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Synopsis

The Supreme Court recently held that delivering a used car that was used as a “Demo-­Test Drive Vehicle” can be said to be unfair trade practice.

A division bench made this observation while upholding the decision of the District and State consumer forums directing a car dealer to replace the defective car delivered by him and pay compensation to the aggrieved customer.

"Even to deliver the defective car against the new car was also not permissible. Not to deliver the new car despite the full sale consideration paid and/or to deliver the defective car can be said to be unfair trade practice. Therefore, as such the district forum and the state commission were absolutely justified in directing the respondent no.1- dealer to replace the delivered car and to deliver a new car.", observed a bench of Justices MR Shah and Krishna Murari.

One Rajiv Shukla, a complainant approached the Supreme Court, after the National Disputes Redressal Commission, New Delhi (National Commission) in exercise of revisional jurisdiction set aside the concurrent findings recorded by the District Forum as well as the State Commission.

Shukla had purchased a Tata Victa GX TC Car for which he deposited the booking amount with the dealer- M/s. Gold Rush sales and services. He deposited a further sum of Rs.5,30,000 towards the purchase amount of the said vehicle. The booked car was delivered to the complainant after a period of one year of deposit of the total amount, which as such was an old one and was of 2005 model and in fact was a used car.

The District Forum allowed the complaint and directed the dealer to take back the delivered vehicle and deliver a new vehicle. It also awarded a sum of Rs.5,000 towards the mental agony and Rs.2500­ towards litigation costs.

This order was upheld by the State Commission. 

The Top Court noted that on appreciation of evidence on record, the District Forum as well as the State Commission concurrently found that the car delivered was a used car. 

Such findings of facts were not required to be interfered by the National Commission in exercise of the revisional jurisdiction vested
under Section 21 of the Consumer Protection Act, 1986, the division bench further held.

"...the powers of the National Commission are very limited.  Only in a case where it is found that the State Commission has exercised its jurisdiction not vested in it by law, or has failed to exercise the jurisdiction so vested illegally or with material irregularity, the National Commission would be justified in exercising the revisional jurisdiction. In exercising of revisional jurisdiction the National Commission has no jurisdiction to interfere with the concurrent findings recorded by the District Forum and the State Commission which are on appreciation of evidence on record", the court held.

Thus, while holding that non delivery of a new car can be said to be an unfair trade practice and dishonesty on the part of the dealer and against morality and ethics, court observed that once the new car was booked and the full sale consideration was paid, a duty was cast upon the dealer to deliver a new car which is not defective.

The dealer was accordingly directed to comply with the district forum's order.

"The present appeal is accordingly allowed to the aforesaid extent with costs which is quantified at Rs.1 lakh to be deposited by respondent no.1 within a period of six weeks from today with the Registry of this court. On such deposit Rs.50,000/- be paid to the appellant herein towards the costs/litigation cost etc. and Rs.50,000/- be transferred to the Mediation and Conciliation Project Committee (MCPC), Supreme Court of India, New Delhi", ordered the court.

Case Title: Rajiv Shukla vs. Gold Rush Sales and Services Ltd. & Anr.