The Lack Of Lemon Laws In India Is Really Squeezing The Juice Out Of The Automobile Owners!

The Lack Of Lemon Laws In India Is Really Squeezing The Juice Out Of The Automobile Owners!

NO, this is not a food column, the 'lemon' I am talking about is the 'car' you bought only to discover that what you now possess does not perform or meet your expectations, or the car that spends more time in the workshop than on the road. The year 2018 can rightly be attributed as 'the year of recalls' for the automobile industry, as according to the statistics revealed by Society of Indian Automobile Manufacturers (SIAM), total vehicles recalled by the automobile industry in between January 2018 - May 2018, surpassed the total vehicle recall of that of 2017. Use of substandard product or faulty component in a vehicle is one of the main reasons for Automobile manufacturers to order a recall. BMW India, Mercedes-Benz India, Toyota Kirloskar, and Honda Cars India were among the major companies ordering vehicle recall. Vehicles were recalled mainly due to a defect in untimely inflation of airbags or a malfunction in its deployment or sudden engagement of neutral gear when the vehicle is in motion and loss of control of the vehicle in high speed
[1]. Maruti Suzuki also recalled almost 52,000 units of newly launched Swift and Baleno due to defective brake vacuum hose[2]; defect in this part can lead to an increase in the stopping distance or a possible brake failure. Earlier also in 2012, many Maruti Swifts were recalled due to its braking issue where the car won't stop in bumper-to-bumper traffic
[3]
. Although, Automobile industries boast of this exercise as a goodwill gesture and commitment towards the safety of their consumers; but a question arises, that how those substandard parts did got installed into the affected vehicle in the first place? All of these defects mentioned possess serious hazards to the driver as well as occupants of the vehicle. With such unsafe vehicles plying on Indian roads and India surpassing almost every nation in road deaths, who will fix the responsibility of these manufacturing companies for putting such defective vehicles on road? Why the number of 'total vehicles recalled' is on the rise, year by year? Who will provide the remedies to a consumer if in case he is duped into buying a defective vehicle? The answer lies in the framing and successful implementation of 'Lemon Laws'.

The United States, in 1975, enacted 'Magnuson-Moss warranty act' commonly known as 'lemon laws', these laws provide a remedy to the purchasers of cars and other consumer goods if the purchased product fails to meet the quality of standard and performance. Such as, Californian 'lemon laws' presume a vehicle to be 'lemon' when, (a) the vehicle has been sent to dealer two or more than two times for repairs, during the first 18 months, or 18,000 miles whichever comes first; (b) it should substantially impair the use, value or safety of the vehicle; (c) the defect is such that so as to cause the death or injury; (d) the defect has been directly notified to the manufacturer. If a vehicle is presumed to be 'lemon', then the buyer is entitled to get his/her car replaced, or a full refund of the vehicle's cost along with the court's remedies. Therefore, this law clearly holds the manufacturer strictly liable if any of the above condition arises which is quite evident in some of the mentioned cases. In 1992, a St. Petersburg's Rolls-Royce owner was awarded $ 144,541.30 under the State's Lemon law arbitration program
[4] because of the malfunctioning of warning lights in the instrument panel and even after several visits to workshop the dealer was unable to get it fixed. In another case, a resident of Florida was awarded $165,000 as compensation because the instrument panel of his car could not be read in daylight
[5]
.

However, the concept of this strict liability does not work in the Indian scenario and consumer forums and courts give a decision according to the warranty clauses provided by the manufacturer. Take for instance, In Maruti Udyog Ltd. v. Susheel Kumar Gabgotra
[6], the Supreme Court on analysing the case where after repeated repairs the manufacturer was unable to repair the defect in the car, held that warranty was express and provided for only repair/replacement of the defective part and not the entire vehicle; or, in another case wherein Mercedes Benz through its dealer sold a used car (which previously had also met with an accident) to a customer. After noticing several defects in the car the customer approached the Consumer Forum for replacement of the vehicle. On referral to the National Commission, it was held that the complaints relating to the irregularity of the car had been attended to as per the terms of warranty and hence no replacement of the vehicle was allowed
[7]
. Other than these, there have been cases wherein the manufacturer was unable to fix the manufacturing defect in the brakes of the car
[8]
, or in the body of the vehicle, or in the engine of the vehicle, and the court in those cases let go off the manufacturer by ordering to repair the defect and pay a very meager compensation.

Section 110(1)(p) of Motor Vehicles Act, 1988 empowers the central government to make rules and regulation regarding the warranty and its norms after the sale of vehicle, still the authorities act helplessly when any matter comes pertaining to automobiles; this phenomenon is quite evident in the course of progress followed by Indian authorities in the recent Volkswagen's 'dieselgate scandal'. Volkswagen used cheat devices in the diesel engines of Volkswagen, Porsche, Audi, Seat and Skoda brands helping the cars meet exhaust pollution standards when monitored in tests but in real life, their emissions exceeded the limits
[9]. U.S. authorities on the ground of the violation of federal laws and harm to its nature extracted $25 Billion from Volkswagen in the form of fines, penalties, and restitution[10] for the 5,50,000 affected vehicles sold in the US. US authorities also made Volkswagen dealers buy back the cars from the affected car owners. In India too, Volkswagen sold around 3,23,000 affected vehicles
[11]
; However, in India, the matter was recently decided by National Green Tribunal (NGT). Earlier, the tribunal has asked Volkswagen India to deposit an interim amount of Rs 100 crores with the Central Pollution Control Board (CPCB)[12], and has recently ordered VW India to pay Rs 500 crores
[13]
. The laxity by which this scandal is being dealt with by the Indian authorities clearly gives a hint to automobile manufacturers of themselves being in advantageous position so as to exploit Indian consumers with no concrete remedy at their disposal.

Lack of strong lemon laws, product liability statutes and punitive deterrence has boosted the morale of these manufacturers, who have started treating India as a dumping ground. Are Indian customers the son of a lesser god who are being sold a piece of junk even after paying a hefty premium in comparison to the same model sold abroad? In the recent decade, there has been a total breakthrough in the technological advancements of automobiles. Automobiles are now coming with hi-tech features such as self-driving, self-parking and many more. New-generation automobiles are also coming equipped with gasoline-ethanol blend ready engines or hybrid engines. These technologies are quite generous to nature but have a very complex mechanism. Now a question arises that whether we have laws to protect the consumer if they invest in these automobiles and later face problems because of these still nascent technologies? Do we have proper forum or mechanism at our disposal to protect the consumers from getting duped if these cars are unable to adapt in Indian road conditions?

The need of the hour is a tough deterring law that makes the manufacturer liable for the defects in the vehicle and which does not get entangled in the complexities of their deceptive warranties; and, also to prevent them from manufacturing and selling defective products in India. South Korean's government recent decision to fine BMW 11.2 billion won (USD 9.9 million) and to file a criminal complaint against the company with state prosecutors over an allegedly botched response to dozens of engine fires reported in the country
[14], should encourage India to start taking complaints related to automobiles more seriously.

The author is a 3rd Year Student of Dr Ram Manohar Lohiya National Law University, Lucknow.

[The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of LiveLaw and LiveLaw does not assume any responsibility or liability for the same]


[1] Pratishtha Nangia, 'Vehicle recall doubles in 2018; faulty software emerge as major contributor' (ET Auto, 20 December 2018) https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/vehicle-recall-doubles-in-2018-faulty-software-emerge-as-major-contributor/67142332 accessed 12 January 2019

[2] CarandBike Team, 'Maruti Suzuki Recalls 52,686 Units Of The New Swift And Baleno To Fix Brake Vacuum Hose' (Car and Bike, 8 May 2018) https://auto.ndtv.com/news/maruti-suzuki-recalls-52-686-units-of-the-new-swift-and-baleno-1848794 accessed 13 January 2019.

[3] Ashish K Mishra, 'The New Maruti Swift's Brakes Don't Work' (Forbes India, 23 July 2012) http://www.forbesindia.com/article/special/the-new-maruti-swifts-brakes-dont-work/33388/1 accessed 13 January 2019.

[4] Charlotte Sutton, 'Rolls owner wins $ 144,000 "lemon' complaint', St. Petersburg Times (Florida), Jan 4, 1992, at 1B.

[5]Jay Teixeira Iwanowski, 'Lemon-Aid: Car Buyer Wins $165,000', Palm Beach Post (Florida), Oct 20, 1993, at 1A.

[6] (2006) 4 SCC 644

[7] PTI, 'Rs 2 lakh imposed on Merc India for selling used car', (Economic Times, 6 Feb 2011)

[8] M/s Jaycee Automobiles V Raj kumar Agnihotri, 2016 SCC OnLine NCDRC 1963

[9] 'Five things to know about VW's 'dieselgate' scandal' (Phys.org, 18 June 2018)< https://phys.org/news/2018-06-vw-dieselgate-scandal.html> accessed 13 Januray 2019.

[10] Roger Parloff, 'How VW Paid $25 Billion for 'Dieselgate' — and Got Off Easy' (Fortune, 6 february 2018) http://fortune.com/2018/02/06/volkswagen-vw-emissions-scandal-penalties/ accessed 13 January 2019.

[11] 'Dieselgate: Volkswagen India Asked To Deposit Rs 100 Crore With CPCB' (Outlook, 20 November 2018) https://www.outlookindia.com/website/story/dieselgate-volkswagen-india-asked-to-deposit-rs-100-crore-with-cpcb/320423 accessed 13 January 2019.

[12] ibid

[13] Thomson Reuters, 'Volkswagen India Says Will Contest National Green Tribunal's Rs. 500 Crore Penalty' (NDTV Profit, 7 March 2019) https://www.ndtv.com/business/volkswagen-india-says-will-contest-ngts-rs-500-crore-penalty-2004284 accessed 10 March 2019.