Ford India Limited vs Raj Deepak Rastogi

BOTH the aforesaid appeals are being decided by this common judgment as in both of them common questions of law and facts are involved and they have been preferred against the same order dated 6.5.2004 passed by the learned District Forum, Jaipur -II, Jaipur. Appeal No. 1002/2004

THIS appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act of 1986'') has been filed by the appellant with the prayer that the order dated 6.5.2004 passed by the learned District Forum, Jaipur -II, Jaipur in case No. 702/2003 by which the complaint filed by the respondent non -complainant under Section 12 of the Act of 1986 was (sic.) and the appellant was directed to pay the price of the car in question to the tune of Rs. 5,38,733 to the complainant within a period of two and half months from the date of that order failing which the appellant would be liable to pay interest @ 9% p.a. on the aforesaid amount and the appellant was further directed to pay Rs. 1,000 to the complainant as cost and the claim against respondent No. 2 K.S. Ford was rejected, be quashed and set aside. It arises in the following circumstances: The respondent No. 1 -complainant Raj Deepak Rastogi, who is an Advocate by profession practising in Rajasthan High Court Jaipur, filed a complaint under Section 12 of the Act of 1986 before the learned District Forum, Jaipur -II, Jaipur on 23.7.2003 against the present appellant Ford India Limited and respondent No. 2 M/s. K.S. Ford stating inter -alia that on 25.7.2001, he purchased 1.3 PAS patrol car from respondent No. 2. The price of the car in question at the time of purchase was Rs. 5,38,733 and road tax and registration charges etc. to the tune of Rs. 16,470 were also paid by the complainant. In addition to this, the complainant has also paid insurance charges to the New India Assurance Co., Jaipur. It was further stated in the complaint that the complainant had to take loan from the State Bank of India, New Central Revenue Building, Jaipur to the tune of Rs. 4 lac at an interest @ 11% p.a. to be paid in monthly instalments and he paid Rs. 53,427 as interest upto its final payment.

It was further stated in the complaint that since the delivery of the car in question, the complainant found some defect in it and for that, he has produced copies of Job Cards, Job Card Annex. 3 dated 31.7.2001 reveals that the following defects in the car in question were found and the same were got removed:

AREAL FILLING (Foc) WIPER CHECH and TIGHT The Job Card Annex. 4 dated 12.11.2001 reveals that the following defects were found in the car in question and the same were got removed: AC Blower Speed Fluctuates Boot Light Not Working Door Glass Noise The Job Card Annex. 5 dated 22.12.2001 reveals that the following defects were found in the car in question and the same were got removed: NoiSe Come At Turning Blower Speed SLow at Breaking The Job Card Annex. 6 dated 19.2.2002 reveals that the following defects were found in the car and the same were got removed: Steering Noise While Extreme Right and Left Turn Over Heating Horn Check/Change Ac Blower Speed Dropping Front Suspension Check Rear Suspension Noise and Jump Effect In Slow Speed The Job Card Annex. 9 dated 14.6.2002 reveals that the following defects in the car in question were found and the same were got removed and at the time, the car had run to 8783 kms: Over Heating Coolant Bottle Leak Check FRH Door Lock Check Poor Average Tappet Setting Rear Shocker Bush Wheels Wobbling The Job Card Annex. 10 dated 27.6.2002 reveals that the following defects in the car in question were found and the same were got removed and at that time, the car had run to 9806 kms: Lockset Change U/W Replaced Replace Door Glass With Beading Etc. Completed. Engine KnoKing Cyl. Head Decarbonising Noice in LH DOor Glass Done FR LH AC Louver Fixing Fixed

The further case of the complainant was that as per Job Card Annex. 10, cylinder head was opened and decarbonizing was done and after decarbonizing, the engine life was lost since the engine was opened. According to the complainant, decarbonisation of engine was got done after opening engine.

The further case of the complainant was that since the car in question was found defective since the date of purchase and there were many defects causing inconvenience and problems and there was manufacturing defect in the engine of the car in question, therefore, he served a notice Annex. 11 dated 9.7.2002 on the appellant and prayed that either the car may be replaced by a new car or the amount of the car may be refunded with interest and since nothing was done by the appellant and respondent No. 2, therefore, he filed the present complaint with the prayer that the appellant and respondent No. 2 be directed to:

(i) Refund the purchase price of the car which is Rs. 5,38,733 and amount of Road Tax which is to the tune of Rs. 16,470 and amount of insurance and Approx. Rs. 10,000 which were spent in purchasing the accessories. (ii) Pay the interest amount which the complainant had to pay to the State Bank of India which is to the tune of total Rs. 60,985.06. (iii) Pay 18% interest on the total above amount till the date of actual payment. (iv) Pay a sum of Rs. one lakh as compensation of the loss of mental peace and damages for loss of work resulting in the complainant getting stranded due to improper functioning of the car. (v) Cost of litigation may also be awarded to the complainant. A reply was filed by the respondent No. 2 K.S. Ford on 1.11.2003 stating inter -alia that whenever the car in question came up for repair in the workshop, its repair work was got done and the complainant was fully satisfied. It was further stated by the respondent No. 2 that on 27.6.2002, the car in question came to his workshop and at that time, it had run to 9806 kms. and there was varnish formed in the engine and, that was due to using of adulterated petrol and therefore, cylinder head was decarbonized and, the varnish was removed, but that process did not affect the engine at all and there was no defect in the engine. Hence, no case, complaint be dismissed. A reply was also filed by the appellant and its case was that on examination, it was found that due to usage of impure and adulterated fuel, varnish formed in the engine causing it to knock. It was further stated by the appellant that engine was cleaned and the problem was rectified. It was further stated by the appellant that as a rule Ford does not recommend decarbonisation of engine, but in any case, the allegation of the complainant that the engine life was lost by performing decarbonisation of the engine was false one. Hence, no case, complaint be dismissed.

After hearing both the parties, the learned District Forum, Jaipur -II, Jaipur through impugned order dated 6.5.2004 allowed the complaint of the complainant in the manner as indicated above holding inter -alia:

(i) That it was admitted position of the case that decarbonisation of engine of the car in question was being done by the respondent No. 2 after opening engine. (ii) That since decarbonisation of engine was done, meaning thereby there was some manufacturing defect in the engine. (iii) That in coming to the above conclusion, the learned District Forum has placed reliance on two reports submitted by the concerned authorities; one by Junior Instructor (Motor Mechanic), Industrial Training Institute, Jaipur dated 21.11.2003 and other by Bajaj Motors, Jaipur dated 14.12.2003 and in view of these two reports, the learned District Forum did not place any reliance on the affidavit of Mahendra Singh, Motor Mechanic, who performed the job works of the car in question on behalf of the respondent No. 2. Aggrieved from the said order dated 6.5.2004 passed by the learned District Forum, Jaipur -II, Jaipur, this appeal has been filed by the appellant.

IN this appeal, the following submissions have been made by the learned Counsel appearing for the appellant: (i) That the learned District Forum has committed serious error in coming to the conclusion that there was manufacturing defect in the car in question after placing reliance on the two reports submitted one by Junior Instructor (Motor Mechanic), ITI, Jaipur and other by Bajaj Motors, Jaipur and ignoring the affidavit of Mahendra Singh, Motor Mechanic.

(ii) That since the car in question has been used by the complainant for three years, therefore, ordering of refund of car price by the learned District Forum was illegal and from that point of view also, the impugned order cannot be sustained and liable to be quashed and set aside.

(iii) That decarbonisation of cylinder head was done and not of engine and, therefore, the findings of the learned District Forum that engine was defective are palpably wrong and erroneous one.

THE learned Counsel appearing for the respondent No. 2 supported the above arguments made by the learned Counsel for the appellant. The complainant -respondent No. 1 Raj Deepak Rastogi has supported the impugned order directing appellant to refund the car price to the complainant.

WE have heard the learned Counsel appearing for the appellant, the complainant -respondent No. 1 Raj Deepak Rastogi, Advocate and the learned Counsel for the respondent No. 2 and gone through the entire materials available on record.

BEFORE proceeding further, it may be stated here that since in this appeal, stay was not granted by this State Commission, therefore, the appellant filed a revision petition before the Honble National Consumer Disputes Redressal Commission, New Delhi being Revision Petition No. 2586/2004 and the Honble National Commission through order dated 18.11.2004 disposed of that revision with the following order: ''Heard the learned Counsel for the parties. Considering the dispute involved in the matter, the State Commission is requested to dispose of the matter on the date fixed by it or any other earlier date convenient to it, preferably within three months from today. Learned Counsel for the parties have agreed that they would not ask for adjournment on any ground except on exceptional ground. In this view of the matter, operation of the order passed by the District Forum is stayed with a condition that if the appeal is finally dismissed the petitioner shall pay the amount as ordered by District Forum/State Commission with 10% interest within a period of two weeks from the date of the order passed by the District Forum and would not ask for any stay by contending that petitioner is likely to file revision application. Petition stands disposed of accordingly. There shall be no order as to costs.''

In view of the above order of the Honble National Commission, this case was taken up for hearing on priority basis.

THERE is no dispute on the point that the complainant -respondent No. 1 purchased 1.3 PAS Petrol Car from the respondent No. 2 after paying its price to the tune of Rs. 5,38,733.

THERE is also no dispute on the point that as per job cards, as stated above, defects were found in the car in question and the same were got removed by the respondent No. 2. There is also no dispute on the point that as per Job Card Annex. 9 dated 14.6.2002, it appears that over heating in engine was found and that was removed and at the that, the car in question had run to 8783 kms.

THERE is also no dispute on the point that as per Job Card Annex. 10 dated 27.6.2002, it appears that cylinder head was decarbonized and at that time, car in question had run to 9806 kms.

THERE is also no dispute on the point that the appellant in para 13 of its reply had clearly admitted the fact that on examination, it was found that due to usage of impure/adulterated fuel, varnish formed in the engine causing it to knock and thereafter, the engine was cleared and the problem was rectified. There is also no dispute on the point that the appellant had also stated in its reply that Ford does not recommend decarbonisation of engine and so far as the fact that engine was decarbonized is concerned, it was admitted by the appellant, but the fact that by that process, the engine life was lost was not admitted by the appellant.

THERE is also no dispute on the point that as per affidavit of Mahendra Singh, who was mechanic in the respondent No. 2 and as per Job Card Annex. 10, decarbonisation of cylinder head was done.

THE question for consideration is whether in the facts and circumstances just narrated above, the findings of the learned District Forum on the point that it was admitted position that decarbonisation of engine was done on 27.6.2002 by the respondent No. 2 after opening engine and, therefore, there was manufacturing defect in the engine of the car in question, are liable to be confirmed one or not. In this case, Job Card Annex. 10 dated 27.6.2002 clearly reveals that cylinder head was decarbonized and as per reply of the appellant itself, engine was decarbonized. In our considered opinion, there should have been some defect in the engine resulted in formation of varnish on the top of engine. The question whether cylinder head was decarbonized or engine was decarbonized is another matter, but the fact is that there was trouble in the engine and that is why, as per averment of respondent No. 2, cylinder head was decarbonized.

THE case of the appellant as well as of respondent No. 2 is that because of using impure or adulterated petrol, this trouble was found in cylinder head as well as in engine. In our considered opinion, this argument cannot be accepted at all because of the simple reason that petrol was being purchased from the market and vehicle in question was having trouble from the very beginning which is evident from various job cards as mentioned above. As per Job Card Annex. 9 dated 14.6.2002, over heating in the engine was found and that could be only due to some either patent or latent defect in the engine, especially when the car had run only upto 8783 kms.

THERE is also no dispute on the point that third free service was due and the defect in engine or on the head of cylinder was found earlier when the car in question had run only 9806 kms. and this fact itself goes to show that engine of the car in question was defective one, otherwise in normal course defects as mentioned above would not have occurred. Had the above mentioned trouble in the engine would have occurred after third free service, the position would have been different one, but since it had occurred earlier to that, therefore, it would amount to deficiency in service on the part of the manufacturer -appellant. Apart from this, a perusal of the reports of the Junior Instructor (Motor Mechanic), ITI, Jaipur and that of Bajaj Motors, Jaipur clearly reveals that decarbonisation of engine of the car in question was done and doing of decarbonisation work clearly goes to show that there was some manufacturing defect in the engine of the car in question.

THUS , the findings of the learned District Forum to the effect that decarbonisation of engine of the car in question was done by the respondent No. 2 and that there was manufacturing defect in the engine of the car in question cannot be said to be erroneous or perverse one and rather, they appear to be based on correct appreciation of entire materials available on record including two reports one by Junior Instructor (Motor Mechanic), ITI, Jaipur and other by Bajaj Motors, Jaipur. The approach of the learned District Forum does not appear to be manifestly erroneous one.

IT may be stated here that there is difference between guarantee and warranty. A guarantee is anything in writing if it contains or purports to contain some promise or assurance that defects will be made good by complete or partial replacement, or by repair, monetary compensation or otherwise. Goods are regarded as used by a consumer when he actually uses the same or has physical possession of goods for use unless the same are exclusively for the purpose of business. Express warranty may be termed a guarantee. The enforceability of the guarantee depends upon the terms of the contract between manufacturer and consumer. If construed as a unilateral contract, that is, one where an offer is made to arrange of possible offerees and is accepted by a particular offeree doing the contemplated act, the contract would probably be completed by purchase of the article. This would operate both as acceptance and furnish consideration by the purchaser, if it is assumed that he is aware of the guarantee at the time of purchase. Any defects detected during the warranty period empowers the consumer to claim damages. However, during the guarantee period, a consumer is entitled only to reject the goods and demand fresh goods.

FOR further clarification, Section 12 of the Sale of Goods Act may be referred to where distinction between condition and warranty has been made. Breach of a condition entitles the injured party to repudiate a contract, refuse to accept the goods and to recover price. On the other hand, the only remedy for breach of a warranty is recovery of damages.

THE word ''defect'' has been defined in Clause (f) of Section 2(1) of the Act of 1986. The definition is wide enough to include any fault, imperfection or short -coming in the quality, quantity, potency, purity or standard. It may be stated here that in case of supply of defective car especially when there is some manufacturing defect in it, in such a situation, consumer is entitled to either price of the car purchased by it or its replacement by a new car.

IN the present case, the car in question was found defective as there was some manufacturing defect in the engine of the car in question and, therefore, in these circumstances, if the learned District Forum had ordered that price of the car in question be refunded to the complainant -respondent No. 1, no illegality or irregularity has been committed by the learned District Forum in doing so.

SO far as the argument that since the car in question has been utilized by the complainant -respondent No. 1 for so many months, therefore, ordering to refund the car price to the complainant -respondent No. 1 was wholly illegal is concerned, the same cannot be appreciated in view of the facts and circumstances just narrated above, especially when defects in the car in question were found right from the very beginning. Therefore, the authorities relied upon by the learned Counsel for the appellant in Ramesh Chandra J. Mehta and Another v. M/s. P.H. Wadia and Sons and Another, II (1993) CPJ 787, and Jay Malhotra v. M/s. Maruti Udyog Ltd., III (2002) CPJ 95 (NC), would not be helpful to the appellant. For the reasons stated above, no interference is called for with the impugned order dated 6.5.2004 passed by the learned District Forum, Jaipur -II, Jaipur as it does not suffer from any basic illegality or infirmity and this appeal deserves to be dismissed. Appeal No. 1112/2004

THIS appeal has been filed by the complainant with the prayer that the order dated 6.5.2004 passed by the learned District Forum, Jaipur -II, Jaipur to the extent of not granting relief against the respondent No. 2 M/s. K.S. Ford be quashed and set aside and the respondent No. 2 may also be held liable for payment of the car price and further, Rs. one lac be awarded to the complainant for mental and physical harassment.

IN our considered opinion, since manufacturing defect was found in the engine of the car in question, therefore, in these circumstances, if the learned District Forum had not made respondent No. 2 liable in making payment of the car price, it has not committed any illegality or irregularity in doing so, especially when the respondent No. 2 M/s. K.S. Ford, dealer has done its best by repairing the car in question. So far as compensation for mental agony and physical harassment is concerned, it was rightly refused by the learned District Forum. Since the car in question has been utilised by the complainant, therefore, it would not be just and proper to award him compensation towards mental or physical harassment.

FOR the reasons stated above, there is no merit in this appeal and the same deserves to be dismissed. Accordingly, in the result, both the aforesaid appeals one filed by Ford India Limited and the second filed by complainant Raj Deepak Rastogi are dismissed. Appeals dismissed.