NCDRC Grants Partial Relief to Renault India in Kwid Warranty Battle
In a significant ruling, the National Consumer Disputes Redressal Commission (NCDRC) has provided partial relief to Renault India Private Limited by substantially reducing a compensation amount previously deemed "extortionary." The apex consumer body slashed the penalty from Rs 1 lakh to Rs 50,000 in a long-running dispute concerning the denial of warranty repairs for a Renault Kwid vehicle.
Bench Emphasizes Proportional Compensation
A bench comprising President Justice A P Sahi and Member Bharatkumar Pandya delivered the judgment on January 27, 2026. The commission was hearing an appeal by Renault India challenging an order from the Chandigarh State Consumer Commission, which had directed the automaker to pay Rs 1 lakh in compensation to a consumer alleging service deficiency.
The NCDRC firmly stated that consumer compensation must be fair, balanced, and proportionate to the actual injury suffered. "The compensation to be granted cannot be disproportionate or extortionary. It has to balance the scale and must be a quantum which appears just in the circumstances," the commission remarked.
Disproportionate Award Scaled Down
The NCDRC observed that while a deficiency in service was established, the Rs 1 lakh compensation awarded by the state commission for mental agony and harassment was excessively high relative to the repair charges of Rs 16,140. The commission noted that awarding such a sum for a deficiency involving relatively modest repair costs was "certainly disproportionately higher" than necessary to compensate for the consumer's injury.
However, the NCDRC upheld the finding of deficiency in service, emphasizing that manufacturers remain responsible for ensuring warranty promises are honored by their authorized service centers. The commission refused to absolve Renault entirely, noting that the company could not distance itself from failures of its dealer network during the warranty period.
Final Directions and Modified Relief
While modifying the relief, the NCDRC issued the following directives:
- Renault India must reimburse Rs 16,140 to the consumer for repair costs incurred during the warranty period.
- The automaker is to pay Rs 50,000 as compensation for mental agony and harassment.
- Litigation expenses of Rs 10,000 are to be covered by Renault India.
- An additional Rs 887 must be refunded by the dealer for unauthorized charges.
Compliance with these orders must occur within 60 days, failing which interest at 12% per annum will apply.
Background of the Dispute
The case originated in January 2016 when Rameshwari Sharma, a resident of Chandigarh, purchased a Renault Kwid car with a warranty covering four years or 100,000 kilometers. On August 21, 2017, after the vehicle had run just over 15,000 kilometers, it developed engine trouble and stopped functioning.
The car was towed to the authorized service center, PMG Auto in Chandigarh, where warranty repairs were refused. The service center claimed the engine was damaged due to water ingress from submergence during heavy rainfall—an assertion strongly contested by the consumer.
Insurance Claim Rejection and Legal Journey
Following the denial of warranty coverage, the consumer approached Future Generali General Insurance Company Limited, but her claim was rejected on November 8, 2017, on grounds that no accident had occurred as per the policy terms. With both warranty and insurance claims denied, Sharma got the car repaired at another authorized Renault service center in Panchkula at her own expense of Rs 16,140.
Aggrieved, she filed a consumer complaint before the district consumer forum on December 5, 2017. On April 29, 2019, the district forum ruled against the dealer, describing the water submergence allegation as "bogus and frivolous" and faulting Renault India for its "casual attitude." Both the dealer and manufacturer were held jointly liable.
State Commission's Shift in Liability
On appeal, the Chandigarh State Consumer Commission, in orders dated February 17 and February 23, 2022, absolved the dealer and placed sole liability on Renault India. The state commission reasoned that since water entered the engine without external accident or impact, the defect must be attributable to manufacturing failure. It directed Renault India to reimburse repair costs, pay litigation expenses, and compensate the consumer with Rs 1 lakh for mental agony and harassment.
The NCDRC's recent ruling modifies this order, reducing the compensation while upholding the principle of manufacturer accountability for warranty service deficiencies. This decision underscores the importance of proportionate compensation in consumer disputes, balancing consumer rights with fair penalties for companies.
