Versus
- M/s Zenica Cars India Private Ltd. Orchid Centre, Sector-53, Golf Course Road, Gurugram-122001, email: vaibhav.sharma@audigurgaon.in.
- Audi India, Silver Utopia, 4th Floor, Cardial Gracious Road, Chakala, Andheri (East), Mumbai-400099. Email: th Floor, Cardial Gracious Road, Chakala, Andheri (East), Mumbai-400099. Email:
…..Opposite Parties
CORAM: Naresh Katyal, Judicial Member
Argued by:- Sh. Anuj Dewan, counsel for complainant.
None for Opposite parties (defence of opposite parties struck off vide order dated 02.09.2022).
ORDER
NARESH KATYAL, JUDICIAL MEMBER:
Facts in complaint are: Complainant is a partnership firm. OP No. 1, as per averment, is a company with registered office at: Orchid Centre, Sector-53, Golf Course Road, Gurugram. OP No.1 was authorized dealer of OPs No. 2 & 3, until September-2018 for selling new cars under name and style of Audi Gurgaon and Audi Central Delhi. As per plea, they (OP No.1) are also authorized Audi Pre-owned car retailer of OPs No. 2 & 3 and were engaged in business of selling Pre-owned Audi cars, duly approved and certified by OP No. 2 & 3 under name and style of “Audi Approved Plus”. OP No. 2 is a division of OP No. 3 who is manufacturer of Audi Cars in India. OP No. 2 and 3 do not make direct sales, but sell, promote and market their cars through their authorized dealers, appointed all over India.
2. Complainant booked Audi A6 Car for personal use of partners on 24.07.2017 by paying Rs.1.00 lacs as token amount. It was suggested by OP No. 1 to Mr. Wadi Singh-partner of complainant that: in order to make some tax savings; it would be more beneficial to buy car in the name of firm-LLP, to which Mr. Wadi Singh agreed. On 09.08.2017, complainant purchased Pre-owned Audi A6 car bearing No. HR-26DC-0884 from OP No. 1 who was authorized Audi Pre-owned car retailer of OPs No. 2 & 3 for consideration of Rs.40.00 Lacs. Another sum of Rs.60,000/- was paid to OP No. 1 for carrying out transfer of car in name of complainant. Thus, as per allegations complainant paid Rs.40.60 Lacs to OP No.1.
3. It is pleaded that: Mr. Wadi Singh-partner of complainant, at the time of finalizing the car noticed that: registration certificate of car was in the name of OP No. 1, but car was hypothecated to M/s Federal Bank Ltd. It was assured to Mr. Wadi Singh that it is standard practice of industry that: after payment is received from buyer; car is transferred in the name of buyer within 3-4 months of full payment. After full and final payment is received from buyer; authorized dealer coordinate with hypothecating bank and ensure that payment made by buyer is transferred to hypothecating bank. Upon that, bank issues ‘foreclosure letter’ which is submitted to RTO for transfer of car. It is pleaded that: OP No. 1, despite having received full payment from complainant, failed to honour and perform its obligation and car, till date, has not been transferred in the name of complainant which is causing losses and mental suffering to complainant. Car was delivered to complainant on 12.08.2017 as per receipt Annexure C-5. Vehicle registration transfer process may take up to 120 days to complete; however, OPs refused to come forward to perform its obligation. In the meantime, car was serviced twice, but as it was in the name of OP No.1; amount of Rs.34,771/- was paid by Mr. Wadi Singh to Mr. Rajvir Singh-Sales Manager vide receipt Annexure C-7 and another amount of Rs.36,512/- was paid by Mr. Wadi Singh vide receipt Annexure C-8 on 08.05.2019. Complainant also paid, twice, for insurance for the year 2017-18 and year 2018-19 as per Annexure C-9 (Colly).
4. Complainant, on receiving no assistance from OP No. 1, wrote e-mail dated 07.05.2019-Annexure C-10 to OPs No. 2 & 3 apprising them of situation and mess created by their authorized dealer (OP No.1) and requested to intervene, as he had paid huge amount. Despite having possession of car, he was not its registered owner; such possession is no possession at all, in law. OP No. 2 responded to complainant vide its e-mail dated 08.05.2019-Annexure C-11 and informed complainant that: OP No. 1 had ceased to be their Audi authorized dealer w.e.f. 05.09.2018 and they have issued public notice (Annexure C-12) to that effect in leading newspapers for information of general public at large and OPs No. 2 & 3 are not responsible for actions/inaction of OP No.1. Complainant wrote letter to OP No. 1 on 25.06.2019-Annexure C-13 requesting to come forward and get registration certificate in name of complainant. There was no response from OP No.1. Left with no option; complainant served legal notice to OPs on 29.07.2019-Annexure C-14. OP No. 2, vide e-mail dated 05.08.2019-Annexure C-15 responded and assured complainant that they will look into the complaint and help to resolve the issue, at the earliest. It requested for documents viz: registration certificate of car, invoice of car, payment receipts of car, delivery certificate of car. Complainant vide e-mail dated 05.08.2019 Annexure C-16, provided documents as sought. OP No. 2, since then, has not got back to complainant. Registration certificate of car is Annexure C-17.
5. It is pleaded that: OP has resorted unfair trade practice, caused irreparable loss and damage to rights of complainant. OP No. 1 failed to transfer registration of Audi Car No. HR-26DC-0884 purchased from it, by complainant by paying Rs.40.60 lacs, way back in August, 2017. Intention of OP No. 1, from inception, was to commit fraud upon complainant. They (OP No.1) has no intention, either to pay off loan secured from Federal bank or transferring car in the name of complainant. OPs No. 2 & 3 are also liable for fraud committed upon complainant, since OP No. 1 was authorized dealer/agent of OPs No. 2 & 3. OPs No. 2 & 3 exercise considerable control and authority over their authorized dealer and thus are equally liable to make good the loss suffered by complainant for commissions/omissions of OP No.1. Authorized dealers act as agent of company in promoting marketing and selling product manufactured by company. It is pleaded that: primary liability to refund the amount, in a case, where authorized dealer fails to deliver the car, is that of manufacturer. Without transfer and registration certificate, there cannot be legal delivery of possession of car. It shall be deemed to be a failure in delivery of vehicle. OP No. 1 never transferred sale proceeds received from complainant to hypothecating bank-Federal Bank. It appears that: since bank has never received the money, they will never ‘foreclose the account’ of OP No.1, leaving complainant to run after OP No.1. OPs No. 2 & 3 are involved in this transaction and e-mail dated 05.08.2019 is a proof. Their seeking documents, from complainant go to show that they are equally responsible for misconduct of their self appointed dealer. After seeking documents from complainant; OPs No. 2 & 3 slept over the same and same amounts to deficiency in service on their part. OPs No. 2 & 3 cannot shy away from their liability of compensating the complainant. On these facts; by pleading cause of action, this complaint has been filed for seeking direction against OPs No. 1 to 3 to refund Rs.40.60 lacs, jointly and severally, paid by complainant to OP No. 1 for Audi A-6 Car No. HR-26DC-0884 with interest @15% p.a. from date of payment till realization; to pay complainant Rs.3,35,847/-, jointly and severally, which was paid to OP No. 1 towards insurance, service and other ancillary expenses with interest @15% p.a. from date of payment till realization; pay Rs.1.00 lacs for mental harassment, hardship; jointly and severally; pay Rs.1.00 lacs, jointly and severally towards litigation costs. Text of complaint is supported by affidavit of Mr.Wadi Singh-partner of complainant.
6. Upon notice, Sh. Ajay Bishnoi, Advocate appeared on 29.01.2020 as proxy counsel for Sh. Vijay Yadav, Advocate for OPs No. 2 & 3. Nobody appeared on behalf of OP No. 1, despite that: Kohli and Sobti Associates, Advocates of Delhi have filed their power of attorney bearing date 18.12.2020 on behalf of OP No.1. It is mentioned in this Commission’s Order dated 01.12.2021 that learned counsel for OP No. 1 has already filed power of attorney. Further, it is apparent from record of this complaint that: nobody appeared on behalf of OPs from 01.12.2021 onwards, on dates fixed in the complaint. In between, vide this Commission’s order dated 02.09.2022; defence of OPs was struck down.
7. Complainant proceeded to record its evidence. Sh. Anuj Dewan, Advocate for complainant filed affidavit Ex.CW-1/A of Mr. Wadi Singh Ahlluwalia-partner of complainant firm and relied upon documents Ex.C-1 to Ex.C-17 towards affirmative evidence of complainant and closed complainant’s evidence through his statement dated 20.12.2022. Written submissions were also filed by learned counsel for complainant and besides that; learned counsel for complainant has also addressed oral arguments on 16.11.2023.
8. Learned counsel for complainant has urged that pleas raised in complaint have been testified on oath, vide duly sworn affidavit Ex.CW-1/A of partner of complainant. Documentary Evidence Viz. Ex.C-1 to Ex.C-17 substantiate the cause and grief of complainant. It is urged that entire evidence of complainant (Oral and documentary) remain un-rebutted, un-impeached and unchallenged, as defence of OPs were struck off. In wake of these circumstances, it is contended that complainant is entitled to relief as claimed in complaint.
9. Upon giving anxious consideration to all relevant facets which have cropped up in this complaint; this Commission is of opinion that despite the evidence led by complainant remain unchallenged; still complainant is not entitled to any relief against OPs No. 2 & 3. Reason is obvious. Vociferous contention of complainant’s counsel that: OPs No. 2 & 3, in their capacity as manufacturer, have primary liability to refund; the amount of Rs.40.60 lacs to complainant and also to refund amount of Rs.3,35,847/- so received by OP No. 1-dealer from complainant, does not hold ground. May be, OP No. 1 was authorized dealer of OPs No. 2 & 3 on the date of purchase of pre-owned car by complainant, from OP No.1, yet liability of OPs No. 2 & 3 will not be co-extensive and vicarious with liability of OP No. 1. There is no evidence on record that amount of Rs.40.60 lacs received by OP No. 1 from complainant towards sale of pre-owned Audi A6 car No. HR-26DC-0884, was ever transferred in the account of OPs No. 2 & 3. More so, admittedly it was not a new car sold by OP No. 1 in its capacity as authorized dealer of OPs No. 2 & 3. There could be some liability of OPs No. 2 & 3 (manufacturer), at legal pedestal, had OP No. 1 (dealer) failed to deliver possession of new car to complainant, despite receiving consideration money for it. On 09.08.2017, when complainant purchased pre-owned Audi A6 car from OP No. 1 who was retailer of OPs No. 2 & 3, by paying Rs.40.60 lacs; OP No. 1-Zenica Cars India Pvt. Ltd. was its registered owner as it is so evident from registration certificate Ex.C-17 meant for Car No. HR-26DC-0884. Thus, contention of complainant that OP No. 1-dealer had acted on behalf of OPs No. 2 & 3 is bereft of credence. There is absolutely, no privity of contract between complainant and OP’s No. 2 and 3. Hence, there cannot be any vicarious liability upon OPs No. 2 & 3, for a transaction of sale of pre-owned Audi A-6 car No.HR-26DC-0884, allegedly conducted by OP No.1 with complainant on 09.08.2017, in which OP’s No. 2 and 3 were not involved, in any manner. Complainant was not a rustic villager. It must have known all niceties of law. Once, having parted with Rs.40.60 lacs in favour of OP No.1, while purchasing pre-owned Audi A-6 car from OP No. 1 on making down payment of Rs. 40.60 lacs; complainant should have ensured for itself that all necessary documents meant for transfer of car are executed promptly, in its favour by OP No. 1. Pre-owned Audi A6 Car was booked and purchased on 24.07.2017 and 09.08.2017 respectively. OP No. 1 ceased to be authorized dealer of OPs No. 2 & 3 with effect from 05.09.2018. Intervening one year period was enough time, available at the helm of complainant, to get the vehicle transferred in its name from OP No.1 by adopting appropriate means. May be, these means could be coercive in nature. Curiously enough, from the text of complaint and from duly sworn affidavit Ex.CW1/A of complainant, tendered towards its evidence, it is visible that: no effective step, much less any conceive step was taken during this period towards getting the vehicle transferred. It was also required for complainant to ensure that money paid by him to OP No.1 must have been utilized by it (OP No.1) for clearing hypothecation of purchased car, in order to pave a safe way for ensuring its transfer in its (complainant’s) favour. These acts are usually and normally performed in any scenario of sale/purchase of any pre-owned vehicle and could be no exception so far as facts of this complaint are concerned.
10. Even if, OPs No. 2 & 3 had demanded certain documents from complainant vide e-mails dated 05.08.2019-Ex.C-15 & Ex.C-16, still by showing their goodwill gesture with a positive intention to help and mitigate the suffering of complainant; OPs No. 2 & 3 cannot be found faulty, even remotely. Complainant cannot be allowed to use halter around the neck of OPs No. 2 & 3, once OPs No. 2 & 3 have absolutely no authority, domain and supervisory control over working of OP No. 1, regarding sale of pre-owned cars, as it is so reflected from facts of present case. As a sequel to these observations, it is held that no liability can be fastened upon OPs No. 2 & 3. This being so, this complaint is dismissed qua OPs No. 2 & 3.
11. It is proved from evidence brought on record, (oral as well as documentary) that: complainant had paid Rs.40.60 lacs, while purchasing pre-owned Audi A6 Car No. HR-26DC-0884, from OP No.1. It is also proved from evidence of complainant that possession of pre-owned Audi Car was delivered to complainant by OP No. 1 on 12.08.2017 vide delivery receipt Ex.C-5. On the day of sale of this pre-owned Audi A-6 car to complainant by OP No. 1, and also on the day of delivery of its possession to complainant; OP No. 1 was admittedly its registered owner as per registration certificate Ex.C-17. In backdrop of these facts, it was contractual and legal obligation upon OP No. 1-dealer to ensure that vehicle sold by it, should be transferred in the name of buyer-complainant, and prior thereto; the charge created over this vehicle through its hypothecation with Federal Bank is set off by paying the amount due to bank. Since OP No. 1, has miserably failed in this regard and had not honoured its contractual and legal obligation towards complainant and instead, eventually ceased to be a dealer of OPs No.2 & 3 therefore, there is proved gross deficiency and unfair trade practice on part of OP No. 1 towards complainant, for which complainant deserves to be compensated. Nothing can be more vulnerable for complainant than this situation in which he has been made to land. He had purchased pre-owned Audi A6 car, owned by OP No. 1 for consideration, but still has not become its registered owner. Even, he has not become insured of this vehicle. All these have happened to complainant, because of inept attitude of OP No. 1 who has created all types of
sordid conditions before complainant. Hence, complainant is entitled to relief from OP No.1. Accordingly, this complaint is allowed, in favour of complainant and against OP No.1-Zenica Cars India Pvt. Ltd. only. Direction is hereby issued against OP No.1-Zenica Cars India Pvt. Ltd. to refund Rs.40.60 lacs (Rupees Forty Lacs Sixty Thousand) received by it from complainant towards sale consideration, at the time of selling pre-owned Audi A6 Car No.HR-26DC-0884 to him with interest @ 9% p.a., from date of payment of this amount (40.60 Lacs.), till its realization. Likewise, further direction is issued against OP No. 1-Zenica Cars India Pvt. Ltd. to refund Rs.3,35,847/- along with interest @ 9% p.a. from the date of payment of this amount till actual realization. Consolidated amount of Rs.25,000/- is awarded to complainant as flowing compensation for suffering mental tension, harassment and agony on account of misdeeds of OP No.1, as well as, for litigation expenses. It is made clear that this amount of Rs.25,000/- as compensation will not carry any interest. Aforesaid directions issued against OP No. 1-Zenica Cars India Pvt. Ltd. are to be complied by it within a period of three months from date of this order, failing which, the rate of interest would escalate from 9% to 12% p.a.
12. Application(s) pending, if any stand disposed of in terms of the aforesaid judgment.
13. Copy of this judgment be provided to parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
14. File be consigned to record room.
Date of pronouncement: 21th December, 2023
Naresh Katyal
Judicial Member
Addl. Bench-II
