Chandigarh

StateCommission

A/38/2022

Parshottam Lal - Complainant(s)

Versus

Volkswagem, A.G. C/o Skoda Auto India Pvt. Ltd. - Opp.Party(s)

Vinod Gupta & Mayank Gupta Adv.

30 Jun 2022

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	38 of 2022
Date of Institution	:	21.04.2022
Date of Decision	:	30.06.2022

 

Parshottam Lal s/o Sh. Shivji Ram r/o H.No.2537, Sector 35-C, Chandigarh.

 

……Appellant/Complainant

V e r s u s

1. Volkswagen A.G. c/o M/s Skoda Auto India Pvt. Ltd., Plot No.A-1/1, Five Star, Digital Area, MIDC, Shendra, Tq and District Aurangabad-431201, through its Director.
2. World Class Automobile Pvt. Ltd., 68/3, Najafgarh Road, Near Moti Nagar, New Delhi, through its Director.
3. Lalli Motor India Pvt. Ltd., Plot No.72, Industrial Area, Phase-1, Chandigarh through its Director.

…..Respondents/opposite parties

Present:-             

                             Sh. Vinod Gupta, Advocate for the appellant.

                             Sh. Manish Jain, Advocate for the respondent no.1

                             Respondent no.2 exparte vide order dated 21.04.2022

                             Sh.Devinder Kumar, Advocate for respondent no.3.

 

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Appeal No.	:	19 of 2022
Date of Institution	:	25.02.2022
Date of Decision	:	30.06.2022

Skoda Auto Volkswagen India Pvt. Ltd., 4^th Floor, Silver Utopia, Cardinal Gracious Road, Chakal, Andheri (West), Mumbai-400099

……Appellant/opposite party no.1

V e r s u s

1. Parshottam Lal s/o Sh. Shivji Ram r/o H.No.2537, Sector 35-C, Chandigarh.

…..Respondent no.1/complainant

2. World Class Automobile Pvt. Ltd., 68/3, Najafgarh Road, Near Moti Nagar, New Delhi, through its Director.
3. Lalli Motor India Pvt. Ltd., Plot No.72, Industrial Area, Phase-1, Chandigarh through its authorized person.

…..Respondents no.2 and 3/opposite parties no.2 and 3

Present:-             

                             Sh.Manish Jain, Advocate for the appellant.

                             Sh.Vinod Gupta, Advocate for the respondent no.1

                             Respondent no.2 exparte vide order dated 21.04.2022

                             Sh.Devinder Kumar, Advocate for respondent no.3.

 

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BEFORE:              JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MRS.PADMA PANDEY, MEMBER.

                             MR.RAJESH K. ARYA, MEMBER.

 

PER JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

 

M.A. Nos.298 of 2022 and 177 of 2022:-         

                   Alongwith these appeals, respective applications for condonation of delay of 6 days (in FA No.38 of 2022) and 17 days (in FA No.19 of 2022), in filing the same, have been filed. Arguments on these applications heard. In view of the reasons explained in the applications and also the findings of the Hon’ble Supreme Court of India in Civil  Original  Jurisdiction Miscellaneous  Application No. 21 of 2022 Suo Motu  Writ Petition (c) No.3 of 2020, decided on 10.01.2022, wherein it was held that in    cases   where   the limitation would have expired during the period between 15.02.2020  to 28.02.2022  shall stand excluded, the delay of 6 days (in FA No. 38 of 2022) and 17 days (in FA No.19 of 2022), in filing these respective appeals is condoned. Accordingly, these applications stand allowed and disposed of, accordingly.

2.           Appeal bearing no.38 of 2022 has been filed by the complainant- Parshottam Lal, for enhancement of the relief awarded by the District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (in short the District Commission), vide order dated 27.12.2021, whereby the consumer complaint bearing no.1026 of 2019  was partly allowed and the opposite party no.1- Volkswagen A.G. c/o M/s Skoda Auto India Pvt. Ltd., was directed as under:-

 “……As a sequel to the above discussion, the present consumer complaint succeeds and the same is accordingly partly allowed. OP-1 is directed as under :-

1. to pay a global compensation of ₹6,00,000/- to the complainant towards medical expenses and endangering the life of the complainant and his wife due to non-opening of the air bags as well as for loss of income etc.
2. to pay an amount of ₹1,00,000/- to the complainant as compensation for causing mental agony and harassment to him;
3. to pay ₹10,000/- to the complainant as costs of litigation.

This order be complied with by OP-1 within thirty days from the date of receipt of its certified copy, failing which, it shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 9% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.

Since no deficiency in service, unfair trade practice or manufacturing defect is proved against OPs 2 & 3, therefore, the consumer complaint qua them stands dismissed with no order as to costs. …”

3.           At the same time, cross appeal bearing no.19 of 2022 has been filed by opposite party no.1- Volkswagen A.G. c/o M/s Skoda Auto India Pvt. Ltd., for setting aside the order impugned passed by the District Commission.
4.           Before the District Commission, it was the case of the complainant that he purchased Jetta 2.0 highline TDI, an automatic car from the opposite parties, on making payment of Rs.18,71,800/-.  It was stated that at the time of sale of the said vehicle, it was  told to the complainant that in the event of any accident, occupants sitting therein would be safe as there are 8 balloons/air bags.  The said vehicle met with accident on 03.07.2017 near Ambala Cantt. and got badly damaged. The wife of the complainant received serious multiple injuries as the balloons/air bags of the vehicle did not open.  On 04.07.2017, the vehicle was taken to opposite party no.3-Lalli Motors for repairs and was handed over on 06.11.2017, for which the complainant paid an amount of Rs.5,80,517/- Alleging that non opening of the air bags is a manufacturing defect, the complainant filed consumer complaint before the District Commission.
5.           Notice was issued to the opposite parties. Initially, Sh. Gaurav Bhardwaj, Advocate put in appearance on behalf of opposite party no.1/appellant and the case was adjourned for filing reply and evidence.  However, subsequently, neither the reply and evidence were filed nor anybody put in appearance on behalf of opposite party no.1, as a result whereof, it was proceeded against exparte vide order dated 17.02.2020, by the District Commission.   
6.            Despite deemed service, none put in appearance on behalf of opposite party no.2-World Class Automobile Pvt. Ltd., as a result whereof, it was proceeded against exparte vide order dated 16.12.2019.
7.           Opposite party no.3-Lalli Motor India Pvt. Ltd., in its written version averred that it cannot be held liable to any independent act and omission, if any, committed by other parties; that in the absence of expert evidence, it cannot be alleged by the complainant that the vehicle in question was having any inherent manufacturing defect; that the complainant failed to set out any case against opposite party no.3; that as per manual, the airbags can protect vehicle occupants during frontal and side collisions by reducing the occupants’ movements in the direction of collision. Prayer was made to dismiss the complaint against it.
8.           In the rejoinder filed, the complainant reiterated all the averments contained in his complaint and controverted those contained in written version of opposite party no.3.
9.           The contesting parties led evidence by way of affidavits and documents before the District Commission.
10.           The District Commission after hearing the contesting parties and on going through the material available on record, partly allowed the consumer complaint, as stated above, out of which these appeals have arisen.   
11.           We have heard the contesting parties and gone through the material available on the record; including the written arguments.
12.           In F.A. No.38 of 2022  (Parshottam Lal Vs. Volkswagen A.G. and ors.), Counsel for the appellant-complainant contended with vehemence that since the District Commission came to a definite conclusion that there was a manufacturing defect in the  vehicle in question, as a result whereof, its airbags could not be opened at the time of accident, wherein, his wife sustained multiple injuries; and also the fact that the vehicle remained parked in the workshop for more than four months, as such, it was required of the District Commission to grant compensation keeping in mind all those aspects but it awarded meager compensation of Rs.7 lacs alongwith litigation expenses of Rs.10,000/- which needs to be enhanced.
13.           On the other hand, to defend its case, Counsel for the appellant- Volkswagen A.G. (now Skoda Auto Volkswagen India Pvt. Ltd.) in F.A. No.19 of 2022 raised following contentions:-
    1. that  the appellant has completed the process of merger of three companies, through NCLT order dated 05.09.2019 and it is now known as Skoda Auto Volkswagen India Private Limited;
    2. that when notice was served, there was merger takeover going on and there is highest possibility that the notice was missed by the former entity due to various transitional arrangements;
    3. that due to COVID-19 interactions and coordination between the departments became extremely difficult and that the said act of the appellant is an inadvertent error;
    4. that in the absence of any instructions, Sh.Gaurav Bhardwaj, Advocate put in appearance on behalf of the appellant before the District Commission, and thereafter when he failed to appear, the appellant was wrongly proceeded against exparte;
    5. that it was only through opposite party no.3 that the appellant came to know about passing of the order impugned;
    6. that the vehicle in question was passed through stringent quality and safety tests;
    7. that from the photographs placed on record it is evident that the car has been hit from front as well as rear side, which creates doubt that the accident occurred due to a cow coming in front of it;
    8. that the triggering of airbag system depends on the vehicle deceleration rate caused by the collision and registered by the electronic control unit; and
    9. that the complainant has failed to produce on record any expert evidence to prove that the vehicle suffered any manufacturing defect.
14.           First coming to the contention raised by the appellant- Volkswagen A.G. (now Skoda Auto Volkswagen India Pvt. Ltd.) to the effect on account of completion of process of merger of three companies,  there is highest possibility that the notice of consumer complaint was missed by the former entity due to various transitional arrangements and that due to COVID-19 interactions and coordination between the departments became extremely difficult; it may be stated here that perusal of record reveals that upon notice, Sh.Gaurav Bhardwaj, Advocate put in appearance on behalf of the appellant before the District Commission on 16.12.2019 and filed his memorandum of appearance. Thereafter also, he appeared on behalf of the appellant on 29.01.2020 and 06.02.2020 and it was only thereafter, when none put in appearance on behalf of the appellant, it was proceeded against exparte vide order dated  17.02.2020. In our considered opinion, it cannot be assumed that an Advocate on its own will file his memo of appearance on behalf of any party, without any instructions, especially, when the receipt of notice of the consumer complaint from the District Commission has not been denied by the appellant. Thus, in our considered opinion the District Commission was right in passing order of exparte against the appellant. 
15.           Now coming to the contentions raised by the appellant to the effect that the complainant failed to prove that the vehicle actually met with an accident with cow or otherwise, it may be stated here that irrespective of the fact that the vehicle in question met with an accident with a cow or otherwise, the photographs of the accidental vehicle placed on record clearly show the damage caused to the said vehicle. Furthermore, it is also coming out from the record that the accidental vehicle was taken to opposite party no.3 for repairs on 04.07.2017 and was finally repaired and ready for delivery vide invoice dated 03.10.2017. It is evident from the said invoice that as many as 58 parts, including hood, cover, headlight, carrier, guide, hinge, deflector, rear apron, tail lights, lid, grille, windshield, bumper, condenser, air duct, member etc., were replaced. Without forceful impact, the vehicle would not have been so badly damaged.  In such circumstances, non-opening of air bags in itself is sufficient to prove manufacturing defect in the vehicle in question.  The District Commission was also right in holding so.
16.           As far as plea taken by Counsel for the appellant that the airbags deploy only when there is severe impact of force and airbags may not deploy if the vehicle collides with cow etc., when full force of the impact is not delivered to the sensors and at the same time,  no expert evidence was produced by the complainant to substantiate any manufacturing defect; it may be stated here that the vehicle in question had been purchased by the complainant for its safety features, but the airbags did not function when required, due to which her wife sustained serious injuries. The impact/force required for triggering the front airbags was not made known to the complainant. Nowhere has the minimum threshold force been quantified and this defence can never be refuted. Highlighting safety features including airbags while selling the car and not elaborating and disclosing the threshold limits for their opening is by itself an unfair trade practice. At the same time, from the photographs placed on record by the complainant, it is evident that the vehicle was damaged extensively. Without forceful impact, the vehicle would not have been so badly damaged. In fact the air bags are meant to protect the driver and the passengers from severe injuries in a frontal or side collision. They are further designed to provide further protection in addition to the primary safety provided by seat belts. In the instant case, the non-functioning of the air bags is a total failure of engineering which could be more fatal, hence it can easily be said that the vehicle, in question, has got major defect, which could be discovered only at the time of such an accident as has happened in the instant case. In our considered opinion, the District Commission has rightly opined that there was no need of expert evidence in the matter, on the face of photographs of the damaged vehicle. 

                   Recently also, similar plea has been negated by the Hon’ble Supreme Court of India in Hyundai Motor India Limited vs Shailendra Bhatnagar, Civil Appeal No.3001 of 2022, decided on APRIL 20, 2022 wherein, the appeal filed by the Hyundai Motor India Limited was rejected, while holding as under:-

 “………6. It is the case of the appellant that the airbag deployment depends on a number of factors including vehicle speed, angle of impact, density and stiffness of vehicles or objects which the vehicle hits in the collision. The vehicle is designed to deploy the front airbags only when an impact is sufficiently severe and when the impact angle is less than 30 degrees from the forward longitudinal axis of the vehicle. Mr. Ahmadi has submitted that the front airbags are not intended to deploy if the impact is from the side or in cases of rear impact or roll over crashes. He has referred to a variety of circumstances in a collision which may not result in deployment of the airbags. He has cited the investigation report to which we have already referred to.

7. Before the Commission, point of limitation was also taken and the appellant wanted the limitation to run from the date of purchase of the vehicle and not the date of the accident. This objection on maintainability has been rightly rejected by both the State Commission and the National Commission. We do not find any error in the view of the respective Commissions on this point. Vehicles are goods within the meaning of Section 2(7) of The Sale of Goods Act, 1930 and they carry implied conditions as to their fitness. That is a statutory mandate and that mandate also operates in respect of goods, whose defect is subject of proceeding in a consumer complaint under the Consumer Protection Act, 1986. In the complaint, it has been pleaded that the respondent had relied on the safety features of the vehicle projected by the manufacturer. In such a situation, the limitation will run from the day the defect surfaces in a case. There is no way by which the nature of defect complained against could be identified in normal circumstances at an earlier date, before the collision took place. In this case, the safety feature of the vehicle fell short of the quality of fitness as was represented by the manufacturer by implication. The National Commission’s view is broadly based on the principle incorporated in Section 16 of the 1930 Act. The defect in this case  ought to be treated to have had surfaced on the date of the accident itself. We quote below the provisions of Section 16 of The Sale of Goods Act, 1930:­ “16. Implied conditions as to quality or fitness.— Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:— (1)Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:

Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose.

(2)Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality:

Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.   (3)An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.

(4)An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.”

8. The question on privity of contract was also raised before the State as also the National Commission and from the decision under appeal we find that this point was raised on the ground that the dealer was not impleaded as a party and there was no contract between the appellant and the respondent consumer. This issue was rejected by both the consumer fora. No argument has been advanced before us on this point and we do not find any error in the reasoning of the National Commission on this point.

9. There are findings of the two fora about the defect in the product sold, in this case being a vehicle. This was sold with front airbags and there was frontal damage. The airbags did not deploy. The accident caused injuries to the respondent. The appellant referred to various portions from the owner’s manual to contend that the impact of the collision was not sufficient to activate the sensor which in turn would have resulted in deployment of the airbags. We would not like to revisit the facts on which findings have been returned by the two fora against the appellant. The State Commission relied on the principle of Res Ipsa Loquitur to affix the liability of the manufacturer as regards defect in the airbag system, having regard to the nature of the collision. The National Commission affirmed this finding referring to certain photographs of the damaged vehicle, which showed substantial frontal damage. In such circumstances, both the aforesaid fora took the view that expert evidence was not necessary in the subject case. Such view cannot be faulted as being unreasonable, in the given facts.

10. We do not find any reason to interfere with the finding of the National Commission. We would like to add here that ordinarily a consumer while purchasing a vehicle with airbags would assume that the same would be deployed whenever there is a collision from the front portion of the vehicle (in respect of front airbags). Both the fora, in their decisions, have highlighted the fact that there was significant damage to the front portion of the vehicle. Deployment of  the airbags ought to have prevented injuries being caused to those travelling in the vehicle, particularly in the front seat. A consumer is not meant to be an expert in physics calculating the impact of a collision on the theories based on velocity and force. In such circumstances, we do not find that there is any error in the findings of the two fora as regards there being defect in the vehicle.

11. We shall now turn to the reliefs granted by the State Commission and upheld by the National Commission. The first point argued in this regard is that there was no prayer in the petition for replacement of the vehicle. This is a case where the 1986 Act was applicable and Section 14 of the said statute lays down the reliefs which may be granted. The directions as per the statute, could be for replacement of defective goods as also punitive damages. The appellant have also taken a point that so far as replacement of the vehicle is concerned, there was no substantive direction and no discussion either. The operative part of the order suffers from a shortcoming on this count, but that is not fatal. On a composite reading of the directions, we find from paragraph 20 of the  Order of the State Commission that such a direction was made. The confusion, if any, arises because of construction defect in the Order of the State Commission. Considering the fact that the dispute is pending for a reasonably long period of time, we have ourselves applied our mind on this issue and our view is that a direction for replacement of the vehicle is justified in the facts of this case. The direction for replacement of the vehicle would not be treated as non­est having regard to paragraph 20 of the State Commission’s Order. The fact that the consumer has got the car repaired on insurance money would not impact the quantum of damages, which is partly punitive in nature in this case.

12. Three cases arising out of motor accident claims were cited before us. In Nagappa v. Gurudayal Singh & Others. [(2003) 2 SCC 274], it was held that there is no restriction that the Tribunal or Court cannot award compensation amount exceeding the claimed amount. Two other authorities were cited before us, by Ms. Tamta, learned counsel for the respondent, being the cases of Sangita Arya and Others v. Oriental Insurance Company Limited and Others  [(2020) 5 SCC 327] and Jitendra Khimshankar Trivedi and Others v. Kasam Daud Kumbhar and Others [(2015) 4 SCC 237]. These two cases lay down the principle of just and reasonable compensation that may be paid. The ratio of these authorities, however, do not directly apply in the facts of this case.

13. The damages awarded against the appellant may have gone beyond the actual loss suffered by the respondent and may not represent the actual loss suffered by him in monetary terms. But the provision of Section 14 of the 1986 Act permits awarding punitive damages. Such damages, in our view, can be awarded in the event the defect is found to have the potential to cause serious injury or major loss to the consumer, particularly in respect of safety features of a vehicle. For instance, defective safety feature in a vehicle has to be distinguished from a dysfunctional “courtesy light”. The manufacturer should be under strict and absolute liability in respect of the latter. Compensation in the form of punitive damages ought to have a deterrent effect. We also refer to  the principles detailing the factors guiding quantification of liability laid down by a Constitution Bench of this Court in the case of M.C. Mehta and Another v. Union of India and Others [(1987) 1 SCC 395]. In this case it has been opined:­ “32. We would also like to point out that the measure of compensation in the kind of cases referred to in the preceding paragraph must be corelated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect. The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.”

14. The aforesaid decision arose out of a case involving the death of an individual and injuries to several others in an industrial accident. But in our opinion, in the subject dispute also the same principle can be extended. We are dealing with a case where in a collision, the airbags did not deploy. The complainant, driving the vehicle, suffered substantial injuries as a result thereof. The impact of the collision was such that it would have been reasonable for the respondent to assume that there would have been deployment of the airbags. The safety description of the goods fell short of its  expected quality. The content of the owners’ manual does not carry any material from which the owner of a vehicle could be alerted that in a collision of this nature, the airbags would not deploy. Purchase decision of the respondent­ complainant was largely made on the basis of representation of the safety features of the vehicle. The failure to provide an airbag system which would meet the safety standards as perceived by a car­ buyer of reasonable prudence, in our view, should be subject to punitive damages which can have deterrent effect. And in computing such punitive damages, the capacity of the manufacturing enterprise should also be a factor. There was no specific exclusion clause to insulate the manufacturer from claim of damages of this nature. Even if there were such a clause, legality thereof could be open to legal scrutiny. But there is no reason for dilating on that aspect in this case. That question doesn’t arise here.

15. If the reliefs granted in a consumer complaint fits any of the statutory provision contained in sub clause (1) of Section 14 of the Act, it would be well within the power and jurisdiction of the Forum to pass directions irrespective of the fact as to whether specifically certain reliefs have been claimed or not, provided that facts make out foundations for granting such reliefs. In any event, it is within the jurisdiction of the said forum to mould the reliefs claimed to do effective justice, provided the relief comes within the stipulation of Section 14(1) of the Act. We find that the relief granted to the respondent comes within the statutory framework. We accordingly do not want to interfere with the decision of the National Commission. We do not find the reasoning of the Commission or the operative part of the order awarding damages to be perverse. We do not need the aid of the ratio of the three authorities cited before us pertaining to motor accident claim to sustain the decision under appeal. We are also of the view that the directions issued against the appellant by the State Commission and upheld by the National Commission cannot be said to have failed the test of proportionality. We hold so as we find the subject­ defect to be of such nature that the provisions relating to punitive damages ought to be attracted against the appellant.

16. We accordingly dismiss the appeal. Interim order passed in this matter shall stand dissolved.….”

17.           As far as plea taken by Counsel for the appellant in F.A. No.38 of 2022 regarding enhancement of compensation awarded by the District Commission is concerned, it may be stated here that we are of the considered view that an amount of Rs.7 lacs i.e. Rs.6,00,000/- towards medical expenses and endangering the life of the complainant and his wife due to non-opening of the air bags as well as for loss of income etc. and Rs.1,00,000/- for causing mental agony and harassment, awarded by the District Commission in favour of the complainant cannot be said to be meager, especially, when it is the case of the complainant that fortunately, he and his wife are safe, though she sustained injuries in the said accident.  Thus, no case is made out by the complainant for enhancement of compensation already awarded by the District Commission.
18.           In view of the above discussion, it is held that the impugned order passed by the District Commission, being based on the correct appreciation of evidence and law on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission and the same stands upheld.
19.           For the reasons recorded above, both these appeals being devoid of merit must fail and the same stand dismissed with no order as to costs.
20.           Certified copies of this order be sent to the parties, free of charge and one copy thereof be placed in the connected case file.
21.           The concerned files be consigned to Record Room, after completion.

Pronounced

30.06.2022

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

 

Sd/-

 (RAJESH K. ARYA)

MEMBER

Rg