The company later moved the state commission against the district forum's order.
The country's apex consumer commission, NCDRC, has asked Tata Motors to pay Rs 3.5 lakh towards compensation and punitive damages for misleading advertisements making false mileage claims regarding its car Tata Indigo.
The commission observed that the customer was allured to buy the car due to the claims made in the advertisement, but test drives done on different dates showed that the car's mileage was not as promised.
The National Consumer Disputes Redressal Commission (NCDRC) directed Tata Motors to pay compensation of Rs 2 lakh to Kolkata-resident Pradipta Kundu and asked it to deposit Rs 1.5 lakh towards punitive damages with the state consumer welfare fund.
NCDRC rejected the review petition filed by Tata Motors and upheld the state commission's order which had directed the company to pay Rs 3.5 lakh in total for taking recourse to deceptive trade practice by way of misleading advertisement.
Pradipta Kundu, who purchased a Tata Indigo in 2011 after seeing an advertisement which claimed its mileage to be 25 kilometres per litre, was disappointed to find out that the car did not provide the promised mileage.
The advertisement had also claimed that it was India's most fuel-efficient car and that it was an offer for a limited period.
Pradipta Kundu had moved the district forum after the company refused to replace the car.
The district forum directed Tata Motors to refund the cost of the vehicle, which was Rs 4.8 lakh along with a compensation of Rs 5 lakh and cost of Rs 10,000.
The company later moved the state commission against the district forum's order.