CCI rejects plea against Mahindra & Mahindra over warranty denial due to externally sourced engine oil

The Competition Commission of India (CCI) has dismissed a complaint accusing car manufacturer Mahindra & Mahindra and one of its authorised dealers of anti-competitive conduct for allegedly refusing warranty coverage because a vehicle owner used externally sourced engine oil..The CCI noted that the warranty agreement between Mahindra and the consumer contained a requirement that engine oil will be procured from Mahindra or its authorised dealers.Hence, the CCI held that the warranty terms agreed upon between the manufacturer and end consumer cannot be examined as a vertical restraint under Section 3(4) of the Competition Act. It also found no material to establish abuse of dominance under Section 4..It consequently held that the alleged requirement to procure engine oil from Mahindra or its authorised dealers, insofar as it formed part of the warranty arrangement with the consumer, fell outside the scope of Section 3 on anti-competitive agreements..The complaint was filed by one Bharti Sharma, who had purchased a Mahindra XUV700 vehicle from Delhi-based authorised dealer Sri Durga Automobiles in June 2024. She had also bought an extended warranty valid until July 2029.According to Sharma, she bought Pakelo Krypton XT LA-V SAE 5W-30 engine oil during scheduled services in January 2025 and January 2026. The dealer allegedly used the oil on both occasions without warning her that doing so could affect the warranty.Soon after the January 2026 service, the vehicle displayed a “check engine system” warning and suffered reduced acceleration. The dealer later diagnosed a defective turbocharger and gave an estimate of ₹50,000 for replacement and labour costs.However, Sharma alleged that her warranty claim was rejected because the engine oil had been procured externally. Mahindra subsequently told her that using externally sourced engine oil could invalidate warranty coverage.Sharma argued that the oil met Mahindra's specifications and accused the company of effectively forcing consumers to purchase lubricants through its authorised network. She claimed this restricted consumer choice and foreclosed competition in the aftermarket for lubricants and vehicle maintenance services..However, the CCI said the dispute essentially concerned warranty conditions applicable to Sharma's individual vehicle rather than a competition concern arising from abuse of market power.It also observed that manufacturers may prescribe technical specifications and maintenance requirements in the interests of safety, reliability and vehicle performance.“Such conditions may reasonably require the owner to adhere to specified standards and use recommended consumables,” the Commission said.It added that such requirements could legitimately affect warranty obligations so long as they were properly communicated and reasonably connected with the vehicle's safety, performance or functioning.The Commission further found no material suggesting that the warranty conditions concerning the specified consumables had not been disclosed to Sharma. It noted that she had voluntarily purchased an extended warranty subject to stipulated terms and conditions..Finding no prima facie violation of Sections 3 or 4 of the Competition Act, the CCI closed the case..[Read Order]