Renault India wins partial relief as NCDRC slashes ‘extortionary’ Rs 1 lakh fine in Kwid warranty battle

The NCDRC said that award of Rs 1 lakh as compensation for mental agony and other sufferingss of the consumer is disproportionately higher. (Image enhanced using AI)

Apex consumer body redraws line on compensation

• No error in the factual conclusion of deficiency in service as provided by the petitioner as arrived at by both the fora (district and state consumer fora).
• The compensation of Rs 1 lakh granted by the state commission does not commensurate with the deficiency in service, as was alleged and was established on record by the complainant.
• We agree with this contention.
• The award of Rs 1 lakh as compensation for mental agony etc for a deficiency involving repair charges of Rs 16140 is “certainly disproportionately higher” than that required to compensate for the injury or damage suffered by the consumer.

NCDRC: Deficiency made out

• Hearing the revision petition, the NCDRC disagreed with the state commission’s conclusion that entry of water into the engine, by itself, established a manufacturing defect in the absence of any expert or technical report.
• However, the commission refused to absolve the manufacturer entirely.
• The NCDRC noted that Renault had accepted the district forum’s findings by not challenging them earlier.
• The commission said that the company could not distance itself from failures of its authorised service centres during the warranty period.
• “There is a concurrent finding that there is deficiency in service suffered by the complainant,” the commission noted.
• Emphasising that manufacturers remain responsible for ensuring that warranty promises are honoured seamlessly by their dealer network.

Final directions

• While upholding the finding of deficiency in service, the NCDRC modified the relief.
• It directed Rs 16,140 to be reimbursed by Renault India towards repair costs incurred during the warranty period.
• Rs 50,000 payable by Renault India as compensation for mental agony and harassment.
• Rs 10,000 towards litigation expenses.
• Rs 887 to be refunded by the dealer for unauthorised charges.
• Compliance to be made within 60 days, failing which interest at 12% per annum would apply.

What triggered dispute

• The case has its roots in January 2016, when one Rameshwari Sharma, a Chandigarh resident, purchased a Renault Kwid car from an authorised dealer.
• The vehicle came with a warranty covering four years or 1,00,000 kilometres, whichever was earlier.
• On August 21, 2017, with the car having run just over 15,000 kilometres, it developed engine trouble and stopped functioning.
• The vehicle was towed to the authorised service centre, PMG Auto, Chandigarh.
• However, warranty repairs were refused on the ground that the engine had allegedly been damaged due to water ingress caused by submergence during heavy rainfall, an assertion strongly contested by the consumer.

Insurance claim rejected

• After denial of warranty coverage, the consumer approached the insurer, Future Generali General Insurance Company Limited, but her claim was rejected.
• On November 8, 2017, the company rejected the insurance claim on the ground that there was no accident within the meaning of the policy.
• With both warranty and insurance claims rejected, the consumer got the car repaired at another authorised Renault service centre in Panchkula at her own expense of Rs 16,140.
• Aggrieved, she filed a consumer complaint on December 5, 2017 before the district consumer forum.

District forum’s findings against dealer

• On April 29, 2019, the district forum came down heavily on the dealer, describing the allegation of water submergence as “bogus and frivolous”.
• The district forum said that no technical inspection had been carried out before rejecting the warranty claim.
• The forum also faulted Renault India for its “casual attitude” in not monitoring or intervening despite being aware of the consumer’s grievance.
• Both the dealer and manufacturer were held jointly liable.
• Directions were issued for reimbursement of repair costs and payment of compensation for mental agony.

State commission shifts full liability to Renault

• On appeal, the state consumer commission, Chandigarh, by orders dated February 17 and February 23, 2022, absolved the dealer and fastened sole liability on Renault India.
• The state commission reasoned that since water had entered the engine without any external accident or impact, the defect must be attributable to manufacturing failure.
• It directed Renault India alone to reimburse the repair cost, pay litigation expenses and compensate the consumer with Rs 1 lakh for mental agony and harassment.