Vehicle warranties and Consumer Law in India

BMW 20 d

Every new and used car purchased through the relevant vehicle sales agreement contains warranties
about the mechanical soundness, road worthiness and performance capabilities of the vehicle
amongst others. These agreements also list the circumstances in which such warranties could be
limited or denied to the owner, for example for damage to the vehicle which results from negligent
use, improper operation and improper or unauthorised repair, lack of or improper maintenance,
environmental influences, flood, accident etc.

Owners are also provided with detailed user manuals on proper car use and maintenance, failure to
adhere to which also, such manufacturers deny or limit their liability for an alleged breach of
vehicle warranty. However where negligence or misuse of the vehicle is denied and the
manufacturer’s assurances and warranties fail the owner post-sale, what are the options left to the
suffering car buying consumer.

The Consumer Protection Act, 1986

In addition to other possible civil law remedies, the Consumer Protection Act, 1986 (the Act) through
the appropriate Consumer Dispute Redressal Agency (District Forum, State Commission or
National Commission depending on appropriate jurisdiction set by location of cause of action, claim
amount etc.) may provide some ready and efficient solutions to the consumer for such paid-for
defective goods and/or deficient services and possibly restrictive and unfair trade practices for any
false or misleading statements, warranties and assurances.

The Act defines key words like “defect”, “deficiency”, “service” and “unfair trade practices”. These
cover matters like any fault, imperfection or shortcoming in the quality, quantity, potency, purity,
nature or standard of goods and manner or time for performance of services (required by law or
implied/express terms of a contract or as represented). Further, “unfair trade practice” has been
defined to include misleading and false statements, representations and warranties and other unfair
methods or deceptive practices on the public and consumer for the purpose of promoting the sale,
use or supply of any goods or for the provision of any service.

Waterlogged-Cars

Complaint and Procedure

The consumer who has acquired or is authorised to make use of such paid-for goods and services for
non-commercial and private use purposes, may through a complaint in writing along with
supporting documents and affidavits (if required) evidencing defective goods and/or deficient
services and/or unfair trade practices can file after payment of prescribed court fees, the written
complaint against the seller, trader, manufacturer or service provider (as the case maybe) with the
appropriate Consumer Dispute Redressal Agency for relief.

Sec.24A of the Act prescribes a limitation period of 2 years from the date of cause of action (reason
for the complaint) which could be extended for “sufficient cause” shown in an appropriate case.
Subject to a hearing and adjudication on the complaint so filed and subsequent to a reply or written
statement (if any) against the complaint by the opposite party, if the complainant’s case is made out,
the nature and quantum of relief found legally justified could take the form of monetary
compensation for loss, injury or damage suffered, repair or replacement of goods, removal of
defects, repayment of price paid, withdrawal or non-manufacture of hazardous goods etc.

Rain Check

Recent Case Law on alleged mechanical defect caused by water damage “hydrostatic lock” in
a premium car, onus on complainant to substantiate mechanical damage and unreasonable
repair costs within warranty period not justified

Delhi State Consumer Disputes Redressal Commission decision
Alok Gupta vs Bmw India Pvt. Ltd. on 14 March, 2013

(Please click to view complete judgement.)

Important features:

  • The defect of hydrostatic lock occurs when driving is undertaken in waterlogged area and
    conditions where the water is above the level of the air intake system or the cars speed is
    excessive, creating a tall bow wave. While driving in waterlogged area, the speed of the car
    has got to be slowed and it has to be driven slowly and cautiously.
  • Vehicle had been driven against the instructions contained in the Manual Book and also the
    instructions and advice given to the buyer at the time of purchase, resulting in hydrostatic
    lock damage.
  • Damage caused to the engine was a user related damage, it is not covered under the
    warranty. It was not the case of manufacturing defect and therefore it was not covered under
    the terms of warranty. Under the circumstances, there was no question of any replacement of
    the car.
  • Mere fact that vehicle was taken to service station for one or two times does not ipso facto
    prove manufacturing defect. Onus was on the complainant to prove his case of alleged
    mechanical defect by an expert opinion or some kind of reliable evidence, mere allegation is
    not enough.
  • It is also undisputed that the car was within the warranty period. It was a costly luxury car
    and under the circumstances, if the car was towed to the workshop of the dealer, it was his
    duty to attend the problem free of cost and to make it road-worthy. The demand of a sum of
    Rs. 2-3 Lacs for its dismantling and repair was unjustified and amounted to deficiency of
    service and also amounted to adopting unfair trade practice.
  •  The Evidence Act or Civil Procedure Code are not applicable to proceedings before
    Consumer Courts. Disputes are to be decided on the yardstick of reasonableness and
    probability. Principles of Natural Justice do apply in full force.

 

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Author: Anand Chaudhuri

Anand is an Advocate and Solicitor with Chaudhuri & Associates. Check out his work at MinusTax.com.

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