The Supreme Court of India directed BMW India Private Limited to compensate a customer with Rs. 50 lakhs for a defective BMW 7 series sold in 2009. The court, led by Chief Justice DY Chandrachud, also quashed a criminal case against BMW and its officials over the persistent defect issue.
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NEW DELHI: The Supreme Court of India has directed BMW India Private Limited to compensate a customer with Rs. 50 lakhs for selling a defective BMW 7 series car in 2009. This decision came from a bench comprising Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra, who also quashed the criminal case against BMW and its Managing Director, along with other officials.
The case began when GVR Infra Projects purchased a BMW 7 series vehicle in September 2009, only to discover a serious defect that persisted despite repairs by an authorized workshop. This led to the filing of a First Information Report (FIR) against BMW under Sections 418 and 420 of the Indian Penal Code (IPC) for cheating. The FIR named BMW, its Managing Director, and other directors as the accused.
In 2012, the Andhra Pradesh High Court quashed the criminal proceedings against BMW, directing the company to provide a new car to GVR Infra Projects in place of the defective one. However, BMW’s offer to replace the defective car with a new one was rejected by the complainant, who instead demanded a full refund along with interest.
Both the State of Andhra Pradesh and the complainant challenged the High Court’s decision before the Supreme Court. BMW and its directors did not challenge the High Court’s decision.
The Supreme Court criticized the High Court’s directive to replace the defective car after quashing the case against BMW.
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“The High Court determined that the elements constituting the offence of cheating were not substantiated based on the FIR’s contents. Given this finding, the High Court found no grounds to order the manufacturer to replace a new BMW 7 Series vehicle. The manufacturer had petitioned the High Court to dismiss the complaint under Section 482 of the Code of Criminal Procedure 1973. The High Court was obligated to assess whether sufficient grounds for dismissal were present.”
-the Supreme Court stated.
The Supreme Court further noted-
“Considering the dispute was limited to a defective vehicle, prolonging the prosecution nearly fifteen years after the issue emerged would not serve the interests of justice.”
The Supreme Court upheld the High Court’s decision to dismiss the case against BMW but reversed the order to replace the defective car with a new one. To ensure justice, the Supreme Court exercised its authority under Article 142 of the Constitution and directed BMW to compensate the complainant with Rs.50 lakh.
“We acknowledge that as early as June-July 2012, the manufacturer offered to replace the old vehicle with a new one, as directed by the High Court. However, the complainant did not agree to this offer.”
-the Court noted in its judgment.
The Court emphasized that if the complainant had used the vehicle, its value would have depreciated significantly by now.
“If the complainant had used the vehicle, its value would have depreciated over time. Given the facts and circumstances of this case, we believe that BMW India Private Limited should be instructed to pay a lump sum of Rs 50 lakhs to settle all disputed claims conclusively.”
-the Court ordered.
The legal representatives for the appellants were Advocates Rajiv Kumar Choudhry, Sowri Dev, and Tharini. Representing BMW were Advocates Diwakar Maheshwari, Shreyas Edupuganti, Susmit Pushkar, Aarthi Rajan, and S Udaya Kumar Sagar.
The Supreme Court’s decision underscores the importance of fair compensation in cases involving defective products. By leveraging Article 142, the Court ensured a balanced resolution that takes into account the depreciation of the vehicle over time and provides a substantial monetary compensation to the complainant. This ruling sets a significant precedent for similar cases in the future, highlighting the judiciary’s role in protecting consumer rights and ensuring justice.
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The background of this case stretches back to 2012, when BMW initially offered to replace the defective vehicle as per the High Court’s direction. However, the complainant refused this offer, leading to a prolonged legal battle. The Supreme Court’s intervention brings a conclusive end to this dispute, with BMW being ordered to pay Rs.50 lakh in full and final settlement of all claims.
