parties 1 to 3. So, the opposite parties are to be made liable to compensate the complainant for the aforesaid deficiency in service and the mental agony suffered by the complainant. 23. As per the warranty conditions the opposite parties are only bound to effect the necessary repairs including replacement of the defective parts. The C1 report would show that the defective engine has been rebuilded and the same is in a roadworthy condition. It only requires the normal running repairs for further operation. The opposite parties are bound to repair the aforesaid vehicle so as to make it in a roadworthy condition. The necessary running repairs required for the engine and the vehicle are to be carried out by the opposite parties. The Forum below cannot be justified in ordering refund of the price of the vehicle. It is to be noted that the vehicle was delivered on 4.4.02 and from that date onwards the vehicle has been used by the complainant till the engine failure occurred 20.3.03. It is also to be noted that on the said date the vehicle had covered a distance of 45054Kms. This circumstance would show that the vehicle was not having such serious or substantial manufacturing defects. It is to be noted that the defects have been rectified by the opposite parties by replacing all the required spare parts. It is also to be noted that the warranty stipulates repairing of the defects with replacing of the necessary parts. So, the Forum below can not be justified in ordering refund of the price of the vehicle which was purchased by the complainant on 30.3.02. The order directing refund of the price of the vehicle is legally unsustai9nable and the same is liable to be quashed. Hence we do so. 24. The opposite parties had collected Rs.10000/- from the complainant towards repair charges. They had also collected a cheque for Rs.20000/-. The Forum below is perfectly justified in ordering refund of Rs.10000/- paid by the complainant towards repairing charges and also to return the cheque for Rs.20000/-. Therefore, the aforesaid order regarding refund of Rs.10000/- and return of the cheque for Rs.20000/- is confirmed. 25. There can be no doubt that the opposite parties are liable to compensate the complainant for the deficiency in service on their part and also for the mental agony and inconvenience suffered by the complainant. It is to be noticed that due to the deficiency in service the complainant suffered financial loss. The complainant could not ply the vehicle from 22.5.03. Considering all these aspects, a sum of Rs.50,000/- is awarded by way of compensation to the complainant. The opposite parties 1 to 3(appellants) are jointly and severally liable to pay the aforesaid compensation of Rs.50,000/- to the respondent/complainant. The appellants/opposite parties are also liable to repair the said vehicle so as to make the same in a roadworthy condition and hand over the same to the complainant in a defect free condition. The aforesaid vehicle will also get an extended warranty for a further period of 2 years from the date of handing over of possession of the vehicle to the complainant. The appellants/opposite parties are also liable to pay cost of Rs.10000/- to the respondent/complainant. The impugned order passed by the Forum below is modified as indicated above. These points are answered accordingly. In the result the above appeals are disposed of and thereby the impugned order dated 8th October 2004 passed by CDRF, Ernakulam in OP.No.450/03 is modified. The appellants/opposite parties are directed to hand over possession of the vehicle covered by A4 invoice to the respondent/complainant after effecting necessary repairs so as to make the vehicle in a good road worthy condition. The appellants/opposite parties are not entitled to collect any repair charges or cost of the replaced defective parts from the respondent/ complainant. The appellants/ opposite parties are liable to refund Rs.10,000/- collected from the complainant and also to return the dishonoured cheque for Rs.20,000/-. The appellants/opposite parties are jointly and severally liable to pay compensation of Rs.50,000/- to the respondent/complainant for the deficiency of service on their part and also for the mental agony and financial loss suffered by the respondent/ complainant. The aforesaid vehicle will get an extended warranty for a period of 2 years from the date of handing over of possession of the said vehicle to the respondent/complainant. The appellants/opposite parties are also liable to pay cost of Rs.10000/- to the respondent/complainant. The impugned order passed by the Forum below directing refund of price of the vehicle amounting to Rs.6,46,600/- is quashed. The compensation of Rs.50,000/- and refund of Rs.10,000/- are to be effected within one month from the date of receipt of copy of this judgment, failing which the aforesaid amounts will carry interest at the rate of 9% per annum from the date of the impugned order(8.10.04) till payment/realisation. SRI.M.V.VISWANATHAN :JUDICIAL MEMBER SRI.M.K.ABDULLA SONA : MEMBER ps | 
