The Supreme Court recently ordered BMW India Private Limited to pay ₹50 lakhs as compensation to a customer for selling a defective car in 2009 [State of Andhra Pradesh v. BMW India Private Limited].
The bench, comprising Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra, also quashed the criminal case against BMW, its Managing Director, and other officials.
The complainant, GVR Infra Projects, purchased a BMW 7 series vehicle in September 2009. However, a serious defect was detected, which persisted even after repairs by an authorized workshop.
Subsequently, a First Information Report (FIR) was filed against BMW for cheating under Sections 418 and 420 of the Indian Penal Code (IPC), naming the manufacturer, Managing Director, and other directors as the accused.
In 2012, the Andhra Pradesh High Court quashed the proceedings against BMW and directed the company to provide a new car to the complainant in place of the defective one. BMW complied with the High Court order by offering a replacement, but the complainant refused and instead demanded a refund with interest.
Both the State of Andhra Pradesh and the complainant challenged the High Court’s decision before the Supreme Court, while BMW and its directors did not.
The Supreme Court criticized the High Court’s direction for BMW to replace the defective car, noting that the High Court had already determined that the ingredients of the offence of cheating were not established based on 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 Supreme Court stated.
The Supreme Court also noted that continuing the prosecution nearly fifteen years after the dispute arose would not serve the interests of justice. Thus, it upheld the High Court’s decision to quash the case against BMW but set aside the direction to replace the defective car with a new one.
To ensure justice, the Supreme Court invoked its powers under Article 142 of the Constitution and directed BMW to pay ₹50 lakhs as compensation to the complainant. “Given 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 Court ordered.
Advocates Rajiv Kumar Choudhry, Sowri Dev, and Tharini appeared for the appellants, while Advocates Diwakar Maheshwari, Shreyas Edupuganti, Susmit Pushkar, Aarthi Rajan, and S Udaya Kumar Sagar represented BMW.
