The legal questions surrounding India’s E20 rollout | Explained
The story so far: A District Consumer Disputes Redressal Commission in Raipur has directed a Maruti Suzuki dealer to replace a Grand Vitara with a
The story so far: A District Consumer Disputes Redressal Commission in Raipur has directed a Maruti Suzuki dealer to replace a Grand Vitara with a new E20-compatible model and pay compensation after holding that the complainant had been sold a non-E20-compatible vehicle as a new one. The Commission found the dealer and the manufacturer guilty of a deficiency in service and an unfair trade practice. Maruti Suzuki, however, has disputed the findings, maintaining that the vehicle was fully E20-compatible, that there was evidence of fuel contamination, and that it would challenge the order. The order has brought into focus the legal remedies available to consumers in disputes involving E20 fuel compatibility, warranty claims and manufacturer liability. What was the case about? The case arose from a complaint by a customer who purchased a Maruti Grand Vitara Strong Hybrid Zeta Plus in June 2024. Following repeated stalling issues, the complainant alleged that the vehicle developed problems after being fuelled with E20 petrol. He further claimed that he had not been informed at the time of purchase that the vehicle was not fully compatible with E20 fuel, despite the vehicle having been sold in 2024. The government mandated public sector oil marketing companies to roll out E20 fuel in a phased manner from April 1, 2023. It also required new petrol vehicles sold from that date to be E20-compatible. If E20 fuel allegedly damages a vehicle, who could be legally liable? “In practice, liability may be apportioned along three axes: (a) the vehicle’s manufacture and certification date; (b) whether or not incompatibility was disclosed at the point of sale; and (c) the terms of the warranty,” says S.M. Algaus, Partner, Dispute Resolution, CMS IndusLaw. According to Mr. Algaus, where a vehicle marketed as E20-compatible suffers from a manufacturing or design defect, or where adequate instructions regarding its use were not provided, consumers may proceed against the manufacturer, dealer and service provider under the product liability provisions of the Consumer Protection Act, 2019. For older vehicles sold after the E20 compliance requirements came into force without adequate disclosure regarding compatibility, dealers could independently face action under the Consumer Protection Act, depending on the facts of the case. Algaus says oil marketing companies(OMC) would ordinarily not be liable merely because they supplied E20 fuel. However, they continue to have statutory obligations to maintain fuel quality, ensure the correct ethanol blend and prevent contamination.
If damage results from improperly blended, contaminated or otherwise non-compliant fuel, liability may extend to the oil marketing company or the retailer. He adds that consumers would nevertheless bear the burden of proving that the fuel itself was defective or failed to meet prescribed standards. The Essential Commodities Act, 1955 and the Motor Spirit and High-Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 there under, separately impose statutory duties on OMCs to maintain fuel quality. What legal remedies do consumers have? Consumers may approach consumer commissions if they believe a vehicle or fuel did not match the representations made by manufacturers or fuel retailers, or if there was a deficiency in service or an unfair trade practice. A complaint may be preferred before the District, State or Commission, depending on pecuniary jurisdiction under Section 34 of the Consumer Protection Act, 2019. According to Mr. Algaus, complaints may be founded on four broad grounds depending on the facts: defective goods, deficiency in service such as repeated failed repairs, unfair trade practices including non-disclosure at the point of sale, and statutory product liability. He notes that consumer disputes are decided on the civil standard of a “preponderance of probabilities”, although allegations of manufacturing defects would ordinarily require technical or expert evidence. Once a complainant establishes that a defective product caused harm, Section 84 of the Consumer Protection Act shifts parts of the burden onto the manufacturer to demonstrate compliance with applicable standards. Section 87 of the Consumer Protection Act also provides exceptions to product liability. A product liability action cannot ordinarily be maintained where the product has been misused, altered or modified by the consumer. How do warranty and insurance claims generally work? There is no specific legal framework requiring manufacturers to honour warranty claims for engine or fuel system damage allegedly caused by E20 fuel in non-compatible vehicles. If a consumer runs a non-compatible vehicle on E20 despite the vehicle not being certified for it, the resulting damage is properly attributable to the owner’s own choice, and liability should not ordinarily stretch to the manufacturer unless the manufacturer had given an express warranty covering such use. The Centre has clarified that using E20 fuel in accordance with the manufacturer’s specifications will not, by itself, invalidate a motor insurance policy. Claims continue to be assessed based on policy terms, coverage and the circumstances of the loss.
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