13 years after purchase, national consumer commission orders Mahindra to replace Scorpio SUV or refund Rs 12.27 lakh

There is no reason to interfere in the prime findings of the state consumer commission in the impugned order which are based on cogent and convincing reasons, said the NCDRC. (Image enhanced using AI)

NCDRC upholds defect finding

• In our opinion the state consumer commission has taken a correct and logical view that the opposite parties did not lead evidence to prove that the vehicle was being used for commercial purpose.
• The state commission rightly did not accept that the complainant is not a consumer as alleged by the opposite parties.
• The state consumer commission in our opinion rightly observed that the vehicle was frequently taken to opposite parties for repair and could not be repaired satisfactorily and despite a change of engine.
• In case of a complaint of manufacturing defect, the expert opinion is not always mandatory particularly the manufacturing defect is apparent from the record.
• The perusal of repair orders and change of engine although in warranty period clearly indicated manufacturing defects in the vehicle.
• The contentions and arguments raised on behalf of opposite parties are without any basis and deserve to be rejected.
• There is no reason to interfere in the prime findings of the state commission in the impugned order which are based on cogent and convincing reasons.

Faults within months of purchase

• The dispute traces back to May 13, 2013, when complainant Kanaram Jat purchased a Mahindra Scorpio SUV for Rs 12,27,426, including registration and insurance, from a dealer in Ajmer.
• Within two to three months, the Mahindra vehicle began showing engine-related issues.
• According to case records, the vehicle was first taken to the workshop on September 16, 2013, and returned on September 20 after repairs.
• However, the problems persisted, forcing another visit on December 27, 2013.
• The SUV remained in the Mahindra workshop until January 21, 2014.
• Despite repeated assurances from the dealer, the faults continued.
• By September 2014, the engine broke down again, prompting the dealer to replace it after keeping the vehicle for nearly two months.
• Even after the engine replacement, the vehicle suffered multiple breakdowns, including issues with an air vacuum tube in December 2014.
• Eventually, in January 2015, the vehicle was left at another authorised service centre and was never taken back, as the complainant alleged it remained defective.

State commission’s 2016 order

• Aggrieved by recurring defects, the complainant approached the Rajasthan State Consumer Disputes Redressal Commission in 2015, alleging deficiency in service and unfair trade practices.
• On December 1, 2016, the state consumer commission ruled in favour of the complainant and directed the replacement of the vehicle or refund of Rs 12.27 lakh, payment of interest at 10.5 per cent on the loan amount and compensation of Rs 4 lakh for financial and mental distress.
• The consumer commission also rejected the manufacturer’s claim that the vehicle was used for commercial purposes, noting lack of evidence.

Mahindra’s appeal

• Mahindra and Mahindra challenged the order before the NCDRC in 2017. The company argued that no expert evidence was produced to prove manufacturing defects.
• The vehicle was allegedly misused and serviced by unauthorised mechanics. The engine had been replaced under warranty, fulfilling obligations.
• The company also contended that the complainant did not qualify as a “consumer” due to alleged commercial use of the vehicle.

Relief modified: Compensation reduced

• While affirming the finding of defect, the national consumer commission modified the relief granted the direction to replace the vehicle or refund Rs 12.27 lakh was upheld
• The award of loan interest was set aside, noting it was not specifically claimed.
• Compensation was reduced from Rs 4 lakh to Rs 50,000.
• Liability was fixed jointly on the manufacturer and dealer, excluding the service centre.
• The commission held that the earlier compensation was “excessive” and required moderation.
• It also clarified that the dealer and manufacturer must comply with the order within two months, failing which interest at 9 per cent per annum would apply on the payable amount.

Key takeaways

• The ruling reinforces key principles in consumer law including persistent defects and repeated repairs can establish manufacturing defect even without expert testimony.
• Manufacturers cannot escape liability merely by citing warranty limitations if defects persist and compensation must be proportionate to the facts and claims made.