1999 Supreme(SC) 881

1999(7) Supreme 240
Supreme Court of India
(From MRTP Commission, New Delhi)
B.N. Kirpal & Umesh C. Banerjee, JJ.
Colgate Palmolive (India) Ltd. —Appellant
versus
Hindustan Lever Ltd. —Respondent
Civil Appeal No. 2620 of 1998
With
Hindustan Lever Ltd. —Appellant
versus
Colgate Palmolive (India) Ltd. & Anr. —Respondents
Civil Appeal No 3288 of 1998
Decided on 18-8-1999
Counsel for the Parties :
For the Appellant in C.A. No. 2620/98 and for Respondent No. 1 in C.A. No. 3288/1998 : Kapil Sibal, Dr. A.M. Singhvi, Ashok H. Desai, Sr. Advo­cates, R.N. Karanjawala, S. Ganesh, Gaurab Banerjee, Ms. Nandini Gore, Ms. Ruby Singh Ahuja, Ms. Manik Karanjawala, Advocates.
For the Respondent in C.A. No. 2620/98 and for Appellant in C.A. No. 3288/ 1998 : Rakesh Dwivedi, Harish N. Salve, Dalip Kumar Malhotra, Rajesh Malho­tra, Advocates.
For the Respondent No. 2 in C.A. No. 3288/98 : P. Parmeswaran, Advo­cate (N.P.).

Important points
1. In the event of a complaint being lodged by a trader in respect of unfair trade practice, it is for the trader to convince by way of ‘evidence-sufficient’ that there is involved an element of public interest in the complaint, in order to obtain an order of injunction in terms of Section 12A and the Commis­sion in its turn, has thus to consider as to whether or not, the public are being deceived or likely to be deceived and in the event, the Commission comes to a finding that there is likelihood of such a deception, then and in that event only, the question of grant of an order of injunction would arise.
2. The basic principle of the grant of an order of injunction is to assess the right and need of the plaintiff as against that of the defendant and it is a duty incumbent on to the law courts to determine as to where the balance lies.

Headnote:(i) Monopolies and Restrictive Trade Practices Act, 1969—Section 12A—Temporary injunction—Con­dition precedent to grant—Relief by way of interlocutory injunction is granted to mitigate risk of injustice to complainant during period before uncertainty could be resolved —In case of complaint by a trader, the trader must convince by way of ‘evidence sufficient’ that there is involved an element of public interest in complaint—Complaint alleging appellant’s Colgate Dental Cream advertisement claiming ‘germ fighter’ ‘stops bad breath’ and ‘fight tooth decay’ as unfair and highly misleading qua consumers and trade—Appellant also used a ring around a family termed as ‘Suraksha Chakra’—No allegation of unfairness as regards ‘Suraksha Chakra’ made in complaint—MRTP Commission refused to pass interim restraint order, for want of evidence, as regards advertisement of ‘germ fighter’ ‘stop bad breath’ and ‘fight tooth decay’—Commission­er, however, took up issue of ‘Surak­sha Chakra’ which is wholly incidental passed order of restraint as regards display of ring round family as Suraksha Chakra—Not sustainable—No evidence of a single consumer being misled and not a whisper as to what constitute an unfair trade practice pertaining to ‘Surak­sha Chakra’—Having recorded that there was no evidence to put res­traint order on advertisement of main three alleged misleading phrases Commission could not have passed restraint order on an issue without any material on record.

       Held : While it is true that the conferment of power, under Section 12A, has very wide ramifications but the legislature was itself conscious enough to record in the body of the section certain in-built require­ments to be fulfilled in order to clothe the Commission with the authority and jurisdiction in the matter of grant of an order of in­junction. On a plain reading of the provision of Section 12A the following requirements thus emerge:--

        (a) Temporary injunction can be granted only during an inquiry.

        (b) There must 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. (Para 3)

       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. Regulations 76 provides that an application for grant of temporary injunction ought to be supported by an affidavit stating therein the circumstances 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 the Commission and the Commission, upon consideration thereof, may pass appropriate orders in regard thereto. The Commission’s powers to grant temporary injunctions is somewhat akin to that of the Civil Court under Rule 2A to 5 of order XXXIX of the Code of Civil Procedure. (Paras 4 & 6)

       In the event of a complaint being lodged by a trader in respect of unfair trade practice, it is for the trader to convince by way of ‘evidence-sufficient’ that there is involved an element of public interest in the complaint, in order to obtain an order of injunction in terms of Section 12A and the Commis­sion in its turn, has thus to consider as to whether or not, the public are being deceived or likely to be deceived and in the event, the Commission comes to a finding that there is likelihood of such a deception, then and in that event only, the question of grant of an order of injunction would arise. (Para 5)

       In the instant case, 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. 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 Chakra” 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 `toothdecay’. 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. (Paras 25, 30 & 31)

       The decision of this Court in Antox India cannot but lend concurrence to the view expressed above to the effect that the object of interlocutory injunction is to protect the plaintiff against the injury by reason of violation of his right and relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before the uncertainty could be resolved—three specific features available in the complaint have not in any way been disturbed by reason of lack of evidence but an incidental issue wholly dependent upon those three specific features has been taken up for consideration and an order of injunction granted. This is where the Commission is in error. The vindication of public right or public injury as contended by Mr. Salve does not, however, make a dent in the contextual facts, since the case with which a party comes to court ought to be considered in all fair­ness, in its proper perspective but unfortunately there is a total lack of the same in the instant matter. (Para 31)

       In any event, a distinction shall always have to be made and a latitude is allowed in the event of there being an advertisement to gain a purchaser or two. The latitude spoken of, however, cannot and does not mean any misrepresentation but by a description of permissible assertion. 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 regarded as 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 be his protector’ has its definite connotation and its application in matters of the nature as the present one. (Paras 32 & 33)

       The observations of the Commission itself which runs to this effect; “falsity or otherwise of these claims can be established conclusively at the stage of trial when evidence will be adduced by the informant/complainant by examining the experts and their cross examination by the respondent. Due weight and consideration has to be given to the opinions of experts while appre­ciating and evaluating evidence in order to arrive at a just conclu­sion and this can be done at the final stage of the enquiry.” In our view the observation or expression of opinion as above, as a matter of fact, runs counter to an order of injunction as has been granted by the Commission. Obviously the commission was persuaded to pass the order of injunction pertaining to “Suraksha Chakra” as and by way of an interlocutory order by reason of the factum of the injunction as granted by the Federal Trade Commission in the United States of America and we have already noticed earlier that in the advertisement under controversy no invisible shield to protect the tooth is avail­able. It is the complainant’s definite case that the advertisement pertaining to the foaming action, stopping bad breath and toothdecay cannot but be said to be a misrepresentation of facts and as such ought not to be permitted to be continued with such an advertisement. On a perusal of the complaint ‘Suraksha Chakra’ cannot be said to be within ambit of the foaming action and has been referred therein only to complete the advertisement portion as an incidental issue and obviously the Commission was persuaded more by the U.S. Trade Commission’s Report rather than consideration of the allegations in the complaint itself. 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 resistance by an invisible shield by reason of the user of the toothpaste would not arise. The situation in the present context is however totally dissimilar. 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 avoid decay or germs or whether it does or does not stop bad breath—It is only against these three items that there is `Suraksha’ by means of a `Chakra. There is no claim that the toothpaste would act as a shield against any hard substance which may or may not tantamount to mislead­ing the common unwary purchaser in the clampham omnibus: This “Surak­sha Chakra” refers two basic elements, namely `toothdecay’ and `germ fighting’ coupled with stopping of bad breath. It does not as a matter of fact require any special knowledge to appreciate or understand as to the effect of the “Suraksha Chakra”. No evidence has been led as to whether there would be avoidance of `toothdecay’ or `germ fighting’ by reason of the user of the toothpaste and without rendering evidence on these two basic elements in our view, question of there being a prima facie case for establishment for the grant of interlocutory injunction does not and cannot arise. The Commission, as appears, was totally obsessed with the FTC’s finding in regard to the invisible shield without however any factual support in the matter under consideration. The Commission it seems in fact, misapplied and misread the observa­tions of Federal Trade Commission since there is no factual similarity between the two. Prima facie case or at least arguable case does not and cannot possibly suggest an order of injunction without any factual support. There ought to be some such support on facts without which there would not be any justification for grant of an interim order. (Paras 36, 37 & 39)

       The bona fides of the application under Section 12A cannot also be brushed aside and in our view non consideration thereof by the Commission has resulted in a clear error on the part 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 advertisement in Hindi at least since 1987—there was no lodgment of any protest or complaint in public interest but it only filed as a back lash on the appellant’s complaint as noticed above and the motive therein in our view cannot also be ruled out. The appeal preferred by the complainant as against the failure of the Commission to pass orders on the other three elements of the advertisement 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 Commission passed an order of injunction in regard to an issue without however any material on record. As a matter of fact there is no evidence of a 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 delved into by the Commission at all. (Paras 41, 42 & 43)

       (ii) Code of Civil Procedure, 1908—Order 39—Temporary injunction—Guiding principles in the matter granting of.

       Held : Generally, however, the interlocutory remedy by way of a grant of an order of injunction is intended to preserve and maintain in status quo the rights of the parties and to protect the plaintiff, being the initiator, of the action against incursion of his rights and for which there is no appropriate compensation being quantified in terms of damages. The basic principle of the grant of an order of injunction is to assess the right and need of the plaintiff as against that of the defendant and it is a duty incumbent on to the law courts to determine as to where the balance lies. Another redeeming feature in the matter of grant of interlocutory injunction is that, in the event of a grant of injunction in regard to a party defendant where the latter’s enterprise has commenced and in that event the consideration may be somewhat different from that where the defendant is yet to commence its enterprise. (Paras 8 & 9)

       We think it fit to note herein below certain specific considerations in the matter of grant of interlocutory injunction, the basic being-non-expression of opinion as to the merits of the matter by the Court, since the issue of grant of injunction usually, is at the earliest possible stage so far as the time frame is concerned. The other considerations which ought to weigh with the Court hearing the application or petition for the grant of injunctions are as below:—

        (i) Extent of damages being an adequate remedy;

        (ii) Protect the plaintiff’s interest for violation of his rights though however having regard to the injury that may be suffered by the defendants by reason therefor;

        (iii) The court while dealing with the matter ought not to ignore the factum of strength of one party’s case being stronger than the others;

        (iv) No fixed rules or notions ought to be had in the matter of grant of injunction but on the facts and circumstances of each case - the relief being kept flexible;

        (v) The issue is to be looked from the point of view as to whether on refusal of the injunction the plaintiff would suffer irreparable loss and injury keeping in view the strength of the parties case;

        (vi) Balance of convenience or inconvenience ought to be considered as an important requirement even if there is a serious question or prima facie case in support of the grant;

        (vii) Whether the grant or refusal of injunction will adversely affect the interest of general public which can or cannot be compen­sated otherwise. (Para 19)