1999 (8) TMI 742 - SC - Indian Laws

Supreme Court overturns MRTP Commission injunction, emphasizes evidence and public interest balance.

Colgate Palmolive (India) Ltd. Versus Hindustan Lever Ltd.

The Supreme Court held that the MRTP Commission erred in granting an injunction against 'Suraksha Chakra' without proper evidence and consideration of the ... Whether on refusal of the injunction the plaintiff would suffer irreparable loss and injury keeping in view the strength of the parties case? Held that:- Appeal allowed. As a matter of fact there is no evidence of single consumer being misled and not a whisper as to what constitute an unfair trade practice pertaining to ‘Suraksha Chakra’. The Commission also thought it fit not to record any reason or justification for the grant of an interim order of injunction in spite of finding as above and before the matter is investigated and complaint is finally heard. This apart, the factum of non-availability of any explanation of more than 13 years delay has also not been delayed into by the Commission at all.In that view of the matter question of there being any order of injunction at this stage of the proceeding on the face of the finding as passed by the Commission itself does not and cannot arise. Issues Involved:1. Authority of the MRTP Commission to grant temporary injunctions.2. Requirements and conditions for granting temporary injunctions under Section 12A of the MRTP Act.3. Assessment of whether Colgate's advertising practices constituted unfair trade practices.4. Consideration of the balance of convenience and public interest in granting an injunction.5. Examination of the delay in filing the complaint and its impact on the grant of injunction.Detailed Analysis:1. Authority of the MRTP Commission to Grant Temporary Injunctions:The appeals were filed under Section 55 of the Monopolies and Restrictive Trade Practices Act, 1961 (MRTP Act), challenging the order of the MRTP Commission under Section 12A of the MRTP Act. The MRTP Act did not originally confer the power to grant temporary injunctions to the Commission. However, the Sachhar Committee recommended such powers to strengthen the Commission's authority, leading to the incorporation of Section 12A by the MRTP (Amendment) Act, 1984.2. Requirements and Conditions for Granting Temporary Injunctions under Section 12A of the MRTP Act:Section 12A allows the Commission to grant temporary injunctions during an inquiry if it is proven that a person or undertaking is carrying on or about to carry on any monopolistic, restrictive, or unfair trade practice likely to affect public interest or the interest of any trader or consumer. The requirements include:- Temporary injunction can be granted only during an inquiry.- There must be proof of the practices being carried on or about to be carried on.- Such practices must likely affect public interest, supported by evidence.3. Assessment of Whether Colgate's Advertising Practices Constituted Unfair Trade Practices:The complaint by Hindustan Lever Ltd. (HLL) alleged that Colgate's advertisements for its Dental Cream, claiming it had a 'Germ Fighter,' could 'Stop bad breath,' and 'Fight tooth decay,' were false and misleading. The Commission's power to grant injunctions is akin to that of a Civil Court under Order XXXIX of the Code of Civil Procedure, 1908. The Commission must consider whether public interest is being deceived and whether there is sufficient evidence to prove the allegations.4. Consideration of the Balance of Convenience and Public Interest in Granting an Injunction:The principles for granting interlocutory injunctions include preserving the status quo, protecting the plaintiff's rights, and weighing the balance of convenience. The Court must assess the potential injury to the plaintiff against the defendant's right to exercise their legal rights. The decision must be based on the balance of convenience, irreparable harm to the plaintiff, and public interest.5. Examination of the Delay in Filing the Complaint and Its Impact on the Grant of Injunction:The appellant (Colgate) argued that the complaint by HLL was filed as a counterblast to their complaint against HLL's advertisement for 'New Pepsodent.' The 'Suraksha Chakra' had been used in Colgate's advertisements since 1985 without any objections until 1997. The Commission's order was challenged on the grounds that there was no specific allegation against 'Suraksha Chakra' in the complaint, and the delay in filing the complaint indicated a lack of bona fides.Conclusion:The Supreme Court found that the MRTP Commission erred in granting the injunction against 'Suraksha Chakra' without sufficient evidence and proper consideration of the balance of convenience and public interest. The appeal by Colgate Palmolive (India) Ltd. succeeded, and the injunction was set aside. The appeal by Hindustan Lever Ltd. was dismissed. The Court emphasized that the Commission should consider the matter afresh, based on evidence and in accordance with the law, without being influenced by the observations made in this judgment.