Delhi State Commission Holds Mercedes Benz And Its Authorised Dealer Liable For Manufacturing Defect In Car

Brief facts:

On 02.11.2022, the complainant purchased a Mercedes Benz EQS580 Electric Car ('car') for Rs.1,55,00,000/- from Mercedes Benz India Pvt. Ltd. ('manufacturer') through Global Star Auto LLP ('dealer'). The manufacturer and the dealer are collectively referred to as 'opposite parties'. The vehicle was insured with ICICI Lombard Insurance Company which was effective from 03.11.2022 to 02.11.2025.

On 04.05.2023, the complainant was informed by the dealer that the lithium battery pack in the car needs to be replaced which is under warranty and the car was returned to the complainant on 02.06.2023, nearly after 29 days. The manufacturer subsequently offered to the complainant a refund of five months' EMIs for the inconvenience, an extended Warranty/Advance Assurance for the 4th and 5th years, along with a comprehensive 5-year Star Ease Compact Plus Service Package for the car.

On 27.06.2023, the car was again sent to the workshop with the complaint that the air conditioner was not functioning. On examination, it was found that the AC compressor was required to be replaced. As per the complainant, the rear tyre of the car developed a bugle which was changed by the dealer. On 01.09.2023, the car was again sent to the workshop due to sudden stoppage of the vehicle, radar sensor failure, malfunctioning of dirt sensor, humming noise coming from AC blower, a whistle like noise coming when speed exceeds 60 KM per hour and other issues. It was stated that although the car was delivered on 12.09.2023, it was observed that some issues were still not resolved.

Again on 27.09.2023 and further on 05.10.2023, the car was sent back to the workshop with several complaints including malfunctioning of radar system, faulty active brake assist, dirty sensor. A legal notice dated 14.10.2023 was then sent to the opposite parties but no reply was received. Hence, a complaint was filed by the complainant before the Delhi State Commission alleging deficiency in service and praying for appropriate compensation.

Submissions of the manufacturer:

It was submitted that the complainant is not a consumer under the Consumer Protection Act, 2019 since the car was purchased for a commercial purpose. It was further submitted that the commission lacks the territorial jurisdiction to try the complaint and no expert report has been filed by the complainant.

Submissions of the dealer:

It was submitted that the commission has no territorial jurisdiction to try the complaint since clause 15 of the purchase agreement exclusively confers jurisdiction on the courts situated in Pune. It was further submitted that the complaint has not been filed by an authorised representative of the complainant company.

Observations of the bench:

Issue 1: whether the complainant is a 'consumer' under the Consumer Protection Act,2019?

The bench relied on the definition of consumer provided under Section 2(7) of the Consumer Protection Act, 2019 and the decision of the NCDRC in Crompton Greaves Ltd. & Ors. vs Daimler Chrysler India and held that since the car was purchased for the personal use of the director of the company, the complainant is a consumer under the 2019 Act. Hence, the complaint was held to be maintainable.

Issue 2: whether the Delhi State Commission has territorial jurisdiction to entertain the complaint?

The bench relied on Section 47 (4) of the Consumer Protection Act, 2019 as per which the commission shall have jurisdiction where either the opposite party or the complainant actually or voluntarily resides, carries on business, personally works for gain or cause of action arose. It was observed that since the office of the dealer is situated at Okhla, New Delhi and also the car was sent to the service centre situated at Delhi, the state commission at Delhi has the jurisdiction to entertain the complaint.

It was further observed that the condition in the agreement cannot limit a court's jurisdiction and the provisions of the Consumer Protection Act, 2019 were held to have an overriding effect.

Issue 3: whether there is deficiency in service on the part of opposite parties?

The bench observed that the issues in the car started to arise within six months from date of purchase and continued to persist till date despite repeated interventions. It was observed that since the battery pack had to be replaced, it indicated a manufacturing defect which was also acknowledged by the opposite parties.

The bench noted that the fact that an extended warranty, free of charge, was offered by such a reputed international brand supports the inference that there was a manufacturing defect. Hence, the opposite parties were held liable for deficiency in service for failure to rectify the defects or replace the car.

As regards compensation, the bench examined the loan documents evidencing a loan of Rs. 1 crore for the car, insurance documents and bank statements and allowed the complaint with the following reliefs:

1. Refund of Rs.1,78,16,541 /- [ break up as follows: purchase amount of Rs. 1.55 crores + TCS of Rs. 1,55,000 + Insurance of Rs. 3,10,000 + Road Tax/ Registration Charges of Rs. 6,330/- + other statutory levies of Rs. 38,284/- , and interest borne on the loan i.e. Rs.16,30,321.74 ]

2. Rs. 5 lakhs as costs for mental agony and harassment to the complainant

3. Litigation costs of Rs. 50,000/-

Since the vehicle was still lying in the workshop, it was directed to be taken over and to be used by the manufacturer after refund.

Case Title: Samaran Media Consultants Pvt. Ltd. vs Mercedes Benz India Pvt. Ltd.

Case Number: CC No. 158/2023

Date of Decision: 12.09.2025

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