The Supreme Court has directed BMW India Private Ltd to pay Rs 50 lakh as compensation to a customer for supplying a defective car in 2009. A bench comprising Chief Justice DY Chandrachud and Justices J B Pardiwala and Manoj Misra set aside a Telangana High Court order that had quashed the prosecution against the automaker and instructed BMW to provide a new vehicle to the complainant.
“Bearing in mind the facts and circumstances of this case, we are of the considered view that the manufacturer, BMW India Private Limited, should be directed to pay a consolidated amount of Rs 50 lakh in full and final settlement of all claims in dispute. The manufacturer shall pay this amount to the complainant on or before August 10, 2024, by electronic transfer of funds,” the bench stated in its July 10 order.
The court stipulated that once the payment is made, the High Court order quashing the complaint and the directive to replace the defective vehicle with a new one will be set aside.
“The claims of the complainant shall stand duly satisfied on the payment of compensation quantified at Rs 50 lakh in terms of the above order,” the bench said.
The bench noted that back in June-July 2012, BMW had offered to replace the defective vehicle with a new one, as per the High Court’s order. However, the complainant did not accept this offer. The court observed that if the complainant had used the vehicle, it would have depreciated in value over time.
During the hearing, it was revealed that the old vehicle had been returned to the dealer by the complainant. The bench remarked, “Considering the nature of the dispute, which was confined only to a defective vehicle, allowing the prosecution to continue nearly fifteen years after the dispute arose would not serve the ends of justice. Instead, by exercising the jurisdiction of this Court under Article 142 of the Constitution, substantial justice can be done by directing the payment of compensation to the complainant while sustaining the order quashing the complaint.”
The bench criticized the High Court’s order from March 22, 2012, which concluded that the ingredients of the offence of cheating were not established based on the FIR. It found no justification for the High Court to direct BMW to replace the defective vehicle with a new one.
The Supreme Court noted that the High Court’s order was challenged by the Andhra Pradesh government and the complainant, GVR India Projects Limited, not by the car manufacturer. BMW had communicated with the complainant, asking for the return of the old vehicle to comply with the High Court’s order. Despite this, the complainant’s advocate informed BMW in a letter dated July 25, 2012, that the complainant was not interested in a new car but wanted compensation equivalent to the car’s value, along with interest.
The complainant had purchased a BMW 7 Series vehicle on September 25, 2009, and reported a serious defect by September 29, 2009. The car faced similar issues again on November 13, 2009. A complaint was filed on November 16, 2009, under Sections 418 and 420 of the Indian Penal Code, leading to the registration of an FIR, naming the manufacturer, Managing Director, and other directors as accused.