• PGCL Moot Court Society

PRODUCT LIABILITY UNDER THE CONSUMER PROTECTION ACT, 2019.

Updated: Dec 13, 2020

- Rashi Priya






The Consumer Protection Act, 2019 indicates the starting of a new era of consumer rights in India that are in correspond with new-age consumer expectations. The New Act takes the rich legacy of The Consumer Protection Act, 1986 that was regarded innovative at the time when it was enacted but due to the rapidly growing and inter-dependent market for goods and services it was unable to meet the challenges.

One of the new additions to the law is the addition of the meaning of the term product liability that brings the Latin term or traditional rule of Caveat Emptor into play which essentially means that let the buyers beware. As with the new Consumer Protection Laws, the burden of proof has shifted from the buyers to the sellers. The Consumer Protection Act, 2019, gives protection to the interest of the consumers, establishment of a central consumer protection authority, mechanism to settle consumer disputes and specifically regulates product liability and misleading advertisements.[1]It was acknowledged that dealing with the Product Liability either in day to day transaction or at the time of entering into any commercial relationship, should be acknowledged always not only by the buyer but also by the seller the responsibility and accountability towards the marketed products or services.

A product liability claim was registered under the existing laws of contract and tort. There were no specific authorities governing product liability, but such claims could be found and derived from laws such as the Consumer Protection Act, 1986, the Sale of Goods Act, 1930and the Indian Contract Act, 1872. These claims made were also based on case laws that could have both civil and criminal aspects, which led to a lot of confusion and different approaches. There were certain sector-specific laws touching upon principles of product liability such as the Drugs and Cosmetics Act, 1945 and the old Prevention of Food Adulteration Act, 1954 which is now replaced by the Food Safety and Standards Act, 2006 was also counted upon. But until recently, there was no comprehensive legislation to cover the aspect of product liability.

Product under Section 2(33) of consumer protection act, 2019 is defined, “any article or goods or substance or raw material or any extended cycle of such product, which may be in gaseous, liquid, or solid state possessing intrinsic value which is capable of delivery either as wholly assembled or as a component part and is produced for introduction to trade or commerce, but does not include human tissues, blood, blood products and organs”[2]

Product liability under Section 2(34) of consumer protection act, 2019 is defined, “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” [3]

Product liability action under Section 2(35) of Consumer Protection Act, 2019 is defined, “a complaint filed by a person before a District Commission or State Commission or National Commission, as the case may be, for claiming compensation for the harm caused to him”[4]

Product manufacturer under Section 2(36) of the Consumer Protection Act, 2019 means “a person who— (i) makes any product or parts thereof; or (ii) assembles parts thereof made by others; or (iii) puts or causes to be put his own mark on any products made by any other person; or (iv) makes a product and sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains such product or is otherwise involved in placing such product for commercial purpose; or (v) designs, produces, fabricates, constructs or re-manufactures any product before its sale; or (vi) being a product seller of a product, is also a manufacturer of such product;”[5]

Product Seller is defined under section 2(37) and Product Service Provider is defined under section 2 (38) of The Consumer Protection Act.[6]

In Chapter VI i.e. Section 82-87 of the Consumer Protection Act talks about Product Liability wherein in talks about the application in section 82 and about product liability action in Section 83. Exceptions to the product liability action are discussed in Section 87.

Liability of the product manufacturer is described under section 84 of the Consumer Protection Act which talks about the conditions when a product manufacturer shall be liable in a product liability action. Such as when the product has a manufacturing defect, the product design is defective, when there is a difference from manufacturing specifications, the product does not conform to the express warranty, the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage. A product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product.[7]

Section 85 talks about from product liability action of a product service provider when the service provided by him was faulty or imperfect and the nature or manner of performance which is required to be provided. When there is an act of omission or commission or negligence or conscious withholding any information which caused harm.

Section 86 talks about the condition when a product seller who is not a product manufacturer shall even be liable in a product liability action. One of those criteria is that when the product seller has utilized significant control over the designing, testing, manufacturing, packaging or labelling of a product that has caused harm. Another criterion is that when he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm.

The Consumer Protection Act, 2019 grants aggravated party to claim compensation for any harm caused on account of a defective product apart from imprisonment and fine. In addition to that, CPA, 2019 contemplates suspension of any license for up to 2 years issued for the first offence and cancellation of such license in case of a subsequent offence.[8]Severally, the authority formulated under CPA, 2019 may require that goods that are dangerous, hazardous or unsafe be recollected or that purchasers of such goods be compensated.

If we compare the CPA of 1986, CPA 2019 is more far-reaching and in accord with the consumer protection laws around the world. The CPA, 2019 is a very important step taken by the Government of India to prevent the exploitation of the interest of consumers from misleading schemes of not only manufacturers but also product service providers and product sellers. With the introduction of a product liability law in CPA, there is a clear shift in the principle of caveat emptor. Moreover, the ease of approaching consumer forums and the strict laws will only push consumers to experiment with these provisions.

The new legislation alerts everyone involved in trade except consumer with the burden of responsibilities and accountabilities to protect the interest of consumers. As the Product manufacturers, sellers and service providers are required to ensure that they have done their due diligence properly to be compliant with the various requirements under different legislations. A checklist of such compliances backed with proper legal and technical advice would go a long way in protecting their interest and the interest of the consumers.[9]

Rashi Priya is a second year student at Pravin Gandhi College of Law, Mumbai.

(rashipriya500@gmail.com)

[1]http://www.legalserviceindia.com/legal/article-1064-let-the-seller-be-aware-product-liability-under-consumer-protection-act-2019.html [2]https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf [3]https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf [4]https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf [5]https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf [6]https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf [7]https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf [8]http://www.legalserviceindia.com/legal/article-1064-let-the-seller-be-aware-product-liability-under-consumer-protection-act-2019.html [9]https://www.barandbench.com/columns/product-liability-under-the-consumer-protection-act-2019-let-the-manufacturer-seller-beware

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