The new Consumer Protection Act of 2019 & its Impact on Herbal and Ayurvedic Medicines & Products: Lawyers Advice

Herbal and ayurvedic medicines are the oldest forms of medicines, facilitating a worldwide demand till today. Practitioners of these medicines are utilising e-commerce in order to reach a wider consumer base as well. Claims from the effectiveness and safety of these medicines are not backed with evidence or clinical data. Sometimes, consumers are denied basic knowledge, access to product information or even a basic prescription which would be provided otherwise. The recent Consumer Protection Act of 2019 provides consumers with a wider ambit of protection, while keeping in mind the current scenario of markets today as well. Hence, this article seeks to examine the impact on such herbal and ayurvedic products after the passing of the Consumer Protection Act of 2019.

Key aspects of the new Consumer Protection Act, 2019 –

1. Definition of “Consumer”– The Act of 2019 has expanded the definition of “consumer” as under Section 2(7) so as to include consumers involved in online transactions. The Act now covers E-commerce business within its ambit. With reference to herbal and ayurvedic medicines, they too are being made available online via various e-commerce websites. This expanded definition is beneficial for such consumers, as it provides an ambit of protection to them as well.
2. Definition of “Unfair Trade Practices”– The Act of 2019 has also expanded the definition of “unfair trade practices”. As compared to the 1986 Act, under this definition the new Act includes –
   • Online misleading advertisements,
   • Not issuing a memo or bill for goods and services,
   • Failure to either take back defective goods or deactivate defective services and refund the amount within the stipulated period of time, and
   • Disclosing the consumers personal information, unless such disclosure is in accordance with the law.
3. Introduction of the concept “Unfair Contracts”– The new Act has introduced the concept of “unfair contracts”. Unfair contracts are those which are against the interest of the consumers such as contracts mandating an excessive security deposit to be given by the consumers for performing the obligations of the contract. This new concept allows consumers to file complaints with respect to such unfair contracts.
   With reference to herbal and ayurvedic medicines, sellers will now have to extremely cautious, as this new concept keeps e-commerce websites in check as well. Those sellers who take advantage of their dominance in the market and mandate consumers to sign their unfair contracts and accept their standard terms before providing their goods and services can now be held liable.
4. Central Consumer Protection Authority– The new Act provides for the establishment of the Central Consumer Protection Authority (CCPA).
   • The CCPA has been provided with vide powers to inquire, investigate and take actions against the violations of the Consumer Protection Act, 2019.
   • The CCPA also has the power to impose penalties and take action against misleading and false advertisements as well as any endorser of such advertisements.
   • The CCPA may impose a penalty of up to Rs.10 Lakhs for the first violation and up to Rs.50 Lakhs on every subsequent violation on a manufacturer or an endorser, for a false or misleading advertisement. In addition to this, such manufacturer or endorser could also be sentenced to imprisonment for up to two years.
5. Product Liability– The new Act also introduced the concept of “product liability” which covers within its ambit the product manufacturer, product service provider and product seller, for any claim for compensation. Hence, consumers can now be compensated by such sellers, manufacturers and service providers for any harm caused by such deficient product or service provided.

Product sellers now include a person who is involved in placing the product for a commercial purpose and as such would include e-commerce platforms as well. Hence, the ground commonly taken by E-commerce websites that they merely act as “platform”’ or “aggregators” will now not be tenable before the court anymore.

Analysis of the Consumer Protection Act of 2019 on the Companies selling Herbal and Ayurvedic Medicines & Products:–
The following provisions are extremely beneficial to consumers of such herbal or ayurvedic medicines or any other product. Due to the stringent measures provided, along with penalties and even imprisonment imposed, the recent increase in fake, misleading ASU advertisements may come to a permanent end.
• The Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy (AYUSH) notified the Drug and Cosmetic Rules, 2018 in order to regulate the advertisements of ASU Drugs.
• The Customer Complaints Council (CCC) of Advertising Standards Council of India (ASCI) recently found that the claims made by Hindustan Unilever Ltd. for its lever ayush soap ‘based on 5,000-year-old ayurved scriptures with 15 ayurvedic herbs’ besides other claims were inadequately substantiated and are misleading as well.
• Bhanwar Kanwar v. R.K. Gupta and Ors, (Civil Appeal No. 8660 of 2009– This case was an appeal against an order passed by the National Consumer Dispute Resolution Commission, New Delhi. In this case, the appellant bought an ayurvedic medicine claiming to treat patients who have fits by the respondent, who also advised the appellant to go ahead and use the same. Soon it was discovered that the medicine was allopathic and not ayurvedic. The respondent was then held liable for unfair trade practices, and were ordered to pay a compensation of 15 lakhs as well.
• As of June,2020 the General Secretary of National Consumer Welfare Council at Chandigarh has filed a criminal complaint seeking a case against Baba Ramdev and Patanjali Ayurved Ltd. The complaint was filed under the Indian Penal Code and the Drugs and Magical Remedies Act, 1954. In the complaint, the appellant stated that products conducting medicine for diseases and human consumption cannot be advertised without prior government permission and authorisation of the medical council.

To conclude, it is evident that although beneficial, these herbal and ayurvedic medicines are being misused by suppliers, who are also guilty of engaging in unfair trade practices of the same frequently. While regulations to handle the same were already present, with respect to the Drugs and Magical Remedies Act, AYUSH, and Consumer Dispute Resolution Commissions, I believe the Consumer Protection Act of 2019 imposes an even greater responsibility on sellers, manufacturers of these medicines. Due to the ambit of protection and increase in redressal mechanisms provided under the Act, they will have to act with an increased amount of care and caution while selling, advertising, or even endorsing these medicines to consumers.
Authored By: Adv. Anant Sharma & Madhulika Iyer