Car Dealer Told to Refund ‘Incidental Charges’ to Customer

Published: 23rd September 2014 06:05 AM  |   Last Updated: 23rd September 2014 06:05 AM   |  A+A-

KOCHI: Beware!, if any vehicle dealer approaches you demanding ‘incidental charges’ for the delivery of a vehicle that you purchased. For, it is a cognisable offense.

Giving a huge relief to consumers, the Ernakulam Consumer Dispute Redressal Forum has pronounced a path-breaking verdict against the practice of collecting ‘incidental charges’ for transporting vehicles from the manufacturer’s yard to the showroom.

This judgment is the first of its kind, not only in the State but in the country. The Forum observed that collecting ‘incidental charges’ does not have any statutory backing, and hence not legally valid. Customers can always approach consumer forums when they are asked to pay such charges.

The Forum pronounced the verdict on a complaint lodged by Thomas Varghese Oommen of Pathanamthitta against Platino Classic Motors India Pvt Ltd, an automobile dealer, and BMW India Pvt Ltd, a manufacturer of cars.

The complainant purchased a BMW-520-D car from Platino Classic Motors, for which the showroom price fixed by BMW India Pvt Ltd was `38,82,900. But, the dealer demanded an additional payment of `28,000 from the complainant as handling expenses, which he paid.

Later, on realising that he was not liable to pay the additional charges, the complainant approached the Consumer Forum. 

Against the dealer’s argument that the complainant had agreed to pay the incidental charges, the Forum asked whether dealers were legally entitled to collect handling charges from customers, in addition to the price and other statutory charges.

“The opposite parties miserably failed to explain how the handling charges were legally valid. The dealer has made the charges look like government levy. If it is not under the the Motor Vehicles Act-1988, how can the dealer collect the additional charges, when they are not entitled to do so,” the Forum said.

 “Hence, the illegal levy of ‘handling/incidental charges’, in addition to the price fixed by the manufacturer, amounts not only to deficiency in service, but also to unfair trade practice by the dealer.

Apart from refunding `28,000, the dealer will also have to pay an additional amount of `10,000 towards the mental agony the complainant had to go through and also towards covering the cost of the proceedings.

The verdict was pronounced by Consumer Forum president A Rajesh, Sheen Jose and V K Beenakumari.

The Forum also observed that the manufacturer was keeping silence regarding the illegal levy of handling charges by the dealer, which speaks volumes.

“In this case, the manufacturer is exempted  from penalty, who argued that the sale of vehicles stands concluded when they are handed over to the dealer, which was accepted by the Forum,” the Forum stated.

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