/2022 INSC 0316/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL  NO. 3001 OF 2022
(Arising out of Petition for Special Leave to Appeal (Civil)
No. 4881 of 2021)
Hyundai Motor India Limited           ……...Appellant(s)
Versus
Shailendra Bhatnagar           ……Respondent(s)
     J U D G M E N T
ANIRUDDHA BOSE, J.
Leave granted.
2. The   appellant   are   manufacturers   of   vehicles   and   the   present
appeal   arises   out   of   a   complaint   made   by   the   respondent
concerning   defect   in   a   vehicle,   particularly   in   relation   to   its   safety
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features   originating   from   the   appellant,   of   the   model   Creta   1.6
VTVT SX+. The vehicle came with two front airbags. Purchase of the
vehicle was made on 21 st
  August 2015. It met with an accident on
the   Delhi­Panipat   highway   on   16 th
  November   2017   resulting   in
substantial  damage  to   its  RH  front   pillar,   RH  front   roof,  side  body
panels,   front   RH   door   panels   and   LH   front   wheel   suspension.   The
initials RH and LH appears to be used as short forms of Right Hand
and   Left   Hand   sides   of   the   vehicle.   At   that   point   of   time,   the
complainant   (being   the   respondent   herein),   his   mother   and
daughter   were   in   the   vehicle.   The   airbags   of   the   vehicle   did   not
deploy   at   the   time   of   collision.   The   complainant   suffered   head,
chest   as   also   dental   injuries.   He   attributes   such   injuries   to   non­
deployment   of   airbags   at   the   time   of   accident.   The   appellant
themselves   obtained   an   investigation   report   which   has   been
referred  to as  SRS  report. The  remarks  and conclusion  of  the said
SRS Investigation Report, as it appears from pages 53 and 54 of the
paperbook were:­
“Remarks:
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 Vehicle   found   with   major   damage   on   RH   front
pillar,   RH   Side   body   panels   and   LH   front   wheel
suspension. 
 Under   ride   &   Angular   impact   found   on   the   RH
Front Pillar, Roof and Front RH Door panel. 
 Grazing   damages   found   on   the   RH   side   panels
due to the scratch against truck while moving towards
left. 
Findings:
 No   crash   info   recorded   in   SRSCM,   hence   no   air
bags deployed.
 No impact damage observed on both side chassis
members, damages found away from impact sensors.
 Vehicle   found   completely   dismantled   and   mid­
repair condition during inspection.
Conclusion:
 The   major   impact   to   the   vehicle   from   RH   pillar
resulted in under ride and angular condition.
 Both   front   chassis   member   found   unaffected   by
the   frontal   impact,   hence   no   impact   sensed   by   the
front   impact   sensors   and   not   triggered   any   signal   to
SRSCM   (No   crash   info   recorded   in   SRSCM   for   frontal
impact).
 After   thorough   study,   it   is   confirmed   that   the
condition   was   not   met   for   the   air   bag   deployment,
hence   no   air   bags   deployed.   The   air   bag   system   was
working proper at the time of accident.
Accident description:
 As   per   customer   verbatim,   while   he   was   driving
at 100 kmph speed on Gannaur highway. A front going
truck   applied   sudden   brake,   his   car   hit   to   the   truck
from the right side to the left rear corner of the Truck.
Further   his   car   scratched   against   the   truck   while
moving   towards   left   side   of   the   road   and   finally   hit   to
some   stones   on   the   left   front   wheel   and   vehicle
stopped.”
(quoted verbatim)
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3. The   Delhi   State   Consumer   Redressal   Commission,   in   a
complaint   raised   by   the   respondent,   upheld   his   claim.   The   main
theme of his complaint was that the main reason for his purchase
decision   of   the   model   was   because   of   its   safety   features   including
the   airbags   and   the   injury   was   suffered   by   him   because   of   non­
deployment   of  the  airbags.  The  State  Commission   granted  relief  to
the following effect:­
“ 19. Keeping   in   view   of   the   facts   and   circumstances
of   the   present   consumer   complaint,   we   direct   the
opposite party to:
a. Compensate   the   complainant   an   amout   of
Rs.2,00,000/­ for medical expenses and loss of income.
b. Compensate   the   complainant   an   amount   of
Rs.50,000/­ for mental agony.
c. Pay   to   the   complainant   an   amount   of
Rs.50,000/­ as cost of litigation.
20 . The   aforesaid   payment   shall   be   made   by
opposite party within two months from the date of this
order by way of demand draft. Failure of opposite party
in   paying   the   said   amount   in   stipulated   period   will
attract   an   interest   of   7%   per   annum   from   the   date   of
default. Furthermore, failure in replacing the vehicle of
the   appellant   will   also   attract   an   interest   of   7%   per
annum   of   the   value   of   the   vehicle   from   the   date   of
default.”
4. The  appellant  preferred  appeal  before  the  National  Consumer
Dispute   Redressal   Commission   (“National   Commission”).   The
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National   Commission   dismissed   the   appeal   sustaining   the
compensation awarded by the State Commission. The Order of the
National   Commission,   which   was   passed   on   5 th
  January   2021,   is
under   appeal   before   us.   Neither   the   State   Commission   nor   the
National  Commission   accepted  the  justification   sought  to   be  made
by   the   appellant   referring   to   the   said   investigation   report,   having
regard   to   the   fact   of   non­deployment   of   the   airbags.   It   has   been,
inter­alia, held by the National Commission:­
“11....   Learned   Counsel   for   the   Appellant/Opposite
Party   submitted   that   the   airbags   deploy   only   when
there   is   severe   impact   of   force   and   airbags   may   not
deploy if the vehicle collides with objects like poles and
trees,   when   full   force   of   the   impact   is   not   delivered   to
the sensors. Learned Counsel for the Appellant argued
that   the   SRS   Investigation   report   dated   01.12.2017
clearly stated that the impact of the accident was such
that   the   minimum   threshold   force   required   for   the
deployment   of   the   airbags   was   not   delivered   to   the
front sensors installed in the engine compartment and
hence,   the   airbags   did   not   deploy.   No   expert   evidence
was   produced   by   the   Respondent   to   substantiate   any
manufacturing   defect.   The   Complainant   contended
that   he   purchased   the   car   for   its   safety   features
highlighted   by   the   Manufacturer,   but   the   airbags   did
not function when required, due to which he sustained
serious   injuries   as   can   be   seen   from   the   medical
prescriptions   and   bills   furnished   by   the   Complainant.
The   impact/force   required   for   triggering   the   front
airbags   was   not   made   known   to   the   Complainant.
Nowhere   has   the   minimum   threshold   force   been
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quantified   and   this   defence   can   never   be   refuted.
Highlighting   safety   features   including   airbags   while
selling   the   car   and   not   elaborating   and   disclosing   the
threshold limits for  their  opening  is  by  itself  an unfair
trade   practice.   Complainant,   however,   had   filed
photographs of the accidental car. Major damage to RH
front   pillar,   RH   front   roof,   side   body   panels   front   RH
door   panels   and   LH  front   wheel  suspension  is   seen  in
the   photographs   of   the   car.   Without   forceful   impact,
the   car   would   not   have   been   so   badly   damaged.   The
accident   was   a   major   accident   in   which   the   entire
deriver side of the car, the side part and even the front
mirror of the car got smashed and broken. The impact
of   the   accident   was   so   intense   that   the   front   bumper
grill, dash board and the radiator got totally damaged.
The   State   Commission   rightly   observed   “that   expert
evidence need not be relied upon where the facts speak
for   themselves.   This   is   a   case   of   Res   Ipsa   Loquitur
where   the   photographs   of   the   damaged   vehicle   placed
on   record   clearly   show   the   impact   of   the   accident   on
the vehicle.”
5. One of the points argued on behalf of the appellant by         Mr.
Huzefa   Ahmadi,   learned   Senior   advocate,   is   that   the   order   for
replacement   of   the   vehicle   ought   not   to   have   been   passed.   The
respondent had not asked for replacement of the vehicle as part of
the   reliefs  claimed before  the  State  Commission.  He has   otherwise
questioned   legality   of   the   decisions   of   the   two   fora   citing   certain
clauses from the owner’s manual. His argument on this count has
been that if force generated by the collision is lesser than a certain
degree, there  would   not  be  deployment  of  the   airbags. Thus,  there
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was   no   defect   in   the   security   system   according   to   him.   He   also
highlighted that impact of the accident was from the side and it was
not a frontal hit.
6. It   is   the   case   of   the   appellant   that   the   airbag   deployment
depends   on   a   number   of   factors   including   vehicle   speed,   angle   of
impact,   density   and   stiffness   of   vehicles   or   objects   which   the
vehicle   hits   in   the   collision.     The   vehicle   is   designed   to   deploy   the
front   airbags   only   when   an   impact   is   sufficiently   severe   and   when
the   impact   angle   is   less   than   30   degrees   from   the   forward
longitudinal axis of the vehicle. Mr. Ahmadi has submitted that the
front   airbags   are   not   intended   to   deploy   if   the   impact   is   from   the
side or in cases of rear impact or roll over crashes. He has referred
to a variety of circumstances in a collision which may not result in
deployment of the airbags.   He has cited the investigation report to
which we have already referred to.
7. Before the Commission, point of limitation was also taken and
the   appellant   wanted   the   limitation   to   run   from   the   date   of
purchase   of   the   vehicle   and   not   the   date   of   the   accident.   This
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objection   on   maintainability   has   been   rightly   rejected   by   both   the
State   Commission   and   the   National   Commission.   We   do   not   find
any  error  in  the   view  of  the   respective  Commissions  on  this  point.
Vehicles are goods within the meaning of Section 2(7) of The Sale of
Goods   Act,   1930   and   they   carry   implied   conditions   as   to   their
fitness.   That   is   a   statutory   mandate   and   that   mandate   also
operates in respect of goods, whose defect is subject  of  proceeding
in   a   consumer   complaint   under   the   Consumer   Protection   Act,
1986.   In   the   complaint,   it   has   been   pleaded   that   the   respondent
had   relied   on   the   safety   features   of   the   vehicle   projected   by   the
manufacturer. In such a situation, the limitation will run from the
day   the   defect   surfaces   in   a   case.   There   is   no   way   by   which   the
nature   of   defect   complained   against   could   be   identified   in   normal
circumstances at an earlier date, before the collision took place. In
this case, the safety feature of the vehicle fell short of the quality of
fitness as was represented by the manufacturer by implication. The
National   Commission’s   view   is   broadly   based   on   the   principle
incorporated in Section 16 of the 1930 Act. The defect in this case
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ought to be treated to have had surfaced on the date of the accident
itself.   We   quote   below   the   provisions   of   Section   16   of   The   Sale   of
Goods Act, 1930:­
“16.   Implied   conditions   as   to   quality   or   fitness.—
Subject   to   the   provisions   of   this   Act   and   of   any   other
law   for   the   time   being   in   force,   there   is   no   implied
warranty   or   condition   as   to   the   quality   or   fitness   for
any   particular   purpose   of   goods   supplied   under   a
contract of sale, except as follows:—
(1) Where the buyer, expressly or by implication, makes
known   to   the   seller   the   particular   purpose   for   which
the   goods   are   required,   so   as   to   show   that   the   buyer
relies   on   the   seller’s   skill   or   judgment,   and   the   goods
are   of   a   description   which   it   is   in   the   course   of   the
seller’s   business   to   supply   (whether   he   is   the
manufacturer   or   producer   or   not),   there   is   an   implied
condition   that   the   goods   shall   be   reasonably   fit   for
such purpose: 
Provided that, in the case of a contract for the sale of a
specified   article   under   its   patent   or   other   trade   name,
there   is   no   implied   condition   as   to   its   fitness   for   any
particular purpose.
(2) Where goods are bought by description from a seller
who   deals   in   goods   of   that   description   (whether   he   is
the   manufacturer   or   producer   or   not),   there   is   an
implied   condition   that   the   goods   shall   be   of
merchantable quality:
Provided   that,   if   the   buyer   has   examined   the   goods,
there   shall   be   no   implied   condition   as   regards   defects
which such examination ought to have revealed.
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(3) An   implied   warranty   or   condition   as   to   quality   or
fitness for a particular purpose may be annexed by the
usage of trade.
(4) An   express   warranty   or   condition   does   not   negative
a   warranty   or   condition   implied   by   this   Act   unless
inconsistent therewith.”
8. The question on privity of contract was also raised before the
State as also the National Commission and from the decision under
appeal   we   find   that   this   point   was   raised   on   the   ground   that   the
dealer   was   not   impleaded   as   a   party   and   there   was   no   contract
between   the   appellant   and   the   respondent   consumer.   This   issue
was   rejected   by   both   the   consumer   fora.   No   argument   has   been
advanced   before   us   on   this   point   and   we   do   not   find   any   error   in
the reasoning of the National Commission on this point. 
9. There   are   findings   of   the   two   fora   about   the   defect   in   the
product sold, in this case being a vehicle. This was sold with front
airbags and there was frontal damage. The airbags did not deploy.
The   accident   caused   injuries   to   the   respondent.   The   appellant
referred   to   various   portions   from   the   owner’s   manual   to   contend
that   the   impact   of   the   collision   was   not   sufficient   to   activate   the
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sensor   which   in   turn   would   have   resulted   in   deployment   of   the
airbags.   We   would   not   like   to   revisit   the   facts   on   which   findings
have been returned by the two fora against the appellant. The State
Commission   relied   on   the   principle   of   Res   Ipsa   Loquitur   to   affix
the   liability   of   the   manufacturer   as   regards   defect   in   the   airbag
system,   having   regard   to   the   nature   of   the   collision.   The   National
Commission   affirmed   this   finding   referring   to   certain   photographs
of  the  damaged vehicle, which  showed substantial  frontal damage.
In   such   circumstances,   both   the   aforesaid   fora   took   the   view   that
expert   evidence   was   not   necessary   in   the   subject   case.   Such   view
cannot be faulted as being unreasonable, in the given facts. 
10. We do not find any reason to interfere with the finding  of the
National   Commission.   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). Both the
fora,   in   their   decisions,   have   highlighted   the   fact   that   there   was
significant damage to the front portion of the vehicle. Deployment of
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the airbags ought to have prevented injuries being caused to those
travelling in the vehicle, particularly in the front seat. 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.  
11. We   shall   now   turn   to   the   reliefs   granted   by   the   State
Commission   and   upheld   by   the   National   Commission.     The   first
point   argued   in   this   regard   is   that   there   was   no   prayer   in   the
petition   for   replacement   of   the   vehicle.     This   is   a   case   where   the
1986 Act was applicable and Section 14 of the said statute lays
down   the   reliefs   which   may   be   granted.     The   directions   as   per   the
statute,   could   be   for   replacement   of   defective   goods   as   also   punitive
damages.   The   appellant   have   also   taken   a   point   that   so   far   as
replacement   of   the   vehicle   is   concerned,   there   was   no   substantive
direction   and   no   discussion   either.   The   operative   part   of   the   order
suffers   from   a   shortcoming   on  this   count,   but  that   is   not   fatal.     On  a
composite   reading   of   the   directions,   we   find   from   paragraph   20   of   the
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Order   of   the   State   Commission   that   such   a   direction   was   made.     The
confusion, if any, arises because of construction defect in the Order of
the State Commission. Considering the fact that the dispute is pending
for   a   reasonably   long   period   of   time,   we   have   ourselves   applied   our
mind  on this issue and our view is that a direction for replacement of
the   vehicle   is   justified   in   the   facts   of   this   case.     The   direction   for
replacement   of   the   vehicle   would   not   be   treated   as   non­est   having
regard to paragraph 20 of the State Commission’s Order.  The fact that
the consumer has got the car repaired on insurance money  would not
impact the quantum of damages, which is partly punitive in nature in
this case. 
12. Three cases arising out of motor accident claims were cited
before us .  In  Nagappa v. Gurudayal Singh & Others.  [( 2003) 2  SCC
274],   it  was  held    that   there is  no     restriction    that  the  Tribunal  or
Court   cannot   award   compensation   amount   exceeding   the   claimed
amount.     Two   other   authorities   were   cited   before   us,   by   Ms.   Tamta,
learned counsel for the respondent, being  the cases of   Sangita Arya
and   Others   v.   Oriental   Insurance   Company   Limited   and   Others
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[(2020) 5 SCC 327] and   Jitendra Khimshankar Trivedi and Others
v. Kasam Daud Kumbhar and Others  [(2015) 4 SCC 237]. These two
cases   lay   down   the   principle   of   just   and   reasonable   compensation
that   may   be   paid.   The   ratio   of   these   authorities,   however,   do   not
directly apply in the facts of this case.
13. The   damages   awarded   against   the   appellant   may   have   gone
beyond   the   actual   loss   suffered   by   the   respondent   and   may   not
represent   the   actual   loss   suffered   by  him   in  monetary   terms.     But
the   provision   of   Section   14   of   the   1986   Act   permits   awarding
punitive damages.   Such damages, in our view, can be awarded in
the event the defect is found to have the potential to cause serious
injury   or   major   loss   to   the   consumer,   particularly   in   respect   of
safety features of a vehicle. For instance, defective safety feature in
a   vehicle   has   to   be   distinguished   from   a   dysfunctional   “courtesy
light”.   The   manufacturer   should   be   under   strict   and   absolute
liability   in   respect   of   the   latter.   Compensation   in   the   form   of
punitive damages ought to have a deterrent effect.  We also refer to
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the principles detailing the factors guiding quantification of liability
laid down by a Constitution Bench of this Court in the case of  M.C.
Mehta   and   Another   v.   Union   of  India  and   Others   [(1987) 1 SCC
395]. In this case it has been opined:­
“32.  We  would   also   like  to  point   out   that  the   measure
of compensation in the kind of cases referred to in the
preceding   paragraph   must   be   corelated   to   the
magnitude and capacity of the enterprise because such
compensation must have a deterrent effect.  The larger
and   more   prosperous   the   enterprise,   the   greater   must
be   the   amount   of   compensation   payable   by   it   for   the
harm caused on account of an accident in the carrying
on of the hazardous or inherently dangerous activity by
the enterprise.” 
14. The aforesaid decision arose out of a case involving the death
of   an   individual   and   injuries   to   several   others   in   an   industrial
accident.  But  in  our  opinion,  in the subject dispute also  the  same
principle   can   be   extended.   We   are   dealing   with   a   case   where   in   a
collision,   the   airbags   did   not   deploy.   The   complainant,   driving   the
vehicle, suffered substantial injuries as a result thereof. The impact
of the collision was such that it would have been reasonable for the
respondent   to   assume   that   there   would   have   been   deployment   of
the   airbags.   The   safety   description   of   the   goods   fell   short   of   its
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expected quality. The content of the owners’ manual does not carry
any   material   from   which   the   owner   of   a   vehicle   could   be   alerted
that   in   a   collision   of   this   nature,   the   airbags   would   not   deploy.
Purchase decision of the respondent­complainant was largely made
on the basis of representation  of the safety  features of the vehicle.
The   failure   to   provide   an   airbag   system   which   would   meet   the
safety   standards   as   perceived   by   a   car­buyer   of   reasonable
prudence,   in   our   view,   should   be   subject   to   punitive   damages
which   can   have   deterrent   effect.   And   in   computing   such   punitive
damages, the capacity of the manufacturing enterprise should also
be a factor.   There was no specific exclusion clause to insulate the
manufacturer   from   claim   of   damages   of   this   nature.   Even   if   there
were such a clause, legality thereof could be open to legal scrutiny.
But there is no reason for dilating on that aspect in this case. That
question doesn’t arise here.
15. If   the   reliefs   granted   in   a   consumer   complaint   fits   any   of   the
statutory provision contained in sub clause (1) of Section 14 of the
Act, it would be well within the power and jurisdiction of the Forum
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to pass directions irrespective of the fact as to whether specifically
certain   reliefs   have   been   claimed   or   not,   provided   that   facts   make
out foundations for granting such reliefs.  In any event, it is within
the jurisdiction of the said forum to mould the reliefs claimed to do
effective  justice,  provided the  relief comes within  the stipulation  of
Section   14(1)   of   the   Act.   We   find   that   the   relief   granted   to   the
respondent   comes   within   the   statutory   framework.   We   accordingly
do   not   want   to   interfere   with   the   decision   of   the   National
Commission.   We   do   not   find   the   reasoning   of   the   Commission   or
the   operative   part   of   the   order   awarding   damages   to   be   perverse.
We   do   not   need   the   aid   of   the   ratio   of   the   three   authorities   cited
before us pertaining to motor accident claim to sustain the decision
under   appeal.   We   are   also   of   the   view   that   the   directions   issued
against  the   appellant   by   the  State   Commission   and   upheld   by   the
National   Commission   cannot   be   said   to   have   failed   the   test   of
proportionality.   We   hold   so   as   we   find   the   subject­defect   to   be   of
such nature that the provisions relating to punitive damages ought
to be attracted against the appellant.  
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16. We   accordingly   dismiss   the   appeal.   Interim   order   passed   in
this matter shall stand dissolved. 
17. Pending application(s), if any, shall stand disposed of.
18. There shall be no order as to costs.
………………………J.
     (VINEET SARAN)
……………………….J.
(ANIRUDDHA BOSE)
NEW DELHI;
APRIL 20, 2022. 
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