Product Liability Under Consumer Protection Act

Coverage of this Article

Key Takeaways:

-Product Liability and responsibility of manufacturer toward consumers.

INTRODUCTION:

-The Consumer Protection Act, 2019 is the latest legislation governing consumer protection in India. It replaced the previous Consumer Protection Act, 1986.

Consumer Protection Act, 2019:

-Section 2(34) defines product liability as the responsibility of a product manufacturer, service provider or seller of goods or services to compensate a consumer for any harm or injury caused by a defective product or deficient service.

Relevant Case Laws:

-The Supreme Court ruled in MC Mehta v. Union of India (1987) that producers of dangerous chemicals have an unassailable obligation to ensure that their products are safe for use and that they are responsible for any damage produced as a result of those items.

Defences available to a product manufacturer

-The product was purchased by the employer to be used at work, and the employer received proper warnings or the product itself contained warnings that the employer was aware of, but the employee who filed the lawsuit was not made aware of them.

Drawbacks:

-Burden of proof: Under the Consumer Protection Act, the burden of proof lies with the consumer to establish that the product was defective and caused injury or harm. This can be a challenging and costly process, particularly for consumers who may lack resources and expertise.

Recommendation:

-Increase consumer awareness: Consumers need to be aware of their rights and responsibilities in case of product defects. The government can launch awareness campaigns to educate the public about product liability laws and how to seek compensation in case of damages caused by defective products.

Conclusion

-Proceedings before the Consumer Commission are brief in nature. While keeping in mind the Act's provisions that set forth a timeline for case resolution, every effort is taken to provide the harmed consumer with redress as soon as practicable.

Key Takeaways:

Product Liability and responsibility of manufacturer toward consumers.

Indian law regarding Product Liability with relevant case laws.

Defences available to the manufacturer to escape liability.

INTRODUCTION:

The Consumer Protection Act, 2019 is the latest legislation governing consumer protection in India. It replaced the previous Consumer Protection Act, 1986. The Act aims to provide better protection to consumers and ensure that their rights are upheld. Product liability, which refers to a manufacturer's or seller's responsibility for any injury to a consumer resulting from a defective product, is a provision of the Consumer Protection Act of 2019. A product is deemed to be faulty under the Act if it fails to live up to the consumer's reasonable expectations for performance and safety. To ensure prompt and efficient resolution of consumer issues, the Act calls for the creation of Consumer Dispute Redressal Commissions at the national, state, and district levels. The Act also calls for the creation of a Central Consumer Protection Authority (CCPA) to advance, defend, and uphold consumer rights. Unfair business practices and false advertising is subject to investigation and enforcement by the CCPA.

Manufacturers, service providers, and retailers who engage in unfair business practices or offer subpar goods or services are subject to severe penalties under the Act. Courts began to recognize the separate and concurrent responsibility of manufacturers or suppliers to third persons, other than the immediate purchaser, in Donoghue v. Stevenson.

Consumer Protection Act, 2019:

• Section 2(34) defines product liability as the responsibility of a product manufacturer, service provider or seller of goods or services to compensate a consumer for any harm or injury caused by a defective product or deficient service.
• Chapter VI talks about “Product Liability” 
• Section 84 provides for the liability of a product manufacturer for any harm caused to a consumer due to a defective product.
• Section 85 provides for the liability of a product seller for any harm caused to a consumer due to a defective product if the seller knew or ought to have known about the defect at the time of sale.
• Section 86 provides for the liability of a product seller for any harm caused to a consumer due to a deficient service.
• District Commission for monetary values up to Rs. 50 lakh, the State Commission for values up to Rs. 2 crores, and the National Commission for values greater than Rs. 2 crores, a written complaint may be submitted.
• In addition to the civil lawsuit option previously accessible to the injured consumers, the remedy under Act is an additional option. A consumer is only obliged to pay a small charge when filing a complaint, appeal, or petition under the Act, not any court fees.
• The Act gives aggrieved people the right to compensation for any injury brought on by a defective product in addition to prison time and a fine. Moreover, provides for the suspension of any license (for a period of up to two years) issued for a first offense and the cancellation of such license in the event of a second offense. Separately, the authority established by the Act may demand that unsafe, risky, or harmful goods be recalled, or that customers who purchased them be compensated, etc.

Relevant Case Laws:

• The Supreme Court ruled in MC Mehta v. Union of India (1987) that producers of dangerous chemicals have an unassailable obligation to ensure that their products are safe for use and that they are responsible for any damage produced as a result of those items.
• In the case of Nizam Institute of Medical Science v. Prasanth S. Dhananka (2009), the Supreme Court increased the award for medical malpractice that resulted in the paralysis of the complainant from Rs. 15 lakhs to Rs. 1 crore.
• M/S Associated Cement Companies vs Commissioner Of Customs (2001 AIR (SC) 862): After relying on the information from the aforementioned encyclopedia, the plaintiffs developed severe illnesses as a result of cooking and consuming mushrooms. The plaintiffs filed a lawsuit against the publishers and demanded compensation for things like product liability and warranty breaches.

 According to the trial court, a book's contents are not considered products for the purposes of strict liability under products liability legislation. The Court of Appeals agreed with the trial Court and stated that the products liability legislation reflects its emphasis on material objects and does not take into account the distinctive qualities of ideas and expressions. In other words, for the purposes of product liability law, the class of the material in a book would not be considered a product.

• Ttk Prestige Ltd v. Akhil Bhartiya Grahak Panchayat (II (1999) ACC 638)- A settlement of Rs. 1 lakh was given to the buyer after a pressure cooker burst while being used, causing the buyer's engineer wife to lose her right hand.
• A television was purchased and repaired in Solidaire India Ltd. & Another v. K. Indira. The television quit working just after a week, necessitating a total of 11 repairs.
• In Tata Motors v. Rajesh Tyagi & Associates, the complainant was given a defective car and was required to fix it once every month. The NCDR issued a ruling directing the manufacturer to make the required repairs as soon as possible and return the vehicle to the complainant within three months.

Defences available to a product manufacturer

• The product was purchased by the employer to be used at work, and the employer received proper warnings or the product itself contained warnings that the employer was aware of, but the employee who filed the lawsuit was not made aware of them.
• The item was a part that would go into another item. Regarding the component product, all cautions have already been issued. The component product alone did not cause the injury; rather, it was only when it was combined with the other product that it did. 
• All warnings were conveyed to utilise the product exclusively under expert supervision.
• Due to the use of a drug or intoxicating substance that was not given to him by a medical professional, the customer was not conscious while using the product. Harm was done as a result of the intoxication or drug impact done by the customer.
• However, the producer is not required to issue any warnings of any such dangers if a reasonable customer is aware of them. For instance, it is not the manufacturer's fault if a customer is unaware that driving a car underwater can cause damage to the car and hence cannot be compensated by the manufacturer.

It has been ruled in the matter of Classic Automobiles vs. Lila Nand Mishra & Anr. [I (2010) CPJ 235 (NC)] that the complainant has the burden of proving the manufacturing defect and that it is also important to acquire an expert opinion before claiming that there is a manufacturing flaw. As a result, the customer could seek reimbursement as it was regarded as a service deficiency.

Drawbacks:

• Burden of proof: Under the Consumer Protection Act, the burden of proof lies with the consumer to establish that the product was defective and caused injury or harm. This can be a challenging and costly process, particularly for consumers who may lack resources and expertise.
• Limited compensation: The compensation awarded to consumers under the Consumer Protection Act is often limited, and it may not fully cover the damages suffered by the consumer.
• Lengthy legal process: The legal process under the Consumer Protection Act can be lengthy and time-consuming, which can be a deterrent for consumers seeking redress for their grievances.

Overall, while the Consumer Protection Act provides important protections for consumers in India, there are some limitations that can make it challenging for consumers to seek justice and compensation for defective and unsafe products.

Recommendation:

• Increase consumer awareness: Consumers need to be aware of their rights and responsibilities in case of product defects. The government can launch awareness campaigns to educate the public about product liability laws and how to seek compensation in case of damages caused by defective products.
• Strict enforcement of regulations: The government needs to enforce product liability laws strictly and take legal action against companies that violate these regulations.
• Provide incentives for companies to follow safety standards: The government can provide incentives to companies that follow safety standards and manufacture safe products. This will encourage companies to invest in product safety and reduce the number of defective products in the market.
• Establish a product liability fund: The government can set up a product liability fund to compensate consumers who suffer damages due to defective products. The fund can be financed by a levy on manufacturers of hazardous products.

Conclusion

Proceedings before the Consumer Commission are brief in nature. While keeping in mind the Act's provisions that set forth a timeline for case resolution, every effort is taken to provide the harmed consumer with redress as soon as practicable. Consumers can appeal to the State Commission if they are dissatisfied with a District Commission's ruling. A consumer may approach the National Commission in contravention of a State Commission order. The establishment of a Product Safety Cell is recommended in order to strengthen consumer protection laws in India and provide better avenues for compensation for consumers who suffer harm as a result of defective products. The Product Safety Cell will investigate product safety issues and ensure compliance with safety standards.

In conclusion, product liability is a complicated field of law created to safeguard customers from harm brought on by subpar goods. The development of product liability law has been significantly influenced by landmark cases, which still have an impact on legal judgements today