Is floodwater damage to car covered under warranty? Supreme Court stays NCDRC order

The Supreme Court on Friday stayed a National Consumer Dispute Redressal Commission (NCDRC) order which had held that damage to car on account of rainwater during floods is covered by warranty [The Branch Manager OSL Hyundai vs Ruparanjan Das and ors]..A Bench of Justices Hemant Gupta and V Ramasubramanian issued notice in the matter after car manufacturer Hyundai challenged an order of the NCDRC. The petitioner contended that damage to the car on account of flood water entering the vehicle is not covered by warranty and NCDRC erred in coming to such a conclusion. "Learned counsel for the petitioner contends that the car got damaged during floods when the rainwater entered the vehicle. The damage on account of such incident is not part of warranty and the authorities have completely erred in law in allowing the cost of the car to the complainant. Issue notice. In the meantime, there shall be stay of the operation of the impugned order," the Court said in its order..The Court was hearing an appeal which said that the petitioner-company would suffer "grave loss and injury" if the liability for flood damage continues to be imposed on it. The NRDRC had upheld the order of fora below which had ordered the company to repair the vehicle free of cost and also to pay compensatory interest at 12 percent on the cost of the vehicle (₹10 lakh) till the vehicle was repaired and handed over to the complainant. The NRDRC essentially said that rainwater could have entered the vehicle and caused damage only on account of manufacturing defects, which the company was liable to fix for free as the car was covered by the warranty period. It thus upheld the orders of State Consumer Redressal Commission and District Consumer Forum in this regard. .The petitioner submitted that at the time the respondent sent the damaged car for repairs to one of the dealers, the company had ceased to play any role in servicing the vehicle. The plea said that the District Commission in its order had categorically held that from the pleadings on record there was no evidence, expert opinion or conclusive finding that there was any inherent manufacturing defect in the Car. Nevertheless, the District Commission held the petitioner liable for repairs even though the complainant never approached the petitioner for any repairs/defects, the plea said.The same was upheld by State and National Commission.The petitioner contended that the the NCDRC erroneously held that if any manufacturing defect has occurred, then it was liable to be repaired free of cost by the Petitioner, without taking into consideration the facts and circumstances of the case.The following questions of law were inter alia raised by the petitioner:- Whether the Hon’ble National Commission was justified in coming to a conclusion that the Petitioner is liable to repair the manufacturing defect when the District Commission in its order has held that on perusal of documents on record there is no inherent manufacturing defect? - Whether the Hon’ble National Commission was justified in coming to a conclusion that the Petitioner was liable to repair manufacturing defect when there are no findings of latches or deficiency of service against the Petitioner? .Advocates Sriram Parakkat, Rajinish Sinha, Bhagya Bhatia, Shreya Kohli, Pawan Kumar Dabas, Muskaan Garg, and Prerna Robin appeared for the petitioner. Advocates SS Nehra, Prafulla Kumar Behera, Vikrant Nehra, Saloni Singh, Rahul Nehra, and Nisha Rani appeared for the respondents. [Read order]