State Consumer Disputes Redressal Commission
M/S Shimla Automobiles Pvt. Ltd & Anr. vs Bhagwan Dass Jassal & Anr. on 5 April, 2008
H H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA Date of Decision 05.04.2008. Appeal No. 187/2005 1. M/s Shimla Automobiles Pvt. Ltd., through its Managing Director Kachhi Ghati (Tara Devi), Shimla 171-10 2. M/s Shimla Automobiles Pvt. Ltd. through its Branch Manager Mubarakpur Road, Amb, Distt. Una 177 203. . Appellants. Versus 1. Sh. Bhagwan Dass Jassal S/o late Sh. K.R.Jassal R/o VPO Amb, Tehsil Amb, Distt. Una, HP. . Respondent. 2. M/s Mahindra & Mahindra Ltd., through its Managing Director SHQ Mahindra Towers, Worli Road No.13, Mumbai 400 018 3. M/s Mahindra & Mahindra Financial Services Ltd., through its Managing Director Mahindra Towers, Worli, Mumbai 400 018. . Proforma respondents. For the Appellants. Mr. Ratish Sharma, Advocate. For the Respondent No.1. Mr. Anoop Rattan, Advocate. For the Respondent No. 2. Mr. Rahul Mahajan, Advocate. Appeal No. 193/2005. Sh. Bhagwan Dass Jassal S/o late Sh. K.R. Jassal R/o VPO Amb, Tehsil Amb, Distt. Una, HP. . Appellant. Versus 1. The Managing Director Mahindra & Mahindra Limited SHQ Mahindra Towers Worli, Road No.13, Mumbai 400 018, 2. The Managing Director, Mahindra & Mahindra, Financial Service Limited, Mahindra Towers Worli-18, 400 018, 3. The Managing Director M/Shimla Automobile Private Limited, Kachhi Ghati (Tara Devi ) Shimla 171010, 4. The Branch Manager, Mahindra & Mahindra, Shimla Automobile Mubarakpur Road, Amb, Distt. Una, HP 177203. . Respondents. For the Appellant. Mr. Anoop Rattan, Advocate. For the Respondents No.1 & 2 & 4. Mr. Rahul Mahajan, Advocate. For the Respondent No.3. Mr. Ratish Sharma, Advocate. Honble Mr. Justice Arun Kumar Goel, President. Honble Mrs. Saroj Sharma, Member. Whether Approved for reporting? Yes. O R D E R:
Justice Arun Kumar Goel (Retd.) President (Oral) Since both these appeals have been arisen out of the order passed by the District Forum Una, in Complaint No. 129/2002, on 17.5.2005, as such these have been heard together and are being disposed of by this order.
2. Admittedly Mahindra & Mahindra Limited, is the manufacturer of the vehicle which is subject matter of these appeals. It was financed by Mahindra & Mahindra Finance Limited. Vehicle was sold by the manufacturer through its authorized agent like appellant in Appeal No. 187/2005 at Amb, where it was having its sale-cum-office at Mubarakpur Road, Tehsil & District Una. In this case the vehicle was sold on 26.7.2001 under a Hire Purchase Agreement. It was financed by the financier after receipt of margin money from the purchaser i.e. Bhagwan Dass Jassal. After calculating the amount of interest etc., repayment of the total amount including interest was to be made in monthly installments of Rs. 14,660/- by purchaser of vehicle i.e., Bhagwn Dass Jassal.
3. It is admitted case of the financier that the owner of the vehicle had only paid 7 installments, 4 were paid in time and 3 were paid belatedly. This vehicle was taken over by the financier on 29.9.2002 due to persistent defaults, and was sold on 10.2.2003 for Rs. 1,52,000/- on as is where is condition.
4. From this fact it can safely be inferred that the vehicle was not roadworthy, otherwise there was no occasion for the financier to sell it on as is where is condition. What is its effect, will be dealt with hereafter.
5. On the other hand case of Bhagwan Dass Jassal hereinafter to be referred as the complainant was, that immediately after purchase of the vehicle it started giving trouble like sound in hissa, overheating of engine and also defect being there in the gear box. Defects were there from the very beginning is otherwise established from the material placed by the parties on record. As also on the basis of the admission of the manufacturer and the other two respondents who are the clients of Mr. Ratish Sharma. At this stage, Mr. Mahajan pointed out that his clients i.e. Manufacturer and Financier both have specifically disputed that there was any manufacturing defect or anything was brought to their notice in that behalf. This plea has no merit in the face of the stand of Mr. Ratish Sharmas client as well as in view of the affidavits of mechanic, cleaner of the vehicle and of the complainant. As such this plea is being noted simply to be rejected for the simple reason that the complainant was dealing with the clients of Mr. Sharma who had admittedly sold the vehicle in question as authorized dealer of the manufacturer and had not disputed either the defects or those having been attended upon those.
6. It is further evident from the record and we are fully satisfied that there is adequate material to suggest that the vehicle was suffering from inherent manufacturing defect right from the day one which were brought to the notice of the clients of Mr. Sharma at Amb, who did make some attempts to remove those.
7. Here the affidavit of mechanic who was employed by the clients of Mr. Sharma, i.e. of Mr. Chaman Lal assumes significance. Its perusal completely negates the case as well as demolishes the stand of Mr. Mahajan that the vehicle was not having any manufacturing defect. This affidavit has remained completely unchallenged. This man has specifically stated that he was a duly trained mechanic of Mahindra & Mahindra Company and was employed in this Company. He had spoken about the vehicle HP-19A-1277 having been delivered after due test. Per him even at that point of time there was some typical noise in the hissa of the vehicle which fact the mechanic had brought to the notice of Manager Service Engineer (Area) of the Company at Chandigarh on telephone. As per telephonic advice of the Area Engineer, he changed the oil and for that purpose the hissa was opened on a number of occasions, but it could not be rectified.
8. When it could not be repaired, then the Area Engineer asked it to be replaced within 10 or 15 days. This was not changed till 4th month of 2002. Again this mechanic Mr. Chaman Lal has stated in his affidavit that in the end of 4th month there was trouble in gear box which was adjusted, but again it could not be rectified. Vehicle was again brought to the workshop on 4.5.2002 and with great difficulty on 29.5.2002 incomplete parts were collected from many places, some old parts were used to make the vehicle roadworthy. But still it was not fully repaired. Customer on the satisfaction certificate on 1.6.2000, had written a note at the instance of the Manager. Further according to this deponent Manager himself told that when the parts were not available, he cannot do anything. All these facts were brought to the notice of DO, Chandigarh and to Mr. Jagar Nath Sharma, Financial Manager because this matter was discussed in the office on a number of occasions. Almost to the similar effect is affidavit of Mr. Rakesh Kumar cleaner of the vehicle who was employed with the complainant on the vehicle in question, from October 2001 to August, 2002 when he left the job. To the contrary, there are affidavits of Mr. Praveen Kumar, his first affidavit is on behalf of the respondent No.2-the financier and is at pages 46 onwards of the complaint file. Another affidavit filed by him is on behalf of respondent No.1, i.e. the manufacturer, and of respondent Nos. 3-4 i.e. the clients of Mr. Sharma. This is at page 60 onwards.
9. Another very strange feature of this case is needs to be noted, is that all the four OPs were being represented by the same counsel in the proceedings before District Forum. Here alternate plea raised by Mr. Sharma on behalf of his clients, that if ultimately it is held that there is any liability, then since there was manufacturing defects, therefore, liability is of Mr. Mahajans client the manufacture-respondent No.1. This directly spells out the conflict of interest between the OPs inter-se in the complaint.
10. Faced with this situation, Mr. Mahajan again forcefully reiterated that neither the clients of Mr. Sharma nor the complainant ever informed regarding manufacturing defect to the Area Manager of his client the manufacturer. This plea is being noted again to be rejected for the simple reason that the averments made by the mechanic who was there at the time of the vehicle having clearly stated in unambiguous terms that he had informed the Manager and Area Engineer of manufacturer at Chandigarh and on whose advice, action was taken for repairing the vehicle.
11. While contesting the claim of the clients of Mr. Sharma, as well as the complainant, it was pointed out by Mr. Mahajan on behalf of the manufacturer and financier, that assuming everything for the sake of argument without conceding against his clients, still on the pleaded facts, no relief can be given to the complainant in the appeal filed by him.
12. First and foremost requirement of law to be established by him was that the vehicle in question was purchased by him for his self employment. There is no averment in the complaint to that effect, therefore by referring to a number of decisions, he submitted that the complaint is liable to be dismissed on this short ground alone.
13. Looking to the overall facts and circumstances of this case and even otherwise cumulative effect of the above referred number of defects this is purely a case of sale of a defective vehicle from day one when it was sold to the complainant. This was his misfortune that the counsel had not pleaded that the vehicle was purchased by him for his own employment, still we are of the view that it does not give a license to the manufacturer to supply anything and everything whether defective or not. Ordinarily it should have been pleaded by the complainant that the vehicle purchased by him was meant for his self employment. But can on this ground alone the complaint merits dismissal. In our opinion the complainant cannot be non-suited when the mechanic of the clients of Mr. Sharma has specifically stated that the hissa was giving abnormal sound even on the date of sale before other defects came to surface.
14. Next ground urged by Mr. Mahajan was that the vehicle had been purchased by the appellant for commercial purpose and in his pleadings i.e. in the complaint he had spoken that he had employed a driver and conductor for plying the vehicle in question. Ordinarily this plea should have been upheld, but for the view that we have taken that by supplying a vehicle which inherently from day one had manufacturing defects, manufacturer cannot be absolved of its responsibility not to have rolled such a defective vehicle for sale in the market.
15. In this behalf while rejecting the submission of Mr. Mahajan, we may further observe that an attempt was made by him to support the plea of his client, i.e. manufacturer, but in the face of the alternate plea of Mr. Sharma to hold the manufacturer liable for the manufacturing defects, this plea of Mr. Mahajan is again rejected. Case of the complainant is further supported from his own affidavit which is already there on the file. And when it is read with those two affidavits of Mr. Praveen Kumar, and of the mechanic and cleaner filed by him i.e. the complainant, then on the basis of such affidavits case fully tilts in favour of complainant and we hold accordingly.
16. Another serious contention raised by Mr. Mahajan was that after filing of the complaint the vehicle was sold on 10.2.2003, whereas complaint was filed on 3.8.2002. Notice of this complaint was served upon the financier (who sold the vehicle), on 19.9.2002 as is evident from the acknowledgment which is at page 161 of the complaint file and it bears the stamp of the said financier. Whether it could and it should have sold the vehicle after having come to know about the filing of the complaint and grievance being made by the complainant is another fact that calls for adjudication in this appeal. Position of the complainant can be better imagined than explained. Because vehicle was having manufacturing defect from the very beginning and was not in a roadworthy condition when sold. It is not the case of the complainant that it had not got the vehicle financed and or that he was not liable to pay the installments. Wherefrom he was to pay those, Mr. Mahajan said in reply to our query that it was for the complainant to arrange repayment in terms of the Hire Purchase Agreement and it was not the concern of the financier.
17. So far Hire Purchase Agreement is concerned, it speaks of not only regarding payment of installments, but also other rights of the purchaser including right to repossess by him i.e. purchaser.
According to us, this agreement is meaningless and no benefit can be derived by it for the simple reason that it contemplates the financier as the registered owner of the vehicle i.e. the purchaser, whereas it had only provided money for its purchase to the registered owner i.e. the complainant. Therefore, no benefit from any of the clauses can be derived by the financier. As prima facie when such an agreement is there, then the financier is the purchaser and the person who is financed like complainant in this case is the hirer, that being the position the entire bottom of the case of Mr. Mahajan is knocked.
18. We may hasten to add here that the complainant having derived benefit from the client of Mr. Mahajan in law is bound to restore the same under the law of contract. How and in what manner it has to proceed is a question to be decided by the financier. Though Mr. Mahajan submitted that the finding regarding the Hire Purchase Agreement may not be recorded by us, but we do not agree with him and repel this contention, because Hire Purchase Agreement pre-supposes the financier to be the purchaser from whom the complainant had hired the vehicle as hirer. Above all the case of the financier is based on the Hire Purchase Agreement. It had repossessed the vehicle and sold it in terms of this agreement.
19. Mr. Mahajan submitted that no relief is claimed against his client in the complaint, as such agreement cant be now allowed to be challenged by the complainant and this Commission should not go into this question. We have already dealt with this aspect, therefore, we reject this plea of Mr. Mahajan.
20. Sale of vehicle during pendency of the complaint after receipt of notice tantamounts to an unfair trade practice on the part of the financier i.e. the client of Mr. Mahajan. Faced with this situation he pointed out that stay should have been obtained by the complainant against the sale of the vehicle by the complainant. We are of the view that when the matter was pending, it was also the duty of the financier to have sought permission of the District Forum below to sell the vehicle, why this was not done, Mr. Mahajan had no explanation save and except that it was the duty of the complainant. We are not at all satisfied with this reply of financier that it was the duty of the complainant.
21. No doubt the complainant should have taken care of by filing an application before the sale of the vehicle. Application was in face filed by the complainant on 30.11.2002 which was at page 119 onwards and a prayer was made seeking direction against the client of Mr. Mahajan, as well as Mr. Sharma to restore the vehicle as it was till the final decision of the complaint.
22. It is a different matter that the District Forum below on 30.11.2002 chose not to decide the same and finally rejected it on 30.4.2004. Submission of Mr. Mahajan that no request was made after filing of the application is without any substance, because looking to the situation it was incumbent upon the District Forum below to have either allowed or disallowed the said application, instead of doing so it slept over the matter for reasons best known to it.
We may observe that in the matter of the present nature particularly the financier being a high contracting party and complainant is left with no option, as such called upon the District Forum below to dispose of the said application. In fact by its act, the financier has tried to take undue advantage of its position after taking over the vehicle in question and then selling it despite knowledge of filing of the complaint and stay application.
23. It hardly needs to be pointed out that ad interim order can be challenged at that stage and if not challenged, then there is no prohibition of its being challenged in the appeal against the final order under law.
24. Now coming to the question as to what relief can be given to the complainant in these appeals. By referring to a number of decisions, Mr. Sharma submitted that since this is a case of manufacturing defect, therefore, liability is that of manufacturer and it may be held liable after exonerating his client upon whom the liability has been fixed in the impugned order while exonerating the manufacturer and financier.
25. On an overall examination of the whole case, we are fully satisfied that the vehicle was having manufacturing defect from day one, thus we hold at the risk of repetition that no direction can be issued to the financier to restore the vehicle of the complainant at this belated stage, as such we feel that interest of justice will be well served if it is ordered to compensate the complainant. We feel that in addition to the amount already allowed by the District Forum below a further sum of Rs. 2 lacs be paid to the complainant who is now entitled to Rs. 2.75 lacs which is to be paid jointly and severally by the manufacturer as well as by the financier, thus exonerating the client of Mr. Sharma. Since we have dealt with the case purely on facts, as such we have not referred to the decisions relied upon by Mr. Anoop Rattan learned counsel for the complainant, as well as by Mr. Ratish Sharma and Mr. Rahul Mahajan. To be fair to them these are noted in the form of an annexure, which will for all purposes form a part of this order.
26. No other point is urged.
In view of the aforesaid discussion while allowing both the appeals it is ordered as under;
a) That the clients of Mr. Sharma are exonerated, as such Appeal No. 187/2005 is allowed;
b) It is held that now a total sum of Rs. 2,75,000/- with interest from the date, as well as at the rate as ordered by the District Forum below shall be payable by the clients of Mr. Mahajan i.e. the manufacturer as well as the financier who are held jointly and severally liable.
Liability on the latter has been fixed because it sold the vehicle despite being aware of the pendency of the complaint as also of the application for restoration of the vehicle when it had not been sold by the financier; and
c) Before concluding we may clarify and reiterate that if under law of contract financier has any remedy, this order will not bar it to take benefit thereof.
All interim orders passed from time to time in Appeal No. 187/2005 shall stand vacated forthwith.
Office will place authenticated copy of this order on the file of Appeal No. 193/2005 Learned counsel for the parties have undertaken to collect the copy of this order from the Reader free of cost in both these appeals.
Shimla.
5th April, 2008. (Justice Arun Kumar Goel) Retd.
President.
(Saroj Sharma), Karan* Member.
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