Once Defect Is Noticed Within Warranty Period, Both Dealer & Manufacturer Are Jointly Liable For Deficiency In Service: J&K&L High Court

Highlighting the legal obligations of both dealers and manufacturers to resolve defects within the prescribed warranty period the Jammu and Kashmir and Ladakh High Court has held that once a defect is identified within the warranty period, both the dealer and the manufacturer are jointly and severally liable for the deficiency in service.

In fastening the liability on the dealer and the manufacturer and while affirming a compensation order passed by consumer commission Justices Sanjeev Kumar and Sanjay Parihar observed,

“.. The dealer acts on behalf of the manufacturer for maintenance and service. It is not the appellant's case that the defect surfaced after expiry of the warranty. Once the defect is noticed within the warranty period, both dealer and manufacturer are jointly and severally liable for the deficiency in service”

The matter before the Court pertained to a complaint filed by one Mohammad Ashraf Khan, the complainant, who purchased an SX-4 motor car from an authorized dealer of Maruti Suzuki India Limited. After taking delivery of the car, Khan noticed persistent vibrations in the first and reverse gears, a defect that the dealer failed to rectify despite several attempts. Frustrated by the continued unresolved issue, the complainant approached the Jammu and Kashmir Consumer Disputes Redressal Commission (the Commission) seeking redress.

Initially, only the authorized dealer was named as the respondent in the complaint. However, after receiving an ambiguous report from the State Motor Garages which indicated a possible manufacturing defect, the Commission decided to implead Maruti Suzuki India Limited, the manufacturer, ensuring they were given a chance to present their side of the case.

Despite the dealer and manufacturer presenting reports claiming the vehicle was in proper working condition, the complainant produced a report from the Government Polytechnic College, which confirmed the vibration issue and pointed to a manufacturing defect. The Commission found the evidence from the complainant's side more credible, stating, "the persistent nature of the defect, combined with the dealer's failure to address the issue effectively, clearly demonstrated the presence of a manufacturing flaw."

After considering all the evidence, the Commission ruled in favor of the complainant, directing Maruti Suzuki India Limited to either refund the amount of ₹7,00,000 along with ₹5,000 as litigation costs, or replace the defective vehicle with a new one, in which case the complainant would only need to pay the difference, if any, between the original and new vehicle prices.

Maruti Suzuki appealed the decision, raising two key arguments. First, it submitted, that there was no reliable evidence to substantiate the claim of a manufacturing defect, and second, that the Commission had erred in impleading the manufacturer after the proceedings had commenced, causing prejudice. However, after scrutinizing the record the bench while dismissing the appeal, upheld the Commission's decision.

The Court observed, "Once a defect is noticed within the warranty period, both the dealer and the manufacturer are jointly and severally liable for the deficiency in service." It also emphasized that the warranty agreement binds both parties, stating, "The manufacturer is under an obligation to repair or replace the defective component within the warranty period, and to deny this responsibility would be to render the warranty clause meaningless."

Further, the Court clarified that the mere submission of reports by the manufacturer, without addressing the findings of independent experts, was insufficient. The bench remarked,

"Having been duly notified and afforded ample opportunity to rectify the defect, the manufacturer cannot evade liability on the grounds of ignorance or lack of opportunity."

The court also noted the critical role of the dealer in representing the manufacturer for service and maintenance. The Court stated,

"The dealer acts on behalf of the manufacturer for maintenance and service, and in this case, both the dealer and the manufacturer are equally responsible for failing to rectify the defect within the warranty period."

In affirming the Commission's order, the Court reinforced the consumer's right to seek redress when defects persist within the warranty period, making it clear that both the dealer and the manufacturer are accountable for failing to resolve such issues.

“We accordingly find no reason to differ with the view taken by the Commission in the impugned order and find no infirmity or illegality in the order passed by it”, the court remarked and dismissed the appeal.

Case Title: Maruti Suzuki India Ltd Vs Mohammad Ashraf Khan

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