On 18/02/2021, three judge bench of Hon’ble Supreme Court of India has passed its judgment in Civil Appeal No. 574 of 2021, titled Tata Motors Limited VS. Antonio Paulo Vaz and anr., pertaining to the liability of dealer and manufacturer towards a purchaser of car under Consumer Protection Act, 1986. The facts of the case are that one Antonio Paulo Vaz (respondent), bought a car after paying the agreed total consideration price in 2011 to the second respondent, Vistar Goa (P) Ltd, a dealer in car. A 2009 model car which had run 622 kilometres was sold to him in place of the latest model of 2011 make. Vaz, therefore, requested for refund of the price paid or replacement of the car with one of 2011. The price was however not refunded; neither was the car replaced. Vaz refused to take delivery of the 2009 model car. He attempted a resolution of his concern and thereafter, caused a legal notice to be issued to the dealer, as well as the appellant.

The District Forum arrived to the finding that there was a ‘deficiency in service‘ and further held that, the dealer and the appellant (i.e. manufacturer of the car) to be jointly and severally liable. The manufacturer preferred an appeal to the State Commission. The State Commission dismissed the appeal with costs of 5,000/-. It held that Vaz was a consumer as defined under Section 2 (d) (i) of the Act.

National Commission, while upholding the orders of the fora below, has held that, the relationship of the dealer and the appellant in the facts appearing from the record, did not absolve it of liability. Further, that the appellant had indulged in unfair trade practice, for which it was imposed with costs of 2,00,000/- of which 1,00,000/- was to be made over to Vaz and the balance to the Consumer Legal Aid Account of the District Forum within four weeks.

Before Hon’ble Supreme Court, it was contended on behalf of the appellant [manufacturer] that, its relationship with the dealer was not one of agent principal, but rather, principal to principal and that it could not be held liable.

Hon’ble Court has held that, no doubt, the absence of the dealer or any explanation on its part, resulted in a finding of deficiency on its part, because the car was in its possession, was a 2009 model and sold in 2011. The findings against the dealer were, in that sense, justified on demurrer. However, the findings against the appellant, the manufacturer, which had not sold the car to Vaz, and was not shown to have made the representations in question, were not justified. The failure of the complainant to plead or prove the manufacturer’s liability could not have been improved upon, through inferential findings, as it were, which the district, state and National Commission rendered. The circumstance that a certain kind of argument was put forward or a defence taken by a party in a given case (like the appellant, in the case) cannot result in the inference that it was involved or culpable, in some manner. Special knowledge of the allegations made by the dealer, and involvement, in an overt or tacit manner, by the appellant, had to be proved to lay the charge of deficiency of service at its door. In these circumstances, having regard to the nature of the dealer’s relationship with the appellant, the latter’s omissions and acts could not have resulted in the appellant’s liability.”