Supreme Court Directs BMW To Pay Rs 50 Lakhs Compensation To Customer For Defective Car

The Supreme Court recently disposed of a 15-year-old cheating case pending against BMW India Pvt. Ltd. and certain members of its management. The case was instituted by GVR Infra Projects, being aggrieved by BMW's supply of a defective car in 2009.

Putting an end to the prolonged legal battle, the bench of CJI DY Chandrachud and Justices JB Pardiawala, Manoj Misra directed payment of Rs.50 lakhs by BMW to GVR Infra Projects, as compensation, in full and final settlement of the dispute.

To recap, GVR Infra Projects had instituted a criminal case for the offence of cheating (Section 418 & 420 of the Indian Penal Code) against BMW India for supply of a defective car in 2009. In 2012, the Andhra Pradesh High Court quashed the criminal proceedings against BMW, with a direction that the company provide a new car to the complainant.

Accordingly, BMW made an offer to replace the defective car with a new one, but the complainant refused and insisted on refund of its money alongwith interest. It assailed the High Court's order before the Supreme Court. The State of Andhra Pradesh also appealed against the High Court order.

Before the Supreme Court, counsel for BMW submitted that the company was always ready and willing to comply with the High Court's direction and had addressed communications to the complainant seeking return of the old car.

On hearing the parties, the Supreme Court took exception to the High Court's direction to replace the car, observing that it ought to have confined itself to the issue of quashing of the criminal case. It was further noted that the manufacturer did not challenge the High Court's order and expressed willingness to replace the old car.

"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," the Court recorded, while deciding to invoke its jurisdiction under Article 142 of the Constitution to direct the payment of compensation to the complainant.

It was further noted that had the complainant accepted the offer of replacement in 2012, the new vehicle would have suffered value depreciation till date. Thus, the court ordered:

"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 manufacturer shall pay this amount to the complainant on or before 10 August 2024 by electronic transfer of funds".

In closing, it was said that the High Court's quashing order will remain in force subject to the manufacturer complying with the above condition.

Case Title: The State of Andhra Pradesh v. BMW India P.Ltd. and Ors., Crl.A. No. 1044/2019 (and connected case)

Citation : 2024 LiveLaw (SC) 466

Click here to read the order