The National Consumer Disputes Redressal Commission (NCDRC), in an order dated July 15, has held that Tata Motors cannot be held liable after a dealer sold a test-drive vehicle as a brand-new car to a customer. The commission set aside a Punjab State Consumer Commission order that had made the manufacturer jointly liable along with the dealer.Why did the buyer claim he was sold a demo car?According to the order, the complainant purchased a Tata Manza Elan from dealer M/s Hind Motors India in October 2011 for around Rs 7 lakh.Soon after taking delivery, he noticed several defects in the vehicle. Despite repeated visits to the workshop, the dealer failed to rectify the issues. It was later revealed that the car had been used by the dealer as a demo or test-drive vehicle for about eight months and had already covered 3,248 km before being sold, without this being disclosed to the buyer.Neither the retail invoice nor the sale certificate mentioned that the vehicle had previously been used as a test-drive car.The complainant approached the District Consumer Disputes Redressal Commission in Mohali, seeking replacement of the vehicle and compensation.In 2012, the district commission ruled only against the dealer, directing Hind Motors to refund the full purchase amount with interest, take back the vehicle, pay Rs 2 lakh as compensation and Rs 20,000 towards litigation costs.The dealer challenged the order before the Punjab State Consumer Disputes Redressal Commission. In 2014, the state commission held that since the dealer had offered a discount on the manufacturer's instructions, Tata Motors was also jointly liable as the dealer's "principal". However, it reduced the compensation from Rs 2 lakh to Rs 1 lakh.Following the order, three separate petitions were filed before the NCDRC—one by Tata Motors challenging the finding that it was liable, one by the complainant, Sadhu Singh, seeking restoration of the original compensation, and one by the dealer.Why did the NCDRC rule in Tata Motors' favour?Tata Motors argued that the vehicle had been sold to the dealer separately as a demo unit, that the relationship between the manufacturer and dealer was on a "principal-to-principal basis", and that there was no manufacturing defect that could make the company liable.The complainant argued that no trade certificate had been produced to establish how the vehicle moved from the manufacturer to the dealer and contended that the defects should still be treated as the manufacturer's responsibility.A bench comprising Justice A.P. Sahi (President) and Bharatkumar Pandya (Member) held that the state commission erred in holding the manufacturer liable without any evidence of a manufacturing defect."The state commission has erroneously, without there being any evidence of a proven manufacturing defect, went on to hold the manufacturer to be liable. In order to hold the manufacturer to be liable for any manufacturing defect, the examination of the process of manufacturing or any evidence relating thereto to infer a manufacturing defect has to be examined," the commission said.The bench also observed that the district commission had never held Tata Motors responsible."The district commission did not hold the manufacturer to be liable of any deficiency. The state commission to the contrary on an erroneous inference that the principal would also be liable has proceeded to caste a liability on the manufacturer which in our opinion is not justified," the commission further added.Accordingly, the NCDRC allowed Tata Motors' petition and restored the district commission's order, which had absolved the manufacturer of liability.Compensation against dealer restoredThe commission also found no reason for the state commission to reduce the compensation payable by the dealer from Rs 2 lakh to Rs 1 lakh."We find no justification for the reduction of the compensation of Rs.1 lakh that had been awarded against the dealer. In the absence of any fault or cogent reasoning the said reduction is also not justified," the bench noted.The NCDRC partly allowed the complainant's petition and restored the original compensation of Rs 2 lakh against the dealer, while declining to enhance it further.The petition filed by dealer Hind Motors was dismissed for non-prosecution after neither the company nor its liquidator appeared before the commission to pursue the matter.