SC orders BMW to pay ₹50 lakh as compensation to customer for defective car

The Supreme Court of India has directed luxury car manufacturer BMW India Private Ltd to pay a whopping ₹50 lakh as compensation to a customer for delivering a defective car in 2009, reported PTI. A bench of Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra at the apex court reportedly set aside an order of the Telangana High Court quashing the prosecution against the German auto major and asking the company to deliver a new vehicle to the complainant in place of the defective one. The automaker has been directed to pay the entire amount to the affected customer by August 10, 2024.

The Supreme Court bench reportedly said in its July 10 order, “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 ₹50 lakhs 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 further said conditional on the payment being made by the manufacturer to the complainant, the order of the high court quashing the complaint and the direction for the replacement of the old vehicle with a brand new vehicle shall stand set aside. "The claims of the complainant shall stand duly satisfied on the payment of compensation quantified at ₹50 lakhs in terms of the above order," the bench of the apex court reportedly said.

The bench took note of the fact that, as far back as in June-July 2012, the luxury car manufacturer had offered to replace the old affected vehicle with a brand new vehicle in compliance with the order of the high court. "However, this was not acceded to by the complainant. Had the complainant used the vehicle, it would have depreciated in value until date," the bench noted. The bench also reportedly said that during the hearing it was informed that the old vehicle was returned to the erstwhile dealer by the complainant.

The bench further observed, "Bearing in mind the nature of the dispute, which was confined only to a defective vehicle, we are of the view that allowing the prosecution to continue, at this stage, nearly fifteen years after the dispute arose, would not subserve 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."

Finding fault with the high court order dated March 22, 2012, the bench said the high court had come to the conclusion that the ingredients of the offence of cheating were not established on the basis of the contents of the FIR. "Having come to this conclusion, there was no justification for the high court thereafter to direct the manufacturer to replace a brand new BMW 7 Series vehicle. The high court had been moved by the manufacturer for quashing the complaint under Section 482 of the Code of Criminal Procedure 1973. The high court was required to address whether a case for quashing was made out," the bench reportedly said.

The Supreme Court reportedly said that the order of the high court was challenged by the Andhra Pradesh government and the complainant GVR India Projects Limited and not the manufacturer of the car. It noted that the car manufacturer had addressed communications to the complainant to return the old vehicle to facilitate compliance with the order of the high court.

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