Repainted car sold as New- does Court hold it as manufacturing defect?

It is a case where the car was painted to match the original colour before being handed to the complainant. It was not stated in the report that the car was old or involved in an accident prior to repainting. Instead, it is a case of typical scratches that were bound to appear during the vehicle’s trailer transportation from the factory to the agency, according to state commission Haryana Panchkula. SC affirms that there was no manufacturing flaw in this instance.     

Dr Prem Lata Legal Head VOICE

Case: Mahaveer Stone Crushing Co vs Tata Motors Ltd (SC)

Issue: Repainted & Repaired vehicle sold-Whether it is manufacturing defect

Facts of the Case 

The complainant purchased the new vehicle on 10.2.1999. After about five months there was an occasion that he took the vehicle to a workshop for service when it was observed that vehicle had an accident and was repainted. Complainant came before the consumer forum, filed complaint before District Forum Gurgaon under CP Act 1986 and claimed relief for re-placement of the vehicle. Dealer as well manufacturer were made parties. Expert made report on 27.1.2000 confirmed the fact. District forum ordered replacement with cost of litigation included.

Matter came before the State Commission in appeal and the State commission observed that there was no manufacturing defect in the vehicle neither it was involved in an accident. There were normal scratches while transporting from factory to agency but no manufacturing defect found which could entitle the complainant for replacement of vehicle. Hence sum of 50000/- was granted to complainant as compensation. This order was against Tata motors Ltd, the manufacturer. 

National commission confirmed the order. SC ordered for Inspection which was done on 15.06.2003 through court.

SC observed

1. Vehicle found repaired from left side, right side and back.
2. Found repainted 80% and 20% had original paint.
3. Paint work done was discoloured and turned yellow.
4. Left front door was not working/the key supplied were not matching the slot of lock. 

The Supreme Court observed that a manufacturing problem actually affects a procedural or technical feature of the vehicle. Although no manufacturing flaw could be found, the new vehicle is physically damaged in this state. As a result, compensation in the amount of Rs. 1,600,000 was given rather than a replacement.

Old Model Car Sold against New Booking

However, we have another case wherein it is apparent on the face of it that an old model car was sold as a new one, and the consumer now wanted a replacement.

Rajiv Shukla vs Gold Crush Sales & Services

Facts leading to dispute are that it is a case of one Rajiv Shukla who booked the Vehicle Tata Sumo Victa GX TC car by paying booking amount to M/s Gold Crush Sales and Services. A receipt was also issued for payment on the same day. Thereafter, he paid Rs 5, 30,000. However, the vehicle was delivered only a year after the booking. Rajiv Shukla found that he had been delivered an old model of 2005 which had already run 1000/- km prior to delivery of the vehicle to him. On investigation, it was revealed that the said car was used as Demo Test Drive Vehicle prior to delivery to Rajiv Shukla. Complainant lodged an FIR with police for fraud on the part of dealer but the matter could not be settled. The complainant filed a complaint before the District Forum with the prayers to replace aforesaid used car Tata Sumo Victa GX TC Model No 2005 with new car /vehicle to him.

The District Forum allowed the complaint and directed Gold Crush Sales & Services to take back the delivered vehicle and deliver a new one to the complainant against the previously deposited amount. The District Forum also awarded a sum of Rs.5, 000/ towards the mental agony besides a sum of Rs.2500/ towards litigation costs.   The District Forum also found that the delivered car was   a used   car   and   was   being   used   as a “Demo Test Drive Vehicle”.

The   order   passed   by   the   District   Forum was confirmed   by   the   State   Commission. The National Commission while   exercising   the revisional jurisdiction, has set aside the findings of facts recorded by the District Forum as well as the State Commission   and directed to pay compensation in the sum of Rs.1 lakh to be paid to the complainant.

Matter comes to SC in Appeal

Supreme Court observed that the National Commission has materially erred in upsetting the findings   of   facts   recorded   by   the   District Forum and the State Commission, and held that   the car delivered was a used car. It was further observed that the National Commission   in   exercise   of   the   revisional   jurisdiction under Section 21 of the Consumer Protection Act, 1986 could not have interfered with the evidence taken on record by lower commissions.

SC Order 

Once the complainant paid the full sale consideration for a new car, the duty was cast upon the dealer to supply the   new   car   which   was   booked and if not done so, it would tantamount to dishonesty and unfair trade practice.

Conclusion

There is a difference between a defective and an old car. In the case of Mahaveer Stone Crushing Co. vs Tata Motors Ltd (SC), the court observed that cars bear defect due to scratches in the process of transportation whereas in the case cited above in Rajiv Shukla it is proved through cogent evidence that an old car used as Demo Test Drive Car was sold as a new one.