Warranty policies provided by the manufacturers of a product are bound by certain terms and conditions which act as pre-requisites to availing such warranty benefits. In the case of Shivam Motors and Anr Versus Neeraj Kumar Tiwari and Ors, the Petitioner i.e. the Dealer in Tata Vehicles filed a revision against the order of the State Commission holding the Dealer liable to pay an amount of Rs. 41,568/- along with interest to the Complainant/Respondent No.1.

The Petitioner argued that the warranty clause was not applicable as the manufacturer itself had denied the applicability of the warranty and therefore, the Petitioner was not liable to undertake repairs on the vehicle. The Petitioners, with respect to the principal/agent relationship that existed between it and the manufacturer, referred to the judgment in Prem Nath Motors Limited Vs. Anurag Mittal, (2009) 16 SCC 274 which held that

“7. Section 230 of the Contract Act categorically makes it clear that an agent is not liable for the acts of a disclosed principal subject to a contract to the contrary. No such contract to the contrary has been pleaded. …….”

In response to the arguments of the Petitioner, the Respondent No 1 pled that deposition of dust on the engine does not amount to negligence in maintaining the vehicle and therefore the warranty was applicable as held by the State Commission. The Respondent No 2/ Manufacturer stated that there was firstly no manufacturing defect as pled by Respondent No 1 in its case before the State Commission and secondly there was evident negligence in maintaining the vehicle which resulted in revocation of the warranty.

After hearing the arguments advanced by the concerned parties, the NCDRC observed that delay in seeking free services does not amount of negligence in maintaining the vehicle. Furthermore, it was observed that as per well-established practise, the dealer would undertake repairs of the vehicle under warranty and subsequently settle the claims with the manufacturer directly. As a result, the NCDRC recognised the role of the manufacturer in the present case and held as follows:

“10. Based on the above discussion, the revision petition No.2055 of 2015 is partly allowed and the order of the State Commission is modified only to the extent that the petitioners along with respondent No.2/Opposite Party no.3 Tata Motors Ltd shall be jointly and severally liable to pay the compensation of Rs.41,568/- along with interest and compensation as ordered by the State Commission. With this modification the order of the State Commission is confirmed.”

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Judgment: Shivam Motors and Anr Versus Neeraj Kumar Tiwari and Ors