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PETITIONER:

COLGATE PALMOLIVE (INDIA) LTD.

Vs.

RESPONDENT:

HINDUSTAN LEVER LTD.

DATE OF JUDGMENT: 18/08/1999

BENCH:

B.N.Kirpal, Umesh C. Banerjee

JUDGMENT:

BANERJEE, J.

These two appeals under Section 55 of the Monopolies

and Restrictive Trade Practices Act ( hereinafter referred

to as the `MRTP Act') are directed against the order of the

Monopolies and Trade Practices Commission under Section 12 A

of the MRTP Act dated 30th April, 1998 in matter No. UTPE

415 of 1997. The matter pertains to colgate toothpaste, a

product of Colgate Palmolive India Limited and by reason of

a complaint from M/s. Hindustan Lever Limited being the

Appellant in the 2nd appeal. Whereas CA No.2620 of 1998 is

against the order of the Commission containing an order of

restraint as regards the display of the ring round the

family as "Suraksha Chakra" in Colgate Palmolive's

hoardings, print advertisements and T.V. commercials, the

CA No.3288 of 1998 filed by M/s. Hindustan Lever Limited is

against the order of refusal on the part of the Commission

to put a total ban on the product of the Colgate Palmolive

as noticed above. Before adverting to the rival

contentions, be it noted that the M.R.T.P. Act as

originally framed did not confer any power on to the

Commission to grant temporary injunction during the course

of inquiry. The Sachhar Committee report however, recorded

that power to issue temporary injunction order ought to be

made available to the Commission in order to give effect and

strengthen the jurisdiction and authority of the Commission

and it is by reason therefor the legislature thought it fit

to incorporate Section 12A in the body of the Act by MRTP

Amendment Act 1984 conferring such a power to the

Commission. 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 and it is on this perspective that

Section 12A ought to be noticed at this juncture. Section

12A reads as below:-- "12A Power of the Commission to grant

temporary injunctions-

(1) Where, during an inquiry before the Commission, it

is proved, whether by the complainant, Director General, any

trader or class of traders or any other person, by affidavit

or otherwise, that any undertaking or any person is carrying

on, or is about to carry on, any monopolistic or any

restrictive, or unfair, trade practice and such monopolistic

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or restrictive, or unfair trade practice is likely to affect

prejudicially the public interest or the interest of any

trader, class of traders or traders generally or of any

consumer or consumers generally, the Commission may, for the

purposes of staying or preventing the undertaking or, as the

case may be, such person from causing such prejudicial

effect, by order, grant a temporary injunction restraining

such undertaking or person from carrying on any monopolistic

or restrictive, or unfair, trade practice until the

conclusion of such inquiry or until further orders.

(2) The provisions of rules 2A to 5 (both inclusive)

of order XXXIX of the First Schedule to the Code of Civil

Procedure, 1908 (5 of 1908) shall, as far as may be, apply

to a temporary injunction issued by the Commission under

this section, as they apply to a temporary injunction issued

by a Civil Court, and any reference in any such rule to a

suit shall be construed as a reference to an inquiry before

the Commission.

[Explanation I- For the purposes of this section an

inquiry shall be deemed to have commenced upon the receipt

by the Commission of any complaint, reference or as the case

may be, application or upon its own knowledge or information

reduced to writing by the Commission.

Explanation II-For the removal of doubts, it is hereby

declared that the power of the Commission with respect to

temporary injunction includes power to grant a temporary

injunction without giving notice to the opposite party.]"

On a plain reading of the provision 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.

The situation thus after the incorporation of the Act

of 1984, in the Statute Book emerges that 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. Incidentally, be it noted that in

the event of a complaint being lodged by a trader in respect

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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. Needless to record here that 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. Having dealt

with however, the broad legislative perspective in the

matter of conferment of power and authority on to the

Commission in regard to the grant of injunctions and whilst

on the subject let us however discuss the state of the law

in the matter of grant of an order of injunction be it

statutory or otherwise involving equitable considerations

and the same being purely discretionary in nature though

ordered only on the exigencies of the situation and not as a

matter of course in accordance with the known principles of

law. 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. The decision of this Court

in Wander Ltd. Vs.Antox India P.Ltd. (1990 Supplement SCC

727) lend support to the observations as above. This Court

in paragraph 9 of the Report observed: "Usually, the prayer

for grant of an interlocutory injunction is at a stage when

the existence of the legal right asserted by the plaintiff

and its alleged violation are both contested and uncertain

and remain uncertain till they are established at the trial

on evidence. The court, at this stage, acts on certain well

settled principles of administration of this form of

interlocutory remedy which is both temporary and

discretionary. The object of the interlocutory injunction,

it is stated

"..is to protect the plaintiff against injury by

violation of his rights for which he could not adequately be

compensated in damages recoverable in the action if the

uncertainty were resolved in his favour at the trial. The

need for such protection must be weighed against the

corresponding need of the defendant to be protected against

injury resulting from his having been prevented from

exercising his own legal rights for which he could not be

adequately compensated. The Court must weigh one need

against another and determine where the `balance of

convenience' lies."

The interlocutory remedy is intended to preserve in

status quo, the rights of parties which may appear on a

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prima facie case. The court also, in restraining a

defendant from exercising what he considers his legal right

but what the plaintiff would like to be prevented, puts into

the scales, as a relevant consideration whether the

defendant has yet to commence his enterprise or whether he

has already been doing so in which latter case

considerations somewhat different from those that apply to a

case where the defendant is yet to commence his enterprise,

are attracted."

Incidentally, the House of Lords prior to the decision

in American Cyanamid Co. vs. Ethican Ltd. [ 1975 (1) All

ER 504] in J.T. Stratford & Sons Ltd. Vs. Lindley (1965

AC 269) in no uncertain terms laid down that the plaintiff

had to show a strong prima facie case that his rights has

been infringed and thereafter the plaintiff was required to

show that the damages would not be an adequate remedy in the

event of there being a success of the plaintiff at the trial

and that the balance of convenience favoured the grant.

This requirement, however, in the matter of grant of an

injunction so far as the English Courts are concerned,

stands slightly diluted by reason of the decision in

American Cyanamid's case (supra) which records that in the

event of there being a serious issue to decide, the grant

would be available to a plaintiff on however, compliance

with the other fundamentals as noticed below. A strong

prima facie case, therefore, stands substituted by a serious

issue to be decided.

At this juncture, however, the decision of the House

of Lords in American Cyanamid's case though raised certain

eye-brows lately, ought to be considered in slightly more

greater detail. Lord Diplock in Cyanamid's case laid down

the following guiding principles for the grant of

interlocutory injunction: (1) "The plaintiff must first

satisfy the Court that there is a serious issue to decide

and that if the defendants were not restrained and the

plaintiff won the action, damages at common law would be

inadequate compensation for the plaintiff's loss.

(2) The Court, once satisfied of these matters will

then consider whether the balance of convenience lies in

favour of granting injunction or not, that is, whether

justice would be best served by an order of injunction.

(3) The Court does not and cannot judge the merits of

the parties `s respective cases and that any decision of

justice will be taken in a state of uncertainty about the

parties' rights."

It would seem to follow therefore, that what should be

borne in mind, in addition to what has been phrased in Lord

Diplock's speech, is that if there is uncertainty, the Court

should be doubly reluctant to issue an injunction, the

effect of which is to settle the parties' rights once for

all. On a clear analysis of the speech of Lord Diplock, it

appears that if damages, recoverable at common law, would be

an adequate remedy and the defendant would be in a financial

position to pay the same, no interlocutory injunction should

normally be granted, howsoever strong the plaintiff's claim

appear to be at that stage. Lord Diplock went on to observe

further that in the event of there being any doubt, as to

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the adequacy of the respective remedies and damages

available to either party or both, then and in that event,

the question of balance of convenience arises and the same

will vary from case to case. Similar view has also been

expressed by the House of Lords in the case of Dimbleby &

Sons Ltd Vs. National Union of journalists (1984 1 ALL ER

751). In Power Control Appliances Vs. Sumeet Machines Ltd.

(1994 (2) SCC 448) this Court did follow the decision of

this Court in Antox India's case (supra) and expressly

approved the main dicta of the House of Lords in American

Cyanamid's case. In Gujarat Bottling Co. Ltd. Vs. Coca

Cola Co. & Ors., (1995 (5) SCC 545: AIR 1995 SC 2372) this

Court however sounded a different note, though however,

emphasised the discretionary power in the matter of grant of

interlocutory injunction and in paragraph 43 this Court

observed: "43. The grant of an interlocutory injunction

during the pendency of legal proceedings is a matter

requiring the exercise of discretion of the court. While

exercising the discretion the court applies the following

tests - (i) whether the plaintiff has a prima facie case;

(ii) whether the balance of convenience is in favour of the

plaintiff; and (iii) whether the plaintiff would suffer an

irreparable injury if his prayer for interlocutory

injunction is disallowed. The decision whether or not to

grant an interlocutory injunction has to be taken at a time

when the existence of the legal right assailed by the

plaintiff and its alleged violation are both contested and

uncertain and remain uncertain till they are established at

the trial on evidence. Relief by way of interlocutory

injunction is granted to mitigate the risk of injustice to

the plaintiff during the period before that uncertainty

could be resolved. The object of the interlocutory

injunction is to protect the plaintiff against injury by

violation of his right for which he could not be adequately

compensated in damages recoverable in the action if the

uncertainty were resolved in his favour at the trial. The

need for such protection, has, however, to be weighed

against the corresponding need of the defendant to be

protected against injury resulting from his having been

prevented from exercising his own legal rights for which he

could not be adequately compensated. The court must weigh

one need against another and determine where the "balance of

convenience" lies. (see: Wander Ltd. Vs. Antox India (P)

Ltd, (1990 (supp) SCC at pp.731-32.) In order to protect the

defendant while granting an interlocutory injunction in his

favour the court can require the plaintiff to furnish an

undertaking so that the defendant can be adequately

compensated if the uncertainty were resolved in his favour

at the trial".

As noted above, lately the `triable issue concept' as

introduced by Lord Diplock in Cyanamid's case has been

thought to be much too rigid and wide even conceptually and

doubts are even raised as to its legal efficacy having

regard to the facts of adequate compensation theory. As a

matter of fact the Courts in England have even gone to the

extent of ascribing the judgment to be beneficial for the

richer sections of the society! We however can not

subscribe to such a view, neither find any justification for

such uncharitable comments and it seems that Cynamid's

decision has been more misunderstood than understood and in

this regard we record our concurrence with the views

expressed by Laddie J. in Series 5 Software Vs. Clarke and

Others in 1996 (1) ALL ER 853 wherein the learned Judge has

explained the judgment of American Cyanamid with extreme

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competency and in our view also correctly Laddie, J.

observed: "In many cases before American Cyanamid the

prospect of success was one of the important factors taken

into account in assessing the balance of convenience. The

courts would be less willing to subject the plaintiff to the

risk of irrecoverable loss which would befall him if an

interlocutory injunction was refused in those cases where it

thought he was likely to win at the trial than in those

cases where it thought he was likely to lose. The

assessment of the prospects of success therefore was an

important factor in deciding whether the court should

exercise its discretion to grant interlocutory relief. It

is this consideration which American Cyanamid is said to

have prohibited in all but the most exceptional case. So it

is necessary to consider with some care what was said in the

House of Lords on this issue.

Lord Diplock said ([1975] 1 ALL ER 504 at 511, [1975]

AC 396 at 409):

`..if the extent of the uncompensatable disadvantage

to each party would not differ widely, it may not be

improper to take into account in tipping the balance the

relative strength of each party's case as revealed by the

affidavit evidence adduced on the hearing of the

application.. The court is not justified in embarking on

anything resembling a trial of the action on conflicting

affidavits in order to evaluate the strength of either

party's case.'

It appears to me that there is nothing in this which

is inconsistent with the old practice. Although couched in

terms `it may not be improper', this means that it is

legitimate for the court to look at the relative strength of

the parties' case as disclosed by the affidavits. The

warning contained in the second of the quoted sentences is

to avoid courts at the interlocutory stage engaging in mini-

trials, which is what happened, at least in the Court of

Appeal, in American Cyanamid itself. Interlocutory

applications are meant to come on quickly and to be disposed

of quickly.

The supposed problem with American Cyanamid centres on

the following statement by Lord Diplock 9([1975] AC 396 at

409):

`[Asssessing the relative strength of the parties'

cases], however, should be done only where it is apparent

upon the facts disclosed by evidence as to which there is no

credible dispute that the strength of one party's case is

disproportionate to that of the other party.'

If this means that the court cannot take into account

its view of the strength of each party's case if there is

any dispute on the evidence, as suggested by the use of the

words `only' and `no credible dispute', then a new

inflexible rule has been introduced to replace that applied

by the Court of Appeal. For example, all a defendant would

have to do is raise a non-demurable dispute as to relevant

facts in his affidavit evidence and then he could invite the

court to ignore the apparent strength of the plaintiff's

case. This would be inconsistent with the flexible approach

suggested in Hubbard v. Vosper [1972] 1 ALL ER 1023, [1972]

2 QB 84 which was cited with approval earlier in American

Cyanamid [1975] 1 ALL ER 504 at 510, [1975] AC 396 at 407.

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Furthermore, it would be somewhat strange, since American

Cyanamid directs courts to assess the adequacy of damages

and the balance of convenience, yet these too are topics

which will almost always be the subject of unresovled

conflicts in the affidavit evidence.

In my view Lord Diplock did not intend by the

last-quoted passage to exclude consideration of the strength

of the cases in most applications for interlocutory relief.

It appears to me that what is intended is that the court

should not attempt to resolve difficult issues of fact or

law on an application for interlocutory relief. If, on the

other hand, the court is able to come to a view as to the

strength of the parties' cases on the credible evidence,

then it can do so. (Emphasis supplied)."

The learned Judge, thereafter went on to record that

the House of Lords in American Cyanamid did not suggest that

it was changing the basis upon which most courts had

approached the exercise of discretion in this important

area. Thus on an analysis of the decisions as noticed

above, there does not seem to be any difficulty in

appreciating the view as expressed by Lord Diplock in

American Cynamid. As a matter of fact, Laddie, J.'s

decision in Series 5 Software case (supra) has been able to

resolve the issue without any departure from the true

perspective of the judgment as noticed above. We, however,

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 adversly affect the interest

of general public which can or cannot be compensated

otherwise.

It is on this backdrop that exercise of discretion by

the Commission shall have to be considered and it is at this

juncture certain further factual details ought to be noted.

On the factual score it appears that the appellant started

its advertisement campaign for `Colgate Dental Cream' using

the phrase "Stop bad breath" and "Fight tooth decay" from

1960. The user of the words `Suraksha Chakra' commenced

however from the year 1985. The records depict that in

March 1997 the Respondent in Civil Appeal No.2620 of 1998

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being Hindustan Lever, complained to the Advertising

Standards Council of India (ASCI) against Appellant's

advertisement in respect of Colgate Dental Cream. The

Consumer Complaints Council of ASCI scrutinised the

appellant's advertisement in detail and came to a finding

that the same does not in any way be termed to be unfair or

deceptive. Significantly, however, though there is existing

a provision for review, the respondent has chosen not to

proceed with the matter and allowed the matter to be set at

rest. Subsequently, however on 15th October, 1997, the

appellant herein filed a complaint before the MRTP

Commission being No.UTPE 405 of 1997 against respondent by

reason of the Respondent's advertisement wherein it has been

stated that the Respondent's product "New Pepsodent" had

102% more germ- fighting capability as compared to the

`leading toothpaste'. According to the Appellant this

`leading toothpaste' cannot but refer to `Colgate

Toothpaste' and as such the advertisement is directly aimed

at disparagement of appellant's product namely Colgate

Dental Cream and it only thereafter the respondent herein on

22nd October 1997, filed a complaint before MRTP Commission

against Appellant's advertisement in respect of `Colgate

Dental Cream' which is ascribed to be purely as a counter

blast. We are not however expressing any opinion in that

regard. Be that as it may, records depict that the

complaint initiated by the respondent herein contained three

specific grievances relevant extracts thereof are set out

herein below:- "For the purpose of promoting the sale, use

and supply of its said product, Colgate Dental Cream, the

Respondent has been using television, POP (Point of

Purchase), hoardings, radio and press advertisement

campaigns, which contain statements which are false and

misleading. T.V. advertisements and storyboards of the

same in Hindi, along with their English translation, is

annexed hereto and marked as Annexure 1 (collectively). A

copy of POP is also enclosed as Annexure 2.

In the said advertisements for promotion of sale of

Colgate Dental Cream (CDC), the Respondent has inter alia,

made the following claims, which it is submitted, are both

false and misleading: a) The Respondent's CDC toothpaste is

claimed to have action of `Germ Fighter', which is projected

as a process by which germ activity (which is the root cause

of oral problems viz. tooth decay and bad breath) is

controlled.

b) The Respondent's CDC toothpaste is stated to have

the ability to `fight tooth decay'.

c) The Respondent's toothpaste is stated to have the

ability to `Stop bad breath'.

The above mentioned claims are false and highly

misleading qua the consumers and trade.

It is submitted that the advertisement of the

Respondent's CDC toothpaste purport to set up "germs" as the

cause of both toothdecay and bad breath. It then suggests

that Colgate Dental Cream has a special "Germ Fighter". The

advertising then goes on to suggest that as a result the

toothpaste offers the benefit of Stops Bad Breath, Fights

Toothdecay" and provides a ring or circle of safety or

protection. The complainant craves leave to refer to and

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rely upon cassettes of all these TV advertisements at the

time of hearing.

The Complainant/Informant believe the impugned

advertisement of Colgate Dental Cream has been on air since

August 1996 claiming "Germ Fighter" proposition. Prior to

the impugned advertisement no claim of any "Germ fighter"

was made in respect of CDC. However, for last more than one

year the Respondent have introduced new advertising in which

this new claim has been made even though there has been no

change in the ingredients of Colgate Dental Cream.

Storyboards of the advertising before August'96 are annexed

hereto and marked Annexure 3."

It therefore, appears that 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. The complaint itself further records that

the advertisement of the appellant purport to suggest that

Colgate Dental Cream has a special germ fighter and

thereafter the complainant records as a result, the

toothpaste offers the benefit of stoppage of `bad breath'

and `tooth decay' and thus provides the ring of safety or

protection and it is on this perspective Mr. Desai

contended that since the principal grievance pertains to the

three broad-heads as above and the ring cannot but be termed

to be an incidental issue on which, the order of injunction

is wholly unwarranted. Mr. Desai, in support of the appeal

further contended that the allegations of unfair and

restrictive trade practices is rather a serious allegation

of misconduct as regards the trade and there ought to be

specific pleading in the complaint as also in the notice of

inquiry together with full particulars thereof and in the

absence of which, question of any credence thereto does not

arise, for less the grant of an order of injunction as has

been granted by the Commission and impugned in this appeal.

In order however, to assess the substance of the point in

issue as raised by Mr. Desai, a look at Section 36A may be

convenient at this juncture. Section 36A defines "unfair

trade practice" as a trade practice which for the purpose of

promoting the sale, use or supply of any goods or for

provision of any services, adopts any unfair method or

unfair or deceptive practice as mentioned in the Section and

thereby causes loss or injury to the consumer of such goods

or services, whether by eliminating or restricting

competition or otherwise and in this context specific

reference may be made to specific sub-Sections appended

thereunder which are of some relevance and as such noted

herein below:- (i) "falsely represents that the goods are of

a particular standard, quality, [quantity] grade,

composition, style or model;

(ii) falsely represents that the services are of a

particular standard, quality or grade;

(v) represents that the seller or the supplier has a

sponsorship or approval or affiliation which such seller or

supplier does not have;

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(vi) makes a false or misleading representation

concerning the need for, or the usefulness of, any goods or

services;

(vii) gives to the public any warranty or guarantee of

the performance, efficacy or length of life of a product or

of any goods that is not based on an adequate or proper test

thereof;

Provided that where a defence is raised to the effect

that such warranty or guarantee is based on adequate or

proper test, the burden of proof of such defence shall lie

on the person raising such defence;

(viii) makes to the public a representation in a form

that purports to be -

(i) a warranty or guarantee of a product or of any

goods or services; or

(ii) a promise to replace, maintain or repair an

article or any part thereof or to repeat or continue a

service until it has achieved a specified result,

if such purported warranty or guarantee or promise is

materially misleading or there is no reasonable prospect

that such warranty, guarantee or promise will be carried

out;

(ix) gives false or misleading facts disparaging the

goods, services or trade of another person."

It is in this context however that the observations of

this Court in Lakhanpal's case (Lakhanpal National Ltd. Vs.

MRTPC 1989 (3) SCC 251) is rather apposite. This Court in

paragraph 7 of the report observed: "7. However, the

question in controversy has to be answered by construing the

relevant provisions of the Act. The definition of "unfair

trade practice" in Section 36-A mentioned above is no

inclusive or flexible, but specific and limited in its

contents. The object is to bring honesty and truth in the

relationship between the manufacturer and the consumer.

When a problem arises as to whether a particular act can be

condemned as an unfair trade practice or not, the key to the

solution would be to examine whether it contains a false

statement and is misleading and further what is the effect

of such a representation made by the manufacturer on the

common man? Does it lead a reasonable person in the

position of a buyer to a wrong conclusion? The issue cannot

be resolved by merely examining whether the representation

is correct or incorrect in the literal sense. A

representation containing a statement apparently correct in

the technical sense may have the effect of misleading the

buyer by using tricky language. Similarly a statement,

which may be inaccurate in the technical literal sense can

convey the truth and sometimes more effectively than a

literally correct statement. It is, therefore, necessary to

examine whether the representation, complained of, contains

the element of misleading the buyer. Does a reasonable man

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on reading the advertisement form a belief different from

what the truth is? The position will have to viewed with

objectivity, in an impersonal manner. It is stated in

Halsbury's Laws of England (4th edn., paragraphs 1044 and

1045) that a representation will be deemed to be false if it

is false in substance and in fact; and the test by which

the representation is to be judged is to see whether the

discrepancy between the fact as represented and the actual

fact is such as would be considered material by a reasonable

representee. "Another way of stating the rule is to say

that substantial falsity is, on the one hand, necessary,

and, on the other, adequate, to establish a

misrepresentation" and "that where the entire representation

is a faithful picture or transcript of the essential facts,

no falsity is established , even though there may have been

any number of inaccuracies in unimportant details.

Conversely, if the general impression conveyed is false, the

most punctilious and scrupulous accuracy in immaterial

minutiae will not render the representation true". Let us

examine the relevant facts of this case in this background."

Similar is the finding of this Court that "for holding

a trade practice to be unfair trade practice, therefore, it

must be found that it causes loss or injury to the consumer"

(emphasis supplied) ( H.M.M. Ltd. vs. Monopolies &

Restrictive Trade Practices Commission): (1998) 6 Supreme

Court Cases 485 at 490. In the instant matter 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. The rigours of

American Cynamid and subsequent modulations thereof by the

other English decisions along with the observations of

Laddie, J. (supra) do not in any event run counter the

observations as above. 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

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its proper perspective but unfortunately there is a total

lack of the same in the instant matter.

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. In this context a passage from Anson's Law of

Contract, (27th Edn.) may be of some relevance and the same

is quoted herein below:-

"Commendatory expressions, such as advertisements to

the effect that a certain brand of beer `refreshes the parts

that other beers cannot reach', or that an after-shave

lotion is irresistibly attractive to the opposite sex, are

not dealt with as serious representations of fact. A

similar latitude is allowed in private contracts to a man

who wants to gain a purchaser, though it must be admitted

that the borderline of permissible assertion is not always

easily discernible. At a sale by auction, land was stated

to be `fertile and improvable'; it was in fact partly

abandoned and useless. This was held to be a mere

flourishing description by an auctioneer' [Dimmock v.

Hallett (1866), LR 2, Ch. App. 21]. But where in a sale

of a hotel the property was said to be let to `a most

desirable tenant', whereas his rent could only be obtained

under pressure and was currently much in arrear, such a

statement was held to entitle the purchaser to rescind the

contract. [Smith v. Land and House Property Corporation

(1884) 28 Ch. D.7]

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

commendatio non obligat' - 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. On this score

Mr. Desai contended that when there is an advertisement and

the same is said to have constituted an unfair trade

practice, the Commission has to examine the advertisement as

a whole and assess its impact on the users and viewers. An

advertiser is permitted to indulge in some amount of

exaggeration or hyperbole since an advertisement is not an

affidavit and as such question of going into the same to its

`letter' does not arise and it is on this context, strong

reliance was placed on the decision of this Court in the

case of Tata Press v. M.T.N.L. [1995 (5) SCC 139] in which

this Court held that commercial speech is a part of the

freedom of speech and expression of guarantee under Article

19(1)(a) of the Constitution. We do not however, think it

fit to express any opinion in regard thereto since the

matter does not warrant such a detailed discussion on this

aspect of the matter at this stage. The other aspect of the

matter on which strong reliance was placed by Mr. Desai is

the delay involved in the matter. Admittedly "Suraksha

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Chakra" featured continuously in the appellant's

advertisement since the year 1985 without any demur or

protest from any quarter and not even from the complainant.

As noticed above on the factual score that the complaint was

filed as late as on 22.10.1997 immediately after the

appellant's complaint against the advertisement in respect

of `New Pepsodent' and it is on this score that Mr. Desai

contended that the finding of the Commission as regards

"Suraksha Chakra" or the grant of an interim order of

injunction in regard thereto does not and cannot arise. Mr.

Desai ascribed this move of the respondent herein as nothing

but a counter blast and we do find some justification in

regard thereto. The Commission according to Mr. Desai was

in clear error when it recorded that "Suraksha Chakra" was

assailed first before the Commission. Mr. Desai contended

that "Suraksha Chakra" was not at all an independent

complaint and at least cannot but be ascribed to be merely

an incidental one by reason of the three specific complaints

as noticed above. Mr. Desai contended that the Commission

as a matter of fact was persuaded to issue interim order

pertaining to "Suraksha Chakra" by reason of the factum of

an order of injunction granted by the Federal Trade

Commission in the United States of America wherein a

complaint was made in respect of Colgate Dental Cream with

Gardol in November 1959 in the United States. In the U.S.

advertisement incidentally, there was an invisible shield

protecting the tooth. But in the facts of the matter under

consideration, there is no such protection as was offered in

the United States but it is the resultant effect of the

foaming action which stops bad breath and toothdecay and the

entire family would be safe so far as toothdecay is

concerned. `Suraksha' has a meaning in common acceptation

and implies safety and `Chakra' mean a wheel or a disc and

the words put together as `Suraksha Chakra' cannot be

equated or be understood to mean an invisible shield which

would protect the tooth as was available in the U.S.

advertisement. In this context it would be pertinent to

note the observations of the Commission pertaining to its

order of the grant of injunction. The Commission stated:

"In the complaint the respondent's parent company in

USA was alleged to have made false, misleading and deceptive

representations in advertising CDC with Gardol. The print

and television advertisements gave the impression to the

prospective purchasers of CDC with Gardol that persons who

brush their teeth with that toothpaste would prevent decay

from getting to their teeth as an invisible protective

shield around the teeth is formed by CDC with Gardol. The

TV advertisement depicted a coconut, tennis ball and lariat

being thrown towards a person but, the coconut, tennis ball

and lariat bounce off and do not reach the person at whom

they are thrown because of an invisible transparent glass

shield as also in no way damaged or penetrated. The

advertisement of invisible shield and representation as to

the degree or extent of protection was found to be false,

misleading and deceptive by the FTC and an order was passed

directing the respondent's parent company to cease and

desist from representing directly or by implication that CDC

with Gardol afforded to users complete protection against

tooth decay or development of cavities in their teeth. It

was also brought to our notice that although the respondent

had voluntarily abandoned the impugned advertisements and TV

commercials during the course of hearing before FTC and gave

an undertaking not to display the advertisement, containing

the objectionable claim of invisible protective shield, the

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above cease and desist order was passed because the

assurance given by the respondent's parent company, was not

considered sufficient for ruling out the likelihood of

resumption of the impugned advertisements and unfair trade

practice in some other form. It was also pointed out that

since no appeal was filed, this order of FTC had become

final."

Let us now however consider 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 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 and it is in this perspective as

a matter of fact the complainant records in the complaint:

"The Complainant carried out in their Research Centre

well accepted test to study the anti-bacterial efficacy, if

any, of the CDC. The Executive Summary of the test shows

that:-

Contact Germ Kill test (Ref. - Spangler S.K. Jacobs

MR, and Applebaum PC, J of Antimicro Chemo Therapy 39 (suppl

B) p23, 1997).

"The test data shows that Colgate Dental Cream has no

significant impact on the survival rate of oral bacterial

during the contact of 60 seconds which is more than the

average brushing time of consumers. The same test done for

toothpaste will standard anti-bacterial agent shows a

significant drop in the survival rate of these bacteria

under similar conditions". The Complainant craves leave to

refer to and rely upon the detailed report, enclosed as

Annexure 6.

The analytical report clearly establishes that Colgate

Dental Cream has no proven anti-bacterial ingredient nor

dies it have any significant anti- bacterial activity or

effect. The claim made in the advertising are not proved

and/or substantiated scientifically/technically and are thus

false and misleading.

In India the ability of a toothpaste to protect

against harmful oral germs is a very compelling consumer

benefit. A national survey of consumers done by the

complainant/informant in 1994 showed that 55% of all

consumers see `ability to fight germs' as the most important

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attribute of a toothpaste. In fact, germ protection is a

strong source of competitive advantage in the market. As

such, any claim in this area, must be backed by proven

efficacy of the product to combat the threat of harmful oral

bacteria.

The Respondent is thus making advertising claims on

Colgate Dental Cream for promoting sale of Colgate Dental

Cream that are misleading and false, to gain unfair

advantage in the market place to the extent of monopolising

the toothpaste market, beyond the intrinsic quality of the

product. The Respondent has also been making the claim of

`fights toothdecay' for promoting sale of Colgate Dental

Cream. This claim again is false and absolutely misleading.

It is a scientifically established fact that the well known

agent that can fight "toothdecay" is Fluoride. More than

100 long term clinicals have been carried out to show in

unequivocal terms that fluoride is capable of reducing

toothdecay. The complainant enclose a summary of literature

on toothdecay and the role of fluoride in reducing the same

in support of the fact that presence of `fluoride' can help

in reducing tooth decay. (Annexure 8 (Colly).

The Complainant/informant submits that Colgate Dental

Cream does not have soluble fluoride. The fact that Colgate

Dental Cream does not have soluble fluoride can be

ascertained from the pack of Colgate Dental Cream (copy CDC

pack photocopy is enclosed as Annexure 9).

The Complainant further submits that even the claim of

"Stops Bad Breath" is false and misleading, as bad breath is

the result of action of oral bacteria that act on proteins

present in saliva or food particles giving Volatile Sulphur

Compounds (VSC) like hydrogen sulphide and Indoles. These

compounds are volatile and are currently considered as root

cause of bad breath. Process of generation of VSCs is well

reported (Steenberghe van D and Rosenberg M (ed.), Lueven

University Press 1995).

The Respondent has also published a report (Niles

H.P., J dent. Res.73 sp.issue, Abst. No.1579)

demonstrating that reduction in VSCc can be achieved by

using triclosan in the toothpaste. A placebo (without

triclosan) showed no effect over and above the negative

control. Demonstration of reduction in VSC is pre-requisite

for making claims on bad breath. It is, therefore, clear

that Colgate Dental Cream which does not contain triclosan,

can not supress the bad breath leave alone "stops" it."

(Emphasis supplied)

The averments as above unmistakably therefore, depict

that it is on the basis of laboratory tests that the

complainant has found that representation is not correct and

it is on this perspective that Mr. Desai also contended

that the entire grievance of the complainant has to be

decided on the basis of the evidence at the time of the

trial but not at any stage prior thereto. As a matter of

fact the Commission itself, as noted above, has recorded

such a finding, but after recording the same, came to find

about `Suraksha Chakra' and we find some justification in

Mr. Desai's criticism as regards the non application of

mind in the matter of passing of an order of injunction as

impugned in this appeal. 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

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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.

Mr. Salve appearing for the Respondent/Complainant

strongly contended that by using `Suraksha Chakra' in the

commercial advertisement specially in Hindi, the appellant

has, in fact, targeted the ordinary common man in the Hindi

belt so as to give an expression that the toothpaste as

matter of fact provides a durable and permanent protection

with respect to germs, toothdecay and bad breath to the

entire family and "Suraksha Chakra" depicts the same. Mr.

Salve contended that at this stage, question of there being

any definite finding on any of the issues would not arise

since only an arguable case is required to be made out at

this juncture. Probably an arguable case leading to the

establishment of the prima facie case is required - we have

dealt with this issue in the early part of this judgment and

as such we need not detain ourselves on this score but the

fact remains that question of the balance of convenience of

the parties have not been dealt with or discussed in the

order of the Commission. Mr. Salve in continuation of his

submission contended that there is, in fact, a cross appeal

by the Complainant by reason of the failure of the

commission to pass orders as regards the three limbs of the

advertisement namely `germ fighting', `toothdecay' and `bad

breath' and the fact however remains that the Commission was

otherwise satisfied that this cannot but be termed to be a

case similar in nature as was heard by the Federal Trade

Commission wherein the invisible shield was taken recourse

to by the appellants. Mr. Salve contended that at least

there would be an arguable case by reason of the order of

FTC and as such question of interference in Appeal by this

Court in terms of provisions of Section 55 does not arise

more so by reason of the fact that the Commission has not

returned any finding as regards the three principal issues

but passed an order of injunction only as regards the

`Suraksha Chakra' by reason of the specific order of the FTC

as noticed above.

The submission of Mr. Salve at the first blush is

rather attractive that at this stage we are not really

concerned with the factum of establishment of any truth or

falsity but merely a prima facie case or an arguable case

resulting in establishment of a prima facie case and in that

perspective the issue therefore emerges as to whether such a

prima facie case has been made out or not - we are however

afraid that the answer cannot but be the negative. 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 dis- similar. 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 ort

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

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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. Mr.

Salve next contended that the complaint pertains to

vindication of a public right and since the public interest

is involved, question of any delay for moving the Commission

does not arise and more so, it is a remedy to public wrong

and not being a personal relief. We are, however, unable to

record our concurrence at this juncture. Public wrong, if

any, needs to be assessed and proved, without which question

of having an order of injunction would not arise. While it

is true that the relief prayed for is statutory in nature

but that does not clothe the Commission to pass orders de

hors the basic principles of law. In fine, the submission

of Mr. Desai as regards 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

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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. In that view of the

matter question of there being any order of injunction at

this stage of the proceeding on the face of the finding as

passed by the Commission itself does not and cannot arise.

The Appeal No.2620 of 1998 (Colgate Palmolive (India) Ltd.

vs. Hindustan Lever Ltd.) therefore succeeds: The Appeal

as filed by the complainant being No.3288 of 1998 (Hindustan

Lever Ltd. vs. Colgate Palmolive (India) Ltd.) stands

dismissed. Each party to bear its own cost. Be it recorded

that any observation made in this order shall not in any way

effect the hearing of the matter before the Commission and

the Commission would be at liberty to deal with the matter

in accordance with the law and without being inhibited by

any observations made in this order.