The Kerala High Court the other day absolved noted Malayalam actor Mohanlal from liability in a consumer case of alleged unfair trade practice by Manappuram Finance for demanding interest rate higher than what was advertised by it.
A single bench of Justice Ziyad Rahman A A set aside consumer forum orders that had kept Mohanlal in the dock over an alleged misleading gold loan advertisement. The court ruled that as long as the actor was only the brand ambassador of Manappuram Finance and did not, in any manner, persuade them to avail their services, liability cannot be fastened against him.
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Mohanlal had approached the high court challenging the orders passed by the District and State Consumer Dispute Redressal Commissions rejecting his challenge to maintainability against a consumer complaint.
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The Complainants had pledged gold at the Catholic Syrian Bank at 15 per cent interest per year. Manappuram Finance took over the loan, promising even lower rates, drawn by Mohanlal’s TV ads. But when closing the loan, they faced higher charges than advertised, leading to claims of service deficiency and unfair trade. They sought an excess interest refund and Rs 25 lakh compensation, naming Mohanlal as a party.
Before the district commission, the actor filed a written version stating that he did not have any direct relation and cannot be held responsible for deficiency of service or unfair trade practice. He also raised the question of maintainability of the complaint against him.
The district commission, however, relied on the definition of ‘endorsement’ under Section 2(18) of the Consumer Protection Act, 2019 and held the complaint to be maintainable. This was challenged in revision before the State Commission but it also refused to enter into any specific finding as to maintainability. Aggrieved, the actor approached the Kerala High Court.
The high court considered the definitions of ‘endorsement’ and ‘unfair trade practice’ under the Act and remarked that the term ‘endorser’ is not specifically mentioned therein, except under Section 21.
As per Section 21, the Central Authority may impose a penalty of Rs. 10 lakhs on an endorsee if there is a false or misleading advertisement. One of the clauses specifically provides that the endorser shall not be liable to pay the penalty if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service endorsed.
The Court then opined that liability for deficiency of service or unfair trade practice can be imposed on endorsers only if there is a direct link between endorser and the persons availing the service.
The Court noted that there were only two references of the actor in the complaint, the first one that the actor was an ambassador and the second that Manappuram’s manager assured that the interest rate will be as endorsed by Mohanlal in the advertisements, and this did not establish a direct link between the complainants and the actor. Accordingly, the Court quashed the orders of the Commissions and held that the complaint is not maintainable against the actor. However, the Court also made it clear that the complainants are free to invoke the remedy under Section 21 of the Act.
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