PRODUCT LIABILITY UNDER CONSUMER PROTECTION ACT, 2019

The #Ministry of Consumer Affairs, Food & Public Distribution vide Press Release dated 20.07.2020 notified the provisions of the #ConsumerProtectionAct, 2019 (‘the Act’). The Union Minister said that this new Act will empower #consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant goods. This Article only deals with the provisions related to #Product Liability under the Act.

Prior Position

Earlier, there was no specific Product Liability concept in India. But it is significant to make it evident that there were certain laws in India which protected the interests of the consumers against faulty products. Such claims were guided by the principles of justice, equity and good conscience and founded its basis under the legal regime of the Consumer Protection Act, 1986; The Indian Contracts Act 1872; The Sale of Goods Act 1930; The Drugs and Cosmetics Act, 1945; and The Prevention of Food Adulteration Act, 1954 as repealed by Food Safety and Standards Act, 2006.

Current Position

As none of above mentioned legislations could lay a comprehensive legal framework related to the Product Liability, it was the need of the hour to establish a detailed Product Liability doctrine which would safeguard the interest of the consumers. This has been done through the Act, which introduces the concept of Product Liability, amongst others.

Sections 82 to 87 of the Act deals with the Chapter related to the Product Liability claims of the consumers. Under the Act, Section 2(34) defines Product Liability as the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto.

The impact of Section 82 of the Act is that it is not only the manufacturer who will be liable to compensate a consumer but also the seller if it fulfils the conditions mentioned in the Act. The New Act allows a person to raise a Product Liability action by means of filing a complaint before a District Commission or State Commission or National Commission. Further, the Act clarifies the liabilities of the manufacturer, seller, service providers and exceptions thereof. A gist of the liabilities under the Act are as follows:

  1. Manufacturer’s Liabilities (Section 84)

The Act sets out the following scenarios in which a product manufacturer shall be liable:

  • The product contains a manufacturing defect, or
  • The product has a defective design, or
  • There is a deviation from the manufacturing specifications, or
  • The product does not conform to an express warranty given by the manufacturer (even when the manufacturer proves that it was not negligent or fraudulent in making the express warranty for the product), or
  • The product does not contain adequate instructions or any warning regarding improper or incorrect usage of correct usage to prevent harm.
  1. Service Provider’s Liabilities (Section 85)

Similarly, a service provider shall be liable for:

  • Providing services which were faulty, imperfect, deficient or inadequate, or
  • Proving inadequate instructions and warning to prevent harm, or
  • Providing services which do not conform to the warranty or the terms and conditions mentioned in the contract.
  1. Seller’s Liabilities (Section 86)

The Act even makes a product-seller liable for a product liability claim if:

  • It has exercised substantial control over the designing, testing, manufacturing, packaging or labelling of the product, or
  • It altered or modified the product and such alteration or modification was a substantial factor in causing the harm, or
  • It has made an express warranty which is independent of the warranty made by a manufacturer and such product failed to conform to such express warranty made by the product-seller which caused the harm, or
  • The identity of the manufacturer is not known or if known, the service of notice or process or warrant cannot be affected on the manufacturer or it the manufacturer is not subject to the law which is force in India, or
  • The product seller has failed to exercise reasonable caution in assembling, inspecting or maintaining the product or it did not follow the warnings or instructions for the product provided by the manufacturer while selling such product and such failure was the proximate cause of the harm caused to such product.
  1. Exceptions to a Product Liability Action Claim (Section 87)

The Act envisages certain scenarios where a Product Liability action cannot be brought against the product-seller. No liability will be fastened on the product-seller if at the time of harm, the product was misused altered or modified.

Further, in any product liability action based on the failure to provide adequate warnings or instructions, the product-manufacturer shall not be liable, if-

  • The product was purchased to be used at a workplace and the product-manufacturer had provided warnings to such employer, or
  • The product was sold as a component to be used in another product and necessary instructions and warnings had been given by the manufacturer, and the harm was caused to the complainant from the use of the end product, or
  • The product was one which was legally meant to be used under the supervision of an expert or a class of experts and the product-manufacturer had employed reasonable means to give warnings or instructions for usage to such expert or class of experts, or
  • The complainant was under the influence of alcohol or any prescription drug while using the product which was not prescribed a medical practitioner, or
  • Such instructions or warnings are obvious or commonly known to a user or a consumer of such product or which the consumer should have known, taking into account the characteristics of such product.

Even prior to the Act of 2019, in most product liability actions one or more of the above defenses were taken. These defenses now have statutory recognition under the Consumer Protection Act, 2019.

Lakshmi Vishwakarma

Associate

The Indian Lawyer

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