Delivering Defective Car Despite Payment In Full Tantamounts To Dishonesty & Unfair Trade Practice: SC

The Supreme Court has held that not delivering a new car despite the payment of full sale consideration and/or to deliver the defective car can be said to be unfair trade practice.

The Bench of Justice M. R. Shah and Justice Krishna Murari observed that once the new car is booked and the full sale consideration is paid, its car dealer's duty to deliver a new car which is not defective.

In this case, the appellant– original complainant had purchased a Car. He deposited the booking amount with the dealer – M/s. Gold Rush Sales and Services Ltd. against which a receipt was issued. Thereafter the complainant deposited a further sum of Rs.5,30,000/­ towards purchase amount of the said vehicle.

However, the car was delivered to the complainant after a period of one year of deposit of the total amount. According to the original complainant the car was old and it had already run upto 10,000 kms.

The original complainant lodged FIR with the police. However, the matter could not be settled and therefore, the complainant filed a complaint before the District Forum.

The District Forum allowed the complaint and directed the dealer to take back the delivered vehicle and in lieu thereof to deliver a new car to the complainant against the previously deposited amount.

The District Forum specifically gave a finding that the delivered car was used car and was being used as "Demo­Test Drive Vehicle".

The order passed by the District Forum was confirmed by the State Commission.

However, having given the findings that the complainant got a defective car, the National Commission (NCDRC) modified the orders passed by the District Forum confirmed by the State Commission and directed to pay compensation in the sum of Rs.1 lakh to be paid to the complainant.

Feeling aggrieved, the complainant moved Supreme Court.

Advocate Praveen Agrawal appeared for the Appellant whereas Advocate Abhinav Ramkrishna appeared for the car dealer.

The Court noted that the concurrent findings of the District Forum and State Commission was made on appreciation of evidence on record. The Court held that such findings were not required to be interfered by the National Commission in exercise of the revisional jurisdiction.

While observing that the powers of the National Commission are very limited, the Court held thus "Only in a case where it is found that the State Commission has exercised its jurisdiction not vested in it by law, or has failed to exercise the jurisdiction so vested illegally or with material irregularity, the National Commission would be justified in exercising the revisional jurisdiction."

The Court further observed that "…once the new car was booked and the full sale consideration was paid, a duty was cast upon the dealer to deliver a new car which is not defective therefore the District Forum as well as the State Commission were justified in directing the dealer to give delivery of a new car."

Therefore, the Court set aside the Order passed by NCDRC while restoring the Judgment passed by the District Forum as confirmed by the State Commission.

The Court directed the car dealer to deposit costs to the tune of 1 Lakh rupees with the Registry of the Supreme Court.

Cause Title- Rajiv Shukla v. Gold Rush Sales and Services Ltd. & Anr

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