BMW dealer told to pay Rs 5.42 lakh charged for repairing car to owner

In his complaint at the District Commission, Pawan Kumar Goel of Panchkula stated that he purchased a BMW 730 LD car from the authorised dealer (Krishna Automobiles). “I have been using the vehicle for eight years, covering nearly 60,000 kilometres. But for the past four years, I have been facing significant maintenance issues,” Goel said.

As per Goel’s complaint, on July 6, 2016, Krishna Automobiles sent him an extended warranty package via email, described as the BSI Plus and Extended Warranty Package. Convinced by the offer, Goel paid Rs 3,74,379 for the warranty extension. On May 16, 2020, the complainant reported a rear suspension issue.

Following this, the vehicle was inspected at the dealership’s service centre, where it was determined that the problem was with the air suspension caused by a malfunctioning air supply pump. The complainant believed this issue was covered under the warranty policy. However, on the same day, the dealership sent an email with an estimate of Rs 4,67,375.26 for the repairs, which shocked the complainant.

Goel argued that the dealership’s claim was unfounded, as he should not have to pay for repairs to parts covered under the warranty package. The complainant said that he immediately raised his concerns, sending an email to concerned authorities detailing the vehicle’s maintenance issues.

He said that he repeatedly requested BMW India and its dealership to rectify or replace the defective parts in accordance with the warranty terms, however complainant was informed that “the parts in question were not covered under the warranty and would incur additional charges”.

Goel, thus, filed a complaint before the District Commission.

BMW India in reply stated that the extended warranty policy was purchased by the complainant on August 5, 2016, and this was the fifth year of ownership for the vehicle, which had been purchased on September 8, 2011. Consequently, the repair-inclusive warranty expired in the sixth year of the vehicle’s ownership, specifically on September 7, 2017, it stated. It was further stated that the complainant raised the issue regarding the vehicle’s suspension on May 16, 2020. “Since this complaint was made well after the expiration of the extended warranty policy, the complainant was not entitled to any benefits under an expired policy,” BMW India said.

The dealership, Krishna Automobiles in reply clarified that the vehicle in question was purchased in the name of the firm, “Chemical Resources”, which operates as a commercial entity. “The invoice and registration of the car were issued in the firm’s name, emphasising that the transaction pertains to commercial activities. The warranty period concluded on September 7, 2016,” said the dealer, adding the complainant failed to disclose these critical facts, the reasons for which remain unclear.

The District Commission after hearing the contesting parties and going through the material available on record, directed the dealership to carry out the necessary repairs and replace/change the defective parts, and pay Rs 25,000 as compensation and Rs 10000 as the cost of litigation.

However, aggrieved with the order of the District Commission, BMW India and Krishna Automobiles moved to the State Commission to set aside the order of the District Commission, whereas the complainant Goel filed an appeal before the State Commission for the modification of the order, seeking enhancement of compensation amount.

The State Commission on hearing the matter said the significant sum of Rs 3,74,379 paid by the complainant raises questions about the rationale behind such an expenditure if the extended warranty was to only cover a mere one-year period, particularly when the original warranty would have effectively reduced its value.

“Based on the evidence presented and the absence of clear documentation indicating otherwise, this Commission also finds that the extended warranty purchased by the complainant commenced upon the expiration of the original warranty. The District Commission’s conclusion in this matter was, therefore, justified and appropriate.”

The Commission, thus, held that the order passed by the District Commission needs modification. Resultantly, appeal bearing No. 321 Pawan Kumar Goel versus BMW India Private Limited and Krishna Automobiles stands partly allowed.

Thus, modifying the order passed by the District Commission, the State Commission directed Krishna Automobiles to refund to complainant Pawan Kumar Goel the entire amount received, which is Rs 5,42,019, for repairs/replacement of defective parts of the vehicle in question, being the same under warranty/extended warranty, and to pay compensation to the tune of Rs 35,000 and cost of litigation to the tune of Rs 20,000.