Tata Motors, Dealer Asked To Give New Vehicle or Pay Cost of Rs6.27 Lakh with 9% Interest for Defective Tata Venture
Moneylife Digital Team 05 June 2024
While upholding orders passed by fora below, the national consumer disputes redressal commission (NCDRC) directed Tata Motors Ltd and National Garage, the company's authorised dealer, to provide a new Tata Venture, a seven-seater mini-van, or pay Rs6.27 lakh, the cost of the vehicle with an interest of 9%pa (per annum), for selling a vehicle with manufacturing defects.
In an order last week, the NCDRC bench of air vice-marshal (AVM) J Rajendra (retd) (presiding member) says, "The repetitive nature of the defects in the car is undisputed. The district forum and the state commission examined the evidence and passed well-reasoned concurrent findings that the petitioners sold a defective car to the complainant in which multiple defects which emerged within 20 days of purchase and, despite several attempts to rectify these issues through visits to National Garage, the defects remained unresolved. This rendered the vehicle unusable by the complainant within a short time."
On 27 February 2012, Ramkumar Verma from Balloudabajar district in Chhattisgarh bought a Tata Venture vehicle manufactured by Tata Motors and sold by National Garage for Rs6.27 lakh. However, he alleged that the mini-van had multiple manufacturing defects, including issues such as the door not locking, window glass not closing, malfunctioning air conditioner, gear problems due to a hard clutch, intermittent breaking of the coolant pipe, wheel jamming, and repeated bearing failures within just 21 to 22 days of purchase. 
He says, "When the vehicle was finally taken for repairs on 10 June 2013, it took almost a month to address these issues. However, the vehicle experienced gear and wheel jamming again on 18 July 2013 and continued to exhibit various defects over the next one and a half years, rendering it unusable for extended periods." 
Due to these persistent issues, Mr Verma eventually handed over the vehicle to National Garage, stating that the vehicle spent more time in the garage than in use. The first instance of repair occurred on 21 March 2012, addressing defects such as a non-functioning air-conditioner and front-wheel jamming. Subsequently, the vehicle was repeatedly given for repairs to National Garage from 17 April 2012 to 10 June 2013. Despite these efforts, the vehicle's manufacturing defects could not be permanently resolved during the warranty period, and the mini-van was returned to Mr Verma with temporary fixes.
He further asserted that the recurring defects during the warranty period indicated inherent manufacturing issues and requested a replacement vehicle. However, National Garage only provided assurances without taking concrete action, allegedly aiming to prolong the warranty period and avoid responsibility, Mr Verma added.
Meanwhile, he continued paying loan instalments to Cholamandalam Finance Co Ltd for a vehicle that remained largely unusable, leading to financial losses.
Mr Verma then approached the Raipur district consumer disputes redressal forum seeking reimbursement of vehicle cost of Rs6.27 lakh with 12%pa and Rs1 lakh as compensation for mental distress and other grievances from Tata Motors and National Garage.
The counsel for Tata Motors contended that Mr Verma purchased the vehicle on 27 February 2012 and, by 12 August 2013, it had run 32,387km, indicating that it was extensively used without defects. "The allegations of manufacturing defects were unfounded and highlighted that the burden of proving such defects lies with Mr Verma, through a report from a specialist or mechanical engineer as per Section 13(1)(c) of the Consumer Protection Act, 1986. In the absence of such report, the claim of manufacturing defects cannot be substantiated."
The counsel for National Garage submitted that the vehicle was brought to the workshop on 8 December 2012 after an accident, which, as per warranty terms, voided the warranty. He claimed that Mr Verma suppressed this fact, indicating bad faith. "Post-accident repair charges for the door were taken, as accidental damages are not covered under warranty. On 31 December 2012, the vehicle was brought in for a hard clutch, hard gear shifting, and engine coolant leakage," the counsel says.
In its order on 3 January 2017, the district forum allowed the complaint and held Tata Motors and National Garage responsible for providing deficient service. It says, "Tata Motors and National Garage are on, jointly or severally, guilty in this matter for giving deficiency in service as well as business misconception. Hence, Mr Verma is eligible to get a new vehicle of the same model in place of the subject vehicle or to get the total value of the subject car amounting to Rs627,000 along with the interest from Tata Motors and National Garage, jointly and severally. Mr Verma is also eligible to get compensation of Rs10,000 towards mental stress, along with Rs2,000 towards the cost of the complaint from Tata Motors and National Garage, jointly and severally."
Aggrieved by the order, Tata Motors and National Garage filed an appeal before the Chhattisgarh state consumer disputes redressal commission. While dismissing the appeals, the state commission observed that Mr Verma gave his vehicle to National Garage on various occasions between the dates of 27 February 2012 to 10 June 2013 for various problems and submitted photocopies of the job cards and job slips.
It says, "Within just 21-22 days after the purchase of the subject vehicle, serious problems such as door not locking due to electronic defect, window glass not closing fully, AC not working, gear stuck or not working due to clutch getting hard, breaking of coolant pipe again and again besides wheels getting jammed and breaking of bearing on many occasions, cannot be treated in the category of ordinary problems. This definitely shows and proves that there are manufacturing defects in the subject vehicle. Hence, it shall not be proper to pressurise for the requirement of specialist report in such matters. This matter is clearly of 'Res ipsa loquitur' (the thing that speaks for itself). Where there is no requirement of evidence of specialist report."
"We accept the argument of Mr Verma that the subject vehicle had manufacturing defects, and refusing to give the replacement of new vehicle in place of this clearly shows a deficiency in service as well as business misconception. The conclusion made by the district forum in para 16 of its order is fully proper. There is no illegality and irregularity," the state commission says.
Tata Motors and National Garage then approached NCDRC with their revision appeal. The counsel for Tata Motors argued that the vehicle was used extensively for commercial purposes and the minivan had run 32,387km in just 18 months. "Mr Verma is primarily interested in getting the vehicle replaced, but such a request cannot be granted. Additionally, he did not get the vehicle inspected by an independent institution as required under Section 13(1)(c) of the Act to substantiate the allegations." 
The counsel for National Garage argued that Mr Verma failed to provide evidence regarding any manufacturing defect, rendering the orders passed by both forums incorrect. "As National Garage is not the manufacturer of the vehicle, no order should be passed against it for the replacement of the new vehicle," the counsel says.
The counsel for Mr Verma pointed out that the lower fora held that Tata Motors and National Garage failed to substantiate their allegation that the vehicle was being used commercially. Regarding the liability of the manufacturer and dealer, he argued that the dealer did not conduct a proper inspection of the vehicle before delivery, resulting in the sale of a defective vehicle to him. As regards the argument of extensive usage of the vehicle, he asserted that the frequent breakdowns caused the vehicle to remain in the garage for repairs more often than it was in service. Since Tata Motors and National Garage did not provide any remedy, he had no choice but to return the vehicle to the authorised dealer, he added.
After examining the pleading and associated documents on record, the NCDRC bench observed that the main issue in the matter is the allegation of 'manufacturing defects'. "Specifically, the recurring problems suffered by Mr Verma included door not locking, window glass not closing, malfunctioning air conditioner, gear problems due to a hard clutch, intermittent breaking of the coolant pipe, wheel jamming, and repeated bearing failures, which started showing up within about 20 days of purchase. Despite efforts on multiple occasions by Mr Verma in taking the vehicle to National Garage, the problems remained unresolved."
Referring to job card details documented by National Garage, AVM Rajendra (retd) stated that the vehicle in question exhibited persistent issues and defects from the very outset which the authorised dealer failed to repair adequately.  
He says, "Considering the fact that National Garage is the authorised servicing agency of Tata Motors, and National Garage could not address the deficiencies which persisted and severely constrained the basic use and enjoyment of the vehicle purchased by Mr Verma, no different opinion was reasonably expected from any expert." 
"National Garage inherently has engineers and technicians specially trained and qualified to service the type of the car under dispute, provided the resolution of the defect is possible. Therefore, the state commission after considering the failure of National Garage to rectify the defects, did not find the requirement of any other expert opinion under Section 13(1)(c) of the Act necessary in the case. Considering the facts and circumstances of the case and established persisting unresolved defects in the vehicle, I endorse the same," the bench says.
While dismissing the appeals, NCDRC directed Tata Motors to give a new vehicle of Tata Venture subject model or Rs6.27 lakh, the cost of the mini-van with 9% interest and Rs12,000 as compensation for mental stress and litigation expenses. 
(Revision Petition No946 of 2018 Date: 31 May 2024)
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