Consumer Protection Act, 1986: s. 14(1) – Defect in respect of safety features of a vehicle – Award of punitive damages – On facts, non-deployment of air bags in the car at the time of accident resulting in injuries to the complainant – Award of compensation by fora below – On appeal, held: Fora below rightly relied on the principle of Res Ipsa Loquitur to affix the liability of the manufacturer as regards defect in the airbag system, having regard to the nature of the collision and took the view that expert evidence was not necessary – They highlighted that there was significant damage to the front portion of the vehicle – Ordinarily a consumer while purchasing a vehicle with airbags would assume that the same would be deployed whenever there is a collision from the front portion of the vehicle – Deployment of the airbags ought to have prevented injuries being caused to those travelling in the vehicle, particularly in the front seat – Consumer is not meant to be an expert in physics calculating the impact of a collision on the theories based on velocity and force – Thus, no error in the findings of the two fora as regards there being defect in the vehicle – As per the statute, the direction could be for replacement of defective goods as also punitive damages – In the facts of the case, direction for replacement of the vehicle is justified and the fact that the consumer has got the car repaired on insurance money would not impact the quantum of damages, which is partly punitive in nature – Failure to provide an airbag system which would meet the safety standards to be subject to punitive damages – Thus, the decision of the National Commission not interfered with – Sale of Goods Act, 1930 – ss. 2(7), 16.
Dismissing the appeal, the Court
HELD: 1.1 Vehicles are goods within the meaning of Section 2(7) of the Sale of Goods Act, 1930 and they carry implied conditions as to their fitness. That is a statutory mandate and that mandate also operates in respect of goods, whose defect is subject of proceeding in a consumer complaint under the Consumer Protection Act, 1986. In the complaint, it has been pleaded that the respondent had relied on the safety features of the vehicle projected by the manufacturer. In such a situation, the limitation will run from the day the defect surfaces in a case. There is no way by which the nature of defect complained against could be identified in normal circumstances at an earlier date, before the collision took place. In this case, the safety feature of the vehicle fell short of the quality of fitness as was represented by the manufacturer by implication. The National Commission’s view is broadly based on the principle incorporated in Section 16 of the 1930 Act. The defect in this case ought to be treated to have had surfaced on the date of the accident itself. [Para 7] [115-F-H; 116-A-B]
1.2 The question on privity of contract was raised on the ground that the dealer was not impleaded as a party and there was no contract between the appellant and the respondent consumer. This issue was rightly rejected by both the fora. [Para 8][116-H; 117-A]
1.3 There are findings of the two fora about the defect in the product sold, in this case being a vehicle. This was sold with front airbags and there was frontal damage. The airbags did not deploy. The accident caused injuries to the respondent. The appellant referred to various portions from the owner’s manual to contend that the impact of the collision was not sufficient to activate the sensor which in turn would have resulted in deployment of the airbags. The State Commission relied on the principle of Res Ipsa Loquitur to affix the liability of the manufacturer as regards defect in the airbag system, having regard to the nature of the collision. The National Commission affirmed this finding referring to certain photographs of the damaged vehicle, which showed substantial frontal damage. In such circumstances, both the said fora took the view that expert evidence was not necessary in the subject case. Such view cannot be faulted as being unreasonable, in the given facts. [Para 9] [117-B-D]
1.4 Ordinarily a consumer while purchasing a vehicle with airbags would assume that the same would be deployed whenever there is a collision from the front portion of the vehicle (in respect of front airbags). Both the fora, in their decisions, have highlighted the fact that there was significant damage to the front portion of the vehicle. Deployment of the airbags ought to have prevented injuries being caused to those travelling in the vehicle, particularly in the front seat. A consumer is not meant to be an expert in physics calculating the impact of a collision on the theories based on velocity and force. In such circumstances, there is no error in the findings of the two fora as regards there being defect in the vehicle. [Para 10][117-E-G]
1.5 This is a case where the 1986 Act was applicable and Section 14 of the said statute lays down the reliefs which may be granted. The directions as per the statute, could be for replacement of defective goods as also punitive damages. The appellant have also taken a point that so far as replacement of the vehicle is concerned, there was no substantive direction and no discussion either. The operative part of the order suffers from a shortcoming on this count, but that is not fatal. On a composite reading of the directions, it is found that such direction was made. The confusion, if any, arises because of construction defect in the Order of the State Commission. A direction for replacement of the vehicle is justified in the facts of this case. The direction for replacement of the vehicle would not be treated as non-est having regard to the State Commission’s Order. The fact that the consumer has got the car repaired on insurance money would not impact the quantum of damages, which is partly punitive in nature in this case. [Para 11][117-H; 118-A-C]
1.6 The damages awarded against the appellant may have gone beyond the actual loss suffered by the respondent and may not represent the actual loss suffered by him in monetary terms. But the provision of Section 14 of the 1986 Act permits awarding punitive damages. Such damages can be awarded in the event the defect is found to have the potential to cause serious injury or major loss to the consumer, particularly in respect of safety features of a vehicle. The manufacturer should be under strict and absolute liability in respect of the latter. Compensation in the form of punitive damages ought to have a deterrent effect. [Para 13][118-F-H; 119-A]
1.7 In the instant case, the impact of the collision was such that it would have been reasonable for the respondent to assume that there would have been deployment of the airbags. The safety description of the goods fell short of its expected quality. The content of the owners’ manual does not carry any material from which the owner of a vehicle could be alerted that in a collision of this nature, the airbags would not deploy. Purchase decision of the respondent-complainant was largely made on the basis of representation of the safety features of the vehicle. The failure to provide an airbag system which would meet the safety standards as perceived by a car-buyer of reasonable prudence should be subject to punitive damages which can have deterrent effect. And in computing such punitive damages, the capacity of the manufacturing enterprise should also be a factor. There was no specific exclusion clause to insulate the manufacturer from claim of damages of this nature. Even if there were such a clause, legality thereof could be open to legal scrutiny. [Para 14][119-D-G]
1.8 If the reliefs granted in a consumer complaint fits any of the statutory provision contained in sub clause (1) of Section
14 of the Act, it would be well within the power and jurisdiction of the Forum to pass directions irrespective of the fact as to whether specifically certain reliefs have been claimed or not, provided that facts make out foundations for granting such reliefs. In any event, it is within the jurisdiction of the said forum to mould the reliefs claimed to do effective justice, provided the relief comes within the stipulation of Section 14(1) of the Act. The relief granted to the respondent comes within the statutory framework. The decision of the National Commission is not interfered with. The reasoning of the Commission or the operative part of the order awarding damages are not perverse. The directions issued against the appellant by the State Commission and upheld by the National Commission cannot be said to have failed the test of proportionality. The subject-defect is found to be of such nature that the provisions relating to punitive damages ought to be attracted against the appellant. [Para 15][119-H; 120-A-D] Nagappa v. Gurudayal Singh & Others (2003) 2 SCC
274 : [2002] 4 Suppl. SCR 499; Sangita Arya and Others v. Oriental Insurance Company Limited and Others (2020) 5 SCC 327; Jitendra Khimshankar
Trivedi and Others v. Kasam Daud Kumbhar and Others (2015) 4 SCC 237 : [2015] 2 SCR 120; M.C. Mehta and Another v. Union of India and Others (1987) 1 SCC 395 : [1987] 1 SCR 819 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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