1

Subject: Law of Torts and Consumer Protection Act-II

B.A.LL.B-IInd Sem
Subject Teacher: Akhlaqul Azam
Study Material of Unit-V (B)
Topic: Product Liability under Consumer Protection Act 2019 (Sections 82-87)

Product Liability under Consumer Protection Act 2019 (Sections 82-87)

Chapter VI of Consumer Protection Act 2019 deals with Product Liability. Product liability is the
area of law in which manufacturers, distributors, suppliers and retailers are held responsible for
any injuries products cause.

Section-2(33) "product" means 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;

Section 2 (34) "product liability" means 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;

Section 2 (35) "product liability action" means a 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;

Section 2(36) "product manufacturer" means a person who—

(i) makes any product or parts thereof; or

(ii) assembles parts thereof made by others; or
(iii) puts or causes to be put his own mark on any products made by any other person; or
 2

(iv) 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
(v) designs, produces, fabricates, constructs or re-manufactures any product before its
sale; or
(vi) being a product seller of a product, is also a manufacturer of such product;

Section 2(37) "product seller", in relation to a product, means 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—

(i) a manufacturer who is also a product seller; or

(ii) a service provider, but does not include—

(a) a seller of immovable property, unless such person is engaged in the sale of constructed
house or in the construction of homes or flats;

(b) 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;

(c) a person who—

(I) acts only in a financial capacity with respect to the sale of the product;

(II) is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service
provider;

(III) 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;
 3

Section 2(38) "product service provider", in relation to a product, means a person who provides
any service in respect of such product;

Application of Chapter-section 82

Section 82- This Chapter shall apply to every claim for compensation under a 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.

Product liability action-Section 83

Section 83- A product liability action may be brought by a complainant against a product
manufacturer or a product service provider or a product seller, as the case may be, for any harm
caused to him on account of a defective product.

Liability of product manufacturer-Section 84

Section 84. (1) A product manufacturer shall be liable in a product liability action, if—

(a) the product contains a manufacturing defect; or

(b) the product is defective in design; or

(c) there is a deviation from manufacturing specifications; or

(d) the product does not conform to the express warranty; or

(e) the product fails to contain adequate instructions of correct usage to prevent any harm or any
warning regarding improper or incorrect usage.

(2) 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 product service provider-Section 85

Section 85. A product service provider shall be liable in a product liability action, if—
 4

(a) 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

(b) there was an act of omission or commission or negligence or conscious withholding any
information which caused harm; or

(c) the service provider did not issue adequate instructions or warnings to prevent any harm; or

(d) the service did not conform to express warranty or the terms and conditions of the contract.

Liability of product sellers.-Section 86

Section 86. A product seller who is not a product manufacturer shall be liable in a product
liability action, if—

(a) he has exercised substantial control over the designing, testing, manufacturing, packaging or
labelling of a product that caused harm; or

(b) he has altered or modified the product and such alteration or modification was the substantial
factor in causing the harm; or

(c) 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

(d) 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

(e) 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.
 5

Exceptions to product liability action-Section 87

Section 87. (1) A product liability action cannot be brought against the product seller if, at the
time of harm, the product was misused, altered, or modified.

(2) In any product liability action based on the failure to provide adequate warnings or
instructions, the product manufacturer shall not be liable, if—

(a) the product was purchased by an employer for use at the workplace and the product
manufacturer had provided warnings or instructions to such employer;

(b) 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;

(c) 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

(d) 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.

(3) 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.

Analysis

Steps To Be Taken By The Companies Involved In Goods And Services Sector:

If company is acting as a Product Manufacturer:

The product shall not contain any manufacturing defect or should not be defective in design;
There should not be a deviation from the manufacturing specifications;
 6

The product should conform to an express warranty. Express warranty is a material statement,
description, sample of a product conforming that the product corresponds to such statement,
description, sample (as the case may be); or

The product should contain adequate instructions as to how to correctly use it to avoid any harm
or the product does not contain appropriate warnings regarding improper usage.

2. If company is acting as a Product Service Provider:

Services provided by him should be perfect and adequate in respect of quality, nature or manner
of performance mandated under any law or in pursuance of any contract;
There should not be any act or omission or negligence which might cause injury to the consumer;
He should not withhold any information which might cause harm to consumer;
He should not issue adequate instructions or warnings to prevent any harm;
The services should confirm the express warranties and terms and conditions of the contract.
Further, 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.

3. If company is acting as a Product Seller:

He should alter or modify the product only to that extent up till which no harm can be caused to a
consumer;
He should not exercise any substantial control over the designing, testing, manufacturing,
packaging or labelling of a product that caused harm;

Any express warranty made independent to that made by manufacturer must be complied with;
He should ensure that the product or services assembled and inspected properly;
He should provide adequate instructions to the consumer as passed onto him by the
manufacturer.

Exceptions To Product Manufacturer Liability:

 7

In a product liability claim arising on account of failure to provide adequate warnings /

instructions, the product manufacturers will be exempt from liability in scenarios where: –

The product was purchased by an employer for use at workplace and the product manufacturer
had provided warnings or instructions to such employer;

The product which was sold was to be used as a component in another product, provided the
following conditions are met – appropriate warnings or instructions were given by the product
manufacturer in relation to such product; and the harm was caused by use of the main product
(i.e. of which the product of the product manufacturer was only a component);

The product was legally meant to be used under the supervision of an expert and the product
manufacturer had deployed reasonable means to give warnings or instructions regarding such
condition;
The product was used under the influence of alcohol or a prescription drug without such
prescription; and

The dangers with respect to a product are obvious or commonly known or consumers ought to
have known, in view of the characteristics of the product.

Liability For Default:

Whenever any contractual relationship has been entered into between the parties, warranty is
typically provided by manufacturers with respect to product or services, which is later on passed
on by seller or retailer to the consumer. This thus creates privity of contract between
manufacturer and consumer.

In event of contractual breaches including without limitation to defects in products or services,

liability cab be apportioned contractually or by considering joint and several principle which
may differ as per the provisions of contract and facts of the case. Thus, if any consumer files
complaint under CPA, liability can be apportioned joint and severally wherein manufacturer on
account of warranty provided and seller or retailer or dealer on account of involving in selling
and distributing the products or services, are jointly and severally liable for sale of defective
products.
 8

Who Can File Complaint?

An action for product liability claims can be brought against a product manufacturer by multiple
persons including a consumer (i.e. a purchaser or user of the manufactured goods but does not
include a reseller or a person who uses such goods for commercial purposes), a registered
voluntary consumer association, Central or State Government, and one or more consumer(s)
where a number of consumers have the same interest.

Remedies:
Apart from imprisonment and fine, the CPA, 2019 entitles aggravated persons to claim
compensation for any harm caused on account of a defective product. Further, CPA, 2019
contemplates suspension of any license (up to 2 years) issued for the first offence and
cancellation of such license in case of a subsequent offence. Separately, the authority formulated
under CPA, 2019 may require that goods which are dangerous, hazardous or unsafe be recalled
or that purchasers of such goods be reimbursed etc.

Probable Questions

1. Define Product Liability and discuss its objective

2. Explain the following:
i. Liability of product manufacturer.
ii. Liability of product service Provider
iii. Liability of Product Seller
iv. Exceptions to Product Liability actions