Car Dealer Compensation : Dealer kept car for years, failed to transfer ownership; commission orders Rs 2.57 lakh payout |
NEW DELHI: The West Bengal state consumer commission has upheld an order directing a car dealer to pay Rs 2.57 lakh to a customer after the dealer failed to transfer ownership of a second-hand car and kept the vehicle at its workshop for years after an accident. The commission also upheld 10 percent annual interest, Rs 5,000 compensation and Rs 5,000 towards legal expenses. The order was passed on September 2, 2026.Why did the customer approach the commission?According to the commission order, the customer booked a pre-owned Maruti SX4 on March 10, 2016, under the dealer’s “true value” scheme for Rs 3.69 lakh. He paid Rs 5,000 as booking advance and gave his father’s Maruti Omni, valued at Rs 1.30 lakh, in exchange. He paid the remaining Rs 2.39 lakh to the dealer.The customer also paid Rs 13,000 for administrative and other charges for transferring the car’s ownership and registration. The dealer assured him that the transfer would be completed within six months. The car was delivered on April 5, 2016.Six days later, on April 11, the car met with an accident and was taken to the dealer’s workshop. The dealer issued a repair estimate of Rs 53,780 but did not repair the vehicle. The car remained at the workshop.The customer later sent a legal notice to the dealer. He also faced a problem when the RTO asked him to produce the car for inspection because the vehicle was still inside the dealer’s workshop. He then approached the consumer commission.The dealer argued that the customer was not a consumer, that the complaint was filed late and that ONGC, the earlier registered owner, and the insurance company should also have been made parties. It also said the repairs could not be carried out because the customer had not paid the repair charges.The customer said he had given the dealer all the documents available with him after the accident. He also relied on the delivery note, which stated that the dealer had agreed to take responsibility for helping complete the ownership transfer.Why did the commission rule against the car dealer?The bench of member Rajes Guha Ray and member Santanu Saha found that the dealer had taken Rs 13,000 specifically for transferring the car’s ownership but failed to complete the process within the promised six months. It noted that the dealer did not submit the required papers to the RTO until October 27, 2016.“It is an undisputed fact that the appellant collected Rs.13,000/- specifically to effect the change of ownership and name transfer. The delivery note explicitly bound the Appellant to full responsibility for this transfer. The car was delivered on April 5, 2016, with a clear verbal promise to complete the process within six months,” the bench said.The dealer claimed that the transfer was delayed because the customer failed to produce the car for an RTO inspection. The commission rejected this argument because the car had already been lying inside the dealer’s workshop since the accident.“The appellant argues that the transfer got stalled because the Complainant failed to produce the car for inspection on November 8, 2016. However, this argument is logically flawed. The car had been lying inside the Appellant’s workshop since the accident on April 11, 2016, and hence, the Appellant held physical custody of the vehicle. Expecting the complainant to produce a vehicle lying inside the appellant’s own garage is absurd,” the commission held.On the repairs, the commission said the dealer could not necessarily be forced to carry out extensive repairs without payment. However, it said the dealer could not keep the customer’s vehicle indefinitely.“However, the deficiency of the Appellant lies in its subsequent conduct. Even if repairs were stalled due to financial and documentation disputes, the Appellant had no legal right to hold the consumer’s vehicle in perpetuity, allowing it to deteriorate for years while using the documentation deadlock as a shield,” the commission further noted.The commission dismissed the dealer’s appeal and upheld the district commission’s order directing it to pay Rs 2.57 lakh with 10 percent annual interest, along with Rs 5,000 compensation and Rs 5,000 legal expenses.The dealer has been directed to pay the entire amount within 45 days. Once the payment is made, it can take possession of the damaged vehicle, which remains at its workshop, as salvage.
