Introduction
The Consumer Protection Act, 1986 has been replaced by the Consumer Protection Act, 2019 (‘Act’ for short). Most of the provisions of the new Act come effect from 20.07.2020. The Act provides a new concept which is called product liability.
Product
Section 2(33) of the Act defines the term ‘product’ as 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.
Product Liability
Chapter VI of the Act provides the procedure for claiming compensation on product liability action by a complainant for any harm caused by a defective product manufactured by a product manufacturer or serviced by a product service provider or sold by a product seller.
Section 2(34) of the Act defines the expression ‘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.
Product manufacturer
Section 2(36) of the Act defines the expression ‘product manufacturer’ as a person who-
- makes any product or parts thereof; or
- assembles parts thereof made by others; or
- puts or causes to be put his own mark on any products made by any other person; or
- 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
- designs, produces, fabricates, constructs or re-manufactures any product before its sale; or
- being a product seller of a product, is also a manufacturer of such product.
Product seller
Section 2(37) of the Act defines the expression ‘product seller’ in relation to a product, as a person who, in the course of business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains, or otherwise is involved in placing such product for commercial purpose and includes-
- a manufacturer who is also a product seller; or
- a service provider,
but does not include-
- a seller of immovable property, unless such person is engaged in the sale of constructed house or in the construction of homes or flats;
- a provider of professional services in any transaction in which, the sale or use of a product is only incidental thereto, but furnishing of opinion, skill or services being the essence of such transaction;
- a person who-
- acts only in a financial capacity with respect to the sale of the product;
- is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service provider;
- leases a product, without having a reasonable opportunity to inspect and discover defects in the product, under a lease arrangement in which the selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor.
Product service provider
Section 2(38) of the Act defines the expression ‘product service provider’ in relation to a product, as a person who provides any service in respect of such product.
Product Liability action
Section 2(35) of the Act defines the expression ‘product liability action’ as 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.
A product liability action may be brought by a complainant against-
- a product manufacturer; or
- a product service provider; or
- a product seller,
for any harm caused to him on account of a defective product.
Where the District Commission/State Commission/National Commission is satisfied that the goods complained against suffer from any the allegations contained in the complaint about under product liability are proved, it shall issue an order to the opposite party directing him to pay such amount as may be awarded by it as compensation in a product liability action.
Liability of the product manufacturer
A product manufacturer shall be liable in a product liability action, if-
- the product contains a manufacturing defect; or
- the product is defective in design; or
- there is a deviation from manufacturing specifications; or
- the product does not conform to the express warranty; or
- 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.
Liability of a product service provider
A product service provider shall be liable in a product liability action, if-
- the service provided by him was faulty or imperfect or deficient or inadequate in quality, nature or manner of performance which is required to be provided by or under any law for the time being in force, or pursuant to any contract or otherwise; or
- there was an act of omission or commission or negligence or conscious withholding any information which caused harm; or
- the service provider did not issue adequate instructions or warnings to prevent any harm; or
- the service did not conform to express warranty or the terms and conditions of the contract.
Liability of a product seller
A product seller who is not a product manufacturer shall be liable in a product liability action, if-
- he has exercised substantial control over the designing, testing, manufacturing, packaging or labeling of a product that caused harm; or
- he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm; or
- he has made an express warranty of a product independent of any express warranty made by a manufacturer and such product failed to conform to the express warranty made by the product seller which caused the harm; or
- the product has been sold by him 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; or
- he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product while selling such product and such failure was the proximate cause of the harm.
Exemption from product liability action
A product liability action cannot be brought against the product seller if, at the time of harm, the product was misused, altered, or modified. 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 by an employer for use at the workplace and the product manufacturer had provided warnings or instructions to such employer;
- the product was sold as a component or material to be used in another product and 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 one which was legally meant to be used or dispensed only by or under the supervision of an expert or a class of experts and the product manufacturer had employed reasonable means to give the warnings or instructions for usage of such product to such expert or class of experts; or
- the complainant, while using such product, was under the influence of alcohol or any prescription drug which had not been prescribed by a medical practitioner.
A product manufacturer shall not be liable for failure to instruct or warn about a danger which is obvious or commonly known to the user or consumer of such product or which, such user or consumer, ought to have known, taking into account the characteristics of such product.
