The Supreme Court has ruled that carmakers should be held liable for punitive penalties if their airbags fail.

Faulty airbags that do not deploy following a car collision may result in punitive penalties against the carmakers involved. This statement was made by the Supreme Court on Thursday while hearing a case involving a Hyundai Creta Sport Utility Vehicle (SUV) that failed to deploy airbags following an accident on the Delhi-Panipat highway.

According to the Supreme Court, a car manufacturer's refusal to supply an airbag system should be subject to punitive damages that can serve as a deterrence.

Failure to offer an airbag system that meets the safety criteria recognized by a car buyer exercising reasonable caution, in our opinion, should be subject to punitive damages that can have a deterrence impact. In calculating such punitive damages, the manufacturing enterprise's capability should also be considered, said a bench consisting of Justices Vineet Saran and Aniruddha Bose.

According to the court, when a new automobile is purchased, the owner expects the airbag to deploy automatically in the event of an accident. It further stated that it is unreasonable to expect the owner to be a physicist capable of assessing the impact of a collision based on velocity and force theories.

These observations were expressed by the Supreme Court while hearing an appeal filed by Hyundai Motor India Limited against an order of the National Consumer Disputes Redressal Commission (NCDRC) dismissing the appeal and upholding the compensation given by the State Commission. Hyundai filed an appeal after a car customer complained about a defective airbag in his Hyundai Creta 1.6 VTVT SX SUV.

The Creta SUV, acquired on August 21, 2015, has two front airbags. On November 16, 2017, the SUV was involved in a collision on the Delhi-Panipat highway, causing significant damage to the vehicle. The complainant additionally claimed to have sustained head, chest, and tooth injuries as a result of the airbags not being deployed at the time of the collision.

The state commission ordered compensation of Rs.2 lakh for medical expenditures and lost income, Rs.50,000 for mental anguish, and Rs.50,000 for litigation costs. The state commission further stated that failure to replace the appellant's car will result in an interest charge of 7% per year of the vehicle's worth from the date of default.