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, which can be corrected in review proceedings under Section 50 of the Consumer Protection Act, 2019.
The complainant, Karan Bansal, purchased a Jeep Compass in 2022, which allegedly suffered from persistent defects. An independent expert report of a duly constituted committee of mechanical engineers from Punjab Engineering College, Chandigarh, found that the vehicle was suffering from inherent manufacturing defects. Based on repeated service records, unresolved issues, and the expert report, the Commission in its main order had 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. Aggrieved by the direction, the dealer filed a review application contending that once a manufacturing defect is established, the liability to refund can only be imposed upon the manufacturer, Stellantis India Private Limited, and not on the dealer.
The dealer argued that under the doctrine of product liability, the primary responsibility for a manufacturing defect lies with the manufacturer. Reliance was placed on the decision of the National Commission in Tata Motors Limited v. Harpreet Singh and the judgment of the Supreme Court in Hindustan Motors Ltd. v. N. Siva Kumar, wherein it was held that in cases of manufacturing defects, the manufacturer alone is liable and not the dealer.
The manufacturer and the complainant opposed the review, contending that the Commission’s earlier order was well reasoned and did not suffer from any illegality or error.
The Commission explained that an “error apparent on the face of the record” refers to a clear and obvious mistake in a judicial decision that can be identified without extensive reasoning. It observed that such an error is one that is self-evident and can be recognized immediately upon review of the record.
Referring to Section 84 of the Consumer Protection Act, 2019, the Commission noted that a product liability action can be brought against a manufacturer, seller, or service provider, but where the defect is a manufacturing defect, the principal liability rests upon the manufacturer. It further observed that once a finding of manufacturing defect is recorded, “the liability to refund the purchase consideration necessarily flows from the doctrine of product liability, which squarely places the primary responsibility upon the manufacturer of the defective product.”
The Commission held that fastening the liability upon the dealer, despite the categorical finding of manufacturing defects, amounted to an error apparent on the face of the record and required correction. Accordingly, the review application was allowed, and the earlier order was modified. The Commission directed the manufacturer, Stellantis India Private Limited, to refund ₹23,71,581 after deducting 10% depreciation from the total cost of ₹26,35,090, along with interest at 12% per annum from 11.05.2022. In case of default, the amount would carry penal interest at 13% per annum.
The manufacturer was also directed to pay ₹75,000 as compensation for mental agony and harassment and ₹35,000 towards litigation costs, failing which the amounts would carry penal interest at 9% per annum. The complainant was directed to hand over possession of the vehicle upon receipt of the awarded amount, and the complaint against the dealer was dismissed. Thus, the Commission modified its earlier order and held the manufacturer alone liable to refund the purchase consideration in view of the established manufacturing defect.
Cause Title: Karan Bansal v. Stellantis India Private Limited & Ors.
Case No.: Review Application No. SC/4/RA/17/2025 in CC No. 23/2024
Coram: Justice Raj Shekhar Attri (President) and Mr. Preetinder Singh (Member)
