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Disposition

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Attorney(S)
  • M/s. A.P. Mishra & Assoc.
Acts
  • u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the 'Act')
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Citation Codes
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citation codes
Case Number
Disposition

in part

Attorney(S)
  • M/s. A.P. Mishra & Assoc.
Acts
  • u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the 'Act')
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Smart Summary

Concise Analytical Summary of the Opinion — State Consumer Disputes Redressal Commission, Odisha

Factual and Procedural Background

This consolidated opinion arises from three first appeals (FA Nos. 327, 367 and 406 of 2015) filed under Section 15 of the Consumer Protection Act, 1986 challenging a common order of the District Consumer Forum, Puri in CC No. 275 of 2013. The appeals were heard together because they challenge the same impugned order.

The material facts as recorded in the opinion: the complainant purchased a new Hyundai Verna (registration OR-05-AW-7777) from OP No.2 on 25.4.2012 for Rs. 10,08,294/-. The vehicle developed mechanical trouble on or about 24.7.2013 (within the period of an extended warranty asserted by the complainant). The complainant alleged that the OPs failed to rectify the defects and therefore committed deficiency of service. OP Nos. 1, 2 and 4 denied a manufacturing defect and contended that the failure was due to misuse/accident/flooding (not covered by warranty). OP No.3 (the insurer) contended the reported loss was beyond policy coverage and disclaimed liability.

The District Forum allowed the complaint against OP Nos. 1, 2 and 4 (and dismissed it as against OP No.3), directing repair under warranty, payment of compensatory interest at 12% per annum on the vehicle cost from 3.8.2013 until repair (with a higher rate in case of default), and litigation costs of Rs.5,000/-. The present Commission reviewed appeals by OP Nos. 1, 2 and 4 against that order.

Legal Issues Presented

  1. Whether OP Nos. 1, 2 and 4 were guilty of deficiency of service and liable to repair the vehicle and pay compensation under the Consumer Protection Act for the defects appearing within the warranty period.
  2. Whether the alleged defects fell outside warranty coverage because of misuse, flood, accident or other excluded causes (and hence whether the manufacturer/dealer/service centre could be absolved of liability).
  3. Whether OP No.3 (the insurer) bore any liability for the complainant's claim under the facts and the relevant policy conditions.
  4. Whether the District Forum's determination of the commencement date for payment of compensatory interest (3.8.2013) was justified or required modification.

Arguments of the Parties

Appellants (OP Nos. 1, 2 and 4)

  • OP No.4 (service centre) argued the complaint was not maintainable against it because it neither sold the vehicle nor manufactured it; it had issued estimates but the vehicle remained in the garage due to inaction/non-payment by the complainant. It contended the repair estimate was unsigned by the owner and repair could not be undertaken without owner consent.
  • Appellants generally contended there was no manufacturing defect and that any defect arose from misuse, accidental damage or having been used in flood conditions — all of which, they argued, fall outside the warranty (para. 2.7). Consequently, they asserted no liability to pay compensation.
  • OPs argued the District Forum erred by holding them jointly liable without sufficient evidence and failed to consider precedents (National Commission and Supreme Court decisions) allegedly supporting that negligence by a complainant in using the vehicle does not equate to a manufacturing defect.
  • Specific to OP No.2 (dealer), it stated it had attended to the vehicle only on two occasions as covered by warranty and had no other occasion to do so; thus, joint liability was asserted to be inappropriate.

Complainant / Respondent

  • The complainant maintained the vehicle developed mechanical trouble within the warranty period and that the defect was not due to flood or misuse. He asserted the defect was covered by extended warranty and supported the District Forum's order for relief against the OPs.
  • The complainant placed materials filed before the District Forum, including an expert report and related documents, in support of his claim that the defect arose during use in the rainy season but was a manufacturing-type defect covered by warranty.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Commission considered the submissions of counsel and the District Forum Record (DFR), including the impugned order and expert reports. The Commission articulated the following analytical steps and findings based strictly on the recorded material:

  1. Warranty and temporal facts: It is an admitted fact that the vehicle was purchased on 25.4.2012 and that a warranty and extended warranty card were produced by the complainant showing coverage up to 24.4.2016; the defect manifested on 24.7.2013, within that warranty period.
  2. Evidence from experts and service records: The Commission reviewed an expert/technical report provided by Mr. M.R. Lal (engaged by OP Nos. 1, 2 & 4). That report recorded inspection on receipt (25 July 2013), observations of water in the air filter and a broken engine cylinder block, photographs, and a note that the customer told the technician the vehicle had been driven in a water-covered area on 24 July 2013. The report described technical analysis concluding water entered the engine via the air filter, causing piston/valve damage and likely seizure or forcible movement leading to breakage; it also recorded that an estimate was issued (received by the customer's representative on 3 August 2013) and that the workshop requested permission to start repairs but had not received confirmation from the customer.
  3. Assessment of OPs' defenses: OPs 1, 2 and 4 relied on the warranty exclusion clause for misuse/abuse/accident/flooding. The Commission found that none of the OPs proved these excluded causes. OP No.4 claimed there was a flood in Puri in 2013, but produced no documentary evidence to support that assertion. The Commission observed that vehicles are used in varying weather and that running in rain does not automatically demonstrate misuse falling outside warranty.
  4. On the question of whether the defect was a manufacturing defect or caused by misuse/flooding, the Commission interpreted the technical observations as establishing water ingress into the engine system and resultant damage noted within the warranty period; it concluded that those observations constituted a manufacturing defect (as described in the impugned order) and were not satisfactorily shown by OPs to be due to excluded causes.
  5. On the procedural issue of repair consent and the estimate: Although the OPs' report recorded that an estimate was issued and that the complainant or his representative received it, the Commission observed that no copy of the estimate or correspondence establishing part performance by OP No.4 was placed on record to prove that the complainant failed to give consent to the repair. Therefore, OP No.4 failed to prove that the complainant had prevented repair by not attending or not authorizing payment.
  6. Liability of the insurer (OP No.3): Based on the written version of OP No.3 and the material, the District Forum had found OP No.3 not liable; the Commission accepted that finding, concluding OP No.3 had no liability on the facts proved.
  7. Conclusion on deficiency of service: Given the expert observations, the lack of evidence by OPs to discharge their burden of proving exclusion (misuse/flood/accident), and the absence of proof that the complainant obstructed repair, the Commission agreed that the complainant had proved deficiency of service against OP Nos. 1, 2 and 4.
  8. On remedy and modification: While the Commission confirmed the District Forum's order in substance, it found the District Forum had awarded compensatory interest from 3.8.2013 without stating reasons for that commencement date. The Commission held that compensation should commence from the date of the impugned order (the date when the complainant is entitled to it) rather than from 3.8.2013. The rest of the operative directions of the District Forum were confirmed. The Commission also vacated any interim order, directed the DFR be returned, and ordered supply of the Commission's order to the parties.

Holding and Implications

Final Disposition: The Commission held that the complainant proved deficiency of service on the part of OP Nos. 1, 2 and 4; OP No.3 was not liable. The Commission confirmed the District Forum's operative order as to liability and remedial directions, but modified the commencement date for compensatory interest.

Concrete directives and effect on the parties (direct consequences):

  • The District Forum's findings that OP Nos. 1, 2 and 4 are liable and that OP No.3 is not liable were upheld in substance.
  • The Commission confirmed the direction that OP Nos. 1, 2 and 4 are to repair the vehicle as per the repair estimate(s) dated 3.8.2013 and 16.11.2014 under warranty free of cost and deliver it in perfect running condition within two months from the date of receipt of the order (as originally directed by the District Forum).
  • The payment of compensatory interest and litigation costs ordered by the District Forum were confirmed, but the commencement date for compensatory interest was altered: the Commission ruled that the interest should run from the date of the impugned order (i.e., the date when the complainant is entitled to receive it), not from 3.8.2013 as originally directed by the District Forum — the Commission observed the District Forum had not assigned reasons for choosing 3.8.2013 as the starting date.
  • If OPs fail to comply with the directions, the higher rate of interest directed by the District Forum (as a consequence of non-compliance) remains applicable as per the operative order confirmed by the Commission.
  • The interim order, if any, was vacated. The appeals were described as partly allowed and disposed of accordingly. No costs were awarded by the Commission for the appeals.

No new precedent was established by this order; the Commission reviewed and affirmed the District Forum's fact-finding on deficiency of service, while making a limited modification to the date from which compensation should run.

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    Hyundai Motors India Ltd. v. Rupranjan Das

    IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION

    ODISHA, CUTTACK

    First Appeal No. A/327/2015 ( Date of Filing : 07 Jul 2015 ) (Arisen out of Order Dated 30/05/2015 in Case No. CC/275/2013 of District Puri)

    1. Hyundai Motors India Ltd. Through its authorized signatory plot no. III, SIPCOT Industrial Park, Irungattukottaim Sriperumbadur Taluk, Kanchipuram, Tamilnadu-602105. ...........Appellant(s) Versus

    1. Rupranjan Das S/o- Narayan Das, S/o- Narayan Das,Prabhu Electronics, Near Salabeg, Grand Road, Kumbharapada, Puri.

    2. The Branch Manager, OSI Hyundai. Unit of OSL Motors Pvt. Ltd. Rajatrangini Complex, Boxi Bazar, Cuttack-753001.

    3. The Divisional Manager TATA AIG General Insurance Co. Ltd.

    Regd. office at 15th Floor, Tower-A, Peninsula Business Park, Ganptrau Kadam Marg, Senapati Bapat Marg, Lower Patel, Mumbai-400013.

    4. The Branch Manager, Aditya Care Pvt. Ltd., Flat No. II NHS Dasbatia, Tamando, Khurda, Bhubaneswar. ...........Respondent(s)

    BEFORE:

    HON'BLE MR. JUSTICE Dr. D.P. Choudhury PRESIDENT PRESENT:Mr. S.M. Patnaik, Advocate for the Appellant 1 M/s. A.P. Mishra & Assoc., Advocate for the Respondent 1 M/s. M.K. Mishra & Assoc., Advocate for the Respondent 1 M/s. A.A. Khan & Assoc., Advocate for the Respondent 1 M/s. R.K. Pattnaik & Assoc., Advocate for the Respondent 1 Dated : 18 Feb 2021

    Final Order / Judgement

    FIRST APPEAL NO. 327 OF 2015

    FIRST APPEAL NO. 367 OF 2015

    FIRST APPEAL NO. 406 OF 2015

    Learned counsel for the appellant in FA No. 327 of 2015 and learned counsel for the appellant in FA No. 406 of 2015 are present. None appears for the appellant in FA No. 367 of

    2015.

    Learned counsel for the respondent in all the appeals is present.

    1

    Heard both of them.

    2. These three appeals are assailed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the 'Act') against common impugned order passed by the learned District Forum, Puri in CC No. 275 of 2013. Therefore, these appeals were heard together. This common order shall govern the result of these three appeals.

    3. Parties to these appeals shall be referred to with reference to their respective status before the District Forum. FA No. 327 of 2015 has been filed by OP No. 1 - The Divisional Manager, HUNDAI Motor India Ltd. whereas FA No. 367 of 2015 has been filed by OP No. 2 - The Branch Manager, OSL Hundai, Cuttack and FA No. 406 of 2015 has been filed by OP No. 4 - Branch Manager, Aditya Hundai, Bhubaneswar.

    4. The unsworn details of the case of the complainant is that the complainant has purchased a new Verna Car having registration No.OR-05-AW-7777 from OP No.2 on 25.4.2012 for consideration of Rs.10,08,294/-. It is alleged inter alia by the complainant that after purchase of the vehicle, it gave some mechanical trouble. In spite of complaint, the mechanical defects were not removed. The complainant allegedly approached the OPs. On 24.7.2013, the Service Engineer found also manufacturing defects in the vehicle. Rather, it is suggested by OP No.2 to approach the Insurance Company - OP No.3 for necessary realization of cost of the repair, they said defect as accidental repair. As the problem was not solved by any of the OPs, showing deficiency of service of OPs, the complaint was filed by the complainant.

    5. OP No.1 filed written version stating that the complainant has purchased the vehicle in question and the vehicle was delivered with perfect running condition without any technical or mechanical defect. After running mileage of 14,505 kms within a period of 14 months, there was no defect in the car complained but when there is defect reported by the complainant on 26.7.2013, it was taken to work shop of OP No.4, which happens to be the authorized Service Centre of OP No.1 for attending the repair. They found that the defect in the vehicle was due to negligence of proper maintenance as required and therefore, they asked the complainant to approach the Insurance Company-OP No.3. Since there is no manufacturing defect in the vehicle, OP No.1 prayed to exempt him from any liability.

    6. OP No.2 filed written version stating that after the vehicle was purchased, the first service was held on 22.5.2012 and the vehicle was also repaired on 6.1.2013 for second time. Thereafter, there was no any occasion to bring the vehicle to his workshop. So he submits that there was no deficiency of service on his part.

    7. OP No.3 filed written version stating that after getting complaint from the complainant, they deputed the surveyor and after physical inspection, the surveyor opined that loss is beyond the scope of policy condition. So OP No.3 submitted that the dispute being between the complainant and the manufacturer, they are not liable to any extent.

    8. OP No.4 filed written version separately stating that the complaint is not maintainable as he is neither the dealer from whom the vehicle was purchased nor the manufacturer of the vehicle. He admitted that the vehicle has been brought to his work shop for repair after causing an accident/flood. He attended the work being authorized Service Centre of OP No.1. According to him, there was no manufacturing defect of the vehicle. He found the defect was occasioned due to impact of accident in flood. This OP stated to have issued the repair orders

    2

    dated 26.7.2013 and 27.7.2013. So there is no deficiency of service on his part.

    9. Learned District Forum after hearing both parties passed the following impugned order:-

    "xxx xxx xxx The complaint is allowed against OP No.1,2 & 4 on contest and dismissed as against OP No.3 as there is no deficiency in service on his part. The OP No.1,2 & 4 are directed to repair the vehicle as err the repair estimate dated 3.8.2013 and dated 16.11.2014 of Aditya Car Pvt.Ltd OP No.4 under warranty free of cost and deliver the vehicle in perfect running condition within two months from the date of receipt of this order. Besides, the OP No.1, 2 and 4 are directed to pay compensatory interest @12% per annum on the cost of the vehicle of Rs.10,08,294/- from 3.8.2013 till it is repaired and handed over to the complainant as the complainant could not get any utility out of the vehicle. If the Opp.Parties No.1, 2 & 4 are failed to comply with the directions they shall be liable to pay interest on the above amount @18% per annum instead of 12% per annum. Further the Opp.Parties No.1,2 & 4 are also liable to pay cost of the litigation of Rs.5,000/- (Rupees five thousand) only."

    10. Learned counsel for the appellant in FA No. 406 of 2015 submitted that the complaint is not maintainable against him as there is no whisper in the complaint about his role is concerned. According to him, the vehicle was brought having the allegation of manufacturing defect and they have issued the estimate but due to inaction of the complainant the vehicle remained in their garage. As there was no any payment made, the repair could not be taken up. He further submitted that though OP No.4 is the authorized Service Centre of OP No.1 to take up the work but that estimate being not signed by the owner of the vehicle, it could not be taken up and the owner after hearing about the repairing cost did not come again to take care of the vehicle. So there is no deficiency of service on their part and the learned District Forum has erred in law by finding fault with him.

    11. Learned counsel for the appellant further submitted that the learned District Forum ought to have fixed the responsibility on the complaint because the complainant has used the vehicle in flood condition which is not covered by the warranty. Since the repair work is beyond the condition of warranty, the cost of the repair has to be borne by the complainant. Learned District Forum ought to have appreciated such fact while passing the impugned order. He further submitted that the estimate has already been made and handed over to the complainant but no payment has been made for which the vehicle remained in his garage till date. So the appeal against him should be allowed by setting aside the impugned order.

    12. Learned counsel for the appellant in FA No. 327 of 2015 submitted that there is no manufacturing defect in the vehicle. There is no warranty covering the accidental repair or flood due to which the vehicle has started trouble. When the defect is not covered by warranty, OP No.1 is not liable to pay compensation. On the other hand, he submitted that there is no deficiency of service on their part and the learned District forum without considering the materials on record has passed the impugned order which is liable to be set aside.

    13. Learned counsel for the appellant further submitted that the learned District Forum has

    3

    committed error in law by not going through the decisions of the Hon'ble National Commission and the Hon'ble Supreme Court where it is clearly observed that the negligence on the part of the complainant to use the vehicle cannot be proved as manufacturing defect to saddle the manufacture with liability. Therefore, he submitted to set aside the impugned order by allowing the appeal.

    14. Although the counsel for appellant in FA No. 367 of 2015 is absent but the memo of appeal are available on the record and accordingly his grounds of appeal are also taken into consideration. In the appeal memo, it is submitted that except attending the vehicle on two occasions being covered by the warranty, he has no other occasion to attend the vehicle. So the direction of the learned District Forum to have joint liability with other OPs is unacceptable. Therefore, it is submitted to set aside the impugned order against it.

    15. Learned counsel for the complainant/respondent placed all the materials filed before the learned District Forum. According to him they would go to show that the vehicle has been purchased by him and he has got trouble started in the vehicle. He further submitted that the vehicle was not used in flood condition and there was no flood during that period at Puri and the vehicle faced mechanical trouble while it was running under the rainy season. He further submitted that the defect as pointed out is totally covered under the extended warranty. According to him, the learned District Forum has rightly passed the impugned order and he supports the same.

    16. Considered the submission of learned counsel for both parties and perused the DFR including the impugned order.

    17. The complainant is required to prove the deficiency of service on the part of all the OPs.

    18. It is admitted fact that the vehicle was purchased by the complainant from OP No.2 o 25.4.2012. It is not in dispute that there was warranty card and extended warranty service produced by the complainant which revealed that it was up to 24.4.2016.

    19. No doubt the facts and pleading of both parties reveal that the vehicle has been used and trouble started. The complainant has alleged that the OPs have not properly attended the work for his vehicle whereas the OPs categorically stated that the defect as pointed out is not the manufacturing defect.

    20. It is revealed from the complaint that after purchase of the vehicle on 25.4.2012, it gave trouble on 24.7.2013 which is within the warranty period and he has also approached the OPs including OP No.3. He produced one report of Amit Kumar Behera, who is appointed as surveyor and he asked question how the vehicle gave trouble. Not only this, but also the vehicle has been attended with repairs prior to that as per the column of cash receipt available on record. The written version of OP No.3 clearly stated that it is not accidental repair. Therefore, the policy condition does not contain same. But the report of one of the expert produced by the OPs is available on record to know whether it is a manufacturing defect or not. Same has been discussed in the impugned order by the learned Distinct Forum

    21. The report of Mr. M.R.Lal the expert engaged by OP Nos. 1, 2 & 4 is as follows:-

    4

    "xxx xxx xxx We have received (Towing from Puri with the customer's representative -Named Biswajt Mohapatra) the above said vehicle on dated 25th july 2013. While receiving the vehicle from Puri (on the spot at customer's residence) our technician inspected the vehicle (Before Towing) and explained in details with the condition of vehicle (water found in air filter and engine block broken) to the customer and the customer put a signature in our pick up and drop format. After receiving at our workshop on inspection (in front of customer's representative) we found that there is water in the air filter/air filter casing as well as engine cylinder block broken those are visible condition. These observation was mentioned in the job order and also signed by the customer's representative. On discussion the customer voice was that the vehicle ply in a water covered area on dated 24th july 2013 after that the problem started.

    We have taken photographs of Air Filer/Air filter casing (water found in the system) Engine cylinder block broken portion for future reference. The customer advise us not to start the job and demanded a estimate copy for insurance claim purposes which was received by the customer representative on dated 03rd August, 2013.

    TECHNICAL OBSERVATION/ANALYSIS: On observation we found that water entered in to the engine system through air filter. Due to the contact of water with the valve/piston the above said parts loose their temper and it may also stick/seized. At the same time the crankshaft try to move the piston up and down forcible. Due to the forcible movement it may affect/broken/bend/damages the affected parts in the affected area. Suspected the vehicle was running after water entered in the engine system. We have contacted several times to the customer over telephone and also send letter through courier service to give approach to start the job. But unfortunately we are not able to receive approval to start the job.

    Till date we have not received any confirmation from the customer to start the job."

    22. The aforesaid view of the technical expert of OPs clearly established that on 3.8.2013 they found there is manufacturing defect appeared in 2013 which is within warranty period. Now OPs 1, 2 and 4 vehemently urged to dispense with the defect stating that the warranty does not cover as per para number 2.7 of the warranty, i.e. for misuse, abuse, accident, theft, flooding or fire. In the instant case, OPs 1, 2 and 4 have not proved neither of these causes. It is submitted by the learned counsel for OP No.4 that there was flood in Puri during that 2013 but not a single document was produced by him that there was flood but fact remains that the vehicle was running in rainy season. It is quite natural that the vehicle must run under all the weathers. The user cannot keep the vehicle in show case and used under sunny weather only. The defect as pointed out by expert as aforesaid and fact that water entered to engine to make it unworthy for running is clearly a manufacturing defect. Same cannot be said due to negligence use of the vehicle by the complainant. Moreover, this defect is cover under warranty as discussed. The entire argument of OPs 1, 2 and 4 that same is not covered by warranty is totally indefensible.

    5

    23. The above report of Mr Lal also demonstrate that they have issued estimate and informed the complainant about repair but the complainant did not turn up as a question of fact. No such estimate or copy of any letter is produced to show the part performance by OP No.4. Therefore, OP No.4 failed to prove that complainant did not attend his call to give consent to repair the vehicle on payment of cost. But fact remains that the vehicle has not been attended to by OP No.4 in spite of manufacturing defect noticed by him and till date vehicle is lying without any repair. Had there been repair attended by OP Nos. 1, 2 and 4 jointly to make vehicle fit to run, matter could have been otherwise. But keeping deficiency on their part and the burden on the consumer which can be speak volume of unfair trade practice, bereft of the facts that they are also deficiency of service on the part of OP Nos. 1, 2 and 4. Thus, the complainant has proved the deficiency of service on the part of OP Nos. 1, 2 and 4. Of course in the facts proved OP No.3 has no liability.

    24. Learned District Forum has absolutely assessed the materials on record and passed the impugned order which is legal and proper. This Commission do not find any reason to interfere with the well reasoned and detail order of the learned District Forum. But the operative portion of impugned order requires modification as learned District Forum has granted compensation from the date of 3.8.2013 without assigning reason to it ought to be from the date of the impugned order when complainant is entitled to it. Rest part of operative portion of the impugned order is hereby confirmed. The interim order, if any stands vacated. All the appeals are partly allowed and disposed of accordingly. No cost.

    DFR be sent back forthwith.

    Supply free copy of this order to the respective parties.

    [HON'BLE MR. JUSTICE Dr. D.P. Choudhury]

    PRESIDENT

    6

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    Comments

    Hyundai Motors India Ltd. v. Rupranjan Das
    (Feb 18, 2021)