Dealer, manufacturer jointly liable for car defects reported within warranty period: Jammu & Kashmir High Court

The High Court of Jammu and Kashmir and Ladakh has held that a vehicle's authorised dealer as well as its manufacturer would be jointly and severally liable for any defects found in the vehicle which are reported within the warranty period [Maruti Suzuki India Limited v/s Mohammad Ashraf Khan].

A Division Bench comprising Justice Sanjeev Kumar and Justice Sanjay Parihar held,

"Once the defect is noticed within the warranty period, both dealer and manufacturer are jointly and severally liable for the deficiency in service."

The Court observed that a vehicle warranty creates a binding agreement connecting the consumer, the dealer, and the manufacturer.

Therefore, if a defect surfaces in the vehicle during the warranty period, the manufacturer cannot shift responsibility solely onto the dealer or evade responsibility merely by citing alleged procedural lapses such as its late impleadment in a consumer case.

"Once liability for deficiency in service is joint, the dealership relationship and warranty terms bind both. To exclude the manufacturer would render the warranty clause meaningless. As the producer of the vehicle, the manufacturer is best placed to diagnose and rectify defects," the Court said in its November 27 ruling.

The High Court was hearing an appeal filed by Maruti Suzuki India Limited challenging a 2015 order of the Jammu and Kashmir Consumer Disputes Redressal Commission, which had directed the company and its authorised dealer to refund ₹7 lakh to a customer or replace a defective vehicle purchased by him.

The customer, Mohammad Ashraf Khan, had purchased an SX-4 model vehicle in May 2007. He claimed that the car began showing persistent vibration in first and reverse gears soon after purchase. Despite repeated visits to the dealer and inspections during the warranty period, the defect continued. The vehicle eventually remained in the workshop from 2009 onwards.

Khan eventually filed a consumer complaint. In 2015, the consumer commission directed that Khan be paid a ₹7 lakh refund, along with ₹5,000 as litigation expenses, while the dealer and manufacturer retained the vehicle.

Alternatively, the commission directed the replacement of the car within six weeks, with the complainant paying only any difference in cost.

Maruti Suzuki challenged the order, arguing that the commission acted without proper expert evidence and had erred in impleading the manufacturer at a late stage. The company also claimed that reports from its engineers and the State Motor Garages confirmed the vehicle was roadworthy.

The High Court, however, rejected these arguments. Relying on a report of the Principal of Government Polytechnic College, which confirmed the vibration and indicated a manufacturing defect, the Court held that the manufacturer had been afforded sufficient opportunity to contest the findings.

The Bench observed that the company chose not to produce rebuttal evidence and instead submitted an internal report that did not adequately address earlier expert conclusions.

The Court further noted that the defect surfaced within the warranty period, and under established law and the terms of warranty, both manufacturer and dealer are jointly and severally liable to repair or replace the defective vehicle.

The Bench concluded that the commission was justified in holding Maruti Suzuki liable along with the car's dealer.

Accordingly, the High Court dismissed the appeal and upheld the commission's order that had directed Maruti Suzuki and its dealer to either refund ₹7 lakhs or replace the vehicle.

Senior Advocate RA Jan, with advocates Wahid Lone and Safa Aziz, appeared for Maruti.

Advocates MA Dar and Javaid Ahmad appeared for Khan.

[Read Order]