State Consumer Disputes Redressal Commission
M/S. Goa Motors Pvt. Ltd., vs M/S. Sydney & Lydon Realtors & on 28 June, 2012
BEFORE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI- GOA Appeal No. 05/2012 M/s. Goa Motors Pvt. Ltd., Having its registered office At Joshi Building, 2nd floor, F.L. Gomes Road, Vasco da Gama, Goa . Appellant/O.P. No. 1 v/s 1. M/s. Sydney & Lydon Realtors & Associates, through its managing Partner Cosme Fransico Isidoro Cabral Fernandes, Resident of 693, Shallom, opp. Custom, Quarters Center, Alto Porvorim, Bardez Goa. ..Resp./Complainant 2. Hyundai Motors Pvt. Ltd., A-30, Mohan Co-op. Industrial Estate Mathura Road, New Delhi Resp/O.P. No. 2 Appeal No. 07/2012 Hyundai Motors India Ltd., Through its authorized signatory A-30, Mohan Co-operative Industrial area, Mathura Road, New Delhi - 110 044. Also at: 5th & 6th Floor, Corporate One (Baani Building) Plot No. 5, Commercial Centre Jasola, New Delhi 110 076 .. Appellant/O.P No. 2 v/s. 1. M/s. Sydney & Lydon Realtors &Associates, through its Managing Partner, Cosme Francisco Isidora Cabral Fernandes, R/o. 693, Shalom, Opp. Customs Quarters Centre, Alto Porvorim, Bardez, Goa. ..Resp/Complainant 2. M/s. Goa Motors Pvt. Ltd., Having its registered office at, Joshi Building, 2nd floor, F.L. Gomes Road, Vasco da Gama, Goa-403 802 Resp/O.P. No. 1 Appellant/O.P. No. 1 is represented by Adv. Shri. A. Shetye. Appellant/O.P. No. 2 is represented by Adv. Ms. A. Shashikumar. Respondent/Complainant is represented by Adv. Shri. R. Rao. Coram: Shri Justice N.A. Britto, President Smt. Vidhya Gurav, Member Dated: 28/06/2012 ORDER
[Per Shri Justice N.A. Britto, President] The manufacturer and its authorized dealer, the O.Ps in CC. No. 08/07 have filed these appeals and they are directed against order dated 14/02/12 of the Lr. District Forum, North-Goa at Porvorim.
2. Some facts are required to be stated to dispose off this appeal.
3. We assume that the complainant Shri. C.F.I.C. Fernandes is a consumer. The complainant obtained a loan of Rs. 1.6 lacs on 24/3/06 from HDFC Bank and purchased a Hyundai Santro car for Rs. 3,68,107/- from O.P. No. 1, the authorized dealer of O.P. No. 2. The complainant paid life tax of Rs. 18,405/- and in all Rs. 4,12,750.18 for the purchase of the said car which was delivered to the complainant on 7/4/2006 and registered under No. GA-03-C 0350.
4. The complainant, a retired government servant was of 63 years of age when he purchased the said car for the first time.
5. On 27/4/06 the complainant was travelling from Mapusa to Panaji via Candolim. The car stopped at Verem market and according to him the complainant was an object of abusive and offensive language. The car started after about 10 minutes but again stopped before Mandovi bridge on the ascent. The car again stopped near the Secretariat at Panaji causing obstruction to the traffic and the complainant was left stranded for about 15 minutes. On his way back home, the car again stopped near Government Training College, at Alto Porvorim.
6. After reaching home the complainant informed the Sales Executive of the O.P. at Caranzalem.
The car was taken for inspection at Caranzalem service centre. The complainant was informed that as the thermostat of the car malfunctioned, the coolant was being thrown out, and because of it the engine was getting over heated. The complainant was informed that the car had to be taken to Verna service centre.
7. On 29/04/06 the car was collected from the residence of the complainant by O.P. No. 1s service advisor by name Savio Gama.
On the way to Verna, the car got heated up and again stopped at Zuari bridge. The complainant met Mr. Sharad V. Habbu, O.Ps mechanical engineer and asst. manager of the service centre who informed the complainant that that was the 3rd car of the same batch with the same defect i.e overheating of engine.
The complainant met the General Manager, Mr. Avadhoot Zarapkar. The complainant was provided a replacement, a gesture car, having No. GA-06-A-3312.
8. The complainants car was attended to by the said Shri. Sharad V. Habbu who alongwith one Gregory Fernandes replaced the thermostat and took a test drive and found the vehicle was in perfect condition without any problem of overheating and knocking. Later, he filed his affidavit dated 25/9/08 to that effect in the proceedings.
9. O.P. No. 1 wrote a letter dated 10/05/06 to the complainant informing him that the car was ready; that the minor repair was carried out and the car was tested and was in perfect condition. The complainant was asked to inform the date as to when the car could be delivered to him and was requested to return the gesture santro car having No. GA-06-A-3312.
10. The complainant replied the letter, by his reply dated 12/05/06. In the said reply, the complainant informed O.P. No. 1 that they were liable to take back the vehicle and replace it with a brand new vehicle.
Complainant informed that accepting the vehicle with such surgery conducted was not acceptable to him as he would not have the pleasure of driving a brand new vehicle and that he would face tension not knowing as to when would be the next breakdown.
11. The O.P. No. 1 wrote a letter dated 10/06/06 to the complainant making it very clear that the question of replacing the car with a new one did not arise at all. The complainant was reminded that the car came with warranty of two years for unlimited kilometers. Complainants attention was drawn to clause No. 2 of the Owners Manual under which they were required either to repair or replace any of their genuine spare parts as acknowledged by them to be defective in material or workmanship within the warranty period at no cost to the owner. The complainant was advised that good sense would prevail upon him and was requested to collect the car and return their car immediately failing which they would be compelled to take action against him for not returning the car.
12. We need not refer to the correspondence exchanged by the complainant either with the in-charge of the customer care service of O.P. No. 2 or with the Chairman of O.P. No. 2 at South Korea. O.P. No. 1 then sent a legal notice to the complainant dated 4/8/06 informing the complainant that his vehicle did not have any manufacturing defect and that the heating of the engine was due to the malfunctioning of the thermostat which was duly rectified and that the vehicle was tested and the same was in good order and condition. Complainant was asked to take away his car having No. GA-03-C-0350 and return their car within three days failing which the complainant was informed that they would take action to retrieve their car from custody of the complainant, at his risk.
13. O.P. No. 1, then, through its Managing Director filed a complaint to the Police against the complainant on 12/9/06 stating that the complainant was informed that it was not possible for them to replace the said vehicle as all the mistakes were duly rectified and that the complainant had illegally detained their gesture car and was refusing to give possession of the same.
14. The complainant by letter dated 13/11/06 wrote to the General Manager of O.P. No. 1 stating that the replacement of thermostat may be a minor problem and an apparent solution but the damage caused to the engine due to the malfunctioning of the thermostat was irreversible and the problem could be sorted out either by replacing the entire car with a brand new car or replacing the entire engine with a brand new engine. Complainant stated that there was need to replace the damaged engine.
15. The complainant by another letter of the same date informed O.P. No. 1 to collect the gesture car as soon as possible within a period of 14 days and accordingly the said gesture car was collected by O.P. No. 1, on 17/11/06.
16. The complainant by another letter dated 20/11/06 reminded the O.P. No. 1 about letter dated 13/11/06 and O.P. No. 1 by letter dated 16/11/06, with reference to letter dated 13/11/06, informed that the complainants car was in perfect condition and the engine was not damaged and therefore the question of replacing either the engine or the car did not arises. The complainant was further informed that in case the car was not collected within 7 days they would be compelled to charge rent at the rate of Rs. 250/- per day from the day the complainant was informed to collect the car.
By another letter dated 17/11/06 the complainant was informed that the gesture car was all bruised and that it was given step motherly treatment while the same was in complainants possession. The complainant was asked to deposit a sum of Rs. 30,000/- for repairs to be carried out. Repairs were estimated to cost of Rs. 28,851/- .
17. The complainant by letter dated 24/11/06 stated that he wished to collect the car and further stated that he was accepting the General Managers word that the car is in perfect condition. Complainant further stated that the matter would not be closed with the delivery of the said car as the car was expected to perform like a new car purchased from O.P. No. 1 and any further problems would confirm that it is a defective product that needs replacement. By another letter dated 24/11/06, as regards the gesture car, the complainant stated that the cost of additional damage can be negotiated, the damage which might have occurred while the car was in his possession. The complainant stated that he was awaiting subsequent estimate and pending a detailed analysis, the complainant requested for the prompt delivery of his car. The number of the car appears to be wrongly mentioned in this letter.
18. Thereafter the complainant again changed his mind and filed the complaint on 20/12/06, inter alia, seeking refund of Rs. 3,68,107/- with interest at the rate of 18%, Rs. 44,643/- again with interest at the rate of 18% and Rs. 1 lac by way of compensation which by application dated 21/03/07 was sought to be enhanced to Rs. 3 lacs. The complaint was then amended, by application dated 1/2/10, when the complainant received the notice dated 23/06/09 stating that while the complainants car was being driven, the person while driving was speaking on the mobile phone.
It was the complainants contention that the complainants car was being used unauthorisedly by O.P. No. 1 and such a conduct amounted to further harassment of the complainant. O.P. No. 1 however denied that the complainants car was taken out from the Verna workshop and to support the same, filed copies of vehicle trail register, which according to O.P. No. 1, did not show that the complainants car had come out of the workshop on 11/6/09.
19. That is the sequence of events leading to the filing of the complaint. We have heard Shri. A. Shetye and Miss. A. Shashikumar, the Lr. Advocates on behalf of the Appellants/O.Ps and Shri. R. Rao, Lr Advocate on behalf of the complainant.
20. Shri. Shetye, the Lr. Advocate on behalf of O.P. No. 1 would submit that the thermostat has been replaced and the car is in perfect condition. Lr. Advocate submits that they told the complainant to take the car, but the complainant refused to take the same. Lr. Advocate submits that replacement of the thermostat is not a major defect of the car and that the complainant had failed to prove that there was any inherent defect in the car sold to him. Lr. Advocate submits that O.P. No. 1 is ready to hand over the possession of the car to the complainant even today and are also prepared to waive the parking charges. Lr. Advocate submits that they are even prepared to extend the warranty. Lr.
Advocate Miss. Shashikumar, on behalf of O.P. No. 2, submits that after the thermostat was replaced there was no deficiency of service. Lr. Advocate had tried to impress upon us that thermostat is a part outside the main engine of the car which can be easily replaced. Lr. Advocate has further submitted that the burden was on the complainant to show that there was an inherent defect as claimed by him which burden the complainant has failed to discharge by not examining any expert.
21. On the other hand, Shri. Rao, Lr. Advocate of the complainant would submit that the gesture car was given to the complainant only to pacify him. Lr.
Advocate submits that the complainant was an object of abusive language from other road users whenever the complainants car stopped due to overheating. Lr. Advocate submits that the fact that the thermostat was not available with O.P. No. 1 would tend to show that the car required major repair. He submits that the order of the Lr. District Forum is just and needs to be maintained. Written submissions have been filed to say that the thermostat constitutes a vital component of car assemblage, which helps to regulate engines temperature.
22. Before the Lr. District Forum, on behalf of the Complainant reliance was placed on the case of M/s. Scooters India Limited & anr. vs. Madhabananda Mohanty & ors. (un-reported order dated 7/2/03 in RP No. 240/02). On behalf of O.P. No. 2, reliance was placed on three decisions which have been totally ignored by the Lr. District Forum, one of them being the case of Dr. Hema V. Dhakori vs. Bajaj Auto Ltd., & ors. (II 2005 CPJ 102) also of the National Commission and the other Mahindra and Mahindra Ltd (I 1993(1) CPR 170). We cannot help but to observe that the Lr. District Forum has misread the order dated 7/2/03 of the National Commission in M/s. Scooters India Ltd. That was a case where the complainant had purchased an auto rickshaw and the complainant had to repeatedly take the a/rickshaw for repairs to remove the defects such as defects in the engine, gear box teleccrown body, brake system, etc so much so that there were also breakdowns as the vehicle left the workshop. The Lr. National Commission did observe that if the vehicle is defective a consumer has right to seek its replacement or refund of the price. The Lr. National Commission had also observed that if the defects are insignificant, that could not be a case of replacement or refund.
The Lr. District Forum appears to have read the said order dated 7/2/03 selectively, taking note of the first observation and ignoring the second observation (emphasis supplied). Eventually the complainants case was accepted and he was awarded damages of Rs. 10,000/- and costs of Rs. 2000/-.
23. There is no doubt that when a new vehicle breaks down either for a minor or major fault a consumer loses the satisfaction and the loss of satisfaction is much more in a case when a person buys a vehicle with its hard earned money, as observed by National Commission in order dated 29/11/07 in Revision Petition No. 958/2007 in the case of M/s. Hyundai Motors India Ltd., vs. M/s. Affiliated East West Pest (p) Ltd. Every consumer can certainly expect a new vehicle to be mechanically perfect and give him service without any problem. Our expectations sometimes do go wrong and at times some parts refuse to function and that is where the concept of warranty comes in by which a manufacturer undertakes to replace the defective parts free of cost and i.e what had happened in the case at hand. O.Ps mechanical engineer, the said Shri. Sharad V. Habbu had filed an affidavit in defence and had categorically stated that the malfunctioning of the thermostat which was a replaceable part was replaced and the vehicle was in prefect condition without any problem. The Lr. District Forum has completely ignored the said affidavit.
24. It is well settled by now that under Section 13 of the C.P. Act the burden to prove the defect or deficiency, if any, on the part of the O.P. is on the complainant. The Lr. National Commission in M/s. Scooters India Ltd., & anr. (supra) had observed that it is not always necessary for the consumer to give expert testimony though if he does so it will add to the weight of the evidence. This Commission in Maruti Suzuki India Ltd., (supra) has observed that the onus of proof primarily has to be discharged by the complainant to show that there was any manufacturing defect in the vehicle purchased by the complainant; and that could be done either by leading evidence of an expert or some job cards or at least of some correspondence to that effect.
25. When a spark plug of a scooter fails, and that happens very very rarely, we do not replace the scooter or refund the price. We replace the spark plug or ask it to be replaced. That is the approach we adopt in this consumer jurisdiction, as can be seen from various judicial pronouncements. The Lr. Forum ought to have known about the same.
26. The Lr. District Forum has ignored the affidavit of the mechanical engineer of the O.Ps and has observed that the O.P.s had not filed any affidavit-in-evidence or report of any independent expert to say that the car was in perfect condition. Did the complainant who is a layman file any affidavit of an expert to say that the thermostat malfunctioning had damaged the engine irreversibly? Was there any evidence to counter the affidavit of the said mechanical engineer? Or was the Lr. District Forum to accept as gospel truth whatever was alleged by the complainant even in technical matters? The Lr. District Forum conceded that the complainant had not examined any expert nor filed an application asking for appointment of a Commissioner but observed that was not required as there was an admission on the part of the O.Ps that there was a defect. The Lr. District Forum appears to have lost sight that the defect of malfunctioning of the thermostat was rectified by them and there was no defect left to be rectified. The impugned order has proceeded on non application of mind. The Lr. District Forum has awarded interest at the rate of 18% and has also awarded compensation of Rs. 1 lac in addition to Rs. 25,000/- as costs of litigation. Why such bonanza? We fail to understand why interest on the entire sum of Rs. 3,68,107/- has been ordered to be paid at the rate of 18% from 22/3/06 when the complainant had taken a loan from the said date only of Rs. 1,60,000/-. When did the complainant pay the balance amount before 7/4/06? The Apex Court in Ghaziabad Development Authorities vs. Balbir Singh (2004 5 SSC 55) has held that the interest must be granted at the current rate of interest where the proceedings are for the recovery of debt or damages.
27. If O.P. No. 2 had relied upon three authorities before the Lr. District Forum, Miss. A. Shashikumar has also relied upon three authorities before this Commission. The Apex Court in Maruti Udyog Ltd., (2006 (4) SCC 644) has held that where defects in various parts of a car are established , direction for replacement of the car would not be justified.
Replacement of the entire item or replacement of defective parts only is called for. The said judgement of the Apex Court was followed by the National Commission in the case of Sushila Automobiles Pvt. Ltd., (order dated 7/5/10 in Revision Petition No. 1652/2006) and both the judgements were followed by us in Maruti Suzuki India Ltd., vs. Ana Paula Sanches, by order dated 15/05/12 in FA No. 40/09 and it was observed as follows:
14. The National Commission in Sushila Automobiles Pv. Ltd. vs. Dr. Birendra Narain Prasad & ors. ( (III) (2010) CPJ 130 (NC)) has stated that to establish a claim for the total replacement by a new vehicle, complainant has to prove by cogent, credible and adequate evidence supported by the opinion of an expert automobile/mechanical engineer that the vehicle suffered from inherent manufacturing defect. The Lr. Commission has further observed that the Honble Supreme Court as well as the Commission in a number of cases have held that unless this onus is satisfactorily discharged by the complainant, the liability of the manufacturer would be limited to removal of the defect and/or replacement of the parts. The Commission has further observed that merely because the car was taken to the workshop or because of number of letters were written, it will not by itself amount to manufacturing defect. The Lr. Commission also referred to Maruti Udyog Ltd., V/s. Susheel Kumar Gabgotra & anr. ((II) (2006) CPJ 3 (SC) = (2006) 4 SCC 644) wherein it was held that where defects in various parts of a car are established, direction for replacements of the car would not be justified and replacement of the entire item or replacements of the defective parts only was called for.
28. In Maruti Suzuki India Ltd., (supra) this Commission had observed as follows:
The Lr. District Forum has further observed that the onus of proof lies on the O.P. to prove with expert evidence to show that there was no manufacturing defect. Since when are we following reverse burden of proof? The approach of the Lr. District Forum is wholly fallacious. The onus of proof primarily has to be discharged by the complainant to show that there was any manufacturing defect in the vehicle purchased by the complainant; and that could be done either by leading evidence of an expert or some job cards or at least of some correspondence to that effect.
29. We would like to revert to the facts of the case of Maruti Udyog Ltd decided by the Hon. Apex Court. A maruti cars clutch was not functioning properly. It had developed unusual noise/jerks on running the engine.
Clutch was behaving erratically.
Complainant had contended that there was a manufacturing defect to the car sold to him and had sought for replacement of the car. The O.P had contended that their obligation under the warranty was only to repair or replace any part found to be defective. The Apex Court eventually directed the clutch assembly to be replaced free of cost.
30. In the case of Dr. Hema Vasanti A. Dacoria (II 2005 CPJ 102 (NC) there was a crack developed in the chassis of a Bajaj Super Scooter during warranty. The O.Ps had offered to change the chassis and that was not acceptable to the complainant for which he alone was held to be accountable. The chassis was directed to be replaced by the State Commission. The National Commission refused to interfere observing that if a part could be replaced or a defect could be removed then replacement of the entire vehicle cannot be ordered.
31. In the case of Mahindra and Mahindra Ltd., vs. B. G. Thakur Desai (I 1993 (1) CPR 170), there was excessive engine oil consumption in the jeep. Complete engine assembly was changed and the complainant was asked to take the delivery of the vehicle. Complainant did not take delivery apprehending that the trouble may start again. The National Commission observed that once the engine of the vehicle which was giving trouble was replaced and there was no other defect pointed out, there was no reason for the complainant not to take back the vehicle in question after it was duly repaired. The National Commission further held that the complainant ought to have taken delivery of the vehicle after new engine assembly was installed and ought to have run the vehicle to find out if any defect remained in the vehicle. Ultimately, the National Commission held that if a consumer purchases some machinery and some part of it is found having manufacturing defect and that part can be replaced then it will be very prejudicial to the interests of the manufacturer if he is asked to replace the whole machinery without sufficient cause.
32. In the case of M/s. Tata Engineering & Locomotive Co. Ltd., (1994 (3) CPR 395 it was held that even if there are numerous defects which can be rectified, it will be very hard on the manufacturer to replace the vehicle or refund its price merely because some defect not manufacturing defect, appears which can be rectified or defective part can be replaced.
33. In the case of B. Srinivasa Rao (2012(1)CPR 106 it was held that the entire car cannot be replaced for having defective A.C. even if it had suffered from manufacturing defect.
34. The case of Seva Automotive Ltd. vs. Anil Bansilal Chordiya (2012(1)CCC 31) was a case where a maruti zen car was alleged to have its engine overheated due to failure of cooling system; cylinder head original fitment disturbed and the coolant consumption had increased due to overheating and it was observed by the State Commission that in such a case the order of replacement or refund of money was bad in law, erroneous, patently illegal, palpably unreasonable and unrealistic and the defects were required to be removed by proper servicing and repairing.
35. We could go on and on. What follows from the above cases is that when a part is found to be defective, the same is to be replaced and defect rectified. The demand for the replacement of the entire engine or the entire vehicle was most unfair and unreasonable. Even if we accept that the vehicle was taken out by the servants of the O.P No. 1 without their knowledge on 11/06/09, that would not entitle the complainant to obtain the reliefs granted by the Lr. District Forum.
36. The thermostat of the car had failed in this case. It was replaced during the warranty period. After that there was no deficiency of service on the part of the O.Ps.
The complainant ought to have collected the car as required by letter dated 10/5/06 and returned the gesture car.
That was not done. It was done only after police complaint was filed.
Complainant decision to collect the car conveyed by letter dated 24/11/06 was the right decision. The complainant was illadvised to change the same and file the complaint. The complainant has deprived himself of the use of his car for all these years and he has no one to blame. The complainant was not entitled either for replacement of the car or its engine or refund of its price when the O.Ps had replaced the thermostat which was a replaceable part, under the warranty.
37. The offer made by Lr. Adv. Shri. Shetye on behalf of O.P. No. 1 is fair and reasonable.
Even otherwise it can be made into order of the Commission. We therefore direct O.P. No. 1 to return the car of the complainant duly serviced at their own cost within a period of 2 weeks with an extended warranty for two years on same terms and conditions.
38. Nevertheless, the complainant would certainly be entitled to some compensation for the inconvenience and embarrassment caused to him by the vehicle not functioning on 4 occasions on 27/4/06 and on the 5th occasion on 29/4/06.
The complainant was provided with a replacement by way of gesture car which it appears was not used as was required by the complainant as partly admitted by him in letter dated 24/11/06.
Complainant was expected to take care of it, as he would take of his own. The complainant shall be paid compensation of Rs. 30,000/- for the inconvenience, embarrassment, disappointment and frustration caused to the complainant particularly on 27/04/06. Compensation to be paid within a period of 4 weeks and in case the same is not paid it shall carry interest at the rate of 9% until it is paid. To be paid by the OPs, jointly and severally.
39. For reasons aforesaid, the appeals are allowed. The impugned order dated 14/02/12 is hereby set aside and the complaint disposed off on terms indicated hereinabove.
[Smt. Vidhya R. Gurav] [Shri. Justice N.A. Britto] Member President