MARUTI UDYOG LTD. vs Arjun Singh And Anr.

LEARNED Counsel for the petitioner present who has drawn our attention to Memorandum of Understanding (MOU) between respondent No. 1/complainant and Ashish Automobiles (A division of Somani Swiss Ind. Ltd.) -respondent No. 2, order of the District Forum dated 3.1.2000, limits of authority as per Clause 5 of dealership agreement of the petitioner with the dealer as also the subsequent judgment of the State Commission in similar matters in Maruti Udyog Ltd. v. Achutya Nand Singh and Ors., FA Nos. 286, 296, 299 301, 311 and 328 of 2007. After drawing out attention to the said documents, it was submitted by him that once the delivery of the vehicle in question had been given to the complainant, no further liability could be fastened on the petitioner specially in view of the fact that MOU was entered into between respondent Nos. 1 and 2 after the judgment of the District Forum. He also placed before us judgment of the Apex Court in Indian Oil Corporation v. Consumer Protection Council, Kerala and Anr., II (1994) CPJ 21 (SC), which has material bearing on the issue involved in the revision upon which reliance was placed by the State Commission in the subsequent judgment in similar matters in the Appeals referred to above.

THE respondent No. 1 had sent counter affidavit which was received on 16.7.2009 and subsequent thereto, he had sent an application stating that he is not in a position to attend the hearing of the Commission and that he has already submitted his counter affidavit in July which may be considered. In the said counter affidavit, it is stated by him that he had entered into MOU treating the dealer as Maruti Udyog Ltd.''s representative and he had signed the said MOU in which apart from delivery of vehicle, interest @ 18% was to be paid to him. He has further stated that Maruti Udyog Ltd. delivered the vehicle and did not pay 18% interest as agreed earlier in the MOU. The MOU never absolved Maruti Udyog Ltd. from the responsibilities; Maruti Udyog Ltd. and the dealer are one unit and since the dealer has failed to pay 18% interest and compensation Maruti Udyog Ltd. is liable for the same.

FIRST of all, we would like to point out that there is nothing in the MOU entered into between the complainant and respondent No. 1 to suggest that the said MOU was entered into by respondent No. 2 on behalf of the Maruti Udyog Ltd. The said MOU was entered into after the judgment of the District Forum and in the said MOU, it was stated that the settlement is full and final and the customer shall not raise any other claim in any Court, Tribunal and Forum, etc. Admittedly, the vehicle in question was delivered to the complainant on 14.6.2000 that is to say the date on which MOU was entered into between respondent Nos.1 and 2. At this stage, we would like to point out that the District Forum in order dated 3.1.2000 had directed the Maruti Udyog Ltd. to deliver the car through authorized dealer or through any other agency failing which directions were given to refund the money as stated below. Once, the car was got delivered by Maruti Udyog Ltd., there could be no further liability on Maruti Udyog Ltd. since the first part of the order of the District Forum had been fully complied with. It is only in connection with the alternative direction that further directions were given to pay 18% interest and also compensation of Rs. 5,000. The petitioner has relied upon the Clause 5 of the Dealership Agreement which reads as under: "Nothing in this agreement shall make or deemed to make the dealer, the agent or representative of the company for any purpose and the dealer shall not describe or represent itself as such. The dealer has no right or authority to bind the company by any contract or representation whatsoever with or to any third party or to assume any obligation of any third party on behalf of the company. The company shall not be responsible nor shall the dealer have any authority to render the company responsible for any deposits received by the dealer from the purchasers of products."

KEEPING in view the said limits of authority, the relationship between the Maruti Udyog Ltd. and the dealer is on the basis of principal to principal and as such the Maruti Udyog Ltd. would not be liable for the acts of the dealer. It may also be pointed out at this stage that the State Commission in identical matters in the First Appeals referred to above had come to the conclusion that there was no privity of contract between the Maruti Udyog Ltd. and the customers who had booked the vehicle with the dealer. The State Commission has pointed out that it is settled that in case of relationship between manufacturer and its distributor on principal to principal basis the manufacturer was not liable for acts and its distributor. The State Commission had relied upon the judgment of the Apex Court in Indian Oil Corporation v. Consumer Protection Council, Kerala and Anr. (supra), wherein it is held that once delivery of vehicle is given to the dealer after realizing the price from dealer, the relationship between the manufacturer and dealer was not of principal and agent, but of vendor and purchaser. The State Commission, ultimately held in the said cases that the company was not liable to either deliver the vehicle or to refund the deposit amounts or to pay compensation to the complainant. It was further held that the authorized dealer Ashish Automobiles (A division of Somani Swiss Ind. Ltd.) headed by Mr. M.K. Somani was alone liable to comply with the impugned orders.

IN view of the above position, the impugned order of the State Commission dated 14.6.2006 cannot be sustained wherein it is stated that Maruti Udyog Ltd. is liable to pay 18% interest and it may realize the same from the authorized dealer. The liability to pay interest and compensation would, therefore, under the circumstances, be that of respondent No. 2 alone. The revision is, accordingly, allowed in aforesaid terms with no order as to cost. R.P. allowed.