In Hyundai’s case, the Delhi State Consumer Disputes Redressal Commission (SCDRC) has held that Hyundai Motors Limited cannot be held liable for a dealer’s failure to deliver a Hyundai Santro car to a customer, even after the full payment.
The judgment highlighted that the car manufacturer is not responsible for the misconduct or non-performance of an independent dealer due to the absence of any direct contractual relationship between the manufacturer and the customer.
The case arose after Suhrit Hyundai, a car dealership in Mayapuri, New Delhi, failed to deliver a Santro car to a customer who had made a full payment of ₹3.32 lakhs in two installments.
The dealership later shut down, leaving the customer without the car or a refund. Despite repeated efforts by the customer to seek resolution from Hyundai Motors, no refund or delivery was arranged, leading to the complaint.
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Court Holds Hyundai Not Liable for Dealer’s Misconduct
The State Commission, comprising Justice Sangita Dhingra Sehgal (President) and Member JP Agrawal, ruled in favor of Hyundai Motors, stating that there was no legal basis to hold the manufacturer liable for the dealer’s failure to perform.
The bench noted that the customer had no contract with Hyundai Motors and could not establish a direct connection between the manufacturer and the dealer’s non-delivery of the vehicle.
“Hyundai Motors cannot be held liable for the dealer’s misconduct or omissions, as there was no contract or agreement between the customer and Hyundai Motors. The alleged deficiencies on the part of Respondents Nos. 2 and 3 (Hyundai Motors Ltd. and Hyundai Motors India Ltd.) have not been substantiated,” the Commission noted in its September 2, 2024, order.
No Manufacturer-Dealer Agreement on Record
One of the key factors influencing the decision was the absence of any formal agreement between Hyundai Motors and the dealership, Suhrit Hyundai.
The court concluded that the dealer was not an agent of the manufacturer, and their relationship was that of a principal-to-principal nature, rather than a principal-agent relationship.
“In this case, there is no manufacturer-dealer agreement on record. Therefore, based on the submissions of Respondent Nos. 2 and 3, the court must assume that the agreement is based on a principal-to-principal relationship rather than a principal-to-agent relationship,” the Commission observed.
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Background of the Case
The dispute traces back to December 2008, when Hyundai Motors India advertised a special offer for the Hyundai Santro car at a discounted price of ₹2.99 lakhs.
Attracted by the promotion, the customer visited Suhrit Hyundai in Mayapuri and paid ₹3.32 lakhs to book the car, which was promised to be delivered by January 31, 2009.
However, the delivery was delayed, and when the customer visited the showroom on February 10, 2009, he found that it had been shut down without prior notice.
The customer promptly lodged a police complaint and reached out to Hyundai Motors’ head office and customer relations office, but received no resolution.
The District Consumer Commission initially ruled in favor of the customer in 2015, ordering Suhrit Hyundai to refund the ₹3.32 lakhs with 9% interest.
However, the commission dismissed the customer’s claim against Hyundai Motors, citing the lack of a direct contractual relationship.
The complainant then appealed the district commission’s decision, arguing that since Suhrit Hyundai had shut down, Hyundai Motors should be held responsible for fulfilling the order or issuing a refund.
The State Commission, however, rejected this argument and upheld the original ruling in favor of Hyundai Motors.
Court’s Final Judgment
The State Consumer Commission’s final ruling highlights the importance of direct contractual relationships in determining liability in consumer cases.
The court’s decision reinforces that manufacturers are not automatically liable for the actions of independent dealerships unless a contractual or agency relationship can be established.
Bench and Party Details
- Bench: Justice Sangita Dhingra Sehgal (President), Member JP Agrawal
- Complainant: Customer (Name not disclosed)
- Respondents: Suhrit Hyundai (Respondent No. 1), Hyundai Motors Ltd., Hyundai Motors India Ltd. (Respondents Nos. 2 and 3)
- Advocate for Complainant: Kapil Chawla