In a landmark decision, the Supreme Court of India has upheld the rulings of the National Consumer Disputes Redressal Commission (NCDRC) in two pivotal cases involving luxury car manufacturer Mercedes-Benz. The court’s decision underscores the expectation that high-end car buyers should receive faultless products and holds Mercedes-Benz accountable for defects in their vehicles.
Background of the Case
The cases, consolidated under Civil Appeal No. 353 of 2008 and Civil Appeal Nos. 19536-19537 of 2017, revolved around two separate incidents involving Mercedes-Benz cars purchased by companies for the use of their directors. The first case involved M/s Daimler Chrysler India Pvt. Ltd. (now Mercedes Benz India Pvt. Ltd.) and M/s Controls & Switchgear Company Ltd., while the second involved Mercedes Benz India Pvt. Ltd. and CG Power and Industrial Solutions Ltd.
Key Legal Issues
The primary legal issue was whether the purchase of a vehicle by a company for the use of its directors constituted a “commercial purpose” under Section 2(1)(d) of the Consumer Protection Act, 1986. This determination was crucial as it would decide whether the companies could be considered “consumers” eligible for protection under the Act.
Observations and Rulings
In the first case, M/s Controls & Switchgear Company Ltd. had purchased two Mercedes cars for the use of its executive directors. One car developed persistent heating issues, particularly in the center hump area. Despite multiple attempts at rectification, the problem persisted. The NCDRC directed Mercedes to replace the car or refund half the purchase price of Rs. 1,15,72,280. Mercedes appealed this decision.
The Supreme Court upheld the NCDRC’s decision but modified the compensation, directing Mercedes to pay Rs. 36 lakhs instead of Rs. 58 lakhs, considering the complainant had used the car for 17 years. The court allowed the complainant to keep the car.
Important Observations:
– “People do not purchase high-end luxurious cars to suffer discomfort, more particularly when they buy the vehicle keeping utmost faith in the supplier who would make the representations in the brochures or the advertisements projecting and promoting such cars as the finest and safest automobile in the world”.
– The court emphasized that the burden of proof lies with the seller (Mercedes) to prove commercial use, which Mercedes failed to do .
In the second case, CG Power and Industrial Solutions Ltd. purchased a Mercedes E-Class car for its Managing Director. During a head-on collision, the car’s airbags failed to deploy, resulting in severe injuries to the director. The NCDRC found that Mercedes had not adequately informed the consumer about the conditions under which the airbags would deploy, constituting an unfair trade practice.
Important Observations:
– “Highlighting the safety features including the airbags for selling the vehicle, without such a disclosure, in my opinion, constituted an unfair and deceptive trade practice”.
– The court upheld the NCDRC’s compensation of Rs. 5 lakhs for deficiency in service and Rs. 5 lakhs for unfair trade practice.
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Case Details
Case Number: Civil Appeal No. 353 of 2008, Civil Appeal Nos. 19536-19537 of 2017
Bench: Justice Bela M. Trivedi and Justice Pankaj Mithal
Lawyers: Senior Advocate Dhruv Mehta represented Mercedes-Benz, while Senior Advocate Prashanto Chandra Sen represented the respondents.
Parties:
– Appellants: Mercedes Benz India Pvt. Ltd.
– Respondents: Controls & Switchgear Company Ltd. and CG Power and Industrial Solutions Ltd.
