Dabur India Limited vs M/S Colortek Meghalaya Private ...
2009 Latest Caselaw 4975 Del

*          THE HIGH COURT OF DELHI AT NEW DELHI

%                                           Judgment Reserved on: 24.11.2009
                                            Judgment delivered on: 04.12.2009

                             CS(OS) No. 2029/2009

DABUR INDIA LTD.                                                  ..... Plaintiff

                             Through : Mr N.K. Kaul, Sr. Advocate with Mr Sudhir
                             K. Makkar, Advocate.

                      vs.

M/S COLORTEK MEGHALAYA PVT. LTD.             ....Defendant
                   Through : Mr Dushyant Dave, Sr. Advocate with Mr
                   RajivTyagi, Ms Chanchal Biswal & Mr Yashwardhan,
                   Advocates.

CORAM :-
HON'BLE MR JUSTICE RAJIV SHAKDHER

1.

Whether the Reporters of local papers may be allowed to see the judgment ? Yes

2. To be referred to Reporters or not ? Yes

3. Whether the judgment should be reported in the Digest ? Yes

RAJIV SHAKDHER, J

IA No. 13875/2009 (O. 39 R. 1&2 of CPC by pltf.)

1. The plaintiff's application under Order 39 Rule 1 & 2 of the Code of Civil

Procedure, 1908 (hereinafter referred to as the ‗CPC') seeks order of an ad-interim

injunction against the defendants, their Directors, agents and assigns in respect of

telecast of their advertisement. ―Good Knight Naturals Mosquito Repellant Cream‖.

The short ground for seeking an injunction is that the impugned advertisement

disparages plaintiff's mosquito repellant cream, marketed under the brand name

―ODOMOS‖.

2. The impugned story board being pertinent is extracted hereinbelow:-

     HINDI                                 TRANSLATION (ENGLISH)
     Do-do partiyan ho rahi hain.          Two parties are going on...

      Ek bachchon ki. Ek Machcharon ki.      One for the kids and the one (other)
                                            for mosquitoes...

Ab kehne ko mosquito repellant Just to say there are mosquito creams hai. Par lagao to museebat. repellant creams. But if you apply Na lagao to museebat. Lagao toh them, it's a problem and if you rashes, allergy ka darr. Upar se don't, even then it is a problem. If chipchipi. you apply you get rashes, there is a risk of allergy and on top of that its sticky...

Aur na lagao....to machharon ki ash. And if you don't then it's a fun Toh Karen kya? time for mosquitoes. So what do we Wohi toh bataane aayi hoon do?

     Goodknight Naturals                    That is what I have come here to
                                            tell you...
     Tulsi                                  Tulsi...
     Lavender                               Lavender...
     Aur Milk proteins se bani              And Milk protein...
     Goodknight Naturals                    Goodknight Naturals
     Mosquito repellent cream               Mosquito repellent cream...
     Machcharon ki haar,                    Mosquitoes lose...
     Skin se pyaar                          ...love with your skin

3. The plaintiff which is as per its own averments in the plaint is the

manufacturer of the pharmaceutical products, toiletries, ayurvedic and other

medicinal preparations, acquired the business of mosquito repellant cream only on

amalgamation of M/s Balsara Hygiene Products Ltd along with two other companies;

namely, M/s Balsara Home Products Ltd. and M/s Besta Cosmetic Ltd in September,

2006. The plaintiff claims that its product ODOMOS is an extremely popular brand

which enjoyed 86.5% of market share in the year 2007-08 and 84.4% in the year

2008-09. The annual sales figure and the amount spent on advertising its products

‗ODOMOS' as set out in the plaint is as follows:-

Sales & Advertising Data: Odomos from 2004-2009 Year Sales Value (Rs lakhs) A&P (Advertising and Promotion) (Rs lakhs) 2009-10 1601.24 (upto 30.09.2009) 354.3 (upto 30.09.2009) 2008-09 2636.86 537.92 2007-08 2476.4 647.43 2006-07 2514.37 338.25 2005-06 1752.03 358.26 2004-05 887.83 62.5

4. It is further averred that the impugned advertisement was aired on the Zee

News Channel on 8.10.2009 and hence, the necessity to institute the present action.

5. Mr.Neeraj Kaul, Sr.Advocate in support of the plaintiff's case, submitted as

follows:-

(i) given the fact that the plaintiff enjoys 84-86% of the market share of the mosquito

repellant cream business - the impugned advertisement is targeted towards the

plaintiff;

(ii) it makes no difference that the advertisement makes no direct reference to the

plaintiff's product as disparagement can be both ‗overt' and ‗covert';

(iii) it is well settled that an injunction will be granted even where disparagement is

generic in nature, that is, where goods are slandered as a class;

(iv) the impugned advertisement has the effect of denigrating the plaintiff's product,

in as much as, it insinuates that it causes rashes and allergies;

5.1 In order to make good his submissions Mr.Neeraj Kaul relied upon the

following judgments:-

Eureka Forbes Ltd. Vs. Pentair Water India Pvt. Ltd. 2007 (35) PTC 556 (Karn.); Karamchand Appliances Pvt. Ltd. Vs. Sh. Adhikari Brothers & Ors. 2005 (31) PTC 1(Del.); Dabur India Ltd. Vs. Colgate Palmolive India Ltd. 2004 (29) PTC 401(Del.); Dabur India Ltd. Vs. Emami Ltd. 2004 (29) PTC 1 (Del.) Dabur India Ltd. Vs. Wipro Ltd FAO(OS) 204/2006 dated

31.05.2006 and Dabur India Ltd. Vs. Wipro Ltd. FAO(OS) 204/2006 dated 29.01.2007

6. The defendant on the other hand in its reply to the captioned application has

broadly averred that both the suit and interlocutory application ought to be dismissed

on the ground of :-

(i) lack of cause of action;

(ii) the advertisement only adverts to a statement of fact;

(iii) there is neither any intent nor is there any disparagement in point of fact;

(iv) after extensive research it has manufactured a mosquito repellant cream - sold

under the brand name ―Good Night Naturals‖ which mitigates chances of getting

rashes or allergy;

(v) there is no comparison made in the impugned advertisement with the plaintiff's

product or for that matter any reference to the plaintiff's product;

(vi) lastly, the fact that advertisement seeks to bring to fore the advantages of a

mosquito repellant cream comprising of natural additives as against the mosquito

repellant cream which does not have such additives cannot be termed as one

disparaging the product of the plaintiff.

7. Mr.Dushyant Dave, learned senior Advocate buttressed the grounds of

opposition taken in the reply with the following:-

(i) the plaint does not disclose a prima facie case of disparagement;

(ii) disparagement is, in sum and substance a tort of slander of goods. In order that an

action is brought home successfully the plaintiff will have to atleast make an

averment that firstly, the impugned statement in the form an advertisement is false;

secondly, there is a clear intent to harm the defendant; and lastly, there is damage

caused by such slanderous action of the defendant;

(iii) there is no concept in law of generic disparagement A legislative indicator of the

same is Section 36A(x) of the Monopolies Restrictive Trade Practices, 1969

(MRTP)--which speaks of disparagement of specific goods;

(iv) the plaint is not accompanied by even a single affidavit of a consumer to

demonstrate effect of the impugned advertisement on him;

(v) advertising is a form of commercial speech which is protected by the provisions of

Article 19(1)(a) of the Constitution of India. No injunction can issue unless a clear

case of disparagement of the plaintiff's goods is set up; and

(vi) lastly, the impugned advertisement runs for 30 seconds- if a case of

disparagement has to be made out by a process of reasoning- it is not a case of

disparagement.

7.1 In support of his submissions Mr. Dushyant Dave relied upon the following:-

Clerk and Lindsell on Torts, 16th Edition, Chapter 20- "Malicious Falsehood, Slander of Title, Slander of Goods and other Varieties;

Halsbury's Law of England, 4th Edition, Volume 28- "Malicious Falsehood"; Ratanlal Dhirajlal's The Law of Torts, Ratanlal rd Ranchhoddas and Dhirajlal Keshavlal Thakore, 23 Edition, 1997; The law of unfair Competition, Trademarks and Monopolies, Rudolf Callman, 4th Edition, Vol 2; Tata Press Ltd vs Mahanagar Telephone Nigam Limited, AIR 1995 SC 2438; Colgate Palmolive vs Hindustan Lever Limited, (1999) 7 SCC 1; Godfrey Phillips India vs Ajay Kumar, (2008) 4 SCC 504; M. Balasundram vs Jyothi Laboratories and Anr., (1995) 82 Comp Cases 830; Reckitt and Coleman India Ltd vs Jyothi Laboratories Ltd, 1999 CTJ 107 (MRTPC); Pepsi Foods Ltd & Ors vs Bharat Coca Cola Pvt Ltd, (1999) 81 DLT 122; Reckitt Benckiser (India) Ltd vs Naga Ltd & Ors 104 (2003) DLT 490; Godrej Sara Lee Ltd vs Reckitt Benckiser

(i) Ltd, 128 (2006) DLT 81; Dabur India Ltd vs Wipro Ltd 129 (2006) DLT 265; White vs Mellin (1895) AC 154 HL; Reckitt & Colman of India ltd vs Kiwi T.T.K. Ltd, 1996 PTC (16) 393 (Del); Reckitt & Colman of India ltd vs M.P. Ramachandran & Anr, 1999 PTC (19) 741 (Cal)

REASONS

8. The law on the subject of disparagement atleast in this court has obtained

certain defined contours. Therefore, what is to be essentially seen in the light of

principles enunciated in these judgments is whether the defendant in issuing the

impugned advertisement has, at least prima facie, committed a tort of slander of

plaintiff's goods. Broadly, the principles being :-

(i) puffery is permissible eventhough it results in extolling the virtues of ones own

goods- which may not be quite in accord with reality. A trader cannot most certainly

denigrate a rival trader's goods. [See Reckitt & Colman of India ltd vs M.P.

Ramachandran & Anr, 1999 PTC (19) 741 (Cal)]

(ii) comparative advertisement is permissible as long as it does not attain negative

overtones; [see Godrej Sara Lee Ltd vs Reckitt Benckiser (I) Ltd, 128 (2006) DLT

81 and Dabur India Ltd vs Wipro Ltd 129 (2006) DLT 265]

(iii) generic disparagement being tortious, it makes no difference whether it is ‗overt'

or ‗covert' for it to be held as tortious. In that sense, generic disparagement falls foul

of the law and can be injuncted. [See Dabur India Ltd. Vs. Colgate Palmolive India

Ltd. 2004 (29) PTC 401(Del.), Dabur India Ltd. Vs. Emami Ltd. 2004 (29) PTC 1

(Del.) and Karamchand Appliances Pvt. Ltd. vs Sri Adhikari Bros. & Ors. 2005 (31)

PTC 1 (Del)]

(iv) truth is a complete defence to a charge of tort of defamation or slander of goods;

(v) advertising is a form a commercial speech and hence, protected under the

provisions of Article 19(1)(a) of the Constitution; which will have to adhere

reasonable restrictions. (See Tata Press Ltd vs Mahanagar Telephone Nigam

Limited, AIR 1995 SC 2438)

8.1 As an adjunct to the above, it may not be out of place to bear in mind that the

actions, like the present kind, are in the nature of "trade libel". The tort of the trade

libel is variedly referred to as slander of goods, malicious falsehood or even injurious

falsehood. It appears that in recent times courts have been using the expression of

―malicious falsehood‖ to describe a tort of the kind involved in the present case. The

reason perhaps is that the expression of "slander goods" or "trade libel" presents a

narrower scope of the tort which essentially is tailored to protect the financial interest

generally and not commercial interest. For a plaintiff to succeed in an action based

on malicious falsehood, the necessary ingredients are:

(i) a false statement is made which is calculated to cause financial damage;

(ii) the statement is made maliciously with an intent to cause injury;

(iii) the impugned statement has resulted in a special damage. unlike in defamation in

which the falsehood of the statement is presumed, and it is for the defendant to prove

that the statement is true.

8.2 Given the ingredients, a plaintiff can succeed in an action only if he is able to

prove malice; the burden of which is on him; unlike in defamation in which the

falsehood of the statement is presumed, and it is for the defendant to prove that the

statement is true.

8.3 Therefore, the court is required to do a balancing act, in as much as, while

every attempt is made to safeguard the financial interest of the plaintiff the interests

of the defendant/trader are also borne in mind so that he is in a position to inform the

public at large that his goods are available in the market which have certain

advantages over the goods of the plaintiff/trader. Essentially the courts are guided by

the fact that competition is good, and healthy competition enures in the favour of the

public, i.e., consumer. It is this underlying philosophy, which motivates the courts to

zealously protect commercial speech as a fundamental right under Article 19(1)(a) of

the Constitution. (See Kerly's Law of Trade Marks and Trade Names 14th Edition

pages 613-615)

8.4 Recent trends have shown that the articles even in science journals

commenting on the efficacy of goods manufactured by large multinational

companies, are sought to be shut out through medium of courts. While an aggrieved

party's right to seek recourse to law cannot be questioned, interest of the consumers

to know must be guarded - even if the dissemination of information is by way of an

advertisement which exaggerates the virtues of the traders goods. Public debate is

good. The only caution that the defendant-trader has to bear in mind is that his

advertisement does not fall within the four corners of what constitutes in law

malicious falsehood. Consequently, the courts are slow to grant interim relief if the

defendant has set up an arguable case that the impugned statement is true. The courts

are not ordinarily a forum which should determine as to whether the plaintiff's or the

defendant's goods or services are better.

8.5 The three English cases cited before me; White vs Mellin (1895) AC 154 HL,

The Royal Baking Powder Company vs Wright Crosssley & Co. (1901) 18 R.P.C. 95

and De Beers Abrasive Products Ltd. & Ors. Vs International General Electric Co.

of New York Ltd. (1975) 2 ALL ER 599, seem to in nut shell lay down the following

principles:

(i) Trader is entitled to say his goods are best in the world. In doing so, he can

compare his goods with another.

(ii) While saying that his goods are better than those of the rival traders he can say

that his goods are better ―in this or that or other respect‖.

(iii) Whether the impugned statements made to disparage the rival trader's goods, is

one which would be taken ‗seriously' by a ‗reasonable man'. A possible alternative

to this test would be whether the defendant has pointed out the specific defect or

demerit in the plaintiff's goods.

(iv) A statement by the defendant puffing his own goods is not actionable.

8.6 In so far as the third (iii) conclusion is concerned the judgments of this court

on the issue of specific defect or demerit is at variance. Therefore, this aspect I need

not touch upon further as I am bound by those judgments. Suffice it to say a similar

issue arose in Schulke and Mayr U.K.Ltd. Vs. Alkapharm U.K.Ltd. (1999) F.S.R.

161 wherein the court refused an injunction since there was no reference to the

plaintiff's goods in the impugned statement.

9. Let me now examine the facts of the present case in the light of the principles

enunciated by the judgments cited before me. Both the plaintiff and the defendant

manufacture a mosquito repellant cream. The active ingredient in both the plaintiff

well as the defendant's product is ―N, N-Diethyl benzamide‖ - a chemical synthetic.

In the course of submission it also came through that both the plaintiff's product

―ODOMOS‖ and the defendant's product ―Good Night Naturals‖ contains an

ingredient known as "Oil of Citronella"- which is a pesticide used as an animal or

insect repellant. Material filed with reply and handed over in court seems to suggest

that it causes allergy and rashes. Similarly, at least two laboratory reports produced

by the plaintiff suggest that the plaintiff's product is safe for human use on an ―acute

basis‖. The point of difference in the two products according to the defendant is that

since its product is milk protein based, the likelihood of rashes and allergy is greatly

diminished- a virtue it seeks to extol. The defendant cannot obviously disparage

mosquito repellant creams generally because what is produced by it is also a

mosquito repellant cream- the difference is, according to the defendant, in the

additives. This is quite clear from the following utterances of the model where she

says that ―if you apply them (reference is to mosquito repellant creams) it's a problem

and if you don't even then it is problem‖. (emphasis is mine). Thus, there is an

attempt on the part of the defendant to persuade the consumers to buy its mosquito

repellant cream with its proclaimed additives to avoid risk of allergies and rashes.

9.1 The statement made by the defendant may be an idle boast or puffery but it

certainly does not constitute disparagement. The defendant cannot generally be seen

to disparage mosquito repellant creams because it manufactures the same as well.

There is another way of looking at it. Suppose the defendant were to say that Good

Night Naturals is a milk protein based product which does not cause allergy and

rashes, would that amount to disparagement ? The answer would be a clear no. If that

be so, merely because it says the same thing in a more round about manner- which is

―if you apply you get rashes, there is a risk of allergy and top of that it is sticky and if

you don't then it is fun time for mosquitoes.......‖- is not in my view a statement

which disparages the rival's product.

10. In an action for malicious falsehood the plaintiff must necessarily plead and

prove the ingredients of malicious falsehood, which are:

(i) that the impugned statement is untrue;

(ii) the statement is made maliciously, that is, without just cause or excuse;

(iii) the plaintiffs have suffered special damage thereby.

[See Royal Baking Powder Company (supra)]

10.1 Mr Dave, learned senior counsel for the defendant is perhaps right in

submitting upon a perusal of that the pleadings it does appear that there are no

pleadings with respect to the impugned advertisement having been taken out by the

defendant with a malicious intent to cause injury and/or damage to the plaintiff. It is

trite law that every disparagement of a rival trader's goods is not actionable in law.

However, that is not the scope of captioned application. This aspect of the matter will

be dealt with in appropriate proceedings.

10.2 The other submission of Mr Dave that the plaintiff is not entitled to relief

sought for: on account of the fact that no evidence has been filed by the plaintiff in

the form of an affidavit of the consumer(s) or a survey report of the consumer(s)

generally to demonstrate prima facie the impact of the impugned advertisement on

them; I am of the view that the said submission of the learned counsel for the

defendant cannot be accepted at this stage for disposal of a motion for interlocutory

relief. At the trial the plaintiff will be entitled to submit requisite evidence provided

as observed above, it is so pleaded. At this stage the best course open would be for

the court to step into the shoes of a ―reasonable‖ and ―prudent man‖ and assess for

itself the impact of the impugned advertisement. This is not to say that where

evidence of a consumer(s) is filed, that the court gives up this role. The court's

intercession at every stage is crucial, more so, at the interlocutory stage.

10.3 Therefore, in coming to the conclusion, which I have, I have examined the

impugned advertisement and the result is that I am of the view that impugned

advertisement does not fall prima facie within the tort of ―malicious falsehood‖. The

defendant has set up an arguable case. There is a possibility that the submission,

which is even if it is assumed is directed towards the plaintiff; is true. This is apart

from my reasoning hereinabove that I am not persuaded to hold that the impugned

advertisement is directed against the plaintiff.

11. For the reasons given above, the application is dismissed.

CS(OS) 2029/2009

12. The defendant shall file the written statement within two weeks. Replication,

if any, be filed before the next date.

13. List before the Jt. Registrar on 27.04.2010 for completion of pleadings, filing

of original documents and admission/denial, thereof.

DECEMBER 04, 2009                                            RAJIV SHAKDHER, J
da/kk

Note:- Corrections carried out in terms of order dated 09.12.2009