[porsche_guy]

Vehicle Manufacturer Cannot Be Held Liable For Deficiency In Service By Dealer/Authorized Service Centre In Repair : Supreme Court

The Supreme Court observed that a vehicle manufacturer cannot be held liable for any deficiency in service by the dealer or the authorized centre in rendering assistance for repairs of the vehicle.

In this case, the complainant purchased a 'Honda City' Car in the year 1999. In 2010, the car suffered damage in an accident and was taken to the authorized service centre for repairs. Alleging deficiency on part of the Manufacturer as well as the dealer and the service centre, a complaint was filed before District Forum. The District Forum allowed the complaint but held that the manufacturer cannot be held liable since there was no claim that the vehicle had some manufacturing defect. This finding was affirmed by the State Commission (SCDRC). However, the National Consumer Disputes Redressal Commission, allowed the revision petition filed by the complainant and directed the manufacturer to provide a brand new Honda City car to the complainants on payment of a nominal sum of Rs.2,50,000/-.

If there be any deficiency in service by the dealer or the authorized centre in rendering assistance for repairs of the vehicle, the manufacturer of the vehicle cannot be held liable, the court said while referring to a recent judgment in TATA Motors Ltd. v. Antonio Paulo Vaz.

So per this judgement, the OEM has no accountability over the quality of service provided by their authorised dealers? If what I have inferred from this article is right, then it would be a major disadvantage to consumers. There is already a lack of seriousness among most OEMs when it comes to dealing with service issues and this will only lead to more frustration for those facing issues with the service experience or quality.

This will also reduce the incentive to service your car only at the authorised sales network since the peace of mind aspect will be gone!

Or am I missing some fine print? Experts kindly guide

Source

[WorkingGuru]

What is the point of being "Authorised" if the dealer workflow/activities aren't "Authorised" by the OEM ?

I understand the lower courts often operate whimsically & pass very very poor judgements, but one assumes the High Court and Supreme Court will talk sense. At the outset, this frankly makes NO sense and is possibly the first such judgement in the world.

Please realise, this isn't just about auto-industry, how will people trust that the "authorised dealer" of ANY brand will give them reasonable quality of service ?

[Somz]

What a poor judgement by the honorable supreme court that OEM can't be held accountable for deficiency of service by authorised service centre. OEM's are the one who Authorize service centre to carry out business on their behalf. For services, both are accountable for after sales services. Otherwise OEM will continue to sell lemons and people purchasing their cars with their hard earned money will run pillar to post for repairs. If such judgement is pronounced then words like ' Sue' the OEM or service centre doesn't exist in India. A very serious dampening judgement by honourable supreme court.

[Sushil Pingua]

I sincerely believe that 'OEM' and 'Authorised Service Centre' are two separate entities.
Hon'ble Apex Court has nowhere used the term OEM.
This thread created confusion in my mind by use of the term OEM.

[shancz]

This particular case was of an accidental Honda City and there is another with TML vs an individual which I can't see due to a pay-wall.

I maintain that we buy an OEM vehicle and not an OEMDealer's vehicle so the end experience is also the responsibility of OEM as well. They might not be the one servicing it but they should have an oversight and redressal when things don't go as expected.

But taking a leaf from this judgement since OEMs are not legally bound the point of customer service and after sales becomes even more important in purchase decisions.

Although I don't see this judgement making any palpable affect in sales numbers in the immediate future for OEMs with poor track record but it will increase the "not this OEM" factor in the long run, IMHO.

[gkveda]

Specifically, for the Honda City case mentioned in first quote, where a 1999 model car has failed in 2010(after 11years) and met with accident, the judgement is right. Nobody can blame manufacturer or dealer and they cannot be held responsible for defective part. It is 11 years old car and due to ageing, all parts would get into wear and tear. (I am not commenting on services since the data on service date is not known)

But the judgement in the second quote, if it is generic and applicable to all cases in future, which I don't think so, then, it is just ridiculous.

Then, who is responsible for the defective parts or deficiency in services in a new car? Roads? Pedestrians? Car driver? Or owner himself?

Or

Will supreme court judge himself take the onus of replacement of defective parts and provide efficient service to such cars?

[GTO]

Legally, both are entirely independent entities and hence, I would agree with the thread title. I usually side with the customer, but we have to be fair. You can sue the manufacturer for product defects, but for any deficiency in service, it is the dealer who is "legally" liable.

Of course, this is just the legality. But in the actual market-place, the OEM can & should be held responsible. It is the dealer who is the face of the brand and the smart OEMs are extremely particular about how their customers are treated at the dealership (just ask Maruti or Toyota).

[Hayek]

Agree fully with what GTO said. We very often fail to recognise that authorised dealers are not the same as the OEM - and think that the OEM needs to take responsibility for all the actions of the dealer. That is not the case. Of course as a commercial matter, you can choose to give your business only to those OEMs who have good dealers in your city - or a wide range of dealers to choose from. And OEMs may choose to try and retain your business by keeping tight controls over their dealers and having the dealers compensate you for deficiencies in service. But legally, none of this is necessary - OEMs have a responsibility to make parts available for a certain period after selling a car. But they have no legal responsibility to ensure that authorised service centres provide good service or even that authorised service centres exist.

[aargee]

If vehicle manufacturer cannot be held liable for deficiency in service by authorized service centre in repair, then why should vehicle manufacturer honor warranty ONLY when the vehicle is serviced at ASC? Why shouldn't they honor the warranty no matter I get my vehicle serviced at FNG?

Ok, may be because, ASC has the service records sent to manufacturer; well as a customer (or FNG) can send the same after servicing the vehicle.

But manufacturer trusts no FNG or customer!!

Trust!! is the keyword here

Trust of manufacturer with ASC; Trust of customer with manufacturer!! Suddenly if Mayapuri to Pudupet, if all these places starts manufacturing cars, would anyone go to buy them? Ofcourse, they would have an ultra niche segment. But would anyone from here buy a car from them for our daily use? I don't know about Mayapuri, but for sure from Pudupet or Kunnamkulam, we wouldn't!! That's our trust with the manufacturer.

If vehicle manufacturer trusts their ASC, then they're equally partner in crime!! May be 10%, may be 50%, may be 90%. Only a partner in crime knows what the other partner does & it's just because of this trust the ASC survives & many FNG struggles.

[Comrade]

Legalities aside, practically I will agree to this argument that they are independent entities only when an OEM starts treating all customers equally, and is willing to support its customers directly. Why don't OEMs just release service manuals, parts catalogs etc to all customers (even if at a purchase price)? Why do only dealerships get access to special tools, know-how etc. In such case, an OEM is holding the customer hostage that they have to visit a dealership, and there is no other option. If they create a closed environment where only dealers have access to OEM's engineers, sales personnel, technical guides, parts etc., how is it a free market, and OEM and dealership are not behaving hand-in-glove?

Heck, once I had issue with incorrect contract dates for VW extended warranty. When I approached the OEM directly, all they did was merely redirect the query to nearest dealership. Why can't OEM, at least in such trivial cases, provide direct support to the customer? In India, for all practical purposes, OEM and dealers are one big closed network.

[lsjey]

All,

I came across this news item today. Posting this to hear from you all and learn more about this aspect.

News source: https://www.livelaw.in/top-stories/s...-dealer-185588

In summary the judgement says that:

1. With regards to service, and deficiency thereof only the ASC is responsible.
2. Only if there are manufacturing defects Vehicle manufacturer is liable.

I've seen many instances where in this forum we have been saying that Vehicle manufacturer should intervene and help and should be responsible as well. In many cases it seemed very intuitive to me as well.

Now this judgement basically throws all this out.

For me it clarifies the role of the ASC better. This underscores the need to vet and validate the ASCs much more than the Vehicle manufacturer and the car per se.

Regards,
lsjey

[DicKy]

So, if we get stuck with a rogue dealer, we are done for? Unless if there is a strong manufacturer like Maruti or Toyota who has a tight hold of their dealers.

[AutoNoob]

Though the judgement is delivered by Supreme Court and there may be legal reasons for the same. Can't comment without reading detailed judgment.

However, as a customer, I am extremely distressed by this judgment. I would have agreed with the judgement if manufacturers had given option to customer - of purchasing, servicing and repairing vehicles directly with them. Who wants to deal with the dealers showrooms or dealer workshops ? Why are they called Authourized dealers or Authorized Service Stations ? Who authorized them ? The manufacturer.

Why manufacturer voids warranty when customer goes to a non-ASS ? If manufacturer isn't responsible for the work done at ASS, how can the customer be forced to take vehicle to ASS under threat of voiding warranty ?

When the time comes to take responsibility, the manufacturers hide behind the legal veil.

Key point from news article :

In 2010, the car suffered damage in an accident and was taken to the authorized service centre for repairs. Alleging deficiency on part of the Manufacturer as well as the dealer and the service centre, a complaint was filed before District Forum. The District Forum allowed the complaint but held that the manufacturer cannot be held liable since there was no claim that the vehicle had some manufacturing defect. This finding was affirmed by the State Commission (SCDRC). However, the National Consumer Disputes Redressal Commission, allowed the revision petition filed by the complainant and directed the manufacturer to provide a brand new Honda City car to the complainants on payment of a nominal sum of Rs.2,50,000/-.

In appeal, the bench agreed with the submission made by the manufacturer that there is not an iota of material that the accident occurred as a result of any manufacturing defect.

The court observed that the District Forum was justified in making only the dealer and the authorized centre, liable for the deficiency on their part. "These findings were rightly affirmed by the State Commission and the National Commission ought not to have passed direction putting the burden on the appellant and asking the appellant to provide a brand new vehicle as a "goodwill gesture".

[ani_meher]

If companies are not responsible for ASCs, then the warranties shouldn't depend on whether the vehicle was serviced at an ASC.

[Col Mehta]

Ford owners in India after reading this:

"Welcome aboard, you can take the lower deck for now. Once completely abandoned by the manufacturers, you can join us on the upper deck".

Though not every action/service provided by the dealers can be regulated by the manufacturers, this verdict does leave us, the consumers, in a hopeless situation. We need strong consumer laws in this country, not such laughable verdicts!!