Supreme Court Rules Mercedes Benz Responsible for Vehicle Defects

Order Date: Not Mentioned
Order Name: M/S Daimler Chrysler India Pvt. Ltd. v. M/S Controls & Switchgear Company Ltd. & Anr.
Case No.: Civil Appeal No. 353 of 2008
Citation: 2024 LiveLaw (SC) 447

The Supreme Court has supported decisions made by the National Consumer Disputes Redressal Commission (NCDRC) in favor of two companies that had issues with luxury cars purchased from Mercedes-Benz for their directors’ use.

Key Points from the Judgment:

1. Background of the Cases:
   • First Case: Heating Issues with Mercedes-Benz:
     • The issue involved M/s Daimler Chrysler India Pvt. Ltd. (now known as Mercedes Benz India Pvt. Ltd.) and M/s Controls & Switchgear Company Ltd.
     • Controls & Switchgear purchased two Mercedes cars for their executive directors. One of these cars developed persistent heating problems, especially in the center hump area.
     • Despite several repair attempts by Mercedes, the issue was not resolved.
     • The NCDRC ruled in favor of Controls & Switchgear, instructing Mercedes to either replace the car or refund half of the purchase price, which was Rs. 1,15,72,280.
     • Mercedes challenged this decision in the Supreme Court.
2. Supreme Court’s Observations:
   • The court noted that the car was used for personal purposes by the director and his family and was not linked to any profit-generating activity of the company.
   • The burden of proving that the car was used for commercial purposes lay with Mercedes, which they failed to do.
   • The NCDRC had conducted thorough inspections, including long drives to measure temperatures, and found consistently high temperatures in the car.
   • The Supreme Court upheld the NCDRC’s decision but modified the compensation. Given the car was used for 17 years, Mercedes was directed to pay Rs. 36 lakhs instead of Rs. 58 lakhs, allowing the complainant to keep the car.
3. Second Case: Airbags Not Deploying in Accident:
   • This case involved Mercedes Benz India Pvt. Ltd. and CG Power and Industrial Solutions Ltd.
   • CG Power’s Managing Director was in a serious accident where the car’s airbags did not deploy, despite the vehicle being marketed for its advanced safety features.
   • The NCDRC awarded Rs. 5 lakhs for service deficiency and another Rs. 5 lakhs for unfair trade practices.
   • Mercedes argued that the accident conditions did not warrant airbag deployment, as per their safety protocols.
   • The NCDRC found that the Owner’s Manual lacked critical information about the conditions for airbag deployment, which was a deficiency in service.
   • The Commission deemed this non-disclosure as an unfair trade practice and upheld the complainants’ claims.
   • The Supreme Court dismissed Mercedes’ appeals and supported the NCDRC’s decision, noting that incomplete or non-disclosure of airbag functioning details constituted unfair trade practices.

     Takeaway:
     The Supreme Court’s judgment reinforces that luxury car buyers are entitled to the high standards of comfort and safety as advertised. Companies must ensure full disclosure of product functionalities and conditions to avoid being penalized for unfair trade practices.