Delay In Getting Free Service Not Ground To Revoke Vehicle’s Warranty: NCDRC Hold Tata Motors, Dealer Liable To Compensate Customer [Read Order]

Observing that some delay in getting free service of the vehicle done would not imply that the user of the vehicle was negligent in its maintenance thereby resulting in revoking of the warranty and that the manufacturer of the vehicle is equally responsible, as is its dealer, for allowing repairs under warranty, the National Consumer Disputes Redressal Commission (NCDRC) has directed Tata Motors and one of its dealers to compensate their customer for refusing to repair the vehicle under warranty.

NCDRC Presiding Member Prem Narain said so while modifying the order of the State Commission which had directed an authorised dealer of Tata Motors to pay compensation of Rs 41,568 along with litigation cost of Rs 5,000 for refusing to repair a truck.

The NCDRC partly allowed the appeal of the dealer from Bilaspur, Chhattisgarh, which had challenged the order of the State Commission which had exonerated Tata Motors of any liability in the matter.

In the instant case, the complainant had purchased a truck from the instant petitioner. The vehicle was under warranty but the petitioners refused to repair it, forcing the complainant to move the consumer forum in January 2014 against him and also the manufacturing company Tata Motors Limited.

Before the commission, Tata Motors denied any responsibility saying there was no manufacturing defect in the vehicle. The State Commission accepted the argument and held the petitioners as solely liable to compensate the complainant.

Before the NCDRC, the petitioners stated that they were only the agent of principal Tata Motors Limited and that the warranty is granted by the manufacturer and the Tata Motors Limited in its written statement have clearly denied the applicability of warranty in the present case on the ground that there was negligence on the part of the complainant in maintaining the vehicle.

It was also claimed that the complainant did not avail of three free services in time and therefore, there was a lot of dust over the engine and according to warranty conditions, the warranty had ceased to exist. The dealer, who is an agent of principal Tata Motors, cannot take up the repairs under warranty when the principal has denied the operation of the warranty itself.

The petitioner also relied upon the case titled Prem Nath Motors Limited Vs. Anurag Mittal wherein the Supreme Court had held that Section 230 of the Contract Act categorically makes it clear that an agent is not liable for the acts of a disclosed principal subject to a contract to the contrary. No such contract to the contrary has been pleaded.

It was argued that on the basis of this judgment, the State Commission has erred in finding deficiency on the part of the petitioners, whereas the principal/manufacturer has been left scot-free.

The complainant told the NCDRC that it was not concerned whether the compensation is paid by the petitioners or by the manufacturer, Tata Motors Ltd.

Tata Motors reiterated that the State Commission has clearly held that there was no manufacturing defect in the vehicle and therefore, no deficiency was found on its part.

“In practice, it is the dealer who repairs the vehicle under the warranty and then settles claim with the manufacturer under terms of their agreement. In this case, the petitioners refused to repair the vehicle under the warranty and therefore, they are equally liable for dishonouring the warranty,” it said.

After hearing all parties concerned, the NCDRC held, “…There has been some delay in getting the free services done. However, this does not imply that the complainant was negligent in maintenance of the vehicle resulting in revoking of the warranty.

“The main argument advanced by the learned counsel for the petitioners is that they are not responsible for any deficiency as they were only the agent of the principal, Tata Motors Ltd. I agree with the point raised by the petitioners that the warranty has been issued by the Tata Motors Ltd. and they are responsible for allowing repairs under the warranty. The State Commission has ordered for payment of repairs keeping in view the operation of the warranty clause. However, the State Commission erred in totally exonerating Tata Motors from their liability under warranty. Clearly, the dismissal of the complaint against the manufacturer Tata Motors Ltd is justified only to the extent that the State Commission has not found any manufacturing defect in the vehicle. However, so far as the warranty is concerned, the manufacturer Tata Motors Ltd is equally responsible as the petitioners.”

“In practice, it is the dealer who repairs the vehicle under the warranty and then settles claim with the manufacturer under terms of their agreement. In this case, the petitioners refused to repair the vehicle under the warranty and therefore, they are equally liable for dishonouring the warranty,” it added.

It then modified the order of the State Commission to the extent that it held the dealer and Tata Motors jointly and severally liable to pay the compensation awarded by the Commission.