Manufacturer, Not Dealer, Liable To Refund Purchase Amount In Case Of Manufacturing Defects: Chandigarh State Consumer Commission

The State Consumer Disputes Redressal Commission, U.T. Chandigarh, comprising Justice Raj Shekhar Attri (President) and Mr. Preetinder Singh (Member), has held that where a vehicle suffers from inherent manufacturing defects, the liability to refund the purchase consideration lies with the manufacturer and not the dealer. While allowing a review application, the Commission observed that directing a dealer to refund the cost of a vehicle suffering from manufacturing defects amounts to an error apparent on the face of the record, warranting review under Section 50 of the Consumer Protection Act, 2019. Brief Facts The complainant, Karan Bansal, purchased a Jeep Compass in 2022, which allegedly suffered from persistent defects. An independent expert report by the Punjab Engineering College (PEC), Chandigarh, confirmed that the vehicle was suffering from inherent manufacturing defects. As the defects remained unresolved, the complainant approached the State Consumer Disputes Redressal Commission, Chandigarh. The Commission directed refund of the purchase price after deducting depreciation, along with interest, compensation and litigation costs. However, the liability to refund was fastened upon the dealer, WSL Automobiles Pvt. Ltd. (Opposite Party No.2). Aggrieved, the dealer filed a review application contending that once a manufacturing defect is established, refund liability can only be imposed on the manufacturer, Stellantis India Private Limited (Opposite Party No.1). Arguments The dealer argued that under the doctrine of product liability, only the manufacturer can be held liable for manufacturing defects. Reliance was placed on the National Commission's decision in Tata Motors Limited v. Harpreet Singh and the Supreme Court's ruling in Hindustan Motors Ltd. v. N. Siva Kumar. The manufacturer and the complainant opposed the review, contending that the original order was well reasoned and did not warrant interference. Decision Allowing the review, the Commission clarified that an “error apparent on the face of the record” refers to an obvious mistake that does not require extensive reasoning. Referring to Section 84 of the Consumer Protection Act, 2019, the Commission held that in cases of manufacturing defect, primary liability squarely rests on the manufacturer. Accordingly, the Commission modified its earlier order and directed Stellantis India Private Limited to refund Rs. 23,71,581/- (after deducting 10% depreciation from the total cost of Rs. 26,35,090/-) along with 12% interest per annum from 11.05.2022. In the event of default, the manufacturer would be liable to pay 13% penal interest. The manufacturer was also directed to pay Rs. 75,000/- as compensation and Rs. 35,000/- as litigation costs, failing which the amounts would carry 9% penal interest. The complaint against the dealer was dismissed. Case Title: Karan Bansal v. Stellantis India Private Limited & Ors. Case No.: Review Application No. SC/4/RA/17/2025 in CC No. 23/2024 Click Here To Read/Download Order

Manufacturer, Not Dealer, Liable To Refund Purchase Amount In Case Of Manufacturing Defects: Chandigarh State Consumer Commission

Apoorva Pandita

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