Order No. 13 date: 21-07-2017

Sri Shyamal Gupta, Member

By this Appellant, Managing Director, Hyundai Motor India Ltd. has challenged the Order dated 10-09-2014 passed by the Ld. District Forum, Howrah in C.C. No. 299/2013.

Brief facts of the complaint case are that on 14-08-2012, Complainant booked one car with the OP No. 1 and paid a sum of Rs. 10,000/- as advance.  On 28-08-2012, the Complainant paid rest amount of Rs. 6,37,142/-.  However, the OP No. 1 did not deliver the car despite repeated requests of the Complainant for long.  Thereafter, after the intervention of SP, Howrah, though the car was delivered on 04-03-2013, the OP No. 1 withheld original car related papers.  In absence of requisite papers in original till date, the Complainant is unable to use the car. In such circumstances, Complainant filed the complainant before the Ld. District Forum.

OP No. 2, by submitting its WV before the Ld. District Forum stated that this OP operates with all its dealers, including the OP No. 1, on a principal-to-principal basis and errors/omission, if any, at the time of retailing or servicing of the car is the sole responsibility of the concerned dealer.  It is further stated that the liability of this OP, being the manufacturer of the car in question, is limited and extends to its warranty obligations and error/omission/misrepresentation, if any, at the time of retail sales or services of the car on the part of the dealer cannot be fastened upon this OP.  Also it is stated that cars are purchased by the concerned dealers such as the OP No. 1 from this OP against payment and thereafter, the purchased cars are sold by the dealer to customers. Insofar as no allegation has been made against this OP by the Complainant, it prayed for dismissal of the case against it.

Decision with reasons

The moot point for consideration in this Appeal is whether Principal can be vicariously held responsible for any act of omission or commission on the part of the dealer at the time of retailing a car.

Normally, one is solely responsible for one’s wrongful acts and another person does not incur any liability for the acts of others.  In certain cases, however, vicarious liability, that is the liability of one person for the act of another person may arise.

Generally, vicarious liability is applicable in the following case scenario: (1) Liability of the principal for the tort of his agent (2) Liability of partners of each other’s tort; (3) liability of the master for the tort of his servant.

In this case, the Respondent No. 2 happens to be the dealer of the Appellant.  Now, let us see whether the Respondent No. 2 can be treated either as an agent or a partner or a servant of the manufacturer.  Needless to say, a dealer cannot be equated with either a partner or a servant of the manufacturer.  So, let us see now if there is any difference between an agent vis-à-vis a dealer.

Agent is a person who markets a third party product for a fixed.  He does not take ownership of the goods.  On the other hand, dealer is a person who retails the product for a company directly from a retail outlet.  Unlike an agent, a dealer is the Principal, who buys products from the manufacturer. 

The above difference makes it amply clear that a dealer cannot be classified as an agent.  It appears that the Ld. District Forum somehow blurred the basic difference between an agent and a dealer which is why it held both the Appellant as well as the Respondent No. 2 jointly and severally liable for the sufferings of the Respondent No. 1.

There is no dispute as to the fact that the Appellant works with the Respondent No. 2 on a principal-to-principal basis and not on principal-to-agent basis.  Further, it is also not in dispute that the Respondent No. 2 sold the car in question after purchasing the same from the Appellant.  It is nobody’s case that the Appellant was responsible in any manner for the delayed supply of car or non-delivery of requisite car related papers.  Both being the handwork of the Respondent No. 2 and given that the manufacturer cannot be held responsible for errors/omissions/commissions/ misrepresentation on the part of the dealer at the time of retailing of the car, to our mind, it would be unfair to hold the Appellant for the misfortune of the Respondent No. 1.

The Appeal, thus, succeeds.

Hence,

O R D E R E D

That A/1348/2014 be and the same is allowed on contest against the Respondent No. 1.  The Respondent No. 1 is hereby exonerated of all liability to comply with the impugned order.  The impugned order stands modified accordingly.  Parties do bear their respective costs.