NEW DELHI: A district consumer commission in Delhi has directed an authorised Kia dealer to refund Rs 1.08 lakh to a company that booked a Kia Carnival but did not receive the vehicle despite being promised delivery within weeks. Holding the dealer guilty of deficiency in service, the commission said the vehicle manufacturer could not be held liable for the delay because its relationship with the dealer was on a principal-to-principal basis.
Case background
As per the commission order, RR Investor Capital Services booked a Kia Carnival Limousine 7-seater, in steel silver colour on December 17, 2021, for Rs 38,98,624 through authorised dealer Jayanti Motors. The company paid Rs 1 lakh as a booking amount and was assured that the vehicle would be delivered by the first week of February 2022.However, the vehicle was not delivered within the promised period. The complainant alleged that the dealer kept postponing delivery on one pretext or another and repeatedly revised the vehicle’s price through proforma invoices dated December 17, 2021, January 6, 2022, and April 13, 2022. The dealer also sent apology emails.The company claimed that the delay caused substantial business losses as its senior officials and managing director could not commute conveniently. It also alleged that it had to continue paying the salary of a driver who remained engaged despite the non-delivery of the vehicle.RR Investor Capital Services approached the commission, alleging deficiency in service and seeking a refund of Rs 1.08 lakh with interest, Rs 7.5 lakh as compensation for physical strain and mental agony, Rs 60,000 towards the driver’s salary for three months and Rs 25,000 as litigation expenses.In their written statement, Kia India and its officials argued that the complaint was not maintainable and that the dispute, if any, was between the complainant and the authorised dealer. They said the relationship between the manufacturer and dealer was on a principal-to-principal basis and that the manufacturer could not be held liable for the dealer’s acts or omissions.The dealer and its managing director did not file their written statement within the statutory period. Their defence was struck off by the commission on January 13, 2023.
Commission’s findings
The bench of president Poonam Chaudhry and member Shekhar Chandra examined whether the manufacturer and the authorised dealer could be held jointly and severally liable for the delay.Relying on the Delhi state consumer commission’s February 21, 2023, ruling in Hyundai Motor India Ltd v. Hari Singh Bal and Others, which referred to the National Consumer Commission’s decision in Maruti Udyog Ltd v. Nagender Prasad Sinha, the bench said that where the relationship between a manufacturer and its authorised dealer is on a principal-to-principal basis, the manufacturer cannot be held responsible for the dealer’s failure to deliver a vehicle.The commission observed that the responsibility for the delay rested with the authorised dealer and not the manufacturer.“We thus hold that in case of delay in delivery of vehicle the liability is of authorized dealer and not the manufacturer. OP No.3 is the Managing Director of OP No.4 the authorized dealer. We accordingly hold OP no.3 and 4 guilty of deficiency of services and direct OP No.3 and 4 to refund the sum of Rs.1,08,000/- (Rupees One Lakh Eight Thousand) to complainant with interest @9% per annum from the date of receipt of payment,” the bench said.It accordingly held Jayanti Motors and its managing director liable for deficiency in service, while absolving Kia India and its officials of liability.
Final order
Announced on October 5, 2026, the order partly allowed the complaint. The commission directed the authorised dealer and its managing director to pay:
- Rs 1.08 lakh, the amount deposited, with 9 percent annual interest from the date of receipt of payment.
- Rs 1 lakh as compensation.
- Rs 25,000 as litigation expenses.
The payment must be made within six weeks of receiving the order, failing which the amount will carry 12 percent annual interest until realisation.
