Volkswagen’s Dealer Held Liable For Deficiency In Service; Hyderabad-I District Commission

Brief Facts of the Case:

Sachin Pohar (“Complainant”), approached PPS Motors Pvt. Ltd. (“Dealer”) to purchase Volkswagen Polo GT, manufactured by Volkswagen India Pvt. Ltd. (“Manufacturer”). After paying an initial booking amount of Rs 5,000 via credit card to the dealer, he subsequently paid Rs. 4,94,000 in cash to the dealer’s representatives for the remaining balance of the vehicle cost. However, he experienced continuous delays in the delivery of the car.

Upon further investigation, the complainant discovered that the funds he had paid in cash had been misappropriated, and the dealer was unable to deliver the car registered in his name. He issued a legal notice, but only the dealer responded and not the manufacturer. Aggrieved, the complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-I, Hyderabad (“District Commission”) against the dealer and the manufacturer.

The complainant contended that he had no personal relationship with either the dealer or the manufacturer or their representatives and that the amounts he paid in cash were for the purchase of the car. He argued that the both of them, especially the manufacturer, should be held directly and vicariously liable for the amounts he paid.

The manufacturer denied any direct involvement in the transaction, asserting that they were wrongly made parties to the complaint. They claimed that once the car is delivered to the dealer, the entire retail process, including payments and delivery, is handled by the dealer's representatives. They argued that the relationship between them and the dealer was purely on a principal-to-principal basis and, therefore, they should not be held liable for the actions of the dealer or its employees.

The dealer contended that they do not accept cash payments from customers and that the complainant's claim of making cash payments to their representatives was implausible. They argued that the complainant failed to exercise due diligence before entertaining the representatives at his residence. They also claimed that the complainant's payments were made directly to their employees, not as part of their official business operations. They stated that they terminated the services of the representatives after discovering their fraudulent acts.

Observations by the Commission:

The District Commission held that the dealer could not absolve themselves of liability in this matter. The representatives had used the stationery and resources of the dealer, which was acting on behalf of the manufacturer. The District Commission ruled that the dealer was jointly and severally liable for the refund and compensation due to the negligence and deficiency of service on their part.

The District Commission noted that the manufacturer had been incorrectly made parties to the complaint. It was established that once the car is delivered to the dealer, the entire retail process, including payments and delivery, is handled by the dealer's representatives. The District Commission found that the relationship between the manufacturer and the dealer was purely on a principal-to-principal basis. Therefore, the District Commission dismissed the complaint against the manufacturer, as there was no evidence of negligence or deficiency of service on their part.

The District Commission directed the dealer to refund the entire amount of Rs 4,94,000 to the complainant within 45 days from the date of receipt of the order. A compensation of Rs 15,000 was also awarded to the complainant for the financial loss and mental agony he had suffered due to the dealer’s actions. The dealer was further directed to pay Rs 10,000 as legal costs to the complainant.

Case: Sri Sachin Pohar vs Volkswagen India Private Limited & Others

Case No.: CC/87/2022

Advocate for the Complainant: Adv. Venkateshwarlu Khali

Advocate for the Respondent: Adv. Lanka Jagannadham

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