Chandigarh State Commission Holds Manufacturer Solely Liable for Refund in Jeep Compass Manufacturing Defect Case

January 08, 2026 : The State Consumer Disputes Redressal Commission, U.T. Chandigarh, has held that where a vehicle is found to suffer from inherent manufacturing defects, the liability to refund the purchase consideration rests with the manufacturer and not the dealer.

The ruling came in Review Application No. SC/4/RA/17/2025 in CC No. 23/2024, titled Karan Bansal v. Stellantis India Private Limited & Ors., decided on 07.01.2026 by a Bench comprising Justice Raj Shekhar Attri (President) and Mr. Preetinder Singh (Member).

The review application was filed by WSL Automobiles Pvt. Ltd., the dealer, challenging the earlier order dated 17.10.2025 whereby the Commission had directed refund of the vehicle’s purchase price after recording a categorical finding that the vehicle suffered from inherent manufacturing defects.

The complainant, Karan Bansal, had purchased a Jeep Compass in May 2022 for ₹26,35,090. The vehicle allegedly developed persistent defects. The Commission, in its main order, relied upon repeated service records and an independent expert report of a duly constituted committee of mechanical engineers from Punjab Engineering College, Chandigarh, which confirmed the existence of inherent manufacturing defects.

Although refund of the purchase price was ordered in the main complaint, the liability had been fastened upon the dealer. Aggrieved by this direction, the dealer sought review under Section 50 of the Consumer Protection Act, 2019, contending that once a manufacturing defect is established, only the manufacturer can be held liable.

The Commission examined the scope of review jurisdiction under Section 50 and clarified that an “error apparent on the face of the record” refers to a clear and obvious mistake which can be identified without elaborate reasoning. It held that directing the dealer to refund the purchase consideration despite a categorical finding of manufacturing defect constituted such an error.

Referring to Section 84 of the Consumer Protection Act, 2019, the Commission observed that while a product liability action may be brought against a manufacturer, seller, or service provider, the principal liability in case of a manufacturing defect rests upon the manufacturer. It also took note of precedents including Tata Motors Limited v. Harpreet Singh and the Supreme Court judgment in Hindustan Motors Ltd. v. N. Siva Kumar, which affirm that in cases of manufacturing defects, the manufacturer alone is liable.

Allowing the review application, the Commission modified its earlier order and directed Stellantis India Private Limited, the manufacturer, to refund ₹23,71,581 after deducting 10% depreciation from the total cost of ₹26,35,090, along with interest at 12% per annum from 11.05.2022, payable within 30 days. In case of default, penal interest at 13% per annum would apply.

The manufacturer was further directed to pay ₹75,000 as compensation for mental agony and harassment and ₹35,000 towards litigation costs, failing which the amounts would carry penal interest at 9% per annum.

The complainant was directed to hand over possession of the vehicle upon receipt of the awarded amount. The complaint against the dealer was dismissed.

With this modification, the Commission clarified that once a finding of inherent manufacturing defect is recorded, the doctrine of product liability squarely places the refund obligation upon the manufacturer.