National Consumer Disputes Redressal Commission, New Delhi

Ashok Bhan, President and Vineeta Rai, Member

General Motors India Pvt Ltd and Anr - Appellants


G S  Fertilizers (P) Ltd and Ors – Respondents

First Appeal No. 723, 736 of 2006                                                                                    Decided on 07.02.2013

(Against the order dated 18.09.2006 in Complaint Case No.91/2001 of the West Bengal State Consumer Disputes Redressal Commission)

Consumer Protection Act, 1986 – Sections 2(1)(d)(ii), 17, 19 and 21 - Automobile-- Manufacturing defect - State Commission directed Opposite Parties to jointly and severally pay Rs. 7,17,000 ( 80% of price of car) to Respondent-Complainant along with 9% interest and cost of Rs. 3,000 - Respondent-Complainant had clearly stated that vehicle was purchased for use of its Managing Director - This clearly amounts to its purchase for a commercial purpose - Even otherwise, Respondent-Complainant has not been able to produce any evidence, including that of an expert to indicate that there was any manufacturing defect in vehicle – Whenever there was any problem with vehicle either because of normal wear and tear or following accidents, these were promptly attended to by Appellants and there was no deficiency in service in this respect - Impugned order set aside - Appeals allowed.           (Paras 4, 9 to 11) 

Important Point

Purchase of vehicle for company would amount to its purchase for a commercial purpose.


1.Vineeta Rai, Member - Being aggrieved by the order dated 18.09.2006 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata (hereinafter referred to as the State Commission) in SC Case No. 91/2001, allowing the complaint of M/s G S  Fertilizer (P) Ltd, original Complainant before the State Commission and Respondent No.1 herein, the present cross First Appeals No. 723 of 2006 and 736 of 2006 have been filed by M/s General Motor India (P) Ltd and India Automobiles (1960) Ltd, Opposite Parties No.1 and 2, respectively and Appellants herein. Since the facts and parties in both first appeals are common, we propose to dispose of these appeals by a common order.


2. Respondent-Complainant, M/s G S Fertilizer (P) Ltd, had purchased an OPEL ASTRA Diesel Driven Hard Top Saloon Car for Rs.9,43,280 on for use by its Managing Director from Opposite Party No.1 - M/s India Automobiles (1960) Ltd, the authorized dealer of Opposite Party No. 2 - M/s General Motor India (P) Ltd, the manufacturer of the said vehicle. Soon after taking delivery of the car, several problems arose in the car, for which it was sent for repairs on a number of occasions to Opposite Party No. 1’s workshop but these could not be rectified and, in fact, the complaints became more aggravated. Ultimately, the car had to be left at the garage of Opposite Party No. 1 since 10.09.2001. It was contended that though both Opposite Parties expressed regrets regarding the malfunctioning of the vehicle and apologized for the inconvenience and harassment caused to Respondent-Complainant, the vehicle was never satisfactorily repaired. However, the period of warranty was extended because of the innumerable defects in the car. It was contended that a defective car had been sold to the Respondent-Complainant with inherent manufacturing defects which could not be repaired and on which he had to spend over Rs. 10 lakh and also suffer untold harassment and inconvenience. Respondent-Complainant, therefore, filed a complaint before the State Commission on grounds of deficiency in service and unfair trade practice and requested that Opposite Parties be directed to pay it Rs. 5 lakh as compensation, apart from refund of the price paid for the car, which was Rs. 9,43,280 or, in the alternative, replace it with anew car of the same quality.

3.Opposite Parties No. 1 and 2, on being served, filed written replies denying the allegations made by the Respondent-Complainant. Opposite Party No. 1 contended that from the job card dated 26.04.2000, which is filed in evidence, it was clear that the vehicle had travelled over 12,000 kms within a period of one year from the date of purchase, which indicates that there was no manufacturing defect in the car, as otherwise it could not have made such extensive journeys. The job card dated 04.08.2000 again showed that the car had travelled 15,400 kms, but, thereafter, the Respondent-Complainant tampered with the mileage indicator, as a result of which it registered only 1,324 kms. It was stated that after this tampering, Respondent-Complainant sent 6 letters to Opposite Party No. 1 regarding various defects. It was also contended that the vehicle had met with 3 accidents within 7 months of its purchase and, although, the Respondent-Complainant termed these accidents as minor, in one accident alone, the repairing bill was for over Rs. 43,000 as reflected in the job card dated 04.06.1999. The vehicle was thoroughly repaired after these accidents but Respondent-Complainant actually wanted to purchase a new car at a concessional rate and tried to pressurise both the Opposite Parties. When he was not obliged, he continued his allegations regarding noises in the steering, defects in wheel gear, under-carriage, doors, dicky, air-conditioner, etc. making out a case for replacement. Opposite Parties also raised the point of maintainability of the complaint under the Consumer Protection Act, 1986 (hereinafter referred to as the Act), as the vehicle had been purchased by the Respondent-Complainant, which is a private limited company for its Managing Director, which amounts to use for 'commercial purposes' and, therefore, under Section 2(1)(d)(ii) of the Act, Respondent-Complainant is not a ‘Consumer’.

4.The State Commission, after hearing the parties and going through the evidence placed before it, allowed the complaint by observing as follows:

“…After hearing both sides and perusal of the documents placed before us, we are of considered view that the car had some manufacturing defects almost from the very inception, otherwise the OPs would not have attended to the complaint so many times. However, the fact that the Complainant took about 2 years 3 months’ time to return the car to the Manufacturer/Dealer proves that he was not decided as to what action he should take vis-a-vis the car with the defects. The 2 years and 3 months’ time is considered rather long, which has not been properly explained to the satisfaction of the Commission. However, as already observed, the Manufacturer, i.e. OP No. 2 evidently admitted the manufacturing defects of the car, which ultimately prompted it to offer a new car at a concessional price with a discount of Rs. 1.5 lakh, which is supported by their letter No. GMT/DEUCAU2001.264 dated 15.6.01. Hence, the deficiency of OP Nos. 1 and 2 has been proved beyond doubt. In view of the above position and considering that the Complainant used the car for 2 years and 3 months, we are not in favour of allowing refund of the full price. We, however, consider that an amount equal to 80% of the price of the car will be reasonable amount to refund to the Complainant after taking into account the depreciation, together with interest of 9% p.a. on the amount. It would be probably appropriate to refer to the decision in Raja Rao Vs. Mysore Auto Agency & Another, wherein the Hon'ble National Commission allowed full refund of the price of the car to the Complainant, though the car was used for about 7 months and had run 36,377 kms.”

The State Commission, therefore, directed Opposite Parties No. 1 and 2 to jointly and severally pay Rs. 7,17,000 (i.e. 80% of the price of the car) to the Respondent-Complainant within a period of 30 days from the date of receipt of that order, along with interest @ 9% per annum from the date of payment till the amount is paid in full. After expiry of that date, the above amount will carry interest @ 12% per annum. Opposite Parties No. 1 and 2 were also directed to pay litigation cost of Rs. 3,000.

5.Aggrieved by this order, both Opposite Parties No. 1 and 2 filed two separate appeals.

6.Learned Counsel for both the Appellants, as also the Respondent-Complainant made oral submissions.

7.Learned Counsel for Appellants contended that the State Commission erred in directing them to jointly and severally refund 80% of the cost of the vehicle with interest @ 9% per annum to the Respondent-Complainant, because there was no proof that there was any manufacturing defect in the vehicle. The State Commission merely noted that the vehicle was required to be taken to the workshop on a number of occasions and, based on this, concluded that there was a manufacturing defect. On the other hand, from the job cards it is clear that the vehicle had been used extensively, which would not have been possible if there had been any manufacturing defect. In fact, Respondent-Complainant had filed this complaint with an ulterior motive because he wanted a new vehicle at concessional rate. Further, the State Commission failed to take note of the fact that since the vehicle had been purchased by a private limited company i.e. Respondent-Complainant for use of its MD, it was obviously for a ‘commercial purpose’ and not for the purpose of earning livelihood by self-employment. Respondent-Complainant, therefore, did not fall within the purview of the definition of ‘Consumer’ under Section 2(1)(d)(i) of the Consumer Protection Act, 1986 and the complaint was not maintainable.

8.Learned counsel for the Respondent-Complainant denied that there was any ulterior motive in his making the complaint before the State Commission. The job cards showing the number of times the vehicle needed to be repaired was a clear indication that there were manufacturing defects right from the beginning and it was because of this reason that the warranty period was also extended. Learned counsel for the Respondent-Complainant cited a judgment of this Commission in R Raja Rao Vs Mysore Auto Agencies & Anr in support of his contention, wherein it had been held that if a consumer of a new motor vehicle is forced to hand it over to the Dealer/Manufacturer on the ground that it is to be repaired every now and then within a few months of its purchase, it cannot be said that he is to be deprived of refund of the amount paid as purchase consideration. The State Commission, being the first court of fact, after carefully considering the evidence before it had rightly concluded that there was manufacturing defect in the car and directed both the Appellants to refund 80% of the price of the car that the Respondent-Complainant had paid. Refuting the contention of the Appellants regarding maintainability of this case under the Consumer Protection Act, 1.986, counsel for the Respondent-Complainant pointed out that since the instant case was filed in 1999 and was prior to 2002 when the amendment in the Act was made, it would not be relevant in the present case.

9.We have heard learned counsels for both parties and have gone through the evidence on record. We note that in his complaint before the State Commission, the Respondent-Complainant had clearly stated that the vehicle was purchased for the use of its MD. We agree with Appellants' contention that this clearly amounts to its purchase for a ‘commercial purpose’ since the Managing Director of a private limited company would obviously not use this vehicle for self-employment to earn his livelihood but for ‘commercial purposes’ as a perk of his office. Counsel for the Respondent-Complainant has sought to challenge this contention by pointing out that since the present case pertains to 1999 and the amendment referred to was made only in 2002, it was not applicable in the instant case. We are unable to agree with this contention as well because the 2002 Amendment to the Act pertains to Section 2(1)(d)(ii) of the Act relating to hiring or availing of services for a consideration and not to Section 2(1)(d)(i) of the Act, which relates to purchase of goods. In fact, the interpretation of Section 2(1)(d)(i) of the Act relating inter alia to purchase of goods has been well settled by the Hon'ble Supreme Court as far back as in 1995 in its judgment in Laxmi Engineering Works Vs PSG Industrial Institute, wherein the Hon'ble Apex Court has ruled as follows:

“…On this interpretation of the definition clause, persons buying goods either for resale or for use in large scale profit-making activity will not be ‘Consumers’ entitled to protection under the Act. It seems to us clear that the intention of Parliament, as can be gathered from the definition section, is to deny the benefits of the Act to persons purchasing goods either for purpose of resale or for the purpose of being used in profit-making activity engaged on a large scale. It would, thus, follow that cases of purchase of goods for consumption or use in the manufacture of goods or commodities on a large scale with a view to make profit will all fall outside the scope of the definition. It is obvious that Parliament intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture, which they may have embarked upon in order to make a living as distinct from large-scale manufacturing or processing activity carried on for profit.”

10.Since instant case pertains to the purchase of goods admittedly for ‘commercial purposes’, it is squarely covered by the above judgment of the Hon'ble Apex Court. The State Commission erred in not taking note of this important fact while deciding the complaint. Even otherwise, we note that the Respondent-Complainant has not been able to produce any evidence, including that of an expert to indicate that there was any manufacturing defect in the vehicle. We also note that whenever there was any problem with the vehicle either because of normal wear and tear or following accidents, these were promptly attended to by the Appellants and there was no deficiency in service in this respect.

11.In view of the above facts and respectfully following the judgment of the Hon'ble Supreme Court in Laxmi Engineering Works (supra), we are unable to uphold the order of the State Commission and set aside the same. The present first appeals are, therefore, allowed. No cost




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