Chapter: 3.1.6 National Commission on relationship between Dealer and Manufacturer

National Commission on relationship between Dealer and Manufacturer:

National Commission has held in HERO HONDA MOTORS V/S K B MURLIDHARAN & ANR 1994 (2) CPR 533 (NC) as follows:

"Where the agreement between a 'manufacturer' and 'dealer' is that of 'principle to principle' and not as 'principle' and 'agent', the manufacturer cannot be held liable jointly with the dealer for refund of an amount accepted by the dealer."

In the above case, the complainant booked a Hero Honda Motor Cycle with the dealer but the vehicle was not delivered as per the agreement between the dealer and manufacturer. Transaction between them was on principle-to-principle basis and it is not the case of the complainant that the amount deposited with dealer was passed on to the manufacturer. The order of the Forum below making the manufacturer jointly liable for refund of the amount with the dealer is liable to be set aside.