Retailer is liable too
Pushpa Girimaji

When a product that you buy turns out to be defective, you obviously hold not only the manufacturer, but also the dealer from whom you purchased the product, liable. However, dealers invariably try to escape responsibility by pointing a finger at the manufacturer. And they have often challenged court decisions holding them as much liable as the manufacturer for a defective product.

In the case of Harmohinder Singh vs Anil Sehgal, for example, the State Commission rejected the plea of the dealer that he was not responsible for the sealed compressor unit that he had used in the air-conditioner assembled by him, because he was not the manufacturer of the compressor. Said the State Commission: "A dealer cannot avoid his liability simply on the ground that he was not a manufacturer. It is his responsibility to carry out the terms of the warranty and in turn he may involve the manufacturer in fulfilling his obligations under the warranty." This was upheld by the Apex Consumer Court.

Similarly in the case of Alkotach Power Industries vs K.N. Gopala Krishna Bhat, the consumer courts at the district as well as the state level held the dealer responsible for the false claim made on the product.

This issue of the dealerís liability came up yet again some months ago before the Apex Consumer Court, when a dealer challenged the decision of the lower consumer courts asking him as well as the manufacturer to pay for a defective power tiller purchased by a consumer, Abdul Karim.

A farmer, Karim, mortgaged his land, secured a loan of Rs 70,000 from the Mushirabad branch of State Bank of India and bought a power tiller for Rs 80,000. However, the tiller developed some snags and despite several attempts, could not be repaired, forcing the farmer to eventually seek the help of the consumer court for relief.

The Consumer Disputes Redressal Forum in Mushirabad directed the dealer and the manufacturer to refund the cost of the tiller after deducting 10 per cent towards depreciation for the use of the tiller. Aggrieved by this decision, the dealer filed an appeal before the State Commission, which dismissed it, except to say that the money should be paid to the bank which had loaned the amount towards the purchase of the power tiller.

The dealer then filed a revision petition before the National Consumer Disputes Redressal Commission. His contention was that a dealer cannot be held liable for defects in goods and the responsibility for such defects rested only with the manufacturer. In support of this, he quoted an order of the Supreme Court in the case of Hindustan Motors Ltd vs N. Sivakumar, wherein it was held that only the manufacturer of the vehicle was liable for the defects, and not the dealer. "We make it clear that for the manufacturing defects in the vehicle, the dealer cannot be held liable. The liability must be borne by the manufacturer," the court had said in this case.

Dismissing this contention, the National Commission quoted a more recent judgement of the Supreme Court in the case of Philip Mampillil vs. Premier Automobiles Ltd., wherein the court had made it clear that the dealer or the agent would be as liable as the manufacturer. If it was legally possible, the dealer could later recover that money from the manufacturer, but as far as the consumer was concerned, both were responsible, the Supreme Court said.

The Apex Consumer Court also took into consideration the provisions of Section 226 of the Contract Act, and concluded that since the purchase of the tiller was made through the dealer, the privity of contract was with him. It was therefore incorrect to say that the agent or the dealer was not jointly and severally liable for the defects.

So whenever you file a complaint about a defective product, remember to name both the retailer and the manufacturer in your complaint. That would ensure that both will take responsibility for defective goods and deficient services.