consumers beware!
Unreasonable terms cannot be binding
pushpa girimaji

I had booked an SUV (Sports Utility Vehicle) in the first week of January and the dealer had promised to deliver it by the first week of February. However, he did not keep to his promise and delivered it only in the first week of March and collected more than the agreed price (at the time of booking) on the ground that the excise duty had gone up. Is this fair on his part? What can I do here?

Several factors come into play here: (a) If you have an agreement with the dealer, where he has promised to deliver the vehicle at a particular price, then he has to stick to that price and cannot charge you more (but usually the agreements have a clause that allows the dealer to increase the price in certain circumstances)

(b) If he has given you in writing, the date of delivery and has failed to deliver it on that date, then he has to absorb the increase in excise duty and not collect it from you (the only exception is where such delay was caused by circumstances beyond his control)

(c)There is another possible scenario — the dealer may have delivered the vehicle to those who had made the booking after you and delayed yours —in such a case he has to not only absorb the additional duty, but also needs to compensate you for his unethical and unfair behaviour.

Sometimes dealers deliberately delay the delivery, so as to collect (and pocket) the increased duty. If the vehicle has left the factory premises before the revision in excise duty, then obviously it would not have attracted the enhanced duty and so the dealer cannot ask you to pay it. Doing so would amount to "unjust enrichment" of the dealer/manufacturer and it is an unfair trade practice. So you need to check these facts and on that basis, demand that he pay back the extra money collected, along with interest. If he fails to comply, you can complain to the manufacturer and, if necessary, go to the consumer court.

Have consumer courts dealt with such cases before? If so, what is their verdict?

In Tata Engineering Locomotive Company and Sakti Automobiles vs John Jacob (RP no 1079 of 1998, decided on April 4, 2006) the consumer, John Jacob, had booked a Tata Sumo through Shakti Automobles, Kochi, by making an advance payment of Rs 25,000. The agreed price of the vehicle at the time of booking was Rs 3,30,061 and subsequently, when the booking matured, the entire amount was collected by the dealer. However, at the time of taking delivery of the vehicle in September 1996, Jacob was asked to pay an additional amount of Rs 38,344 on the ground that there was a hike in excise duty.

Here, the National Consumer Disputes Redressal Commission held that if the vehicle had attracted additional duty, then the dealer was justified in collecting the additional amount from the consumer. If not, doing so would amount to an unfair trade practice. So he asked the manufacturer for the exact date on which the vehicle had left the factory. On learning that this was before the revision in the excise duty, the Commission held the manufacturer and the dealer guilty of unfair trade practice for having collected from the consumer, the additional excise duty, when the car had not attracted the revised cess. It directed them to refund the amount of Rs 38,344 with interest at the rate of 12 per cent per annum, calculated from September 1996. It also awarded costs of Rs 25,000

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