DR.
RAM MANOHAR LOHIYA
NATIONAL LAW UNIVERSITY, LUCKNOW
ACADEMIC SESSION: 2021-22
CONSUMER PROTECTION LAW PROJECT
THE CONCEPT OF PRODUCT LIABILITY UNDER THE CONSUMER
PROTECTION ACT, 2019
ACKNOWLEDGEMENT
I would like to express my gratitude towards all those whose help and constant support the
project would not have reached its current facet. Foremost, I would like to thank Amandeep
Sir for his kind guidance and for quenching my queries on many doubts and technicalities
which I came up during the making of this project. I would take advantage of this situation to
thank the Hon‟ble Vice Chancellor, Prof. Subir K. Bhatnagar, esteemed Dean (Academics)
Prof. Dr. C.M. Jariwala and Dr. Ram Manohar Lohiya National University for providing me
with such an enriching opportunity to work and research on this topic.
This project would not have seen the light of the day without the constant direction and
guidance of my parents and guardians to whom I owe a lot. I would also like to use this
opportunity to thank my brother in helping me out with the nitty-gritty of formatting.
I would also like to thank all of my friends and seniors who aided me along the way. I must
also extend my gratitude to the e- library services that provided me with research material
and good books to work upon and the distinguished authors, jurists and journals for providing
in the public domain such invaluable information.
TABLE OF CONTENTS
Introduction ................................................................................................................................ 4
Principles Of Product Liability .................................................................................................. 5
Evolution Of The Principle ........................................................................................................ 6
Product Liability Under The Consumer Protection, 2019 ......................................................... 8
Exceptions To A Product Liability Action ............................................................................ 8
Conclusion ............................................................................................................................... 10
Bibliography ............................................................................................................................ 11
INTRODUCTION
Product liability law provides the consumers with legal recourse for any injuries suffered
from a defective product. It is estimated that millions of people around the globe are
negatively affected by defective products, and that the manufacturers or sellers end up paying
large amounts for products-liability insurance as well as damages. A product is required to
meet the ordinary expectations of a consumer; therefore, responsibility lies with the
manufacturers and the sellers to ensure safety and quality of the product as per description.
This, however, has not always been the case. The theory of caveat emptor, meaning let the
buyer beware, governed the general consumer law from 18th century up until early
20th century.1 Where the lifestyle was modest and all the products that were locally made, and
therefore any consumer who suffered any damages from a defective product could directly
confront the manufacturer and the intervention of courts or legislature was not required.
However, with the changes in the means of production and consumption, such as industrial
revolution, technological developments, among others, have led to the development of
products-liability law due to the rise in issues arising out of defective products.
The modern market for consumers for goods as well as services have undergone drastic
transformation with the emergence of global supply chains, rise in international trade and the
rapid development of e-commerce have led to not only plethora of products and services but
also new delivery systems, options and opportunities for consumers.2 It has also rendered the
consumer vulnerable to new forms of unethical and fraudulent practices and sale of products
based on misleading information. Therefore, a robust legal framework is required to regulate
the industries and protect the interests of consumers.
Very recently, the Indian Ministry of Consumer Affairs, Food and Public Distribution made
the new Consumer Protection Act, 2019 ("CPA 2019") effective which replaced the erstwhile
Consumer Protection Act, 1986 in entirety. One of the key features of the CPA 2019 is the
concept of product liability. Prior to this there was no specific provision under any statutes in
India which governed product liability and also there was no comprehensive legislation
regarding this. Law related to product liability in India was essentially governed by contracts
and generally under the Consumer Protection Act, 1986, the Sales of Goods Act, 1930, the
1
Don Mayer, Daniel M. Warner, George J. Siedel and Jethro K. Lieberman, "Basics of Product Liability, Sales,
and Contracts". Available at < [Link]
[Link] >
2
[Link]
evolution accessed 12th November, 2021.
Indian Penal Code, 1860 and certain specific statutes pertaining to specific goods and
standardization.
The CPA 2019 now provides for detailed ambit on product liability with specific
responsibilities and liabilities of a 'product manufacturer'2, 'product service provider'3 or
'product seller'4, 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.
To understand the genesis of these specific provisions and the overall concepts of product
liability introduced in the CPA 2019, it is pertinent to be aware of the principle and the
historic evolution of the product liability law.
PRINCIPLES OF PRODUCT LIABILITY
Product liability law finds its origin in the common law concept of caveat venditor, meaning
“let the seller beware”, placing the onus on the seller for any problem that the buyer might
encounter with a service or product. Product liability implies the responsibility of a
manufacturer or vendor of goods to compensate for injury caused by defective merchandise
that it has provided for sale. Product-liability cases have consequently led to development in
general principles of contract law and tort law; wherein in contract law, product liability is
based on the principle of „warranty‟, and in tort law product liability is based on the
principles of „negligence‟ and „strict liability‟.
The early days of product liability jurisprudence revolved around the principles of contract
law wherein remedies were awarded by courts upon breach of any warranty made on the
product. A warranty is synonymous to a guarantee, it can either be implied or express, and is
essentially the manifestation of nature or quality of goods that forms the basis of a purchase.
Therefore, any non-conformity with guaranteed nature or quality of goods may result in a
product liability action by a consumer. There is however a blurry line between a warranty and
trade-talk, for instance, representations by a salesperson of a faulty car as "in A-1 shape" and
"mechanically perfect" can be construed as an express warranty3 whereas the representations
made by a salesperson of a faulty bull that would "put the buyer on the map" and that "his
father was the greatest living dairy bull" can just be just trade-talk.4 Further, the principle of
warranty is often subjected to the doctrine of privity of contract, which states that an effected
3
Wat Henry Pontiac Co. v. Bradley, 210 P.2d 348 (Okla. 1949).
4
Frederickson v. Hackney, 198 N.W. 806 (Minn. 1924).
person can only sue a negligent person if he or she was a party to the transaction with the
effected person. The inadequacy of protection offered by contract law in product liability
cases, led the courts to move towards tort law principles of negligence and strict liability to
protect the interests of the consumers.
Negligence simply means the lack of due or reasonable care, and is often effective in cases of
defective designs, warnings, and privity. Sellers that fail to exercise due caution, fall in the
trap of negligence. However, there are many possible defences to a claim of negligence, that
make holes in such claims, such as, proximate cause, contributory negligence, subsequent
alteration of product, misuse of product, and assumption of risk by the plaintiff.
As the pleas of warranty and negligence failed, courts developed the strict liability principle,
wherein products that were unreasonably defective and dangerous that the seller would be
made liable for any proprietary loss or personal injury. However, to say that this principle is
absolute would not be correct, as there maybe disclaimers on liability of the product, or a
recovery limit, or the economic loss may not recoverable. Basis this qualified principle, we
note that the CPA 2019 also envisages some specific exceptions to a product liability action. 5
EVOLUTION OF THE PRINCIPLE
With the advancement of time, the jurisprudence of product liability cases have progressed on
the lines of holding the manufacturer liable for negligence in the event of an injury sustained
by the ultimate consumer due to a manufacturing defect, irrespective of the fact that no
contract existed between such effected consumer and the manufacturer.
Cases in India on issues of product liability have been dealt by courts basis the principles of
negligence and strict liability,6 while statues have been historically silent on the provisions
for liability of seller or manufactures for defective or faulty products and services.
The Apex Court in A.S. Mittal v. State of U.P. (1989), considered a question of law involving
product liability and held that the same would depend on the facts and evidence presented.
In Airbus Industrie v. Laura Howell Linton (1994), where one aircraft, a scheduled passenger
flight from Bombay to Bangalore, in the course of flight while attempting to land at
Bangalore airport contacted ground approximately 2,300 feet before the beginning of the
5
Section 87 of the CPA, 2019.
6
Manubhai Punamchand Upadhya v. Indian Railways (1995), and Banyan Tree Holding (P) Limited v. A.
Murali Krishna Reddy (2009).
runway and immediately hit the boundary wall. As a result, the fuselage, the wings and other
parts of the aircraft disintegrated. With the result, 92 passengers and four crew members
perished and the remaining 54 survivors sustained injuries of varying degrees of severity. In
action by the appellants to recover compensation from the aircraft manufactures, airlines and
airport authority of India, a claim by the respondents were made that the Texas court was a
more appropriate forum as India had no law on strict product liability. In this regard, the
Karnataka High Court rejected the claim of the respondents and considered the liability of the
appellants on the basis of common law concepts of causation and principles of negligence
rather than strict product liability and concluded that "a mere fact that the Indian Courts does
not have the strict product liability law, it is not wise to say that in such a situation and
parties can go without any remedy. As it was done in Charan Lal Sahu v. Union of India
(Bhopal Gas Disaster) that such antiquated acts can be drastically amended or fresh
legislation should be enacted to save the situation."
Consumer markets for goods and services have undergone profound transformation since the
enactment of the Consumer Protection Act in 1986. Prior to the CPA 2019 and the rules made
thereunder, there was uncertainty and ambiguity in the Indian legal framework for product
liability. The amendment to the Consumer Protection Act, 1986 in 1993 and 2002, failed to
contemplate provisions in relation to product liability. The consumer protection bills of 2011,
2015 and 2018 also showed the pro-consumer approach of government and urged for the
updation of laws, to correct the legal uncertainty and lack of precedents.
All the above instances have gradually led to the enactment of the new CPA 2019, which has
provided provisions in relation to product liability, built on the strict liability principle of tort
law and the jurisprudence laid down by the courts. Further, the e-commerce guidelines
framed under the CPA 2019 mandate the e-commerce entities to endorse product liability
construct while requiring them to disclose proper information to consumers, thereby enabling
transparency and more protection to the consumers. Further, the provisions under the Indian
Penal Code, 1860, the Sales of Goods Act, 1930 and certain specific statutes pertaining to
specific goods and standardization (like the Drugs and Cosmetics Act, 1945; Prevention of
Food Adulteration Act, 1954, Food Safety and Standards Act, 2006; Bureau of the Indian
Standards Act, 1986; Agricultural Produce (Grading and Marking) Act, 1937; among others)
continue as an additional measure for the protection of consumers.
PRODUCT LIABILITY UNDER THE CONSUMER PROTECTION, 2019
Sections 82 to 87, appearing in Chapter VI of CPA 20197, provide an all-encompassing
scheme which would apply to every claim for compensation under a product liability action.
CPA 2019, expressly or by necessary implication, does not indicate that these new provisions
of product liability will also apply to product liability actions already pending before various
consumer fora. However, since these provisions create new rights and liabilities, there is a
presumption in law that they are prospective in operation.
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”.8
A product liability action can be filed against „product manufacturer‟ or a „product service
provider‟ or a „product seller‟, as the case may be.9 CPA 2019 defines each of these
expressions in very wide terms to bring within their fold every possible aspect of a product
liability claim. CPA 2019 also delineates the situations in which they will be held liable. It
however remains to be seen how the courts will interpret these provisions.
Exceptions to a product liability action
CPA 2019 also envisages some specific defences to a product liability action. Few of the
defences are summarized below:
(i) The product was misused, altered or modified at the time of harm. Curiously, as per this
exception, there cannot be a product liability action against a product seller. This is
somewhat intriguing, since this exception should equally apply to a product manufacturer or
a product service provider.
(ii) In any product liability action based on the failure to provide adequate warnings or
instructions, the product manufacturer will 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 the employer; or
7
Consumer Protection Act, 2019 available at <[Link] accessed
12th November, 2021.
8
Section 2(34) of the CPA, 2019.
9
Section 83 of the CPA, 2019.
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; or
The product ought to have been used only by or under the supervision of an expert; or
The complainant, while using the product, was under the influence of alcohol etc.
(iii) A product manufacturer will not be liable for failure to instruct or warn about a danger
which is obvious or commonly known to the user of such product.
Even prior to CPA 2019, in most product liability actions, one or more of the above defenses
were taken. These defenses now have statutory recognition.10 CPA 2019 does not say that the
defences set out are the only defenses to any product liability action. It, however, remains to
be seen how the courts will interpret these provisions.11
10
<[Link]
manufacturer-seller-beware> accessed 12th November, 2021.
11
<[Link] accessed 12th November, 2021.
CONCLUSION
When compared to the earlier Act of 1986, CPA 2019 is far more comprehensive and in tune
with the consumer protection regimes elsewhere around the world. The introduction of a
product liability regime is a welcome change and will streamline product liability actions.
There is a clear shift in principle of buyer beware to seller beware. Even though some aspects
are unclear, the new regime is set to change the legal landscape of India pertaining to product
liability. The ease of approaching consumer forums and the strict regime will only push
consumers to experiment with these provisions to a new high.
Product manufacturers, sellers and service providers will need 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.
As the legal theories regarding product liability continue to mature, we expect to see in future
further interesting judgments delivered by the courts and new statutes coming into force.
Further, with the advent of the product liability laws in India it would be also interesting to
see how the industry and judiciary deal with the increasing unethical and fraudulent activities
by certain consumers and whether these provisions are misused by certain consumers to
indulge in fraudulent activities.
BIBLIOGRAPHY
Articles and online resources.
[Link]
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982d85a064c6
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liability-law-in-india-an-evolution
[Link]
liability-vis-a-vis-the-consumer-protection-act-2019
[Link]
protection-act-2019-let-the-manufacturer-seller-beware