Supreme Court upholds Rs 10 lakh fine against Mercedes, order Rs 36 lakh refund for ‘defects’

Denying both the claims, Mercedes argued the cars were purchased for “commercial purposes”, barring the companies from proceeding against them under the Consumer Protection Act, in which a consumer “does not include a person who obtains such goods for resale or for any commercial purpose”.

A bench of Justices Bela M Trivedi and Pankaj Mithal observed that there is no “straitjacket” method to decide if the cars were purchased for commercial purposes, but mentioned that the “dominant intention or dominant purpose” should be to facilitate profit generation.

In the case of Controls & Switchgear, the bench found “there is nothing on record worth the name to show that the said car was used for any commercial purpose”.

In CG Power’s case, the court observed Mercedes “had failed… to show that the dominant purpose or dominant use of the car in question was for commercial purpose”.

The court also referred to a test conducted by the National Consumer Disputes Redressal Commission in 2006 to check the “excessive heating” claims. Two local commissioners were directed to travel 300 km in the Mercedes towards Rishikesh and it was “clearly established… that excessive heat was generated in the car”.

The court also held that “a misrepresentation was made” by Mercedes while promoting the car’s safety system as the airbags were not deployed even when the seat belt was fastened.