Summary
A company buying a car for a director’s personal use is not automatically excluded from consumer protection; commercial purpose depends on the dominant purpose and a direct nexus with profit generation. Liability for persistent overheating and, in connected appeals, airbag non-deployment and misleading safety disclosures was upheld. Relief for overheating was adjusted to Rs.36 lakh with retention of the car; the connected awards were affirmed.
Issues
- Whether company ownership and use by directors necessarily made the purchases commercial.
- Who bore the burden of establishing commercial purpose.
- Whether persistent overheating constituted a defect and what relief remained equitable after prolonged use.
- Whether airbag failure and incomplete safety disclosures justified the connected compensation awards.
Provisions considered
- Section 2(1)(d), Consumer Protection Act, 1986Consumer status depended on dominant purpose and close, direct nexus with profit generation. The seller asserting commercial purpose bore the onus; company ownership, high price and possible tax deductions did not themselves establish exclusion. (¶¶ 9, 10, 11, 12, 13, 14, 15, 16, 17, 29)
- Section 2(1)(f), Consumer Protection Act, 1986Persistent overheating of the hump and cabin, established through correspondence, tests and other material despite attempted rectification, was a shortcoming in expected quality and constituted a defect. (¶¶ 18, 19, 20, 21, 22, 23, 24)
- Section 2(1)(r), Consumer Protection Act, 1986Promoting safety features while withholding material limitations governing airbag operation amounted to unfair trade practice on the record. (¶¶ 34, 36, 37, 39)
Held
- Whether a purchase serves a commercial purpose is fact-specific. The purchaser’s corporate identity and the transaction’s value are not conclusive. The relevant inquiry is the dominant purpose and a close, direct connection with profit generation. If dominant use is personal or otherwise unconnected with commercial activity, the self-employment exception need not be examined. (¶¶ 11, 12, 13, 14, 15, 16)
- The seller who challenges maintainability on the ground of commercial purpose must establish that ground. Here no material linked either car purchase to a dominant profit-generating activity. A director’s personal-use perquisite did not become commercial merely because the company purchased the car or might have claimed a tax deduction. Both complaints were maintainable. (¶¶ 17, 29)
- In Civil Appeal 353/2008, the correspondence, failed rectification efforts, temperature tests and commissioners’ reports established persistent excessive heating and consequent discomfort. Directing air-conditioning vents at the overheated area did not answer the defect. The vehicle fell short of the quality and standard contracted for. (¶¶ 18, 19, 20, 21, 22, 23, 24)
- Although replacement or full refund had been justified, equity required adjustment because the complainant rejected an earlier repurchase offer and retained and used the car for about seventeen years. It could retain the car and receive Rs.36 lakh instead of the approximately Rs.58 lakh refund previously ordered. (¶¶ 25, 40)
- In the connected airbag case, the front of the car was severely damaged in a collision and the driver had worn his seat belt, yet the frontal airbags did not deploy. On the evidence the defect was established. The manufacturer also failed to disclose material operating limits in the manual or brochure despite promoting airbag safety; incomplete disclosure supported the finding of unfair trade practice. (¶¶ 32, 33, 34, 35, 36, 37)
- The awards of Rs.5 lakh for deficiency in service, Rs.5 lakh for unfair trade practice and Rs.25,000 litigation costs in the airbag case required no interference. The manufacturer’s connected appeals and the complainant’s cross-appeal were dismissed. (¶¶ 7, 33, 37, 38, 40)
- For the overheating claim, Rs.36 lakh must be paid within three months. On default it carries interest at 9% per annum from the date of the Supreme Court’s order until payment. (¶ 40)
Result
Civil Appeal 353/2008 partly allowed: complainant retains the car and receives Rs.36 lakh within three months, with default interest at 9% annually from the order date. Civil Appeals 19536–19537/2017 and 2633/2018 dismissed; the connected Commission order stands.