Kia Carnival not delivered to company: Dealer told to refund ₹1.08 lakh, pay ₹1.25 lakh more; what consumer panel said
A Delhi district consumer commission has directed an authorised Kia dealer and its managing director to refund ₹1.08 lakh, along with 9% annual interest, to a company that booked a Kia Carnival but did not receive the vehicle despite being promised delivery within weeks, according to a report by Times Of India.
The commission also ordered them to pay ₹1 lakh as compensation and ₹25,000 towards litigation expenses, holding the dealer guilty of deficiency in service.
The commission, however, absolved Kia India and its officials of liability, observing that the relationship between the vehicle manufacturer and its authorised dealer was on a principal-to-principal basis. It held that the manufacturer could not be held responsible for the dealer’s failure to deliver the vehicle on time.
What was the Kia Carnival booking dispute?
According to the commission’s order, RR Investor Capital Services booked a Kia Carnival Limousine 7-seater in steel silver colour through authorised dealer Jayanti Motors on December 17, 2021. The vehicle was priced at ₹38,98,624, and the company paid ₹1 lakh as an advance booking amount.
The dealer had assured the company that the vehicle would be delivered by the first week of February 2022. However, the promised delivery deadline passed without the vehicle being handed over.
The complainant alleged that the dealer repeatedly postponed the delivery on various pretexts and revised the vehicle’s price through proforma invoices issued on December 17, 2021, January 6, 2022, and April 13, 2022. The dealer also sent apology emails over the delay.
RR Investor Capital Services claimed that the non-delivery affected its business operations, as its senior officials and managing director faced difficulties commuting. It also said the company continued paying the salary of a driver who remained engaged despite the vehicle not being delivered.
The company subsequently approached the consumer commission, alleging deficiency in service. It sought a refund of ₹1.08 lakh with interest, ₹7.5 lakh in compensation for physical strain and mental agony, ₹60,000 towards the driver’s salary for three months and ₹25,000 in litigation expenses.
What did Kia India and the dealer argue?
In their written response, Kia India and its officials challenged the maintainability of the complaint, arguing that any dispute arising from the delayed delivery was between the complainant and the authorised dealer.
They maintained that the manufacturer and dealer operated on a principal-to-principal basis, making Kia India not liable for the dealer’s actions or omissions, the report noted.
Jayanti Motors and its managing director missed the statutory deadline for filing their written responses, following which the commission removed their defence from the proceedings on January 13, 2023.
Why did the consumer commission hold the dealer liable?
The bench comprising commission president Poonam Chaudhry and member Shekhar Chandra examined whether Kia India and its authorised dealer could be held jointly and severally responsible for the delay.
The commission relied on a February 21, 2023, ruling by the Delhi State Consumer Commission in Hyundai Motor India Ltd v. Hari Singh Bal and Others. The ruling had referred to the National Consumer Commission’s decision in Maruti Udyog Ltd v. Nagender Prasad Sinha.
Based on these precedents, the commission observed that a vehicle manufacturer cannot be held responsible for an authorised dealer’s failure to deliver a vehicle when their business relationship is on a principal-to-principal basis.
It concluded that the responsibility for the delay in the present case rested with Jayanti Motors and not Kia India.
“We thus hold that in case of delay in delivery of vehicle the liability is of authorized dealer and not the manufacturer. OP No.3 is the Managing Director of OP No.4 the authorized dealer. We accordingly hold OP no.3 and 4 guilty of deficiency of services and direct OP No.3 and 4 to refund the sum of Rs.1,08,000/- (Rupees One Lakh Eight Thousand) to complainant with interest @9% per annum from the date of receipt of payment,” TOI quoted the bench as saying.
The commission accordingly held Jayanti Motors and its managing director guilty of deficiency in service while absolving Kia India and its officials.
What did the final order say?
In its order dated October 5, the commission partly accepted the complaint and directed the authorised dealer and its managing director to refund ₹1.08 lakh to the company, along with 9% annual interest calculated from the date the payment was received.
The dealer and its managing director were also ordered to pay ₹1 lakh as compensation to the complainant and an additional ₹25,000 towards litigation expenses.
The commission directed the dealer and its managing director to make the payments within six weeks of receiving the order. In case of non-compliance, the amount will attract 12% annual interest until realisation.
