1994 (5) TMI 162 - Commission - Companies Law

Commission dismisses complaint, finding no false claims. Prospectus highlights technology quality without discrediting competitors.

Federation of Parenteral Manufactures of India Versus Core Parenterals Ltd.

The Commission dismissed the complaint, finding that the respondent's claims were not false, misleading, or disparaging. It concluded that the ... Unfair trade practice Issues Involved:1. Jurisdiction of the Commission2. Alleged false and misleading representations in the prospectus3. Disparagement of complainants' products4. Technological superiority claims by the respondent5. Compliance with Indian Pharmacopoeia standardsDetailed Analysis:1. Jurisdiction of the Commission:The respondent challenged the jurisdiction of the Commission to entertain the complaint, relying on a Full Bench decision in the matter of TTK Pharma, which ruled that issuing shares to raise capital does not constitute a trade practice. However, the Commission found it unnecessary to address this preliminary objection as the complaint was dismissed on merits.2. Alleged False and Misleading Representations in the Prospectus:The complainants argued that the representations made by the respondent about their Form-Fill-Seal (FFS) technology being 'the most modern' and 'conforming to international quality standards' were false and misleading. The Commission examined the extracts from the prospectus and found that the respondent's claims about the FFS technology were supported by substantial evidence, including a certificate from Kennet Bioservices of the UK. The Commission concluded that the claims were not false or misleading.3. Disparagement of Complainants' Products:The complainants contended that the respondent's claims disparaged the conventional technology used by them. The Commission held that the respondent's statements did not amount to disparagement. It emphasized that 'disparagement' implies discrediting or running down another's products, which was not the case here. The respondent merely highlighted the advantages of its technology without directly or indirectly discrediting the complainants' products.4. Technological Superiority Claims by the Respondent:The complainants argued that the respondent's claim of technological superiority was unfounded since the FFS technology was developed two decades ago. The Commission rejected this argument, noting that the technology had undergone several improvements and upgradations over the years. The Commission found no evidence of a more recent technology that surpassed FFS, thus validating the respondent's claim of using the latest and most modern technology.5. Compliance with Indian Pharmacopoeia Standards:The complainants asserted that any technology conforming to Indian Pharmacopoeia standards should be considered as good as the FFS technology. The Commission disagreed, stating that while Indian Pharmacopoeia lays down minimum standards, manufacturers can adopt further improvements to achieve higher levels of sterilization and excellence. The Commission found no substance in the argument that the respondent's process did not conform to pharmacopoeia standards.Conclusion:The Commission dismissed the complaint, concluding that the complainants failed to demonstrate that the respondent's claims were false, misleading, or disparaging. The Commission emphasized that the respondent's prospectus did not discredit the complainants' products but merely highlighted the superior quality and standards achieved through its FFS technology. No order as to costs was made.