Car manufacturer not liable for dealer's misconduct: Delhi consumer court

The State Consumer Disputes Redressal Commission (SCDRC) in Delhi recently ruled in favour of Hyundai Motors Limited in a consumer case, holding that the car manufacturer was not responsible for a Hyundai dealer's failure to deliver a Santro car to a customer. .The State Commission was dealing with a case where a dealer failed to deliver a Hyundai Santro car to a customer who had booked the vehicle by paying ₹3.32 lakhs. A coram of SCDRC President Justice Sangita Dhingra Sehgal and Member JP Agrawal said that Hyundai Motors could not be held accountable for the dealer’s misconduct or non-performance as there was no contract or agreement between the customer and Hyundai Motors."Consequently, it is evident that Respondent Nos. 2 and 3 (Hyundai Motors Ltd. and Hyundai Motors India Ltd.) cannot be held liable for any wrongdoing or omissions by the dealer (Suhrit Hyundai). Therefore, the alleged deficiencies on the part of Respondent Nos. 2 and 3 have not been substantiated", the Commission said in its September 2 order. The State Commission in its order also observed that there was no manufacturer-dealer agreement between Hyundai Motors (the head company) and and the dealer (Suhrit Hyundai).The Commission concluded that the dealer could not be assumed to be an agent of the manufacturer and that the relationship between the two was likened to a principal-to-principal (and not a principal-agent) relationship. "...in this case, there is no manufacturer-dealer agreement on record. Therefore, based on the submissions of Respondent Nos. 2 and 3, the court must assume that the agreement is based on a principal-to-principal relationship rather than a principal-to-agent relationship," it said, in this regard. .By way of background, in December 2008, Hyundai Motors India advertised an offer in the Times of India for the public to buy a Hyundai Santro car at a discounted price of ₹2.99 lakhs, along with various other benefits. Attracted by this offer, a man (customer/ complainant) visited Suhrit Hyundai, a showroom in Mayapuri, Delhi (Respondent No. 1) and paid ₹3.32 lakhs in two installments to book the car. He was assured that the car would be delivered by January 31, 2009. However, the delivery was delayed, and he was asked to wait until February 10, 2009. Upon visiting the showroom on that date, he found it had closed down without any notification. The customer immediately lodged a police complaint and contacted Hyundai Motors' head office and customer relations office (Respondents Nos. 2 and 3) to resolve the issue. Despite several complaints and emails, no resolution was provided, and no refund was issued..He then approached the District Consumer Commission, which ruled that the Suhrit Hyundai was liable for the non-delivery of the car and should refund ₹3.32 lakhs with 9 per cent interest. However, it dismissed the complainant's claim against Hyundai Motors Limited (Hyundai Motors' head office and customer relations office) stating that he failed to establish any connection between himself and Hyundai Motors."Though admittedly, they (Hyundai Motors) are the manufacturers of the Santro Cars yet since the booked car has not been delivered by O.P-I (Suhrit Hyundai) to the Complainant despite having received Rs. 3,32,000/- on their own account vide Ex C-2 (Colly), no liability can be fastened in this case on O.P-II and O.P-III (Hyundai Motors' head office and customer relations office) for any deficiency-in-service or sale of the car," the district consumer forum said in its 2015 order. .The complainant challenged this ruling before the State consumer commission, arguing that since Suhrit Hyundai had closed down and could not be located, Hyundai Motors should be held liable for carrying out the district commission’s order. He added that since Hyundai Motors had not terminated their relationship with Suhrit Hyundai, they should bear the responsibility for the failure to deliver the car.The State Commission, however, disagreed since there was no contract between Hyundai Motors and the customer. Therefore, it dismissed the appeal..Advocate Kapil Chawla appeared for the complainant-appellant. .[Read Order]