TaxTMI 
TaxTMI 
1999 (8) TMI 742
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....620 of 1998 is against the order of the Commission containing an order of restraint as regards the display of the ring round the family as 'Suraksha Chakra' in Colgate Palmolive's hoardings, print advertisements and T.V. commer-cials, the CA No. 3288 of 1998 filed by Hindustan Lever Ltd. is against the order of refusal on the part of the Commission to put a total ban on the product of the Colgate Palmolive as noticed above. Before adverting to the rival contentions, be it noted that the MRTP Act as originally framed did not confer any power on to the Commission to grant temporary injunction during the course of inquiry. The Sachhar Committee report, however, recorded that power to issue temporary injunction order ought to be made available to the Commission in order to give effect and strengthen the jurisdiction and authority of the Com-mission and it is by reason therefor the Legislature thought it fit to incorporate section 12A in the body of the Act by the MRTP (Amendment) Act, 1984, conferring such a power to the Commission. 2. While it is true that the conferment of power, under section 12A, has very wide ramifications but the Legislature was itself conscious enough to r....
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.... be proof of certain practices mentioned therein to have been carried on or are about to be carried on by the person specified therein. (c)Such practices are likely to affect prejudicially the public interest and there must be some evidence either by way of an affidavit or otherwise. 3. The situation thus after the incorporation of the Act of 1984, in the Statute Book emerges that the Commission's power can be invoked under section 12A within, however, such limits and restrictions as noticed above. Be it placed on record, that for an appreciation of the powers under section 12A and to read the same in its proper perspective. Regulations 76 and 77(2) of the MRTP Regulations, 1991 ought also to be noticed. Regulation 76 provides that an application for grant of temporary injunc-tion ought to be supported by an affidavit stating therein the circumstanc- es under which the trade practices can be ascribed to be prejudicial to the interest of the public, consumer etc. and Regulation 77(2) provides a safeguard to the effect that the Commission before making an order under section 12A, may direct the Director-General of Investigation to make an investigation and submit a report to th....
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....et to commence its enterprise. 9. The decision of this Court in Wander Ltd v. Antox India (P.) Ltd 1990 Suppl. SCC 727 lend support to the observations as above. This Court in paragraph 9 observed : "Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated : '... is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The Court must weigh....
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....nction or not, that is, whether justice would be best served by an order of injunction. (3) The Court does not and cannot judge the merits of the parties respective cases and that any decision of justice will be taken in a state of uncertainty about the parties' rights." 13. It would seem to follow, therefore, that what should be borne in mind, in addition to what has been phrased in Lord Diplock's speech, is that if there is uncertainty, the Court should be doubly reluctant to issue an injunction, the effect of which is to settle the parties' rights once for all. 14. On a clear analysis of the speech of Lord Diplock, it appears that if damages, recoverable at common law, would be an adequate remedy and the defendant would be in financial position to pay the same, no inter-locutory injunction should normally be granted, howsoever strong the plaintiff's claim appear to be at that stage. Lord Diplock went on to observe further that in the event of there being any doubt, as to the adequacy of the respective remedies and damages available to either party or both, then and in that event, the question of balance of conve-nience arises and the same will vary from case to case. ....
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....ire the plaintiff to furnish an undertaking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trial." As noted above, lately the 'triable issue concept' as introduced by Lord Diplock in American Cyanamid Co.'s case (supra) has been thought to be much too rigid and wide even conceptually and doubts are even raised as to its legal efficacy having regard to the facts of adequate compensation theory. As a matter of fact the Courts in England have even gone to the extent of ascribing the judgment to be beneficial for the richer sections of the society! We, however, cannot subscribe to such a view, neither find any justification for such uncharitable comments and it seems that American Cyanamid's case (supra) decision has been more misunder- stood than understood and in this regard we record our concurrence with the views expressed by Laddie, J. in Series 5 Software v. Clarke [1996] (1) ALL ER 853 wherein the learned Judge has explained the judgment of American Cyanamid Co.'s case (supra) with extreme competency and in our view also correctly Laddie, J. observed : "In many cases before American Cyanamid the prospect of success....
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....ispute on the evidence, as suggested by the use of the words 'only' and 'no credible dispute', then a new inflexible rule has been introduced to replace that applied by the Court of Appeal. For example, all a defendant would have to do is raise a non-demurable dispute as to relevant facts in his affidavit evidence and then he could invite the court to ignore the apparent strength of the plaintiff's case. This would be inconsistent with the flexible approach suggested in Hubbard v. Vosper [1912] 1 All ER 1023, [1972] 2 QB 84 which was cited with approval earlier in American Cyanamid [1975] 1 All ER 504 at 510, [1975] AC 396 at 407. Furthermore, it would be somewhat strange, since American Cyanamid directs courts to assess the adequacy of damages and the balance of convenience, yet these too are topics which will almost always be the subject of unresolved conflicts in the affidavit evidence. In my view Lord Diplock did not intend by the last-quoted passage to exclude consideration of the strength of the cases in most applications for interlocutory relief. It appears to me that what is intended is that the court should not attempt to resolve difficult issues of fact or law on an ap....
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....ise. It is on this backdrop that exercise of discretion by the Commission shall have to be considered and it is at this juncture certain further factual details ought to be noted. 19. On the factual score it appears that the appellant started its advertise-ment campaign for 'Colgate Dental Cream' using the phrase 'Stop bad breath' and 'Fight tooth decay' from 1960. The user of the words 'Suraksha Chakra' commenced, however, from the year 1985. 20. The records depict that in March 1997 the respondent in Civil Appeal No. 2620 of 1998 being Hindustan Lever, complained to the Advertising Standards Council of India (ASCI) against appellant's advertisement in respect of Colgate Dental Cream. The Consumer Complaints Council of ASCI scrutinised the appellant's advertisement in detail and came to a finding that the same does not in any way be termed to be unfair or deceptive. Significantly, however, though there is existing a provision for review, the respondent has chosen not to proceed with the matter and allowed the matter to be set at rest. 21. Subsequently, however, on 15-10-1997, the appellant herein filed a complaint before the MRTP Commission being No. UTPE 405 of 1997 a....
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....d Breath, Fights Tooth decay and provides a ring or circle of safety or protection. The complainant craves leave to refer to and rely upon cassettes of all these TV advertisements at the time of hearing. The Complainant/informant believe the impugned advertisement of Colgate Dental Cream has been on air since August 1996 claiming 'Germ Fighter' proposition. Prior to the impugned advertisement no claim of any 'Germ fighter' was made in respect of CDC. However, for last more than one year the Respondent have introduced new advertising in which this new claim has been made even though there has been no change in the ingredients of Colgate Dental Cream. Storyboards of the advertising before August '96 are annexed hereto and marked Annexure 3." [Emphasis supplied] 23. It, therefore, appears that the principal grievance of the respondent herein before the Commission is that the claim of the appellant that its toothpaste is 'germ fighter' having the ability to 'stop bad breath' and its ability to 'fight tooth decay' are highly misleading qua the consumers and the trade. The complaint itself further records that the advertisement of the appellant purport to suggest that Colgate Denta....
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....here a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence; (viii)makes to the public a representation in a form that purports to be- (i)a warranty or guarantee of a product or of any goods or services; or (ii)a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is mate-rially misleading or there is no reasonable prospect that such warranty, guarantee or promise will be carried out; (ix)****** (x)gives false or misleading facts disparaging the goods, services or trade of another person." It is in this context, however, that the observations of this Court in Lakanpal National Ltd v. MRTPC 1989(3) SCC 251 is rather apposite. This court in paragraph 7 observed : "7. However, the question in controversy has to be answered by construing the relevant provisions of the Act. The definition of "unfair trade practice" in section 36A mentioned above is no inclusive or flexible, but specific and li....
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....causes loss or injury to the consumer" [Emphasis supplied] - H.M.M. Ltd. v. MRTP Commission [1998] 6 SCC 485 at p. 490. 27. In the instant matter there are no allegations in the complaint against the term 'Suraksha Chakra' nor even an allegation that the same is misleading or an unfair trade practice. The notice of inquiry also does not contain any reference to 'Suraksha Ghakra' as unfair trade practice or there being any involvement or any falsity or in any way the same tantamounts to a misleading information to the people at large. The allegations in the complaint filed by Hindustan Lever stand restricted or confined to Colgate's claim in respect of 'germ fighting', 'bad breath' and 'tooth decay'. 28. On the factual analyses as above, would we be justified in ascribing the grant of the order of injunction by the Commission that the same is in accordance with the known principles of law and the factors which ought to weigh with the Court in the matter of grant of injunction as indicated above-the answer obviously cannot possibly be in the affirmative. The rigours of American Cyanamid and subsequent modulations thereof by the other English decisions along with the observation....
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....der pressure and was currently much in arrear, such a statement was held to entitle the purchaser to rescind the contract. [Smith v. Land and House Property Corporation [1884] 28 Ch. D. 7]. Further, assuming there was in fact an express warranty but that by itself would not necessarily result from a simple commendation of the quality of goods by the seller' : For in this case the rule of civil law, 'simplex commendation non-obligate' - simple commendation can only be regard- ed a mere invitation to customer without any obligation as regards the quality of goods : Every seller will naturally try and affirm that his wares are otherwise good to be purchased unless of course the same appears to be on evidence that the commendation was intended to be a warranty. The popular English saying 'in a purchase without warranty, one's eyes, tastes and senses must he his protector' has its definite connotation and its application in matters of the nature as the present one. 30. On this score Mr. Desai contended that when there is an advertisement and the same is said to have constituted an unfair trade practice, the Commission has to examine the advertisement as a whole and assess its impa....
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....ration, there is no such protection as was offered in the United States but it is the resultant effect of the foaming action which stops bad breath and tooth decay and the entire family would be safe so far as tooth decay is concerned. 'Suraksha' has a meaning in common acceptation and implies safety and 'Chakra' mean a wheel or a disc and the words put together as 'Suraksha Chakra' cannot be equated or be understood to mean an invisible shield which would protect the tooth as was available in the U.S. advertisement. In this context it would be pertinent to note the observations of the Commission pertaining to its order of the grant of injunction. The Commission stated : "In the complaint the respondent's parent company in USA was alleged to have made false, misleading and deceptive representations in advertising CDC with Gardol. The print and television advertisements gave the impression to the prospective purchasers of CDC with Gardol that persons who brush their teeth with that toothpaste would prevent decay from getting to their teeth as an invisible protective shield around the teeth is formed by CDC with Gardol. The TV advertisement depicted a coconut, tennis ball and lari....
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....inant's definite case that the advertisement pertaining to the foaming action, stopping bad breath and tooth decay canno but be said to be a misrepresentation of facts and as such ought not to e permitted to be continued with such an advertisement and it is in this perspective as a matter of fact the complainant records in the com laint : The Complainant carried out in their Research Centre well acce ted test to study the anti-bacterial efficacy, if any, of the CDC. The Executive Summary of the test shows that :- Contract Germ Kill test (Ref. - Spangles S.K. Jacobs MR, and Applebaum PC, J of Antimicro Chemo Therapy 39 (suppl B) p23, 1997). "The test data shows that Colgate Dental Cream has no significant impact on the survival rate of oral bacterial during the contract of 60 seconds which is more than the average brushing time of consumers. The same test done for toothpaste will standard anti-bacterial agent shows a significant drop in the survival rate of these bacteria under similar conditions". The Complainant craves leave to refer to and rely upon the detailed report, enclosed as Annexure 6. The analytical report clearly establishes that Colgate Dental Cream has no pro....
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.... Lueven University Press 1995). The Respondent has also published a report (Niles H.P., J dent, Res. 73 sp. issue, Abst, No. 1579) demonstrating that reduction in VSCC can be achieved by using triclosan in the toothpaste. A placebo (without triclosan) showed no effect over and above the negative control. Demonstration of reduction in VSC is pre-requisite for making claims on bad breath. It is, therefore, clear that Colgate Dental Cream which does not contain triclosan, can not suppress the bad breath leave alone 'stops 'it. "[Emphasis supplied] The averments as above unmistakably, therefore, depict that it is on the basis of laboratory tests that the complainant has found that representa- tion is not correct and it is on this perspective that Mr. Desai also contended that the entire grievance of the complainant has to be decided on the basis of the evidence at the time of the trial but not at any stage prior thereto. As a matter of fact the Commission itself, as noted above, has recorded such a finding, but after recording the same, came to find about 'Suraksha Chakra' and we find some justification in Mr. Desai's criticism as regards the non application of mind in the matter....
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....of the FTC as noticed above. 34. The submission of Mr. Salve at the first blush is rather attractive that at this stage we are not really concerned with the factum of establishment of any truth or falsity but merely a prima facie case or an arguable case resulting in establishment of a prima facie case and in that perspective the issue, therefore, emerges as to whether such a prima facie case has been made out or not-we are, however, afraid that the answer cannot but be the negative. The Federal Trade Commission was confronted with an invisible shield which was protecting the tooth from a coconut, tennis ball and a piece of stone and it is on this factual back-drop that FTC came to a conclusion that withstanding of the pressure of the coconut or resis- tance by an invisible shield by reason of the user of the toothpaste would not arise. The situation in the present context is, however, totally dissim-ilar. No material object is bouncing back after hitting the tooth by reason of 'Suraksha Chakra'. 'Suraksha Chakra' comes up by reason of the factum of fighting of germs, tooth decay and bad breath-it has not been proved or even enquired as to whether the Colgate Dental Cream can av....
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....art of the Commission. The fact that within a period of 10 days of the application by the appellant herein before the Commission, the respondent files the instant complaint with an application for an interim prayer-though, however, this 'Suraksha Chakra' admittedly is available in the commercial advertisement since 1985 and in the visual advertise-ment in Hindi at least since 1987-there was no lodgement of any protest or complaint in public interest but it only filed as a backlash on the appellant's complaint as noticed above and the motive therein in our view cannot also be ruled out. 37. The appeal preferred by the complainant as against the failure of the Commission to pass orders on the other three elements of the advertise-ment in our view at this stage cannot be entertained and we record our concurrence with the finding of the Commission that without going through the evidence, it is neither feasible not proper in any event to pass any orders thereon at this juncture. We are dismayed, however, by the fact that after recording a finding on that score as noticed above, the Commis-sion passed an order of injunction in regard to an issue without, however, any material on recor....