Delhi State Commission Orders Mercedes Benz to Refund ₹1.78 Cr for Defective EQS 580; Holds Manufacturer and Dealer Liable
Pranav B Prem
The Delhi State Consumer Disputes Redressal Commission has held Mercedes Benz India Pvt. Ltd. and its authorised dealer, Global Star Auto LLP, liable for a manufacturing defect in a luxury electric car and for failing either to rectify the issues or to replace the vehicle. The Bench, comprising Justice Sangita Dhingra Sehgal (President) and Member (Judicial) Pinki, directed refund of the car’s cost along with compensation and litigation expenses.
Background
On 2 November 2022, the complainant purchased a Mercedes Benz EQS 580 electric car for Rs. 1.55 crore from the dealer in Delhi. The vehicle was insured with ICICI Lombard Insurance Company for the period from 3 November 2022 to 2 November 2025. Within six months of purchase, multiple defects surfaced.
On 4 May 2023, the dealer informed the complainant that the lithium battery pack required replacement under warranty. The car was returned after nearly a month, on 2 June 2023. To address the inconvenience, the manufacturer offered refund of five months’ EMIs, extended warranty for the 4th and 5th years, and a five-year service package. However, the problems persisted.
On 27 June 2023, the car was again sent to the workshop due to air-conditioning failure, requiring replacement of the AC compressor. The complainant also reported that the rear tyre developed a bulge, which had to be replaced. On 1 September 2023, the car broke down suddenly and was found to suffer from multiple faults, including radar sensor failure, malfunctioning dirt sensor, abnormal noises from the AC blower, and whistling noises at high speeds. Even after delivery on 12 September 2023, several issues remained unresolved.
Further complaints followed on 27 September 2023 and 5 October 2023, including malfunctioning of the radar system, faulty active brake assist, and dirty sensor. A legal notice dated 14 October 2023 was sent but remained unanswered. Consequently, the complainant filed a case alleging deficiency in service and seeking refund and compensation.
Manufacturer’s Defence
Mercedes Benz argued that the complainant was not a “consumer” under Section 2(7) of the Consumer Protection Act, 2019, since the car had been purchased for commercial purposes. It also contended that the Commission lacked territorial jurisdiction and that the complaint was unsupported by expert reports.
Dealer’s Defence
The dealer similarly challenged jurisdiction, citing clause 15 of the purchase agreement which conferred exclusive jurisdiction on courts at Pune. It also argued that the complaint was not filed through an authorised representative of the complainant company.
Findings of the Commission
On the first issue, the Bench held that the complainant qualified as a consumer. Relying on the NCDRC’s decision in Crompton Greaves Ltd. & Ors. v. Daimler Chrysler India, it observed that the car had been purchased for the personal use of the company’s director and not for commercial purposes.
On jurisdiction, the Commission noted that under Section 47(4) of the Consumer Protection Act, jurisdiction lies where the opposite party or complainant resides, carries on business, or where the cause of action arises. Since the dealer’s office and service centre were in Delhi, jurisdiction of the Delhi Commission was affirmed. It also clarified that contractual clauses cannot override statutory provisions of the 2019 Act.
On deficiency in service, the Bench noted that the car developed major issues, including replacement of the battery pack, within six months of purchase, which indicated a manufacturing defect. The extended warranty and benefits offered by the manufacturer reinforced this inference. The failure to rectify the persistent issues or to replace the car amounted to deficiency in service.
Relief Granted
The Commission directed refund of Rs. 1,78,16,541 to the complainant, which included:
- Purchase price of Rs. 1.55 crore
- TCS of Rs. 1,55,000
- Insurance premium of Rs. 3,10,000
- Road tax/registration charges of Rs. 6,330
- Other statutory levies of Rs. 38,284
- Loan interest borne by the complainant of Rs. 16,30,321.74
Additionally, Rs. 5,00,000 was awarded as compensation for mental agony and harassment, and Rs. 50,000 towards litigation expenses. Since the vehicle was lying in the workshop, it was directed to be taken over by Mercedes Benz after refunding the complainant.
The Commission thus allowed the complaint, holding Mercedes Benz India and its authorised dealer liable for deficiency in service arising from a manufacturing defect and directing refund along with compensation.
Cause Title: Samaran Media Consultants Pvt. Ltd. vs Mercedes Benz India Pvt. Ltd.
Case No: CC No. 158/2023
Coram: Sangita Dhingra Sehgal [President], Pinki [Judicial Member]
