Analyzing Product Liability Under The Consumer Protection Act 2019

The Consumer Protection Act, 2019("2019 Act"), which recently received the Presidential assent on the 9th August 2019 and was published in the Official Gazette for general information,aspires to safeguard the interests of the consumers by introducing provisions which aim at addressing consumer concerns in a timely and effective manner. In the words of Ram Vilas Paswan, Union Minister of Consumer Affairs, Food and Public Distribution, the new legislation would ease the overall process of consumer grievance redressal.Key takeaways from the 2019 Act can be summed up as: (i)the inclusion of an exclusive provision concerning product liability; (ii) establishment of Central Consumer Protection Authority (CCPA), with the powers of initiating class action and enforcing recall, refund and return of products;(iii) provision enabling consumers to file complaint from any place (even video conferencing) instead of the current practice of filing it from the place of purchase/seller's registered address; (iv) penalties for misleading advertisement; and (v) providing a comprehensive framework dealing with unfair contracts. The 2019 Act also aims to deal with unfair contracts in a comprehensive manner. It provides that a contract between a manufacturer or a seller or a trader and a consumer will come under the purview of an unfair contract if it will, in any manner, undermine the rights of the consumer. It lists down grounds on the basis of which the fairness of a contract can be ascertained. This comes as a notable amendment as it endeavors to base a statutory recognition to the practice the judiciary of striking out unfair terms of a contract in the interest of consumers. The Supreme Court in a case held that, "the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power." Another remarkable provision which the 2019 Act has brought out is the imposition of penalty for misleading advertisements. In doing so, the manufacturer or endorser or advertiser or publisher, as the case may be, would be asked to discontinue advertisements which are prejudicial to the interests of the consumer and additionally be asked to pay penalty for the same. Most importantly, the endorser may also be prohibited from making endorsement of any product or service for a period of one year which may extend to three years. This is an innovative provision, as in the past, there have been instances where in celebrities were found endorsing faulty goods and services, be it cricketers in the recent Amrapali case or Bollywood celebrities in the Maggi case. These endorsements impact the consumers monumentally and hence it is important that the endorsers exercise due diligence before advertising the product. This is more so in a country like India, where celebrities, cricketers, etc. are often idolized as demi-Gods and significantly influence decision making of consumers in terms of buying or not buying a product. Product Liability: Legal Framework before the advent of the 2019 Act The term "product liability" was not defined in any statute before the 2019 Act came into picture. That being said, there was no specific statute dealing with the product liability claims. As a result of this, the jurisprudence pertaining to product liability evolved mainly with the aid of judicial decisions. The Courts resorted to the principles of justice, equity and good conscience, and often English common law, especially to the principle enshrined in the case of Donoghue v Stevenson . By analyzing the principle enunciated in the case of Donoghue v Stevenson, product liability can be simply understood as the liability of all the persons involved in the chain of delivering a product to a consumer(manufacturing-servicing-selling), if that product causes harm to him. It can be said that the concept of product liability originated with this landmark judgment of the House of Lords. Though, a few statutes (the Consumer Protection Act, 1986, the Sale of Goods Act, 1930, The Indian Contract Act, 1872) have helped in resolving product liability claims in the past, none of them could lay down a comprehensive framework for its redressal. These statutes led to the implied curtailment of the consumer's right to approach the appropriate authority since these statutes could not ascertain a specific individual in the supply chain against whom the consumer could lodge a grievance. The Hon'ble Karnataka High Court also held that,"the doctrine of product liability does not exist in India." Hence, there arose a need for a pro-consumer legislation. Product Liability: Who is responsible? Product liability under the 2019 Act has been defined to mean the responsibility of a product manufacturer or a product seller or a product service provider, of any product or service, to compensate for any harm caused to a...

Analyzing Product Liability Under The Consumer Protection Act 2019

Jeevan Ballav Panda & Siddhi Kochar

Tags