NATIONAL CONSUMER DISPUTES REDRESSALCOMMISSION

NEW DELHI

 

 

REVISION PETITION NO. 1363 of 2003

(From the order dated 17.2.2003 in S.C. Case No. 473/A/98 of the State Commission, West Bengal)

 

 

Ashoke Khan                                                                Petitioner

 

Versus

 

Abdul Karim & Ors.                                             Respondents

 

 

BEFORE :

                        HON’BLE MR. JUSTICE M.B.SHAH, PRESIDENT.

                        DR. P.D. SHENOY, MEMBER.

 

For the Petitioner                  :           Mr. Pijush Kanti Roy, Advocate.

 

For the Respondents            :          Mr. D.N. Ray, Advocate

 

DATE :   30th     AUGUST, 2005

O  R  D  E  R

 

M.B.SHAH, J. PRESIDENT.

 

                   The say of the Petitioner is that he is an authorised dealer of M/s. Bengal Tools Ltd. which is dealing in the sale of power tillers used for the purpose of agriculture and also as a carrier under the name and style of ‘Krishi Pragati’. Respondent No.1 (Complainant) approached the Petitioner for purchasing the ‘power tiller’ after obtaining a loan of Rs.70,000 from the State Bank of India, Murshidabad,  by mortgaging the land. The price of the power tiller was Rs.80,000/-. The power tiller was delivered on 27.3.1996, which was hypothecated with the Bank.

                   It is the contention of the Complainant that on taking the delivery of the power tiller, it was noticed that it had developed snags. Therefore, the Complainant approached the Petitioner (the  dealer) for repair of the same, during the warranty period. The Petitioner sent  mechanics on several occasions to repair the said tiller, but the defects could not be removed. It is also contended that on 23.1.1998 one mechanic of the Petitioner took away some valuable parts of the said power tiller. The Complainant failed to get any relief from the Petitioner and the Respondent No.2, the manufacturer, M/s. Bengal Tools Ltd., therefore, filed Complaint Case No. 18 of 1998 before the District Consumer Disputes Redressal Forum, Murshidabad. The District Forum arrived at the conclusion that the Petitioner was the authorised dealer of Respondent No.2, the manufacturer;  by its letter dated 29th December, 1998, the dealer admitted that the power tiller was not performing normally;  and,  it was not of standard quality.  On the basis of the correspondence, the District Forum arrived at the conclusion that immediately after purchase of the said tiller it developed some snags and during the warranty period some materials were also supplied.  Considering the aforesaid facts, by judgment and order dated 31.8.1998, the District Forum allowed the complaint and directed the dealer and the manufacturer (Petitioner and Respondent No.2) to jointly and severally return the consideration money after deducting 10% towards depreciation for the use of the said power tiller.

                    Admittedly, the order passed by the District Forum was not challenged by the manufacturer nor any revision application was filed by it.

                   Against that judgment and order, the dealer preferred Appeal No.478/A/98 before the State Commission.  After considering all the relevant facts, the State Commission dismissed the appeal with a direction that the amount shall be paid to the bank as the power tiller was hypothecated with the Bank.

                    Aggrieved by the judgment and order of the State Commission, the dealer has filed the present revision petition.

                   Learned Counsel appearing for the Petitioner (the dealer) submitted that for the manufacturing defects the dealer cannot be held  jointly and severally liable  to pay any compensation to the Complainant. For this purpose, he relied upon the observation of the Apex Court in Hindustan Motors Ltd. & Anr. Vs. N. Sivakumar & Anr. (2000) 10 SCC 654, which reads as under:

 

“We have heard learned counsel for the parties.

 

Leave granted.

 

Learned Senior Counsel appearing on behalf of the appellants has stated before us and it is also mentioned in the synopsis of facts given in the special leave petition that M/s Hindustan Motors who are the appellants before us have stopped manufacturing Ambassador NOVA model cars and, therefore, the order of the National Commission that a new car be supplied to the respondent cannot be complied with.

 

In this situation, we are left with no alternative except to direct that the order passed by the State Commission for the refund of Rs.1,77,200 along with interest at the rate of 12 per cent from the date of the complaint till actual payment, together with a sum of Rs.50,000/- as compensation for mental pain and agony, be complied with as we are fully satisfied, on the facts of the case, that the appellants had sold a defective car to the respondent and the offer of the appellants for repairs including replacement of a new engine block will not be a substitute for a new car which the respondent legally deserves to be supplied. The order of the State Commission for payment of Rs.3000 towards costs is also maintained.

 

The observations of the National Commission to the following effect:

“An apprehension has been expressed by the dealer that the burden of this may ultimately fall upon the dealer. We make it clear that for the manufacturing defects in the vehicle, the dealer cannot be held liable. The liability must be borne by the manufacturer.”

are also maintained.

 

The appeal is disposed of accordingly.”

 

                   As against this, Mr. Ray, learned Counsel for the Respondent No.1 (Complainant) submitted that the orders passed by the District Forum and the State Commission are justified on the facts, as agent / dealer and the manufacturer are jointly and severally liable because the purchaser of the vehicle knows the dealer and not the manufacturer.   The privity of contract is between the dealer and the purchaser. He also submitted that under the Contract Act dealer or agent would be jointly and severally liable. For this purpose, reliance is placed on Sections 226 and 237 of the Contract Act.    In support of his contention he has also placed reliance on the decision of the Apex Court in Jose Philip Mampillil Vs. Premier Automobiles Ltd. & Anr. (2004) 2 SCC 278, the relevant portion is as under:

“8. In our view, it is 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 1st respondent chose to deny liability and has contested this matter. For this failure in service the appellant is entitled to the following reliefs:

 

(a)              “…..The liability to pay the repair cost will be joint and several of both the respondents. The 2nd respondent is being held jointly liable as it was the duty of the 2nd respondent to have refused to deliver a defective car and in any case to have properly repaired the car during the warranty period…..”

(b)             It is clarified that the liability to pay is, as stated above, joint and several. In the event of the amount not being paid forthwith, the District Forum shall ensure execution expeditiously and immediately, if necessary, by making the 2nd respondent pay initially. It will then be for the 2nd respondent to claim reimbursement from the 1st respondent, if in law they are entitled to do so.

(c)              There is no doubt that the appellant has had to suffer mental agony in taking delivery of a defective car after having paid for a brand new car and in taking the car again and again to the dealer for repairs. For this mental agony and torture, we direct that the appellant shall be entitled to a sum of Rs.40,000. The liability to pay this amount shall also be joint and several of both the respondents. This amount is to be paid within a period of one month from today. The District Forum shall ensure payment, if necessary, by execution.

(d)                 The 1st respondent had unnecessarily filed an appeal before the State Forum. …. We, therefore, direct the 1st respondent to pay to the appellant by way of costs a sum of Rs.50,000/-.

 

                    The aforesaid subsequent judgment rendered in  Philip Mampillil Vs. Premier Automobiles Ltd. & Anr. (Supra) makes the position clear that dealer/agent and manufacturer would be jointly and severally liable.    Further, considering the provisions of Section 226 of the Contract Act, it cannot be said that agent or dealer is not jointly and severally  liable for the defects in the ‘power tiller’,  as the contract is through the dealer.  Therefore, privity of contract is with him. It is true that normally such liability with regard to the manufacturing defects is to be borne by the manufacturer.  But, that would not mean that the dealer is absolved from joint and several liability.    As held in the aforesaid case the District Forum shall ensure  execution expeditiously and immediately, if necessary, by making the petitioner to pay  initially and, then, it will be for the petitioner to claim reimbursement from the manufacturer (Respondent No.2).

 

                   In the result, the Revision Petition is dismissed. There shall be no order as to costs.

                                                                                    Sd/-

                                                                   ………………………...J.

                                                                   (M.B.SHAH)

                                                                   PRESIDENT

 

                                                                                                         Sd/-

                                                                   ……………………….….

                                                                   (P.D.SHENOY)

                                                                   MEMBER