Ashok Kesharlal Saraf vs TATA MOTORS LTD

THE original complainant Mr. Ashok Saraf is no more alive. After demise of original complainant, the legal heirs of deceased are brought on record.

THE original O.P. No. 1 is a limited Company registered under Indian Companies Act, 1956 and carrying a business of manufacturing four wheeler cars, brakes, etc. O.P. No. 1 has appointed O.P. No. 2 as its agent, dealer and distributor. O.P. No. 1 has manufactured the car known as Tata Estate. O.P. No. 1 made publicity and advertisement on Tata Estate and represented public that Tata Estate is one of their best products. Believing the said representation and advertisement, original complainant purchased on hire purchase basis one Tata Estate Car from O.P. No. 2 on 25.8.1994 for Rs. 4,39,620.74ps. Original complainant had taken financial assistance from M/s. Sundaran Finance Ltd. to purchase four wheeler. O.P. No. 2 brought the said car from Daman and gave delivery of the car to the original complainant. Original complainant noticed following defects in the car: 1. There were scratches on the body of the car. 2. Blades of the wiper were found damaged. 3. Door show strips were broken. 4. Motor which was connected to power window was not operating. 5. Washer switch was not in working condition. 6. Alignment of the wheels was not proper. 7. Because of wrong alignment two tyres and rims were damaged. 8. There was leakage of oil. 9. The starter of the vehicle was not in good condition. 10. There was loud noise while operating brakes of the vehicle. It was like a firing of the truck. 11. Light setting was not proper. 12. There was a vibration in the vehicle. 13. Central locking system was not proper.

BECAUSE of inherent defects in the car, the original complainant was required to take the car to O.P. No. 2. In spite of frequent repairs, the car did not run smoothly. The engine of the car was useless and defective. The original complainant made serious grievance about the inherent defects in the car to the O.Ps. O.Ps. however did nothing. Complainant was not satisfied with the working condition of the vehicle. He, therefore, left the vehicle with O.P. No. 2 on 7.2.1995. The original complainant finally lodged his consumer complaint before the State Commission.

O .P. No. 1 filed the written statement and resisted the complaint. O.P. No. 2 has also filed separate written statement and resisted the complaint. The O.Ps. have raised following defences : 1. Vehicle was purchased for commercial purpose. 2. Purchaser is not a consumer within the definition of Section 2(1)(d) of Consumer Protection Act, 1986. 3. There are no manufacturing defects in the vehicle. The warranty is for replacement of defective parts. 4. No warranty was given for misuse and improper use of the vehicle by the purchaser. 5. Alleged defects in the car are not manufacturing defects. The complaints were attended and rectified by technical trained personnel. 6. Complaint filed by the purchaser of the vehicle is false and frivolous.

O.P. No. 2 has contended in the written statement that there is no privity of contract with complainant and, therefore, complaint is liable to be dismissed as against O.P. No. 2.

IN support of the complaint, original complainant filed his affidavit and rejoinder. Mr. P.J. Vajifdar, Sr. Manager (Law) of O.P. No. 1 has filed his affidavit for and on behalf of O.P. No. 1. We heard the learned Advocate Mr. Rahul Gandhi for the complainant and learned Advocate Mr. J.M. Baphna for O.P. No. 1. None present for O.P. No. 2. Advocate Rahul Gandhi has relied upon following cases : 1. Diamond Plastic Industries v. Govt. of A.P., reported in AIR 1997 Supreme Court 2774. 2. II (1999) CPJ 644, Shriram Refrigeration Industries Ltd. and Ors. v. The Ratnakar Bank Ltd. 3. Mrs. Sabira Z. Khan v. M/s. Premier Automobiles Ltd. in Complaint No. 40/97 decided by this Commission in the month of July 2002. Learned Advocate Mr. J.M. Baphna has relied upon following cases : 1. TELCO v. T. Nagaraju, reported in 1997 NCJ 194 (NC). 2. Mahindra and Mahindra Ltd. v. B.G. Thakurdesai reported in I (1993) CPJ 72 (NC). 3. Ashok Leyland Ltd. v. Prabhulal Maru and Ors., reported in IV (2004) CPJ 38 (NC)

FOLLOWING points would arise for consideration: (1) Whether purchaser of the vehicle is a consumer within the definition of Section 2(1)(d) of Consumer Protection Act, 1986? (2) Whether complainant proves that the vehicle purchased through O.P. No. 2 is not road worthy because of inherent manufacturing defects in the vehicle? (3) Whether legal heirs of deceased complainant are entitled to get refund of purchaser price? (4) What order? Our findings on the above points are as under : Point No. 1 : Yes Point No. 2 : Yes Point No. 3 : Yes Point No. 4 : Final order as passed below. Reasons :

Purchaser has his packing business. His business is known as super packer. Purchaser manufactures packing articles. According to the O.Ps. purchaser purchased vehicle for commercial purpose and, therefore, purchaser did not fall within the definition of consumer. The purchaser purchased vehicle for his own use. If purchaser uses his car for going to his factory, the purpose cannot be said to be commercial purpose. Article purchased is not directly used in the process of manufacturing packing articles. The purchaser, therefore, cannot be said to have purchased vehicle for commercial purpose.

IN this behalf we would like to refer to the decision of the National Commission in Group of First Appeal Nos. 159, 160 and 161/2004 in the case of I (2005) CPJ 27 (NC), M/s. Harsolia Motors v. National Insurance Co. Ltd., decided on 4.12.2004. National Commission has discussed the issue of commercial purpose in elaborate manner. The National Commission has observed that the goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity, which is not directly intended to generate profit, it would not be commercial purpose. In the case in hand, the vehicle purchased is not directly used in the process of manufacturing packing articles. The car purchased does not intend to be used to generate profit. Therefore, purchaser is a consumer. Purchaser has purchased the vehicle for consideration. Therefore, purchaser falls within the definition of consumer. We, therefore, hold that complaint filed by the purchaser is a consumer complaint. Accordingly we answer point No. 1 in the affirmative.

DURING pendency of the complaint, this Commission by order dated 3.2.1997 appointed ARAI as a Commissioner to examine the condition of the vehicle and to submit a report. ARAI instead of examining the vehicle at Pune examined the vehicle at the workshop of O.P. No. 2 at Nasik. The vehicle was inspected and examined on 16.7.1997. Report of ARAI dated 17.9.1997 is on record. ARAI in its report dated 17.9.1997 concluded that there are no manufacturing defects in the vehicle and vehicle is perfectly roadworthy. Advocate Rahul Gandhi has raised serious doubt about the report submitted by ARAI. On the other hand, Advocate J.M. Baphna has placed very strong reliance on the report of ARAI. Arai is vital link to make all the vehicles safe, less polluting and efficient. Arai provides its technical expertise to Government during framing of regulations. It is the leading Institute where all vehicles are tested and certified, and also where R & D is carried out for above three basic objectives.

THE ARAI was established in 1996 as a Co -operative Industrial Research Centre by the Automotive Industry and Government of India. It has grown substantially to become a prime research, development and testing institute in India, bringing complete automotive technology under one roof. ARAI is the first automotive R & D Institute in India with ISO 9001 Quality Systems Certification and also NABL, Accreditation.

RESEARCH Institute of Automotive Industry is supported by the Ministry of Commerce and Industry, Government of India. It is registered Society managed by Governing Council, Industrialists and Government Representatives. Arai is located on Vetal Hill, Pune, Maharashtra with 20,000 sq. mts. of labs and offices. Total staff of Arai is 414 and technical staff is 296. The objective and charter of Arai are as under : * Carry out Research and Development of immediate benefit to Industry. * Development Testing for Industry * Mandatory/ Certification Testing on behalf of Govt. of India. * Consultancy/Feasibility Reports/Projects. * Dissemination of Information (Automotive Abstract) * Preparation of Draft standard e.g. Emission, Safety, etc. * Forward Looking Research/Technology Demonstrator Projects. * Interaction with Academic Institutions. * Policy matters affective Automotive R and D. * Utilisation of spare capacity for non -automotive work. Arai offers following services : 1. Automotive Electronics Department 2. Alternate Fuel Lab./Corporate Technology Group 3. Engine Development Laboratory 4. NVH and CAE Laboratory 5. Structural Dynamics Laboratory 6. Automotive Materials Laboratory 7. Calibration and Metrology Laboratory 8. Emission Certification Laboratory 9. Safety and Homologation Laboratory 10. Vehicle Evaluation Laboratory 11. Apex Central Cell 12. Information and Technology Management 13. Plant and Services 14. Single Window System This Commission on 3.2.1997 gave following directions : ''We, therefore, direct that the vehicle of the complainant should be got examined by Automotive Research Association at Pune. The expenses of taking vehicle and the fees of Automotive Research Association, at Pune should be borne initially by opposite party No. 1. This examination of the vehicle should be done preferably within two weeks in the presence of complainant. The expert report be put up for further consideration. Notices to the parties.''

THIS Commission directed ARAI to examine the vehicle at Pune. It is material to note that this order has not been strictly followed by the ARAI. It is clearly seen that the vehicle was examined at the workshop of O.P. No. 2 at Nasik. Why examination was done at Nasik is not known nor explained by ARAI. O.P. No. 2 has necessary equipment for carrying out servicing. O.P. No. 2 has trained manpower. However, the requisite equipment for physical and mechanical property testing is not available at the workshop of O.P. No. 2 at Nasik. Physical and mechanical property testing equipments are with ARAI at Pune. ARAI was specifically directed to carry out inspection of the vehicle at Pune.

A serious grievance, therefore, was made by the complainant during pendency of the complaint. The complainant moved the Forum by application dated 15.2.2000 and brought to the notice of the State Commission that order dated 3.2.1997 was flouted by ARAI. This Commission, therefore, compelled to pass second order on 15.2.2000. This Commission directed the O.Ps. to immediately proceed for the compliance of initial order dated 3.2.1997. The Commission gave two months time to the O.Ps. for compliance from the date of order. In order to appreciate the issue of non -obedience of the order dated 3.2.1997, we reproduce the portion of order dated 15.2.2000: ''It is to be stated that by Order dated 3.2.1997, this Commission ordered and directed the vehicle in question to be examined by an Expert Laboratory viz., Automotive Research Association at Pune. Inasmuch as the operation part of the said order is reproduced under : We, therefore, direct that the vehicle of the complainant should be got examined by Automotive Research Association at Pune. The expenses of taking vehicle and the fees of Automotive Research Association, at Pune should be borne initially by opposite party No. 1. This examination of the vehicle should be done preferably within two weeks in the presence of complainant. The expert report be put up for further consideration. Notices to the parties. By reading the directions issued reproduced herein above, it would be plain that clear directions have been issued and it is, therefore, obvious that the O.Ps. have not taken steps to comply with the said directions. We, therefore, direct the O.Ps. to immediately proceed to the compliance of the said order and the directions given stipulating the time for such compliance for two months from today. Mr. Gandhi, the complainants Advocate shall communicate this order to the O.Ps.''

On 26.4.2000, Advocate Mr. Rahul Gandhi for the complainant, Mr. J.B. Gai -Representative of O.P. No. 1 I/b Mulla & Mulla Co. and Advocate Mr. D.D. Juvekar I/b Gagrat & Co. for O.P. No. 2 informed the Commission that as per order passed by this Commission, the vehicle in dispute was made available to ARAI Pune for inspection and the said Agency has conducted a thorough test and their report is awaited. It is material to note that ARAI did not place on record the Inspection report. ARAI instead placed on record the report dated 17.9.1997. At the cost of repetition, we would like to mention that with utter disregard to the order passed by this Commission on 3.2.1997 ARAI carried out inspection at the workshop of O.P. No. 2 at Nasik. Report dated 17.9.1997 is in respect of examination of the vehicle at Nasik. On 15.2.2000 this Commission directed ARAI to examine and inspect the vehicle at Pune and to submit its fresh report. However, ARAI has not sent the subsequent report. Our order dated 15.2.2000 is not complied with by ARAI.

UNDER the circumstances, we attach no weight to the report of ARAI dated 17.9.1997, because physical and mechanical testing equipment are at Pune. Requisite testing machinery is not at all available at the workshop of O.P. No. 2. It is clearly seen that without minding order of State Commission dated 3.2.1997, ARAI carried out inspection at Nasik. Therefore, the report dated 17.9.1997 submitted by ARAI loses its probative value.

WE thoroughly examined the entire material placed on record. Within a short span of three months time from the date of purchase of the vehicle, so called new vehicle was required to be taken to the Garage 10 times. O.P. No. 1 when asked by ARAI to produce the replaced parts of the vehicle, O.P. No. 1 could not produce the replaced parts of the vehicle. O.P. No. 1 informed ARAI that the replaced parts were sold. If replaced parts were produced by O.P. No. 1, one can easily come to the conclusion about inherent defects in the vehicle. There is sufficient material placed on record to show details of the complaints and jobs attended by O.P. No. 2 with regard to vehicle of the complainant. On 29.8.1994, scratches on Bonnet were found, front bumpers were found mis -aligned and loose. On 13.9.1994, Dicky door lock gets locked but does not open easily. Indicator lever does not return to normal position. Rear water sprayer found defective. Front right side wiper blade does not sweep windshield evenly.

ON 14.9.1994, Rear wiper motor found not working. Rear water sprayer found defective. Left hand rear door glass not working.

ON 28.9.1994 following defects were noticed : Doors, door lock, dicky found noisy, Erratic operation of light, wiper, window glass and blinkers, vehicle pulling on one side, front tyre wear, vibrations in 3rd, 4th gears. On 30.9.1994 there was steering oil leakage.

ON 3.10.1994 and 6.10.1994 following defects were noticed : PDI oil change, brakes not satisfactory, rear wiper not working.

ON 19.10.1994 there was brake fluid leakage from rear brake pipe. On 21.10.1994 there was brake fluid leakage. On 7.11.1994, rear left hand door not locking and there was starting trouble. On 8.11.1994, dicky door was noisy. Rear left hand door found misaligned. On 17.11.1994, 4000 kms. servicing. There was noise from front shock absorber. Brake not holding at high speed. Steering oil leakage, central and dicky lock not working properly. On 18.11.1994, there was steering oil leakage. On 23.11.1994, there was erratic operation of central lock and power window. There was noise in self starter, vibration in 3rd, 4th speed, dash board and glove box noisy, head light setting. On 25.11.1994, there was steering oil leakage, self starter noisy, front brakes squeaking. On 9.12.1994, there was steering oil leakage. On 15.12.1994, combi switch was broken. On 23.12.1994 self starter was noisy. On 4.1.1995 following defects were noticed: 8000 kms. service, left hand door not opening from inside, light/electrical check, diesel leakage from supply line.

ON 5.1.1995 following defects were noticed: Brakes squeaking and vehicle jodding on braking.

ON 12.1.1995 following defects were noticed: Rear right show strips cone loose, front bumper mis -aligned, steering oil leakage, right hand head light diffused, central locking not working, sound in self starter, engine oil leakage from rear seal, rear seal sagging. On 7.2.1995 following defects were noticed : Noise in font wheels, silencer raffling, noise in clutch.

THERE is a lot of correspondence between the complainant and O.Ps. It is seen from the material placed on record that vehicle was required to be taken to the garage number of times within a short span of 3 months from the date of purchase. The vehicle could not give full satisfaction to the owner. The entire purpose of a new car was frustrated. It is admitted fact that on number of occasions complaints were attended and some of the parts were also changed. In spite of replacement of parts, the vehicle was not smooth on the road. From top to bottom and from front to rear vehicle was in disorder. This was the condition of brand new car. After payment of full price, manufacturer cant be allowed to foist such a bad car on consumer.

AFTER having scanned the entire material on record and after having considered the rival submissions in the light of well settled legal principles, we are of the clear opinion that the vehicle purchased by the complainant was not at all road worthy and it had inherent manufacturing defects. Vehicle was left at the workshop of O.P. No. 2 on 7.2.1995. Since 7.2.1995 the vehicle is in the custody of O.P. No. 2 till today. Complainant paid consideration of Rs. 4,39,620.74 to O.P. No. 1. Vehicle was delivered to the complainant on 25.8.1994. Practically within a period of three months from the date of purchase, vehicle was required to be taken to the garage for more than 10 times. Complainant and his family members could not enjoy the vehicle to their full satisfaction. Because of inherent defects into vehicle, complainant and his family members were deprived of use of vehicle since 5.2.1997. The complainant and his family members hardly used the so called new vehicle for a period of 5 months. They did not get replacement of the vehicle. They lost their money as well as the vehicle. Under the circumstances, the complainants are entitled to get refund of purchase price of the vehicle together with interest. They are also entitled to get reasonable compensation for mental pain and harassment. We, therefore, answer point Nos. 2 and 3 in the affirmative. In the result, we pass the following order : ORDER 1. Complaint is partly allowed. 2. We hereby direct the O.P. No. 1 to refund Rs. 4,39,620.74 ps. to the complainants together with interest @ 9% p.a. from 5.2.1997 till the date of realization. 3. O.P. Nos. 1 and 2 are hereby directed to pay compensation of Rs. 25,000 to the complainants for mental pain and harassment. 4. O.P. Nos. 1 and 2 are further directed to pay Rs. 5,000 to the complainants by way of cost of this proceeding. 5. O.P. Nos. 1 and 2 are hereby directed to comply this order within a period of 30 days from the receipt of the order. 6. Copies of the order herein to be furnished to the parties.

Complaint partly allowed.