FA no.179 of 2018

For the Appellant                 Mr Purushottam Sharma Tripathi,

                                        And Mr Abhishek Gupta, Advocates

For the Respondents            Mr Rishi K S Gautam, Advocate for R 1

                                        Ms Ekta Bhasin, Advocate

                                        Mr Sanidhya Sonthalia, Advocate for

                                        R 2 and 3

FA no.253 of 2018

For the Appellant                 Ms Ekta Bhasin Advocate and

                                         Mr Sanidhya Sonthalia, Advocate

For the Respondents            Mr Rishi K S Gautam, Advocate for R 1

                                         Mr Abhishek Gupta, Advocate for R 2

ORDER

PER SUBHASH CHANDRA

1.          The present first appeal has been filed under section 19 read with section 21 (a) (ii) of the Consumer Protection Act, 1986 against the judgment dated 30.11.2017 passed by the State Consumer Disputes Redressal Commission, Circuit Bench Jodhpur, Rajasthan (in short, ‘the State Commission’) in Complaint no. 10 of 2013, whereby the complaint of the complainant was allowed by the State Commission.

2.     In view of the fact that both the appeals emanate from the same order, they are proposed to be disposed of by way of a common order. For the sake of convenience, FA no.179 of 2018 is taken as the lead case.

3.      The brief facts of the case are that the appellant Kamal Autotech Pvt. Ltd., is an authorised dealer of Audi cars in Rajasthan under the name of ‘Audi Jaipur’, having its showroom and service centre in Jaipur. Respondent no.2 Audi India was established in March 2007 as a division of Volkswagen Group Sales India. Since September 2007, the Audi India uses the manufacturing facilities of respondent no.3 – Skoda Auto India Private Limited in Aurangabad, Maharashtra to assemble the exclusive models of Audi India viz.,: Audi A3, Audi A4, Audi 6, Audi Q3 and Audi Q7. The remaining models are imported attracting heavy import duty and customs.

4.     On 22.03.2012, respondent no.1 (Shri Bikramjit Singh Bakshi), proprietor of Rustic Art Exports, Jodhpur purchased an Audi A4, TDI Premium bearing chassis no. WAUZMB8K1CY701002, Engine no. CME003807, Colour IBIS White, RC no. RJ 19 CD 3737 for a sum of Rs.27,00,000/-. The warranty condition accompanying the invoice specifically excluded normal wear and tear and damage caused by abnormally rough or improper use or improper modifications.

5.     Respondent no.1 on 31.10.2012 after running the Audi A4 car for 7825 kms in 7 months, brought to the notice of the appellant that the car had low coolant and demanded repair of the same. Upon inspection of the car by the Audi Technical Team it was opined that Exhaust Gas Recirculation (EGR) Cooler and Valve had developed problems and needed replacement. The EGR system recirculates exhaust gases back into the engine in order to decrease cylinder temperatures and nitrogen oxide emissions.  The EGR cooler is a component used to lower the temperature of the exhaust gases that are recirculated by the EGR system. On 21.12.2012, the EGR system of respondent no.1’s Audi Car had developed defects. The appellant dealership exchanged the car with a brand new Audi A 4, 2.0 TDI Premium Model Car from the appellant’s showroom in Jaipur bearing Chassis no. WAUZJC8K8DY701255, Engine No.CMF002378, Colour IBIS White, RC no. RJ 19 CD 5757 without any additional charge and issued a fresh invoice for the new car.

6.     After using the new Audi A4 Car from 14.06.2013 to 22.06.2013 for 6,068 kms in 6 months, respondent no.1 brought to the notice of appellant that the car had ‘white smoke is coming from silencer and coolant is low’ of the car and demanded repair of the same. The Audi Technical Team inspected  the vehicle and subjected it to the Guided Fault Functions (GFF) Test which is a PC based diagnostic systems for AUDI vehicle which utilize a Bluetooth/USB VCI (vehicle communication interface), the VAS 5054A to connect the vehicle and perform guided diagnostics.  The inspection team noted the following problems namely; (i) fuel injector pipe (which introduced fuel under pressure into the combustion system of the engine) had developed problem and was to be changed; (ii) the throttle value (value to regulate the air or mixture supply for combustion in the engine) had developed problem and was to be changed; (iii) the Rail pipe in the engine (connecting pipe) had developed a problem and needed to be repaired; (iv) Exhaust Gas Recirculation (EGR) pipe (which controls Nitrogen Oxide (NOx) emissions from the engine and its recirculation to the engine cylinders) had developed problem and needed replacement; and (v) the EGR Coolant had to be replaced.

7.     As the vehicle was in warranty period, the appellant company carried out the necessary repairs amounting to Rs.59,100/- free of charge and handed over the car to respondent no.1. Again on 01.07.2013, respondent no.1 brought to the notice of the appellant that the car had again developed the same problem i.e., ‘white smoke is coming from the vehicle and coolant is low”. Upon receiving the car in its workshop on 02.07.2013, the Audi Technical team detected the same problem as diagnosed earlier. To diagnose the root cause of the repeated breakdown of the vehicle, a comprehensive examination of the respondent no.1’s car was undertaken with the engine being dismantled and reassembled and the entire fuel line (pipe carrying fuel from the fuel tank to the engine) was examined. On preliminary examination undertaken by the Technical Team of the Audi came to the conclusion that the fuel (diesel) used in the car was adulterated/ contaminated fuel thereby damaging the EGR system of the vehicle which had also affected the optimal running of the diesel engine. The appellant collected the sample fuel from the car of the respondent no.1 and sent the same for a detailed/ comprehensive and scientific examination by an independent expert. On 02.07.2013, the appellant provided a courtesy Audi Car to respondent no.1 with a chauffeur for temporary use, during the period the respondent no.1’s car was under repair. On 03.07.2013, the appellant sent the fuel (diesel) found in the car to respondent no.2 Audi India which in turn submitted the fuel sample with SGS Oil Gas and Chemicals for testing and analysis. On 05.07.2013, the SGS Oil, Gas and Chemical conducted the analysis of the fuel sample collected from the car of respondent no.1 and found that the fuel used in the said car was adulterated with an inordinately high level of Sulphur Content of 310 mg/kg as opposed to the maximum permissible limit of 50 mg/kg as per the Bureau of Indian Standards (BIS).

8.     On 06.07.2013, in response to the respondent’s e-mail dated 02.07.2013, complaining of defective vehicle was supplied to respondent no.1 by the appellant, it was inspected by the Audi Technical team along with the Technical Team of Audi India and found that adulterated fuel was being used in the car and it was not a manufacturing defect. On 28.07.2013, the appellant informed respondent no.1 about the progress of repairs under taken on his car. It was also informed that the base engine needed to be replaced which was under process.  On 31.07.2013, after carrying out the necessary repairs/ replacement of the EGR system and engine amounting to Rs.7,44,697/- free of charge, appellant sought respondent no.1’s approval for the delivery of the vehicle. On 02.08.2013, since respondent no.1’s car was duly repaired by the appellant free of charge and the respondent no.1 duly informed, appellant recalled the chauffer driven car and requested the respondent no.1 to hand over the courtesy car and take delivery of his own car. On 05.08.2013, the appellant sent a reminder e-mail to respondent no.1 requesting him to take delivery of his car. However, there was no response from respondent no.1. Again on 08.08.2013, the appellant sent another e-mail to respondent no.1 to take delivery of his car to avoid parking charges. On 16.08.2012, the appellant reminded respondent no.1 to take the delivery of his car otherwise parking charges would be attracted, as the vehicle was ready since 31.07.2013. On 23.08.2013, instead of taking the delivery of the car, the respondent no.1 levelled unsubstantiated accusation that the EGR valves of the Audi A4 Model Cars sold in India were defective and claimed replacement of his car with a brand new car of the same of higher model and compensation.  Respondent no.1, instead of accepting the Fuel Test Analysis report conducted by an International Expert (SGS Oil, Gas and Chemicals), refuted the same by contending that respondent no.1 was using the same quality fuel (diesel) in his other three vehicles, i.e., Toyota Innova, Toyota Fortuner and Maruti Swift. According to the appellant the respondent failed to appreciate that the Audi range of vehicles was based on Euro V standard for fuel consumption. Appellant sent numerous reminders to respondent no.1 to take back his car but there was no response from respondent no.1. Instead, respondent no.1 filed a Consumer Complaint no.10 of 2013 before the State Commission alleging sale of defective goods and deficiency in service on the part of the appellant dealership seeking direction to replace the Audi 4 with a brand new Audi A4 or higher model car, pay damages quantified at Rs.2.00 lakh for deficiency in service, Rs.2,50,000/- towards damages for loss of time due to defective car, Rs.3,50,000/- towards loss caused due to payment of monthly instalment for the car purchased by him, Rs.5.00 lakh towards wrong attribution of adulterated diesel, Rs.10.00 lakh towards damages for loss of reputation, Rs.16,20,589/- towards reimbursement of cost of a new Toyota Innova Car purchased by him and Rs.50,000/- towards litigation cost. 

9.     The complaint was contested by the appellant/dealer by refuting all the submissions by a written statement. After hearing the learned counsel for the parties, the State Commission vide impugned order dated 30.11.2017 allowed the complaint of the complainant and ordered as under:

By allowing the complaint of the complainant, the defendants are directed that they should replace the Audi Car number RJ 19 CD 5757 with a new car and gave to the complainant. If they do not give the new car, then they should make the payment of the price of the car of the equivalent model. For the mental suffering which the complainant has undergone unnecessarily, the purchase of the car by taking a loan from the bank and the same to be found to be defective, levelling of the counter allegation that the car has become defective due to use of the defective fuel and causing bad impression among the society due to breakdown of the car on the road, keeping all these circumstances in view, the respondents should pay the sum of Rs.10,00,000/- and the suit expenses of Rs.50,000/- to the complainant from the date of filing of the suit on 25.10.2013 to the date of payment.

10.   The appellant has filed this present appeal before this Commission with the prayer to:

1. Set aside the impugned judgment and order dated 30.11.2017 passed by the State Commission, Circuit Bench Jodhpur in complaint no.10 of 2013; and
2. Declare that the appellant were not guilty of either sale of defective Audi A 4 Car (RC no. RJ 19 CD 3737) to the respondent no.1 nor guilty of deficiency in service with respect to after sales services of the said car; and
3. Pass any other or further orders as may be deemed fit and proper in the circumstances of the case.

11.   We have heard the learned counsel for both the parties and perused the records carefully.

12.   Learned counsel for the appellant has contended that on 22.03.2012, Audi A4 Car was sold to respondent no.1 for Rs.27 lakh (RJ 19 CD 3737). The appellant submitted that the warranty conditions specifically excluded damage caused by abnormally rough or improper use or improper modifications and as per the manual of instructions specified that use of sulphur free diesel complying with ENS 90 standard was recommended. Learned counsel for the appellant submits that the car broke down after seven months of running after 7825 kms on 30.10.2012. From 30.10.2012 to 02.11.2012, the Audi Technical team diagnosed the car and found that there was a problem in the exhaust Gas Recirculation (EGR) Cooler and Valve which needed replacement. Learned counsel further submits that on 21.12.2012, the appellant replaced the Audi A4 Car with a new Audi A4 car (RJ 19 CD 5757) without any additional charge and issued a fresh invoice for the new car. Again on 14.06.2013, the second car also broke down after six months of running for 6068 kms. Between 14.06.2012 to 22.06.2013, the Audi Technical team diagnosed the problem faced in the car and replaced the part worth Rs.59,100/- without any charge. Learned counsel for the appellant further submitted that on 02.07.2013 the car again broke down with the same problem. The Audi team diagnosed and rectified the car for Rs.7,44,697/- and bore the costs. On 02.07.2013 a chauffeur driven car was also provided to respondent no.1 for temporary use. Learned counsel for the appellant submits that on 06.07.2013, respondent no.1 was informed that the damage to the EGR System of the vehicle was due to the adulterated fuel used in the car and was not a manufacturing defect. Hence, repair/ replacement was not subject to any warranty condition.

13.   Learned counsel for appellant submitted that on 31.07.2013, the appellant had conducted the necessary repairs/ replacement of the EGR system and engine amounting to Rs.7,44,697/- free of charge. On 05.08.2013, the appellant sent an email to the respondent no.1 asking him to take delivery of his car which was ready for delivery on 31.08.2013. Learned counsel for the appellant submits that the failure of the engine was due to adulterated fuel and was not covered under warranty, yet the base engine and other parts were replaced free of cost to respondent no.1. On 08.08.2013, the appellant sent another e-mail to respondent no.1, requesting him to take delivery of his car and to avoid parking charges, but instead of taking delivery of the car, the respondent no.1 on 23.08.2013 levelled a false and unsubstantiated accusation that the EGR value of the Audi A4 Model Cars sold in India were defective and claimed replacement of his car with a brand new car of the same and higher model and compensation. Learned counsel for the appellants submits that, respondent no.1 was reminded through letters dated 02.09.2013, 22.09.2013 and 31.10.2013 to take back his car, but no response was received from the respondent no.1.

14.   It is contended by the appellant that respondent no.1 has failed to show any evidence whatsoever to prove any manufacturing defect in the vehicle. To prove such a defect, opinion of an expert is necessary which was not forthcoming in the present case. Learned counsel for the appellant has relied upon the following judgments of this Commission (i) Maruti Udyog Ltd., vs Hasmukh Lakshmichand (RP no. 827 of 2004 decided on 26.05.2009; (ii) General Motors India (Pvt) Ltd., and Anr. vs G S Fertilizers (P) Ltd., and Ors., (FA no. 723, 726 of 2006, decided on 07.02.2013); (iii) Raja Bala vs M D Skoda Auto India Pvt. Ltd., and Anr. (RP no.4803 of 2012 decided on 23.10.2013); and (iv) Sushila Automobiles Pvt. Ltd, vs Dr Birendra Narain Prasad and Ors., (RP no.1652 of 2006 decided on 07.05.2010). Learned counsel for the appellant also relied upon the judgment of the Hon’ble Supreme Court in Maruti Udyog Ltd., vs Susheel Kumar Gabgotra and Another (2006) 4 SCC 644, wherein it was held that even where defects in various parts of a car are established, direction for replacement of the car would not be justified. Replacement of the entire item or replacements of defective parts are only called for. Hence, the learned counsel prays that the present appeal be allowed and the impugned order dated 30.11.2017 passed by the State Commission be set aside.

15.   Per contra, learned counsel for respondent no.1 contended that on 22.03.2012, respondent no.1 purchased an Audi A4 Car from the appellant who was the dealer of respondent no.2 company. Within six months i.e., on 31.10.2012, the car suffered engine failure because of low coolant problem and thereafter the car was sent to the workshop. On 21.12.2012, the car was in warranty and the issue was caused due to the manufacturing defect and the appellant and respondent no.3 replaced the car with a brand new car of the same model and make bearing registration no. RJ 19 CD 5757. Learned counsel for the appellant submits that the warranty charge and the insurance amount of the new car were paid by the appellant whereas the road tax for the new car was shared equally by respondent no.1 and the appellant. Learned counsel for respondent no.1 submits that the new car developed a problem in the engine and started consuming excessive oil and emitting thick white smoke. On 22.06.2013, the car was delivered back to the respondent no.1 after rectification of the problem. Again on 27.06.2013, the car was returned to the workshop with same problem of low coolant. Learned counsel for respondent no.1 submitted that the brand new car was also having the same defects since beginning. Learned counsel for respondent no.1 states that after keeping the car for 10 days, the appellant informed him on 06.07.2013 that the damage to the EGR components and the engine was due to the use of adulterated fuel. The respondent no.1 replied to the appellant stating that the respondent no.1 had been using the same fuel for all his other cars from the same petrol pump and requested to replace the new car. Learned counsel for respondent no.1 has prayed that the appeal be dismissed and the order of the State Commission upheld with direction to the appellant to deliver a brand new car of the same or similar make and model as that of the exchanged car to respondent no.1 or, in the alternative, to refund the price of the car as mentioned in the invoice along with interest.

16.   From the foregoing it is seen that there is no dispute with regard to the facts of the case in so far as relating to the purchase, breakdown, repair and replacement of the first vehicle and thereafter the repairs to the replacement of the vehicle provided by the appellant. The case of the appellant is that the vehicle developed defects on account of use of adulterated/ inappropriate grade of fuel by respondent no.1 which does not conform to the grade fuel that had been recommended as per the manual instructions of the vehicle. It has also relied upon the test of the fuel used as test of internationally accredited laboratory to contend that the cause of the breakdown of the vehicle was on account of use of adulterated/ inappropriate grade of fuel by respondent no.1. It is also evident that while the appellant had replaced the first vehicle even after it had covered nearly 7000 kms and it also undertaken to repair and replacement of parts of the second vehicle after it had covered nearly 6800 kms.

17.   The issue which calls for consideration is whether the impugned order in directing replacement of the car in question with a new car or in the alternative to make payment of the price of the car equivalent to the model along with compensation for mental suffering of Rs.10.00 lakh and litigation cost of Rs.50,000/- is correct.

18.   As per Section 13 (1) ( c) of the Act relates to the procedure to obtain an expert opinion. The said section reads as follow:

        13.     Procedure on admission of complaint:

          (i)      The District Forum shall, (on admission of a complaint), if it relates to any goods-------

          (a)     ……………….

          (b)     ………………

          (c )    where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it an authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;

19.   In the instant case, the State Commission has directed replacement of the vehicle without establishing whether the vehicle in question suffered from a manufacturing defect as provided under the Act and directed its replacement by the appellant and without establishing the facts of the nature of manufacturing defect. There is also no finding on the basis of any technical input to establish that the fuel used by the respondent conformed to the grade/ standard of fuel as per the instructions of the manual issued with the car which has been established by the appellant to be different as per a lab report. No finding has been made available to contradict the report of SGS lab which had examined the grade of fuel. Admittedly, the respondent had been using a grade fuel (diesel) which he was using for other vehicles owned by him which was not in the same grade as required for luxury car in question. Even if the report of M/s SGS regarding fuel grade were to be disregarded, in the absence of any expert opinion being obtained to establish manufacturing defect under section 13 (i) (c) of the Act, the conclusion of the State Commission that the vehicle itself be replaced or that equivalent cost of a similar model be given to the respondent cannot be sustained since the requirements of Section 13 (1) (c ) have not been met.

20.   For the reasons stated above, the appeal is found to have merit and is accordingly allowed. The order of the State Commission is set aside. Parties shall bear their own costs.

21.   All pending IAs, if any, shall stand disposed of with this order.