Yes, seating three adults at the rear of the Tata Punch will be tight. Tata Motors has recently unveiled a new updated Punch; however, changes are to the features and engine, space inside will remain the same.
We would recommend the Mahindra XUV 3XO as the rear is spacious, particularly in terms of width, which is what you will need to seat 3 adults at the rear. Moreover, the car has a comfortable ride and is well-equipped too.
However, do not expect class-leading fuel efficiency as the engines are tuned with a bias towards a more lively performance.