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Consumer protection was one of the duties of India’s rulers even before the country gained its freedom. To guarantee that customers are happy, the government and companies collaborate on consumer protection, which is a social and economic activity. The degree of protection was increased to the next level with the passing of the new Consumer Protection Act of 2019[1].

In addition to amending the 1986[2] Act’s concepts, the new law also includes several revolutionary features, such as the notion of a “unfair contract,” mediation as a method for resolving consumer disputes, the establishment of a central agency called the Central Protection Agency with the authority to conduct investigations and issue cease-and-desist orders, and a new chapter on offenses and penalties. A separate article will be needed for each of these subjects. The regime on product responsibility, which in our opinion will revolutionize the game, will be briefly summarized in the current article. India is now one of the few nations with rules governing “Product Liability” thanks to the 2019 Consumer Protection Act[3].

Tracking The Development In Law – Evolutionary Perspective in Purview

Common law serves as the conceptual foundation for product liability. Let the vendor beware, also known as caveat venditor, places the burden of evidence on the seller and expresses the idea that a maker or seller of the goods should be held accountable if a customer has been harmed. It is important to comprehend the legal precedent that established a complete system that recognizes product responsibility, as well as the concepts of tort law and contract law with regard to negligence, strict liability, and warranty.

Cases involving product responsibility in India have grown out of tort law concepts. In A.S. Mittal v. State of U.P.[4], the Supreme Court expressed the opinion that facts and evidence must be considered while deciding the product liability legal matter. Several cataract surgery patients at a “eye-camp” had absolute blindness after their procedures, and the victims were given financial compensation out of compassion. The highest standards of sterile conditions at all locations where Ophthalmic surgery or any other surgery is conducted cannot be overemphasized, according to Court, who also added that it is not enough to simply formulate theoretical standards; rather, a professional commitment to providing the best standard of care must follow. The doctors explained that the infection occurred despite all precautions, but Court emphasized that the highest standards of sterile conditions cannot be overemphasised.

India’s government recently repealed and replaced the Consumer Protection Act, 1986, with the Consumer Protection Act.

The Consumer Protection Act was passed in 1986, which marks the beginning of the history of consumer protection laws in India. Since the Consumer Protection Act of 1986 was passed, a lot of water has flowed through the river. One such trend is the spread of information technology into every aspect of human existence. Additionally altered is the character of the goods offered on the market. This Act did not include any particular provisions addressing product responsibility. This law produced a sense of exhilaration. The customers were joyful, and there was good cause for it. The market’s customers endured a lot for a very long time. The norm was a shortage and adulteration of goods, exploitational pricing, and egregious flaws in the services.

According to CPA 2019, product liability is the duty of a product maker or product seller, of any product or service, to pay for any injury to a customer by such faulty product created or sold or by deficiency in services connected thereto[5].” Depending on the situation, a product liability lawsuit may be brought against the “product maker,” “product service provider,” or “product seller.” To include all facets of a product liability lawsuit, CPA 2019 defines each of these words in very broad terms.

Also outlined in CPA 2019 are the circumstances under which they will be accountable. The following is a summary of a few such instances. Although the scenarios envisioned by the CPA 2019 are fairly extensive, there is nothing to suggest that liability will only emerge in these circumstances. However, it is unclear how the courts will apply these rules.

Responsibility of the Manufacturer

A product’s manufacturer is responsible[6] if it has any of the following flaws:

(i) a manufacturing defect;

(ii) a design flaw;

(iii) a deviation from manufacturing specifications;

(iv) a failure to comply with an express warranty;

(v) a lack of adequate usage instructions to prevent harm or any warnings about improper or incorrect usage.

Liability of the Seller of Goods

If a product seller (who is not a product manufacturer) had substantial control over the designing, testing, manufacturing, packaging, or labeling of a product that caused harm;

(i) had altered or modified the product, and that alteration or modification was a significant factor in the harm; or

(ii) had made an express warranty of a product independent of any express warranty made by a manufacturer and the product failed to live up to that warranty; the seller would be liable. Suppliers of goods and services are responsible A product service provider is responsible if any of the following apply: the service was subpar in terms of quality, nature, or method of performance;

(iii) the service provider committed an error due to negligence or wilful concealment of material information;

(iii) the service provider failed to provide sufficient instructions or warnings to prevent any harm; or

(iv) the service did not meet the express warranty or the contract’s terms and conditions.

Limitations on a product liability lawsuit A product liability claim may also be defended against in accordance with CPA 2019.

Charge of Proof

The onus of proof is with the claimant, and it is up to the adjudicating officer or court to decide whether to use the preponderance of the evidence standard or the balance of probability standard. But the onus of evidence could also be placed on the opposing side. In this regard, it is important to note that the National Consumer Disputes Redressal Commission held in Tata Motors v. Rajesh Tyagi and HIM Motors Show Room[7] that “the burden shifts to the manufacturer to show that the vehicle does not suffer from manufacturing defect once the complainant has proven and discharged the initial onus that the vehicle was defective on the basis of a large number of job cards showing that vehicle was taken on numerous occasions for removing one defect of the other” The Complainant suffered because they were forced to spend money for an expert opinion to prove that the car had manufacturing flaws, and the Court recognized this suffering. The court ruled that this would be “too much,” noting that the fact that the car was removed for repair work due to a flaw during or after the warranty period removes any possibility of a manufacturing defect in the products that were sold to the customer.

It is appropriate to point out that an interpretation of CPA Sections 2(34) and 2(22) tends to lay the burden of proof on the complaint to demonstrate that a product that has caused injury was faulty. According to CPA, a product must be faulty, flawed, or of insufficient quality or standard in order to be considered defective under a contract or the law[8].

Accordingly, if the compensation for the injury in a product liability claim were to be interpreted literally, the customer or claimant would have to persuade the Court that the product was fundamentally flawed. This is a little departure from the ideas that have been established by common law jurisprudence, according to which adequate labelling, appropriate warning, and/or instructions are also considered to be excellent service standards in addition to defects and deficiencies.

As a result, a fair interpretation[9] of the Act is required in light of Chapter VI of the CPA, which holds product manufacturers accountable in product liability actions if the product lacks sufficient instructions for proper use or warnings.

Offering A Critique on Product Liability Vis A Vis Consumer Protection Act, 2019

Potential Defences for Product Liability

According to the notion of “product responsibility,” the complaint must prove that the “damage” a “defective” product caused was for the purpose of establishing product liability. Therefore, the lack of a “fault” in the product and the absence of any “damage” to the customer resulting from usage of the product are unquestionably strong defences against a product liability claim.

Under addition to the aforementioned, the following defences to a product liability claim are provided for in Section 87 of the Act[10]:

(a) If a product seller were the target of a claim, the fact that the product had been abused, modified, or changed at the time of the claimed damage would be a strong defence.

(b) The following would constitute legitimate defences against a claim that a product manufacturer failed to give proper warnings or instructions:

The product was sold as a component or material to be used in another product, and the necessary warnings or instructions were given by the product manufacturer to the purchaser of such component or material, but the harm was caused to the complainant by use of the end product in which such component or material was used. The product was purchased by an employer for use at the workplace, and the product manufacturer had provided warnings or instructions to such employer.

(c) Additionally, a product maker is not responsible for failing to inform or warn about a risk that is clear or well-known to the user or consumer of the product, or that the user or consumer should have known given the product’s features.

Any product liability claim demands prompt response, beginning with an internal inquiry, expert analysis, followed by the proper preventative measures, necessitating suitable disclosures and recalls if necessary.

Conclusion and Suggestions

I believe there are various drafting errors in the Act. Drafting errors, some of which are significant in nature, affect the meaning of words like “customer,” “complaint,” and “product liability lawsuit.” These definitions need to be changed in order to make the legislation clear. The words “or deficiency in the product service, as the case may be,” must be added after the words “on account of a defective product” in section 83 dealing with product liability actions. In section 84, the words “product fails to contain” must be replaced by the words he fails to give” to make the provisions more clear.

The CCPA obviously helps to protect consumer interests, as does the adoption of a stringent framework. With the creation of several entities that operate at various levels, the CPA 2019 extends the reach of the consumer protection regime all the way down to the local level. The numerous dispute resolution mechanisms envisioned by the CPA 2019 are still accessible to consumers. The CCPA may also look into complaints including consumer rights violations, unfair business practices, or deceptive advertising that harms the interests of all consumers.

Market manipulation and unscrupulous business tactics have historically benefited consumers. Every significant worry a sincere customer may have is addressed in CPA, 2019. This might also be a warning indication for nefarious people engaging in unethical business operations. Consumers now have greater authority because to CPA, 2019 which has transferred the responsibility for caution and accountability onto manufacturers, retailers, and service providers.

Product manufacturers, service providers, etc. must now be even more careful about regulatory compliance with industry-specific rules and regulations under general statutes like the Consumer Protection Act of 2019, provide for adequate disclosures and warnings, and act quickly to take preventive and precautionary measures as and when necessary as a result of the continued establishment of product liability regime under various statutes.

[1]The Consumer Protection Act, 2019 (“Act, 2019”) has introduced a new regime of product liability and dedicated Chapter VI to further enumerate liability of a product manufacturer, product service provider or product seller.

[2] The Consumer Protection Act,1986, (Acts by the Indian Parliament).

[3] Id. At. 1.

[4]A.S. Mittal v. State of U.P, SCR (3) 241.

[5]Section 2 (34), Consumer Protection Act, 2019.

[6]Section 84, Consumer Protection Act, 2019.

[7] Tata Motors v. Rajesh Tyagi and HIM Motors Show Room, Revision Petition No. 1030 of 2008.

[8]Section 2(10), Consumer Protection Act, 2019.

[9]Sections 2(34), 2(22), 2(10) and 84, Consumer Protection Act, 2019.

[10]Section 87, Consumer Protection Act, 2019.

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April 2024