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When the relationship between a car manufacturer and a dealer is on a principal-to-principal basis, the former cannot be saddled with liability arising from the actions of the latter that led to sale of a defective car, unless its knowledge about such defects can be proved, the Supreme Court has ruled (Tata Motors Limited v. Antonio Paulo Vaz).
Unless the manufacturer’s knowledge is proved, a decision fastening liability upon the manufacturer would be untenable, given that its relationship with the dealer, in the facts of this case, were on principal-to-principal basis, the Court held. The Court, therefore, absolved Tata Motors of the liability imposed upon it by the National Dispute Redressal Commission (NCDRC) for sale of a defective two-year-old car by the dealer.
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Unless the manufacturer’s knowledge is proved, a decision fastening liability upon the manufacturer would be untenable, given that its relationship with the dealer, in the facts of this case, were on principal-to-principal basis, the Court held. The Court, therefore, absolved Tata Motors of the liability imposed upon it by the National Dispute Redressal Commission (NCDRC) for sale of a defective two-year-old car by the dealer.
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