TATA MOTORS LTD.

V/S ANTONIO PAULO CASE ANALYSIS

FACTS OF THE CASE

When the respondent purchased an automobile from the second respondent, an appellant,
corporate dealer, in 2011, he paid the entire consideration amount to that company. When the
first respondent inquired about a new car, the salesperson instead offered him a 2009 model car
that had already travelled a large distance. To say that a buyer who purchases a new car in a
particular year from an authorised dealer of a manufacturer will only purchase another car of the
same manufacturer in the same year, it is reasonable and logical; however, in the ordinary course
of business, the proposition conveyed by the dealer and understood by the buyer would be that a
new car of the same model as that sold in the year, in question, would be sold. Saying that a
consumer would acquire a used automobile manufactured in 2009 from an approved dealer of a
manufacturer while simultaneously paying for and receiving a new car in 2011 is irrational and
nonsensical (if that had to be so, the buyer would much rather have gone in for a second-hand
resale car, which would have been substantially cheaper than the price for a new car). Rather
than accepting delivery, the first respondent opted instead, to register a complaint with the Goa
District Consumer Forum (District Forum). Despite having been provided with notice, the
respondent failed to appear and was thus left without counsel. As a result of the appellant's
appearance before the District Forum, the District Court found that both the appellant and the
second respondent were jointly and severally guilty for "deficiency in service." The car's body
was completely corrugated, and there were scratch marks all over it. As a result of this decision,
the District Forum determined that the appellant and second respondent must replace the car,
with interest accrued from the date of delivery, and also pay INR 20,000 in damages for mental
distress and INR 5,000 each in costs. The respondent filed an appeal after being dissatisfied with
the District Forum's judgment, which was denied by the State Consumer Disputes Redressal
Commission (State Commission). After arguing before the National Commission that the first
respondent did not qualify as a customer since he did not accept delivery of the car from the
respondent, the appellant was found to have won his case. The appellant further asserted that no
obligation could be imposed on the appellant as a result of the appellant's relationship with the
respondent as a principal-to-principal. After hearing the appellant's arguments, the National
Commission ruled that the District Forum's verdict stood and upheld it. As part of its decision,
the National Commission mandated that the appellant compensate the National Commission INR
200,000 in additional costs (INR 1,00,000 towards the first respondent and INR 1,00,000
towards the Consumer Legal Aid Account of the District Forum).
CONTENTION OF THE PARTIES

It contested the National Commission's decisions that the first respondent's complaint before the
District Forum contained no allegations against it other than executing it and seeking restitution,
as well as the National Commission's determinations that the National Commission's
determinations were correct. As the appellant points out, the complainant never alleged or
proved that the appellant or one of its employees were involved in the transaction in question, or
that the appellant or one of its employees had any influence over the first respondent in his
decision to purchase the car from the second respondent, as was the case in this instance. The
decision in Maruti Udyog Ltd v. Susheel Kumar Gabgotra (2006) was used to argue that the
manufacturer could not be held liable until and unless the appellant could demonstrate that the
car had a fault, which the court agreed with at the time of the hearing. According to the
respondent, the appellant, who was selling an out-of-date car without the claimed accessories,
purposely deceived the appellant into believing that the car was newer. The first respondent said
that the appellant's activities constituted unfair trade practices and a defect in service, as defined
by the statutory definition, as a result of the appellant's operations. It was in this case, Jos Phillip
Mampilil v. Premier Automobiles Limited and Others (2004), that the first respondent asserted
that "it is disgusting that a damaged car was attempted to be sold as a brand-new automobile and
that, rather than accepting responsibility for the deficiencies, the manufacturer chose to reject its
liability." Furthermore, based on the case of Vivek Automobiles Ltd. v. Indian Inc, the first
respondent asserted that a car dealer always operates in the capacity of the manufacturer's agent
(2007)

COURT’S OBSERVATIONS

The Supreme Court of India observed that the appellant played no role or was guilty of any
misconduct in the current case before the District Forum. While analysing the principal-to-
principal relationship between the appellant and the second respondent, the Honourable Supreme
Court referred to the decision in Indian Oil Corporation v. Consumer Protection Council of
Kerala (2003), which was handed down in 2003. When it comes to a principal-to-principal
contract, Indian Oil Corporation was ruled to be immune from liability for the authorised
activities of its distributor, according to the decision in Indian Oil Corporation. In this case, there
was no 'deficiency' against Indian Oil pursuant to Section 2(g) of the Consumer Protection Act
because there was no contractual relationship between Indian Oil and the consumer. To support
its position, the Hon'ble Supreme Court referred to the case in General Motors (I) (P) Ltd. v.
Ashok Ramnik Lal Tolat (2014), in which the court held that a claim must be specifically
pleaded before the court before it can be adjudicated. In the case of General Motors, it was
determined that the National Commission made a mistake by granting relief when the party had
not specifically requested it.
According to the facts of the case, the evidence indicated an extreme paucity of pleadings from
the respondent detailing the appellant's participation or particular knowledge with respect to the
alleged deception. The decisions of the National Commission regarding the appellant were
determined to be arbitrary and capricious. Contrary to the District Forum, State Commission, and
National Commission findings, it was recognised that an inability to allege or demonstrate the
appellant's culpability on the part of the first respondent could not be remedied by drawing
inferences from the evidence. A decision placing culpability on the appellant would be
unworkable unless the appellant's knowledge could be shown, the Hon'ble Supreme Court
determined, particularly given that the appellant and first respondent were operating as
principals.

OTHER CASE LAWS

Indian Oil Corporation v. Consumer Protection Council of Kerala

The facts of the case

The first respondent is a Kerala-based voluntary consumer organisation, as demonstrated by the

National Consumer Disputes Redressal Commission's judgement and order dated March 17,
1993, in which the Commission found the first respondent to be a voluntary consumer
organisation. The registration of scientific, literary, and benevolent societies is governed by the
Scientific, Literary, and Charitable Societies Registration Act of the United Kingdom. Dr P.
Kamalasanan, Ram Nivas (Gayathri), Sasthamcotta, and Dr P. Kamalasanan serve as members
and secretaries of the Respondent. He had received an LPG connection from M/s Karthika Gas
Agency, the appellant's authorised distributor, and was using it at the time of the hearing. The
second respondent is the Karthika Gas Agency, which has already been mentioned. There were
numerous errors on the part of the second respondent when it came to providing him with a gas
connection as well as LPG cylinder refills. There were more gas connections delivered by the
Gas Agency than had been authorised by the appellant, the Indian Oil Corporation. This
amounted to a failure on their part to deliver a satisfactory performance. As the second
respondent, the Indian Oil Corporation's authorised agent is named. Alternatively, the appellant-
Corporation failed to take the required safeguards to ensure that the agency would not deceive its
customers. However, even though the appellant was aware of the second respondent's
wrongdoing, it failed to take any substantial steps to prevent the irregularities perpetrated by the
second respondent from continuing.

Judgment
In a memorandum of agreement, the Indian Oil Corporation and M/s Karthika Gas Agency have
agreed to cooperate. In this case, the Indian Oil Corporation, the appellant, and Karthika Gas
Agency, the Corporation's distributor, are in a principal-to-principal relationship with each other.
Because of the principal-to-principal nature of the relationship, it was found in this case that
Indian Oil could not be held accountable for the conduct taken by its distributor with the
authority to do so. A "deficiency" against Indian Oil under Section 2(g) of the Consumer
Protection Act did not exist in this case since there was no contractual privity between Indian Oil
and the consumer. a fresh legal draught has been created

General Motors (I) (P) v. Ltd. Ashok Ramnik Lal Tolat

If a claim or award of relief is made solely on the basis of the presence of unfair trade practises,
it is necessary to demonstrate that the practises caused the loss. Punitive damages are awarded in
the event of intentional wrongdoing that is unrelated to the actual loss suffered by the plaintiff. A
claim of this nature must be pleaded specifically. This case came before the court to determine
whether it was permissible to award punitive damages in the lack of any claim in the complaint
and in the absence of any evidence of any injury suffered. Customer Protection Act 2019 was
found to be a component of social legislation meant to provide a forum for customers who have
been misled by suppliers of products and services. A consumer is entitled to restitution in the
event of a service failure, as well as in the event of any loss or injury caused by unfair trade
practises. Later amendments can broaden the scope of a complaint to include not only specific
customers, but also consumers who are difficult to identify at the time of the complaint. The
complainant, on the other hand, is required to make an allegation as well as a claim. Under
Section 12 of the Act, a consumer who has purchased or received goods may file a complaint, as
well as any recognised consumer association or one or more consumers acting on behalf of and
for the benefit of all other consumers; however, a case must be established and the affected party
must be heard on such a matter before the complaint can be considered. To protect consumers'
interests, the Act's scheme must be construed freely and purposefully in order to avoid taking a
hypertechnical approach to the law. While at the same time, fair procedure is a defining
characteristic of every legal proceeding, and any party who is affected by a legal proceeding has
the right to be informed of the claim that that party is required to meet. According to the court,
mere proof of unfair trade conduct is inadequate to support a claim or award of relief unless the
source of loss is also proven, which was not the case in the current instance and was not
demonstrated in the previous case. A claim for punitive damages against other consumers was
not raised in the initial complaint, and the appellant was completely unaware of any such claim
when it filed its notice of appeal with the Court of Appeals for the First Circuit.

WHAT IS PRINCIPAL TO PRINCIPAL BASIS

The parties to a contract (financial or non-financial), who are ultimately compelled by

contractual provisions, sign the contract in their own capacity, whether or not they were actively
involved in negotiating and drafting the contract's terms and each party's responsibilities. It also
implies that there are no intermediaries or agents involved in the transaction. Specifically, in this
context, a principle refers to the two parties to a transaction who do not employ the services of an
agent. Credit risk/counterparty risk is a risk of loss coming from the other party's failure or
inability to pay its financial commitments. For example, over-the-counter derivatives are
completed on a principal-to-principal basis, and each party is subject to credit risk/counterparty
risk. In this scenario, there is no need for a clearinghouse to be used between the two parties.

DEFINITION OF CONSUMER AS PER CONSUMER PROTECTION ACT

Section 2(1)(d) of the Consumer Protection Act states the definition of a consumer. According to
the Consumer Protection Act, a consumer is defined as a person who purchases products or
services for consideration (NOT for resale). In addition, a consumer is defined as someone who
utilises products and services with the consent of the person who purchased the goods or services
in question.

MEANING OF DEFECT

In Section 2(1)(f) of the Act, the term "defect" is defined as follows: "defect" means any fault,
imperfection, or shortcoming in the quality, quantity, potency, purity, or standard which is
required to be maintained by or under any law for the time being in force or under any contract,
express or implied, or which is claimed by the trader in any manner whatsoever in relation to any
goods (emphasis supplied) The term "fault" is defined in a straightforward and thorough manner.
And, as per the case in hand sales of a used car of the make 2009 in lieu of a new car of the make
2011 after receiving the full consideration amount for a new car in 2011 and after conveying and
making it clear that the car would be a new car, i.e., of the make 2011, qualify as a 'defect' within
the meaning of Section 2(1) of the Consumer Protection Act 1997. (f). On the surface, the fact
that it was selling a used automobile from the year 2009 was apparent. This did not need the use
of the method established in Section 13(1)(c) to (g) of the Act, as previously stated. When it
comes to the commodities themselves, Section 13 (1)(c) states that "when the complaint claims a
fault in the goods that cannot be established without thorough examination or testing of the
goods," As a result of this inability to detect the "fault" without the need of analysis or testing,
the approach outlined below must be followed. Because the information that a used automobile
with the year 2009 model was being sold was written right on the front of the document, there
was no need for any kind of examination or testing via an appropriate laboratory in this particular
instance.

DEFICIENCY IN SERVICE
Deficiency refers to any flaw, imperfection, shortcoming, or inadequacy in the quality, nature, or
manner of performance that is required to be maintained by or under any law currently in force,
or that has been undertaken to be performed by a person in pursuance of a contract or otherwise
in relation to any service that has been contracted for or otherwise in relation to The defect must
be related to the provision of service - As shown by the phrases '....in regard to any service' in the
definition, the inadequacy is always expressed in terms of service. As a result, if the complaint is
about anything that does not fit within the definition of service, the idea of inadequacy would not
apply. In the usual order of events, if the service is judged to be poor in accordance with the
aforementioned standards, it is declared deficient and compensation is provided. However, there
may be exceptional circumstances that are beyond the control of the person providing the
service. It should not be necessary to punish someone who is unable to provide service of the
intended quality, kind, and manner as a result of such conditions.
For example, A promised to provide water to B for the purpose of irrigation of crops. He was
unable to complete the task because of a power outage caused by the burning of a transformer.
As a consequence, the crop was harmed. B filed a lawsuit against A for delivering inadequate
service. The National Commission ruled that A had a legal obligation to have the transformer
fixed as soon as possible. Orissa Lift Irrigation Corporation Ltd. v. Birakishore Raut, 1991 holds
that he is accountable for the inadequacy in service because he was careless in performing his
duties (NC).