A) ABSTRACT / HEADNOTE
This case explores whether the purchase of a vehicle by a company for the personal use of its directors amounts to a “commercial purpose” under Section 2(1)(d) of the Consumer Protection Act, 1986. The legal challenge arose from complaints of overheating and the non-deployment of airbags in high-end luxury cars purchased by the complainant. The National Commission’s decision to award compensation for product defects and service deficiencies, as well as for engaging in unfair trade practices, was upheld in part, with modifications to the compensation amount based on equity considerations.
Keywords:
Consumer Protection; Commercial Purpose; Deficiency in Service; Unfair Trade Practice; Product Defect.
B) CASE DETAILS
i) Judgement Cause Title:
M/s Daimler Chrysler India Pvt. Ltd. v. M/s Controls & Switchgear Company Ltd. & Anr.
ii) Case Number:
Civil Appeal No. 353 of 2008
iii) Judgement Date:
July 9, 2024
iv) Court:
Supreme Court of India
v) Quorum:
Bela M. Trivedi and Pankaj Mithal, JJ.
vi) Author:
Justice Bela M. Trivedi
vii) Citation:
[2024] 7 S.C.R. 416
viii) Legal Provisions Involved:
- Consumer Protection Act, 1986, Sections 2(1)(d), 2(1)(f), and 2(1)(r).
ix) Judgments Overruled:
None specified.
x) Case Related to:
Consumer Protection Law, Commercial Law.
C) INTRODUCTION AND BACKGROUND OF JUDGEMENT
The case delves into the interpretation of “commercial purpose” under the Consumer Protection Act, 1986. The primary issues arose from complaints about luxury cars, including overheating problems and the failure of airbags during accidents. The case examines whether a corporate entity purchasing goods for non-commercial use can be considered a consumer under the Act. The appellate jurisdiction of the Supreme Court was invoked after the National Commission directed refunds and compensations for deficiencies and unfair trade practices.
D) FACTS OF THE CASE
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Purchase and Use: The complainant purchased luxury cars for the personal use of its directors and their families. The cars were offered as part of perquisites.
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Defects Identified: Complaints of overheating in one car’s center hump were raised, and despite multiple inspections and attempts at rectification, the problem persisted.
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Accident Involving Airbags: In a separate incident, one of the cars involved in an accident failed to deploy airbags, leading to grievous injuries for the director seated inside.
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Consumer Complaints: The complainant approached the National Commission seeking redress for product defects and alleged misrepresentations about the cars’ safety features.
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Decisions by National Commission: The National Commission awarded compensation for deficiencies in service and unfair trade practices, directing a refund of approximately Rs. 58 lakhs.
E) LEGAL ISSUES RAISED
- Whether the purchase by a company for personal use of directors qualifies as “commercial purpose.”
- Whether the defects in the car constituted a deficiency in service under Section 2(1)(f).
- Whether non-deployment of airbags during an accident amounts to an unfair trade practice.
F) PETITIONER/APPELLANT’S ARGUMENTS
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Commercial Use Defense: The appellant argued that cars purchased by a company for directors’ use were for a “commercial purpose” and thus outside the scope of the Consumer Protection Act.
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Onus of Proof: It was contended that the complainant did not adequately demonstrate the defects or deficiency in service.
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Airbag Deployment: The non-deployment of airbags was defended on technical grounds, asserting compliance with predetermined safety thresholds.
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Equity Consideration: The appellant argued that the complainant had used the car for over 17 years, which justified a modification in the compensation amount.
G) RESPONDENT’S ARGUMENTS
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Consumer Status: The complainant argued that the purchase was for personal use, qualifying them as consumers under the Act.
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Defects and Misrepresentation: Evidence was presented to show overheating and misrepresentation about the cars’ safety features, including airbags.
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Deficiency in Service: The complainant asserted that the persistent defects and lack of resolution constituted a clear deficiency in service.
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Unfair Trade Practice: Misleading claims about safety features were cited as deceptive practices aimed at promoting sales.
H) RELATED LEGAL PROVISIONS
i) Consumer Protection Act, 1986:
- Section 2(1)(d): Definition of “Consumer.”
- Section 2(1)(f): Definition of “Deficiency in Service.”
- Section 2(1)(r): Definition of “Unfair Trade Practice.”
ii) Case Law References:
- Laxmi Engineering Works v. P.S.G. Industrial Institute (1995) 3 SCC 583 – Interpretation of “commercial purpose.”
- Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers (2020) 2 SCC 265 – Determination of consumer status.
- National Insurance Company Ltd. v. Harsolia Motors (2023) 8 SCC 362 – Commercial purpose in consumer disputes.
I) JUDGEMENT
a. Ratio Decidendi:
The purchase of cars by a company for personal use of directors does not amount to a “commercial purpose” unless the dominant intention is profit generation.
b. Obiter Dicta:
Misrepresentation in promoting safety features of vehicles constitutes an unfair trade practice under Section 2(1)(r).
c. Guidelines:
- Purchases by corporate entities for personal use can qualify under consumer protection if not profit-linked.
- Disclosures in product manuals must transparently explain limitations of safety features to avoid claims of unfair practices.
J) CONCLUSION & COMMENTS
The case reaffirms that the interpretation of “commercial purpose” hinges on intent and usage rather than ownership. The ruling also strengthens accountability in consumer goods marketing, emphasizing clarity in product claims. Balancing equity and justice, the Court modified the refund amount, recognizing prolonged use by the complainant.
K) REFERENCES
- Laxmi Engineering Works v. P.S.G. Industrial Institute (1995) 3 SCC 583.
- Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers (2020) 2 SCC 265.
- National Insurance Company Ltd. v. Harsolia Motors (2023) 8 SCC 362.
