LEGAL MATTERS

Manufacturing Defect

Only Parts May Be Changed, Not the Vehicle

Many a times, the dealer–buyer conflicts have reached consumer forums, and thankfully so. These have resulted in the penning of landmark judgements that favour consumers and legally empower their rights. The Real Case

“It is shameful that defective car was sought to be sold as brand new car, it is further regrettable that

Any sane person with an eye for little details can spot the difference between ‘used’ and ‘brand new’. And the difference becomes more obvious when an effort is made to make the old look like new. In case of vehicles, especially cars, the difference between the new and the old can be easily found, especially if the old car was damaged and repaired, and its dents mended and repainted. So, what happens when car dealers attempt to pass on a used, repaired and dented-painted vehicle as a new one to innocent buyers? Also, what about cases where the complaints of car owners turned out to be unjustified?

instead of acknowledging the defect, company has chosen to deny and go in appeal,” said the Supreme Court (SC) while announcing its verdict in the case of Jose Philip Mampillil versus Premier Automobiles Ltd in January 2004.

This case began at the district consumer forum. The complainant had bought a Premier 1.38 diesel car (NE 118), manufactured by Premier Automobile. At the time of delivery of the car, the complainant found

defects in the paint. The dealer promised to rectify the same within a few days. However, the defects could not be altered and the complainant refused to accept the delivery of the car. Eventually, the dealer persuaded him to take the car, assuring all defects would be fixed later. The equation between the parties became worse when the complainant found out that the piston rings of the engine were defective as well and there was major leakage of engine oil. Thereafter, the car was repeatedly sent to the dealer for repairs, but the defects could never be repaired.

After thorough hearing, the district forum ordered for repair of paint and parts and replacement of the engine. The forum also ordered for compensation of Rs 40,000.

Nearly 10 Years Later

The legal bindings of dealer, manufacturer and buyer relationships got further clarity in February 2014 when National Consumer Disputes Redressal Commission pronounced an order in the matter of Tata Motors Ltd and others versus Dr Anuj Paul Mainiand others.

In this case, the complainant had purchased a Tata Indigo Marina Dictor and even before invoice could be issued, he found that the vehicle had eight defects that had to be fixed by the manufacturer.

The matter went to the Supreme Court, where the dealer pleaded that as per the warranty clause he was only liable to carry out repairs and those were already done. The dealer further insisted that the compensation should be paid by the manufacturer.

In the final stage of hearing, SC agreed that the piston rings and diesel engine developed defects after the sale and were not a manufacturing defect. The court also observed that the dealer had sold the vehicle even after having full knowledge of the manufacturing defects it had. Hence, the court held both– the dealer and the manufacturer – equally liable for the cost of repairs as well as compensation.

It is pertinent to mention here the Indian Oil Corporation versus Consumer Protection Council Kerala case of 2004. The SC had made it clear then that the relationship between dealer and manufacturer was one of principal to principal and not of principal and agent. Hence, both are liable for their own wrongs.

How It Happened

In order to avoid crushing a dead animal on the road, the driver took a steep left turn, but the steering got stuck. The car landed in a deep trench and was severely damaged. The complainant alleged before the consumer forum that manufacturing defect had caused the accident and obtained an order for replacement of the car with compensation. The State Commission, however, reversed the replacement order, but asked the manufacturer to pay three lakh rupees for repairs along with Rs 2,000 as the cost of litigation.

The complainant moved the National Commission seeking replacement of the vehicle or its whole body. Here, the commission held that the car went to the workshop as many as 11 times and that the defect was admitted right in the beginning even before issue of invoice. Hence, it amounted to manufacturing defect and it was presumed that the same defect had caused the accident. The court held that there was absolutely no need to take expert opinion at that stage.

At the same time, the court held that if the entire cost of repair was paid and the vehicle ran well, there would be no need to replace the whole body. It held that a car ran with assembled parts that could be either repaired or replaced. Thus, the National Commission retained the order passed by the State Commission, but increased the cost of litigation from Rs 2,000 to Rs 10,000.

Relevant Judgements

During the hearings of the above-discussed case, a number of judgements were taken into consideration. Some of these are mentioned below. • Maruti Udyog Ltd versus Susheel Kumar Gabgotra: Supreme Court held that where defects in various parts of a car were established, direction for replacement of the car would not be justified. Replacement of the entire item or replacement of defective parts only was called for. • Surendra Kumar Jain versus RC Bhargava & others: This was the escalation of a case from the State Commission by a complainant who was asking for replacement of the car. He had appealed that the car developed problems from the very beginning. These were attended to from time to time, but he had not purchased a car for taking it to the workshop with such regularity – on almost 11 occasions within a year. The State Commission had already awarded Rs 25,000 as compensation and Rs 2,500 as costs. After thorough investigation of the case, the National Commission held that ‘ the only major fault found in the car was a leaking radiator, which was normal considering the age of the radiator. The radiator was replaced as requested by the complainant. At this stage, we do not wish to get into the controversy of whether the radiator was repaired or replaced. The fact remains that vehicle is on road, and is running, and since the State Commission has already compensated the complainant for the inconvenience caused to the complainant during the warranty period for having taken the vehicle on different occasions, we see no ground to interfere with the well-reasoned order passed by the State Commission. In the aforementioned circumstances, we see no merit in this appeal, hence dismissed.’