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CAVEAT VENDITOR - PRODUCT LIABILITY : CONSUMER PROTECTION ACT, 2019
Until recently, there was no comprehensive legislation to cover the aspect of product liability. The current Consumer Protection Act, 2019 (CPA, 2019) has covered this area of concern.
Earlier, the existing laws of Contract and torts included the product liability claims within their scopes. As there was no particular regime having authority over the product liability, The Sale of Goods Act, 1930; the Consumer Protection Act, 1986; and the Indian Contract Act, 1872 formed the claims for such issues. Civil and criminal case laws also acted as a base for entertaining such claims. The different approaches to these claims made it very confusing.
The Drugs and Cosmetics Act, 1945 and the erstwhile Prevention of Food Adulteration Act, 1954 (now replaced by the Food Safety and Standards Act, 2006) were some sector-specific laws relied upon for underlining few principles of product liability.
Now, The Indian Parliament on August 6, 2019 passed the CPA which addressed this liability in particular. Looking at the recent notification issued on July 15, the Central government has appointed July 20 as the date on which several provisions of the CPA 2019 will come into force, in which Product liability is also highlighted.
Product Liability under CPA, 2019:
CPA 2019 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”.
Section 82 to 87 of the Act, gives an coverall scheme which will apply to the claims of compensation under a product liability action. This action can be filled against a 'product manufacturer’ or a ‘product service provider’ or a ‘product seller’, howsoever the situation demands. The CPA gives clear definitions of these terms so that no aspect remains uncovered and also outlines the situations in which they will be held liable.
The situations described are fully comprehensive, there is nothing to indicate that these would be the only situations where liability will arise. Therefore, the court has to take the final call to interpret these provisions.
A product manufacturer shall be liable, if the product,
- Has manufacturing defect;
- Is defective in design;
- Deviates from manufacturing specifications;
- Does not confirm warranty;
- Fails to give adequate and right usage instructions to prevent harm or any warning regarding improper or incorrect usage.
A product seller (who is not a product manufacturer) shall be liable, if he has,
- Exercised strong control over the designing, testing, manufacturing, packaging or labelling of a product that caused harm;
- Modified the product and such modifications or alterations constituted as a factor in causing the harm;
- Independently made an express warranty not of a product of any express warranty made by a manufacturer and the product failed to conform to such warranty;
- Sold the product and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be effected on him or he is not subject to the law which is in force in India or the order, if any, passed or to be passed cannot be enforced against him;
- Failed to exercise considerate care in assembling, inspecting or maintaining such product.
A product service provider shall be liable, if,
- The service provided was faulty in nature, quality and performance;
- There was an act of omission or commission or negligence or conscious withholding of any information which caused harm;
- The service provider did not supply adequate instructions or warnings to prevent any harm;
- He did not confirm to express terms and conditions of the contract.
CPA 2019 also envisages some specific defences acting as exceptions to a product liability action. Earlier also these were being used but now now they have gained a statutory identification. The exceptions are inclusive and it’s left to the court for interpreting the provisions.
To conclude, by these changes in the CPA there has been a visible shift from buyer beware (caveat emptor) to seller beware (caveat venditor). With the recent developments in the Act, it is evident that it has grown to be more consumer centric and has streamlined the mechanism of product liability claims.
Even though some aspects are unclear, the new regime under the Consumer Protection Act, 2019 is set to change the legal scenario of India concerning to product liability.
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