State Consumer Disputes Redressal Commission
The New India Assurance Co. Ltd., , ... vs Classic Motor Sales, | Rep. By Its ... on 3 June, 2010
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT Tmt.Vasugi Ramanan, M.A. B.L., MEMBER I Thiru.S.Sambandam, B.Sc., MEMBER II F.A.328/2006 [Against order in C.C.1/98 on the file of the DCDRF, Vellore] DATED THIS THE 3rd DAY OF JUNE 2010 1.
The New India Assurance Co. Ltd., | rep. by its Divisional Manager P.N.Vijayakumar, | No.1, C.S.I. Complex, Officer's Line, | Vellore. | | Appellants/1 & 2 Complainants
2. M.M. Kannapiran, | Branch Manager, | The New India Assurance Co. Ltd., | Thiruvannamalai. | Vs.
1. Classic Motor Sales, | rep. by its Partner, | Kalinjur Road, Gandhi Nagar, | Vellore. | |
2. Hindustan Motor Sales, | Regional Office, | Respondents/1to 3 OPs.
Khivraj Motors Complex, | 730, Anna Salai, | Chennai 600 002. | |
3. Hindustan Motors Ltd., | PO High Motors, Hoogly, | Calcutta, West Bengal-3. | The appellants as complainants filed a complaint before the District Forum against the Respondents/opposite parties praying for the direction to the first and second opposite parties to pay the sum of Rs.3,40,440/- being the sale consideration interest at 24% p.a. from 27.3.97 till date of payment.
Opposite parties are liable to pay the sum of Rs.10,000/- for the mental agony, depression, anxiety and also to pay the sum of Rs.10,000/- being the expenses incurred by the said second complainant for making visits to opposite party's company, and also a sum of Rs.5,000/- towards the costs. The District Forum allowed the complaint against the first opposite party, against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.15.12.2005 in C.C.1/98.
This appeal coming before us for hearing finally on 30.03.2010, upon hearing the arguments of the counsels on eitherside, this commission made the following order:
Counsel for the Appellants /Complainants : Mr.Vijayaraghavan, Advocate.
For the R1 / 1 O.P. : Absent.
Counsel for the R2 & R3/2 & 3 OP. :
Mr.Srinath Sridevan, Advocate.
M. THANIKACHALAM J, PRESIDENT
1. The complainants having obtained an order in O.P.1/98 on the file of District Consumer Disputes Redressal Forum, Vellore, as prayed against first opposite party, not satisfied, preferred this appeal, to have the relief against the second and third opposite parties also.
2. The second complainant obtained a loan from the first complainant for the purchase of a new Hindustan Ambassador Nova Diesel Car, delivered the cheque for Rs.3,32,640/- dated 27.03.97, drawn in favour of the first opposite party, who was the dealer of second and third opposite parties-manufacturer of the car. Though the first and second opposite parties assured for the early delivery of the car, failed to do so, despite the fact, the first opposite party had collected from the complainant an additional sum of Rs.7,800/-. Despite registered notice and many demands, the opposite parties not only failed to deliver the car, but also failed to return the amount, thereby, they have caused mental agony by their deficiency in service, for which, they are liable to pay a sum of Rs.50,000/-. In view of the default committed by the opposite parties, first and second opposite parties are jointly and severally liable to pay a sum of Rs.3,40,440/- with interest thereon at 24% per annum, in addition, the opposite parties to pay a sum Rs.50,000/- as compensation, apart from Rs.10,000/- for expenses. Hence, the claim.
3. The second and third opposite parties, in their lengthy Written Version have stated, that the complainants are not consumers and therefore, the Forum has no jurisdiction, that the case is barred by limitation, hit by mis-joinder of parties, that first opposite being the dealer, the relationship was that of principal to principal basis and therefore for the deficiency or any mistake committed by the first opposite party, other opposite parties are not answerable, since they are not an agent, that there is no contract or any connection between the complainant and this opposite parties and this being the position, they are not answerable for any claim, that when they came to know about the misconduct of the first opposite party, they have terminated the dealership, that the dealer was dealing and selling the car independently and as such, there was no privity of contract of any kind between these opposite parties and the complainant which further follows there is no question of deficiency in service or service to be rendered and in this view also, the Forum has no jurisdiction and that the other averments are denied, consequentially praying for the dismissal of the case.
4. The District Forum, considering the rival contentions of the parties, the relationship between them, as proved and admitted as well, as the non-payment of any amount by the second complainant to the second and third opposite parties, came to the conclusion, that there was no deficiency of service on the part of the second and third opposite parties and in this view, they are not answerable for the claims raised by the complainants. It has further concluded that the first opposite party alone having received the amount directly, answerable to the claim of the complainants. Thus, taking the decision, directed the first opposite party alone to pay a sum of Rs.3,40,440/- with interest thereon with cost, dismissing the claim against the second and third opposite parties, thereby, causing grievance to the complainants, resulting this appeal.
5. As seen from the prayer column in the complaint, under (a), direction is sought for against the first and second opposite parties jointly and severally to pay a sum of Rs.3,40,440/-
with interest thereon and under Clause (b), (c) and (d), directions are sought for against the opposite parties, probably against all, for a sum of Rs.50,000/-, Rs.10,0000/- and Rs.5,000/- under three categories. Thus, it is seen, no claim was made in respect of the actual amount paid by the complainant to first opposite party against the third opposite party, who is the manufacturer of the Car called "Ambassador".
6. As described in the complaint, the first opposite party is a dealer and not an agent. The second opposite party is the Regional Sales Office and third opposite party is the Manufacturer of the Car.
7. Heard, the learned counsel appearing for either side, perused the documents, written submissions as well as the order of the District Forum.
8. The second complainant is the Branch Manager of the first complainant/The New India Assurance Co. Ltd., It appears, the second complainant had obtained a loan from the first complainant, for the purchase of a new Ambassador Car, from the dealer namely first opposite party. Accordingly, as described in Para 2 of the complaint, a cheque for Rs.3,32,640/- was drawn in favour of the first opposite party, and handed over to him. The additional amount said to have been paid, as pleaded in Para 3 also was paid only to the first opposite party. Thus, it is seen, no consideration has been paid by the complainants, to second and third opposite parties, for the delivery of the Car. In the complaint also, we find absence of pleadings, regarding the passing of consideration. Even it is not the case that the amount paid to the first opposite party, had been transferred to second and third opposite parties. Generally, we have come across the cases, that the cheque or Demand Draft would be drawn in favour of the Company and be handed over to the Agent/Dealer, thereby, making it clear that amount had reached the manufacturer, thereby, making them also liable to answer the subsequent problems if any.
In this case, admittedly, amounts were paid only to the first opposite party and therefore, we are of the opinion that for the irregularity, if any, committed by the dealer of the second and third opposite parties, in the absence of privity of contract, the second and third opposite parties cannot be held responsible, and in this view, they cannot be directed to pay or return the amount, which was received and benefited by the first opposite party. In this view alone, it appears, the District Forum accepting the case of the complainants as far as the first opposite party is concerned, directed him to pay the amount, refusing to give a direction against the second and third opposite parties, which is under challenge.
9. The learned counsel for the appellants would contend that the third opposite party has not proved, the relationship between themselves and the first opposite party as 'Principal - Principal' and not as 'Principal - Agent' and this being the position, for the irregularity committed by the Agent of the second and third opposite parties, namely the first opposite party, they ought to be held responsible, as held by the National Commission, seeking aid from certain decisions, which we will advert infra. It is the further submission of the learned counsel for the appellants, since the agent's agreement was not proved and what are the duties and liabilities of the agent was not disclosed, believing that the first opposite party was the agent of the third opposite party, they have deposited the amount, for which, second and third opposite parties should be held responsible. Repudiating the above averments, the main submission of the second and third opposite parties was, that the first opposite party was not the agent, whereas, he was only a dealer, had the relationship as 'Principal - Principal', in which case, if any irregularity committed by the dealer, the Principal is not at all responsible.
10. By going through the prayers, as adverted above and the pleadings as well as the payments made by the complainants, to the first opposite party alone, then by going through the reasonable order of the District Forum also, we are of the considered opinion, no error had been committed by the District Forum in rejecting the claim of the appellants/complainants against the second and third opposite parties, warranting our interference and the reasons are hereunder.
11. In Para 3 of the complaint, it is said since the first opposite party did not deliver the car, representation was made to the second opposite party, who assured early deliver. In the previous Paragraphs in detail it is pleaded, payments were made only to the first opposite party. Nowhere, it is pleaded that the second and third opposite parties have agreed to deliver the vehicle or they had the benefits of the amounts given to the first opposite party. Not even it is pleaded that there was consideration between the complainants and second and third opposite parties and they were acting as service provider in order to bring the complainants within the meaning of the consumers and the second and third opposite parties within meaning of service providers.
Thus, it is to be held, no relationship of consumer and service provider has been made, which should follow the case against the second and third opposite parties should fail.
12. As pointed out earlier, no prayer against the third opposite party.
In the body of the complaint also, though we find exchange of notice and other details, nothing is made out against the third opposite party, how they are answerable, that too, in the absence of main prayer in Para 9(a). When the main prayer itself is not against the third opposite party for the refund of the amount, it is not known how the second and third opposite parties could be held responsible for the mental agony or any other expenses incurred by the complainants. In this view also, in the absence of any privity of contract between the complainants and the second and third opposite parties, the case should fail, which failed, should receive approval. However, let us see whether the manufacturer of the Car can be held responsible for the irregularity or deficiency in service committed by the dealer.
13. It is not the case of the second and third opposite parties that the first opposite party was their agent, whereas, it is their case that the first opposite party was the dealer. It seems, the dealers have committed irregularity, resulting Police complaint as seen from Newspaper (Ex.A17) and thereafter the third opposite party also terminated the dealership with effect from September 1998 as seen from Ex.A20-Public Notice. In the Public Notice also, they have not described the first opposite party as their agent, so as to say for the act committed by the Agent, Principal could be made responsible. In view of the specific stand taken by the complainants as well as by the second and third opposite parties, that the first opposite party is a dealer, the non-production of the dealership agreement between themselves, may not loom large that too in this case, in the absence of any benefit by the second and third opposite parties by the payments made by the complainants to the first opposite party. The learned counsel for the appellant drew our attention to the decision of the National Commission in "General Manager, M/s.Dynasty Walford Ltd., Vs. Oriental Insurance Co. Ltd.," reported in "1999 (1) CPR 78 (NC)", and "Tractors & Farm Equipment Ltd., Vs. Sri N.Somanatha Gowda & Anr", reported in "2002 (1) CPR 19 (NC)", in support of his contention that the manufacturer is liable for the irregularity committed by the authorized dealer. In the above cases, it seems, the purchaser of the vehicle paid the amount through the dealer to the Company itself, thereby, Company benefited by the payment. Therefore, it appears when the amount was sent to the manufacturer duly received, it is held that they are answerable for the dereliction of duties or deficiency in service committed by the authorized dealer, that too, when the relationship between themselves are subsisting. In our case, as pointed out by us, cheques were drawn only in favour of the first opposite party and that money has not reached the hands of the second and third opposite parties. Therefore, we feel, manufacture may not be held liable on 'Principal to Principal basis' and the Principal is not liable for the dealer's act, which could be seen from the decision of the National Commission in "Maruti Udyog Ltd., Vs. Nagender Prasad Sinha and another" reported in "2009 CTJ 981 (CP) (NCDRC)". In the case involved in the above decision, based upon the dealership agreement and as per the law laid down by the Supreme Court also, it is held that "In case of relationship between the manufacturer and its dealer on principal to principal basis, the principal is not liable for the dealer's acts". In the case involved in the above decision, it appears, money was deposited in favour of the manufacturer, thereby, informing that consideration has been passed from the dealer to the Principal. Despite this fact, applying the principle, dealer is on the basis of 'Principal to Principal', the National Commission has held for the irregularity committed by the dealer, the manufacturer cannot be held responsible. In our case, when the manufacturer or the Area Manager has not derived any benefits by the payments made by the complainants to the first opposite party and when they have not given any assurance of any kind at any point of time to the complainants, it may not be proper either on facts or on law to direct them to repay the amount, which was admittedly paid and appropriated by the first opposite party alone. The District Forum in our opinion, correctly decided the case and issued proper direction, which cannot be modified as claimed in the appeal. Hence, appeal deserves rejection.
15. In the result, the appeal is dismissed, confirming the order passed by the District Consumer Disputes Redressal Forum, Salem, in O.P.1/98, dt. 15.12.2005. Under the facts and circumstances of the case, there will be no order as to cost in this appeal.
S. SAMBANDAM VASUGI RAMANAN M.THANIKACHALAM MEMBER II MEMBER I PRESIDENT INDEX : YES / NO Ns/mtj/bank/fm