1999 Supreme(Bom) 521

IN THE HIGH COURT OF BOMBAY
S.S. Nijjar, J.
Century Plyboards (India) Ltd...... Plaintiffs.
Versus
The Advertising Standards Council of India..... Defendant.
Notice of Motion No. ... of 1999 in Suit No. 3677 of 1999, decided on 26-7-1999.
Advocates appeared :
I.M. Chagla with J.P. Sen and D.J. Kakalia i/b Mulla Mulla Cragie Blunt and Caroe for the plaintiffs.
N.G. Thakkar with D.J. Khambata Mrs. Zia Mody i/b Little Co., for defendant.

Headnote:Articles 12 and 19-Restrictive orders under Article 19 can only be passed by State-Company cannot be elevated to status of State, statutory corporation or Instrumentality of State.-Advertising Standards Council of India, a company registered under the Companies Act, 1956 under Article 55 of its Articles of Association constituted a Consumer Complaints Council referred to as CCC to examine and investigate complaints received from consumers and general public including members with regard to any breach of ASCIs code of conduct and recommend action to be taken in this regard. A complaint was received by the Association with regard to an advertisement of the plaintiffs which was published in Times of India on 27th September,1988. It was alleged that as per the complaint the following claims made in the advertisement were misleading. "Internationally proven anti-borer chemicals technology has been introduced in the Indian Plywood industry through Century Powder proof ply." It was stated that the advertisement was cleverly designed to mislead the unwary consumers of wood panel products and the general public regarding the evolution and present status of wood preservation technology in the country. The plaintiffs were "invited" to offer any comments which would be placed for the deliberation of the CCC. The plaintiffs were not given the identity of the complainant. They were also not given a copy of the complaint. An order was passed on 24th December, 1998 wherein the complaint has been upheld. The plaintiffs were directed to suspend the ad campaign. It was further stated that failing such an assurance of compliance the defendant will be constrained to request the concerned agency / media not to place or carry the advertisement in its present form. No personal hearing was ever given. The plaintiffs filed suit for perpetual injunction restraining the defendant from acting in furtherance of the two orders dated 24th December, 1998 and 29th April, 1999. Notice of motion was taken out for restraining the defendants from acting in furtherance? of the orders during the pendency of the suit.

       Held, that any directions issued by this company were not binding on the plaintiff. Restrictive orders can only be passed by the State in exercise of its powers under Article 19 of the Constitution. This Article permits the State to impose reasonable restrictions on the Rights to Freedom, guaranteed in this Article. No individual or company can arrogate to themselves the powers of the State, Statutory Authority or Instrumentalities of the State. The said company cannot be elevated to the status of State, Statutory Corporation or Instrumentality of the State. That being so, any action taken by the company which would infringe the rights of a citizen of India guaranteed under Articles 14 and 19 would be without jurisdiction. No directions issued by the company to the members can be held to be binding on a non-member. Therefore, if the directions issued by the company to the members have the effect of adversely affecting the trade or profession of a non-member, the directions would be without jurisdiction. Interestingly in the Memorandum and Articles of Association it is provided that the code is not in competition with law. Its rules, and the machinery, through which they are enforced, are designed to complement legal controls, not to usurp or replace them. But the directions contained in the two impugned orders clearly have the effect of a mandatory injunction. This kind of order can be granted only by Courts duly constituted under law. A voluntary association of persons, even a company such as the defendant, cannot usurp the jurisdiction of the Courts, Tribunal and For a duly constituted by Parliament. The defendant had acted discriminately against the plaintiffs. Orders passed by the defendant had adversely affected the plaintiffs reputation. The defendant having arrogated to itself the status of a Regulatory Body, is required to act fairly and not capriciously or arbitrarily. Its decision must be just and fair. Permitting IPMC to advertise and to prohibit the plaintiff was plainly discriminatory. Ad interim relief pending the hearing and final disposal of the suit ordered restraining the defendant from acting in any manner whatsoever in furtherance of impugned orders including, inter alia, by publishing and/ or publicising the said orders in their reports and/ or communicating the same in any other manner whatsoever to members of the media and the general public.

       Articles 14 and 19-Infringement of rights of citizen guaranteed under-Directions of Board of Directors of company binding on members of company and not on non- members-Directions adversely affecting trade and profession of non-member-It infringes rights of non-member as a citizen-Directions without jurisdiction.- The members of the company would be bound by all the directions which are issued by the Board of Directors of the company. Any directions issued by this company are not binding on the plaintiff. Restrictive orders can only be passed by the State in exercise of its powers under Article 19 of the Constitution. This article permits the State to impose reasonable restrictions on the Rights to Freedom guaranteed in this Article. No individual or company can arrogate to themselves the powers of the State, Statutory Authorities or Instrumentalities of the State. Court is prima facie of the view that this company cannot be elevated to the status of State, Statutory Corporation of Instrumentality of the State. That being so, any action taken by the company which could infringe the rights of a citizen of India guaranteed under Articles 14 and 19 would be without jurisdiction. No directions issues by the company to the members can be held to be binding on a non-member. Therefore if the directions issues by the company to the members have the effect of adversely affecting the trade or profession of a non-member, the directions would be without jurisdiction. Interestingly in the Memorandum and Articles of Association it is provided that the code is not in competition with law. Its rules, and the machinery, through which they are enforced, are designed to complement legal controls, not to usurp or replace them. But the directions contained in the two impugned orders clearly have the effect of a mandatory injunction. This kind of order can be granted only by Courts duly constituted under law. A voluntary association of persons, even a company such as the defendant cannot usurp the jurisdiction of the Courts, Tribunals and For a duly constituted by Parliament.

       Order passed by Association of Advertising Standards Council of India directing plaintiffs to suspend ad campaign-Plaintiffs not given opportunity of hearing-Opportunity of hearing is so cardinal that it cannot even be replaced or substituted by post-decisional hearing.