Cases on Manufactreing of Goods

8/10/2019 Cases on Manufactreing of Goods

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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION CIRCUIT BENCH, KARNATAKA AT BANGALORE

FIRST APPEAL NO. 455 OF 1997 (From the order dated 26.9.1997 in Compl. No. 233 of 1993 of the State Commission, Karnataka)

R. Raja Rao Appellant Versus

M/s. Mysore Auto Agencies & Anr. Respondents

BEFORE: HONBLE MR. JUSTICE M.B.SHAH, PRESIDENT MRS. RAJYALAKSHMI RAO, MEMBER.

For the Appellant : Mr. Arvind Kamath, Advocate.

For the Respondent No.1 : Mr. Mahesh K.V., Advocate.

For the Respondent No.2 : Mr. P.H.Ramalingam, Advocate.

Dated 27 th February, 2006

O R D E R

M.B.SHAH, J. PRESIDENT

If the frustrated (consumer) purchaser of a vehicle is forced to

hand over the vehicle to the dealer/manufacturer on the ground that it is

required to be repaired every now and then within a few days of its purchase,

can it be said that he shall be deprived of refund of the amount spent by him

for the purchase the vehicle?

Obvious answer is the vehicle should be replaced or the amount

should be refunded. Reason being, the defective vehicle would not give the

satisfaction of a new vehicle.


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Further, that after purchase of the new car, if a person is required

to visit garage for repair of the car regularly, it would be a frustrating and

annoying experience. It is also rightly pointed out that various temptingadvertisements are issued for marketing such cars and if the car is found to be

defective requiring regular repairs, there would be total mental dissatisfaction

of purchasing a new vehicle.

Facts in short :

- Appellant is the Complainant before the State Commission.

- On 27.1.1993 he had purchased a Swaraj Mazda, a light

commercial vehicle form the Opposite Party No.1,

M/s. Mysore Auto Agencies and paid Rs.3,68,729/- towards its

consideration.

- Warranty was for 12 months from the date of its purchase,

i.e. 4.2.1993.

- The vehicle started giving troubles within a few days of its

purchase.

- It was sent to the Opposite Party No.1 (dealer) for repairs for

thrice, i.e. on 6.3.1993, 9.3.1993 and 15.3.1993.

- As there was no improvement, the Complainant had his

vehicle checked up with M/s. K.H.T. Agencies Pvt.

Ltd., Bangalore, who had opined that that the vehicle needed

major repairs, because there was mixing of the engine oil with


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diesel oil and seizing of the nozzle. Again on 28.7.1993, the

Complainant took the vehicle to the Opposite Party No.1 for

necessary repairs.

- As there was no improvement, the Complainant had to

deliver back the vehicle to the Opposite Party No.1 on

27.8.1993.

- Then, on 6.9.1993 a legal notice was issued to the Opposite

Parties for replacing the defective vehicle with a new vehicle.

- By letter dated 18.9.1993 the Opposite Party No.1 refused to

comply with the terms of the legal notice.

- Thereafter, the Appellant visited the office of the Opposite

Parties for a number of times. As the vehicle had serious

manufacturing defects he had issued a notice to the Opposite

Parties to return the cost of the vehicle along with a sum of

Rs.1 lakh for loss and damages, or supply a new vehicle with

the said amount of Rs.1 lakh.

- The Appellant further states that he had availed himself ofloan facility from Corporation Bank of Mandya Brnach of

Karnataka, for the purchase of the vehicle and he was liable to

pay interest at the rate of 24.75% and the said bank was likely

to initiate recovery proceedings.

- Hence the Appellant approached the State Commission by

filing Complaint No. 233 of 1993.


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- When the complaint was pending in the State Commission,

Prof. Badrinath was appointed as a Commissioner for the

inspection of the vehicle. He had conducted inspection on

25.7.1996 and submitted his report on 1.8.1996. He opined

that if on test running the diesel oil and the engine oil are

mixing, it will be a serious defect in the engine.

- The State Commission dismissed the complaint by order

dated 26.9.1997.

- Hence, the Complainant has come in appeal before this

Commission.

Defence of the O.P.No.1(Dealer)

1. The Complainant is not a self-employed transporter and he does not

drive the vehicle.

2. Because of repeated requests made by the complainant with all its

pleas, the company had shown sympathy and extended the warranty as aspecial case with a warning to him that he should not mix kerosene with

diesel and not to overload the vehicle.

3. The vehicle would not have developed problem had it put to use, as per

the conditions stipulated,.


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4. Pistons, rings head, gasket though were worn out on account of

misuse only, but in best interest of the customers, the opposite party replaced

the same.

5. That the matter cannot be decided unless an expert opinion is sought

from an independent authority or institution.

Defence of Opposite Party No.2 (Swaraz Mazda Ltd., theManufacturer):

1. It is contended by the Opposite Party No.2 that the complainant,

contrary to the instructions contained in the Swaraj Mazda Instruction Manual

and Advice of the opposite parties, continued to use the vehicle for

carrying jaggery of 5 tonnes weight. As per written instructions the vehicle

should have been used to carry weight upto 3 3.5 tonnes.

2. The vehicle cannot be run effectively, if the appellant continues to

mix diesel with kerosene oil. The Commissioner appointed by the State

Commission, in his report dated 1.8.96, has specifically mentioned about the

use of adulterated diesel, and it resulted in emission of white smoke.

3. The complainant did not agree to change the tyres despite being

advised to do so by the opposite parties, as the brakes could not function

properly. The Commissioner in its report dated 1.8.96 has clearly noted that

the tyres were worn out.

4. The complainant took the vehicle on 27.7.1993 for check up to M/s.

KHT Agencies, authorised dealer of Respondent No.2. M/s. KHT Agencies

required the complainant to change oil and filter which he


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declined. Therefore, the problems/defects, if any, of the vehicle could not be

rectified on account of refusal by the complainant.

5. The opposite parties even offered to extend the warranty subject to

the undertaking that the complainant would not overload the vehicle

beyond the permissible limit. The complainant was not ready to desist from

the past practice of overloading the vehicle and use of the adulterated diesel.

6. By the test run on 20 th October, 1993 by the Service Engineer of the

Opposite Party No.2 and the driver of the Opposite party No.1, it was shown

to the satisfaction of the complainant that the vehicle was in perfect working

condition. Even then the complainant refused to take back the vehicle.

7. That the complainant got his vehicle repaired thrice i.e. on 6.3.1993,

9.3.1993 and 15.3.1993 from the opposite party No.1 and when he was not

satisfied he had got the vehicle checked up at another authorised service

centre, namely, KHT Agencies Pvt. Ltd., authorised dealer of the opposite

party No.2 . M/s. KHT Agencies advised (Ex.C-6) the complainant that

nozzle had seized and the diesel was mixing with engine oil and get the oil

and filter changed. But, the Complainant refused to do so.

8 The Complainant continued to use the vehicle without rectifying the

problems. Even on 28.7.1993 when the complainant came to the opposite

party No.1, he did not complain of the problems as pointed out by M/s. KHT

Agencies Ltd. and complained only regarding pumps (Ex.C-7). Ex.C-7

shows that the vehicle did not suffer from the problems which the complainant

has complained of in the complainant. The defects were of minor in natureand could be rectified.


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Findings :

From the facts stated above, it is apparent that the Appellant

purchased the vehicle in January 27, 1993, and the warranty was for a period

of 12 months, i.e. from 4.2.1993 (the date of taking the delivery).

It is the say of the Appellant that he had opted to purchase the

vehicle only because of the assurance given by the Opposite Parties to the

effect that their vehicle was the best in the market and would give trouble free

services for a long time. However, the vehicle started giving troubles within a

few days of its taking delivery. As it was not picking up speed and emitting

smoke, it was required to be delivered to the Opposite Party No.1, (the

dealer), for repairs. Even after the repair was done on 6.3.1993, 9.3.1993 the

trouble persisted. Therefore, it was delivered to the Opposite Party No.1 on

15.3.1993, for further repairs. As the repair done on this occasion was also

not uptothe mark, the Complainant got some genuine doubt about the ability

of the Opposite Party No.1, and to identify the exact defects in the vehicle and

to do effective repairs, he got it checked at KHT Agencies Pvt. Ltd. who are

also the authorised dealers of M/s. Swaraj Mazda Ltd. The repair order dated

27.7.1993 is as under:

Check excess white smoke.

Check excess Oil consumption and No Pickup.

Check diesel meter not working

Check fuel stop motor cable

On the said Repair Order, against the order for check excess

white smoke there is an endorsement to the effect that On inspection it is

observed one nozzle seized and diesel is mixed with engine oil. Customer


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for 3 years it was dead and had fixed a separate battery for

the purpose of inspection. However, it was taken back after my

inspection.

- While staring the is idling smoke was not observed. It could

not be tested without running on the road.

- The document of the vehicle is stated to have been

surrendered to the R.T.O. Without running the vehicle on the

road, I could not ascertain whether there is any problem of

mixing diesel with engine oil. However, if it is found on test

running that the diesel and engine oil are mixing , it willbe a serious defect in the engine . The engine

appears to have been opened and certain parts appear to

have been replaced . The dealer also confirmed that certain

parts such as cylinder, liner, piston rings, injection nozzle,

etc. have been replaced .

- The speedometer in the vehicle showed the reading

320129 -1 and in my opinion has been run extensively as can

be seen from the bald rear tyres. However, the dealer said

that the Speedometer had been stolen and he had replacedthe same. He has not produced any evidence of his

statement.

The aforesaid report leaves no doubt that the vehicle was used

by the dealer because at the time when the Complainant delivered the vehicle

to the dealer its speedometer showed 36,777 Kms. running of the vehiclewhile on the date of inspection on 1 st August, 1996 the reading was 3,20,129 -


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1 , i.e. roughly more than 2,80,000kms. Even the Commissioner who had

inspected the vehicle specifically mentioned that it had run extensively. This

also can be seen from the bald tyres. He has also opined that if it found on

test running that the diesel and engine oil as mixing, it will be a serious defect

in the engine. The engine appears to have been opened and certain parts

appear to have been replaced. The dealer also confirmed that certain parts

such as cylinder, liner, piston rings, injection nozzle, etc., have been

replaced. This report leaves no doubt that the vehicle was used by the dealer

by replacing certain parts of the engine. This would be beyond doubt that

there was manufacturing defect.

II. Report of Automobile Association of Southern India :

Thereafter, there is a report dated 16.3.2000 by the Automobile

Association of Southern India, which was obtained on the basis of the

directions given by this Commission. This report, no doubt, is an ex-parte

report, because the Complainant was not informed about the inspection.

However, at the same time, the report reveals that the vehicle was road

worthy by test driving, engine was smoothly running and everything was

normal.

This would again reveal that after 1996, the vehicle was

extensively repaired. This would mean that after the delivery of the vehicle to

the dealer Opposite Party No.1 had extensively used the vehicle and repaired

the same. This would not mean that at the time of purchase of the vehicle the

same was not defective as pointed out above. On the contrary, de aler s


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reports reveal that it was required to be brought for repairs within a few days

of its purchase.

It is shameful that even the vehicle was defective. Respondents

failed to acknowledge the defects. And, thereafter, Opposite Party No.1 used

the vehicle for years together without acknowledging the defects and litigating

the matter for years together. The Appellant suffered not only monetary loss

but mental agony all throughout. It is regrettable that we have developed a

tendency not to replace the defective vehicles.

In this view of the matter, this appeal is allowed. The impugned

order passed by the State Commission is set aside. The Respondents are

jointly and severally liable to refund the amount of Rs.3,68,729/- with interest

at the rate of 12% p.a. from 1.2.1993 till its payment. We are not inclined to

direct the Respondent to pay interest at the rate of 24% p.a. as claimed on the

ground that the Bank was charging at that rate. Hence, the Respondents are

directed to refund the amount of Rs.3,68,729/-, within a period of eight weeks

from today, with interest at the rate of 12% p.a. from the date of its purchase

i.e.


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1.2.1993 till its payment. The Respondents shall also pay costs assessed at

Rs.10,000/- to the Complainant. Sd/-

J. (M.B.SHAH)PRESIDENT

Sd/-

(RAJYALAKSHMI RAO)MEMBER

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C.N.Anantharam vs M/S Fiat India Ltd.& Ors.Etc.Etc on 24November, 2010

Author: A Kabir

Bench: Altamas Kabir, Cyriac Joseph

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) NOS.21178-21180 OF 2009

C.N. ANANTHARAM ... PETITIONER

VERSUS

M/S FIAT INDIA LTD. & ORS. ETC. ETC. ... RESPONDENTS

J U D G M E N T

ALTAMAS KABIR, J.

1. On 31st October, 2002, the Petitioner herein purchased a Fiat Siena Weekender

diesel vehicle from M/s Sundaram Automobiles, Bangalore, the commonRespondent in all these three Special Leave Petitions and agent of M/s Fiat IndiaLtd., the manufacturer of the said vehicle. The Petitioner paid a sum of Rs.7,69,187/-towards the Ex-showroom price of the vehicle, together with a sum of Rs.56,537/-towards lifetime road tax and Rs.28,964/- as insurance. The vehicle was dulyregistered in the name of the Petitioner on 25th November, 2002, when the vehicle was delivered.

2. According to the Petitioner, immediately after registration of the vehicle, it wastaken out for a drive when certain defects, particularly in the engine, began to


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manifest themselves. The same day, the Petitioner left the vehicle with the dealer forremoving the defects. On the very same day, the Respondent No.2, M/s Sundaram Automobiles, wrote back to the Petitioner stating that the vehicle was in goodcondition and the noise was on account of the operational characteristics of theengine. Thereafter, on several occasions, the Petitioner left the vehicle with the agentand various parts, including the engine itself, were completely replaced. ThePetitioner, however, was not satisfied with the performance of the vehicle and cameto the conclusion that the vehicle had inherent defects and could not be repaired. He,accordingly, insisted that the vehicle be replaced with a new vehicle or the amountpaid by him as sale price be refunded, together with expenses incurred in trying torectify the defects in the vehicle.

3. Not getting any response, the Petitioner filed Complaint No.474 of 2003 before theIVth Additional District Consumer Disputes Redressal Forum, Bangalore Urban, on17th April, 2003. The complaint was heard by the District Forum, which allowed thesame by its order dated 20th February, 2004, and directed the Respondents 1 and 2to refund a sum of Rs.9,15,536/-, as claimed by the Petitioner, together with interestat the rate of 12% per annum and a further sum of Rs.5,000/- towards cost ofthe legal proceedings. The claim against Respondent No.3, M/s Fiat Sundaram AutoFinance Ltd. was rejected.

4. Aggrieved by the said order, the Respondents 1 and 2 herein filed two separateappeals, being Nos.513 of 2004 and 397 of 2004, respectively, before the KarnatakaState Consumer Disputes Redressal Commission, Bangalore. On 15th June, 2006,the State Commission disposed of the said Appeals modifying the order of theDistrict Forum by directing the Appellants (Respondents 1 and 2 herein) to replacethe Petitioner's vehicle with a brand new vehicle or on their failure to do so to refundRs.7,69,187/-, along with life time tax paid and the monthly instalments which had been paid by the Petitioner, to M/s Sundaram Automobiles, together with interest @12% per annum from the date of the order and also the cost of Rs.5,000/-.

5. The matter was, thereafter, taken to the National Consumer Disputes RedressalCommission, New Delhi, hereinafter referred to as "the National Commission", bythe Respondent No.1 in Revision Petition No.2431 of 2006. The Respondent No.2(agent) filed Revision Petition No.1585 of 2006. The Petitioner, in his turn, filedRevision Petition No.1713 of 2006, before the National Commission. The NationalCommission, while admitting the Revision Petition No.1585 of 2006 on 25th July,2006, only on the point of the monthly instalments (EMI) paid and the quantum of


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interest, directed the Revision Petitioner to deposit its share with interest at the rateof 9%. Aggrieved by the said order, the Respondent No.2 filed Special Leave Petition(Civil) No.13201 of 2006 before this Court on 4th August, 2006, and the same wasdismissed on 22nd February, 2008. Revision Petition Nos. 2431 of 2006, 1585 of2006 and 1713 of 2006 were finally disposed of by the National Commission througha common order dated 17th April, 2009. In the said order, the National Commissionheld as follows:

"....Therefore, while we hold that the complainant has not been able to prove any

manufacturing defect, all the same, the dealer and the manufacturer are directed to remove

the defect, if any, in the vehicle make it roadworthy, if necessary by reconditioning the

vehicle and deliver it to the complainant in the presence of an independent technical expert

mutually agreed upon by the complainant and opposite parties and for this purpose any ofthe party may apply to the District Forum for appointing such expert if it is not mutually

agreed upon by the parties. The expert shall certify that the vehicle is free from any defect

which shall be final for all purposes. This should be done within a period of three months.

The Ops, thereafter, to provide a warranty for one year from the date of delivery. The

revision petitions are accordingly disposed of in these terms. Under the peculiar facts of the

case, there would be no order as to costs."

Thereafter, the Petitioner filed the instant Special Leave Petitions challenging theorder of the National Commission.

6. The issues which fall for decision in these Petitions are :-

(i) Whether it can be said that the

manufacturing defect of the vehicle was

such that it warranted replacement, and

whether the refund of Rs.7,69,186/- and 12% interest as ordered by the StateCommission was justified?; and

(ii) Whether both the dealer and the manufacturer are jointly and severally liable inregard to deficiency of service?


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7. Appearing for the Petitioner in all the three Special Leave Petitions, Ms. KiranSuri, learnedAdvocate, urged that from the very day on which the vehicle wasdelivered to the Petitioner, it was obvious that there were several manufacturingdefects in the vehicle, which could not be removed. The said position was dulyappreciated both by the District Forum as well as the State Commission whichdirected the Respondents to replace the vehicle or to refund the amounts which had been expended by the Petitioner for purchase and to make the vehicle operationaland roadworthy. The National Commission struck a different note upon holding thatthere was no worthwhile evidence to indicate that the vehicle had suffered from anyserious manufacturing defect and that in any case the allegation of noise emanatingfrom the engine even after its replacement with a new engine, could not be believed.Ms. Suri also questioned the view of the National Commission that the obligation ofthe manufacturer/dealer is only to repair/replace any part of the vehicle found to bedefective, even during the warranty period, free of charge, but that the question ofreplacing the vehicle with a new vehicle was not justified.

8. Ms. Suri lastly submitted that the finding of the National Commission that theComplainant/ Petitioner had not been able to prove any manufacturing defect, wasperverse and contrary to the evidence adduced by the parties and the materials onrecord. Ms. Suri also questioned the finding that the refund of the cost of the vehicle

would also not be justified, since the Petitioner had not taken the vehicle from thedealer despite their letter certifying that the vehicle had no defect. Ms. Surisubmitted that further direction given by the National Commission to remove anydefects and to make the vehicle roadworthy, if necessary, by reconditioning the vehicle and to deliver the same to the Petitioner in the presence of an independenttechnical expert mutually agreed upon, was wholly misconceived and could not besustained.

9. In support of her submissions, Ms. Suri referred to a decision of this Courtin Indochem Electronic vs. Addl. Collector of Customs [(2006) 3 SCC 721], wherein while considering the provisions of Sections 3 and 14 of the Consumer Protection Act, 1986, this Court was of the view that when the deficiency began to manifestthemselves it was the duty of the suppliers to attend to such deficiencies immediatelyand if the supplier was unable to attend to the deficiencies and malfunctioning of thesystem soon after installation, it would amount to "deficiency of service".Furthermore, when the deficiencies in the system continued to persist during the warranty period, including the extended period, the suppliers were rightly held to beliable for deficiency in service by the State and National Commission. It was also held
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that in the light of the specific power conferred under Section 14(1)(c) of theaforesaid Act, damages equivalent to price of goods could be awarded, despite theprovisions of Section 12(3) of the Sale of Goods Act, 1930, as the provisions of the1986 Act are in addition to and not in derogation of any other provision of law.

10. Mr. Vijay Kumar, learned Advocate, who appeared for M/s Fiat India Ltd., urgedthat the complaint made by the Petitioner herein was without any basis as the vehicle was fully roadworthy and it was the Petitioner who made continuous complaints which, the Respondent attended to for the sake of maintaining good businessrelations. It was submitted that the manufacturer company went to the extent of evenreplacing the engine and parts of the gear box to give the Petitioner completesatisfaction. However, there was absolutely no justification for the Petitioner to

demand that the vehicle be replaced or that the value thereof, together with theexpenses incurred be refunded. It was also urged that the vehicle had been dulycertified to be completely roadworthy and it was the Petitioner who was at fault fornot having taken delivery of the same, despite the same being ready. It wassubmitted that the decision of the National Commission did not call for anyinterference and the Petition was liable to be dismissed.

11. On behalf of the Respondents it was contended that everything possible was done

to meet the repeated complaints made by the Petitioner, which even involved thereplacement of the engine and other parts. However, instead of taking delivery of the vehicle, the Petitioner continued to insist on replacement of the vehicle which wasnot contemplated under the warranty given by themanufacturing company when the vehicle was delivered to the Petitioner.

12. It was also submitted that, in any event, the agent of a vehicle manufacturer would not be made liable for the defects, if any, in the vehicle and the relief prayedfor against Respondent No.2 was entirely misconceived.

13. In support of the aforesaid submissions, reference was made to the decision ofthis Court in Maruti Udyog Ltd. vs. Susheel Kumar Gabgotra [(2006) 4 SCC 644], in which it was, inter alia, held that if the manufacturing defect was established, thenreplacement of the entire item or the replacement of the defective parts, is only calledfor. In fact, reference was made to the warranty condition which referred only toreplacement of only the defective parts and not the car itself. This Court held thatfrom the various documents exhibited it would appear that the manufacturer had

indicated that it was necessary to download the engine to trace the problem whichhas been complained of, but there was no agreement to replace the engine.
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Moreover, when the manufacturer asked for the vehicle to be brought in for thepurpose of downloading the engine, the Respondent did not do so and, accordingly,to infer that there was any manufacturing defect in the said background was withoutany foundation. However, the relief was moulded so that the defective part could bereplaced without requiring the purchaser to pay any charge.

14. Reference was then made to the decision of this Court in Hindustan Motors Ltd. vs. N. Siva Kumar [(2000) 10 SCC 654], in which it was held that when it becameimpossible to comply with the National Commission's order directing replacement ofthe Respondent's defective vehicle, since the manufacturer had stoppedmanufacturing the said model, this Court directed that the money along withinterest, compensation and costs were to be paid to the purchaser.

15. Having considered the various submissions made on behalf of respective parties, what emerges is the question as to whether the manufacturing company and byextension the dealer/agent was under any compulsion to replace the vehicle itself when the engine of the vehicle from which certain noises were allegedly emanatinghad been replaced. It has been explained that an engine operating on diesel makes arattling noise which does not occur in petrol driven engines and that there was reallyno manufacturing defect in the vehicle as complained of by the purchaser.

16. In such circumstances, the order passed by the National Commission, impugnedin these Special Leave Petitions, does not appear to be unreasonable. For whateverreason, except for amere 800 kilometers the Petitioner has not used the vehicle afterit was delivered and has, on the other hand, made several complaints in an attemptto prove that there were manufacturing defects in the vehicle. The NationalCommission has taken all these matters into consideration in giving the impugneddirections regarding delivery of the vehicle to the Petitioner after having the sameproperly checked by an independent technical expert who would have to certify thatthe vehicle was free from any defect when it is delivered.

17. From the facts as disclosed, it appears that apart from the complaint relating tonoise from the engine and the gear box, there was no other major defect which madethe vehicle incapable of operation, particularly when the engine was replaced with anew one. However, in addition to the directions given by the National Commission, we direct that if the independent technical expert isof the opinion that there areinherent manufacturing defects in the vehicle, the petitioner will be entitled to

refund of the price of the vehicle and the lifetime tax and EMI along with interest @12% per annum and costs, as directed by the State Commission.
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18. In such circumstances, the Special Leave Petitions are disposed of with the abovedirections.

................................................J.

(ALTAMAS KABIR) ................................................J.

(CYRIAC JOSEPH) New Delhi Dated: 24.11.2010.

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CASETITLEISSUESRAISEDGISTMRF Ltd. vs Jagdish Lal and Others(Civil Appeal No. 2710 of 1999) Whether the District Forum, the State and the National Commission followed the prescribed procedure underSection 13(1) (c) of Consumer Protection Act (COPRA),which says:The District Forum shall, on admission of a complaint,if it relates to any goods, where the complaint alleges adefect in the goods which cannot be determined withoutproper analysis or test of the goods, obtain a sample ofthe goods from the complainant, seals and authenticatesit in the manner prescribed. Then, it refers the sample,so sealed to the appropriate laboratory along with adirection that such laboratory makes an analysis or test,whichever may be necessary, with a view to find outwhether such goods suffer from any defect alleged inthe complaint or from any other defect. The laboratoryreports its findings thereon to the District Forum withina period of 45 days of the receipt of the reference orwithin such extended period as may be granted by theDistrict Forum. Having purchased tyres and tubes for vehicles from the local dealer of MRF Ltd, Jagdish Lal and others, onfinding the goods defective, filed a complaint to thedealer to either replace the goods or to refund the money,and therefore, submitted the goods to the dealer, whichwere further sent to the company for replacement, butno action was taken on the same After rigorous follow ups, there was no redressal either

from the dealer s or from the company s side, for which a complaint was registered before the District Forumby the complainants, which held that the defective goodsreturned to the dealer by the complainant were neitherreplaced nor the priced money refunded back. The case was decided in favour of complainant consumerbut the appellant company appealed before the SupremeCourt, on the grounds that the procedure prescribedunder Section 13(1) (c) as explained above, was notfollowed because the complainant (consumer) was not

in the possession of the tyre and tube as these werealready given back to the dealer for either replacement


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or refund of the money. The Supreme Court held that there was no material to show that the appellant had replaced the tyre and tubeor refunded the cost to the respondent consumer. That being the factual matrix, it does not show that how the fault could be found with the District Forum, theState Commission or the National Commission in thematter of not following procedure under section 13 (1)(c) of the Act. The appeal was, therefore, dismissed infavour of aggrieved consumers with no costs.

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NARAYANAN VYANKATKRISHNAN IYENGAR VS. SHAKTI FOODS

LAWS(NCD)-1994-3-89

NCDRC

Decided on March 04, 1994NARAYANAN VYANKATKRISHNAN IYENGAR Appellant

VERSUSSHAKTI FOODS Respondents

JUDGEMENT

Justice G.G. Loney, President -

( 1. ) THIS is an appeal against the order of the District Forum, Akola dated3.2.1993. The complainant in his complaint before the District Forum alleged thatthums up, limca and maza - soft drink bottles purchased by him for a party werefound defective. The complainant alleged that opposite party No. 1, Shakti Foods isthe Dealer of soft drinks at Akola and at the material time was selling aforesaidbranded soft drink bottles manufactured by O.P.No. 2, M/s. Nasik Bevarages Pvt.Ltd.The complainant alleged that he purchased on 6.12.91 'thumps up bottles and 'limca

bottles' of one crate each from O.P.No. 1. The complainant alleged that he hadpurchased those bottles for out-station guests which were visiting his house for aparty. However, the party was cancelled. The complainant alleged that his friendsDamodr Yadav and Shri P.A. Shinde consumed two bottles of thums up and threebottles of limca and as a result of which they felt ill. The complainant alleged thatthey were taken for treatment to the local doctor and advised rest for two days andnot to consume any food. The complainant further alleged that he suspectedadulteration in the said bottles and in one of the bottles he found foreign materialwhich looked like 'Dhatura' seed. The another bottle of limca, he saw foreignmaterial like 'nim' or 'Mahua'. He also alleged that those sealed bottles were

containing less quantity of the drinks. He also alleged that they were havingdiscolouration. He also found a bottle of 'Maza' a defective goods. The complainant,therefore, sealed 'four' bottles and produced them before the District Forum, Akolaalong with his complaint.

( 2. ) THE complainant in his complaint claimed refund of Rs. 82 /- the sale price ofthe bottles and also Rs. 50,000/- towards the compensation.

The O.P. No.1 contended that he is merely a 'Dealer' of O.P. No. 2 and, therefore, heis not liable for any compensation. The O.P.No.1 further admitted that he sold the

bottles in question to complainant and further admitted that they were short ofquantity having different colours. In short, the O.P. No. 1 admitted the sale of
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bottles to complainant manufactured by O.P.No. 2. The O.P. No. 2 denied themanufacturing defeet in the aforesaid bottles. It is also contended on behalf of theO.P .No. 2 that they never received any such complaint and denied their liability tocompensate the complainant. The District Forum rejected the complaint on theground that the complainant is ordinary electrical repairer and according to hisstatus, it was not seem possible for him to purchase one crate of thums up bottlesand another crate of limca bottles each containing 24 bottles for entertainment ofhis friends. Another reason for rejecting complainants claim appears to be that thereport dated 6.6.92 of analysis on the bottles in question was published in onenewspaper dated 19.6.1992.

We have heard Shri Rathi, Advocate for the appellant, the respondent No. 1 in person and Shri Rajivkumar, Advocate for respondent No. 2.

( 3. ) ACCORDING to Shri Rathi, on the first ground to reject the complainant'sclaim on the basis of his status is not correct. The complainant alleged that hepurchased one crate of limca - and one crate of thums up and maza bottles fromO.P. No. 1 has been admitted by O.P. No.1. The fact that O.P. No. 1 sold theaforesaid bottles to the complainant is not in dispute. In view of this admitted fact,the District Forum is totally incorrect to draw an inference that he could not havepurchased it because of his status. It is common knowledge that if there is anyfunction or a party, arranged by a person irrespective of his status, he may purchasethe required article even on obtaining loan or by borrowing funds. Therefore, merelybecause he is a man of megre means that does not mean that he did not purchasethe article in question. The fact has been admitted by O.P. No. 1 and, therefore, thisfinding of the District Forum is contrary to evidence on record. Moreover, thecomplainant has placed on record bill dated 4.12.91 showing the purchase of theaforesaid articles.

It is important to note that the complainant filed his complaint on 2.1.92. He filed anapplication before the District Forum requesting to send the bottles for analysis tothe appointed laboratory. The application was made on 8.4.92. On the request fromthe Court, the bottles were send to Amaravati for analysis. The analysis was carriedout on 11.5.92 and the report was prepared by the laboratory on 6.6.92. The reportof analysis was actually brought by complainant by hamdasta from the analysist.There is report of the Analysist dated 8.5.92 on record. The result of analysis isshown at the bottom of the report under the head 'Remark'. It reads as under :-'Sample No. 1 to 3 of thums-up and limca' detailed above have total plate countmore than 50 per ml. and M.P.N. of Colifora organisms more than 0 per 100 ml. anddo not conform to the standards of sweetened carbonated water as per P.F.A. Rules1955 and are unfit for human consumption. The sample Sr. No. 4 of maaza containsdecomposed dead mass of animal origin and is unfit for human consumption." Theaforesaid result of examination further show that sealed samples of limca, maazaand thumsup were received from the Registrar District Forum, Akola vide his letterdated 7.5.1992. The reading of the report of analysis clearly show that the thums up


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and limca bottles were unfit for human consumption and were containing foreignmaterial. In view of these clinching evidence showing the defective nature of thegoods sold to complainant, the entire report has been discarded by the DistrictForum on the ground that the news-item about the said analysis appeared in somelocal daily published on 19.6.92. It is, therefore, argued by the learned AdvocateShri Rajivkumar that it was the handi work of complainant to have the said report

published in the Press, and, therefore, the District Forum was right in rejecting thatreport. We are not satisfied with this explanation. Simply because the report was

published in the newspaper that does not mean that the report of analysis bediscarded out right now. The samples were sent by the District Forum for analysis tothe laboratory and the genuineness of the report cannot be doubed merely becausethe report of analysis appeared" in the press. It may be that the officials of thelaboratory may have given this news to the local newspaper for publication. It is,therefore, unjust and unreasonable to attribute the supply of material to the pressby the complainant. Even assuming that complainant supplied the news to the local

press, even then the importance of the analysis cannot be doubted as untrue.Hence, we find that the District Forum has committed a mistake to discard thereport of analysis which establishes that the goods sold to complainant weredefective.

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CONSUMER RIGHTS

Company must replace defective vehiclePushpa Girimaji

W HETHER it is a tractor or a car, a motorbike or an autorickshaw, when a consumerbuys a new vehicle, the expectation is that it would give trouble-free service. This is notan unreasonable expectation. However, when such hopes are belied and the vehiclebecomes a source of irritation on account of manufacturing defects, it is only fair that themanufacturer should replace the defective vehicle, or if by then the consumer has lostconfidence in that particular brand or model, refund the cost of the vehicle.

Unfortunately, despite several apex consumer court rulings to this effect, manufacturersdo not seem to have nderstood the rights of the consumers or the responsibilities of themanufacturers vis-`E0-vis defective vehicles. In the case of Vinoo Bhagat vs GeneralMotors the court laid down certain clear criteria for replacement of a defective car: (a) Ifthe car is defective and its use is substantially impaired, a consumer can seek

replacement; (b) When reasonable opportunity had been given to the respondents(manufacturers/ service centres) to repair the car and yet there is a failure, it wouldcertainly be a case for refund or replacement. The case pertained to a defective OpelAstra.

Then in the case of A.Raja Rao vs M/s Mysore Auto Agencies, the court expresseddispleasure at automobile manufacturers who persisted in repairing a new, defectivevehicle, instead of giving refund or a defect-free replacement. Said the commission inthis case, pertaining to a defect in a Swaraj Mazda light commercial vehicle: "It isregrettable that we have developed a tendency not to replace the defective vehicles".

In the case of M/S Hyundai Motors India vs M/S Affiliated East West Press (Revisionpetition no 958 of 2007, decided on November 29, 2007), the National ConsumerDisputes Redressal Commission has gone one step further and held that where aconsumer experiences problems with a vehicle just a couple of months from the date ofpurchase, and the manufacturer is unable to rectify them, even if those problems are notmajor, the manufacturer has to give a replacement or a refund. It has also deplored inthis order the tendency of manufacturers to indulge in protracted litigation instead ofaccepting that there are defects in a particular vehicle and offering the dissatisfiedconsumer a new replacement or a refund.

It is pertinent to quote the apex court here:" Unfortunately, we have developed thepractice or tendency of not admitting the defects in the vehicle and not replacing thesame without contest. In other countries defective vehicles are easily replaced. That

practice is required to be adopted, at least, by big companies like the petitioner herein.Instead of disputing the undisputed facts, the companies should resolve the matter byreplacing the vehicles."

Said the court further: "In our view, if a brand new car gives trouble within a few days ofits purchase, the consumer would be dissatisfied. Further, in such cases, themanufacturing company is not justified in protracting litigation, merely because it hasthe money power. Further, a person who purchases a vehicle, maybe a luxury Accent caror a small car, would not be satisfied if it is a defective vehicle. The defect may not be amajor one but the consumer loses satisfaction of having a new car. That loss ofsatisfaction would be much more in a case when the person buys the vehicle with hishard-earned money."


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The complaint in this case revolved around a Hyundai Accent (diesel), purchased by theconsumer. While the district forum directed the manufacturer to provide a defect-freevehicle to the consumer and pay Rs 10,000 as compensation, the state commissionmodified it and said the manufacturer shall refund the entire cost of the vehicle Rs6,59,783 and also pay Rs 25,000 as compensation. Challenging this before the apexcourt, the manufacturer argued that there were no serious manufacturing defects in thevehicle. Disagreeing with such a contention and upholding the order of the statecommission, the court observed: Undisputedly, a brand new car was required to berepaired repeatedly and the opposite parties are not in a position to a find solution tocontrol emission of white/b lack smoke. Observed the commission further: Maybe suchdefects may occur in one out of 1000 vehicles but, at the same time, it is the duty of thereputed/established manufacturer to replace such a vehicle.

It's time vehicle manufacturers took note of these observations and acted on them.

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