AMICUS AI
Citation Codes
Neutral Citations
1997 INSC 475
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 28(1) of the Consumer Protection Act, 1986
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Neutral Citations
1997 INSC 475
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 28(1) of the Consumer Protection Act, 1986
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The respondent purchased a commercial “Tipper Truck” (Registration No. SK 1210.B/36) on 7-5-1991, financing the purchase through a nationalised bank. After approximately 9,000 km of use, the respondent detected several defects—completely worn tyres, improperly fixed front axle pins, severe vibrations at 40 km/h, and a loose cabin. These defects were first reported by letter dated 10-3-1992 and reiterated in subsequent correspondence, including a letter of 2-5-1992 stating that the problems persisted after 18,000-18,500 km despite repairs allegedly covered by warranty.

Unsatisfied with the manufacturer’s response, the respondent filed a complaint before the State Consumer Disputes Redressal Commission. On 24-9-1994, the State Commission awarded Rs 4,81,132.17 with 18% interest from 28-7-1992. The National Consumer Disputes Redressal Commission upheld this award on 23-9-1996. The manufacturer (appellant) then filed the present appeal before the Supreme Court by special leave.

Legal Issues Presented

  1. Whether compensation awarded for a defective vehicle should be reduced to account for the purchaser’s continued use of the vehicle before and during the pendency of consumer proceedings.

Arguments of the Parties

Appellant's Arguments

  • The complaint was lodged eight months after delivery, by which time the vehicle had already covered 18,000-18,500 km; it had clocked 65,000 km by the Commissioner’s inspection (10-4-1993) and an additional 25,000-30,000 km by the State Commission’s order (24-9-1994).
  • Given this extensive use, a proportional deduction should be made from any damages to reflect depreciation and benefit derived from use.
  • The appellant focused less on the quantum per se and more on establishing the correct principle for calculating damages in such circumstances.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court found merit in the appellant’s contention that the respondent had continued to use the vehicle extensively despite the alleged defects. Acknowledging that the vehicle was never kept idle and that considerable mileage accrued both before and during litigation, the Court held that equity required a deduction from the compensation to reflect the value obtained from such use.

Balancing the need to compensate the purchaser for receiving a defective vehicle against the benefit derived from continued usage, the Court determined that a one-third reduction of the compensation awarded by the State and National Commissions was appropriate. The remainder of the compensation, along with the previously ordered interest, was affirmed.

Holding and Implications

Appeal allowed in part. The Supreme Court ordered a 33⅓ % deduction from the compensation of Rs 4,81,132.17 while confirming the balance; no order as to costs.

Implications: The decision underscores that compensation for defective goods under consumer law may be adjusted to account for the consumer’s actual use of the product during the dispute period. No new legal precedent was set beyond this clarification of compensation principles.

To access the original judgment, please Sign In or Subscribe.

    Tata Engineering & Locomotive Co. Ltd. And Another v. Gajanan Y. Mandrekar .

    Order

    1. Leave granted. We have heard the counsel on both sides.

    2. This appeal by special leave arises from the order, made on 23-9-1996 passed by the National Consumer Disputes Redressal Commission in FA No. 784 of 1994.

    3. The respondent had booked commercial vehicle, more commonly known as a “Tipper Truck” with Registration No. SK 1210.B/36 on 7-5-1991. He purchased the vehicle after securing loans from a nationalised bank on usual commercial rate of interest. After running the vehicle as driver-cum-owner for 9000 kms, it was found that the tyres were worn out completely, front axil pins of the vehicle were not fixed properly; at a speed of 40 kms per hour the vibration of the vehicle (empty) was very high as the cabin was completely loose etc. He mentioned these defects in his letter dated 10-3-1992, after eight months. Subsequently, he reiterated the same in his different letters addressed to the agent, through whom he had purchased the vehicle. Finally, by letter dated 2-5-1992, after intimating that in spite of running the vehicle for 18,000 to 18,500 kms, despite repairs, the vehicle continues to give the same trouble. In spite of the warranty of service, the trouble was not done away with. Accordingly, he filed a complaint with the State Commission. The Commission after considering the evidence and hearing the counsel on both sides, found that the appellant was liable to pay a total amount of Rs 4,81,132.17 with interest at the rate of 18% per annum w.e.f 28-7-1992. That was confirmed on appeal by the National Commission. Thus this appeal by special leave.

    4. Shri F.S Nariman, learned Senior Counsel appearing for the appellant, contends that the appellant is not so much on the quantification of the damages awarded in this case; rather, they want to vindicate the principle on which the damages are awarded in such type of complaints. According to him, the complaint was laid after 8 months from the date of the delivery; that too after the vehicle was used to cover a distance of 18,000 to 18,500 kms; the complaint was laid in August 1992. When the Commissioner appointed gave his report on 10-4-1993, the vehicle had covered a distance of 65,000 kms. The State Commission passed the order on 24-9-1994 by which date a further distance of more than another 25,000 to 30,000 kms had been run. Under these circumstances, proportionate deduction for use of the vehicle would have been given. We find force in the contention. It is not the case that during the said period the vehicle was kept unused. When the vehicle was being used with the same defects as pointed out, necessarily the purchaser is required to be compensated for not delivering the vehicle in good condition as per the warranty after deduction towards the use of the vehicle. In view of the facts and circumstances, we think that 1/3rd of the compensation awarded by the Commission may be deducted towards the user of the vehicle for the period in question. For the rest of the amount, the order of the Commission is confirmed.

    5. The appeal is accordingly allowed in part. No costs.

    Use AI to get other relevant cases.

    Comments

    Tata Engineering & Locomotive Co. Ltd. And Another v. Gajanan Y. Mandrekar .
    (May 5, 1997)