A car manufacturer should be subject to punitive damages as a deterrent effect if the airbag system of a car failed to meet the safety standards as perceived by a car buyer, the Supreme Court observed on Wednesday.
The top court's judgment came on the plea filed by Hyundai against the National Consumer Disputes Redressal Commission (NCDRC) order upholding a state consumer forum's decision directing the carmaker to pay its customer compensation after the airbags of a Creta failed to deploy.
Hyundai's plea against replacing the customer's car was also dismissed after the top court observed that while computing punitive damages, the capacity of the manufacturing enterprise should also be a factor.
"We would like to add here that ordinarily a consumer while purchasing a vehicle with airbags would assume that the same would be deployed whenever there is a collision from the front portion of the vehicle (in respect of front airbags)," the bench comprising Justices Vineet Saran and Aniruddha Bose said.
"Both the fora (NCDRC and the Delhi State Consumer Redressal Commission), in their decisions, have highlighted the fact that there was significant damage to the front portion of the vehicle. Deployment of the airbags ought to have prevented injuries being caused to those traveling in the vehicle, particularly in the front seat," the Supreme Court's judgment said.
"A consumer is not meant to be an expert in physics calculating the impact of a collision on the theories based on velocity and force. In such circumstances, we do not find that there is any error in the findings of the two fora as regards there being defect in the vehicle," it added.
In August 2015, Shailendra Bhatnagar bought a Creta 1.6 VTVT SX+ which came with two front bags. A little over two years later, in November 2017, Bhatnagar was traveling in his car on the Delhi-Panipat highway with his mother and daughter when they met with an accident. When the car collided, the two front airbags failed to deploy. As a result, Bhatnagar suffered head, chest, and dental injuries.
In the accident, there was substantial damage to the car's right hand (RH) front pillar, RH front roof, side body panels, front RH door panels, and left-hand front wheel suspension.
In response to Bhatnagar's complaint, the Delhi consumer commission fined Hyundai Rs. 3 lakhs and directed the carmaker to replace the car.
The Delhi Consumer forum ruled that if Hyundai failed to pay the compensation amount within a period of two months from the date of the order, a 7 percent fine would be added to the total amount starting from the date of the default. Furthermore, failure in replacing the vehicle would also attract an interest of 7 percent per annum of the value of the vehicle from the date of default.
The national consumer forum upheld this claim in January 2021.