The Unraveling of Baba Ramdev’s Empire: Legal Troubles Mount for Patanjali

Bombay High Court Fines Patanjali ₹4.5 Crores for Trademark Violation; Supreme Court Criticizes Ministry’s Inaction on Misleading Advertisements

It seems there is no end to Baba Ramdev’s legal problems. In the past two days, Patanjali Ayurved, the flagship company of the yoga guru turned entrepreneur, has faced significant legal setbacks. On one side, the Supreme Court is addressing misleading advertisements involving Patanjali, while on the other, the Bombay High Court has imposed a hefty fine of ₹4.5 crores on the company.

The Bombay High Court’s decision came on Monday when it imposed costs on Patanjali Ayurved for violating an ad-interim order that restrained the company from selling its camphor products. This order was issued in response to a trademark infringement suit filed by Mangalam Organics, which alleged that Patanjali was infringing on its camphor product trademarks.

Justice R.I. Chagla passed the order, noting that despite the August 30, 2023 injunction, Patanjali continued to sell its camphor products. An affidavit submitted by Patanjali admitted that a cumulative supply worth $49,57,861 had been distributed to distributors until June 24. Products worth $25,94,505 were still with distributors, with sales purportedly halted.

Mangalam Organics, however, claimed that Patanjali continued its sales even after June 24, with camphor products available on Patanjali’s website as of July 8. This omission in the affidavit led the Court to determine that Patanjali had misled it and ordered the company to deposit Rs. 50 lakh initially. On further review, Justice Chagla imposed an additional Rs. 4 crores, citing false affidavits filed by Patanjali’s director, Rajneesh Mishra.

“This is a fit case for sending the director to prison,” remarked the court but opted to impose costs instead.

In another significant legal development, the Supreme Court criticized the Ministry of Consumer Affairs for its laxity in addressing misleading advertisements. During the hearing of the Patanjali misleading ads case, the Court highlighted the Ministry’s reliance on complaints rather than conducting its own due diligence.

A bench comprising Justices Hima Kohli and Sandeep Mehta noted that the Ministry’s effectiveness had diminished since its collaboration with the Advertising Standards Council of India (ASCI) ended. The number of complaints and their resolution rates plummeted from 2500+ between 2018-2020 to just 130 between 2020-2024.

“After the MoU with ASCI expired, the Ministry set up a website integrating GAMA (Grievance Against Misleading Advertisements) into their own system. However, the Ministry seems to be waiting for complaints to come in, whereas ASCI conducted active ground-level due diligence,” observed Justice Kohli.

The Court also criticized several States and Union Territories for non-compliance with its earlier orders requiring affidavits on actions taken against misleading ads. Only 21 out of 36 had complied, and the Court granted two weeks for the remaining 15 to submit their affidavits, warning that the presence of the Secretary (Health) might be mandated if they failed.

Amicus Curiae Shadan Farasat suggested several measures, including requiring proof of effectiveness for new indications, better use of existing penalty mechanisms, prior approval of advertisements for medicines, and re-initiating the ASCI tie-up for more effective oversight.

Additional Solicitor General KM Nataraj informed the Court about meetings with 40 stakeholders to address issues faced by the advertising industry. The Court allowed two weeks for filing recommendations but urged the stakeholders to expedite the process.

These developments indicate that Ramdev Baba and his brand Patanjali, which enjoyed substantial growth and prominence during the Modi era, now face significant legal hurdles. Whether this marks the beginning of the end for Ramdev Baba’s legacy remains to be seen, but the future certainly holds numerous challenges for the once-thriving entrepreneur.