Product liability

Topic: Consumer Rights and Consumer Protection · NCERT: Class 10, Ch 5 "Consumer Rights"

Meaning

Product liability is the duty of a product manufacturer, service provider or seller to pay compensation to a consumer who is harmed by a defective product or a deficient service. It is set out in Chapter VI of the Consumer Protection Act (CPA) 2019 [4].

It matters because the whole supply chain now carries legal responsibility for harm to the buyer, not just the shop that made the sale. It gives legal force to the consumer's right to safety.

Explanation

How it works

• A separate cause of action. A cause of action is a legal ground for going to court. Product liability is a separate ground from an ordinary consumer complaint.
• An ordinary complaint is usually about a bad deal: poor quality, overcharging or an unfair trade practice.

• A product liability claim is about harm, meaning injury or loss caused by a defective product or a deficient service.

• How to claim: the consumer must prove any one of the defect or deficiency conditions listed in the Act [4].

• The consumer does not have to prove every condition. One is enough.

• What NCERT says: the manufacturer or service provider "would be penalized or even imprisoned".

Who can be held liable

• Manufacturer: the company that made the product.
• Service provider: the business that gave the service, for example a repair or installation service.
• Seller: the business that sold the product to the consumer.
• Why this matters:
• Under COPRA 1986 there was no separate product liability chapter.
• Now a harmed consumer can bring a claim against several points in the supply chain.
• So every business in the chain has a reason to check safety.

Key terms

• Defective product: a good with a fault that makes it unsafe or unfit for use, for example a pressure cooker whose valve bursts.
• Deficient service: a service that falls short in quality or manner of performance, for example faulty wiring done by an electrician.
• Consumer: a person who buys a good, or uses a service, for a consideration (a payment, or a promise to pay) [4].
• A person who buys goods for resale or a commercial purpose is not a consumer [4].
• Services given free of charge are not "services" under the Act. So a harm-based claim still needs a paid transaction.

Which forum hears the claim: a worked example

• Where a case is heard depends on pecuniary jurisdiction (the money limit of each commission). Under the 2021 Rules, the test is the price paid, not the compensation claimed [2].
• Example:
• Riya pays ₹60 lakh for a car. A defect in the car causes her harm, and she claims ₹1.5 crore.
• Price paid = ₹60 lakh. This is above ₹50 lakh and not above ₹2 crore.
• So she files before the State Commission. The size of her claim does not change the forum.

In India

• Law: CPA 2019, Chapter VI [4]. The Act got President's assent on 9 August 2019 and came into force on 20 July 2020. It replaced COPRA 1986; it was not an amendment of it.
• Where claims are decided: the three-tier quasi-judicial consumer commissions. These bodies decide cases like a court, but with simpler procedure and no need for a lawyer. Limits under the 2021 Rules [2]:

Commission	Price paid
District	up to ₹50 lakh
State	above ₹50 lakh, up to ₹2 crore
National (NCDRC)	above ₹2 crore

• The preventive side: the CCPA. The Central Consumer Protection Authority came into existence on 24 July 2020 [3]. Product liability pays for harm after it happens. The CCPA tries to stop harm before it spreads. It can:
• order recall of unsafe goods, refunds and return of products [3];
• start class actions (one case filed for a whole group of consumers hurt in the same way) [3];

• act suo motu (on its own, without waiting for a complaint).

• Easier access:

• A complaint can be filed where the consumer lives or works.
• e-Jagriti (launched 1 January 2025) brings the online filing systems together on one platform [5].

• The National Consumer Helpline is 1915 [6].

• Online purchases: these are covered by the law since 2019, so a harmed online buyer can also claim.

Don't confuse with

• Ordinary consumer complaint: this is about a bad deal, such as a defect, overcharging or an unfair trade practice. Product liability is a separate cause of action based on harm caused by a defective product or deficient service.
• CCPA recall order: this is a regulator's executive action to take unsafe goods off the market [3]. Product liability is a claim for compensation that a consumer brings before a consumer commission.
• Penalty for misleading advertisements: this punishes a false claim made in an ad (for example, a CCPA fine of up to ₹10 lakh on a manufacturer or endorser). Product liability covers harm from the product or service itself.
• Unfair contract: this is a one-sided term, such as an excessive security deposit, challenged before the State and National Commissions. Product liability is about physical or financial harm from a defect.

Prelims Hooks

• Product liability was introduced by the CPA 2019 (Chapter VI). COPRA 1986 had no separate product liability chapter [4].
• Liable parties: manufacturer, service provider and seller. Trap: "only the manufacturer" is wrong.
• To succeed, the consumer must prove any one of the listed defect or deficiency conditions, not all of them [4].
• Forum is decided by the price paid, not the compensation claimed. District up to ₹50 lakh, State ₹50 lakh–₹2 crore, National above ₹2 crore (2021 Rules) [2].
• Claims are decided by the consumer commissions (quasi-judicial). The CCPA is an executive regulator, not a court [3].
• A person who buys goods for resale cannot claim as a "consumer". A person who buys goods for self-employment to earn a livelihood can.

Mains Points

• Accountability across the supply chain: product liability, together with endorser penalties, spreads responsibility over every business in the chain.
• Makers, sellers and service providers all carry legal risk.
• So each has a reason to check safety and quality.

• This puts the right to safety and the right to information into practice.

• Cure plus prevention: product liability pays compensation after harm has happened. The CCPA's recall, class-action and suo motu powers stop harm before it spreads [3]. Together they move consumer protection from cure to prevention (GS-II: consumer rights, regulatory bodies).

• The limit is the machinery: access has become easier through filing where the consumer lives or works, e-Jagriti [5] and lower pecuniary limits [2]. But a large backlog of cases and vacancies in district commissions delay decisions. A harmed consumer who waits years for compensation gets only a weak remedy.

Related concepts

• Consumer protection councils
• E-commerce consumer protection
• Mediation
• Dark patterns

Read more

• From COPRA 1986 to the Consumer Protection Act 2019