Calcutta High Court
Heinz India Private Limited vs Glaxo Smithkline Consumer Healthcare ... on 16 March, 2009
Author: Biswanath Somadder
Bench: Surinder Singh Nijjar, Biswanath Somadder
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
PRESENT :
The Hon'ble Chief Justice Surinder Singh Nijjar
And
The Hon'ble Justice Biswanath Somadder
APO No. 64 of 2007
APOT No. 91 of 2007
C.S. No. 235 of 2004
HEINZ INDIA PRIVATE LIMITED
VERSUS
GLAXO SMITHKLINE CONSUMER HEALTHCARE LIMITED & Ors
Appearance:
For the Appellant : Mr. S.K. Kapoor, Sr. Advocate,
Mr. I. P. Mukherjee,
Mrs. Sudeshna Bagchi.
For the Respondent: Mr. Anindya Mitra, Sr. Advocate,
Mr. S. P. Sarkar. Sr. Advocate, Mr. S. Sen, Mr. D. Sen, Mr. Nandan Dasgupta.
Heard on : 5.1.09, 4.2.09, 9.2.09 and 10.2.09. Judgment on : 16.03.09
Surinder Singh Nijjar, C.J. - This appeal is directed against the judgment of the Learned Single Judge G.A. No. 3352 of 2004 in C. S. No. 235 of 2004 dated 27th October, 2006. By the aforesaid judgment the Learned Single Judge has confirmed the ad interim order of injunction passed on September 3, 2004. The ad interim order of injunction was granted in terms of Prayer
(b) which is reproduced hereunder:
"(b) Perpetual injunction restraining the defendant no. 1 and its servants, agents or assigns from publishing any advertisement similar or substantially similar to the advertisement published in Ananda Bazar Patrika being annexure "E-1" hereto and from continuing to telecast or causing to be telecast only further the advertisement/publicity similar to or substantially similar to the advertisement mentioned in paragraph 13 hereof, a copy whereof is annexure "E-1" hereto or containing any comparison with Brand 'H' of any brand referring to HORLICKS directly or indirectly."
The plaintiff claims that amongst the nutritional and healthcare products manufactured and sold by the plaintiff, one of the most popular products is 'Horlicks', a health food drink which has been selling in India and several other countries like U.K., Malaysia, Hong Kong, Australia, South Africa and Singapore for well over 100 years. 'Horlicks' is the leading brand in the health food drinks market in India and is well known both for its quality and long standing reputation. It is also claimed that 'Horlicks' is the leader in the health food drinks market commanding, as recently as April 2004, over 50% of the all India market, 69.2% of the West Bengal market and 53% of the South India market.
The plaintiff has filed the Suit against the first defendant for illegal disparagement of its goods. It is also the case of the plaintiff that the disparagement is being continued on the electronic as well as print media through the active cooperation of the other defendants.
The advertisement complained of runs on the following lines.
"(i) The advertisement starts off by showing a school bus and kids rushing to get in to it. The TV advertisement first shows one school boy laughing, then shows two girls laughing and finally shows all the school children laughing at the attempt of one school boy hanging from the central bar in the bus apparently in a desperate bid to gain some height.
(ii) A smart school boy walks upto the boy hanging from the central bar in the bus who is being laughed at and ridiculed by all other school children. He is advised by the smart boy to ask his mother to give him Complan which is necessary for growing up (growing tall).
(iii) Two cups are then projected - one murky brown cup with 'Brand H' written thereon and the other pure and extra white cup with 'Complan' written thereon. In the background of the TV frame there is scale shown behind the murky brown cup of Brand H. A white coloured liquid is poured into the Brand H cup while a brown coloured liquid is poured into the white coloured Complan cup. There is a visual depiction of the Complan cup growing in height and becoming almost double the height of the Brand H cup, which registers nil growth.
(iv) While this visual depiction of extra growth is being shown for the Complan cup as compared to the Brand H cup, there is a voice over which strongly and emphatically claims that Complan has 100% more milk protein than Brand H ......23 vital nutrients that give extra growing power.
(v) The advertisement proceeds to show the same boy, who had been previously hanging on the central bar of the bus, laughing and vaving his hand. He is asked by the same smart boy as to whether his mother has started giving him Complan. He replies in the affirmative and compares the increase in his height to his friend and finds that he is as his friend. He proudly declares that he too now was a Complan boy.
(vi) The Complan TV advertisement ends on the note 'Complan, extra growing power, enjoyable taste'."
According to the plaintiff, the advertisement is telecast in Bengali on various T.V. Channels of defendant nos. 2, 3 and 4.
The Plaintiff claims that Brand 'H' in the advertisement is intended to suggest to the viewers that it refers to the plaintiff's drink 'Horlicks'. The advertisement is being telecast on various TV Channels of defendant nos. 2, 3 and 4 in Bengali as well as in south Indian languages. The advertisements have been published in Anandabazar Patrika at Calcutta on August 8, 2004 but the same has not been repeated in other newspapers from West Bengal. This advertisement also reveals that the intention of the defendant no. 1 is to disparage 'Horlicks' as the health food drink by making statements that 'Horlicks' is a low quality drink and does not have extra growing power which 'Complan' has. The advertisement amounts to malicious falsehood and slander of 'Horlicks', a rival product of 'Complan'.
The plaintiff claims to have commissioned market survey to assess the adverse of the advertisement campaign the survey reveals that 81% of the viewers of the advertisement telecast in Bengal believe that the hanging boy used to drink 'Horlicks' before becoming a 'Complan' boy. Similar survey conducted by IMRB in Chennai reveals that 58% of the viewers believe that the hanging boy used to drink 'Horlicks' or 'Boost' before becoming a Complan boy. The over simplification of the complex phenomenon of growth in fleeting advertisement of 35 seconds is clearly designed to undermine the product of the plaintiff in the published perception. The suggestion of growth only through milk protein to the exclusion of all other important factors is not only simplistic but also false.
The plaintiff emphasized that the purpose of the misleading advertisement is to disparage the use of 'Horlicks' by suggesting that it is a poor quality drink and unfit for the purpose for which it is promoted and sold. The plaintiff emphasized the falsity of the claim by defendant no. 1 that consumers of 'Complan' are bound to grow faster than the consumers of Horlicks who would not be having that advantage. The advertisement falsely compared the growth of children consuming Complan with a total of growth in case the consumers of 'Horlicks'. To equate growth only with increasing the height is false. The similar use of expression Brand 'H' was restrained by an injunction issued by the MRTP Commission by its order dated 18.11.1996. After desisting from using the comparison, Defendant no. 1 has resumed the use of Brand 'H' in the advertisement since 8th August, 2004.
On the other hand, the defendant no. 1 claims that no cause of action has arisen in favour of plaintiff and against the respondents/defendants in the suit consequently the interlocutory petition was liable to be dismissed. The plaintiff is not entitled to claim any relief against the right of the respondent no. 1 to carry on its business. The relief prayed for by the plaintiff is in violation of right of freedom and expression as guaranteed under the Constitution of India. The Suit has been instituted mala fide and with the ulterior motive and purpose to stifle the competition in business which amounts to putting unreasonable restriction on the right to carry on business by respondent no. 1. The suit is said to be barred by the principles of waiver, estoppel, acquiescence and/or principles analogous thereto. No interlocutory relief can be granted to the petitioner on the ground of delay as also that the plaintiff has failed to make out a prima facie case for grant of any interlocutory relief.
The defendants claim that the advertisement correctly depicts that the product 'Complan' contains 100% more milk protein than Brand 'H'. It is also stated as a fact that milk protein gives growing power. It is also correct that 'Complan' has 23 vital nutrients and it is also correct that 'Complan' has growing power and enjoyable tastes. Thus, growth sequence does not disparage the production of 'Horlicks' in any manner whatsoever. The advertisement gives true and correct information with regard to the product of respondent no. 1. This apart the entire case set up by the plaintiff has been denied and it is disputed that there is any suggestion that growth is only due to milk protein to the exclusion of all other factors. The respondent stresses the importance of milk protein as an important body building material. It is stated that protein which is available in foods like milk, meat, fish etc. or higher quality than vegetable proteins for growing of children and women during pregnancy and lactation protein requires are greater and, therefore, it is desirable to consume a combination of foods. The source of animal protein for growing children is milk. Therefore, milk has to find a permanent place in any balanced diet, particularly, in a vegetarian diet to provide good quality protein, sufficient calcium and riboflavin. In support of this assertion, the respondents also relied upon number of expert groups including Indian Council of Medical Research (ICMR).
The Learned Single Judge considered the entire factual and the legal aspect of the matter. It has been noted that the ad interim injunction had been granted in this case by Justice Subhro Kamal Mukherjee on 3rd September, 2004. The Trial Court, therefore, observed that it was for the defendants and each of them to make out their case justifying vacating the interim order.
The submissions made before us were also made before the Trial Court. The Trial Court prima facie concludes that :-
"...Upon reading of the pleadings of all the parties it is plain to me admittedly that the first defendant with the help of the rest of the defendants has puffed up their product disparaging the product of the plaintiff until it was restrained by this Court... "
The Trial Court also observed that in trade and commerce it is a common practise to indulge in "making puff" of their own products to eliminate the competition from rivals. This, according to the Learned Single Judge, may be done by illegally passing off one's own goods for that of the rival mere product. However, it is made clear that the present action does not relate to passing off. The Learned Single Judge notices the settled position in law and observed that although "making puff" is permissible in law, disparagement of the goods of the rival would be illegal. The Trial Court also observes that even in case of puffing up defamation of the goods of the other is not permissible.
It is also observed that even though it may be permissible to compare one's good with the goods of the rival; it is not permissible to say that the goods of the rival are ineffective or bad for the purpose for which they are produced.
The learned Trial Judge also observes as follows:
"...In the plaint, with the necessary documents it appears to me that first defendant has tried to laud its own product not only by way of a comparison, from the nutritional point of view, with the product of the plaintiff but has also tried to make an efficacious distinction between the two products in a slanderous way. Whether milk protein is the only source of growth of children or for that matter whether protein is the sole contributory factor to the growth and further whether the milk is only source of protein, are wholly disputed question of fact in highly expertised field and the same cannot be established unless evidence with expert opinion and scientific analysis are produced before the Court. Of course both the parties with bare reports have tried to do so with mere report and counter report, but these need scrutiny at the time of the trial in witness action."
The Trial Court also comes to the prima facie conclusion that the advertisement clearly seeks to project in the mind of the customer that the product of the plaintiff is inferior in quality and does not supply adequate quantity of protein and other nutrients to help the growth of children. The Trial Court, thereafter, examines the various features of the advertisement which would tend to show that the cup marked "H" does not record any growth when a liquid is poured into it, whereas on the other hand, the companion cup marked as "Complan"
records steady growth as the liquid is being poured into the cup.
According to the learned Single Judge, the advertisement aims to indicate that the cup marked "H" is inferior in quality. The Learned Single Judge also observed that the entire matter is to be decided on the basis of the evidence at the final hearing. At present the interest of the plaintiff is to be protected. Thus the ad interim order granted has been confirmed.
The appellants challenge the aforesaid findings of the Trial Court on numerous factual as well as legal grounds. Mr. Kapoor, learned Senior Counsel has made elaborate submissions in support of these grounds. We may briefly sum up the submissions of the learned counsel as follows :-
(1) The law permits advertisements showing comparisons between the goods produced by the competitors.
(2) There is no disparagement of the goods produced by the plaintiff. There is no vilification of the product 'Horlicks'.
(3) The advertisement is only the correct representation of the good qualities of Complan.
At best the advertisement merely puffs up the product 'Complan' without in any manner denigrating the product 'Horlicks'.
(4) No special damages have been caused as a direct result of the advertisement. The plaint is vague if not silent about the particulars of any special damage caused to the plaintiff.
(5) The claims made by the plaintiff about the shifting of allegiance of 30% of the customers of 'Horlicks' over to 'Complan' is mere hyperbole.
(6) Therefore, the suit itself is liable to fail.
(7) The Trial Court committed an error in granting relief at the interim stage which could only be granted at the conclusion of the trial. In support of his submissions learned counsel has relied on a number of judgments :-
(1) Timothy White Vs. Gustav Mellin. Reported in 1895 Appeal Cases.
(2) De Beers Abrasive Products Ltd. Vs. International General Electric Co. of New York Ltd. 1975 ALL E R 599 (3) Reckitt & Colman of India Ltd. Vs. M. P. Ramchandran & Anr. 1999 PTC (19) 741 (4) Dabur India Ltd. Vs. Wipro Ltd., Bangalore; 2006 (32) PTC 677 (Del.) (5) Pepsico Inc. & Anr. Vs. Hindustan Coca Cola & Ors. 2001 PTC 699 (Del) (6) [Godrej Sara Lee Ltd. Vs. Reckitt Benckiser (I) Ltd. 2006 (32) PTC 307.
On the other hand, Mr. Anindya Mitra, the Learned Senior Counsel for the plaintiffs/respondents submits that the puffing up of one's product is only limited to unbelievable claims which can be said to be harmless. In other words, mere puffing of one's product is not expected to be taken seriously by the public watching the advertisement. The advertisement ceases to be a mere "puff" when the advertisement claims that what is stated in the advertisement, is correct. In such circumstances, the advertisement makes an assertion on behalf of the advertiser and does not remain a mere "puff".
In the advertisement, the facts asserted about the Complan in relation to milk protein and other ingredients cannot possibly be accepted as mere "puffing" of "Complan". The plaintiff has placed on the record material to show that the assertions made by the defendants/appellants are false and malicious. These assertions have been made deliberately to disparage the product of the plaintiff Horlicks. This is particularly, so as the defendants/appellants claim that milk protein is the only ingredient in a health drink which could lead to growth.
The Learned Counsel submits that there is also sufficient material on the record to show that even in the perspective of the ordinary people, the image of Horlicks as a growth drink has been lowered. This is evident from the data collected by the expert bodies which would show that a that large segment of the users of Horlicks have switched over to Complan after seeing the offending advertisement.
Learned counsel further submits that at this stage, the learned Trial Court was only required to see that the plaintiff has made out a prima facie case and has placed sufficient materials on record to indicate the extent of the damages. The entire issue is yet to be decided at the final hearing of the suit.
Learned Counsel, further, submits that the injunction having been granted in exercise of judicial discretion by the Trial Court can only be vacated if this Court comes to the conclusion that it has been exercised perversely, based on no material or contrary to accepted principles of law. In support of this submission he relies on a judgment of the Supreme Court reported in Wander Ltd. & Anr. vs. Antox India P. Ltd. [1990 (Supp.) SCC 727].
Apart from the detailed submissions as noticed above, the learned counsel have also taken us through the pleadings of the parties in extenso. We have also perused the documentary material attached with the pleadings of the parties.
We have anxiously considered the submissions made by the learned Counsel for the parties.
At the outset we may notice that we were invited to view the advertisement on the computer. Consequently, we have had the advantage of viewing the advertisement. In our opinion, the advertisement clearly shows that the boy drinking 'Horlicks' is not growing. He is shorter than the boy drinking 'Complan'. In order to catch up with the smart boy drinking 'Complan', the Horlicks boy hangs from the middle bar of the bus; hoping to stretch himself to gain height. The other children in the bus find his efforts, hilarious. Ultimately, the smart boy who drinks 'Complan' invites the boy that drink 'Horlicks' to ask his mother to give him 'Horlicks' to drink. Later in the advertisement, it is clearly shown that the 'Horlicks' boy has gained height after switching over to 'Complan'.
This sequence is followed by another significant "fact" which is very prominently displayed in the advertisement. It is shown that when the energy drink is poured into the cup marked "H" it maintains the same size. On the other hand, when the energy drink 'Complan' is poured into the 'Complan' cup, it grows as the drink is poured into it. We are of the considered opinion that even a person of ordinary perception would find it very difficult to ignore the clear insinuation that intake of 'Horlicks' produces nil growth, whereas consumption of 'Complan' would result in speedier and more growth.
In such circumstances, the only thing that remains to be considered is as to whether the advertisement falls within the realm of puffing or in the realm of disparagement. In the case of Timothy White the House of Lords laid down the proposition that a trader can legitimately say that his goods are better than any other goods in the market as such a statement would be treated as a mere trading puff and would be so regarded by the purchasing public.
Lord Herschell held as follows :-
"Mr. Moulton sought to distinguish the present case by saying that all that Lord Denman referred to was one tradesman saying that his goods were better than his rival's. That, he said, is a matter of opinion, but whether they are more healthful and more nutritious is a question of fact. My Lords, I do not think it is possible to draw such a distinction. The allegation of a tradesman that his goods are better than his neighbour's very often involves only the consideration whether they possess one or two qualities superior to the other. Of course "better" means better as regards the purpose for which they are intended, and the question of better or worse in many cases depends simply upon one or two or three issues of fact. If an action will not lie because a man says that his goods are better than his neighbour's, it seems to me impossible to say that it will lie because he says that they are better in this or that or the other respect. Just consider what a door would be opened if this were permitted. That this sort of puffing advertisement is in use is notorious; and we see rival cures advertised for particular ailments. The Court would then be bound to inquire, in an action brought, whether this ointment or this pill better cured the disease which it was alleged to cure - whether a particular article of food was in this respect or that better than another. Indeed, the Courts of law would be turned into a machinery for advertising rival productions by obtaining a judicial determination which of the two was the better."
It was further held as follows :-
"My Lords, obviously to call for the exercise of that power it would be necessary to shew that there was an actionable wrong well laid, and if the statement only shewed a part of that which was necessary to make up a cause of action - that is to say, if special damage was necessary to the maintenance of the action, and that special damage was not shewn - a tort in the eye of the law would not be disclosed, the case would not be within those provisions, and no injunction would be granted."
We may notice here that the plaintiff in the aforesaid case did not insist that he had sustained injury by what the defendants had done. Lord Watson observed as follows :-
"The wrong complained of being the slander of goods, the fact that the representations made by the defendant in the label already referred to might be calculated to disparage the food manufactured by the plaintiff and to interfere with its sale can afford no cause of action. Every extravagant phrase used by a tradesman in commendation of his own goods may be an implied disparagement of the goods of all others in the same trade; it may attract customers to him and diminish the business of others who sell as good and even better articles at the same price; but that is a disparagement of which the law takes no cognizance. In order to constitute disparagement which is, in the sense of law, injurious, it must be shewn that the defendants' representations were made of and concerning the plaintiff's goods; that they were in disparagement of his goods and untrue; and that they have occasioned special damage to the plaintiff. Unless each and all of these three things be established, it must be held that the defendants have acted within his rights and that the plaintiff has not suffered any legal injuria.
It is true that in the present case the plaintiff, who does not aver that he has sustained any special damage, only claims an injunction. That circumstance cannot make any difference in his favour. Damages and injunction are merely two different forms of remedy against the same wrong; and the facts which must be proved in order to entitle a plaintiff to the first of these remedies are equally necessary in the case of the second."
Lord Shand observed as follows :-
"It appears to me that in order to constitute a libel of the class here complained of there must be a statement in disparagement of the plaintiff's goods, and that the statement must be false and injurious. But, then, I do not think that disparagement in a popular sense would be enough for the plaintiff's case. It is a disparagement of one man's goods to say that they are inferior to the goods of another; but such a statement cannot, I think, be the ground of a claim of damages or a claim for injunction such as the plaintiff here asked. If there had been in this case an imputation of intentional misrepresentation for the purpose of misleading purchasers, or a statement that Mellin's food was positively injurious, or that it contained deleterious ingredients, and would be hurtful if it were used, I think there would have been a good ground of action; and if the authorities have not settled the law otherwise, I should even say that an averment of special damage ought not to be necessary. But when all that is done is making a comparison between the plaintiff's goods and the goods of the person issuing the advertisement, and the statement made is that the plaintiff's goods are inferior in quality or inferior, it may be, in some special qualities, I think this cannot be regarded as a disparagement of which the law will take cognizance."
What emerges from the aforesaid discussion by the House of Lords as a principle seems to be that a tradesman can say that his goods are better than those of the rival. In that sense, better would mean in regard to the purpose for which the goods are intended. In so doing it is permissible to emphasise one or the other qualities being better than the quality of the rival product. Every extravagant statement may imply disparagement of the goods of others in the same field. Such disparagement is not actionable. In order to constitute actionable disparagement, the plaintiff must show that the defendant's representations were made about the plaintiff's goods, the statements were untrue and they were disparaging the goods of the plaintiff and that they have caused special damages to the plaintiff.
In the case of De Beers Products (supra) the House of Lords clearly observed that the counsel for the plaintiff had accepted the legal proposition that mere puff by any trader of his own products is not actionable. The House of Lords also considered the question as to whether an action would lie if the trader not only says that his product is superior but also that the product of the rival is not proper for its purpose. It was held as follows :-
"What precisely is the law on this point ? It is a blinding glimpse of the obvious to say that there must be a dividing line between statements that are actionable and those which are not; and the sole question of a dry point of law such as we are discussing here is : where does the line lie ? On the one hand, it appears to me that the law is that any trader is entitled to puff his own goods, even though such puff must, as a matter pure logic, involve the denigration of his rival's goods. Thus in the well known case of the three adjoining tailors who put notices in their respective windows reading : "The best tailor in the world', "The best tailor in this town', and "The best tailor in this street', none of the three committed an actionable offence.
........ ........... ...... ............ ..................... Where, however, the situation is not that the trader is puffing his own goods, but turns to denigrate those of his rival, then, in my opinion, the situation is not so clear cut. Obviously the statement : 'My goods are better than X's is only a more dramatic presentation of what is implicit in the statement : 'My goods are the best in the world'. Accordingly, I do not think such a statement would be actionable. At the other end of the scale, if what is said is : 'My goods are better than X's , because X's are absolute rubbish', then it is established by dicta of Lord Shand in the House of Lords in White v Mellin, which were accepted by counsel for the defendants as stating the law, the statement would be actionable."
It is also held by the House of Lords that in cases where the statement falls between the extremes, in order to draw the line, one must apply the test, whether a reasonable man would take the claim being made as being a serious claim or not. A possible alternative test is to ask whether the defendants have pointed to a specific allegation of some defect or demerit in the plaintiff's goods. These observations clearly tend to show that in case the claim would be seen by the reasonable man as a serious assertion and the assertion is false, the action would lie. The same proposition has been reiterated in the case of Reckitt & Colman of India Ltd. (supra). It has been observed as under :-
(a) A tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.
(b) He can also say that his goods are better than his competitors', even though such statement is untrue.
(c) for the purpose of saying that his goods are the best in the world or his goods are better than his competitors' he can even compare the advantages of his goods over the goods of others.
(d) He, however, cannot, while saying that his goods are better than his competitors', say that his competitors' goods are bad. If he says so, he really slanders the goods of his competitors. In other words, he defames his competitors and their goods, which is not permissible.
(e) If there is no defamation to the goods or to the manufacture of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the Court is also competent to grant an order of injunction restraining repetition of such defamation.
In Dabur India Ltd. case (supra) a learned Single Judge of the Delhi High Court held that "It is one thing to say that the defendant's product is better than that of the plaintiff and it is another thing to say that the plaintiff's product in inferior to that of the defendant. This will always happen in a case of comparison. It is permissible for an advertiser to proclaim that its product is the best." On the other hand, "disparagement of a product should be defamatory or should border on defamation. In other words, the degree of disparagement must be such that it would tantamount to, or almost tantamount to defamation." In Pepsico Inc. (supra) again a learned Single Judge of the Delhi High Court has held that "It is well known law that merely puffing is not dishonest and mere 'poking fun' at a competitor is a normal practice of comparative advertising and is acceptable in the market." It is further observed that "In order to succeed in an action, the plaintiffs have to establish the following key elements :-
1. A false or misleading statement of fact about a product.
2. That statement either deceived, or had the capacity to deceive, a substantial segment of potential consumer, and
3. The deception was material, in that it was likely to influence consumer's purchasing decisions."
Again the same issue was considered by a learned Single Judge of the Delhi High Court in the case of Godrej Sara Lee Ltd. (supra). Therein it is observed as follows :
"13. I may state at the outset that the cardinal principle is that the advertiser has right to boast of its technological superiority in comparison with product of the competitor. He can declare that his goods are better than that of his competitor. However, while doing so, he cannot disparage the goods of the competitor. Therefore, if the advertising is an insinuating campaign against the competitor's product such a negative campaigning is not permissible. The advertiser, therefore, may highlight the positive features of his product and can even claim that his product is better than his competitors. Such a statement may be untrue. But while doing so, he is not permitted to project that his competitor's goods are bad. .... ..... ...."
In the case of Reckitt & Colman of India Ltd. vs. Kiwi T.T.K. [1996 PTC (16) 393] the aforesaid principles have been restated as under:
"The settled law on the subject appears to be that a manufacturer is entitled to make a statement that his goods are the best and also make some statements for puffing of his goods and the same will not give a cause of action to other traders or manufacturers of similar goods to institute proceedings as there is no disparagement or defamation to the goods of the manufacturer so doing. However, a manufacturers is not entitled to say that his competitor's goods are bad so as to puff and promote his goods. It, however, appears that if an action lies for defamation an injunction may be granted."
We have examined the entire issue on the basis of the well-recognised principles of law as indicated above. On a prima facie view of the advertisement it is apparent that a clear attempt has been made by the appellant to systematically demonstrate that 'Horlicks' as a growth drink is ineffective.
The campaign seems to be directly aimed at injuring and lowering the image nurtured and maintained by 'Horlicks' for over 100 years. The advertisement seems to hit the efficacy of the product 'Horlicks' as an energy growth inducing or a health food drink. The advertisement prima facie tends to show that it is aimed at the jugular vein of the energy growth drink 'Horlicks'. It is claimed that 'Horlicks' does not induce growth. This claim, according to the plaintiffs, is false and malicious. It has been made deliberately to wean away even the faithful young customers of 'Horlicks'.
The fact that the cup marked Brand "H" denotes 'Horlicks' is accepted by Mr. Kapoor, learned Senior counsel for the appellant. The advertisement leaves little to the imagination that children drinking 'Complan' would grow whereas those drinking 'Horlicks' would not have the same advantage. As to whether there is any truth in the tall claims made by the appellants would be a matter of evidence to be considered at the final hearing of the suit.
It is sufficient to notice at this stage that the plaintiff has specifically claimed that 81% of the viewers of the advertisement telecast in Bengal believe that the hanging boy used to drink 'Horlicks' before becoming "Complan boy". It is also pleaded that due to the advertisement's publicity generated by the advertisement, 33% customers of 'Horlicks' have switched over to 'Complan'. This has directly resulted in a loss of approximately 3 crores in terms of volume of sales in the city of Kolkata alone.
At this interlocutory stage the rival claims of the parties are still in a fluid state. In our opinion, the discretion exercised by the Trial Court cannot be said to have been exercised arbitrarily, capriciously, perversely or in ignorance of the settled principles of law regulating grant or refusal of interlocutory injunctions. It would not be appropriate for the Appeal Court to reassess the material so as to reach a conclusion different from the one reached by the Trial Court merely because the Appeal Court would come to a different conclusion. The Trial Court in this case has meticulously examined the factual as well as the legal aspects of the issues involved. The interim relief had been granted in accordance with the well-recognised principle. There is sufficient material on the record to prima facie indicate that the advertising campaign of the appellant has resulted in the shifting of a sizeable segment of the 'Horlicks' consumers to 'Complan'.
In such circumstances, we are in agreement with the prima facie view of the Trial Court that the advertisement clearly shows that the growth drink brand "H" fails to produce the results for which it is produced. In such circumstances, it would not be possible to hold even prima facie that the advertisement is only an attempt by the defendants of "poking fun" at the goods of the rival. Undoubtedly, it is permissible to eulogise ones own product. Puffing up ones' goods is permissible so long as it is confined to exhibiting the good qualities of its goods. However, when an advertisement campaign proceeds to make assertions of fact which it claims to be backed by scientific data tending to show that the product of the rival is not suitable for the intended purpose it would clearly fall within the realm of actionable disparagement. In the present case, the appellant in its advertisement has clearly depicted that drinking of 'Horlicks' would not be of any benefit to growing children. On the other hand, the advertisement makes a positive assertion that drinking 'Complan' leads to rapid growth.
We are also unable to accept the submissions of Mr. Kapoor that the plaintiff has failed to produce sufficient prima facie evidence in support of the submission that the advertising campaign has resulted in switching over from 'Horlicks' to 'Complan'. The plaintiff has categorically stated the facts and figures demonstrating the reduction in demand for 'Horlicks' due to switching over by its customers to 'Complan'. In our opinion the exercise of discretion of Trial Court in such circumstances would not call for any interference. At this interlocutory stage the remedy of injunction is merely intended to preserve in status quo, the rights of parties which may appear in a prima facie case. The Trial Court having exercised its discretion reasonably and in a judicial manner, we see no reason to interfere with the same.
The principles on which the court of appeal would interfere with the discretion exercised by the Trial Court in granting interim relief have been laid down in the case of Wander Ltd. & Anr. (supra) are as under:
"9. 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 interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case.
14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion."
In view of our conclusions recorded above, we see no justification to interfere with the impugned order of the Learned Single Judge.
We find no merit in the appeal and is hereby dismissed.
There shall be no order as to costs.
( SURINDER SINGH NIJJAR, C.J. ) I agree.
( BISWANATH SOMADDER, J. )