NEW DELHI: A Punjab district consumer commission has directed a pre-owned car dealer to refund Rs 2.52 lakh to a man who purchased a second-hand Maruti WagonR that was later found to be blacklisted in connection with proceedings before the Punjab and Haryana high court. It held that the dealer failed to verify the vehicle’s legal status before selling it, amounting to deficiency in service.
Case background
According to the commission order, Pardeep Kumar, the complainant, approached an automobile dealer called True Value, on June 10, 2022, to purchase a pre-owned car and deposited Rs 2,000 as security. He purchased a second-hand Maruti WagonR, previously registered in the name of Satnam Singh of Ludhiana, for Rs 2,51,700, excluding registration and insurance charges.Kumar said the dealer assured him that the car was in good running condition and had proper documents. He then purchased it through a final deal slip dated July 1, 2022, by taking a loan of Rs 2.38 lakh from Cholamandalam Investment and Finance Company. He also later renewed its insurance policy.On December 6, 2022, Kumar received a letter from the Vehicle Registration Authority, Ahmedgarh, informing him that the car had been blacklisted by an order of the Punjab and Haryana high court. The authority asked him to produce the vehicle for inspection and verification.Kumar alleged that the dealer assured him the matter would be resolved within a month but kept delaying it. In March 2023, he handed over the vehicle to the dealer after its representatives allegedly asked him to produce it for the high court.The dealer later sent him a legal notice dated September 30, 2023, offering to buy back the car for Rs 2,51,700. Kumar claimed that he had incurred expenses exceeding Rs 3.20 lakh and sought a refund with 17% interest, Rs 50,000 compensation and Rs 20,000 litigation expenses.In its written statement, the dealer argued that Kumar had selected the car after inspecting it and taking a test drive. It said the registration was transferred to his name and a fresh registration certificate issued. It denied assuring him that the blacklisting issue would be resolved and claimed Kumar had left the vehicle at its premises on his own.
Commission’s findings
The bench of president Naveen Puri and members Prem Singh Salaria and Harvimal Dogra held that Kumar qualified as a consumer under the Consumer Protection Act, 2019. It rejected the dealer’s argument that it had merely acted as an intermediary, saying this did not absolve it of responsibility for its representations.The commission noted that the December 6, 2022, letter referred to the vehicle’s involvement in a case pending before the Punjab and Haryana high court. It said the issue related to the vehicle’s earlier history and circumstances predating its sale.“The opposite party was engaged in the business of buying and reselling pre-owned vehicles and was, therefore, expected to exercise reasonable care in verifying the vehicle’s registration particulars and relevant documentation before representing it as having proper documents,” the commission noted.It rejected the dealer’s argument that a fresh registration certificate established that the vehicle’s documents were in order. It also said a physical inspection or test drive could not reveal pending legal proceedings or a blacklisting order.Relying on the Supreme Court’s ruling in Rajiv Shukla v. Gold Rush Sales and Services Ltd., decided on September 8, 2022, the commission said a seller cannot disregard material obligations arising from a sale. The commission noted that the case involved a different situation, where a used vehicle was supplied instead of a new one.The bench held that the dealer failed to establish that it had informed Kumar about the adverse legal issue before the sale or taken adequate steps to verify the vehicle’s status. It found deficiency in service.The commission also noted that the vehicle remained at the dealer’s premises and that Kumar could not use it freely while it remained blacklisted. However, it rejected his claim for expenses exceeding Rs 3.20 lakh as he had not provided supporting receipts.
Final order
Announced on October 21, 2026, the commission directed the dealer to pay:
- Rs 2,51,700 as refund, subject to confirmation that the vehicle remains in its possession
- 6 percent annual simple interest from the date of filing the complaint until payment
- Rs 7,500 as litigation expenses
The dealer was not held liable for outstanding loan instalments. Compliance was directed within 45 days of receiving the order, failing which the refund amount would carry enhanced simple interest of 4 percent per annum from the complaint date until payment.
