Car Dealer’s Failure To Refund Booking Advance After Indefinite Delay Is Unfair Trade Practice: Kerala Consumer Commission
Pranav B Prem
The District Consumer Disputes Redressal Commission, Ernakulam has held that a car dealer’s failure to refund the booking advance after cancelling a vehicle booking due to an indefinite delay in delivery amounts to deficiency in service and unfair trade practice under the Consumer Protection Act, 2019. The Commission directed the dealer to refund the advance amount along with interest and also awarded compensation and costs to the consumer.
The order was passed by a Bench comprising D.B. Binu (President), V. Ramachandran (Member) and Sreevidhia T.N. (Member) in a complaint filed by Noble Mathew, a resident of Kothamangalam, Ernakulam district. The complaint was instituted under Section 35 of the Consumer Protection Act, 2019.
The complainant had booked a Mahindra Thar SUV with the opposite party, M/s Pothen Autos, on July 18, 2022, by paying a booking advance of ₹21,000 from his bank account. Subsequently, he came to know that the delivery of the vehicle would be indefinitely delayed due to internal issues of the dealer. In view of the uncertainty and delay, the complainant cancelled the booking and requested a refund of the advance amount. Thereafter, he purchased the same model vehicle from another authorised dealer.
Despite repeated telephonic requests and a written communication seeking refund, the opposite party failed to return the booking amount. The complainant further stated that the dealer’s office in the Ernakulam district had been closed down, leaving him with no effective remedy. Aggrieved by the continued non-refund, he approached the Consumer Commission seeking refund of the advance amount with interest, compensation for mental agony and hardship, and costs of the proceedings.
Notice was issued to the opposite party, which was duly served. However, the dealer failed to file a written version within the statutory period and did not appear before the Commission. Consequently, the opposite party was set ex parte, and the matter proceeded on the basis of the complainant’s evidence.
The complainant produced documentary evidence, including bank transaction details evidencing payment of the booking amount and a copy of the letter sent to the dealer requesting cancellation and refund. The Commission noted that the complainant’s affidavit and documents remained unrebutted in the absence of any defence from the opposite party.
On the issue of maintainability, the Commission held that the complainant squarely fell within the definition of a “consumer” under Section 2(7) of the Consumer Protection Act, 2019, as the vehicle was booked for personal use. It further held that the opposite party, being an authorised vehicle dealer, was providing “service” within the meaning of Section 2(42) of the Act.
Examining the merits of the case, the Commission found that there was no material on record to show that the vehicle was delivered to the complainant or that the dealer was entitled, under any contractual clause, to retain the booking advance after cancellation. It observed that retaining the booking amount without delivering the vehicle within a reasonable time or refunding the amount upon cancellation clearly amounted to deficiency in service and unfair trade practice.
The Commission observed: “In the present case, the Opposite Party has not only failed to deliver the vehicle within a reasonable time but also refused/omitted to refund the booking advance after cancellation. No explanation is forthcoming as to how they can lawfully retain the amount. Such conduct is squarely covered by the aforesaid principles and clearly amounts to a deficiency in service and unfair trade practice… Once it is found that the Opposite Party has retained the booking amount without either supplying the vehicle or refunding the amount upon cancellation, the complainant is entitled to be restored, as far as money can do it, to the position he would have been in had the Opposite Party acted lawfully, in line with the principle of restitutio in integrum.”
The Commission also noted that the opposite party’s failure to file a written version despite due service of notice justified drawing an adverse inference against it. The unrebutted evidence produced by the complainant was found to be cogent and reliable. Taking into account the mental agony, hardship and financial loss suffered by the complainant due to the unjust retention of his money and the need to pursue avoidable litigation, the Commission awarded compensation and costs.
Accordingly, the Commission directed the opposite party to refund the booking advance of ₹21,000 to the complainant along with interest at the rate of 12% per annum from July 18, 2022, till the date of realisation. It further awarded ₹10,000 as compensation for deficiency in service and unfair trade practice, and ₹5,000 towards costs of the proceedings. The amounts were directed to be paid within 45 days from the date of receipt of the order, failing which additional interest would be payable as specified in the order.
Cause Title: Noble Mathew v. M/s Pothen Autos
Case No: CC. No. 943 of 2023
Coram: D.B. Binu (President), V. Ramachandran (Member) and Sreevidhia T.N. (Member)
