Defective Vehicles: The Law And You

Updated: Apr 4 2004, 05:30am hrs
Many persons invest in a vehicle to take advantage of the depreciation available to them and the consequent tax benefits. Unfortunately, sometimes a vehicle turns out to be defective. In this article, I will deal with certain interesting judgements on the subject.

Case 1: When there are defects which are not manufacturing defects, is a consumer entitled to claim a replacement of the vehicle or a refund of its price This question was decided in the case of Tata Engineering & Locomotive Co Ltd & Anr vs M Moosa, where the National Consumer Disputes Redressal Commission held that even if there are numerous defects, but these are of a trivial nature which can be repaired, and are not manufacturing defects, then it would be hard on the manufacturer if replacement or refund is ordered.

The satisfaction notes signed by the consumer after the repairs would establish the fact that there are no manufacturing defects. Hence replacement or refund cannot be ordered.

Case 2: In the case of Scooters India Limited & Anr v/s Madhabananda Mohanty & Ors, the National Commission laid down certain general principles and criteria for determining when a vehicle ought to be replace or its price refunded. The Commission observed that when a consumer buys a new vehicle he is under the impression that a new vehicle is bound to be mechanically perfect or that a brand new vehicle would be defect free.

A new vehicle could be deficient as well. It could be that some errors are insignificant but there may be many others which substantially impair use of the vehicle. If the vehicle is defective a consumer has a right to seek its replacement or refund of the price. Though the burden to prove the defect would be on the consumer, yet it must be understood that consumer is not bound to pinpoint the precise nature of defects or its cause or source.

The warranty which is given for a vehicle is a warranty for whole of the vehicle and when it is found that the vehicle does not perform properly the warranty would be taken to have been breached even if no individual part could be identified as defective. It is not always necessary for the consumer to give expert testimony though if he does so it will add to the weight of the evidence.

However, it must be shown that the use of the vehicle has been substantially impaired on account of the defects. If the defects are insignificant then no case could be made for replacement or refund. A consumer forum has to take into consideration a consumers state of mind as well. After all a consumer invests in the new vehicle to buy peace of mind hoping that the vehicle is dependable and trouble free.

However, before then coming to a consumer forum, the consumer must first give notice to both to the dealer and manufacturer and both of them must be given reasonable opportunity to repair the defect if it is not an inherent manufacturing defect. It is not that consumer has to take the vehicle to the workshop time and again for repairs to be carried out. It must also be understood that vehicle has to be returned for repair to an authorised dealer and not to the distant manufacturer itself.

For this purpose manufacturer must maintain sufficient repair facilities reasonably close to all areas where the vehicles are sold. As a matter of fact accessibility of repair facility is implicit when a new vehicle is sold.

Case 3: In the initial stages of the evolution of the law of consumer protection, it was considered that the dealer was not responsible for any manufacturing defect. However, the situation has now changed with the judgement of the National Commission in the case of Marikar (Motors) Ltd vs Lalan Carmu & Anr. In this case, the National Commission observed that when the dealer was an independent person who received payment from the consumer and sold the vehicle, then the dealer and the manufacturer would be jointly liable if the vehicle was found defective.

The dealer is not entitled to shift the blame wholly onto the manufacturer. It is for the dealer and the manufacturer to sort out the matter between them. As far as the consumer is concerned, when consideration is paid to the dealer, the dealer is liable to either replace the vehicle or to refund the price, and for this purpose the defective vehicle has to be returned to the dealer.

Case 4: In the case of Jose Philip Mampillil vs Premier Automobiles Ltd & Anr, the Supreme Court observed that it was shameful that a defective car was sought to be sold as a brand new car. It is further regrettable that, instead of acknowledging the defects, the manufacturer chose to deny liability and contest the matter. Consequently it was ordered that the consumer would get the vehicle repaired at any garage of his choice at the cost of the manufacturer.

In addition the consumer was awarded compensation of Rs 40,000 and costs of Rs 50,000 for being required to litigate right from the District Consumer Forum till the Supreme Court. It is common practice for dealer to ask the customer to sign and take delivery of the vehicle when it is given for repairs. People tend to blindly sign without reading what they are signing.

Consequently, without even checking the vehicle, the consumer signs that he is satisfied with the repairs! This very signature is used against him by the manufacturer to claim that there is no manufacturing defect but only a minor defect.

Hence, be careful when you sign and realise the importance of reading what you are signing. If you have to sign, put an endorsement that you have not taken a trial or that your satisfaction depends upon the performance of the vehicle on the road and cannot be communicated immediately.

You have to build up your case. Otherwise, after fighting a legal battle, you will still continue to be saddled with a defective vehicle.

The author is an award-winning consumer activist and will answer readers queries in FE Investor. Send in your queries to