Sunday, 17 July 2016

NCDRC:Tata Motors Ltd. is vicariously liable for the omissions and commissions of their dealer

The Tata Motors Ltd. is vicariously liable for the omissions and commissions of their dealer. They cannot permit their dealers to indulge in such like activities who work under their nose. It is their bounden duty to check the names of the customers particularly when it is called to change the most significant part like engine. However, it is made clear that it is the main responsibility of the dealer itself. The dealer should not have sold this vehicle for the second time. He has tried to suppress the facts. He should have mentioned all these facts to the new purchaser and should have given concession for the same. The fact that the vehicle has run upto 14,173 kms. and 19,960 kms. on 06-06-2006 pales into insignificance in view of the cheating committed by the dealer with the consumer. The action of both the parties is below the belt. They made an attempt to lead the gullible customer up the garden path. The consumer swallowed the bait and drove the car to such an extent without knowing that it is a second hand car. However, the liability upon the Tata Motors Ltd. is on the lower/nominal side. The entire amount of the car as well as compensation and interest as ordered by the fora below would be paid by the Cargo Motors Pvt. Ltd. the dealer. However, watching the inaction, negligence and passivity on the part of the Tata Motors Ltd. we impose costs of Rs. 1,00,000/- upon Tata Motors Ltd. which be paid to the complainant within 45 days from today otherwise it will carry interest at the rate of 9% per annum. The rest of the liability lies on the Cargo Motors Pvt. Ltd. After the receipt of the amount the vehicle be returned to the dealer immediately.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
Revision Petition No. 2179 of 2014
Decided On: 18.04.2016
Appellants: Tata Motors Ltd.
Vs.
Respondent: Prashantbhai Premshankar Vyas and Ors.
Hon'ble Judges/Coram:J.M. Malik, J. (Presiding Member)


1. Counsel for the parties present. This order shall decide both the above detailed cases which were disposed of by the State Consumer Disputes Redressal Commission, Gujarat on 31-01-2014. The State Commission held that both the manufacturer-Tata Motors Ltd.-OP3 and dealer Cargo Motors Pvt. Ltd.-OP1 liable for defective car to the extent of 50% each. The State Commission ordered that the entire price of the car in the sum of Rs. 4,80,716/- be paid to the respondent equally by both the above said petitioners/opposite parties.
2. The facts germane to this case are as follows: Mr. Prashantbhai Premshankar Vyas, the complainant, purchased a Tata Indigo car in the sum of Rs. 4,80,716/- from the dealer, M/s. Cargo Motors Pvt. Ltd. on 19-10-2006. It is alleged by the complainant that problem in the said vehicle started on 10-01-2008. It transpired that the vehicle was not starting. He took the same to Jai Ganesh Auto Centre-OP2 which inspected the vehicle and it informed that the vehicle had failed and that was a second hand vehicle. It also found a number of defects. Therefore, a complaint was lodged with the District Forum with the following prayers:
"In above reference it is my humble request that I purchased a new Tata Indigo car but they sold one. I took loan from ICICI bank. Its instalment are continuing. I hired a car from dated 10-01-2008 to dated 20-01-2008. Its rent Rs. 20,000/- for twenty days was also paid by me.
It is humble request that the company take back said second hand Tata Indigo car and return my full cost/amount to me. It is requested to take appropriate action in this regard."
3. The defence set up by the opposite parties is that the said vehicle had run upto 14,173 kms. within two months. Four services of the car were effected. There was no productive defect as alleged by the complainant. No expert report of the mechanic was filed along with complaint. They contended that they are not liable for the above said defects. Again, during the warranty period the engine was replaced by the manufacturer. As a matter of fact the complainant visited Cargo Motors Pvt. Ltd. and the engine of the car was replaced on the basis of approval of the manufacturer. The car was given delivery to the respondent.
4. The District Forum allowed the complaint in the following manner:
"(a) ***
(b) It is ordered that opponent No. 1 Cargo Motors Pvt. Ltd. and opponent No. 3 Tata Motors Pvt. Ltd. jointly and severally: (1) retail invoice dated 29-10-2006, marked as 4/1, in account of complained indigo car No. GJ4AM 8691 (chasses No. 607144 DTZP 53823 and engine No. 475 IDT 14 DTZP 47248), amount Rs. 4,80,716/- and (2) @ 9% interest on this amount of Rs. 4,80,716/- from dated 16-09-2008 till the date of recovery and (3) Rs. 50,000/- as compensation for physical/mental/emotional suffering/insult/injustice and (4) Rs. 10,000/- as expenditure of this complaint would pay these four amount to the complainant.
(c) Opponent No. 1 and opponent No. 3 will take this order in pursuance till 31-05-2010. If there is any lack in pursuance of this order from the side of opponent, in such conditions (1) the complainant will be rightful to receive @ 6% interest per annum from 01-06-2010 on the above amount of Rs. 50,000/- and above amount of Rs. 10,000/- payable in regard of this order and (2) if required, the complainant can file civil/criminal procedure to get ordered compensation along with expenditure of proceedings.
(d) ***
(e) ***
(f) ***
5. It is not out of place to state here that Tata Motors Ltd. was not originally a party to this case. It was joined as a party subsequently. It was proceeded against ex parte. The record shows that Tata Motors Ltd. was served but they did not appear despite service. It reveals arrogance on its part.
6. Aggrieved by that order separate appeals were filed by both Tata Motors Ltd. and Cargo Motors Pvt. Ltd.. The State Commission dismissed the appeals with costs of Rs. 5,000/- each.
7. I have heard the counsel for the parties. During arguments it also transpired that this car was sold to one Mr. Deepakbhai Kantilal Shah on 30-05-2006. The documents when the vehicle was sold to him, when the sale was cancelled in favour of 1st buyer, have been placed on the record. The Cargo Motors Pvt. Ltd. has failed to make it clear why the car was taken back and sold for the second time. It is a case where the material facts were suppressed by both the petitioners and the poor complainant was taken for a ride. It is also clear that Tata Motors Ltd. did not see to these relevant documents. Record was given to them twice. Counsel for the Tata Motors Ltd. submits that their relationship between dealer is on the basis of principal to principal and they have got no privity of contract with the customer i.e. consumer/complainant. Counsel for Tata Motors Ltd. further submits that no prayer has been made regarding the compensation or interest but the fora below on their own have ordered the same. He further submits that the company is not aware whether the vehicle is being sold for first time or for second time. He further submits that the company is not aware what cheating has been done by the dealer. He submits that only the dealer and not the Tata Motors Ltd. is liable for the same.
8. We find force in his arguments, in a measure. It is strange that on the one hand the company is changing the engine and it does not know to which vehicle the engine is being replaced. All the documents must be in their possession. They did not make an inquiry from the dealer why the dealer sold the vehicle for the second time. They did not take any action against the dealer. His agency was never cancelled. It is, thus, clear that the dealer and Tata Motors Ltd. were working in cahoots with each other.
9. The Tata Motors Ltd. is vicariously liable for the omissions and commissions of their dealer. They cannot permit their dealers to indulge in such like activities who work under their nose. It is their bounden duty to check the names of the customers particularly when it is called to change the most significant part like engine. However, it is made clear that it is the main responsibility of the dealer itself. The dealer should not have sold this vehicle for the second time. He has tried to suppress the facts. He should have mentioned all these facts to the new purchaser and should have given concession for the same. The fact that the vehicle has run upto 14,173 kms. and 19,960 kms. on 06-06-2006 pales into insignificance in view of the cheating committed by the dealer with the consumer. The action of both the parties is below the belt. They made an attempt to lead the gullible customer up the garden path. The consumer swallowed the bait and drove the car to such an extent without knowing that it is a second hand car. However, the liability upon the Tata Motors Ltd. is on the lower/nominal side. The entire amount of the car as well as compensation and interest as ordered by the fora below would be paid by the Cargo Motors Pvt. Ltd. the dealer. However, watching the inaction, negligence and passivity on the part of the Tata Motors Ltd. we impose costs of Rs. 1,00,000/- upon Tata Motors Ltd. which be paid to the complainant within 45 days from today otherwise it will carry interest at the rate of 9% per annum. The rest of the liability lies on the Cargo Motors Pvt. Ltd. After the receipt of the amount the vehicle be returned to the dealer immediately.
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