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Is The Consumer Protection Act Departure Of Caveat Emptor: An Overview

India's diverse development and industrialization resulted in easy access to a wide range of goods and services, but it also increased unfair and immoral trading practices that exposed consumers to exploitation. This is because trade and commerce practices were based on the caveat emptor doctrine, which is a Latin maxim that means "let the buyer beware," or "let the consumer be responsible for his safety."

As a result, a buyer does not have the right to reject an object after making a reasonable decision to buy it. This characteristic was frequently used by vendors, who misled their customers, impairing their judgement and leaving them with no adequate remedy. The Consumer Protection Act of 1986, which was re-enacted in 2019 (herein, referred to as the 'Act') to provide a simple, quick, and inexpensive alternative redress mechanism and safeguard consumers, was designed by policymakers who saw the need for legal protection. A step forward to caveat venditor, which means "let the seller beware," implying that the seller bears some duty to their customers in case of exploitation.

Historical Background
In the Middle Ages, the phrase "caveat emptor" was not a legal principle. They treated buyers with the same respect that we see today in the "customer is always right" phase. Before the Revolutionary War, the phrase was only used in a handful of English court cases (1775-83). England attempted to implement proper trade practises, but this backfired, as there was an increase in unfair trade tactics, with the majority of advertisements being false and misleading.

Trade and commerce exploitation became so prevalent in England's system that individuals chose to labour for their safety by allowing each customer to shift for himself. This agreement spawned the idea "Let the buyer beware," which was immortalised by the Latin writer caveat emptor. The idea was the common people's power; it allowed them to maintain their ground against the seller's exploitation and deception. This trade ideology became a code of personal conduct, a spirit of individualism, and a way of thinking about politics.

Consumer protection in India was likewise deeply rooted in the Indian culture, which goes back to 3200 B.C. During ancient India, human values were prized and ethical principles were prioritised, and all segments of society adhered to the divine law of Dharma, which was drawn from the Vedas. Laws were enacted to protect people's social and economic conditions, including the buyers' interests. However, British colonialism revolutionised the Indian legal system, and the English system was used to administer justice.

However, this tenacious philosophy ran counter to the emerging concepts of a planned and regulated society. The seller had no obligation to offer information, and the buyer's proper scrutiny of the items was deemed more important than any other duty. Any notion of retaliating against the seller or laying accountability on him was likewise rejected. Soon, it became clear that the legislation was skewed in favour of the seller, and that buyers were often exploited. The Consumer Protection Act, 1986 was enacted to protect people.

Caveat Venditor under the Consumer Protection Act, 2019

The concept of caveat venditor is defined under Chapter VI as Product Liability under the Consumer Protection Act, 2019. It is defined as the responsibility of the product manufacturer or product seller, of any product or service, to compensate for any harm caused to a customer by a such defective product manufactured or sold or by a deficiency in service related thereto.

However, as stated in Chapter VI of the Act, there are various exceptions to the obligation. When a product was used improperly, altered, or modified, the manufacturer had provided warnings or instructions, it was sold as a component or material to be used in another product, and the necessary warnings or instructions were given, it was legally intended to be used only by or under the supervision of an expert, or the complainant was under the influence of alcohol or drugs while using the product, no liability shall be fastened on the manufacturer or seller.

The new product liability (Chapter VI) section of the Consumer Protection Act of 2019 strengthens the buyer's position in the market by allowing them to file a lawsuit against the product manufacturer if a consumer is harmed while using a defective or substandard product that they manufacture or sell. It also broadens the scope of the Consumer Courts' jurisdiction.

Section 84(1) of the Act expressly deals with the liability of the product manufacturer in a product liability action, encases of manufacturing defects, defective designs, deviations from manufacturing specifications, doesn't conform to the express warranty or fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage.

Also, Section 84(2) prevents the manufacturers to escape liability on the grounds of non-negligence or non-fraudulent in making the express warranty of a product, it makes the liability watertight and comprehensive. Similarly, Sections 85 and 86 of the Act provide for the liabilities of a service provider and product seller respectively.

This section allows the consumers to seek remedies after buying goods or rendering services that previously were ignored because a rational consumer was expected to have a good judgement. In contrast, availing goods and services and hence, the remedy provided were inadequate.

A Shift from Caveat Emptor to Caveat Venditor

  1. Fundamental Right
    The Indian Constitution guarantees citizens fundamental rights (even as consumers) and protects citizens from the excesses of the state and its agents. In the case of a violation of fundamental rights, a writ petition can be brought against the state and its agents.

    The remedy of such writs, on the other hand, is ineffectual against affluent enterprises that are not state bodies. The Supreme Court recently ruled in Upendra Choudhury v Bulandshahar Development Authority, that people who filed complaints against private enterprises did not fall under its writ jurisdiction. The Supreme Court ruled that a Writ Petition under Article 32 against builders could not be filed before the Supreme Court. Consumer Courts, RERA, and the IBC are all places where citizens can seek help.
  2. Consumer Courts
    Consumers benefit from the three-tier Consumer Court Forum because it gives a better means of recourse than the civil courts. The act expands a Consumer Court's geographical jurisdiction to encompass the complainant's home or workplace. It was helpful during the Covid -19 outbreak. It also saves you money on additional travel expenses that may or may not be paid by compensation.

    It has also significantly increased the pecuniary jurisdiction of Consumer Courts at all three levels, allowing for correct jurisdictional division and better overall efficiency. In addition, a new Executive Regulatory Authority known as the Central Consumers Protection Authority ("CCPA") has been established to protect consumers.

    Under the Consumer Protection Act, 2019, the Consumer Court exercise liability mentioned in the act. Section 90 (1) of the act lays out the penalties for offences such as creating, storing, selling, distributing, or importing spurious items and adulterous goods, as well as deceptive and misleading advertising.

    Hoarding or destroying items to inflate the price is also price manipulation and should be punished. Furthermore, this act introduces the concept of Unfair Contract Terms, which can be annulled by a Consumer Court. Section 89 of the act defines the penalty for false or misleading advertising, stating that any manufacturer or service provider who creates and publishes pretended or misleading advertisements that are harmful to customers will face incarceration as well as indemnity.
  3. Landmark Judgements
    In Donoghue v. Stevenson, A plaintiff's friend bought a bottle of opaque ginger beer. The plaintiff filled a glass with half of the ginger beer and drank it. She then added the remaining liquid to the glass, where she discovered a snail's decayed remains. She claimed that as a result, she became unwell. Since she didn't have a contract with either the store or the manufacturer, she sued the manufacturers of the ginger beer for negligence.

    The House of Lords laid down that a duty was owed by the defendant to the plaintiff, i.e., shifted the burden of responsibility for the content on the manufacturer. Previously, the manufacturer had no duty of care towards the plaintiff as the buyer had purchased the product after his/ her due inspection, so, accordingly, the buyer should be beware.

    In this case, Lord Atkin ruled that a manufacturer of products who sells them in a way that indicates his intention is for them to reach the final consumer in the same condition they left him, with no reasonable opportunity for intermediate inspection, and with the knowledge that failure to prepare and store the products with reasonable care could result in harm to the consumer's life or property, owes the consumer a duty to exercise that reasonable care.
The existence of a duty of care as a matter of law was another issue that the House of Lords had to resolve. It was decided that the manufacturer had a responsibility to ensure that the bottle was free of any foreign objects that would endanger the plaintiff. After the defendant's claim that there was no contractual tie was rejected, a lawsuit was brought under tort law. The complaint would have been brought under the Consumer Protection Act, 2019 in the current circumstance.

The important neighbour principle was also established as Lord Atkin stated, "You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in my contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question."

In Grant v. Australian Knitting Mills Ltd., this concept of duty of care by the manufacturer or seller was first introduced in Australia. In this instance, the plaintiff developed dermatitis as a result of wearing clothing that, at the time it was acquired from the store, was defective due to the inclusion of extra sulphite that had been carelessly left in the manufacturing process.

Any reasonable physical examination would not have been able to find it because it was a latent and concealed flaw. The manufacturers intended for the clothing to be worn exactly as the plaintiff did when they created it. It was determined that there was a duty of care between the manufacturers and the plaintiff, which the manufacturers were responsible for breaching.

Through judgements and statutes, the departure from caveat emptor can be seen as the rights of the buyer are protected and sellers are held liable for their negligence and shortcomings.

Analysis and Suggestions
During the British colonisation of India, the concept of Caveat emptor was adopted. It was successful at first, but as society progressed, this concept was no longer acceptable. In Priest v. Last, the seller's reliance on the buyer to buy a water bottle was taken into account for the first time to allow the buyer to reject the products.

Consumer rights are expressly protected under the Consumer Protection Act of 2019 through consumer courts and central consumer protection authority. In the landmark case of Donoghue v Stevenson[15], the duty to exercise reasonable care towards purchasers, or consumers, was vindicated. Sellers and service providers have a legal obligation to use reasonable caution while selling items and providing services.

This allows a complaint to file a lawsuit and seek damages for any harm or injury he has suffered as a result of defective or faulty goods being supplied to him under Section 2(35) of the act. Unfair trade practises and deceptive advertising are also punishable under the law. It should be mentioned that the concept of caveat emptor became popular in England because customers sought to be protected against unfair trade practises and deceptive advertising.

They believed in their judgement to distinguish between real and counterfeit goods, but issues arose when individual judgement proved insufficient, and governmental authorities were forced to intervene. It should be mentioned that the concept of caveat emptor became popular in England because customers sought to be protected against unfair trade practises and deceptive advertising. They believed in their judgement to distinguish between real and counterfeit goods, but issues arose when individual judgement proved insufficient, and governmental authorities were required to intervene.

The market is no longer merely a physical location in our fast-paced world; its meaning has broadened and evolved to include e-commerce platforms. The caveat emptor doctrine cannot be applied in an electronic market since the consumer is unable to utilise his or her good judgement to analyse the goods before purchasing. The new act also protects online consumers' rights, making it a consumer-friendly law.

With the gradual shift from no duty of the seller or manufacturer to establishing responsibility upon them, the buyers can exercise their remedies in a faster and cheaper manner but to avail of these rights, the buyers must also be mindful of their responsibility and adhere to terms and conditions imposed on them. The conditions can be exceptions under product liability of the Consumer Protection Act, 2019, or filing the charge in correct commission within an appropriate period. The customers must also respect the rights of the seller as a marketplace is a common community existing of both sellers and buyers.

The Consumer Protection Act of 2019 and the discussed judgement emphasise the consumer's rights and protect them. It has also raised corporate accountability, requiring them to refrain from engaging in unfair trade practises. The statute is based on the motto 'caveat venditor,' which is more effective in protecting consumers' interests when socioeconomic and political conditions change.

As discussed above, a divergence from gradually declining caveat emptor can be detected. I feel that reasonable protection is provided while striking an acceptable balance between the rights of sellers and buyers, as previously increased sellers' rule is balanced by now buyers' rights.

Award Winning Article Is Written By: Ms.Aparna Mangla
Awarded certificate of Excellence
Authentication No: SP226239302038-19-0922

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