Non-delivery of new car is unfair trade practice: Supreme Court upholds consumer forum decision directing dealer to replace old, defective car

The Supreme Court recently upheld the concurrent findings of a District Consumer Forum and the corresponding State Consumer Disputes Redressal Commission that a car dealer who delivers an old and faulty vehicle is obligated to replace it with a new vehicle while also compensating the aggrieved consumer. [Rajiv Shukla v Gold Rush Sales and Services Ltd. & Anr.].A bench of Justices MR Shah and Krishna Murari held that non-delivery of a new car was an unfair and dishonest trade practice that was against morality and ethics. "Non delivery of a new car can be said to be an unfair trade practice and even it can be said to be dishonesty on the part of the dealer and against the morality and ethics. As observed hereinabove, once the new car was booked and the full sale consideration was paid, a duty was cast upon the dealer to deliver a new car which is not defective.." the court stated.Observing that it was the dealer's duty to deliver a new car, the court ruled that the District Forum and the State Commission were justified in directing the dealer to deliver a new car to the customer. .The Supreme Court was hearing an appeal against an order of the National Consumer Disputes Redressal Commission (NCDRC) that had set aside the findings of the District and State-level forums..The appellant claimed to have booked a car in 2005 but received it only in 2006, by which time a newer model had been introduced. He alleged that the car was used and had various defects due to which he approached the District Consumer Forum.The Forum allowed his complaint and ordered the car dealer to replace the delivered vehicle with a new one, as well as to compensate the appellant Rs 7500 for mental agony and litigation costs.The order specifically recorded that the delivered car was used as a Demo (Test Drive) Vehicle.The order of the District Forum was upheld by the State Commission..However, while exercising its revisional jurisdiction, the NCDRC set aside the findings that the car delivered was a used car. But, because it was found that the car was faulty, it overruled the Forum's decision and ordered the respondent to pay the complainant ₹1 lakh in compensation..Before the top court, advocate Praveen Agrawal, appearing for the appellant, argued that NCDRC could not set aside findings of facts by the Forum and the State Commission in exercise of its revisional jurisdiction and contended that such action was beyond the scope of revisional jurisdiction under section 21 of Consumer Protection Act (COPRA).Further, he claimed that the findings of NCDRC were contrary to the findings on record, because the car was proved to be a used a used demo car using its chassis number..On the other hand, advocate Abhinav Ramkrishna on behalf of the respondent supported the judgment of NCDRC stating that cogent reasons were given by it while interfering with the findings of the Forum and State Commission.He claimed that NCDRC, on reappreciation of the entire evidence on record, rightly observed that the evidence failed to prove that it was an old car. .The court noted that even as per findings recorded by the NCDRC, the car was defective and stated that its sale would still amount to unfair trade practice.Thereafter, it recorded that NCRDC would be justified in exercising its revisional jurisdiction only when it is found that the State Commission has acted beyond its jurisdiction or has illegally failed to exercise it.It observed that the State Commission had not acted illegally or beyond it's jurisdiction and, therefore, the NCDRC had no jurisdiction to interfere with its findings, based on appreciation of evidence of record. It therefore held that NCDRC had acted beyond its scope and ambit of revisional jurisdiction under section 21(b) of COPRA..Accordingly, the court set aside the judgment of the NCDRC and additionally directed the respondent to pay ₹50,000 as compensation to the appellant and ₹50,000 to Mediation and Conciliation Project Committee (MCPC), Supreme Court of India..[Read Judgment]