CCI Closes Complaint Against Mahindra And Dealer Over Warranty Condition On Approved Consumables

On 9 September, the Competition Commission of India (CCI) closed a complaint against Mahindra & Mahindra Limited and its authorised dealer, Sri Durga Automobiles, over allegations that making vehicle warranty coverage conditional on the use of Mahindra-approved consumables amounted to anti-competitive conduct.

A coram of Chairperson Ravneet Kaur with Members Sweta Kakkad and Deepak Anurag closed the information filed by Bharti Sharma, who alleged that Mahindra and its authorised dealer contravened Sections 3 and 4 of the Competition Act, 2002. The Commission held:

“...the Commission is of the view that no prima facie case of contravention of Sections 3 and 4 of the Act is made out against the OPs.”

Sharma purchased a Mahindra XUV700 from the dealer in June 2024 and opted for an extended warranty until July 13, 2029. During scheduled services in January 2025 and January 2026, she supplied Pakelo Krypton XT LA-V SAE 5W-30 engine oil, which the authorised service centre accepted and used without objection.

After the January 2026 service, the vehicle displayed a “check engine system” warning and suffered reduced performance. The dealer diagnosed a defective turbocharger and estimated around Rs. 50,000 for its replacement. However, it allegedly refused to honour the warranty claim on the ground that externally sourced engine oil had affected the warranty.

Mahindra subsequently responded to Sharma's complaint, stating that warranty coverage was subject to the use of Mahindra-approved consumables.

Sharma alleged that making warranty coverage conditional on the use of Mahindra-approved consumables restricted consumer choice, created barriers for competing lubricant suppliers and foreclosed competition in the aftermarket for lubricants and maintenance services.

The Commission noted that the alleged requirement to procure engine oil from Mahindra or its authorised dealers essentially emanated from an agreement between the enterprise and an end consumer. Examining Section 3(4) of the Competition Act, it observed:

“...the Commission notes that the proviso to Section 3(4) of the Act expressly provides 'nothing contained in this sub-section shall apply to an agreement entered into between an enterprise and an end consumer.' Accordingly, the alleged conduct, being in the nature of an agreement between the enterprise and an end consumer in relation to warranty terms, falls outside the purview of Section 3(4) of the Act.”

On the allegation of abuse of dominance, the Commission stated that Sharma had not placed material regarding the relevant market, market share or dominance to establish abuse of a dominant position. It observed that the dispute essentially concerned the warranty terms applicable to her vehicle and the refusal to honour the warranty claim, rather than abuse of market power.

It also observed that manufacturers may prescribe technical, maintenance and warranty conditions based on safety, performance and reliability, including requirements to use recommended consumables, provided such conditions are properly communicated and reasonably linked to the vehicle's functioning. It added:

“...there is no material on record to suggest that the terms and conditions governing the warranty, including the conditions relating to the use of specified consumables, were not disclosed to or known by the Informant.”

The Commission noted that Sharma had voluntarily opted for the extended warranty, which was subject to its stipulated terms and conditions.

Accordingly, the CCI closed the information.