Old Car Sold As New, Chandigarh-I District Commission Holds Honda Car Ltd. And Its Authorized Dealer Lally Motors Liable For Breach Of Trust

Brief facts of the case:

Anu Garg (“Complainant”), resident of Sector 18-D, Chandigarh, booked a Honda WR-V car from Lally Motors (“Dealer”), a car dealership based in Jalandhar. However, when she went to the dealer to take delivery of the car, she was pressured into accepting a lower variant of the vehicle, WR-V 1.5 MT, with assurances from the dealer that they would later install a rearview camera and refund the excess amount she had paid. Yielding to this insistence, the complainant accepted the lower variant car.

In March 2022, when her husband took the car for servicing at Harmony Honda Mohali (“Service Centre”), he was informed that the vehicle's warranty would expire on March 29, 2022. This was puzzling to the complainant since she had purchased the car on July 12, 2019, and the warranty was supposed to be valid until July 11, 2022. When she contacted the dealer about this discrepancy, they admitted to a clerical mistake but claimed they couldn't rectify it. Instead, they offered to extend the warranty for one year and provide free defect rectification and five years of complimentary car servicing as part of a settlement. Aggrieved, the complainant filed a consumer complaint in the Chandigarh District Consumer Disputes Redressal Commission-I (“District Commission”) against Honda Cars and the dealer. The complainant further alleged that the dealer had sold her an old car, charging her the price of a brand new one, and provided her with a handwritten bill. She also claimed that she was not given a sale certificate indicating the month of manufacture of the vehicle.

Honda Cars Limited maintained that they sold vehicles to authorized dealers on a no-name basis for further sale to potential customers, and they had no involvement in after-sales services to end users. They argued that no manufacturing defects had been highlighted in the complaint that would implicate them.

Whereas, the dealer denied the allegations made by the complainant and accused her of filing a false complaint with the intention of defaming their reputation. They claimed that they had purchased the vehicle in question from Rajasthan on February 22, 2019, and received it on February 24, 2019, at their Ludhiana Yard. They subsequently sold it to the complainant on July 11, 2019. The dealer further asserted that the allegations against them were false and motivated by a desire to extract money from them. They maintained that the complainant had continued to get her vehicle serviced by them from August 2, 2019, until March 8, 2022, indicating her satisfaction with their services.

Observations by the Commission:

The District Commission noted that the complainant had indeed purchased an old car from the dealer, presented as new, at the price of a new vehicle. This misrepresentation, the District Commission held, constituted a breach of consumer trust, causing emotional distress and financial loss. Furthermore, it also held that Honda Cars Limited failed to investigate and address such misconduct by their authorized dealer.

Consequently, the District Commission ruled in favor of the complainant. Honda Cars Limited and the dealer were jointly and severally directed to refund the invoice price of Rs. 8,77,050 to Anu Garg with an interest rate of 9% per annum from the date of purchase. Additionally, an amount of Rs. 50,000 was awarded to the complainant as compensation for mental agony and harassment, along with Rs. 10,000 as litigation costs.

Case: Anu Garg vs M/s Honda Car Ltd.

Case No.: CC/688/2022

Advocate for the Complainant: Vivek Mohan Sharma

Advocate for the Respondent: Sh. Aditya Verma (Advocate for Honda Car Ltd.), None for Lally Motors