Kaleesuwari Refinery Pvt. Ltd. v. M.K. Agrotech Pvt. Ltd.

IN Judgements Database | 06/08/2018

Kaleesuwari Refinery Pvt. Ltd. v. M.K. Agrotech Pvt. Ltd.

The High Court of Madras

O.A. No. 1151 of 2015 in C.S. No. 858 of 2015

Media Involved: Advertisement

Decided On: 29.02.2016

K.K. Sasidharan, J.

1. Original Application praying that this Hon'ble Court be pleased to grant an interim injunction restraining the respondent/defendant their distributors, marketers, franchisees, dealers, agents, stockiest, representatives, advertisers, successors-in-business, assigns or any one claiming through or under them from resorting to generic disparagement of all the branded refined sunflower oil including that of the applicant/plaintiff's "Gold Winner" refined sunflower oil in the impugned three advertisements in any other manner whether directly or indirectly to promote the respondent/defendant's "Sunpure" Refined Sunflower Oil by publishing, printing through newsprint, newspaper magazine, journals filed as a plaint document and/or telecasting and disseminating, and/or exhibiting and/or podcasting the three offending commercial advertisements through any media whether through television channels, internet media and/or satellite channels and/or exhibiting in cinema theatre/movie screen or through any other media for viewing the story board of which are filed as a plaint document along with soft copy of the advertisement in a compact disc., pending disposal of the above case.

This Original Application coming on this day before this court for hearing in the presence of Mr. Sriram Panchu, Senior Counsel for M/s. C. Saravanan, S. Thenmozhi, R. Anish Kumar, M. Sumathi Murali & S.R. Sankareswaran, Advocates for the applicant herein, and Mr. P.S. Raman, Senior Counsel for M/s. Arun C. Mohan, Vasundhara Arun Brinda Mohan, S. Suba Shiny, R. Ganapathy, N.C. Vishal R. Prashanthi & Durga V. Bhatt, Advocates for the respondent herein and upon reading the order herein dated 08.12.2015, and the learned senior counsel for the applicant contended that section 24 of the FSS Act prohibits misleading advertisement and as such, the advertisement given by the respondent violates the mandatory provision. Though the provision prohibits misleading or deceiving advertisement relating to food, the proviso permits the opponent to prove that the advertisement was based on scientific materials and this court observing that truth is always a defense in an action for libel. Such being the position, it would not be possible to injunct the respondent. It is more so on account of the materials produced by the respondent to show that the claim made in the advertisement was supported by relevant materials. This Court do not find any reason to injunct the respondent, pending disposal of suit.

It is ordered:

That the O.A. No. 1151 of 2015 praying this Court to grant an interim 'injunction restraining the respondent/defendant their distributors, marketers, franchisees, dealers, agents, stockist. representatives, advertisers, successors-in-business, assigns or any one claiming through or under them from resorting to generic disparagement of all the branded refined sunflower oil including that of the applicant/plaintiff's "Gold Winner" refined sunflower oil in the impugned three advertisements in any other manner whether directly or indirectly to promote the respondent/defendant's "Sunpure" Refined Sunflower Oil by publishing, printing through newsprint, newspaper magazine,- journals filed as a plaint document and/or telecasting and disseminating, and/or exhibiting and/or podcasting the three offending commercial advertisements through any media whether through television channels, internet media and/or satellite channels and/or exhibiting in cinema theatre/movie screen or through any other media for viewing the story board of which are filed as a plaint document along with soft copy of the advertisement in a compact disc, pending disposal of the suit do stand dismissed without any liability to pay costs.

WITNESS THE HON'BLE THIRU. SANJAY KISHAN KAUL, CHIEF JUSTICE, HIGH COURT AT MADRAS AFORESAID, THIS THE 29TH DAY OF FEBRUARY 2016.

Original Application praying that this Hon'ble Court be pleased to grant an interim injunction restraining the respondent/defendant their distributors, marketers, franchisees, dealers, agents, stockist, representatives, advertisers, successors-in-business, assigns or any one claiming through or under them front resorting to generic disparagement of all the branded refined sunflower oil including that of the applicant/plaintiff's "Gold Winner" refined sunflower oil in the impugned three advertisements in any other manner whether directly or indirectly to promote the respondent/defendant's "Sunpure" Refined Sunflower Oil by publishing, printing through newsprint, newspaper magazine, journals filed as a plaint document and/or telecasting and disseminating, and/or exhibiting and/or podcasting the three offending commercial advertisements through any media whether through television channels, internet media and/or satellite channels and/or exhibiting in cinema theatre/movie screen or through any other media for viewing the story board of which are filed as a plaint document along with soft copy of the advertisement in a compact disc,- pending disposal of the above case.

This Original Application coming on this day before this court for hearing the court made the following order:

In case a party cannot be held responsible for libel as all that has been stated, according to him is the truth which is a complete defense against any assault or challenge, regardless of any damage is sustained as a result of it whether the could be injuncted from publishing the alleged offending advertisement, disparaging to the product manufactured and supplied by the other party, is the core issue that has arisen for consideration in this interlocutory application.

The facts:--

2. The applicant is stated to be a market leader in the refined edible sunflower oil sector. The applicant has been marketing the product under the brand name Gold Winner since 1990. The respondent is a late entrant in the sunflower oil segment, having a minuscule market presence. The respondent released several advertisements both in the print and electronic media to promote its product, claiming superiority over the products manufactured by others in the market. The respondent as part of its advertisement campaign, resorted to defamatory advertisement- to promote its product- "Sun Rich Sunflower Oil" and to brand the sunflower oil manufactured by the applicant and other manufacturers as one causing cancer.

3. According to the applicant the respondent has gone to the extent of releasing a commercial advertisement wherein guest artists were shown dining in one of their friends house where they make a generic swipe in a friendly banter that they are consuming chemical pakodas chemical del tadka, chemical poori, transfat gulabjamoon etc. implying thereby that they are cooked with oils which have chemicals and transfat. The applicant therefore filed the suit to restrain the respondent from resorting to such generic disparagement of refined sunflower oil, besides payment, of a sum of Rs. 25 lakhs as damages for conceiving, telecasting and exhibiting the offensive disparaging advertisement.

4. It is the case of the applicant that they are manufacturing the sunflower oil pursuant to the license issued by the Director of Health and Family Welfare Services, Government of India. According to the applicant, refined edible oil is manufactured by deacidifying with alkali by a refining process. Anti oxidants, which are substances used to prevent oxidative deterioration of food, are used, as permitted by law and as such, the respondent was not correct in making disparaging remarks that sunflower oil manufactured by others would cause cancer. The applicant therefore seeks an order to injunct the respondent from issuing similar disparaging advertisements, pending disposal of the civil suit.

5. The application is opposed by the respondent by filing counter affidavit. It is the contention of the respondent that the advertisement only emphasizes that its sunflower oil is processed in a manner which is free of commercial processing involved in the regular form of processing which irrefutally is chemical based, which is dependent on various chemical additives. According to the respondent, they have not given any advertisement to show the product manufactured by the applicant in a manner derogatory to them. The respondent only highlighted the physical processing method instead of the chemical processing method adopted for refining sunflower oil. Such being the factual position, there is absolutely no basis for the grievance raised by the applicant.

Submissions in a nutshell:--

6. The learned Senior Counsel for the applicant contended that the applicant has been manufacturing sunflower oil by using TBHQ for refining, which is permitted by law. The respondent, without any basis, issued disparaging advertisements to malign the product of the applicant and other market leaders as one causing cancer. The learned Senior counsel by placing reliance on the analysis report, contended that the product manufactured by the applicant satisfied the test indicated in the Food and Safety Standards Act and as such, the respondent erred in giving disparaging advertisements. According to the learned Senior counsel, the respondent issued misleading and deceiving advertisements to promote its product. The advertisement was given in violation of the Food and Safety Standards Act, 2006 and as such, they should be injuncted.

7. The learned Senior Counsel for the respondent by placing reliance on material collected from abroad, contended that the resear on conducted by the scientists proved that the cheaper synthetic anti oxidants like TBHQ would cause cancer. According to the learned Senior counsel, the respondent only highlighted the difference between chemical processing and physical processing and at no point of time, disparaging remarks were made against the rival products, including the product. marketed by the applicant. The learned Senior Counsel contended that truth is a defence in an action for libel and as such, the applicant is not entitled to an order of injunction.

Analysis:--

8. The applicant is stated to be a leading market player in the refined edible sunflower oil sector. The respondent is a comparatively new entrant. The applicant is using the chemical processing method of refining sunflower oil. The respondent on the other hand is using the physical processing method, which is stated to be less harmful. The applicant challenges the advertisement on the ground that it is nothing but disparaging. The respondent on the other hand maintained that no derogatory reference has been made with respect to the product manufactured and marketed by the applicant or any other similar brand available in the market.

9. The alleged, untrue and misleading advertisement given by the respondent made the applicant to rush to this Court. It would be relevant to mention here the submission made by the learned Senior Counsel for the respondent that it was only to prevent the respondent from launching the product at Chenriai the applicant filed the suit.

10. In case attempt- Was made by the defendant to show that the products of the plaintiff are all inferior quality, a cause of action would arise to file a suit either for a restraint order or for damages. In case the defendant is in a position to prove that there is nothing in the advertisement which is untrue or misleading, and attempt was not made to brand the product of the plaintiff as inferior quality, no action for disparaging would lie. The Courts have, in a catena of decisions, held that if an advertiser makes a consumer aware, of the truth, there is nothing wrong in that. The reason is, a party cannot be held responsible for libel when all that has been told is truth, which is a complete defence against any assault or challenge, regardless of any damage sustained as a result of it.

11. The applicant admitted that they are using the commercial processing method for refining sunflower oil. The applicant is using anti oxidants to prevent deterioration.

12. The respondent has produced materials to show that some of the countries like Japan, Romania, Sweden and Australia have already banned chemically processed sunflower oil.

13. The respondent has given certain reasons to support its stand that the advertisement contains only truth. The respondent in its counter affidavit pleaded that regular sunflower oil processing involves artificial fortification, by adding synthetic vitamins and minerals. The synthetic vitamins and minerals may not be readily absorbed by body and it would be harmful in the long run. According to the respondent, some of the artificial preservatives/anti oxidants used to improve the shelf life of the oil would cause cancer and other terminal illness. The respondent therefore maintains that mere statement of such facts would not tantamount to disparagement, thereby giving rise to a claim for damages or a restraint order.

14. I have perused the advertisement given by the respondent and other promotion materials. There is nothing on record to show that the respondent has resorted to generic disparagement of sunflower oil manufactured by leading companies including the applicant. The applicant miserably failed to prove the primary condition that the respondent has attempted to distinguish its product from the products marketed by the applicant and similar other players in the market in a manner derogatory to them. The respondent wanted to convey that the refined sunflower oil. available in market is processed by chemical processing. However, their product is not refined by using such harmful chemicals.

15. The appellant is using chemical addictive TBHQ for refining sunflower oil. The literature available on record shows that some of the countries have already banned sunflower oil possessed by using TBHQ. Such being the factual position, it cannot be said that the respondent is guilty of disparagement.

16. Similar question came up for consideration before the Delhi High Court in Dabur India Ltd. v. Wipro Ltd., 2006 (32) PTC 677 (Del). Madan B. Lokur, J. (as His Lordship then was) observed that in cases of this nature, degree of disparagement must be such that it should tantamount to defamation. While vacating the injunction granted earlier, the Court observed:--

"23. In comparative advertising, a consumer may look at a commercial from. a. particular point of view and corns to a conclusion that one product is superior to the other, while another consumer may look at the same commercial from another point of view and corny to a conclusion that one product is inferior to the other. Disparagement of product should be defamatory or should border on defamation a view that has consistently been endorsed by this Court. In other words, the degree of disparagement must be such that it would tantamount to, or almost tantamount to defamation.

25. A manufacturer of a product ought not to be hyper-sensitive in such matters. It is necessary to remember that market forces are far stronger than the best advertisements. If a product is good and can stand up to be counted, adverse advertising may temporarily damage its market acceptability, but certainly not in the long run."

17. The Supreme Court in Tata press Ltd. v. Mahanagar Telephone Nigam Ltd. and Ors. 1995(5) SCC 139 held that commercial advertisement would come within the ambit of Article 19(1)(a) of the Constitution of India. The Supreme Court said:--

"22. Advertising as a commercial speech" has two facets. Advertising which is no more than & commercial transaction, is nonetheless dissemination of information regarding the product-advertised. Public at large is benefited by the information made available through the advertisement. In a democratic economy free flow of commercial information is indispensable. There cannot be honest and economical marketing by the public at large without being educated by the information disseminated through advertisements. The economic system in a democracy would be handicapped without there being freedom of commercial speech. In relation to the publication and circulation of newspapers, this court in Indian Express newspaper's case. Sakal paper's case and Bennett Colaman's case has authoritatively held that any restraint or curtailment of advertisements would affect the fundamental right under Article 19(1) (a) on the aspects of propagation, publication and circulation.

23. Examined from another angle, the public at large has a right to receive the "Commercial speech". Article (19)(1) (a) not only guarantees freedom of speech and expression, it also protects the rights of an individual to listen, read and receive the said speech. So far as the economic needs of a citizen are concerned, their fulfilment has to be guided by the information disseminated through the advertisements. The protection of Article 19(1)(a) is available to the speaker as well as to the recipient of the speech. The recipient of "commercial speech" may be having much deeper interest in the advertisement than the businessman who is behind the publication. An advertisement giving information regarding a life saving drug may be of of much more importance to general public than to the advertiser who may be having purely a trade consideration.

24. We, therefore, hold that "commercial speech" is a part of the freedom of speech and expression guaranteed under Article 19(1) (a) of the constitution."

18. The learned Senior counsel for the applicant by placing reliance on the judgment of the Supreme Court in Centre for Public Interest Litigation v. Union of India and others 2013 (16) SCC 279, contended that section 24 of the FSS Act prohibits misleading advertisement and as such the advertisement given by the respondent violates the mandatory provision. Though the provision prohibits misleading or deceiving advertisement relating to food the proviso permits the opponent to prove that the advertisement was based on scientific materials.

19. Truth is always a defense in an action for libel. Such being the position it would not be possible to injunct the respondent. It is more so on account of the materials produced by the respondent to show that the claim wade in the advertisement was supported by relevant materials. I, therefore, do not find any reason to injunct the respondent, pending disposal of suit.

20. The application is dismissed without any liability to pay costs.

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