MAHANTAYYA vs MAHALAKSHMI TRACTOR

UNDISPUTEDLY, the petitioner (complainant) booked a new Eicher 485 NC under an exchange scheme offered by the manufacturer, (respondent Nos. 2 to 4) through their dealer, respondent No. 1. Under the said scheme the respondents purchased the old tractor from the petitioner for a sum of Rs. 1,30,000. For the balance amount the petitioner had applied for a loan, for purchase of tractor, from the State Bank of India, Sinhanur Branch, and the Bank sanctioned Rs. 1,69,500 for the said purpose. Accordingly a demand draft was issued by the Bank in favour of the Eicher Tractor, Unit of Eicher Tractor Ltd., payable at Hyderabad, on 4.5.2000, which was handed over to the respondent No. 3. The respondents were to deliver the tractor within 7 days from the date of booking. However, even though the entire amount was paid by the petitioner the respondents failed to deliver the tractor to the petitioner. Hence, the petitioner filed complaint No. 64 of 2000 before the District Forum, Raichur.

THE District Forum directed the complainant to approach appropriate Forum/Civil Court for redressal of his grievance and dismissed the complaint by order dated 19.6.2001. Against that order the complainant preferred Appeal No. 448 of 2001 before the Karnataka State Consumer Disputes Redressal Commission at Bangalore. That appeal was allowed and it was held that the respondent No. 1, the dealer alone, is liable to pay the entire amount of Rs. 2,99,500 deposited by the complainant towards the full purchase price of the tractor together with interest at the rate of 12% p.a. from the date of deposit till the date of payment.

Against that order this Revision Petition is filed by the complainant. It is contended that the manufacturers are primarily liable for refund of the amount as the same was received at the time of booking of the tractor by the respondents directly from the complainant. It is pointed out that if dealer/agent has misappropriated, the petitioner should not suffer. It is also pointed out that the agent/dealer is nowhere available after passing of the order of the State Commission and his dealership was also cancelled by the respondent Nos. 2 to 4, and hence, the order passed by the State Commission has remained unexecuted.

IN our view, the contention raised by the petitioner requires to be accepted. The State Commission relied upon Exhibits R-2 and R-3 produced by respondent Nos. 2 to 4 which establishes that the amount of purchase price of the tractor was collected by the manufacturer from the respondent towards the full cost and held that as the respondent No. 1 was supplying the tractor through the dealer and as the dealer has not delivered the same, the manufacturer cannot be held liable. It is also observed that the respondent No. 1, the dealer, had delivered the said tractor to one Ms. Vijaya Laxmi who had also paid the full price of the tractor. Hence, the dealer only would be liable for the deficiency in not delivering the tractor, and not the manufacturer. In our view, this submission is totally without any substance. The petitioner had paid the full amount to the respondent Nos. 2 to 4 and that amount was received through their dealer. It was their responsibility to see that the tractor is delivered to the complainant who has paid the full price. If the agent/dealer of the manufacturer misappropriates the goods, the complainant is not required to suffer. It is for the manufacturer to secure the delivery by the dealer/agent to the consumer. The manufacturer deals with the consumer or purchaser through their dealers or agents. Therefore, for the wrongs committed by the agent or the dealer, the consumer is entitled to have reimbursement from the manufacturer/principal, and the liability of the dealer/agent and the manufacturer is joint and several.

WITH regard to joint and several liability the law on the subject is settled. The Apex Court in the case of Hindustan Motors Ltd. & Anr. v. N. Sivakumar & Anr., (2000) 1 SCC 654, approved the observation of the National Commission to the following effect: "An apprehension has been expressed by the dealer that the burden of this may ultimately fall upon the dealer. We make it clear that for the manufacturing defects in the vehicle, the dealer cannot be held liable. The liability must be borne by the manufacturer."

Thereafter, in the case of Jose Philip Mampilli v. Premier Automobiles Ltd. & Anr., I (2004) CPJ 9 (SC)=I (2004) SLT 855=(2004) 2 SCC 278, the Apex Court held that in cases of delivery of defective vehicle the liability to pay the amount is joint and several of the dealer and the manufacturer. No doubt, it was also made clear that in case the dealer pays the amount in the first instance, the same can be recovered by him from the manufacturer. Learned Counsel for the respondent contended that as the dealer has misapprorpriated, the manufacturers are not liable and he relied upon the decision of the Apex Court in Qamar Shaffi Tyabji v. Commissioner, Excess Profits Tax, Hyderabad, AIR 1960 SC 1269. In our view, the said judgment has no bearing on the facts of the present case. In this view of the matter, this Revision Petition is allowed. The order passed by the State Commission setting aside the order of the District Forum, is modified to the limited extent that the liability of the agent/dealer and the manufacturer is joint and several, and the rest of the order of the State Commission is upheld. The respondent Nos. 2 to 4 shall pay costs of Rs. 5,000 to the petitioner/complainant. The revision petition is disposed of accordingly. R.P. allowed.