Kerala Consumer Forum Orders Ford India To Compensate Lawyer For Failed Car Booking Taken 3 Weeks Before Closing Operations In India

The Bench comprising the President Manulal V.S. and Members Bindhu R. and K.M. Anto held that if Ford India was ceasing its operations, then the dealers should not have been allowed to take advance booking from the consumers. It observed,

"Had there been any decision to cease the production and sale of the vehicle in India, the first opposite party [Ford India] should not have allowed their dealers to receive the booking from the general public who were not aware of the decision of the first opposite party, which they later-on cancelled."

Thus the Commission held that Ford India is liable for deficiency in service and unfair trade practices. It stated thus:

“In view of foregoing discussion, we are of the considered opinion that deficiency in rendering service and for indulgence into unfair trade practice on the part of the respondents and also for suffering immense physical harassment and mental agony, the first opposite party is liable to compensate the appellant. In our concerted view, consolidated compensation on aforesaid counts and also for litigation expenses, if granted in the sum of Rs.1,00,000/- that would meet the ends of justice.”

The complainant, who is also an advocate, booked an EcoSport Titanium car from Ford India Pvt. Ltd. through its authorized dealer Kairali Ford at Kottayam after being enticed by advertisements and a festival offer by the manufacturer. Accordingly, he paid an initial booking amount of Rs. 2,000 and signed various documents establishing a consumer-supplier relationship with the manufacturer through the dealer. The dealer assured delivery by December 30, 2021.

However, on September 9th, Ford India Pvt. Ltd. made an official announcement that the Ford Motor Company was stopping manufacturing cars in India. The complainant was informed by the dealers that there was no stock left of EcoSport Titanium and that delivery of the car was impossible.

The complainant alleged deficiency in service, unfair trade practice and violation of consumer awareness against the opposite parties for violating the consumer-supplier agreement and for taking the booking when the manufacturing units were closing down. He thus sought compensation, a refund of the booking amount and the cost of litigation expenditures.

The manufacturer claimed they had no direct involvement in the transaction and could only be held liable for manufacturing defects. They argued there was no privity of contract between them and the complainant.

Similarly, the dealer contended that the complainant failed to pay the balance of the booking amount. They also claimed they were unaware of the manufacturer's decision to cease production until the official announcement.

The Commission held that the act of the opposite parties would amount to a deficiency of service and unfair trade practices as they failed to complete the delivery of the car before 31 December 2021 after taking an advance booking from the complainant. It was found that the parties were bound by the terms and conditions of the agreement regarding the delivery of the car and that the booking was confirmed.

The Commission further noted that the complainant's order was cancelled by the opposite parties on their own without thinking about the advance bookings that they had already taken. It noted that if Ford India Pvt. Ltd. was ceasing operations in India, it should not have allowed its dealers to receive car bookings from the general public, only to cancel them later.

It was also observed that Ford India Pvt. Ltd. should have informed its dealers not to take advance bookings for new vehicles from the consumers. The Commission held that both Ford India Pvt. Ltd and the dealer were responsible for the complainant's loss, and that their acts have affected him physically and mentally.

“The feelings of the complainant would have definitely got hurt, when he came to know about the cancellation of the order by the first opposite party on their own and at that time. Had there been any decision to cease the production and sale of the vehicle in India, the first opposite party should not have allowed their dealers to receive the booking from the general public who were not aware of the decision of the first opposite party, which they later-on cancelled.”

The Commission considered the bait advertisements published by the opposite parties which attracted the complainant to purchase the car and stated the opposite parties were bound to keep the assurances made in the advertisements.

“Not only above, when the first opposite party publishes advertisements to sell their vehicles, they were expected to deliver the same on time and in not doing so and simultaneously, cancelling the order on their own amounted to deficiency in rendering service and unfair trade practice on their part.”

With this observation, the Commission directed the authorized dealer to refund Rs. 2,000 booking amount plus interest. Further, it directed Ford India to pay Rs. 1 lakh compensation.

Counsel for the complainant: Advocate Manu Nair G

Counsel for the respondents: Advocates Jidesh Kumar M D, Smita Paliwal, Gaurav Singh Kaur, M C Suresh and George Cherian Karippaparambil and K.Anilkumar Ambady

Case title: Adv. Manu Nair G V Ford India Pvt. Ltd

Case number: CC/57/2022

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