Kerala High Court Dismisses Case Against Mohanlal, Clarifies Celebrity Endorser Liability
The Kerala High Court recently made a significant ruling in a consumer case involving actor Mohanlal. The court set aside proceedings against the actor, stating that a brand ambassador cannot be held responsible for a company's alleged unfair trade practices. This decision came unless a clear and direct connection exists between the endorser and the consumer's specific transaction.
Background of the Gold Loan Dispute
The case originated from complaints against Manappuram Finance. Two borrowers from Thiruvananthapuram had initially pledged gold ornaments with the Catholic Syrian Bank at an interest rate of 15%. In 2018, Manappuram Finance took over these loans. The borrowers claimed a bank manager promised them a lower interest rate at that time.
They stated that advertisements featuring Mohanlal, who served as the company's brand ambassador, attracted them to the deal. However, when they tried to close the loan and retrieve their gold, Manappuram allegedly demanded interest at a higher rate than advertised.
Legal Proceedings and Mohanlal's Defense
The borrowers approached the District Consumer Disputes Redressal Commission. They alleged deficiency of service and unfair trade practices. Their demands included a refund of excess interest and compensation of Rs 25 lakh.
Mohanlal was named as the second opposite party in the case, solely due to his role in the advertisements. The actor raised a preliminary objection before the District Commission. He argued that he had no involvement in the loan transaction, no interaction with the borrowers, and no control over the interest rates charged.
Mohanlal emphasized that being a brand ambassador did not make him a service provider. Despite this, the District Commission rejected his objection. It relied on the statutory definition of "endorsement" under the Consumer Protection Act of 2019. The State Consumer Commission later declined to decide on the issue of maintainability at that stage.
Court's Examination of Consumer Protection Law
The Kerala High Court, led by Justice Ziyad Rahman AA, examined relevant sections of the Consumer Protection Act. Section 2(18) defines "endorsement" broadly. It covers messages that might lead consumers to believe an advertisement reflects the opinion of the person featured.
Section 2(47) provides a wide definition of "unfair trade practice," including false representations about price. The term "endorser" appears explicitly only in Section 21. This section deals with false or misleading advertisements and vests powers in the Central Consumer Protection Authority.
Section 21 allows penalties against manufacturers and endorsers. These can include monetary penalties and temporary bans on endorsements. However, Section 21(5) protects endorsers who exercise due diligence to verify advertisement claims.
The court noted that the Act does not further mention endorsers in consumer disputes over deficiency of service. It stated this omission was not accidental. The liabilities contemplated for endorsers apply only to proceedings under Section 21.
Key Findings and Ruling
The court scrutinized the complaint to find any direct link between Mohanlal and the borrowers' transaction. It found only two references to the actor. One stated he was the brand ambassador. The other recorded that the company's manager assured borrowers about interest rates as promised in advertisements featuring him.
According to the court, these references were insufficient. The pleadings did not show that Mohanlal persuaded the borrowers to take the loan. They did not indicate his participation in the transaction or any personal assurance to them. The assurance, as pleaded, came from the company's manager.
On this basis, the court held that no responsibility could be fastened upon Mohanlal for unfair trade practice or deficiency of service. The court clarified that merely falling within the definition of "endorser" does not create liability. A direct link between the transaction and the endorser must be established.
The High Court quashed the orders of the District and State Commissions concerning Mohanlal. It ruled the complaint was not maintainable against him. However, it clarified that the consumer case against Manappuram Finance would continue. The borrowers remain free to pursue remedies under Section 21 for misleading advertisements before the competent authority.
This ruling addresses a recurring concern in consumer law. It draws a clear line between advertising and transactional responsibility, providing important guidance for future cases involving celebrity endorsements.
