State Consumer Disputes Redressal Commission
Jaycee Automobiles Pvt. Ltd. vs Suresh Singla on 30 August, 2016
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Appeal No. : 84 of 2016 Date of Institution : 18.03.2016 Date of Decision : 30.08.2016 Jaycee Automobiles Pvt. Ltd., Plot No.171, Phase-1, Industrial Area, Chandigarh through its Authorized person Sh. Nirmal Sharma present at G.T. Road, Ludhiana. ....Appellant. Versus Suresh Singla s/o Late Sh.Ranauq Ram, R/o House No.1332, Sector 4, Panchkula. Ankur Bansal s/o Sh.Arjun Dass Bansal, R/o House No.576, Sector 7, Panchkula. Audi India, Division of Volkswagen Group Sales India Pvt. Ltd., Cardinal Gracious Road, Chakala, Andheri (East), Mumbai 400099 through its Authorized Representative. HDFC Ergo General Insurance Company Limited, SCO No.124-125, Sector 8, Madhya Marg, through its authorised representative. .....Respondents. Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. SH. DEV RAJ, MEMBER.
SMT. PADMA PANDEY, MEMBER.
Argued by:
Sh. V. K. Sachdeva, Advocate for the appellant.
Sh. Sandeep Bhardwaj, Advocate for respondents No.1 and 2.
Sh. Munish Jian, Advocate for respondent No.3.
Er. Sandeep Suri, Advocate for respondent No.4.
PER DEV RAJ, MEMBER This appeal has been filed against the order dated 18.01.2016, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (in short 'the Forum'), vide which, consumer complaint bearing No.447 of 2014 was allowed against Opposite Party No.2, directing them as under:-
"20] In the light of above observations, we are of the concerted view that the Opposite Party No.2 had failed in its responsibility of conducting a thorough professional service to the vehicle in question by omitting to top-up the engine with engine oil, which resulted into heavy damage to the engine. This act of the Opposite Party No.2 amounts to deficiency in service on its part. Furthermore, the vehicle being registered in the name of Firm, no compensation can be granted on account of mental agony and harassment, though deserves to be adequately compensated for deficiency in service alone. Hence, the present complaint of the Complainant is allowed qua Opposite Party No.2 and dismissed against Opposite Party No.1 & 3. The Opposite party No.2 is directed as under:-
[a] To refund an amount of Rs.3,95,190/- to the complainants along with interest at the rate of 9% p.a. from the date of payment i.e. 5.8.2014 till its realization;
[b] To pay an amount of Rs.50,000/- to the complainants as consolidated amount of compensation on account of deficiency in service;
[c] To pay litigation expenses to the tune of Rs.15,000/-;
The above said order shall be complied within 45 days of its receipt by the Opposite Party No.2; thereafter, it shall be liable to pay an interest @18% per annum, on the amount mentioned in sub-para [a] from the date of payment i.e. 5.8.2014 till its realization and also on the amount as mentioned in sub-para [b] above, from the date of filing of this complaint till it is paid, apart from paying litigation expenses."
However, the complaint against Opposite Parties No.1 and 3 was dismissed by the Forum.
2. The facts in brief are that the complainants in the year 2010 purchased Audi A6 2.7 TDI bearing Regd. No.HR 02 X 0002 for personal use. Though the said vehicle was registered in the name of Harmony Colonizers Pvt. Ltd., but the same was used by complainant No.1, being Director of the Company for his own use and complainant No.2 who is son-in-law of complainant No.1. The vehicle was got serviced by the complainants at regular intervals. On 3.7.2014, the vehicle was taken to Opposite Party No.2, for service and invoice dated 4.7.2014, claiming an amount of Rs.74,460/-, was issued. After taking delivery of the vehicle, it was found that the same was not running smoothly, as earlier. On 5.7.2014, the complainants were on way to Mansa Devi Temple alongwith family members, when all of a sudden, the vehicle stopped in between the road and did not start. The display started giving the indication of gearbox. Complainant No.2 arranged a crane and towed the vehicle to the dealer at Chandigarh. Thereafter Opposite Parties No.1 & 2 told to bring the vehicle to their workshop and vehicle was towed to Opposite Parties No.1 & 2. On 7.7.2014, Opposite Parties No.1 & 2 informed the complainants about an estimate of Rs.6,34,199.10/- towards the repair cost and the final estimate was to be raised after opening the engine and proper diagnosis of the problem in the vehicle. The complainants were shocked to hear that due to adulterated fuel, the fuel line and engine parts got damaged, which needed replacement. The complainants informed that the vehicle was never got refueled after the service, but the Opposite Parties did not pay any heed. Opposite Party No.2 assured that it would inform the Insurance Company after proper diagnosis of the problem and preparation of final estimate towards the repairs. On 14.7.2014, the Opposite Parties issued an estimate dated 7.7.2014 in the sum of Rs.7,13,523.76/- towards the repairs. On getting the final estimate towards the repairs, the complainants confirmed about informing Opposite Party No.3 but Opposite Parties No.1 & 2 refused about informing Opposite Party No.3. The complainant himself informed the Insurance Company i.e. Opposite Party No.3, whose official visited the workshop and inspected the vehicle and got the claim form filled up from Complainant No.2. The complainants wrote a number of emails to the Opposite Parties asking about the status of the vehicle, but to no avail.
3. It is further submitted that the complainants took delivery of the vehicle under protest after paying a sum of Rs.3,95,190/-. Thereafter, Opposite Parties No.1 & 2 sent an email dated 20.8.2014 to the complainants wherein they agreed to refund the total cost of parts except the labour cost and consumables. The total cost of parts excluding the consumables and repair was Rs.2,75,000/- approximately. It was further stated that Opposite Party No.3 repudiated the claim of the complainants by taking false stand that information with regard to the incident had been given after delay and that the vehicle was dismantled and reassembled. It was further stated that the vehicle was never dismantled prior to the survey. It was further stated that even warranty of the parts replaced was not issued by Opposite Party No.1 & 2. It was further stated that the amount which was paid by the complainants to the tune of Rs.3,95,190/- was not refunded by the Opposite Parties. It was further stated that the aforesaid acts of the Opposite Parties amounted to deficiency, in rendering service, and indulgence into unfair trade practice.
4. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only) was filed seeking various reliefs.
5. Opposite Party No.1, in its written version, admitted the sale and service of the vehicle. It was stated that the vehicle, in question, was purchased by Harmony Colonizers Pvt. Ltd. It was further stated that the complainants met with an accident causing a severe damage to the said vehicle, which fact was concealed by them. It was further stated that complainants themselves admitted that the said vehicle was used by them in a trouble free way for a period of more than four years from the date of its purchase, which established roadworthiness of the said vehicle. It was further stated that Opposite Party No.1 had no personal knowledge about the happening of events on 5.7.2014 and hence, the same was denied for want of knowledge. It was also denied that Opposite Party No.1 gave any kind of repair estimate to the complainants. It was further stated that insurance contract is an independent contract and Opposite Party No.1 plays no role either in executing the insurance contract or in carrying out any activities, such as establishing correspondence with the insurance provider or getting the survey conducted. It was further stated that the vehicle was appropriately repaired by the said dealership, as per the Audi Standards and even a heavy discount purely as a goodwill gesture was provided to the complainants, but inspite of this, the complainants took the delivery of the said vehicle under protest for the reasons best known to them. It was further stated that the expert report as claimed by the complainants could not be treated to be authentic as the expert had neither tested the fuel in the said vehicle nor did he conduct any physical inspection of the said vehicle, hence the contents of said expert report were denied. It was further stated that the claims of the complainants that the adulterated fuel could cause damage to the engine of the vehicle, were baseless and without any merit, hence denied. It was further stated that the vehicle was 5 years old and out of warranty. It was further stated that the discount was purely offered by the said dealership as a goodwill gesture and the same be not interpreted any acceptance of deficiency. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
6. Opposite Party No.2, in its written version, in the preliminary objections stated that the complainants were not consumers in terms of definition as provided in Section 2(1)(d) of 1986 Act. It was stated that consequent upon entering into a Sales Contract dated 24.03.2010 with it (Opposite Party No.2) and M/s Harmony Colonizers Private Limited, SCO 411, Ist Floor, Sector 20, Panchkula for purchase of AUDI A6, 2.7 TDI Model 2010 Exterior Color-IbIS White, Interior color - C. Beige (Exhibit R-2/1), car was sold to the said Company for Rs.41,23,000/-. It was further stated that Sale Certificate/Form No.21 dated 24.03.2010 was issued to the Regional Transport Officer certifying that the aforesaid car had been delivered to M/s Harmony colonizers Private Limited, SCO 411, Ist Floor, Sector 20, Panchkula and the vehicle is held under agreement of Hire Purchase/lease/Hypothecation with ICICI Bank Ltd. It was further stated that the complainants have intentionally and deliberately suppressed Sales Contract, Invoice and Delivery Note and Gate Pass. It was further stated that the said vehicle was purchased and registered in the name of private limited company to claim depreciation, which was a method adopted by the business entities to claim expenses and to bring an overall reduction in income tax liability. It was further stated that there was a direct nexus between the purchase of the vehicle and commercial activities by the company. It was further stated that the complainants, thus, stand ousted from the definition of the term 'consumer' as per the ingredients of Section 2(1)(d) of 1986 Act. It was further stated that the complainants falsely stated that the vehicle was used by respondent No.1/complainant No.1 claiming himself to be a Director of the said Company and further falsely claiming for use of respondent No.2/complainant No.2 claiming to be his son-in-law without any proof of his directorship and proof of their identity or proof of their usage with approval. It was further stated that after sale of the car on 24.3.2010, the car was reported to the workshop of Opposite PartyNo.2 for fourth routine service on 3.7.2014 and 3 satisfactory services on 1.4.2011, 12.4.2012 and 3.5.2013 after having clocked 18,740 kms. It was further stated that the car was delivered back to the company on 4.7.2014 to its complete satisfaction alongwith invoice dated 4.7.2014 which was duly received and signed by the representative of the company alongwith Satisfaction Note certifying the satisfaction with work done (Ex. R-2/6 colly.). The car was fully checked and serviced, as per the prescribed maintenance list (Ex. R-2/8). It was further stated that as per parts requisition Memo dated 3.7.2014, 8.2 liter engine oil was requisitioned and put in the car and the same was also reflected in the invoice dated 4.7.2014 (Ex.R-2/9). The Scanning/Log Report of the vehicle also clearly demonstrated that after filling the Engine Oil, the Oil Check Inspection was re-set by the Sensor/Computer to the next 15000 KM/365 days which clearly established that the Engine Oil was filled in the car as per the Standard Maintenance List and was shown in the Log as successfully re-set. It was further stated that had the engine oil not been filled in the car, as falsely alleged in the complaint, the computerized scan/log of the car would not have shown as successfully re-set and moreover, "Engine Level Low" light would have appeared in the cluster meter, thus the allegations of the complainants that the engine oil was not filled at the time of service of the car was false. It was further stated that the alleged report of the Chartered Engineer was without even checking the vehicle or its records with Opposite Party No.2 and had been prepared on the basis of presumptions and assumption and was totally irrelevant and appeared to be a procured report (Ex.R-2/10). It was further stated that on 5.7.2014, in the very late hours, it was reported that the car was not starting, on which the representative of the company was advised not to crank the car repeatedly and brought it to the workshop of Opposite Party No.2. It was further stated that the car was reported to the workshop of Opposite Party No.2 on 7.7.2014 and a repair order for checking the problem in the car was prepared. After initial checking and diagnosis of the car, it was found that the fuel line of the vehicle had been damaged due to use of contaminated fuel over a period of time, which resulted into damage to the fuel line and injectors and other parts and the customer was informed accordingly and preliminary estimate of Rs.7,13,523.76 was prepared (Annexure C-9). Further, upon receiving the consent of the customer, Opposite Party No.2 further diagnosed the vehicle and it was found that the Cam Shafts had also been damaged due to repeated/excessive cranking of the vehicle by the driver when it had stopped. It was further stated that a revised estimate was prepared including the costs of other parts (Annexure C-11). It was further stated that the vehicle at the time of said damage was out of warranty period. However, Opposite Party No.2, as a goodwill gesture, offered 50% discount on parts as per the estimate excluding labour charges to which the complainants agreed. It was further stated that vide e-mail dated 19.7.2014 (Ann.C-17), the representative of the complainant company confirmed that he shall share 50% of the cost of repair under protest in case the insurance company repudiates its claim and requested to repair the vehicle. It was further stated that accordingly, the customer deposited Rs.1.00 lakh as advance to carry out the repair work. It was further stated that after necessary repairs, the vehicle was delivered to the representative of the complainant company vide invoice dated 5.8.2014 wherein labour charges to the extent of Rs.1,30,652.50 and Rs.2,64,537.67 towards the cost of the parts, were charged. It was denied that the damage to the vehicle had occurred on account of any manufacturing defect. It was further stated that the complainant was informed that it had no connection whatsoever with the insurance claim and it had already reduced the costs of the parts by more than 50% and that the reduced amount had already been paid and vehicle had been taken after repairs. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.2, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
7. Opposite Party No.3, in its written version, admitted the factum of insurance of the vehicle, in question. It was stated that since the vehicle, in question, was being used for commercial purposes, the complainants were not consumers. It was stated that on 16.7.2014, Opposite Party No.3 received intimation regarding the alleged loss caused to the vehicle of the complainants, with a delay of 10 days, which was in violation of terms and conditions of the Policy. It was stated that complaint was not legally maintainable as the vehicle, in question, was insured in the name of M/s Harmony Colonizers Pvt. Ltd., whereas the complaint has been filed by the complainants, who were not competent and authorized to file the present complaint. The complainants were allotted claim number and Mr. Dheeraj Singla, Surveyor was appointed to assess the loss. It was further stated that after inspection of the vehicle and doing different investigations, the Surveyor came to know that the internal parts of engine got damaged due to adulterated fuel being used by the complainants regularly and there was no manufacturing defect. It was further submitted that the complainants claimed the amount of Rs.3,95,190/- being the repair charges, but the same was denied vide e-mail dated 06.08.2014 (Ann.C-30) followed by repudiation letter dated 8.9.2014 as per terms & conditions of the policy, as no claim was payable under the policy. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.3, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
8. The complainants filed rejoinder wherein they reiterated all the averments contained in the complaint and repudiated those as contained in the written statements of the Opposite Parties.
9. The parties led evidence in support of their case.
10. After hearing the Counsel for the parties and, on going through the evidence, and record of the case, the Forum, allowed the complaint against Opposite Party No.2 only, vide the impugned order, as stated above.
11. Feeling aggrieved, Opposite Party No.2 has filed the instant appeal.
12. We have heard the Counsel for the parties, and have gone through the evidence and record of the case carefully.
13. The core question, which falls for consideration, is, as to whether the complainants are consumers within the definition of Section 2(1)(d) of the 1986 Act. The Counsel for the appellant/Opposite Party No.2 submitted that in absence of cogent evidence that Director was authorized to use the vehicle, in question, for himself and his family members, the complainants did not fall within the definition of a consumer. He further submitted that the District Forum also failed to appreciate that there was a direct link and nexus between the purchase of vehicle and profit making activity of Private Limited Company "M/s Harmony Colonizers Private Limited", which purchased the vehicle in its own name. He further stated that resolution dated 15.07.2015 was afterthought and brought, on record, by way of Annexure C-36 to bring the complainants within the definition of a consumer. He further submitted that the District Forum omitted this important aspect and did not record any finding, as to whether the complainants were consumers or not. He placed reliance on General Motors India Pvt. Ltd. & Anr. Vs. G. S. Fertilizers (P) Ltd. and Ors., First Appeal No.723, 736 of 2006, decided by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi on 07.02.2013. Further reliance was placed on M/s Evergreen Traders Private Limited Vs. Hotel Rajwanth Internationals & 4 Ors., First Appeal No.274 of 2012 decided by Hon'ble National Commission on 15.05.2013; Duggirala Prasad Babu Vs. M/s Skoda Auto India Pvt. Ltd. & Ors., Revision Petition No.428 of 2013 decided by the Hon'ble National Commission on 04.03.2014 and Saurabh Gupta, Deputy Manager (Sales) M/s Godrej & Boyce Mfg. Co. Ltd. & Ors. Vs. Hasti Petro Chemicals & Shipping Ltd., First Appeal No.856 of 2013 decided by the Hon'ble National Commission on 13.03.2014.
14. On the other hand, Counsel for respondents No.1 and 2/complainants submitted that no doubt the vehicle was registered in the name of the Company but when it was used by its Director and his son-in-law, the complainants would fall within the definition of 'consumer'. He placed reliance on Techno Mukund Constructions Vs. Mercedes Benz India Limited & Anr., 2011 (2) CLT 362.
15. It is averred in Para 3 of the complaint that the vehicle was used by complainant No.1 who is Director of the Company for his own use and complainant No.2 who was son-in-law of complainant No.1. Though this averment was made in the complaint but no evidence to this effect was brought on record. In the rejoinder, the complainants brought on record Copy of Resolution dated 15.07.2014 (Annexures C-36) and List of Directors (Annexure C-37). Annexure C-36 reads thus:-
Annexure C-36 "Ref No.:- HCPL/CBP/002 Date:15/07.2014 Resolution A meeting of board of directors of the Company was held on 15/07/2014 at their office. It was resolved in the meeting that Mr. Ankur Bansal S/o Sh. Arjun Bansal R/o #576, Sector - 07, Panchkula is authorized to deal with any one regarding any issue regarding the AUDI CAR, audi A6-2.7TDI model bearing Engine No.000408 and Chassi No.CAN023776 and bearing registration No.HR02-X-0002. It is pertinent to mention here that above car is being used by Mr. suresh Singla (Director) S/o Sh. Ronak Ram for their personal use.
Sd/- sd/- Chairman Signatures of Mr. Ankur Bansal. HARMONY COLONISERS (P) LTD. Attested to be true copy."
Annexure C-37 contains names of four Directors of the Company and name of complainant No.1 also figures in the list.
16. The question, whether the complainants, where purchase of car is for use of Director/employee, falls within the definition of consumer as per Section 2(1)(d) of 1986 Act, has been decided by the Hon'ble National Commission in Crompton Greaves Limited & Anr. Vs. Daimler Chrysler India Private Limited & Ors., Consumer Complaint No.51 of 2006 decided on 08.07.2016, wherein in Paras 6, 9 and 11, it was held as under:-
"6. The goods and services made available by a company to its directors or employees can be classified into the following three broad categories:-
(a) The goods and services which are obtained for and made available to the directors or employees of the company and are used by them only for their personal purposes, unconnected with the business of the company. For instance, the cars used by the directors and employees of the company for their shopping, outings, recreations, etc. or for commuting to and from the office of the company. Another example can be the air conditioners and furniture provided at the residence of the directors and employees of the company or the telephone or broadband got installed by the company at their residence.
(b) The goods and services made available to the directors or employees of the company and used by them primarily for their personal purposes but incidentally, also for the purposes of the company. For instance, a car used mainly for outings, recreations, personal commuting etc. of the directors and employees or their families, but also for visiting the factory and offices of the company or attending the business meetings.
(c) The goods and services made available by a company to its directors and employees primarily for the purposes of the company and used by them mainly for the purposes of the company but incidentally also for their personal purposes. For instance, a vehicle purchased for being used as a staff car or a delivery van, but sometimes also used for the personal purposes of the directors or employees, unrelated to the business of the company.
9. As far as the goods or services falling in category (c) are concerned, since the dominant purpose behind such acquisition is to advance and sustain the business activities of the company and the use for the personal purposes of the directors or the employees being incidental, it can be safely said that such an acquisition was for the commercial purposes of the company.
11. For the reasons stated hereinabove, the issue referred to the larger Bench is answered as follows:-
If a car or any other goods are obtained or any services are hired or availed by a company for the use/personal use of its directors of employees, such a transaction does not amount to purchase of goods or hiring or availing of services for a commercial purpose, irrespective of whether the goods or services are used solely for the personal purposes of the directors or employees of the company or they are used primarily for the use of the directors or employees of the company and incidentally for the purposes of the company.
The purchase of a car or any other goods or hiring or availing of services by a company for the purposes of the company amount to purchase for a commercial purpose, even if such a car or other goods or such services are incidentally used by the directors of the company for their personal purposes."
It may be stated here that a Company acts/speaks through resolution(s). The terms and conditions regarding salary and perks of a Director are decided by way of resolution of the Company. In the instant case, no evidence to the effect that complainant No.1, as per any resolution of the Company, was entitled to a car has been brought on record. The car was purchased in the year 2010 in the name of the Company, and it is registered in the name of Company, a private limited company. It is case of the complainants that Audi car was being used by Sh. Suresh Singla son of Late Sh. Ranauq Ram, Director, for personal use and his son-in-law. Annexure C-37 indicates that Mr. Suresh Singla is a Director of the Company. The incident of stopping of the vehicle in between the road when the complainants were on way to Mansa Devi Temple and not starting thereafter took place on 05.07.2014 whereas the resolution, indicating that the car was being used by Sh. Suresh Singla, is after the date of incident. The appropriate and correct evidence to prove that the car was, in fact, being used by Sh. Suresh Singla, would be the terms and conditions/perks of the said Director and also the resolution before the date of incident whereby he was authorized to use the said car, which is not there. In these circumstances, we find that there is force in the argument put forth by the Counsel for the appellant/Opposite Party No.2 that evidence by way of Exhibit C-36 is afterthought being after the date of accident to bring the complainants within the definition of consumer.
17. Since it has not been established by cogent evidence that the car was for the use of the Director of the Company, the complainants do not fall within the definition of consumer as envisaged in Section 2(1)(d) of 1986 Act. Thus, the Forum erroneously allowed the complaint filed by respondents No.1 & 2/complainants on merits, without determining the issue as regards the complainants being consumers or not. Therefore, the impugned order passed by the Forum is liable to be set aside and the complaint deserves to be dismissed as the complainants are held to be not consumers.
18. No other point was raised by the Counsel for the parties.
19. For the reasons, recorded above, the appeal is accepted. The impugned order passed by the Forum is set aside. Consequently, Consumer Complaint No.447 of 2014 is dismissed, with no orders as to cost.
20. Certified copies of the order be sent to the parties free of charge.
21. File be consigned to the Record Room after completion.
Pronounced August 30 , 2016.
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT (DEV RAJ) MEMBER (PADMA PANDEY) MEMBER Ad