Consumer court imposed a fine of Rs. 1 lakh on Amway in 2007

In what could be described as a slap in the face of Amway apologists who claim that Amway products are of high quality, a consumer court in the city of Vijayawada, Andhra Pradesh, India, found fault with the quality of Amway products and imposed a fine of Rs. 1 lakh (Rupees one hundred thousand). Here is the excerpts of judgment delivered on October 16, 2007.

BEFORE THE DISTRICT CONSUMER FORUM - II ::

KRISHNA AT VIJAYAWADA

CC NO. 140 OF 2007

Between:

Consumers' Guidance Society--Complainant

AND

Amway India Enterprises---Opposite party

ORDER

1. Allegations in the complaint:

Opposite party has been offering variety of consumer goods and food products; for sale through networking marketing including dietary supplements. Opposite parties have been selling their products through its distributors in the form of chain market/network market at an exorbitant price. The complainant being a consumer activist made a petition under Right to Information Act to the State Food Laboratory to elicit the true or otherwise in the representations made by the opposite party. State Food Laboratory clearly stated that some of the products of the opposite party are misbranded and some of them are adulterated. Though as per rules the dietary supplements are prohibited from being sold in the form of tablets and capsules, the opposite party has been offering these products in the form of tablets and capsules. They are much beyond the usage levels prescribed by Indian Pharmacopoeia which is a health hazard. The representations, statements made by the opposite party amounts to unfair trade practice. Complainant wrote a letter to opposite party and there is no reply. Hence, the complaint for a direction to opposite party not to indulge in unfair trade practices and to issue corrective advertisement to educate the public on the true state of its products.

2. Averments in the counter affidavit filed by the opposite party:

Complaint is not maintainable as the complainant is not a consumer. The products are manufactured as dietary supplements for which the license was granted under the Prevention of Food Adulteration Act, 1954. This Forum has no jurisdiction since the matter was referred to the Central Food Laboratory, Pune for reanalysis. The products do not fall within the category of drugs. There is no unfair trade practice.

3. Affidavit and counter affidavits were filed.

4. On hearing the parties and upon perusing the documents available on record the followings are taken into consideration.

a) As per the Consumer Protection Act, the Forum has jurisdiction over the subject matter.

b) The Consumer Protection Act authorises any voluntary consumer association to move the Consumer Forum.

c) Complainant stated that information was obtained from the State Food Laboratory, Hyderabad regarding the products offered for sale and the report clearly stated that some of the products are misbranded and some others adulterated. Nutrilite Protein Tins contained less fat content than the label declaration and hence adulterated. Similarly, Amway Madrid Safed Musli (Apple) contains Class-II preservative which is not declared on the label and hence misbranded. Kohinoor Ginger Garlic Paste did not conform to Class-II preservative, hence adulterated. Nutrilite Salmon Omega-III is a dietary supplement which cannot be declared as proprietary food which is a misleading statement. As the label of the sample do not conform to rule 37 of PFA Rules 1955 and hence misbranded. The same observation is given with regard to Nutrilite Triple Guard Echinacea, Nutrilite Bone Health with Ipriflavone, Nutrilite Glucosamine HCL with Boswellia, Nutrilite Siberian Ginseng with Ginkgo Biloba, Nutrilite Cal Mag, Nutrilite Parselenium E, Nutrilite Iron Folic and Nutrilite Natural B. Except the products mentioned under serial No 3 to 11 the remaining products are either misbranded or adulterated. In view of the findings of the State Food Laboratory we are of the considered opinion that some of the products being offered for sale by opposite party are not true to their statement. Accordingly, we hold that the opposite parties are adopting unfair trade practice in publishing and selling their products.

d) This is also a fit case to impose exemplary damages on opposite party to act as deterrence not to repeat such activities in future. Opposite party is directed not to indulge in such unfair trade practices in future and issue corrective advertisements regardingthe products misbranded or misstated. It is a fit case to impose Rs. 1, 00,000 ( Rupees one Lakh only) as exemplary damages.

This is enough for Amway apologists to realise how the Amway is indulging in unfair trade practices in India.