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Supreme Court Upholds Delivering Test Drive SUV to Buyer as New And Unethical Practice

A single Judges’ Bench of the Supreme Court which consisted of M.R Shah while giving no relief to a car dealer ruled that he cannot supply a used vehicle under the guise of Demo Test Drive as it constitutes an unfair and unethical practice.

Top Court’s judgment came against NCDRC decision in which the National Board of Appeals Jurisdiction overturned the consensus findings of the District Forum as well as of the State Board. 

The claimant had purchased his SUV and had deposited the transaction amount with the dealer on which a receipt had been also issued to him. After that, he further deposited Rs. 5,30,000/ to the purchase price of the said vehicle. However, SUV was delivered one year later. So, the judge bench ruled that the received SUV was an old one and was actually a used car. There were various other flaws as well, Supreme Court Judge Bench observed.

While, as per the original claimant, the car was an old one and he has already driven 10,000 km the vehicle was delivered to him. and was also used by the dealer as a “demonstration test drive”.

As a result, consumer complaints were submitted in the district forums when the delivered vehicle turned out to be a used car that had been used as a “demonstration test drive vehicle”. 

The district forum upheld the complaint and instructed the dealer to take back the delivered vehicle and was ordered to deliver a new vehicle to the complainant for the amount previously deposited with the car dealer. Forum also slapped Rs. 2,500 for legal fees and Rs. 5,000 for emotional distress on the car dealer.

The order passed at the District Forum has been confirmed by the State Commission. However, due to the contested judgment and decision, the National board exercised jurisdiction over the appeal and overturned the district forum and the state board’s factual findings that the vehicle supplied was a used vehicle.  

It was filed that the dealer was obligated to deliver the new vehicle reserved if the complainant paid the full selling price of the new vehicle. It was argued that it would be dishonest and unfair business practice not to hand over the reserved new vehicle even if the purchase price had been paid.

Supreme Court Judgement

The Court at the outset noted that when the complainant – customer booked a new car and paid the sale consideration of a new car, the dealer was supposed to and/or bound to deliver the new car instead the dealer delivered the used car which was used as “Demo­Test Drive Vehicle” 

It didn’t approve of the Dealer’s doings and called out the ‘unfair trade practice’. 

Even as per the findings recorded by the National Commission the car which was delivered was a defective car. Even delivering the defective car to the new car was also not permissible. Not to deliver the new car despite the full sale consideration paid and/or to deliver the defective car can be said to be unfair trade practice.” 

Jurisdiction under Section 21 of the Consumer Protection Act, 1986. the Court opined that as per Section 21(b) the National Commission shall have jurisdiction to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised its jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity. 

The appeal was thus allowed.

Vanshika Jaiswal
Vanshika Jaiswal

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