State Consumer Disputes Redressal Commission
M/S Charisma Goldwheels Pvt. Ltd. vs Dr. B.K. Arora & Anr. on 9 May, 2008
H
H.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
SHIMLA.
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DATE OF DECISION: 9.5.2008.
FIRST APPEAL NO.302/2006.
M/S
Charisma Goldwheels (P) Ltd.,
7,
Industrial Area, Phase 1, Chandigarh, through its
Director
Shri Pratap Hoon.
Appellant.
Versus
1.
Dr.
B.K. Arora son of Shri Lal Chand,
resident of Chuha Bag, Rampur Bushehar, H.P.
Respondent.
2.
Hyundai
Motors, Northern Regional Office, A-3-, Mohan
Cooperative Industrial Estate, Mathura Road, New
Delhi-110 044
through its M.D. Mr. C.V.S. Cheri.
Proforma
Respondent.
Present: None for the appellant.
Mr.
Shashi Bhushan Singh Chandel, Advocate,
for
respondent No.1.
Mr.
B.N. Mishra, Advocate,
for
respondent No.2.
FIRST APPEAL NO.331/2006
M/s
Hyundai Motors India Ltd.
through
its General Manager (Customer Care) Mr. D.S. Jang,
A-30,
Mohan Cooperative Industrial Area,
Mathura
Road, New Delhi 110 044.
Appellant.
Versus
1.
Dr.
B.K. Arora son of Shri Lal Chand,
Resident of Chuha Bag, Rampur Bushahar, Himachal
Pradesh.
2.
M/S
Charisma Goldwheels (P) Ltd.
through its Proprietor, 7, Industrial Area, Phase-1,
Chandigarh 160 002.
Respondents.
Present: Mr. B.N. Mishra, Advocate,
for
the appellant.
Mr.
Shashi Bhushan Singh Chandel, Advocate,
for
respondent No.1.
None
for respondent No.2.
Honble
Mr. Justice Arun Kumr Goel (Retd.), President.
Honble
Mrs. Saroj Sharma, Member.
Whether
approved for reporting? Yes.
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O R D E R
Justice Arun Kumar Goel (Retd.), President.
1. Since these appeals have arisen out of the order dated 25.7.2006 passed by the District Forum, Shimla, in Complaint No.270/2004, as such these were heard together and are being disposed of by this order.
While allowing the complaint, District Forum below has ordered as under:-
13. As a sequel of the above, we hereby allow this complaint and direct Ops jointly and severally to replace the defective vehicle with the new one of the same make/equivalent and model, which is functional and road worthy, within a period of forty-five days from the date of receipt of copy of this order, subject to return of the defective vehicle to the Ops on receipt of the new vehicle. In case, Ops are not in a position to replace the defective vehicle with the new one as ordered supra, in that event they shall be liable to refund the cost price of Hyundai Santro car amounting to Rs.3,76,289/- alongwith interest at the rate of 9% per annum with effect from the date of filing of the complaint, i.e. 31.05.2004, till actual payment is made, subject to return of defective vehicle by the complainant. The Ops shall also pay a sum of Rs.25,000/- as compensation to the complainant for rendering deficient service and causing mental harassment. The litigation cost is quantified at Rs.3500/- payable by Ops to the complainant. In case the Ops fail to comply with this order within the stipulated period, as ordered supra, in that event, they shall also be liable to pay a further sum of Rs.10,000/- as punitive damages to the complainant. With these directions, the complaint stands disposed of accordingly.
The file after due completion, and after supplying the copies of this order to the parties free of costs, be consigned to record room.
Announced on this 25th day of July 2006.
2. Appeal No.331/2006 has been filed by the manufacturer i.e. M/S Hyundai Motor India Ltd. AND appeal No.302/2006 has been filed by its authorized dealer M/S Charisma Goldwheels (P) Ltd. and both are being referred to hereinafter as HMIL and dealer respectively, whereas complainant who is respondent No.1 in both the appeals is being referred to hereinafter as the respondent.
3. Learned Counsel for the dealer was heard earlier on two occasions whereas Counsel for HMIL and respondent were heard later.
4. A brand new Santro Car manufactured by HMIL having been sold by the dealer on 18.6.2003 for Rs.3,76,289/- to the respondent is not in dispute. It is admitted by HMIL that the dealer is authorized one for the sale of Santro cars manufactured by it. Car being under warranty for 24 months irrespective of the number of kms. covered during this period is again not in dispute, as it was not a vehicle being used as taxi/tourist operations.
5. Case of the respondent as set out in his complaint was that within a month of the purchase of the Car, it started giving continuous knocking problem that was noticed by him at Rampur Bushahar, which he immediately brought to the notice of the dealer on phone. However, it was held out to be a minor problem and was to be rectified during first service. In terms of warranty, besides other things, respondent was entitled to 3 free services which admittedly he availed from the dealer.
6. Respondent visited the workshop of the dealer for first free service when actuator gasket was replaced during service. On 3.10.2003, when problem persisted, respondent apprised the dealer and the car was serviced again, however, defects could not be removed.
At this juncture, the dealer started holding out that the knocking problem, which according to the respondent was persisting from beginning, may be due to non tuning of engine.
Despite needful having been done, knocking problem continued.
7. On 6.10.2003, attempt was made by the dealer for removing the knocking problem but of no avail, within one week, again this problem cropped up. On 14.10.2003, the car was again checked up by the Engineer of the dealer, when for the first time the respondent was informed that knocking is due to bad fuel, therefore, the former was advised to add fuel additive in every tank full. Here we may observe that according to the averments in the complaint, he was already adding the same even without asking of the dealer. Since the defect of knocking etc. continued to persist, the respondent got the vehicle checked from the dealer time and again as noted above, but without any result. In this background, complaint was filed for refund of the cost of the Car alongwith interest, or in the alternative for its replacement, besides damages.
8. The dealer as well as HMIL filed separate replies. Jurisdiction of the District Forum, Shimla, was challenged by both of them as no part of cause of action accrued to the respondent for maintaining the complaint here. In addition to this, the knocking problem as per the dealer was either because of bad fuel or because of improper driving in hilly areas. Further according to the dealer, without there being any defect at the time of first free service, as a gesture of goodwill, actuator gasket was changed to rule out any possibility of engine defect without any charges as the car was within warranty. The knocking problem was not due to defect in the Car, but because of use of bad fuel and its complete mishandling. Defects were removed, besides sensor knock was changed and engine tuning was also done. It is further pleaded by the dealer that customer still complained of knocking, therefore, as a matter of abundant caution, the engine was de-carbonized. In this background, prayer was made for rejection of the complaint.
9. HMIL the manufacturer, in addition to the challenging the territorial jurisdiction of the Forum at Shimla, vehicle having no manufacturing defect was set up as a defence. Its further case like dealer was that problem, if any, was due to poor quality of fuel. Similarly there being no deficiency in service or any unfair trade practice having been adopted, was also set up as a defence.
It is further case of HMIL that dealing between it and dealer is on principal to principal basis. As such, omission/error, if any, committed while retailing/servicing the cars to its customers was the sole responsibility of the dealer.
10. After taking note of the pleadings of the parties, evidence produced, complaint was allowed in terms extracted hereinabove. According to us, on the basis of submissions made on behalf of both the appellants in these two appeals, following points arise for determination:-
(a) District Forum, Shimla, had no jurisdiction to have entertained, muchless tried the complaint in question;
(b) In order to establish that the vehicle in question had manufacturing defect, there is no expert evidence placed on record by the respondent;
(c) Alternative submission made by the dealer was that for manufacturing defect, liability if any is that of the manufacturer i.e. HMIL, whereas stand of the latter is that the liability if any is that of the dealer since dealing between both the appellants are on principal to principal basis ; and
(d) Mr. Mishra on behalf of the HMIL submitted that basic complaint was of noise in engine, so even if what is alleged by the respondent is accepted to be correct without conceding, at best replacement of such defective part(s) at the most should have been ordered. Because car not only consists of engine alone but number of other parts, as such the impugned order cannot be sustained in any circumstances whatsoever so far it directs either replacement of car with a new one or to refund the amount as directed by the District Forum below.
11. What emerges from the admitted facts is that after the purchase of vehicle in question on 18.6.2003, respondent was persistently complaining to the dealer regarding defects observed by him while plying the same. These facts are even otherwise established from the documentary evidence emanating from the dealer, and placed on record by the respondent as Annexures C.2 to C.8. First free service was done on 18.8.2003. Again the vehicle was taken on 3.10.2003 for service when knock sensor was replaced. Vide Annexure C.4 dated 4.10.2003 engine tuning was done. Within next 2 days again vehicle had to be taken to the dealer when engine de-carbonizing was done against payment. As per Annexure C.6 dated 14.10.2003, complaint regarding engine being noisy was brought to the notice of the dealer and knocking was to be checked as per this document. Again vide Annexure C.7 dated 14.10.2003, the same complaint persisted. It shows that no knocking was observed and it was explained. It was observed that it was due to bad fuel and customer was advised to add fuel additive in every tank full.
12. In terms of the document Annexure C.8, on 1.3.2004, again within the period of warranty, when the vehicle had only run a distance of 6754 kms., engine knocking was complained of by the respondent. In its Col. Remarks and advise for customer, if any, it is mentioned as under:-
Checked and found minor e. knocking may be due to fuel Adulterated. Advised to use fuel Additive.
13. From these documents, it is manifestly clear as well as established that the engine knocking problem was persisting from within few days of the purchase of the vehicle by the respondent. In addition to his having informed the dealer telephonically, this fact is corroborated by the documents placed as well as relied upon on record by both the parties.
14. In these circumstances, both the appellants are not correct that the vehicle was not having any defects and/or grievance of the respondent was without basis. What they were saying while denying these facts is that it was either due to bad fuel or mis-handling in driving in the hilly areas. So far plea of bad fuel is concerned, this plea prima facie appears to be wholly misconceived and in any event respondent cannot be held liable for it. Reason being that fuel is supplied by the Companies which are wholly owned and controlled by none else, but the Government of India. Alongwith his affidavit in evidence, respondent has placed on record copies of the cash memos. regarding purchase of the fuel from time to time. If any of the appellants had any grievance regarding the fuel being adulterated, it was incumbent upon them in the circumstances of this case to have got the same verified through appropriate agencies including random checks on the petrol pumps selling the same, of whose bills were placed on record.
Why no such attempt was made by both the appellants, there is nothing on record, nor could anything be pointed out on their behalf at the time of hearing, by their learned Counsel.
15. Admittedly, the vehicle in question was sold by the dealer to the respondent who was then residing at Rampur Bushahar. So it can safely be said that it was aware that the vehicle is going to be plied in hilly area, as such the defence based on the vehicle being plied in hilly area, is nothing but merely being used as a cover-up to hide the defects in the vehicle in question. And in our opinion this plea is not open to both the appellants in these appeals.
Reason being that it is not their case that the respondent was put to caveat that vehicle is not to be plied on hill road or hilly areas. How and in what manner the vehicle was mishandled during its driving, again there is no evidence placed on record by the dealer in order to succeed on such defence. Even it was not sure whether the defect was due to bad fuel or mishandling of vehicle while driving it.
So both the appellants cannot take any benefit from this defence set out before District Forum as well as vehemently argued at the time of hearing of these appeals.
16. In this behalf the question that needs consideration is whether there was complete mis-handling of the Car resulting in the defence set out by the dealer as well as HMIL. How and in what manner, the car was mis-handled, there is no material on file. Besides this, nothing is mentioned in Annexures C.2 to C.8 by the dealer to sustain the plea of mishandling due to driving in hilly areas/hill roads. If this was the factual position, nothing prevented it to have stated so in these documents. To the contrary, knocking problem persisted right from beginning till April, 2004 is duly established by these documents. These while establishing the case of respondent, completely belies the defence based on it by both i.e. the dealer as well as HMIL, the manufacturer.
17. During the course of hearing, learned Counsel for both the appellants were specifically asked as to whether the knocking defect was there or not, and were specifically confronted with Annexures C.2 to C.8 issued by the dealer. These documents clearly explained the grievance of the respondent and could not be disputed by both of them. In this behalf we may observe that the respondent had not purchased the new car having defects and then every now and then to run to Chandigarh from Rampur Bushahar.
18. Ordinarily, a prudent man would not like to put himself to inconvenience. Therefore in case he did not find any problem with the vehicle as is the situation in the present case, he would not go to Chandigarh every now and then. It is also not the case of both the appellants that complaint is actuated by ill-will or malice on the part of the respondent. In these circumstances, we are prima facie satisfied that the vehicle sold to the respondent was suffering from inherent manufacturing defect.
Knocking, according to us, is a major defect, particularly in hilly areas when the engine does not get proper power due to defect therein.
19. Ordinarily de-carbonizing is also not necessary atleast upto 50,000 kms. as was informed during the course of hearing on behalf of the appellants. Actuator gasket was admittedly changed by the appellants which meant removal of head, then putting the gasket over the block.
This is also not ordinarily done in case of a new vehicle, whereas admittedly according to the dealer it was replaced. Even after 3.10.2003 onwards till 14th after the vehicle was attended upon for continuous knocking by the dealer, defect was not removed. As per Annexure C.8, minor e-knocking was found though it was attributed to fuel adulterated.
20. In the face of the defence set out by both the appellants in these appeals, it is evident that they are not sure whether the problem is due to bad fuel or was due to mis-handling in driving in hilly areas. Respondent is not an expert in this behalf, whereas both the appellants are the experts and it was for them to have clearly established that the defects are because of acts of omission and commission etc. on the part of the respondent by leading cogent and acceptable evidence. There is none on record. In the face of this position, the submission urged on behalf of both the appellants that there is no expert evidence produced by the respondent to establish the fact of defective engine is hereby rejected. As such, the decisions relied upon in this behalf by both the learned Counsel for the appellants and cited at the bar by them are not being referred, as we have held as a question of fact regarding defects being there in the vehicle based on facts as well as documents on record.
21. Now coming to the plea of jurisdiction of District Forum, at Shimla lacking jurisdiction to have entertained the complaint and adjudicated upon it.
According to both the learned Counsel i.e. for HMIL as well as the dealer, car was sold at Chandigarh and the both do not have their either registered office or branch office within the territorial jurisdiction of the District Forum, Shimla, as such no part of cause of action arose in favour of the respondent to maintain the complaint against both of them at Shimla.
22. In this behalf, we may point out that the vehicle was admittedly registered at Rampur Bushahar and was being plied within the jurisdiction of District Forum, Shimla, are such facts which could not be denied on behalf of the appellants in these appeals.
23. It is by now a well settled proposition of law that cause of action consists of bundle of facts. Sale of vehicle at Chandigarh and both the appellants having neither their branch nor registered offices within the jurisdiction of the District Forum, Shimla, are the other factors. However, the question arises whether this is enough to oust the jurisdiction of Forum at Shimla, our answer is in the negative for the simple reason that the vehicle was being plied at Rampur Bushahar of Shimla District of Himachal Pradesh where the defect was noticed for the first time which continued to persist. This also constitutes part of cause of action which gives right to the respondent for maintaining the complaint. This question came up for consideration before this Commission in the case of Narinder Kumar Sood Versus Punjab Motors, Kurali and others, Latest HLJ 2004 (HP) 1378 as also subsequent decisions of this Commission.
Reliance in this behalf was placed on a number of decisions of the National Commission on behalf of both the appellants to the contrary.
24. A perusal of all these decisions, shows that in all cases, the matter was dealt with on the basis of the company/dealer having not its office within the jurisdiction of the Fora concerned as well as the vehicle having also not been sold in its jurisdiction. In none of these cases, the question whether the place where defect is noted while using the sold good, Car in these appeals, was examined nor was it a point at issue, as such all these decisions are distinguishable, and therefore do not advance the case of the appellants in these appeals.
Decisions relied upon in this behalf are, M/S Shimla Automobiles Private Limited and Others Versus Subhash Chand Mahajan and Another, 2004 (2) CPC 577 (HP), Puran Chand Wadhwa Versus Hamil Era Textiles Limited, 2003 (2) CPC 527, Starline Motors Versus Naval Kishore Chiman Lal Bhartia and Another, 1996 (2) CPC 590, and Prefex Prakash Air Freight Pvt. Ltd. Versus Widia (India) Ltd. and Another, 2005 (2) CPC 337(NC).
25. Now coming to alternate plea set out by the manufacturer i.e. HMIL that liability if any is that of the dealer, and plea to the contrary set out by the latter.
According to us instead of marketing its products directly, a manufacturer like HMIL in the instant case appoints its authorized dealers like the dealer in the present case. In fact dealer is the frontman or the face of the manufacturer for the sale/marketing of its manufactured products, therefore, both of them cannot escape from liability and are jointly and severally liable in a situation like the present case. This question is no more res integra in view of the decision of the National Commission in the case of Fiat India Ltd. Versus Amardeep Motors Ltd. & Anr., III(2005) CPJ 124 (NC) besides number of other decisions in that behalf.
26. In the case of Hindustan Motors Ltd. and another Versus N.Siva Kumar and another, (2000) 10 Supreme Court Cases 654, where the National Commission had ordered the replacement of vehicle and the defence set out by the manufacturer was that it had stopped manufacturing said model of the car was not accepted and while exonerating the dealer on the ground that for manufacturing defects, dealer cannot be held liable, manufacturer was held liable.
27. Since we have held the vehicle to be suffering from inherent manufacturing defect, as such submission of Mr. Mishra that his client is only liable and the respondent is only entitled to, the replacement of such defective part(s) and therefore the impugned order needs to be modified though he did not concede and or in any manner admit there being any defect as claimed by the respondent.
28. Identical matter came up before the National Commission wherein defects were noticed in a brand new vehicle immediately after its purchase, as is the situation in both these appeals before us, what was observed in that behalf by the National Commission in the case of Hyundai Motors India Ltd. Versus Affiliated East West Press (P) Ltd. and another, 2008 CTJ 140 (CP) (NCDRC), which aptly applies to the present case, is extracted herein below:-
2. In our view, if a brand new car gives trouble within a few days of its purchase, the consumer would be dissatisfied. Further, in such cases, the manufacturing company is not justified in protracting litigation, merely because it has the money power.
3. Further, a person who purchases a vehicle, may be luxury Accent car or a small car, would not be satisfied, if it is a defective vehicle. That the defect may not be a major one but the consumer loses satisfaction of having a new car. That loss of satisfaction would be much more in a case when the person buys the vehicle with his hard-earned money.
Unfortunately, we have not developed the tendency of accepting the defects or defaults. By some measure of means, the tendency to accept the defects or defaults is required to be encouraged. Otherwise, delay in disposal of such cases defeats the rights and the consumer gets frustrated. On occasions, litigation is dragged on for taking undue advantage of delay in disposal In this case order of the Delhi State Commission directing the Hyundai Motors India Ltd., to replace the vehicle was upheld and the amount was ordered to be refunded in favour of the respondent in this appeal.
29. Faced with this situation, Mr. Mishra tried to distinguish this decision by saying that the nature of the alleged defects in the appeal before us is not so grave and/or major justifying the order of either the replacement of vehicle or refund of the amount to the respondent as has been directed in the impugned order. This argument is being noted simply to be rejected because the respondent had not opted for the purchase a new vehicle having defects and then it being taken every now and then for rectification.
30. At the risk of repetition, we may observe that it is evident from Annexures C.2 to C.8 that between 3.10.2003 to 1.3.2004 vehicle had to be taken every now and then with the knocking problem. Even the dealer has observed minor e-knocking being there but was neither certain nor sure that it was only due to adulterated fuel and in none of these documents the defect is attributed to the mishandling of the driving of the car in question as was argued at the time of hearing of these appeals. In fact the defence of mishandling as well as of bad fuel appears to have been coined up to overcome the lapse on the part of the manufacturer as well as its dealer i.e. the appellants in both the appeals.
In these circumstances, plea of Mr. Mishra that at best the defective part(s) including engine should have been ordered to be replaced and not the car or refund of its cost, has no merit and is rejected.
31. Before parting with this case, we may observe that instead of having the luxury of enjoying his new car, in our opinion, respondent had to bear with nuisance of a defective car who not only had to be taken frequently to Chandigarh for removal of its defects, but also put the respondent to grave inconvenience and harassment. That being the position, we feel that the District Forum was fully justified in directing the appellants to either refund the amount with interest or replace the vehicle in question, as also levying compensation. In the peculiar circumstances of this case, we are of the confirmed view that both these appeals deserve to be dismissed with punitive costs and therefore we order that appellants in addition to the relief granted in favour of the respondent, are further liable to pay the punitive costs in the sum of Rs.50,000/- in these appeals in equal shares.
32. We may notice that at one stage of the proceedings without in any manner admitting or conceding the claim of the respondent, appellant i.e. HMIL offered to replace the engine and all other defective parts free of cost with extended warranty of one year without any other benefit to the respondent. This was declined by the respondent because in that event he was insisting for being compensated as he could not put to full use, the vehicle in a manner a new vehicle was to be used and he was asking for compensation in the sum of Rs.1,00,000/-. This was not acceptable to HMIL.
33. No other point was urged.
In view of the aforesaid discussion, there is no merit in these appeals, thus while upholding the order of the District Forum below in Complaint No. 270/2004 dated 25.7.2006, both these are dismissed with punitive costs of Rs.50,000/- to be paid by both the appellants in equal shares.
All interim orders passed in these appeals from time to time shall stand vacated forthwith.
Office to place authenticated copy of this order on the file of Appeal No.331/2006.
Learned Counsel for the HMIL as well as respondent have undertaken to collect copy free of cost of this order in both the appeals from the Reader of this Court. Office is directed to send copy of this order to the dealer i.e. M/S Chrisma Goldwheels (P) Ltd. by post free of cost as per Rules.
Shimla, May 9, 2008.
(
Justice Arun Kumar Goel ) (Retd.)
President
/BS/ (
Saroj Sharma )
Member.