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Judgment
Avm J. Rajendra, Avsm Vsm (Retd.), Member
The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 04.04.2016 passed by the State Consumer Disputes Redressal Commission, Haryana, Panchkula (hereinafter to be referred as “the State Commission”), in Consumer Complaint No. 20 of 2013, wherein the Complaint filed by the Complainant (Respondent herein) was allowed.
There was a delay of 4 days in filing the present Appeal. For the reason stated in the application, the delay was condoned.
For the sake of Convenience, the parties in the present Appeal being referred to as mentioned in the Complaint before the State Commission. “Shri Pawan Gupta” is referred to as the ‘Complainant’. While ‘M/s T & T Motors Ltd. & Mercedes-Benz India Pvt. Ltd.’ are referred to as ‘the Opposite Party No. 1 & 2’.
Brief relevant facts of the case as per the Complainant are that the Complainant being inclined towards brands like Audi and BMW was persuaded by the staff of OP No.1 to purchase GL 500 SUV Mercedes Benz Car. OP No.1 presented it as a luxurious off-roader with numerous features, emphasizing its elegance, size, and safety. Despite these enticing descriptions, the vehicle exhibited problems right from the start, particularly with its steering, which often got locked and did not rotate freely. Upon delivery, the complainant immediately reported the issue to OP No.1 and lodged a protest. Despite several reminders, the response of OP No.1 was lackadaisical. While the electronic sensor of the vehicle steering was replaced, the problem persisted. The vehicle underwent multiple repair attempts, including a replacement of power steering point/belt, totalling more than 15 visits to the workshop from 09.05.2011 to 18.07.2011. Throughout this period, he sent several emails detailing the persistent technical issues, including problems with the steering, non-replacement of a burst tire, and unfriendly after-sales services. A comparison of the vehicle's performance in the USA and at a workshop in Delhi highlighted the steering issue. On 18.09.2011, the Complainant narrowly escaped a significant accident when the steering got jammed, causing the car to collide with a wall. Despite this dangerous malfunction, the airbags failed to deploy, resulting in minor injuries to him. He wrote a strong email to OP No-2, expressing the harassment faced due to the supply of a defective product with faulty safety devices. In response, OP No-2 denied any malfunction, absolving themselves of any blame for the accident. His legal notice to OP on 25.10.2011 also went unanswered. Inquiry revealed that spare parts were unavailable, leading to further delay in repair. Faced with continued silence, he issued another legal notice on 23.11.2011. In March 2012, the vehicle was finally delivered. However, he immediately identified problems with the engine and power steering. When he reported to OP No-1, they took back the vehicle, promising to rectify the faults. During subsequent test drives, defects in the power steering and gearbox were observed. He pointed out these to German technical expert Mr. Marcus Krause, illustrating how the steering jammed during motion, causing sudden jerks to the left or right. In addition to the steering issue, he noticed a colour change in the vehicle, from white to yellow and he highlighted these concerns in an email on 20.03.2012. The OP replaced the entire engine assembly due to internal coolant leakage, and both the cylinder and steering system were purportedly replaced, with the vehicle certified as roadworthy. Despite these replacements, he continued to experience issues with the steering system and other problems, which he diligently reported in emails dated 09.05.2012, 30.05.2012, 14.06.2012, 07.08.2012, and 21.08.2012. Additionally, he raised concerns about the repainting of the vehicle and the subsequent loss of colour, issues that OP did not address.
The situation escalated to a point where OP No-1 threatened to charge the Complainant Rs.1000 per day as parking fee, forcing him to retrieve his vehicle from workshop. Throughout a year, the entire engine assembly, steering system, fuel pump, transmission, electronic sensor, power steering, cylinder, front suspension, and battery were replaced. The entire car was repainted. Despite these extensive replacements, the steering continued to malfunction, locking and jamming frequently. Further, airbag safety device failed to deploy during the accident on 18.09.2011. Due to non-availability of spare parts, the car languished in the workshop for a significant period. He highlighted the OPs deficient service, emphasizing lack of response to numerous emails, legal notices and inconvenience of visiting OP No-1 workshop and offices multiple times, often waiting due to the unavailability of spare parts. He has also alleged that unfair trade practice adopted by OP No-1 by alluring, inducing, enticing and tempting him to buy GL-500 SUV Model based on false representations. He specifically pointed to misleading claim that the vehicle's power steering was so smooth that it could be rotated by a single finger, a feature that did not align with actual experience. He supported his claims with reviews, notes, and articles on recall of various Mercedes Benz models globally and highlighting defective steering issues in the GL Model.
Being aggrieved by the conduct and non-cooperative attitude of OPs, the Complainant filed a Consumer Complaint before the learned. State Commission with the prayer for ordering the OPs for replacement of the product or return back of the invoice price with insurance and registration charges amounting to Rs.91,47,163 of the vehicle along with compensation of Rs.7.5 Lakhs for mental torture, harassment and for adopting unfair trade practice and has also prayed for award of Rs.51,000/- towards litigation charges.
In their reply, the OPs vehemently denied all the allegations. OP-1, contending that the Complainant is not a consumer due to his position as director of a company. Additionally, as per warranty terms of manufacturer, the repair or replacement of parts would be carried out based on the manufacturer's decision. OP-1's role was of a service provider, and they addressed the operational concerns regarding the vehicle to his satisfaction on multiple occasions. On the other hand, OP-2, the manufacturer, defended their position by asserting compliance with high industry standards and emphasized their certifications from various international agencies and the rigorous quality checks their products underwent at every stage of manufacture. The Complainant was not a consumer, and that the complaint was speculative in nature according to their perspective.
The learned State Commission partly allowed the complaint with the following Order: -
“27. We accordingly direct the OPs as follows: -
OPs shall replace GL 500 SUV Mercedes-Benz car Reg. No. DL-13C-B-9000 with a new car of the same and similar model and take back the old car, or in the alternative refund its full purchase price of Rs.91,47,163 which was paid by the complainant However, considering the facts and circumstances of the case, particularly the fact that complainant has used the car till today though in any Condition, we are not inclined to award any compensation and cost of litigation as prayed.
The above orders are joint as well as several against both the OPs.”
Being aggrieved by the impugned order, the Appellants/OPs filed this present Appeal no. 500 of 2016 with the following prayer:
“(a) call for the record of the case in Complaint No 20/2013 which has been decided by the learned State Consumer Disputes Redressal Commission, Delhi at New Delhi vide impugned judgment and order dated 4.04.2016; and
(b) admit and allow the present appeal and quash/set aside the impugned judgment and order dated 04.04.2016 (ANNEXURE A-1) passed by the learned State Consumer Disputes Redressal Commission, Delhi at New Delhi in Complaint No 20 of 2013 titled as Mr. Pawan Gupta c/o Organic Imaging Research Centre (P) Ltd., Vs. T & T Motors & Anr. and to pass consequential orders of dismissing the said complaint with costs; and
(c) pass an ad-interim ex parte order to stay the operation of the impugned judgment/order dated 4.04.2016 and confirm the same after notice to the respondents till the final adjudication and disposal of the present appeal; and
(d) award costs of the proceedings to the appellants.”
In the Appeal, the Appellants raised the following key issues:
(a) The State Commission failed to recognize the fundamental principle of buyer's responsibility, known as ‘Caveat Emptor’ or ‘Buyer Beware’. The benefits of warranty were duly provided. A thorough inspection of the vehicle proved that there was no manufacturing defect. As he alleged manufacturing defect, he should approach the Automotive Research Association of India for inspection, as mandated under Section 13 of the Act.
(b) All genuine concerns raised by the Complainant were duly addressed free of charge under warranty. The Mercedes-Benz GL-500 SUV meets international standards. The specific issues, including wheel alignment, steering system electronic sensor, coolant malfunction etc. were thoroughly examined by experts. Mr. Sunil Dagar, a technical expert, inspected steering hydraulic and mechanical system and found all components were intact. Based on this comprehensive inspection, it was concluded that the accident was not due to any manufacturing defect or malfunction in the steering system. Additionally, on 09.05.2012, the steering system and engine were replaced, bringing the vehicle into perfect condition. Also, a German Engineer, Mr. Marcus Kruse, certified its quality after a thorough inspection.
(c) The State Commission failed to recognize that if he alleged a manufacturing defect, that could not be repaired and, as per Section 13(1)(c)&(d) of the Act, he should have got his car tested by an appropriate laboratory. As per Section 13, the Complainant is to establish manufacturing defect through tests or examinations, at his own cost, by a laboratory specified under the Act. They cited Hon’ble National Commission in the case of TELCO Vs Hardip Singh & Anr. II (2011) CPJ 236 (NC), that the onus to prove manufacturing defect lies with the Complainant. The NCDRC in Maruti Udyog Ltd Vs Casino Dias & Anr IV (2009) CPJ 144 (NC) has held that the Complainant cannot demand replacement and cannot use his influence or authority to demand replacement.
(d) The State Commission gravely failed in appreciating that their claim was frivolous, speculative and vexatious. He was using the car regularly for last 5 years. The odometer reading was 30596 km on 03.11.2015 and on 22.04.2016, it was 32728 km. They went out of the way and provided the best services. They highlighted that a joint test drive conducted in April 2015, with a representative of the respondent present, demonstrated that the vehicle's performance was satisfactory.
(e) The State Commission erred by ignoring their contentions and judgment of Hon'ble Supreme Court in Morgan Stanley vs. Kartik Das 1994 CPJ 7 (SC). It failed to appreciate that the car remained in the workshop of Appellant No. 1 for 173 days due to minor/major damages. He deliberately did not pick it up after repairs, to bolster his case and picked up 65 days after it was ready, only after repeated reminders and demand for charges.
Upon the notice on the memo of Appeal, the Complainant filed written synopsis reaffirming the facts of the case and asserting that the State Commission order is well reasoned and covered all aspects of the case. Therefore, prayed that the appeal filed by OP No. 1 & 2 be dismissed with costs.
The learned Counsel for the Appellant No. 1/OP-1 in his arguments asserted in respect of the contention that the steering failure and non-deployment of airbags during an accident on 18.09.2011 that, the inspections by technical experts’ post-accident debunked the claim of steering failure or malfunction of airbag system. The inspection entailed comprehensive check of vehicle's electronic systems, steering mechanics, and steering oil levels, all of which were found to be within normal parameters. Moreover, the impact of the accident was deemed insufficient to trigger airbag deployment. The attempt of the Complainant to portray a consistent steering issue contradicts their decision to continue using the vehicle for about 32,000 kilometres without demanding replacement. He argued that the claim of the Complainant that he was advised by the staff to file insurance claim is baseless and misrepresentation. The discrepancy between this claim and subsequent submissions by the Complainant indicates potential perjury. The claim that the steering system couldn't be checked due to coolant leakage and engine issues is untenable, as there exists no such hindrance. The scrutiny of steering system was meticulously held, and no abnormalities were detected. The contention in respect of the duration for which the car remained in the workshop is baseless and it was a deliberate attempt to falsely misrepresent facts. Clearly, the Complainant’s approach in leaving the car for extended periods and neglecting to collect it after repairs is a tactic to build a false case. As regards the expenses attributed to repairs, he argued that the Complainant claim of spending Rs. 5,36,543/- from personal funds is also false as the ledger submitted by him indicates that these were actually covered by the company, Star Imaging & Path Lab Ltd., where he is a director. Thus he falls outside the scope of the Act. He contended the calculations wrt the plying of the vehicle as highly inaccurate. He specifically asserted that in terms of Section 13 of the Consumer Protection Act, despite the Appellant providing expert opinions by the Appellant's technical expert, the learned State Commission concluded that there was manufacturing defect in the vehicle, without seeking an independent expert's inspection, as mandated by the guidelines and judgments cited in the present Appeal. As per him, this was a crucial oversight by the State Commission. He relied on the Hon'ble Supreme Court in C.N. Anantharam versus M/s. Fiat India Ltd. & Ors., SLP (C) 21178-21180 of 2009, Decided on 24.11.2010. He sought for an inspection by ARAl or any other recognized agency to ascertain expert opinions regarding the alleged inherent manufacturing defects. He sought comprehensive revaluation and unbiased inspection by an independent technical expert or approved laboratory. He also discredited the documents submitted by the Complainant, pointing out that they consist of routine emails which do not address the specific steering fault raised in the complaint. This was an attempt to manipulate and mislead judicial process. He has also relied on the following precedents:
(a) General Motors India vs. Ashok Ramnik Lal:
(b) Hyundai Motors India Ltd. Vs. M/s. Affiliated East West Press (P) Ltd & anr:
(c) M/s Controls & Company vs. Daimler Chrysler India & Anr:
(d) Tata Engineering & Locomotive Co. Vs. Gajanan Y. Mandrekar:
(e) Ashoke Khan Vs. Abdul Karim & ors.
(f) Indochem Electronic & Anr. Vs. addl. Collector of Customs, A.P:
The learned counsel for the Appellant No. 2/ OP-2 argued that the Complainant purchased the vehicle after a detailed examination and trial. The Mercedes-Benz Model GL-500 CDI is of international standard. The accident occurred due to the Complainant swerving the vehicle to the left, causing it to skid and collide with a wall. The vehicle was thoroughly inspected by technical expert Mr. Sunil Dagar, who found no defects in the steering system. The accident repair cost was reimbursed by the insurance company, which does not cover repairs for defective vehicles. There is no evidence to establish any manufacturing defect. Technical reports verified that there was no issue with the vehicle at the time of the accident, making the claim speculative and vexatious. He was aware that the vehicle is subject to warranty terms, which allow for free repairs or replacements of defective parts during the warranty period. The Complainant's vehicle was inspected multiple times, and experts confirmed its normal functioning. His concerns were duly addressed and he was informed to approach Automotive Research Association of India (ARAI), if unsatisfied. His extensive use of the car further adds to the absence of manufacturing defects. Any concerns should have been raised during the warranty period, which has long expired, making the complaint baseless. The Complainant used the vehicle well and recorded a mileage of 30596 KM as on 03.11.15 and 32728 KM as on 22.04.2016. He relied on Maruti Udyog Ltd. Vs Susheel Kumar Gabgotra & Anr., I (2006) CPJ 3 (SC) that obligation of manufacturer under warranty is only to repair or replace any part found to be defective and impugned order directing refund of price paid/ replacement of vehicle was set aside. The concept of manufacturing defect was clarified by the NCDRC in R.P No. 827 of 2004 in Maruti Udyog Ltd Vs Hasmukh Laxmichand & Anr. Failure to cooperate in vehicle inspection can lead to adverse inferences. The allegations of Unfair Trade Practice are baseless, as his claims were promptly attended to under the warranty terms. The non-deployment of airbags during the accident was explained by the nature of the collision, which did not directly impact the rigid components of the vehicle, indicating proper functioning of the vehicle's safety system. The learned Counsel asserted that the vehicle was sold subject to warranty terms, which offer free repairs during the warranty period, not replacement or refunds. As the warranty has expired, and the vehicle is in its 6th year of operation, the Complaint lack merit. He placed reliance on following judgments to support his arguments:-
(a) Maruti Udyog Ltd., v. Susheel Kumar Gabgotra & Anr., I (2006) CPJ 3 (SC).
(b) TELCO v. Hardip Singh & Anr. II (2011) CPJ 236 (NC).
(c) Maruti Udyog Ltd v. Casino Dias & Anr IV(2009)CPJ 144 (NC)
(d) Suresh Chand Jain v. MRF I (2011) CPJ 63 (NC).
(e) Tata Eng. And Locomotive Co Ltd and Anr. Vs. Sunil Bhasin and Anr (CPJ 2008 Vol.Il.
On the Other hand, the learned Counsel for the Respondent/ Complainant reiterated the facts of the case and asserted that no new facts or evidence were provided by the OPs, and the Complainant continues to suffer due to the supply of a defective product. The Complainant faced significant harassment, loss of peace of mind, trauma, and mental agony. Customers, especially of luxury brands, expect products that provide comfort and peace of mind against the price paid, which was clearly lacking in this case. This situation highlights a clear deficiency of service and the supply of a defective product on the part of the OP. It was pointed out that the OPs had certified the vehicle as roadworthy and delivered it to the Complainant, only to take it back to their workshop on the same day or the next due to various issues. Within one year of purchase, several parts of the vehicle, including the entire engine assembly, power steering system (twice), fuel pump, transmission device, electronic sensor, power steering point-belt, front suspension, cylinder, coolant system, and battery, were replaced. Additionally, the car was repainted, effectively making it a second-hand vehicle, significantly diminishing its value in the market. The learned Counsel has also argued that the sufferings and harassment faced by the consumer were evident in various emails, most of which went unanswered by the OP. Despite multiple visits and expert opinions, the steering issue remained unresolved. Even after the filing of the appeal, the vehicle continued to visit the workshop on numerous occasions. Furthermore, the counsels argued that the OP failed to justify their claims of providing luxurious and finest automobiles that give peace of mind to consumers. They questioned the double standards of multinational companies, like OP-2, which recall vehicles in strict markets like Europe and America but adopt a different approach in developing nations like India. The major contradictions in OPs statements and evidence were highlighted, including conflicting statements about the speed of the vehicle during the accident and the normal functioning of the steering wheel after the accident. He pointed critical contradictions in the OPs pleadings and evidence that remained unaddressed in the present appeal. He argued that, it was the contention of OP-2 that the vehicle was being driven at a very high speed on 18.09.2011 when the accident occurred, which contradicts the claim that airbags did not deploy due to the impact not having enough force. This raises questions about the accuracy of the OPs stand as regards safety in accidents. Further, the letter of OPs dated 05.10.2011 claimed that Mr. Dagar checked the movement of the steering wheel and found it to be normal. This, however, conflicts with the fact that the vehicle, which was non-functional and stationary in the workshop due to the accident, could not have been assessed as normal without testing in running condition. This is a discrepancy in the assessment of the vehicle's condition. Considering these unresolved contradictions and inconsistencies, he sought dismissal of the Appeal. He relied on the following judgments to support his arguments:-
(a) Supreme Court in TELCO Vs Gajanan Y Mandrekar
(b) Supreme Court in Indochem Electronic vs. Addi. Collector of Customs [(2006) 3 SCC 721]
(c) Hon’ble Supreme Court in General Motors (India) Pvt. Ltd. Vs. Ashok Ramnik Lal Tolat & Anr [CA Nos. 8072-8073 of 2009]
(d) NCDRC in Controls & Switchgear Vs Daimlerchrysler & Ors.
(e) NCDRC in Ashoke Khan & Others Vs Abdul Karim & others
(f) Hindustan Motors Ltd Vs N Siva Kumar [(2000) 10 SCC 654
We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the Parties.
The primary issue in this case revolves around the allegation of manufacturing defects and subsequent problems faced by the Complainant with the Mercedes-Benz GL-500 CDI purchased by him from the Appellants. The Complainant claimed that the vehicle suffered from various defects, leading to extensive replacements and repairs within a short period after purchase. These alleged defects include issues with the steering system, engine, fuel pump, transmission device, electronic sensor, power steering point-belt, cylinder, front suspension, coolant malfunction and battery. Further, the vehicle's colour changed due to repainting, diminishing its value significantly. He expressed dissatisfaction with the OPs responses and the quality of service. Therefore, the primary issue is whether the vehicle indeed suffered manufacturing defects as claimed by the Complainant, the extent of defects, and whether the Appellants adequately addressed these issues.
As regards addressing the core issue as regards the allegation of manufacturing defect, the question is whether the Complainant should approach the Automotive Research Association of India (ARAI) or any recognized Govt. authority for inspection in accordance with Section 13 of the Act? An excerpt from Section 13 pertaining to manufacturing defects is reproduced below:-
(1) Procedure on admission of complaint (1) The District Forum shall, [on admission of a complaint] if it relates to any goods –
(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;
This Commission in Mercedes Benz India Private Ltd Vs. Smt. Revathi Giri & Ors, FA No. 766 of 2021, decided on 11.10.2023 has held that an inherent manufacturing defect needs to be established through the process of examination by way of an expert opinion. The relevant portion of the Order is as under: -
“9. From the material on record it is manifest that no expert opinion of any authorized laboratory or authority has been brought on record to establish that the vehicle suffered from any defect that could be ascribed to the manufacturer of the vehicle by the appellant. The vehicle had admittedly run over 56,815 kms as on 18.07.2019 when it was brought to the workshop of respondent no.2. It is not the case of the respondent that the vehicle was not properly attended to or that the defects were not rectified as per the terms and conditions of the warranty valid for three years. There is, therefore, no deficiency in service that has been established in this particular case either on account of any manufacturing of defect of the vehicle under section 13 (1) (c) or repairs by respondent no.2 for which the appellant would be liable. In the absence of any deficiency in service being established under section 2 (1) (d) the findings of the State Commission that the vehicle suffered from inherent manufacturing defects cannot be sustained. Section 13 (1) (c) makes it explicitly clear that an inherent manufacturing defect needs to be established through the process of examination by way of an expert opinion. Without such an examination being undertaken, the conclusion that there were inherent manufacturing defects cannot be arrived at. Admittedly, provisions of section 13 have not been followed in this case. Defects which are covered under the terms and conditions of the warranty cannot be ascribed to be an inherent manufacturing defect without the requisite examination of the vehicle after applying the rigour of section 13 (1) (c). The defects which are covered under the terms of warranty cannot be concluded to be a manufacturing defect. In the absence of any expert opinion, such a conclusion is conjectural and based on surmise and cannot be sustained. The State Commission’s order is therefore liable to be set aside on these grounds.”
Upon careful examination of the material on record and the order of the learned State Commission, it is evident that no expert opinion from an authorized laboratory or a recognized government authority has been obtained and presented to substantiate the claim of any manufacturing defect in the vehicle, attributed to the Appellants. It remains undisputed that the vehicle had covered 30,596 KM as on 03.11.2015 and 32,728 KM as on 22.04.2016 when it was taken to the Appellants' workshop. There is no substantial and conclusive evidence to support the Complainant’s claim that the vehicle was inadequately attended to or that defects were left unresolved within the warranty terms and conditions. In this context, no deficiency in service is established under Section 13(1)(c) or in the repairs carried out by the Appellants, for which they could be held liable. In any case, a vehicle with allegations of manufacturing defects on one hand cannot be subject to repeated and substantial free replacement of parts. The findings of the State Commission, asserting the Appellants' deficiency in service provision or selling a defective vehicle, lack substantiation and compliance with Section 13 of the Act. Without expert opinion, such conclusions remain speculative, founded on assumptions, and therefore, cannot be upheld. Hence, the State Commission's order is deemed unsustainable on these grounds.
In view of the discussion above, we are of the considered opinion that the order of the learned State Commission dated 04.04.2016 in CC No.20/2013 is unsustainable and therefore, set aside. Consequently, the First Appeal No.500 of 2016 is allowed.
Pending Applications, if any, stand disposed of.
The Registry is directed to release the statutory deposit amount, if any due, in favour of the Appellant as per law.