Mercedes, Dealer Ordered To Pay Rs 10 Lakh Compensation Over Undisclosed Vehicle Billing History

Buying a new car comes with the expectation that its history is fully disclosed. In a case involving an undisclosed earlier billing record, a Delhi Consumer Disputes Redressal Commission directed Mercedes-Benz India and its authorised dealer, T&T Motors, to jointly pay Rs 10 lakh compensation to a buyer.

What Was The Case About

The order was passed on July 24 by a bench comprising President Monika Aggarwal Srivastava and members Rajender Dhar and Ritu Garodia.

According to The Indian Express, the complainant purchased a Mercedes-Benz sedan from T&T Motors on December 12, 2018, for Rs 50.72 lakh and opted for an extended warranty later that month. The issue arose during a service visit in 2020 when the service records and pre-delivery inspection details reflected July 25, 2018, as the vehicle's purchase date.

When the buyer asked the dealer about the discrepancy, he was informed that the vehicle had earlier been billed to another customer in June 2018, but the transaction was later cancelled before the car was sold to him. The buyer said this information had not been disclosed at the time of purchase and approached the consumer commission, seeking a refund, adjustment of the amount paid towards another vehicle and compensation.

What The Commission Said

The commission observed that the complainant was never informed that the manufacturer's software continued to reflect the earlier purchase date. It also noted that despite repeated requests, the records were not corrected, and no satisfactory explanation was provided.

According to the report, the commission held that T&T Motors was guilty of unfair trade practice for not informing the complainant about the purchase date reflected in Mercedes-Benz India's software, while the manufacturer was held liable for failing to correct the purchase records.

During the proceedings, T&T Motors argued that the complainant was not a consumer under the Consumer Protection Act as the vehicle had been purchased by a commercial organisation. It also stated that the earlier booking had been cancelled before the car was sold to the complainant and that it had no authority to modify the manufacturer's software records.

While Mercedes-Benz India argued that it had sold the vehicle to the dealer on a principal-to-principal basis, had no role in the dealer's transaction with the complainant and that the commission lacked territorial jurisdiction to hear the complaint.

After considering the submissions, the commission directed Mercedes-Benz India and T&T Motors to pay Rs 5 lakh each as compensation. It also asked Mercedes-Benz India to update the vehicle's purchase record in its software and gave the time of 60 days to both parties to comply with the order.

The case indicates the necessity of transparency in vehicle sales and encourages buyers to verify purchase documents and vehicle records before completing a high-value purchase.