ADVERTISEMENT
– Wikipedia
defines advertisement as “Advertising is a form of communication for marketing
and used to encourage or persuade an audience (viewers, readers or listeners;
sometimes a specific group) to continue or take some new action. Most commonly,
the desired result is to drive consumer behavior with respect to a commercial
offering, although political and ideological advertising is also common”.
LAWS
REGULATING MISLEADING ADVERTISEMENT IN INDIA
There is no codified law regulating
advertisement in India. The
Advertising Standards Council of India is a non statutory body set up in 1985
and incorporated under Section 25 of the Companies Act, 1956. It entertains and
disposes of complaints based on its Code of Advertising Practice. The Code is
based on certain fundamental principles; clause 1 of its principle says
"To ensure the truthfulness and honesty of representations and claims made
by advertisements and to safeguard against misleading advertisements.
That
the enforcement of the above advertisements Code, by virtue of Rule 7 (9)
of the Cable Television Network Rules appears plausible in theory, the
aforesaid Rules do not create an enforcement mechanism which has the necessary
teeth.
DEFINITION OF “UNFAIR TRADE
PRACTICES”
"Unfair
trade practice" has been defined under Section 36 (A) as follows:
36
(A) unfair trade practice - In this
Part, unless the context otherwise requires, "unfair trade practice"
means a trade practice which, for the purpose of promoting the sale, use or
supply of any good or for the provision of any services, adopts any unfair
method or unfair or deceptive practice including any of the following practices,
namely:
Relevant
clause reads as -
36A(1)(vi) Makes a false or misleading representation
concerning the need for, or the usefulness of, any goods or services;
36A(1)(xi)
Gives false or
misleading facts disparaging the goods, services or trade of another person.
However
it is submitted that MRTP Act, 1969 is repealed by virtue of section 66 of the
Competition Act, 2002.
“UNFAIR TRADE PRACTICES” IN CONSUMER
PROTECTION ACT, 1986
The
definition of “unfair trade practices” has been imported into the Consumer
Protection Act, 1986 by the Amendment Act 50 of 1993, in Section 2(1)(r) of the
Consumer Protection Act, 1986. A careful scrutiny of all the sub-clauses in
Section 2(1)(r) of the Consumer Protection Act would show that 4 types of
representations are categorized as "unfair trade practices" namely
1. False representations falling under
sub-clauses (i), (ii) and (iii);
2. Representations which may not
necessarily be false but are nevertheless incorrect coming under
sub-clauses (iv) and (v);
3. Warranty or guarantee coming under
sub-clauses (vii) and (viii);
4. False or misleading representations
falling under sub-clauses (vi), (ix) and (x).
5. If an advertisements contains a
false representation within the meaning of sub clauses (i) to (iii) or an
incorrect representation within the meaning of sub clauses (iv) and (v) or a
warranty or guarantee within the meaning of sub clauses (vii) and (viii) or a
false or misleading representation or fact within the meaning of sub
clauses (vii), (ix) and (x) of Clause (1) of Section 2(1)(r) of the Consumer
Protection Act.
RIGHT TO ADVERTISEMENT UNDER THE
CONSTITUTION OF INDIA
Advertisement as
a free commercial speech and the status of the right of the consumer to know
and receive information, both of which forms part of the fundamental right of
freedom of speech and expression under constitution of India.
1.
Publication
of advertisement being free commercial speech, is protected by Article 19
(1) (a) of the Constitution.
2.
There
are a few restrictions on the aforesaid right, which would satisfy the test of
reasonableness under Article 19(2). These restrictions could be traced to the
definition of the term "unfair trade practice" in Section 36 (A) of
the Monopolies and Restrictive Trade Practices Act, 1969 and Section 2(1)(r) of
the Consumer Protection Act, 1986.
IF ADVERTISEMENT IS MISLEADING
ACTION WOULD LIE IN?
·
An
advertisement which falls within the definition of the term "unfair trade
practice", an action may lie in before a Consumer Forum, at the instance
of a consumer or a group of consumers or a voluntary consumer association or
even the Central or the State Government as per the definition of
"complainant" under Section 2(1)(b) of the Consumer Protection Act.
·
An
action may lie against such an advertisement before a civil court both at the
instance of a manufacturer or marketer and at the instance of a consumer (since
Section 3 makes the Consumer Protection Act an additional law and not a
law in derogation of any other law), provided that the advertisement in question contains a false representation coming within the
4 corners of sub-clauses (i) to (x) of Clause (1) of Section 2(1)(r) of
the Consumer Protection Act.
PRINCIPLE EXTABLISHED BY HON’BLE
COURTS IN INDIA WITH RESPECT OF MISLEADING ADVERTISEMENT
In Reckitt and Colman of India Ltd. v. M.P. Ramchandran 1999
19 PTC 741, the Calcutta High Court considered the concept of negative
advertisement and held that:
1. A tradesman is entitled
to declare his goods to be best in the world, even though the declaration is
untrue.
2. He can also say that his
goods are better than his
competitors', even though such statement is untrue.
3. For the purpose of
saying that his goods are the best in the world or his goods are better
than his competitors' he can even compare the advantages of his goods over the
goods of others.
4. He however, cannot,
while saying that his goods are better than his competitors', say that his
competitors' goods are bad. If he says so, he really slanders the goods of
his competitors. In other words he defames his competitors and their goods,
which is not permissible.
5. If there is no
defamation to the goods or to the manufacturer of such goods no
action lies, but if there is such defamation an action lies and if an action
lies for recovery of damages for defamation, then the Court is also competent
to grant an order of injunction restraining repetition of such defamation.
It is now a settled law that mere puffing of goods is not
actionable. Tradesman can say his goods are best or better.
But by comparison the tradesman cannot slander nor defame the goods of the
competitor nor can call it bad or inferior. It has been so held in the
following cases:
1.
Hindustan Lever v. Colgate Palmolive (I) Ltd. AIR 1998 SC 526.
2.
Reckitt and Colman of India Ltd. v. M.P. Ramchandran and
Anr. 1999 1 PTC 741.
3.
Reckitt and Colman of India v. Kiwi TTK Ltd. 1996 16 PTC 393.
