C.N. Anantharam Vs M/S
Fiat India Ltd. & Ors. Etc
J U D G M E N T
ALTAMAS KABIR, J.
1.
On
31st October, 2002, the Petitioner here in 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-show room price of the vehicle, together with a sum ofRs.56,537/- towards lifetime
road tax andRs.28,964/- as insurance. The vehicle was duly registered in the
name of the Petitioner on 25thNovember, 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 ofRs.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 RespondentNo.3, M/s Fiat
Sundaram Auto Finance Ltd. Was rejected.
4.
Aggrieved
by the said order, the Respondents 1and 2 herein filed two separate appeals, beingNos.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 2herein) 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 installments 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/-.
1.
2.
3.
4.
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 on25th July, 2006, only
on the point of the monthly installments (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 2006before 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 1713of 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 7 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 be said that the manufacturing defect of the vehicle was such that it warranted
replacement, 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,
learned Advocate, 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) 3SCC 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 there of 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 the manufacturing 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 in Maruti 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 a mere 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 is of 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.
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