Endorser Liability Limited to Section 21 of CPA: Kerala High Court Quashes Consumer Case Against Actor Mohanlal - 2025-10-29

Can Brand Ambassadors Be Sued for Service Failure? Kerala HC Sets Vital Precedent

In a significant legal development clarifying the scope of brand ambassador liability, the High Court of Kerala has ruled that celebrity endorsers cannot be held liable for deficiency of service or unfair trade practices under the Consumer Protection Act , 2019, simply by virtue of appearing in advertisements. Justice Ziyad Rahman A.A. quashed the proceedings against film actor Mohanlal, emphasizing that statutory liability for an "endorser" is distinct from that of a "service provider."

The Dispute: Gold Loans and Celebrity Faces

The case arose from a complaint filed before the District Consumer Disputes Redressal Commission in Thiruvananthapuram by two customers who had pledged gold ornaments with M/s Manapuram Finance. The complainants alleged that they were induced by advertisements featuring the actor to expect a 12% interest rate. However, when attempting to close the loan, they were allegedly charged a higher rate. Consequently, they dragged both the financial institution and the actor—the brand ambassador—into the litigation, seeking compensation for mental agony and financial loss.

Arguments: The Reach of "Unfair Trade Practice"

Counsel for the complainants argued that the term "unfair trade practice" under Section 2 (47) of the Consumer Protection Act is broad enough to encompass the role of an endorser. They contended that because the actor promoted the financial services in various media, he remained answerable for the discrepancies faced by consumers.

Conversely, the petitioner’s legal team maintained that under the 2019 Act, an endorser's liability is strictly delineated. They argued that Section 21 —which deals with false or misleading advertisements—is the only provision explicitly governing endorsers, and that the actor should not be liable for the service provider's internal contractual failings without evidence of personal involvement in the transaction.

Legal Analysis: Drawing the Line

The High Court underscored a crucial distinction. While the term "endorsement" is defined in the Act, liability for an endorser is specifically articulated in Section 21 regarding misleading advertisements. Justice Ziyad Rahman A.A. observed that an endorser cannot be "mulcted with liability" for deficiency of service unless a primary link between their personal interaction and the aggrieved consumer is established.

The Court held that the actor’s role as a brand ambassador, standing alone, does not establish a direct nexus to the specific financial transaction entered into by the complainants. Without proof that the actor was privy to the direct service interaction, the complaint against him was deemed unsustainable.

Key Observations

The judgment provides a clear roadmap for the treatment of endorsers in future consumer litigation:

• On the scope of liability: "As far as the other consequences arising from the provisions in the Act, in relation to deficiency of service or unfair trade practices are concerned, the liability can be imposed upon an endorser, only in a case in which, a direct link has been established between the person who is availing the service and the persons who are impleaded as the opposite parties in the complaint."
• On the limitation of the Act: "The liability contemplated upon the endorser, is in respect of the proceedings envisaged under Section 21 alone."
• On pleading requirements: "It is not discernible that, the 2nd opposite party, the petitioner herein, had in any manner persuaded the petitioner to avail the services of the first opposite party and the assurance was that of the 4th respondent alone."

Implications for the Digital Economy

The ruling serves as a vital safeguard for celebrities and public figures from automatic litigation in consumer disputes. While the Court made it clear that endorsers are not immune to action if they fail to exercise due diligence in vetting advertisements under Section 21 , it effectively restricts the ability of consumers to hold themvicariously liable for the operational errors of the companies they promote.

The case against the financial institution remains live, and the Court has explicitly noted that this decision does not prevent the complainants from seeking remedies against the agency responsible if they believe an advertisement was misleading under the statutory framework.