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SC slams car dealers for illegal charges

SC expressed strong displeasure against the 'game' played by car dealers.

Written by Utkarsh Anand | New Delhi |
September 25, 2012 12:48:08 am

Expressing strong displeasure against the “game” played by car dealers as they continue to levy thousands of rupees from buyers towards logistics and other charges without government authorisation,the Supreme Court on Monday sought an explanation from them after questioning the very foundation of these miscellaneous charges.

“You have made these charges look like a government levy when it is not. How can you charge them when you have not been authorised? Where are the rules in the Motor Vehicles Act that authorise you? It is sort of game that you are playing with the customers. It seems your manufacturers have told the commission they are expected to pay to you,you can pass them on (to) buyers,” a Bench headed by Justice D K Jain said.

The court issued a notice to the Automobile Dealers Association on a petition filed by C Rajaram,who had alleged that malpractices were being carried out by car dealers in Delhi as they charged fees for handling,loading-unloading,service and logistics in an unauthorised and illegal manner.

His counsel Joseph Aristotle told the Bench that the Delhi High Court had erred in holding that complaints of over-charging had to be decided on a case-to-case basis and no general directions could be passed.

The petitioner said the charges vary between Rs 3,500 and Rs 25,000 per vehicle,depending on the make and cost. A sum of more than Rs 550 crore has been collected by car dealers since 1999,it claimed.

Senior advocate Sandeep Sethi,appearing for the auto dealers,sought to defend these charges,contending that they were being levied on account of extra services provided to the buyers,besides registration.

His arguments on charging for petrol from the buyers to enable them to reach the nearest petrol pump boomeranged. “What do you mean you charge for petrol,too? Is a buyer expected to lift the car in his pocket to a petrol pump? He cannot tow it to a pump. You sell a product that runs on petrol so you cannot expect to deliver it without the fuel. Why cannot you deliver it at their homes?” the Bench said.

Citing a 2007 Delhi government notice,the Bench told the dealers that since the buyers had been asked not to pay anything more than the registration fees to them,there appeared no ground why should they continue charging. “We think you can raise the price of vehicles,but you cannot charge under these heads,” it said.

The court questioned the hefty parking charges levied on the consumers at the time of purchase of vehicles. When Sethi said this money went to the municipal corporation,the Bench noted that if such a huge levy had been put on the buyers,it felt that they need not shell out any more money over parking anywhere in the city.

“ After such a hefty one-time parking charge,entire Delhi becomes a parking area for the buyers. We think municipal corporations should also be made party to this case,” the court said.

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