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Synopsis

The Supreme Court has directed BMW to pay Rs 50 lakh to GVR India Projects Limited as full and final settlement in a dispute arising out of sale of a defective vehicle in 2009.

A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra said that subject to payment of amount by August 10, 2024, the Andhra Pradesh High Court's order quashing criminal proceedings initiated against the car manufacturer would stand and the order to replace the old vehicle with a brand new one would be set aside.

The matter before the top court arose out of appeals filed by the Andhra Pradesh government and car purchaser against the High Court's order of March 22, 2012.

Having detected a defect in the car, the buyer filed an FIR on November 16, 2009 alleging offences of cheating and others against the manufacturer, managing director and others as the accused. 

The High Court, by its impunged order, quashed the proceedings, but directed the manufacturer to deliver a brand new BMW Series vehicle to the complainant in place of the defective one.

Before the top court, the manufacturer and directors submitted that they were at all times ready and willing to comply with the order of the High Court and, in fact, addressed a communication to the complainant calling for the return of the defective vehicle so that a brand new vehicle could be handed over.

In 2012, the complainant had informed the manufacturer, through his advocate, that he was not interested in taking a new BMW car, but instead wanted an amount equivalent to the value of the car, together with interest.

The apex court noted that in the case, 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 bench said.

At present, the court found, the old vehicle had been returned to the erstwhile dealer by the complainant.

"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 15 years after the dispute arose, would not subserve the ends of justice," the bench said.

Instead, it said, "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". 

The court noted that, as far back as June-July 2012, the manufacturer had offered to replace the old vehicle with a brand new one 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 said.

The court, thus, ordered BMW India Private Limited to pay a consolidated amount of Rs 50 lakhs in full and final settlement of all claims in dispute.