2.1        Who has the burden of proving fault/defect and damage?

In product liability actions, the burden of proof rests upon the complainant alleging such defect or deficiency in service.  Similarly, for actions under contract or tort, the aggrieved party bears the burden of proof for establishing their claim.

Under the Indian Evidence Act, 1872, liability to prove the existence of facts is upon the person asserting those facts, i.e., the claimant/plaintiff.  Any party seeking the court’s intervention as to enforcement of its legal rights must prove the facts that establish and substantiate its claim.

In a criminal case involving product liability or product defect, the burden of proof generally lies on the prosecution, except where statute provides otherwise.

2.2        What test is applied for proof of causation? Is it enough for the claimant to show that the defendant wrongly exposed the claimant to an increased risk of a type of injury known to be associated with the product, even if it cannot be proved by the claimant that the injury would not have arisen without such exposure? Is it necessary to prove that the product to which the claimant was exposed has actually malfunctioned and caused injury, or is it sufficient that all the products or the batch to which the claimant was exposed carry an increased, but unpredictable, risk of malfunction? 

In claims relating to defects in products, depending on the factual circumstances, the aggrieved party should have suffered a loss to claim damages from the breaching party.  CPA 2019 identifies that an action for product liability may be instituted before the appropriate commission for ‘any harm caused’ on account of a defective product, implying that actual harm/loss is a precondition for the institution of a product liability action.  However, in some cases, the manufacturer or importer will be liable to recall all defective products, rectify the defect, replace the defective part or product, or pay compensation if such rectification or replacement is not possible, without actual loss having been suffered by every claimant, if a product defect has been discovered or admitted by such manufacturer or importer.  Although judicial precedents are lacking on this aspect, we believe that a claimant will not be entitled to damages on account of merely being exposed a defective product without actually suffering any loss, damage or harm.

Various sector specific statutes, such as the Drugs Act, FSSA and MVA do not require mens rea or intent to be established for the person to be held liable for a defective/non-conforming product.  Under the said statutes, establishing that the products offered for sale do not comply with the requisite regulatory standard is sufficient to hold a person liable under the statutes.

2.3        What is the legal position if it cannot be established which of several possible producers manufactured the defective product? Does any form of market-share liability apply?

In India, consumer products/packaged commodities are required to mandatorily specify details of the manufacturer and, if applicable, the importer.  Therefore, it is unlikely that a claimant cannot establish the manufacturer of a defective product.  In any event, such instances (i.e., where it is not possible to establish which of several possible producers manufactured the defective product) have not been tested in the Indian scenario, and the legal position on this has yet to evolve.

Regardless, various statutes, such as the FSSA, CPA 2019 and the Drugs Act, provide for the joint and several liability of the manufacturer, distributor, seller, and importer (as the case may be) for the sale of defective products or products that do not comply with the requisite regulatory standard.

2.4        Does a failure to warn give rise to liability and, if so, in what circumstances? What information, advice and warnings are taken into account: only information provided directly to the injured party, or also information supplied to an intermediary in the chain of supply between the manufacturer and consumer? Does it make any difference to the answer if the product can only be obtained through the intermediary who owes a separate obligation to assess the suitability of the product for the particular consumer, e.g. a surgeon using a temporary or permanent medical device, a doctor prescribing a medicine or a pharmacist recommending a medicine? Is there any principle of “learned intermediary” under your law pursuant to which the supply of information to the learned intermediary discharges the duty owed by the manufacturer to the ultimate consumer to make available appropriate product information?

Mandatory labelling requirements typically include specifications of use and statutory warnings of the product.  In addition, the CPA 2019 holds the product manufacturer and product service provider liable in case of non-issuance of adequate instructions or warnings to prevent any harm which may be caused by the product.  Further, under the CPA 2019 a product seller is liable if it does not pass on the warnings or instructions given by the product manufacturer regarding the dangers involved or proper usage of the product to the consumer and such failure to inform was held to be the proximate cause of the harm.

While as a general principle the concept of ‘learned intermediary’ is not specifically recognised in the Indian context, the CPA 2019 provides for the following specific instances in which a product manufacturer will not be held liable:

1. the product was purchased by an employer for use at the workplace and warnings or instructions of usage had been communicated to the employer;
2. the product was sold as material to be used in another product, warnings or instructions of usage had been communicated to the purchaser and harm is caused by the end product; or
3. the product is legally meant to be used under supervision of an expert and reasonable means have been employed by the product manufacturer to communicate the warnings or instructions of usage to those experts.

3.1        What defences, if any, are available?

The defences typically available to manufacturers, distributors or sellers in product liability claims include the following:

1. the product being compliant with requisite statutory standards;
2. the product not being ‘defective’;
3. loss or injury is owing to negligence or misuse by the consumer or buyer, including contributory negligence;
4. the consumer or buyer had examined the goods prior to purchase and accepted them, being satisfied of their quality or specification; or
5. contractually agreed disclaimers or limitations on warranties in terms of scope, period, recourse and amount.

Additionally, the defences available to a product manufacturer, seller or service provider under the CPA 2019 include:

1. the purchaser or user of the product not being a ‘consumer’ as defined under the CPA 2019;
2. the product not being ‘defective’ as defined under the CPA 2019;
3. there being no ‘harm’ caused to a consumer by the use of the defective product, as defined under the CPA 2019;
4. in case of a claim brought against a product seller, if it is proved that at the time of the harm, the product was misused, altered or modified;
5. the consumer was under the influence of alcohol or prescription drugs not prescribed by a medical practitioner;
6. the product manufacturer failed 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; or
7. in case of a claim brought against a product manufacturer, the exceptions to the requirement to provide adequate warnings or instructions, as detailed in our response to question 2.4, as applicable.

In addition to the foregoing, defendants (such as manufacturers, distributors or sellers) could also contend that a civil action or complaint is barred by limitation in case of belated actions.

However, as noted above, various statues do not require mens rea or intent to be proved if it is established that the products sold do not conform with the requisite regulatory standards.  Further, the FFSA stipulates that compensation shall be payable to a consumer by the manufacturer/distributor/importer/seller (as the case may be) for the injury or death caused to a consumer from the consumption of an article of food.

3.2        Is there a state of the art/development risk defence? Is there a defence if the fault/defect in the product was not discoverable given the state of scientific and technical knowledge at the time of supply? If there is such a defence, is it for the claimant to prove that the fault/defect was discoverable or is it for the manufacturer to prove that it was not?

There is no state of the art/development risk defence available to a manufacturer in India.

3.3        Is it a defence for the manufacturer to show that he complied with regulatory and/or statutory requirements relating to the development, manufacture, licensing, marketing and supply of the product?

Demonstrating compliance with regulatory and/or statutory requirements, prescribed standards, licensing requirements, etc., although it might assist in mitigating liability, is not always an absolute shield to absolve the manufacturer from all liability in relation to a defective product.

3.4        Can claimants re-litigate issues of fault, defect or the capability of a product to cause a certain type of damage, provided they arise in separate proceedings brought by a different claimant, or does some form of issue estoppel prevent this?

The cause of action, amount of harm and nature of damage dictate liability of the breaching party to a claimant.  Different claimants can initiate separate litigations for their cause of action and damage against the same breaching party.  Different claimants bringing in different claims for their respective cause of action does not amount to re-litigation.  Factual findings with regard to a defective product made in one proceeding does not constitute estoppel in separate proceedings by a different claimant, though such findings may have persuasive value.

3.5        Can defendants claim that the fault/defect was due to the actions of a third party and seek a contribution or indemnity towards any damages payable to the claimant, either in the same proceedings or in subsequent proceedings? If it is possible to bring subsequent proceedings, is there a time limit on commencing such proceedings?

In cases of composite negligence, an aggrieved party is entitled to recover damages from any or all of the negligent tortfeasors.  Indian courts have held that a tortfeasor proceeded against has the remedy to sue the other tortfeasors to recover contribution amounts to the extent of their liability.  However, such proceedings are not evidenced as much in product liability claims.  Further, in cases of back-to-back indemnity agreements between the breaching party and third party for contractual liability, the breaching party may claim indemnity from the third party in subsequent proceedings, provided that the loss has been suffered by the breaching party.

Limitation on the filing of suits in India is governed by the Limitation Act, 1963 (Limitation Act).  The period of limitation for civil proceedings for monetary compensation on account of a contractual breach is three years from the date on which the breach occurred.  Specific statutes may also mandate a time period within which a claim may be commenced (for example, the CPA 2019 prescribes a time limit of two years from the date on which the cause of action arose).

3.6        Can defendants allege that the claimant’s actions caused or contributed towards the damage?

Indian courts have recognised the principle of contributory negligence, i.e., the person who has suffered damage is also guilty of some negligence and has contributed towards the damage.  However, such contentions are examined by the courts in determining the quantum of damages that is mitigated by such contributory negligence by the claimant.

The CPA 2019 also recognises that if at the time of harm, the product was misused, altered or modified by the consumer, an action cannot be brought against a product seller.

3.7        Are there any examples in your jurisdiction of legislation providing exemptions from product liability in respect of products produced and/or deployed in the context of a public health emergency?

There is no specific legislation in India that provides exemptions from product liability in respect of products produced or deployed in the context of a public health emergency.  However, the defences provided for in the CPA 2019 would be available to the defendant for such actions.

Though the provisions of the CPA 2019 are not strictly tailor-made for a circumstance such as a public health emergency, the provision is fairly wide in its ambit and would cover liability that could arise from products that are deployed in such a context.

However, it has been seen, specifically in the context of the vaccine developed to combat COVID-19, that most vaccine manufacturers have opted to take out product liability insurance.  This is in response to the Government of India refusing to indemnify them for any claims that could come up in connection with the administration of the vaccine.

4.1        In the case of court proceedings, is the trial by a judge or a jury?

Cases in India are adjudicated by judges.  The jury system was abolished in India in 1974.

4.2        What is the standard of proof applied by the court?  Does the court have to be satisfied of a fact “on the balance of probabilities” (i.e. more likely than not), “beyond all reasonable doubt” or to a different or more flexible standard?

In civil matters such as product liability actions, Indian Courts and Consumer Commissions adopt the ‘preponderance of probabilities’ standard of proof to claims that are instituted by a Plaintiff/Complainant.

4.3        Does the court have power to appoint technical specialists to sit with the judge and assess the evidence presented by the parties (i.e. expert assessors)?

Indian courts cannot appoint technical experts to sit as assessors with the judges.  However, the opinions of experts are admissible as evidence, and typically, parties rely on such opinions for substantiating their claims.  In certain circumstances, the higher courts (such as the High Courts and the Supreme Court) may also appoint an amicus curia to aid them with understanding disputes that involve highly specialised or technical knowledge.  Please also see our response to question 4.9.

The CPA 2019, in the context of claims for defect in goods, empowers the Consumer Commission to refer a sample of the said good to the appropriate laboratory or authority to assess and offer its expert opinion on whether the good suffers from the defect as alleged, or any other defect as may be discovered and report the same to the Consumer Commission with a prescribed timeline.

In a recent decision of the National Consumer Dispute Redressal Commission (NCDRC), in Mercedes Benz India Private Limited v. Revathi Giri, where in the context of an appeal against the decision of the Telangana State Consumer Disputes Redressal Commission directing the appellant/vehicle manufacturer to replace the car purchased by the respondent with another car of similar make/model, or alternatively to refund the full purchase consideration paid by respondent along with interest, the NCDRC has held that it is a statutory requirement that claims against inherent manufacturing defects are made out only if an expert opinion of any authorised laboratory or authority are brought on record to establish that the vehicle suffered from any defect that could be ascribed to the manufacturer of the vehicle.  As the State Commission had failed to adhere to this statutory mandate in arriving at its findings, the appeal was allowed, and the order of the State Commission was set aside.

Additionally, the State and National Consumer Commissions, either upon an application made by the complainant or otherwise, is of the opinion that the subject matter in dispute concerns the larger interest of consumers, may direct the appointment of an expert to assist the Consumer Commissions as the case may be.  Similarly, the CCPA is statutorily empowered to engage experts to assist it in the discharge of its functions.

4.4        Is evidence introduced solely by the parties or may the court take evidence on its own initiative?

While the primary burden is on parties to introduce all possible evidence they may have in support or in defence of a claim, including but not limited to, documentary and testamentary evidence, the Code of Civil Procedure, 1908 (CPC) empowers a Court, on its own motion, to examine any person, including a party to the proceedings, at any time it deems necessary.  As such, the Court may issue summons to such a person to give evidence or to produce any document that may be in their possession.

The provisions of CPA 2019 also empower Consumer Commissions adjudicating upon product liability actions to take assistance of expert opinions during the course of adjudication.

4.5        Is there a specific group or class action procedure for multiple claims? If so, please outline this. Is the procedure “opt-in” or “opt-out”? Who can bring such claims, e.g. individuals and/or groups? Are such claims commonly brought?

Under the CPC, two or more plaintiffs have the right to aggregate their claims in a suit against one defendant, even if their causes of action are separate and distinct, in the event that the right to obtain relief arises out of the same act, transaction, or series of acts or transactions, and the causes of action are of such a nature that if separate suits were filed by the plaintiffs, common questions of law or fact would arise.

The CPC allows one or more persons to file a suit against the opposing party on behalf of, or for the benefit of, numerous persons having the same interest in the suit, with the prior permission of the court in which the suit is required to be instituted.  In this regard, interest is said to be similar or common when plaintiffs have a common grievance against the defendant and the relief sought is in its nature beneficial to all persons interested in the suit.  However, such multi-plaintiff proceedings would not bar a claimant from instituting separate proceedings with regard to his/her claims.

The CPA 2019 also recognises the right of one or more consumers or a voluntary consumer association to file a complaint against a single manufacturer, dealer, distributor, etc. on behalf of, or, for the benefit of, numerous consumers having the same interest.  Additionally, Consumer Commissions also have the power to grant relief to several consumers who have suffered loss or injury but are unidentifiable.

The CPA 2019 also authorises the CCPA to either in a suo moto capacity, or under directions from the Central Government, call for inquiries to be made into violations of consumer rights or unfair trade practices.  The CPPA is also empowered to file complaints before the appropriate Consumer Commissions and can even intervene in ongoing proceedings as the case may be, with respect to any claims of violation of consumer rights or unfair trade practices.

Such claims are not commonly brought, but with increasing access to technology and connectivity, class action suits have become a known phenomenon and have been gaining momentum in recent times.

4.6        Can claims be brought by a representative body on behalf of a number of claimants, e.g. by a consumer association?

As discussed above, claims may be brought by a representative body such as a voluntary consumer association, with prior permission from the relevant court or forum for adjudication of disputes under the CPC or CPA 2019, even if the aggrieved consumer is not a member of such association.

4.7        May lawyers or representative bodies advertise for claims and, if so, does this occur frequently? Does advertising materially affect the number or type of claims brought in your jurisdiction?

The Bar Council of India, which is the regulatory body for legal professionals, does not permit lawyers to solicit work.  As such, lawyers are not permitted to advertise for claims.  However, there are no prohibitions on representative bodies from advertising for claims, and these are relatively frequent in India.  In the past, there have been instances where the Government has published notices on its website notifying the public of faulty medical devices.

4.8        How long does it normally take to get to trial?

The CPA recognises that proceedings under the Act are summary in nature, and as such, there is no concept of a detailed trail for such proceedings.  Though a party is required to produce evidence and to prove their case, there is no mandate for cross examination of the complainant or the opposite party.  Most product liability claims are, however, initiated under consumer protection laws, and the CPA 2019 prescribes timelines that are required to be followed by Consumer Commissions.  A Consumer Commission must endeavour to decide a complaint within a period of three months from the date of receipt of notice by the opposite party, which may extend to five months if the complaint requires analysis or testing of commodities.  On account of the backlog of cases, these timelines are sometimes extended to around 18 months.

For claims that are instituted before a civil court, for any product liability action, due to the backlog of cases pending before the Indian courts, a suit would reach the trial stage within six to 12 months, provided that requisite notices have been served and the prescribed procedure has been complied with.

4.9        Can the court try preliminary issues, the results of which determine whether the remainder of the trial should proceed? If it can, do such issues relate only to matters of law or can they relate to issues of fact as well, and if there is trial by jury, by whom are preliminary issues decided?

Yes, Indian courts can adjudicate upon preliminary issues regarding the maintainability of the claim, usually restricted to questions of law and not fact.  Findings on such preliminary matters generally determine the progress of the case.

As the jury system is not present in India, all issues are determined by judges.

4.10      What appeal options are available?

Generally, the hierarchy of Indian courts has district courts, high courts (with jurisdiction over states of the country) and the apex court, i.e., the Supreme Court of India.  Appeals from district courts would lie before the High Court, and thereafter the Supreme Court, depending upon factors such as the nature of claim, pecuniary jurisdiction, etc.  District courts typically have original jurisdiction except in certain cities where the High Court of the State has original jurisdiction, and appeals in such cases usually lie before a larger bench of judges of the same High Court or, in certain circumstances, to the Supreme Court.

Specific statutes also provide for appeal procedures from cases before tribunals/other quasi-judicial bodies formulated under statute, to an appellate tribunal and/or the High Court, and then to the Supreme Court.  For example, under the CPA 2019, any person aggrieved by an order of the District Commission may prefer an appeal to the State Commission, from which a further appeal to the National Commission may be preferred.

4.11      Does the court appoint experts to assist it in considering technical issues and, if not, may the parties present expert evidence? Are there any restrictions on the nature or extent of that evidence?

Under Indian civil law, experts may be appointed by the court when it is necessary to form an opinion based on a technical or scientific issue.  Expert opinions may be relied on by the parties to a suit or proceeding.  The Indian Evidence Act, 1872 sets out the circumstances in which a court can rely on experts; these include instances when the court has to form an opinion on foreign law, science, art and handwriting.  Indian criminal courts are also vested with the power to summon, examine and receive evidence from experts, including receiving reports from certain governmental scientific experts under the provisions of the Criminal Procedure Code, 1973.  Consumer Commissions may also, on an application by a complainant or if the case involves the larger interest of consumers, direct an expert to assist the court with the case.

However, the courts are not bound by the evidence or opinions of the experts and have discretion to admit this evidence or derive their own conclusions based on these opinions.

4.12      Are factual or expert witnesses required to present themselves for pre-trial deposition and are witness statements/expert reports exchanged prior to trial?

Pre-trial deposition is not a practice in India, and therefore factual or expert witnesses are not required to present themselves for such depositions.

4.13      What obligations to disclose documentary evidence arise either before court proceedings are commenced or as part of the pre-trial procedures?

There is no obligation to disclose documentary evidence prior to commencement of court proceedings or as a pre-trial procedure.  However, the parties are obligated to disclose all documents that they seek to rely upon at the time of instituting the suit or, in the case of the defendants, at the time of filing of their written statement/responses.  In the event a party fails to disclose the documents along with their pleadings, they will require a specific order from the court permitting them to introduce the said document on the later date.  Further, the CPC provides for requests for disclosures to be made in the form of interrogatories.

4.14      Are alternative methods of dispute resolution required to be pursued first or available as an alternative to litigation, e.g. mediation, arbitration?

Alternate dispute resolution (ADR) mechanisms, such as arbitration and mediation, are gaining popularity and generally adopted as a first step towards dispute resolution between parties, especially in case of contractual disputes.  While ADR mechanisms are not mandated generally under Indian law, the courts are empowered to reject suits or refer suits to the contractually stipulated ADR mechanism if the contractually stipulated dispute resolution mechanism has not been exercised first.  The exception to this is an action under the CPA 2019, which would not be barred by the existence of a dispute resolution mechanism in a contract.

The Commercial Courts Act, 2015 (which seeks to streamline and fast-track commercial disputes) makes pre-institution mediation mandatory in all cases where the parties do not require immediate intervention by courts.

The CPA 2019 also provides for establishment of a consumer mediation cell to be attached to each consumer commission and empowers consumer commissions to refer a dispute to mediation if, in its opinion, the matter may be settled outside the commission and the parties consent to settle through mediation.

However, the Consumer Protection (Mediation) Rules, 2020, governing the procedure for mediation, indicate that certain cases such as those involving medical negligence, serious allegations of fraud or forgery, prosecution for criminal and non-
compoundable offences, and public interest may not be allowed to be referred to mediation.  However, unlike the Commercial Courts Act, there is no mandatory pre-requisite under the CPA for a party to pursue mediation prior to instituting a case before the Consumer Commission.

4.15      In what factual circumstances can persons that are not domiciled in your jurisdiction be brought within the jurisdiction of your courts either as a defendant or as a claimant?

Claims can be instituted in India by or against a foreign party if the whole or any part of the cause of action of such proceedings arises in India.

4.16      May hearings take place or witness evidence be given virtually via teleconferencing or other technical methods?

Yes.  Hearings and witness testimony may be virtual, subject to the permission of the Court.  Hearings via videoconferencing have recently been launched for matters before the State Commissions and the National Commission.

5.1        Are there any time limits on bringing or issuing proceedings?

Limitation for institution of product liability actions under the CPA are governed by the provisions of CPA, 2019.  For any actions that may be instituted beyond CPA 2019, the Limitation Act, 1963 (Limitation Act) prescribes timelines for filing of appropriate actions for claims.  Other civil actions are covered by the Limitation Act.

5.2        If so, please explain what these are. Do they vary depending on whether the liability is fault based or strict? Does the age or condition of the claimant affect the calculation of any time limits and does the court have a discretion to disapply time limits?

Under the Limitation Act, the period of limitation for civil proceedings for monetary compensation on account of a contractual breach is three years from the date on which the breach occurs.

The CPA 2019 prescribes a time limit of two years from the date on which the cause of action arises for a complaint to be filed.  However, this period may be extended if the Consumer Commission is satisfied with the reasons for the delay.  The FSSA states that cognisance shall not be taken of any offence after a period of one year from its commission, but this may be extended up to three years with the approval in writing of the Commissioner of Food Safety.

5.3        To what extent, if at all, do issues of concealment or fraud affect the running of any time limit?

Under the Limitation Act, where a claim is based upon fraud of the defendant or its agent or where any documents necessary to establish the right of the plaintiff or applicant have been fraudulently concealed from him, the period of limitation begins after the plaintiff or applicant has discovered the fraud or could, with reasonable diligence, have discovered it.

6.1        What remedies are available, e.g. monetary compensation, injunctive/declaratory relief?

The general law of economic damages in the Indian context is covered under the SGA, the Contract Act, the CPA 2019 and tort law.  The Contract Act provides for the payment of damages or compensation by the defaulting party to the aggrieved party for any loss or damage that arose as a natural consequence of a breach, or that the parties were aware, at the time of entering into the contract, would possibly result from a breach.  In this context, the Contract Act does not allow damages for remote, indirect or incidental loss.

The Indian courts have broad powers to pass interim orders prior to a full trial and at any time during the legal proceedings, when considered necessary and proper in light of the facts and circumstances of the case.  Further, Indian courts are empowered to pass interim orders to prevent damage, alienation, removal or disposition of property or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit.  The courts are also able to pass an interim order attaching the assets of a defendant or requiring it to furnish security in certain circumstances.

In product liability actions before Consumer Commissions, in addition to claims for monetary compensation, complainants are entitled to seek additional remedies such as repair or replacement of the defective goods, return of the price paid for the goods and compensation for any loss or injury suffered on account of the defective goods in cases where manufacturing defects are alleged.

6.2        What types of damage are recoverable, e.g. damage to the product itself, bodily injury, mental damage, damage to property?

In India, law has categorised damages as: ‘direct damage’; ‘indirect damage’; ‘consequential damage’; ‘remote damage’ (the test is whether certain damage suffered by the aggrieved party was a foreseeable consequence of an act or omission on the part of the breaching party); ‘punitive damage’; or ‘exemplary damage’.

Under a contract, damages may be either liquidated or unliquidated.  Liquidated damages are those that have been agreed upon and fixed by the parties in anticipation of a breach, whereas unliquidated damages must be assessed and quantified.  However, the Contract Act does not contemplate the grant of ‘indirect damages’ or ‘remote damages’.

The damages which can be awarded in an action based on tort may be contemptuous, nominal, ordinary or exemplary.  The primary object of award of damages is to compensate the aggrieved party for the harm suffered, while the secondary object is to punish the breaching party for its conduct in inflicting such harm.  The secondary object is achieved in certain cases by awarding, in addition to compensatory damages, damages which are termed as exemplary, punitive, vindictive or retributory damages.  In awarding punitive or exemplary damages, the emphasis is not on the injury caused, but on the defendant and its conduct.  There is, however, a reluctance on the part of Indian courts to award significant amounts of exemplary or punitive damages in claims under tort law.

Indian courts are generally conservative in awarding compensation or damages for tortious liabilities pertaining to mental trauma, distress, and cases where no actual damage is proven.  However, damages have been awarded for non-pecuniary losses such as pain and suffering consequential to injury inflicted on the plaintiff, with compensation varying depending on the intensity of the pain and suffering borne by the plaintiff.  The courts have also been generous (by Indian standards) in awarding damages for mental agony arising from, inter alia, cases involving negligence.

A reduction in life expectancy is another non-pecuniary loss for which courts have awarded damages, in cases where normal life expectancy has been shortened as a result of the injury sustained.  Given the difficulties involved in assessing such damages, courts tend to award moderate sums.  Indian courts are reluctant to grant damages for mental agony in the absence of compelling reasons in case of property damage, and where such damages are granted, the quantum of damages is nominal.

Under the CPA 2019, ‘harm’ has been defined to include mental agony or emotional distress arising out of the defect in the product.  As such, complainants are entitled to quantify and raise a claim for damages for mental agony that may have been suffered as a consequence of such harm as may have been suffered, in addition to other claims.

However, the CPA 2019 does not cover damage caused to the product or any damage to the property on account of breach of warranty conditions or any commercial or economic loss (including any direct, incidental or consequential loss), and such claims cannot be instituted before Consumer Commissions.

Under the FSSA, compensation as stipulated therein can be awarded to an aggrieved party for any harm or death caused due to the consumption of an article of food.

6.3        Can damages be recovered in respect of the cost of medical monitoring (e.g. covering the cost of investigations or tests) in circumstances where the product has not yet malfunctioned and caused injury, but it may do so in future?

In circumstances where the product is admittedly defective, such as in the case of faulty medical devices which have been implanted in humans, the compensation awarded to the aggrieved party would take into account the cost of medical monitoring.  That said, these are not claims commonly seen in the Indian legal landscape.

6.4        Are punitive damages recoverable? If so, are there any restrictions?

In contractual disputes, Indian courts do not normally award punitive or exemplary damages, but may do so where elements of fraud, oppression or malice are established.  In awarding punitive or exemplary damages, the emphasis is not on the injury caused, but on the breaching party and its conduct.

However, in product liability claims under the principles of tort law, in practice, there is limited jurisprudence available as aggrieved parties usually seek redressal under consumer protection laws or under the Contract Act.  This is also due to the reluctance of Indian courts to award significant amounts of exemplary or punitive damages in claims under tort law.  The CPA 2019 permits awards of punitive damages in circumstances deemed fit by consumer commissions.

Damages have been awarded by Indian courts under consumer protection laws in exceptional cases by way of compensation where it has been established that the aggrieved party suffered harassment and extreme pain and suffering as a result of the conduct of the manufacturer, supplier or distributor, pursuant to being notified about the defective product.  However, the quantum of such damages is much lower than, and not comparable with, punitive damages that are awarded in other developed countries.

6.5        Is there a maximum limit on the damages recoverable from one manufacturer, e.g. for a series of claims arising from one incident or accident?

There is no statutorily mandated maximum limit for damages recoverable from a manufacturer.  However, by virtue of contractual arrangements, parties are permitted to exclude liability for indirect losses even if they were aware of such losses when they made the contract.  The Contract Act also permits parties to fix liquidated damages payable by the breaching party in case of breach, thereby limiting the quantum of liability of the breaching party under contract law.

6.6        Do special rules apply to the settlement of claims/proceedings, e.g. is court approval required for the settlement of group/class actions, or claims by infants, or otherwise?

Typically, terms of voluntary out-of-court settlements (which are not mandated by court) must be recorded in writing and the settlement agreement should be filed in the proceedings before the court for the terms of settlement to be taken on record.  Based on the settlement reached, the court will pass a decree.  That said, settlement of group/class actions and claims by minors must be made with the prior approval of the court and in accordance with the procedure set out under the CPC.

6.7        Can Government authorities concerned with health and social security matters claim from any damages awarded or settlements paid to the claimant without admission of liability reimbursement of treatment costs, unemployment benefits or other costs paid by the authorities to the claimant in respect of the injury allegedly caused by the product? If so, who has responsibility for the repayment of such sums?

We have not seen any instances of this in India.

7.1        Can the successful party recover: (a) court fees or other incidental expenses; and (b) their own legal costs of bringing the proceedings, from the losing party?

Courts may award reasonable court fees, legal costs and other incidental expenses to the successful party.  The amount of costs permitted to be recovered is subject to the discretion of the court and may not necessarily equal the actual costs borne by the party.

7.2        Is public funding, e.g. legal aid, available?

The Constitution of India directs the state to provide for free legal aid for securing justice.  Further, the Legal Services Authorities Act, 1987 (Legal Services Act) establishes authorities at the district, state and national level to provide free legal services to certain classes of people.

7.3        If so, are there any restrictions on the availability of public funding?

Under the Legal Services Act, only certain economically and socially disadvantaged classes of persons defined under the Legal Services Act are entitled to free legal services, such as women, children, victims of human trafficking, people with a disability, victims of mass disaster, victims of ethnic violence, victims of natural disasters, socially and economically disadvantaged classes, and industrial workers.

7.4        Is funding allowed through conditional or contingency fees and, if so, on what conditions?

The Bar Council of India, which is the regulatory body for lawyers, does not permit lawyers to charge a success fee or contingency fee.

7.5        Is third party funding of claims permitted and, if so, on what basis may funding be provided?

The Supreme Court of India held in Bar Council of India v. AK Balaji and ors (AIR 2018 SC 1382) that third-party funding/legal financing agreements are not prohibited in India.  In practice, the funding is based on commercially agreed terms between the parties.  Additionally, the Consumer Welfare Fund provides financial assistance for expenses on advocacy and class action suits, and applications may be made to it for reimbursement of legal expenses incurred by a complainant or a class of complainants upon completion of a consumer dispute.

7.6        In advance of the case proceeding to trial, does the court exercise any control over the costs to be incurred by the parties so that they are proportionate to the value of the claim?

No, courts do not exercise control over the costs incurred by parties, as courts are conservative in awarding costs to a litigant.

8.1        Please outline the approach taken to date by the courts in India in relation to product liability for new technologies such as artificial intelligence, machine learning, and robotics, and identify the ways in which this approach differs (if at all) from the approach taken with other products.

We have not come across instances of judicial rulings in respect of product liability for new technologies such as artificial intelligence or machine learning in India, either under the CPA 2019 or its predecessor.

8.2        If relevant for your jurisdiction, what impact do you anticipate as a result of the revised disclosure requirements under the proposed new EU Product Liability Directive?

This is not applicable to India.

8.3        Please identify any other significant new cases, trends and developments in Product Liability Law in your jurisdiction.

The CPA 2019 has replaced the erstwhile Consumer Protection Act, 1986 and came into effect on 20 July 2020.  It aims to strengthen consumer protection laws and the product liability framework in India, and to regulate matters relating to violation of consumers’ rights.  E-commerce and electronic service providers have also been included under the ambit of the statute, and measures to prevent unfair trade and unethical business practices by e-commerce portals have also been prescribed.

The CPA 2019 replaced the erstwhile Consumer Protection Act, 1986 and is hailed to be an important step forward in strengthening consumer rights and identifying protections accorded thereto for breach of such rights.  As highlighted earlier, the CPA 2019 is in fact responsible for codification of the Product Liability regime in India.

Subsequent to the enactment of CPA 2019, several rules  were notified regulating inter alia, E-Commerce Platforms and Direct Selling entities.  The Legislature has also notified rules specifying minimum guidelines to be adhered to in the advertising of products.

The Hon’ble Supreme Court of India in a recent decision National Insurance Co. Ltd. v. Harsolia Motors & Ors, has analysed the scope and meaning of the term ‘commercial purpose’ and ‘consumer’ in the context of an appeal assailing the decision of the NCDRC, which held that ‘a person who takes an insurance policy to cover the evisaged risk does not take the policy for a commercial purpose’, and that ‘policy of for the indemnification of an actual loss and is not intended to generate profits’, and held that the Respondent (insured) was a ‘consumer as defined under the Consumer Protection Act’.

Affirming the decision of the NCDRC, the Supreme Court noted that the question for determination here was whether the insurance service ‘had a close and direct nexus with the profit generating activity, and whether the dominant intention or purpose of the transaction was to facilitate some kind of profit generation for the insured or to the beneficiary’.  The Court found that a claim for insurance is an act of indemnification against losses/damages and bears no proximity to the act of profit generation.

The Supreme Court further held that simply because the insured entity was a commercial enterprise, the same is unrelated to the determination of whether the insurance policy is to be counted within the meaning of ‘commercial purpose’ as defined under the provisions of the Consumer Protection Act.

In a significant decision of the NCDRC, in Neo Build Infrasturcture v. Sushil Ranjan Roy & Ors. set in the context of claims raised by homebuyers against developers, has held that an allottee of a residential flat/plot does not cease to be a consumer of the builder/developer upon taking possession of the flat/plot and/or execution of the conveyance deed of the said flat/plot in his favour.  It was further held that the absence of any expression of protest or reservation at time of taking possession of the flat/plot does not dissolve the remedy of the consumer commission or foreclose the rights of the purchaser of a flat/plot.  The NCDRC went on to find that the relationship of a consumer and trader/service provider, as envisioned under product liability legislation comes into existence upon the purchase of the goods/availing of the service, and that the consumer can raise a consumer dispute either with respect of any deficiency as per original agreement or any deficiency detected post-purchase.

In a product liability action and claim for deficiency of service instituted against an Online Reseller and a Significant E-Commerce Platform for the sale of a faulty television, the District Commission at Andhra Pradesh has held that liability can be fastened upon an E-Commerce Platform as a ‘service provider’ on account of the expansive definition of Product Liability under CPA 2019.  The District Commission has further held that the statutory protection afforded to intermediaries as found in Section 79 of the Information Technology Act, 2000 will not be made available to such E-Commerce Platforms for actions instituted under the CPA, 2019.