Supreme Court orders BMW to pay ₹50 lakh as compensation for defective car

The Supreme Court recently directed BMW India Private Limited to pay compensation of ₹50 lakhs to a customer for selling a defective car in 2009 [State of Andhra Pradesh v. BMW India Private Limited]..The bench of Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra also quashed the criminal case against BMW and its Managing Director and other officials. The complainant, GVR Infra Projects, had bought a BMW 7 series vehicle in September 2009.However, a serious defect was detected which persisted even after the car was repaired by an authorised workshop.Subsequently, a First Information Report (FIR) was registered against BMW for cheating under Sections 418 and 420 of the Indian Penal Code (IPC). The manufacturer, Managing Director and other directors of BMW were named as the accused.In 2012, the Andhra Pradesh High Court quashed the proceedings against BMW with a direction that the company must provide a new car to the complainant in place of the defective one.In compliance with the High Court order, BMW offered replacement of the defective car with a new one. However, the complainant refused and instead demanded refund of of money along with interest.The High Court decision was challenged by both the State of Andhra Pradesh and the complainant before the Supreme Court though BMW and its directors chose not to do so..The Supreme Court took exception to the direction given to BMW for replacement of the defective car even though the High Court had quashed the case against the car company."The High Court came 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 of the complaint under Section 482 of the Code of Criminal Procedure 1973. The High Court was required to address itself to whether a case for quashing was made out," the Court said.The Court nevertheless said that given 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 subserve the interests of justice. Hence, it sustained the High Court direction to quash the case against BMW but set aside the direction to replace the defective car with a brand new car.However, in order to meet the ends of justice, it invoked powers under Article 142 of the Constitution and directed BMW to compensate the complainant by paying ₹50 lakh."We have taken note of the fact that, as far back as in June-July 2012, the manufacturer had offered to replace the old 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. 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 lakhs in full and final settlement of all claims in dispute," the Court ordered..Advocates Rajiv Kumar Choudhry, Sowri Dev and Tharini, appeared for the appellants.Advocates Diwakar Maheshwari, Shreyas Edupuganti, Susmit Pushkar, Aarthi Rajan and S Udaya Kumar Sagar appeared for BMW..[Read Order]