Consumer Laws

Dhathri Ayurveda Case: Strengthening India’s Consumer Rights Paradigm vis-à-vis Misleading Advertisements

India’s tryst with consumer protection laws has always been a chapter in expansive protectionism. Prior to the first enactment of an explicit Indian Consumer Protection Act in 1986, the only exclusive source of consumer protection was provided by the Sale of Goods Act, 1930. The 1986 act, however, was adjudged by the legal contemporaries of the era to be a path breaking enactment in many respects. However, with the rapidly developing modern sensibilities and its corresponding development of the traditions of transaction in the goods and services market, the advent of E-Commerce to be one of them, the 1986 law seemed to appear historically handicapped to tackle the evolving challenges of a liberalized, globalized and digitalized market of modern goods and virtual/digital services.

The Indian Government, having deliberated upon the abovementioned discrepancy between the existing obsolete law and the ground realities of the digitalized market, brought a new Consumer Protection Act of 2019 so that these expanding differences could be bridged and a certain congruence could be brought about in the consumer protection paradigm of the Indian Republic. This new act was notified on 20th July 2020 by the Ministry of Consumer Affairs, Food and Public Distribution and it included, inter alia, provisions for establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers, clauses for Product Liability, provisions for recall of unsafe goods and services, expanded definition of consumers and e-commerce and protections against unfair trade practices.

However, what appears to be of key significance in the new act is the first of its kind protection afforded to consumers against “misleading advertisements” and liability for celebrity endorsers (enlisted under section 21 of the Act). This new paradigm shift in the consumer protection jurisprudence assumes capital significance in the normative background of the new holy trinity of advertisement that uses social media, digital marketing and celebrity influencer outreach campaigns to increase the reach of their products to people who were once outside the scope of the more traditional means of marketing. This increased power in the hands of the advertisers to influence the consumers comes with the added risk of manipulating the market choices by means of erroneous and fictitious advertisement campaigns that prey on the insecurities of the gullible working-class Indian that typically forms their opinion primarily based only on bright advertisements. This problem is compounded manifold in the scenarios where the companies bring powerful celebrities (actors, cricketers, youtubers et cetera) who command a handsome following among the common people. It is precisely this problem that this new 2019 act attempts of tackle by means of protection to consumers against “misleading advertisements” and by imposing liability upon the celebrities for endorsing such sub-standard and hazardous products.

The first application of this new law has surfaced from the state of Kerala, where the District Consumer Redressal Forum, Thrissur in a recent order has applied the latest provisions added in Consumer Protection Act, 2019 for the first time, in providing relief to the complainant by penalizing the manufacturers of “Dhathri Hair Cream” and film actor Anoop Menon, the celebrity who endorsed the product in an advertisement, to pay compensation of Rs 10,000 each to a consumer for making “false promises” by making a misleading advertisement. The complainant had bought the cream for the first time after seeing the advertisement in which Anoop Menon promised that the use of the product for six weeks will assure lush hair growth but no improvement happened. Film actor Anoop Menon in his deposition admitted that he has never used the mentioned product and that he only uses the hair oil prepared by his mother. He also said that he was not aware of what was told during the advertisement as it was the story of the manufacturers. He added that he thought the product was meant for hair care not for hair growth, which clearly implies his unfamiliarity with the product. The actor endorsed the product without exercising due-diligence.

As discussed, the Consumer Protection Act of 2019 contains provisions to deal with celebrities who endorse products about which they do not have knowledge as occurred in the present case as liability for misleading advertisements and celebrity endorsements is one of the key features of the current Consumer Protection Act. Dhathri Ayurveda is one of the early cases under the new Consumer Protection law, to set a precedent for other brands and celebrities to take their responsibility more seriously during product promotions. The sad reality is that many consumers (especially uneducated and minors) end up buying these products endorsed by celebrities. To that extent, the law has put the sword of liability upon the celebrities as well as social media influencers who are increasingly becoming a big part of the endorsement industry.

In the detailed order, the forum deprecated the trend of using attractive marketing techniques to lure consumers into purchasing products that were sub-standard. In addition to this, the consumer forum claimed that these kinds of advertisements should promote the growth of a well informed consumer culture, which enables the consumers to pick wisely and discard products that are deceptive or spurious.

The Dhathri Ayurveda case, on a normative level, although appears to be strengthening the rights of the consumers against the widespread digital matrix of false advertisements, there are some issues that still require further attention of the courts of law. Firstly, though novel in its creation, the imposed fine in the current case is a meagre amount compared to the revenue that the company could generate out of such misleading advertisement. There is an imminent need to not only rectify the wrongs that have been committed through such advertisements but also to embark upon the arduous journey of preventing such misleading endorsements to occupy the public space and thereby influence the common public towards a sub-standard product. Secondly, on a strictly procedural note, the District Consumer Redressal Forum applied a law to this case which was not enacted when the complaint in this case was registered. The complaint was filed in 2019, September and the new act was only notified in 2020, July. At the time when the complaint was registered, there was no provision in the prevalent act to impose liability upon the celebrity endorser of the product. Such an ex post facto application of a law would inevitably give rise to recourse to Section 6 of the General Clauses Act and would eventually lead to further litigation on the legal issue. In the current scenario, where the new act does not discuss this situation that how the new act would roll over in such matters, an additional clarity from higher courts would be very useful to avoid unnecessary litigation and save the precious hours of the already overburdened judiciary. Nevertheless, what the forum has done in the case of Dhathri Ayurveda is novel, path breaking and certainly a bold step towards inspiring the confidence of the general public towards the protectionist regime of the Indian Republic. Whether or not such a decision would snow ball itself into an impactful regime of curtailment of misleading advertisements and emboldened consumer rights is yet to be seen, but the decision of the forum is certainly the first step towards this aspirational direction.


ABOUT THE AUTHOR

Bhoomika Saxena

Bhoomika is an Adjunct Professor at Amity University. She did her Masters (LL.M.) from NALSAR University of Law, Hyderabad with Specialisation in Intellectual Property Law and her B.A., LL.B. (Hons.) from Institute of Law, Nirma University, Ahmedabad with Criminal Law Specialisation.

1 comment on “Dhathri Ayurveda Case: Strengthening India’s Consumer Rights Paradigm vis-à-vis Misleading Advertisements

  1. Vijay Saxena

    Gullible consumers have long been taken for a ride by misleading advertisements and the celebrities who pitch for those products. It’s high time that not only the manufacturers but also the marketers are held accountable for the false claims they make to sell their products. Very informative blog.

    Like

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