Product Recall Under Various Laws
Having discussed the concept of Product Recall and Product liability in Part- I and liabilities of different parties under the Consumer Protection Act, 2019 in Part- II, let us now deliberate on the regulatory and legal framework of product recall under various laws of the land.
In India, legislations pertaining to specific sectors envisage and provide for product recall in case of defective products. However, a single regulatory body in India dealing particularly with product safety reports or recalls is not yet established.
However, various legislations mandatorily provide for recall of defective products under certain circumstances as under:
1.Consumer Protection Act, 2019
The 2019 Act empowers consumers to file a complaint against a defective product and protect their interests with the central authority. Under the Act, a Central Consumer Protection Authority (CCPA) is to be set up which has the powers to regulate and investigate matters pertaining to violation of rights of consumers which affect the interests of public and consumers and to ensure the promotion, protection and enforcement of consumer rights.
The CCPA is empowered to pass an order for recall of goods or withdrawal of services which are dangerous, hazardous and unsafe after conducting investigation and satisfying themselves of the harmful nature of such products.
2.Motor Vehicles Act, 1988
The 2019 amendment to Motor Vehicles Act introduced provisions for mandatory recall of defective motor vehicles in India.
Prior to this amendment, motor vehicle manufacturers would often recall defective vehicles voluntarily to reduce potential liability over such products, pursuant to the Voluntary Code of Vehicle Recall, issued by the Society of Indian Automobile Manufacturers.
Through the amendment, the Ministry of Road Transport and Highways was empowered to order for recall of a particular type of motor vehicle by the manufacturer in case a defect is identified in the vehicle which is harmful to the driver, occupants, other users or the environment, or on report of a defect to the Ministry.
In case of identification of a defective component, the Ministry is empowered to order the manufacturer to recall all motor vehicles consisting of such component. The manufacturer becomes liable to either compensate the buyers, replace or repair the defective component in the motor vehicle or pay fines as prescribed by the Government.
Further, the Act does not prescribe any additional fines to be paid by the manufacturer in case of voluntary recall of defective vehicles.
3.Bureau of Indian Standards Act, 2016
The Bureau of Indian Standards, established under the BIS Act, 2016 is empowered to direct the certified body or licence holder to withdraw the supply and sale of goods or articles which do not conform to the relevant standards and further order for recall of non-conforming goods or articles.
The Act further stipulates penal liability including fine and imprisonment for non-conformance with the standards and non-compliance of orders.
4.Drugs and Cosmetics Act, 1940
Licenses granted under the Act for manufacture and distribution of drugs and medical devices are subject to certain conditions prescribed in the Act, which includes recall of devices not satisfying the specific conditions. The concerned licensing authority is empowered to order for recall of devices which do not comply with the standards prescribed in the Act.
Further, the Medical Devices Rules, 2017 which came into force on 01.01.2018 applies to specific devices as mentioned in the rules and notified under the Drugs Act. It stipulates that manufacturers and authorised agents are under a general obligation to recall manufactured or imported drugs and medical devices which pose or are likely to pose significant risk to users’ health and to state the reasons for recall.
Further, they are obligated to inform the Central Drugs Standard Control Organisation (CDSCO) regarding the recalled device and relevant information. In case of failure to comply with the provisions, the manufacturer or distributor may attract penal liability of fines, imprisonment, suspension, cancellation or debarment of license holder.
5.Food Safety and Standards Act, 2006 (FSSA)
The Food Safety and Standards (Food Recall Procedure) Regulations, 2017 framed under the FSSA specifically deals with the provisions and procedure for recall or removal of unsafe food products. Further, the Regulations mandates all food business operators (FBOs) engaged in the manufacture, import or wholesale supply of food to formulate an up-to-date recall plan to be enforced when a recall is necessary.
The Food Safety and Standards Authority of India (Food Authority) is tasked with supervision and monitoring the process of recall and to ascertain the effectiveness of FBO’s actions. It has issued guidelines to assist FBO’s in formulating a food recall plan, along with requiring the FBOs to establish a recall management team.
Previously, the Food Authority, through its inherent powers under the FSSA, would recall food products being defective or unsafe. The FSSA prohibits the manufacture, storage, sale and distribution or import of food unsafe for human consumption and the same is punishable by imprisonment and fines.
The 2017 Regulation empowers the Food Authority to:
- Ensure that food under recall is removed from all stages of food chain
- Circulation of accurate information to all consumers and consumers
- Retrieve, destroy or reprocess food under recall
In the year 2019, the theory of product liability and product recall has seen vast development in the form of legislations. The enactment of the Consumer Protection Act, 2019 is considered to be the milestone for development of product liability laws in India as it has inculcated the concept of product liability and dedicated a chapter for the same.
Further, the 2019 Amendment to the Motor Vehicles Act has provided a statutory framework for recall of defective motor vehicles. This comes at a time when vehicles are being recalled voluntarily by major manufacturers and dealers to avoid or restrict liability. Hence, the Amendment strengthens the position of product liability and product recall of defective items.
The pharmaceutical sector has seen recall of several drug-related products in 2019, on voluntary basis as well as on orders of CDSCO for not meeting the standards prescribed by the Drugs and Cosmetics Act, 1940.
Further, the 2017 Rules concerning Medical Devices has been amended to include all medical devices, with effect from 01.04.2020 and establishment of an online mode to register medical devices.
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