NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

CIRCUIT BENCH, KARNATAKA AT BANGALORE

FIRST APPEAL NO. 455 OF 1997
(From the order dated 26.9.1997 in Compl. No. 233 of 1993 of the State Commission, Karnataka)

R. Raja Rao
Versus
M/s. Mysore Auto Agencies & Anr.

Appellant
Respondents

BEFORE:
HONBLE MR. JUSTICE M.B.SHAH, PRESIDENT
MRS. RAJYALAKSHMI RAO, MEMBER.
For the Appellant

Mr. Arvind Kamath, Advocate.

For the Respondent No.1 :

Mr. Mahesh K.V., Advocate.

For the Respondent No.2 :

Mr. P.H.Ramalingam, Advocate.

Dated 27th February, 2006

ORDER
M.B.SHAH, J. PRESIDENT

If the frustrated (consumer) purchaser of a vehicle is forced to

hand over the vehicle to the dealer/manufacturer on the ground that it is
required to be repaired every now and then within a few days of its purchase,
can it be said that he shall be deprived of refund of the amount spent by him
for the purchase the vehicle?
Obvious answer is the vehicle should be replaced or the amount
should be refunded. Reason being, the defective vehicle would not give the
satisfaction of a new vehicle.

Further, that after purchase of the new car, if a person is required

to visit garage for repair of the car regularly, it would be a frustrating and
annoying experience. It is also rightly pointed out that various tempting
advertisements are issued for marketing such cars and if the car is found to be
defective requiring regular repairs, there would be total mental dissatisfaction
of purchasing a new vehicle.
Facts in short:

Appellant is the Complainant before the State Commission.

On 27.1.1993 he had purchased a Swaraj Mazda, a light

commercial

vehicle

form

the

Opposite

Party

No.1,

M/s. Mysore Auto Agencies and paid Rs.3,68,729/- towards its

consideration.

Warranty was for 12 months from the date of its purchase,

i.e. 4.2.1993.

The vehicle started giving troubles within a few days of its

purchase.

It was sent to the Opposite Party No.1 (dealer) for repairs for
thrice, i.e. on 6.3.1993, 9.3.1993 and 15.3.1993.

As there was no improvement, the Complainant had his

vehicle

checked

up

with

M/s.

K.H.T.

Agencies Pvt.

Ltd., Bangalore, who had opined that that the vehicle needed
major repairs, because there was mixing of the engine oil with

diesel oil and seizing of the nozzle. Again on 28.7.1993, the

Complainant took the vehicle to the Opposite Party No.1 for
necessary repairs.

As there was no improvement, the Complainant had to

deliver back the vehicle to the Opposite Party No.1 on
27.8.1993.

Then, on 6.9.1993 a legal notice was issued to the Opposite

Parties for replacing the defective vehicle with a new vehicle.

By letter dated 18.9.1993 the Opposite Party No.1 refused to

comply with the terms of the legal notice.

Thereafter, the Appellant visited the office of the Opposite

Parties for a number of times. As the vehicle had serious
manufacturing defects he had issued a notice to the Opposite
Parties to return the cost of the vehicle along with a sum of
Rs.1 lakh for loss and damages, or supply a new vehicle with
the said amount of Rs.1 lakh.

The Appellant further states that he had availed himself of

loan facility from Corporation Bank of Mandya Brnach of
Karnataka, for the purchase of the vehicle and he was liable to
pay interest at the rate of 24.75% and the said bank was likely
to initiate recovery proceedings.

Hence the Appellant approached the State Commission by

filing Complaint No. 233 of 1993.

When the complaint was pending in the State Commission,

Prof. Badrinath was appointed as a Commissioner for the

inspection of the vehicle. He had conducted inspection on
25.7.1996 and submitted his report on 1.8.1996. He opined
that if on test running the diesel oil and the engine oil are
mixing, it will be a serious defect in the engine.

The State Commission dismissed the complaint by order

dated 26.9.1997.

Hence, the Complainant has come in appeal before this

Commission.

Defence of the O.P.No.1(Dealer)

1.

The Complainant is not a self-employed transporter and he does not

drive the vehicle.

2.

Because of repeated requests made by the complainant with all its

pleas, the company had shown sympathy and extended the warranty as a
special case with a warning to him that he should not mix kerosene with
diesel and not to overload the vehicle.

3.

The vehicle would not have developed problem had it put to use, as per

the conditions stipulated,.

4.

Pistons, rings head, gasket though were worn out on account of

misuse only, but in best interest of the customers, the opposite party replaced
the same.

5.

That the matter cannot be decided unless an expert opinion is sought

from an independent authority or institution.

Defence of Opposite
Manufacturer):

1.

Party

No.2

(Swaraz Mazda

Ltd.,

the

It is contended by the Opposite Party No.2 that the complainant,

contrary to the instructions contained in the Swaraj Mazda Instruction Manual

and Advice of the opposite parties, continued to use the vehicle for
carrying jaggery of 5 tonnes weight. As per written instructions the vehicle
should have been used to carry weight upto 3 3.5 tonnes.

2.

The vehicle cannot be run effectively, if the appellant continues to

mix

diesel with kerosene oil. The Commissioner appointed by the State

Commission, in his report dated 1.8.96, has specifically mentioned about the
use of adulterated diesel, and it resulted in emission of white smoke.

3.

The complainant did not agree to change the tyres despite being

advised to do so by the opposite parties, as the brakes could not function

properly. The Commissioner in its report dated 1.8.96 has clearly noted that
the tyres were worn out.

4.

The complainant took the vehicle on 27.7.1993 for check up to M/s.

KHT Agencies, authorised dealer of Respondent No.2. M/s. KHT Agencies

required

the

complainant

to

change

oil

and

filter

which

he

declined. Therefore, the problems/defects, if any, of the vehicle could not be

rectified on account of refusal by the complainant.

5.

The opposite parties even offered to extend the warranty subject to

the undertaking that the

complainant

would

not

overload

the

vehicle

beyond the permissible limit. The complainant was not ready to desist from
the past practice of overloading the vehicle and use of the adulterated diesel.

6.

By the test run on 20th October, 1993 by the Service Engineer of the

Opposite Party No.2 and the driver of the Opposite party No.1, it was shown
to the satisfaction of the complainant that the vehicle was in perfect working
condition. Even then the complainant refused to take back the vehicle.

7.

That the complainant got his vehicle repaired thrice i.e. on 6.3.1993,

9.3.1993 and 15.3.1993 from the opposite party No.1 and when he was not
satisfied he had got the vehicle checked up at another authorised service
centre, namely, KHT Agencies Pvt. Ltd., authorised dealer of the opposite
party No.2 . M/s. KHT Agencies advised (Ex.C-6) the complainant that
nozzle had seized and the diesel was mixing with engine oil and get the oil
and filter changed. But, the Complainant refused to do so.

The Complainant continued to use the vehicle without rectifying the

problems. Even on 28.7.1993 when the complainant came to the opposite

party No.1, he did not complain of the problems as pointed out by M/s. KHT
Agencies Ltd. and complained only regarding pumps (Ex.C-7). Ex.C-7
shows that the vehicle did not suffer from the problems which the complainant
has complained of in the complainant. The defects were of minor in nature
and could be rectified.

Findings:
From the facts stated above, it is apparent that the Appellant
purchased the vehicle in January 27, 1993, and the warranty was for a period
of 12 months, i.e. from 4.2.1993 (the date of taking the delivery).

It is the say of the Appellant that he had opted to purchase the

vehicle only because of the assurance given by the Opposite Parties to the
effect that their vehicle was the best in the market and would give trouble free
services for a long time. However, the vehicle started giving troubles within a
few days of its taking delivery. As it was not picking up speed and emitting
smoke, it was required to be delivered to the Opposite Party No.1, (the
dealer), for repairs. Even after the repair was done on 6.3.1993, 9.3.1993 the
trouble persisted. Therefore, it was delivered to the Opposite Party No.1 on
15.3.1993, for further repairs. As the repair done on this occasion was also
not uptothe mark, the Complainant got some genuine doubt about the ability
of the Opposite Party No.1, and to identify the exact defects in the vehicle and
to do effective repairs, he got it checked at KHT Agencies Pvt. Ltd. who are
also the authorised dealers of M/s. Swaraj Mazda Ltd. The repair order dated
27.7.1993 is as under:
Check excess white smoke.
Check excess Oil consumption and No Pickup.
Check diesel meter not working
Check fuel stop motor cable

On the said Repair Order, against the order for check excess
white smoke there is an endorsement to the effect that On inspection it is
observed one nozzle seized and diesel is mixed with engine oil. Customer

refused to get the oils and filters changed. While smoke still persisting, even
after the nozzles are serviced.

Again, the Complainant handed over the vehicle to the Opposite

Party No.1 on 28.7.1993 for the fourth time, for carrying out the necessary
repairs. Once again the vehicle was to be delivered to the Opposite Party
No.1 for getting rectified the old problems on 27.8.1993, for the fifth time. The
Repair Order is as under:

1.

Check up engine not accelerating, low pick up, white

smoke;
2.

Check up oil consumption/offing cable not releasing;

3.

Engine oil mixed with diesel oil;

4.

Replace diesel pipe;

5.

Check up sockets not working;

6.

Engine Bedding Bold Check up.

Thereafter, the legal notice was issued, reply was received and finally the
Complainant delivered the possession of the said vehicle to the Opposite
Party No.1 for repairs. It is undisputed that the Complainant had delivered the
possession of the vehicle to the Opposite Party No.1 in the month of August,
1993.

Thereafter, the Petitioner filed the complaint on 8.11.1993 before

the State Commission praying that the Opposite Parties be directed either to
deliver a new vehicle which is free from any manufacturing defect or in the
alternative to pay the sum of Rs.3,68,729/- being the cost of the defective
vehicle purchased by the Complainant with interest as paid by the
Complainant, compensation and also the loss of income. Admittedly, the

vehicle was in the possession of the Opposite Party No.1 since August, 1993,
within a period of six months from the date of purchase.

At the time of handing over of the possession of the vehicle to the

dealer, as indicated by the meter reading, the vehicle had run 36,377 Kms.

The

Appellant

has

relied

upon

the

report

of

the

Authorised Dealer who had inspected the vehicle on 21st March, 1993. It has
mentioned that the jobs to be done are:
1.

Diesel leakage near Automiser Pipe;

2.

Break dragging towards left clean break liner;

3.

Exhaust break not working;

4.

Dim & Dip switch not working;

5.

Engine vibration while stopping.

Reports of the Commissioners:

I.

Report of Dr.Badarinath, Commissioner:

Thereafter, the State Commission appointed Mr. D.R. Badarinath,

Commissioner, who vide his report dated 1.8.1996, reported, inter alia, as
under:
-

Steering movement of the vehicle while operating the wheel

found to be normal. But, actual condition could not be verified
without running the vehicle. The vehicle could not run without
the required documents which are reported to have been
surrendered to the R.T.O.

The original battery of the vehicle was replaced with another

service battery. But, the dealer reported that since it was idle

for 3 years it was dead and had fixed a separate battery for
the purpose of inspection. However, it was taken back after my
inspection.

While staring the is idling smoke was not observed. It could

not be tested without running on the road.

The document of the vehicle is stated to have been

surrendered to the R.T.O. Without running the vehicle on the
road, I could not ascertain whether there is any problem of
mixing diesel with engine oil. However, if it is found on test
running that the diesel and engine oil are mixing, it

will

be a serious defect in the engine. The engine

appears to have been opened and certain parts appear to
have been replaced. The dealer also confirmed that certain
parts such as cylinder, liner, piston rings, injection nozzle,
etc. have been replaced.

The speedometer in the vehicle showed the reading

320129-1 and in my opinion has been run extensively as can
be seen from the bald rear tyres. However, the dealer said
that the Speedometer had been stolen and he had replaced
the same. He has not produced any evidence of his
statement.

The aforesaid report leaves no doubt that the vehicle was used
by the dealer because at the time when the Complainant delivered the vehicle
to the dealer its speedometer showed 36,777 Kms. running of the vehicle
while on the date of inspection on 1st August, 1996 the reading was 3,20,129-

1, i.e. roughly more than 2,80,000kms. Even the Commissioner who had
inspected the vehicle specifically mentioned that it had run extensively. This
also can be seen from the bald tyres. He has also opined that if it found on
test running that the diesel and engine oil as mixing, it will be a serious defect
in the engine. The engine appears to have been opened and certain parts
appear to have been replaced. The dealer also confirmed that certain parts
such as cylinder, liner, piston rings, injection nozzle, etc., have been
replaced. This report leaves no doubt that the vehicle was used by the dealer
by replacing certain parts of the engine. This would be beyond doubt that
there was manufacturing defect.

II.

Report of Automobile Association of Southern India:

Thereafter, there is a report dated 16.3.2000 by the Automobile

Association of Southern India, which was obtained on the basis of the

directions given by this Commission. This report, no doubt, is an ex-parte
report, because the Complainant was not informed about the inspection.
However, at the same time, the report reveals that the vehicle was road
worthy by test driving, engine was smoothly running and everything was
normal.

This would again reveal that after 1996, the vehicle was
extensively repaired. This would mean that after the delivery of the vehicle to
the dealer Opposite Party No.1 had extensively used the vehicle and repaired
the same. This would not mean that at the time of purchase of the vehicle the
same was not defective as pointed out above. On the contrary, dealers

reports reveal that it was required to be brought for repairs within a few days
of its purchase.

It is shameful that even the vehicle was defective. Respondents

failed to acknowledge the defects. And, thereafter, Opposite Party No.1 used
the vehicle for years together without acknowledging the defects and litigating
the matter for years together. The Appellant suffered not only monetary loss
but mental agony all throughout. It is regrettable that we have developed a
tendency not to replace the defective vehicles.

In this view of the matter, this appeal is allowed. The impugned

order passed by the State Commission is set aside. The Respondents are
jointly and severally liable to refund the amount of Rs.3,68,729/- with interest
at the rate of 12% p.a. from 1.2.1993 till its payment. We are not inclined to
direct the Respondent to pay interest at the rate of 24% p.a. as claimed on the
ground that the Bank was charging at that rate. Hence, the Respondents are
directed to refund the amount of Rs.3,68,729/-, within a period of eight weeks
from today, with interest at the rate of 12% p.a. from the date of its purchase
i.e.

1.2.1993 till its payment. The Respondents shall also pay costs assessed at
Rs.10,000/- to the Complainant.
Sd/J.
(M.B.SHAH)
PRESIDENT
Sd/
(RAJYALAKSHMI RAO)
MEMBER
http://ncdrc.nic.in/FA45597.html last accessed on 20th Dec. at11:41 AM

C.N.Anantharam vs M/S Fiat India Ltd.& Ors.Etc.Etc on 24

November, 2010
Author: A Kabir
Bench: Altamas Kabir, Cyriac Joseph
REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) NOS.21178-21180 OF 2009

C.N. ANANTHARAM

... PETITIONER

VERSUS

M/S FIAT INDIA LTD. & ORS. ETC. ETC.

... RESPONDENTS

J U D G M E N T

ALTAMAS KABIR, J.
1. On 31st October, 2002, the Petitioner herein purchased a Fiat Siena Weekender
diesel vehicle from M/s Sundaram Automobiles, Bangalore, the common
Respondent in all these three Special Leave Petitions and agent of M/s Fiat India
Ltd., the manufacturer of the said vehicle. The Petitioner paid a sum of Rs.7,69,187/towards the Ex-showroom price of the vehicle, together with a sum of Rs.56,537/towards lifetime road tax and Rs.28,964/- as insurance. The vehicle was duly
registered in the name of the Petitioner on 25th November, 2002, when the vehicle
was delivered.
2. According to the Petitioner, immediately after registration of the vehicle, it was
taken out for a drive when certain defects, particularly in the engine, began to

manifest themselves. The same day, the Petitioner left the vehicle with the dealer for
removing the defects. On the very same day, the Respondent No.2, M/s Sundaram
Automobiles, wrote back to the Petitioner stating that the vehicle was in good
condition and the noise was on account of the operational characteristics of the
engine. Thereafter, on several occasions, the Petitioner left the vehicle with the agent
and various parts, including the engine itself, were completely replaced. The
Petitioner, however, was not satisfied with the performance of the vehicle and came
to the conclusion that the vehicle had inherent defects and could not be repaired. He,
accordingly, insisted that the vehicle be replaced with a new vehicle or the amount
paid by him as sale price be refunded, together with expenses incurred in trying to
rectify the defects in the vehicle.
3. Not getting any response, the Petitioner filed Complaint No.474 of 2003 before the
IVth Additional District Consumer Disputes Redressal Forum, Bangalore Urban, on
17th April, 2003. The complaint was heard by the District Forum, which allowed the
same by its order dated 20th February, 2004, and directed the Respondents 1 and 2
to refund a sum of Rs.9,15,536/-, as claimed by the Petitioner, together with interest
at the rate of 12% per annum and a further sum of Rs.5,000/- towards cost of
the legal proceedings. The claim against Respondent No.3, M/s Fiat Sundaram Auto
Finance Ltd. was rejected.
4. Aggrieved by the said order, the Respondents 1 and 2 herein filed two separate
appeals, being Nos.513 of 2004 and 397 of 2004, respectively, before the Karnataka
State Consumer Disputes Redressal Commission, Bangalore. On 15th June, 2006,
the State Commission disposed of the said Appeals modifying the order of the
District Forum by directing the Appellants (Respondents 1 and 2 herein) to replace
the Petitioner's vehicle with a brand new vehicle or on their failure to do so to refund
Rs.7,69,187/-, along with life time tax paid and the monthly instalments which had
been paid by the Petitioner, to M/s Sundaram Automobiles, together with interest @
12% per annum from the date of the order and also the cost of Rs.5,000/-.
5. The matter was, thereafter, taken to the National Consumer Disputes Redressal
Commission, New Delhi, hereinafter referred to as "the National Commission", by
the Respondent No.1 in Revision Petition No.2431 of 2006. The Respondent No.2
(agent) filed Revision Petition No.1585 of 2006. The Petitioner, in his turn, filed
Revision Petition No.1713 of 2006, before the National Commission. The National
Commission, while admitting the Revision Petition No.1585 of 2006 on 25th July,
2006, only on the point of the monthly instalments (EMI) paid and the quantum of

interest, directed the Revision Petitioner to deposit its share with interest at the rate
of 9%. Aggrieved by the said order, the Respondent No.2 filed Special Leave Petition
(Civil) No.13201 of 2006 before this Court on 4th August, 2006, and the same was
dismissed on 22nd February, 2008. Revision Petition Nos. 2431 of 2006, 1585 of
2006 and 1713 of 2006 were finally disposed of by the National Commission through
a common order dated 17th April, 2009. In the said order, the National Commission
held as follows:
"....Therefore, while we hold that the complainant has not been able to prove any
manufacturing defect, all the same, the dealer and the manufacturer are directed to remove
the defect, if any, in the vehicle make it roadworthy, if necessary by reconditioning the
vehicle and deliver it to the complainant in the presence of an independent technical expert
mutually agreed upon by the complainant and opposite parties and for this purpose any of
the party may apply to the District Forum for appointing such expert if it is not mutually
agreed upon by the parties. The expert shall certify that the vehicle is free from any defect
which shall be final for all purposes. This should be done within a period of three months.
The Ops, thereafter, to provide a warranty for one year from the date of delivery. The
revision petitions are accordingly disposed of in these terms. Under the peculiar facts of the
case, there would be no order as to costs."

Thereafter, the Petitioner filed the instant Special Leave Petitions challenging the
order of the National Commission.
6. The issues which fall for decision in these Petitions are :(i)

Whether

it

can

manufacturing

such

that

defect

it

warranted

be

of

said

the

that

vehicle

replacement,

the

was

and

whether the refund of Rs.7,69,186/- and 12% interest as ordered by the State
Commission was justified?; and
(ii) Whether both the dealer and the manufacturer are jointly and severally liable in
regard to deficiency of service?

7. Appearing for the Petitioner in all the three Special Leave Petitions, Ms. Kiran
Suri, learnedAdvocate, urged that from the very day on which the vehicle was
delivered to the Petitioner, it was obvious that there were several manufacturing
defects in the vehicle, which could not be removed. The said position was duly
appreciated both by the District Forum as well as the State Commission which
directed the Respondents to replace the vehicle or to refund the amounts which had
been expended by the Petitioner for purchase and to make the vehicle operational
and roadworthy. The National Commission struck a different note upon holding that
there was no worthwhile evidence to indicate that the vehicle had suffered from any
serious manufacturing defect and that in any case the allegation of noise emanating
from the engine even after its replacement with a new engine, could not be believed.
Ms. Suri also questioned the view of the National Commission that the obligation of
the manufacturer/dealer is only to repair/replace any part of the vehicle found to be
defective, even during the warranty period, free of charge, but that the question of
replacing the vehicle with a new vehicle was not justified.
8. Ms. Suri lastly submitted that the finding of the National Commission that the
Complainant/ Petitioner had not been able to prove any manufacturing defect, was
perverse and contrary to the evidence adduced by the parties and the materials on
record. Ms. Suri also questioned the finding that the refund of the cost of the vehicle
would also not be justified, since the Petitioner had not taken the vehicle from the
dealer despite their letter certifying that the vehicle had no defect. Ms. Suri
submitted that further direction given by the National Commission to remove any
defects and to make the vehicle roadworthy, if necessary, by reconditioning the
vehicle and to deliver the same to the Petitioner in the presence of an independent
technical expert mutually agreed upon, was wholly misconceived and could not be
sustained.
9. In support of her submissions, Ms. Suri referred to a decision of this Court
in Indochem Electronic vs. Addl. Collector of Customs [(2006) 3 SCC 721], wherein
while considering the provisions of Sections 3 and 14 of the Consumer Protection
Act, 1986, this Court was of the view that when the deficiency began to manifest
themselves it was the duty of the suppliers to attend to such deficiencies immediately
and if the supplier was unable to attend to the deficiencies and malfunctioning of the
system soon after installation, it would amount to "deficiency of service".
Furthermore, when the deficiencies in the system continued to persist during the
warranty period, including the extended period, the suppliers were rightly held to be
liable for deficiency in service by the State and National Commission. It was also held

that in the light of the specific power conferred under Section 14(1)(c) of the
aforesaid Act, damages equivalent to price of goods could be awarded, despite the
provisions of Section 12(3) of the Sale of Goods Act, 1930, as the provisions of the
1986 Act are in addition to and not in derogation of any other provision of law.
10. Mr. Vijay Kumar, learned Advocate, who appeared for M/s Fiat India Ltd., urged
that the complaint made by the Petitioner herein was without any basis as the vehicle
was fully roadworthy and it was the Petitioner who made continuous complaints
which, the Respondent attended to for the sake of maintaining good business
relations. It was submitted that the manufacturer company went to the extent of even
replacing the engine and parts of the gear box to give the Petitioner complete
satisfaction. However, there was absolutely no justification for the Petitioner to
demand that the vehicle be replaced or that the value thereof, together with the
expenses incurred be refunded. It was also urged that the vehicle had been duly
certified to be completely roadworthy and it was the Petitioner who was at fault for
not having taken delivery of the same, despite the same being ready. It was
submitted that the decision of the National Commission did not call for any
interference and the Petition was liable to be dismissed.
11. On behalf of the Respondents it was contended that everything possible was done
to meet the repeated complaints made by the Petitioner, which even involved the
replacement of the engine and other parts. However, instead of taking delivery of the
vehicle, the Petitioner continued to insist on replacement of the vehicle which was
not contemplated under the warranty given by themanufacturing company when the
vehicle was delivered to the Petitioner.
12. It was also submitted that, in any event, the agent of a vehicle manufacturer
would not be made liable for the defects, if any, in the vehicle and the relief prayed
for against Respondent No.2 was entirely misconceived.
13. In support of the aforesaid submissions, reference was made to the decision of
this Court inMaruti Udyog Ltd. vs. Susheel Kumar Gabgotra [(2006) 4 SCC 644], in
which it was, inter alia, held that if the manufacturing defect was established, then
replacement of the entire item or the replacement of the defective parts, is only called
for. In fact, reference was made to the warranty condition which referred only to
replacement of only the defective parts and not the car itself. This Court held that
from the various documents exhibited it would appear that the manufacturer had
indicated that it was necessary to download the engine to trace the problem which
has been complained of, but there was no agreement to replace the engine.

Moreover, when the manufacturer asked for the vehicle to be brought in for the
purpose of downloading the engine, the Respondent did not do so and, accordingly,
to infer that there was any manufacturing defect in the said background was without
any foundation. However, the relief was moulded so that the defective part could be
replaced without requiring the purchaser to pay any charge.
14. Reference was then made to the decision of this Court in Hindustan Motors Ltd.
vs. N. Siva Kumar [(2000) 10 SCC 654], in which it was held that when it became
impossible to comply with the National Commission's order directing replacement of
the

Respondent's

defective

vehicle,

since

the

manufacturer

had

stopped

manufacturing the said model, this Court directed that the money along with
interest, compensation and costs were to be paid to the purchaser.
15. Having considered the various submissions made on behalf of respective parties,
what emerges is the question as to whether the manufacturing company and by
extension the dealer/agent was under any compulsion to replace the vehicle itself
when the engine of the vehicle from which certain noises were allegedly emanating
had been replaced. It has been explained that an engine operating on diesel makes a
rattling noise which does not occur in petrol driven engines and that there was really
no manufacturing defect in the vehicle as complained of by the purchaser.
16. In such circumstances, the order passed by the National Commission, impugned
in these Special Leave Petitions, does not appear to be unreasonable. For whatever
reason, except for amere 800 kilometers the Petitioner has not used the vehicle after
it was delivered and has, on the other hand, made several complaints in an attempt
to prove that there were manufacturing defects in the vehicle. The National
Commission has taken all these matters into consideration in giving the impugned
directions regarding delivery of the vehicle to the Petitioner after having the same
properly checked by an independent technical expert who would have to certify that
the vehicle was free from any defect when it is delivered.
17. From the facts as disclosed, it appears that apart from the complaint relating to
noise from the engine and the gear box, there was no other major defect which made
the vehicle incapable of operation, particularly when the engine was replaced with a
new one. However, in addition to the directions given by the National Commission,
we direct that if the independent technical expert isof the opinion that there are
inherent manufacturing defects in the vehicle, the petitioner will be entitled to
refund of the price of the vehicle and the lifetime tax and EMI along with interest @
12% per annum and costs, as directed by the State Commission.

18. In such circumstances, the Special Leave Petitions are disposed of with the above
directions.
................................................J.
(ALTAMAS KABIR) ................................................J.
(CYRIAC JOSEPH) New Delhi Dated: 24.11.2010.

http://indiankanoon.org/doc/942368/ last accessed on 20th Dec. at 11:17 AM

CASE
TITLE
ISSUES
RAISED
GIST
MRF Ltd. vs Jagdish Lal and Others
(Civil Appeal No. 2710 of 1999)
Whether the District Forum, the State and the National
Commission followed the prescribed procedure under
Section 13(1) (c) of Consumer Protection Act (COPRA),
which says:
The District Forum shall, on admission of a complaint,
if it relates to any goods, where the complaint alleges a
defect in the goods which cannot be determined without
proper analysis or test of the goods, obtain a sample of
the goods from the complainant, seals and authenticates
it in the manner prescribed. Then, it refers the sample,
so sealed to the appropriate laboratory along with a
direction that such laboratory makes an analysis or test,
whichever may be necessary, with a view to find out
whether such goods suffer from any defect alleged in
the complaint or from any other defect. The laboratory
reports its findings thereon to the District Forum within
a period of 45 days of the receipt of the reference or
within such extended period as may be granted by the
District Forum.
Having purchased tyres and tubes for vehicles from the
local dealer of MRF Ltd, Jagdish Lal and others, on
finding the goods defective, filed a complaint to the
dealer to either replace the goods or to refund the money,
and therefore, submitted the goods to the dealer, which
were further sent to the company for replacement, but
no action was taken on the same
After rigorous follow ups, there was no redressal either
from the dealers or from the companys side, for which
a complaint was registered before the District Forum
by the complainants, which held that the defective goods
returned to the dealer by the complainant were neither
replaced nor the priced money refunded back.
The case was decided in favour of complainant consumer
but the appellant company appealed before the Supreme
Court, on the grounds that the procedure prescribed
under Section 13(1) (c) as explained above, was not
followed because the complainant (consumer) was not
in the possession of the tyre and tube as these were
already given back to the dealer for either replacement

or refund of the money.

The Supreme Court held that there was no material to
show that the appellant had replaced the tyre and tube
or refunded the cost to the respondent consumer.
That being the factual matrix, it does not show that how
the fault could be found with the District Forum, the
State Commission or the National Commission in the
matter of not following procedure under section 13 (1)
(c) of the Act. The appeal was, therefore, dismissed in
favour of aggrieved consumers with no costs.

http://www.cuts-international.org/pdf/COPRA_SupremeCourt.pdf
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NARAYANAN VYANKATKRISHNAN IYENGAR VS. SHAKTI FOODS

LAWS(NCD)-1994-3-89
NCDRC
Decided on March 04, 1994
NARAYANAN VYANKATKRISHNAN IYENGARAppellant
VERSUS

SHAKTI FOODSRespondents
JUDGEMENT
Justice G.G. Loney, President -

( 1. ) THIS is an appeal against the order of the District Forum, Akola dated
3.2.1993. The complainant in his complaint before the District Forum alleged that
thums up, limca and maza - soft drink bottles purchased by him for a party were
found defective. The complainant alleged that opposite party No. 1, Shakti Foods is
the Dealer of soft drinks at Akola and at the material time was selling aforesaid
branded soft drink bottles manufactured by O.P.No. 2, M/s. Nasik Bevarages Pvt.Ltd.
The complainant alleged that he purchased on 6.12.91 'thumps up bottles and 'limca
bottles' of one crate each from O.P.No. 1. The complainant alleged that he had
purchased those bottles for out-station guests which were visiting his house for a
party. However, the party was cancelled. The complainant alleged that his friends
Damodr Yadav and Shri P.A. Shinde consumed two bottles of thums up and three
bottles of limca and as a result of which they felt ill. The complainant alleged that
they were taken for treatment to the local doctor and advised rest for two days and
not to consume any food. The complainant further alleged that he suspected
adulteration in the said bottles and in one of the bottles he found foreign material
which looked like 'Dhatura' seed. The another bottle of limca, he saw foreign
material like 'nim' or 'Mahua'. He also alleged that those sealed bottles were
containing less quantity of the drinks. He also alleged that they were having
discolouration. He also found a bottle of 'Maza' a defective goods. The complainant,
therefore, sealed 'four' bottles and produced them before the District Forum, Akola
along with his complaint.
( 2. ) THE complainant in his complaint claimed refund of Rs. 82 /- the sale price of
the bottles and also Rs. 50,000/- towards the compensation.
The O.P. No.1 contended that he is merely a 'Dealer' of O.P. No. 2 and, therefore, he
is not liable for any compensation. The O.P.No.1 further admitted that he sold the
bottles in question to complainant and further admitted that they were short of
quantity having different colours. In short, the O.P. No. 1 admitted the sale of

bottles to complainant manufactured by O.P.No. 2. The O.P. No. 2 denied the

manufacturing defeet in the aforesaid bottles. It is also contended on behalf of the
O.P .No. 2 that they never received any such complaint and denied their liability to
compensate the complainant. The District Forum rejected the complaint on the
ground that the complainant is ordinary electrical repairer and according to his
status, it was not seem possible for him to purchase one crate of thums up bottles
and another crate of limca bottles each containing 24 bottles for entertainment of
his friends. Another reason for rejecting complainants claim appears to be that the
report dated 6.6.92 of analysis on the bottles in question was published in one
newspaper dated 19.6.1992.
We have heard Shri Rathi, Advocate for the appellant, the respondent No. 1 in
person and Shri Rajivkumar, Advocate for respondent No. 2.

( 3. ) ACCORDING to Shri Rathi, on the first ground to reject the complainant's

claim on the basis of his status is not correct. The complainant alleged that he
purchased one crate of limca - and one crate of thums up and maza bottles from
O.P. No. 1 has been admitted by O.P. No.1. The fact that O.P. No. 1 sold the
aforesaid bottles to the complainant is not in dispute. In view of this admitted fact,
the District Forum is totally incorrect to draw an inference that he could not have
purchased it because of his status. It is common knowledge that if there is any
function or a party, arranged by a person irrespective of his status, he may purchase
the required article even on obtaining loan or by borrowing funds. Therefore, merely
because he is a man of megre means that does not mean that he did not purchase
the article in question. The fact has been admitted by O.P. No. 1 and, therefore, this
finding of the District Forum is contrary to evidence on record. Moreover, the
complainant has placed on record bill dated 4.12.91 showing the purchase of the
aforesaid articles.
It is important to note that the complainant filed his complaint on 2.1.92. He filed an
application before the District Forum requesting to send the bottles for analysis to
the appointed laboratory. The application was made on 8.4.92. On the request from
the Court, the bottles were send to Amaravati for analysis. The analysis was carried
out on 11.5.92 and the report was prepared by the laboratory on 6.6.92. The report
of analysis was actually brought by complainant by hamdasta from the analysist.
There is report of the Analysist dated 8.5.92 on record. The result of analysis is
shown at the bottom of the report under the head 'Remark'. It reads as under :'Sample No. 1 to 3 of thums-up and limca' detailed above have total plate count
more than 50 per ml. and M.P.N. of Colifora organisms more than 0 per 100 ml. and
do not conform to the standards of sweetened carbonated water as per P.F.A. Rules
1955 and are unfit for human consumption. The sample Sr. No. 4 of maaza contains
decomposed dead mass of animal origin and is unfit for human consumption." The
aforesaid result of examination further show that sealed samples of limca, maaza
and thumsup were received from the Registrar District Forum, Akola vide his letter
dated 7.5.1992. The reading of the report of analysis clearly show that the thums up

and limca bottles were unfit for human consumption and were containing foreign
material. In view of these clinching evidence showing the defective nature of the
goods sold to complainant, the entire report has been discarded by the District
Forum on the ground that the news-item about the said analysis appeared in some
local daily published on 19.6.92. It is, therefore, argued by the learned Advocate
Shri Rajivkumar that it was the handi work of complainant to have the said report
published in the Press, and, therefore, the District Forum was right in rejecting that
report. We are not satisfied with this explanation. Simply because the report was
published in the newspaper that does not mean that the report of analysis be
discarded out right now. The samples were sent by the District Forum for analysis to
the laboratory and the genuineness of the report cannot be doubed merely because
the report of analysis appeared" in the press. It may be that the officials of the
laboratory may have given this news to the local newspaper for publication. It is,
therefore, unjust and unreasonable to attribute the supply of material to the press
by the complainant. Even assuming that complainant supplied the news to the local
press, even then the importance of the analysis cannot be doubted as untrue.
Hence, we find that the District Forum has committed a mistake to discard the
report of analysis which establishes that the goods sold to complainant were
defective.

http://www.thelaws.com/Encyclopedia/Browse/ShowCase.aspx?CaseId=994991970000 last
visited on 20th Dec. at 12:32 AM

CONSUMER RIGHTS

Company must replace defective vehicle

Pushpa Girimaji

WHETHER it is a tractor or a car, a motorbike or an autorickshaw, when a consumer

buys a new vehicle, the expectation is that it would give trouble-free service. This is not
an unreasonable expectation. However, when such hopes are belied and the vehicle
becomes a source of irritation on account of manufacturing defects, it is only fair that the
manufacturer should replace the defective vehicle, or if by then the consumer has lost
confidence in that particular brand or model, refund the cost of the vehicle.
Unfortunately, despite several apex consumer court rulings to this effect, manufacturers
do not seem to have nderstood the rights of the consumers or the responsibilities of the
manufacturers vis-`E0-vis defective vehicles. In the case of Vinoo Bhagat vs General
Motors the court laid down certain clear criteria for replacement of a defective car: (a) If
the car is defective and its use is substantially impaired, a consumer can seek
replacement; (b) When reasonable opportunity had been given to the respondents
(manufacturers/ service centres) to repair the car and yet there is a failure, it would
certainly be a case for refund or replacement. The case pertained to a defective Opel
Astra.
Then in the case of A.Raja Rao vs M/s Mysore Auto Agencies, the court expressed
displeasure at automobile manufacturers who persisted in repairing a new, defective
vehicle, instead of giving refund or a defect-free replacement. Said the commission in
this case, pertaining to a defect in a Swaraj Mazda light commercial vehicle: "It is
regrettable that we have developed a tendency not to replace the defective vehicles".
In the case of M/S Hyundai Motors India vs M/S Affiliated East West Press (Revision
petition no 958 of 2007, decided on November 29, 2007), the National Consumer
Disputes Redressal Commission has gone one step further and held that where a
consumer experiences problems with a vehicle just a couple of months from the date of
purchase, and the manufacturer is unable to rectify them, even if those problems are not
major, the manufacturer has to give a replacement or a refund. It has also deplored in
this order the tendency of manufacturers to indulge in protracted litigation instead of
accepting that there are defects in a particular vehicle and offering the dissatisfied
consumer a new replacement or a refund.
It is pertinent to quote the apex court here:" Unfortunately, we have developed the
practice or tendency of not admitting the defects in the vehicle and not replacing the
same without contest. In other countries defective vehicles are easily replaced. That
practice is required to be adopted, at least, by big companies like the petitioner herein.
Instead of disputing the undisputed facts, the companies should resolve the matter by
replacing the vehicles."
Said the court further: "In our view, if a brand new car gives trouble within a few days of
its purchase, the consumer would be dissatisfied. Further, in such cases, the
manufacturing company is not justified in protracting litigation, merely because it has
the money power. Further, a person who purchases a vehicle, maybe a luxury Accent car
or a small car, would not be satisfied if it is a defective vehicle. The defect may not be a
major one but the consumer loses satisfaction of having a new car. That loss of
satisfaction would be much more in a case when the person buys the vehicle with his
hard-earned money."

The complaint in this case revolved around a Hyundai Accent (diesel), purchased by the
consumer. While the district forum directed the manufacturer to provide a defect-free
vehicle to the consumer and pay Rs 10,000 as compensation, the state commission
modified it and said the manufacturer shall refund the entire cost of the vehicleRs
6,59,783and also pay Rs 25,000 as compensation. Challenging this before the apex
court, the manufacturer argued that there were no serious manufacturing defects in the
vehicle. Disagreeing with such a contention and upholding the order of the state
commission, the court observed: Undisputedly, a brand new car was required to be
repaired repeatedly and the opposite parties are not in a position to a find solution to
control emission of white/black smoke. Observed the commission further: Maybe such
defects may occur in one out of 1000 vehicles but, at the same time, it is the duty of the
reputed/established manufacturer to replace such a vehicle.
It's time vehicle manufacturers took note of these observations and acted on them.

http://www.tribuneindia.com/2007/20071216/spectrum/rights.htm
accessed on 20th dec. at 2:01 PM

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