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Indian car buyers need protective law

You buy a brand new car, but before you even begin to enjoy the rides, it starts giving trouble. The dealer claims that it is only a minor problem and promises to set it right. Pushpa Girimaji tells more...

india Updated: Aug 03, 2008 23:19 IST
Pushpa Girimaji

You buy a brand new car, but before you even begin to enjoy the rides, it starts giving trouble. The dealer claims that it is only a minor problem and promises to set it right. But despite several visits to the service centre, the malfunctioning continues. It's an extremely frustrating experience.

In the United States, such a car is described as a ‘lemon’ and you have what is called the ‘Lemon Law’ to get the manufacturer to either replace your defective vehicle or give you a refund. Broadly, a vehicle becomes a ‘lemon’ if it has substantial defects that impair its use, re-sale value or safety and the manufacturer has not been able to set right the defect despite attempts to do so. While in some states like New York, the vehicle qualifies for the tag of a lemon if it has gone through four unsuccessful attempts at repair or has been out of service for a cumulative period of 30 days , in some states like New Jersey, the requirement is three unsuccessful repair attempts or 20 days of being out of service. Under the Lemon Law, all the states in the US provide for arbitration to resolve consumer complaints.

They also disclose details of complaints received under the Lemon Law.

Hawaii, for example, received 80 complaints in 2005 under the State Certified Arbitration Programme (Lemon Law ) and helped consumers recover more than $ 9,19,000, while in New Jersey, the total value of refunds, reimbursements and replacement given to consumers under the Motor Vehicle Warranty Act in 2006 was more than $48 million! Such laws definitely generate focus on quality and after-sales service.

In India, even though the automobile sector has seen a phenomenal growth, there is no exclusive law to help consumers who have been sold a lemon.

However, the consumer protection law gives the consumer the right to a refund or a replacement against a defective product. In recent years, the apex consumer court has laid the ground rules for such refund and replacement through some excellent judgements.

In the case of Vinoo Bhagat vs General Motors (India) Ltd, the court said if the defects in the vehicle substantially impaired use, then the consumer was entitled to a refund or a replacement.

In 2006, in the case of RRaja Rao vs M/S Mysore Auto Agencies, it emphasized that a consumer who is sold a defective automobile has to get back his money or a defect-free replacement, on the ground that the same vehicle would not give the satisfaction of a new vehicle.

Last year, in the case of Hyundai Motors India vs Affliliated East West Press, it went even further and held that even if the defects were not major, the consumer satisfaction of having bought a new vehicle was lost if it was repeatedly being taken for repairs. In all these cases, the apex consumer court ordered refund of the cost of the vehicle, costs of litigation and compensation for harassment undergone by the consumer.

However, I do believe that consumers who have been sold a defective vehicle need to have a quicker method of resolving their disputes, either through arbitration or an ombudsman. To that extent, an exclusive law (better than the Lemon Law) to protect the rights of vehicle owners would be most welcome.