Monopolies and Restrictive Trade Practices Commission
Society For Civic Rights vs Colgate Palmolive (India) Ltd. on 19 June, 1991
Equivalent citations: [1991]72COMPCAS80(NULL)
ORDER
R.A. Jahagirdar, J. (Chairman)
1. This enquiry has been placed before the Full Bench for disposal because of the fact that some of the judgments touching upon the subject of this enquiry are inconsistent with each other and also because of the importance of the subject involved in this enquiry. The facts leading to this enquiry ought to be stated. An organisation called "Society for Civic Rights" made an application to the Commission under Section 36B(a) of the Monopolies and Restrictive Trade Practices Act, 1969, complaining of an unfair trade practice on the part of the respondent which is a limited company. The society, hereinafter, for brevity, will be referred to as "the complainant." The respondent is a leading manufacturer of tooth paste and tooth brushes. According to the complaint, the respondent-company had inserted an advertisement in several newspapers in September, 1984, announcing what it called "Colgate Trigard Family Good Habits Contest". "Trigard" incidentally is the name of the tooth brush manufactured by the respondent. The advertisement announced a contest apparently for the purpose of educating families in the good habit of taking care of their dental health. The contest was undoubtedly for the promotion of sale of the Trigard tooth brush manufactured by the respondent.
2. A copy of the hand-bill which also described the contest has been annexed to the complaint. Looking to the same and reading the averments in the complaint, the brief particulars of the contest can be noted. As a condition precedent to participating in the contest, each prospective participant was required to send two upper portions of the cartons in which the Trigard tooth brushes were sold. These two upper portions were to be sent along with each entry form which entry form must bear the dealer's name and address duly rubber-stamped on the form. Obviously, this necessitated the purchase of two Trigard Colgate brushes by a prospective participant in the contest. The entry form contained four questions, each with two alternative answers which were also printed. The contestant was required to tick mark the correct answer. By way of an illustration, the respondent had already ticked the correct alternative in the case of the first question which was as follows :
"Brush your teeth :
(a) only in the morning ;
(b) in the morning and after every meal."
3. In the form, alternative (b) had been ticked. There were similar three questions with alternative answers. Anyone with an ordinary knowledge of dental health would tick mark the correct answer to the three questions. But this was not enough. In addition to answering the questions as mentioned above, each contestant had to write a sentence not exceeding ten words describing as to why the contestant's family used Colgate Trigard tooth brush. The best entry in this regard would win the first prize. There were several other prizes for second, third, fourth winners. There were also fifth prizes. It is not necessary to describe the details of the various prizes which were offered by the respondent. However, it must be added that the respondent offered 825 consolation prizes of Rs. 100 each and 1,200 early bird prizes of Rs. 50 each to be awarded to those 100 entries which were received first every week. The last mentioned prizes were irrespective of whether the answers to the questions were correct or not and irrespective of the merit of the slogan which was to be provided by the contestant. In other words, the last prizes were purely upon a chance of the contestant's entry reaching the respondent's office early in the week.
4. The complainant contended that the contest announced and conducted by the respondent was covered by Clause (b) of paragraph 3 of Section 36A of the Monopolies and Restrictive Trade Practices Act. For the purpose of convenience and in so far as it is relevant for the purpose of understanding the allegation in this regard, the relevant provision may be reproduced as follows :
"36A. In this Part, unless the context otherwise requires, 'unfair trade practice' means a trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any services, adopts one or more of the following practices and thereby causes loss or injury to the consumers of such goods or services, whether by eliminating or restricting competition or otherwise, namely :-- . . .
(3) permits-
(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole.
(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest ;"
5. The complainant alleged that the contest which was organised for the purpose of promotion of sale of the product of the respondent was solely in the interest of the respondent and prejudicial to the interest of the consumer generally and holding of such contests, the complainant alleged, caused serious injury or loss to innocent consumers. Such contests fell within Clause (b) of paragraph 3 of Section 36A of the Monopolies and Restrictive Trade Practices Act.
6. The Commission ordered an investigation by the Director-General of Investigation and Registration. A preliminary investigation report dated April 29, 1984, was submitted on behalf of the Director-General who also came to the conclusion that the proposed contest was a contest covered by Section 36A(3)(b) of the Monopolies and Restrictive Trade Practices Act. The Director-General recommended that notice of enquiry be issued against the respondent.
7. Thereafter, a notice of enquiry dated December 3, 1984, was issued to the respondent. It was mentioned in the notice of enquiry that the Commission had received a complaint from the Society for Civic Rights under Section 36B(a) of the Monopolies and Restrictive Trade Practices Act alleging that the respondent was indulging in the unfair trade practice of permitting the conduct of a contest known as "Colgate Trigard Family Good Habits Contest". The notice of enquiry also mentioned that a preliminary investigation was conducted by the Additional Director-General of Investigation and Registration. A copy of the preliminary investigation report was enclosed with the notice of enquiry. Thereafter, the notice of enquiry proceeded to mention that, after perusal of the complaint and the preliminary investigation report, it appeared to the Commission that the respondent was indulging in an unfair trade practice of conducting a contest for the purpose of promoting the sale of its product and also for the purpose of indirectly promoting its business interest. Such a trade practice was an unfair trade practice causing injury and loss to the users of tooth brushes. The respondent was informed that the Commission had ordered an enquiry to be instituted against the respondent in respect of the unfair trade practice alleged against it.
8. The respondent filed its reply to the notice of enquiry challenging the jurisdiction of the Commission to go into the question on several grounds. It is not necessary to refer to the same because the same have not been agitated before us. As far as the merits of the case were concerned, it was pleaded on behalf of the respondent that the contest did not cause loss or injury to the consumers by eliminating or restricting competition or otherwise. The reply then proceeded to the contest in detail for the purpose of supporting its contention that it was not a contest which caused loss or injury to the consumer in any way. It was also pleaded that the contest was educative inasmuch as, by inducing the users of the tooth brushes to think upon the questions in the contest, it has made them aware of their dental health. It was also pointed out that the best answer to the question would be judged by three eminent persons in different fields. It has come on record that the committee of the judges consisted of the editor of the Illustrated Weekly, the editor of Eve's Weekly and a T. V. personality. There was thus no element of chance or arbitrariness in the selection of the winning slogan.
9. On behalf of the complainant, Mr. S. Kumar who also happens to be an advocate was examined. Evidence was led on behalf of the respondent to show that the total prize money for the contest was 4.5 lakhs and the total number of tooth brushes sold were 6.2 crores. According to the evidence of the respondent, the sales of Trigard tooth brushes during the period of the contest did not rise significantly ; on the other hand, there was a slight decline in the sales. It was also brought on record on behalf of the respondent that, during the period of the contest, there was no price increase of the tooth brush. A slight increase in the price had been made in a period prior to the period in which the contest was held and that increase was in the ordinary course. The thrust of the evidence led on behalf of the respondent was to show that the contest did not place any additional burden upon consumers and, therefore, there was no loss or injury to the consumers. There was of course no elimination or restriction of competition. There was no loss on account of any other reason also.
10. The enquiry was heard by a Bench consisting of Mr. H. C. Gupta and Mr. D. C. Aggarwal. An issue as to whether the contest organised by the respondent constituted a restrictive trade practice within the meaning of Section 2(o) of the Monopolies and Restrictive Trade Practices Act was raised and was answered in the negative by Mr. H. C. Gupta. Mr. D. C. Aggarwal, however, did not proceed to answer that issue at all. It may be mentioned that that issue has not been agitated before us and we proceed on the basis that the contest between the parties before us is confined to the question as to whether the contest organised by the respondent constituted an unfair trade practice within the meaning of Section 36A(3)(b) of the Monopolies and Restrictive Trade Practices Act. Two relevant issues in this regard were framed by the Bench and they are as follows :
"2. Whether, on the basis of the facts and circumstances bearing on the contest as organised by the respondent in the wake of the advertisements, exhibit A-1 and exhibit A-2, the trade practice for the promotion of sale by means of the contest is an unfair trade practice within the meaning of Section 36A of the Monopolies and Restrictive Trade Practices Act ?
3. If the answer to issue No. 2 is in the affirmative, whether the said trade practice is prejudicial to public interest or to the interest of any consumer or consumers generally ?"
11. Mr. H.C. Gupta, after considering the evidence led on behalf of both sides, came to the conclusion that there was no loss or injury caused to the consumers and, therefore, the contest did not amount to an unfair trade practice as alleged. While holding so, Mr. Gupta necessarily implied that, in order that a trade practice should constitute an unfair trade practice within the meaning of Section 36A of the Monopolies and Restrictive Trade Practices Act, loss or injury to the consumer by eliminating or restricting competition or otherwise must necessarily be there.
12. Mr. Aggarwal differed from the view taken by Mr. H. C. Gupta. In an elaborate judgment analysing the relevant provisions of the Monopolies and Restrictive Trade Practices Act, Mr. Aggarwal held that loss or injury was inherent in the case of trade practices mentioned in paragraph 3 of section 36A of the Monopolies and Restrictive Trade Practices Act. Referring to the words "and thereby causes loss or injury to the consumers of such goods or services", Mr. Aggarwal held that the said words are descriptive of the characteristic of the trade practices enumerated in Section 36A in the sense that they were mere words of emphasis to the effect that the said trade practices were the vehicles of loss or injury to the consumers. In other words, it is not necessary to prove separately that actual loss or injury has been caused. The rest of the order of Mr. Aggarwal discusses certain other consequential questions which arose as a result of his view that no loss or injury need separately be proved. Consistent with the view which he thus took, he held that the trade practice under this enquiry is an unfair trade practice within the meaning of Section 36A(3)(b) of the Monopolies and Restrictive Trade Practices Act and prejudicial to the interest of the consumers in general or the public. He, therefore, proceeded to pass a "cease and desist" order under Section 36D(1) of the Monopolies and Restrictive Trade Practices Act directing that the respondent shall discontinue the practice and shall not repeat it. It may incidentally be noted that both the orders were pronounced on April 21, 1989.
13. Unfortunately, the Hon'ble Members did not formulate the difference of opinion in the form of a question to be decided by a third member. However, one may proceed on the basis that the difference between the two members lay in the fact that Mr. Gupta answered issue No. 2 in the negative while Mr. Aggarwal answered the said issue in the affirmative.
14. Normally, this should have been heard by a single member, but noticing that any interpretation of Section 36A enquiry or part thereof might affect a large number of matters which are pending before the Commission and which are likely to come up before the Commission and further noticing that some of the judgments touching upon the interpretation of Section 36A(3)(b) of the Monopolies and Restrictive Trade Practices Act are not wholly consistent with each other, it was directed that this enquiry be heard by a Full Bench.
15. Before proceeding to examine the question arising in this enquiry and some of the judgments touching upon the said question, it would be appropriate to refer to some of the provisions of the Monopolies and Restrictive Trade Practices Act. The Monopolies and Restrictive Trade Practices Act, as the preamble mentions, was enacted to provide that the operation of the economic system does not result in the concentration of economic power to the common detriment, for control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto. The absence of the phrase "unfair trade practices" in the preamble is striking. This was for the simple reason that, in the Act, as it was originally enacted, the Chapter relating to the unfair trade practices was absent. The unfair trade practices of which the Act as it stands today takes cognizance were not absent when the Monopolies and Restrictive Trade Practices Act was originally enacted. However, the Act did not make a provision for dealing with the same. Elaborate provisions were, however, made in the Act for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto.
16. Subsequently, a high-powered expert committee was appointed to review the working of the Act and suggest amendments, if necessary. The said committee known as the Sachar Committee went in depth into the working of the Act and suggested certain amendments to the Act. The Committee took note of the fact that certain new measures for the protection of the consumers were necessary. They stated as follows :
"We have already discussed the need for new legislative measures which would ensure adequate protection to the consumers. With that end in view, we suggest that new provisions relating to unfair trade practices on the lines indicated below should be incorporated by way of a new Chapter in the Act. In this context, we recommend that the following unfair trade practices should, subject to the exceptions indicated in respect of each, be prohibited."
17. Most of the unfair trade practices which now find place in Part B of Chapter V of the Monopolies and Restrictive Trade Practices Act were enumerated by the Sachar Committee. It may, however, be added that certain provisions were also suggested by the Sachar Committee by way of defences to the charge of unfair trade practices. For example, the Sachar Committee recommended that what are now included in the first paragraph of Section 36A of the Monopolies and Restrictive Trade Practices Act should be regarded as unfair trade practices. For example, making false representations in connection with the supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services such as to falsely represent that the goods are of a particular standard, quality, grade, composition, style or mode would, if the Sachar Committee recommendations were accepted, be unfair trade practices. However, the Committee recommended that the aforesaid provision shall not apply, if a person establishes, for example, that the act or omission giving rise to the offence was a result of a bona fide error. Similar exceptions were proposed in respect of other unfair trade practices which the Committee thought should be brought within the ambit of the Monopolies and Restrictive Trade Practices Act. The concept of loss or injury which now finds place in the opening part of Section 36A of the Act as ultimately passed by Parliament was totally absent in the recommendations of the Sachar Committee report.
18. We must now proceed to analyse Section 36A of the Act. The opening part of the said Section has already been reproduced in an earlier context After the opening part, the Section contains what can be described as five paragraphs. Paragraph 1 enumerates ten unfair trade practices which are based upon the practice of making any statement, whether orally or in writing or by visible representation. The statement or the visible representation must be false. Paragraphs 2 to 5 deal with the permitting of certain trade practices as described therein. Permitting the publication of any advertisement for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price would, for example, be regarded as an unfair trade practice. Paragraph 3 consists of two parts. Clause (a) of paragraph 3 covers the practice of offering of gifts or prizes with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole. Clause (b) of paragraph 3 refers to the contest, among other things, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest. It should be noted that the opening part of Section 36A already speaks of the purpose of promoting the sale, use or supply of any goods. However, Clause (b) of paragraph 3 of Section 3GA speaks of promoting the sale, use or supply of any product or any business interest. The expression used in Clause (b) of paragraph 3 of Section 36A is of wider magnitude than the expression used in the opening part of Section 36A.
19. Permitting the sale or supply of goods, knowing or having reason to believe that the goods do not comply with the standards as are necessary to prevent or reduce the risk of injury to the person using the goods is an unfair trade practice covered by paragraph 4 of Section 36A. Paragraph 5 of Section 36A relates to the unfair trade practice of hoarding or destruction of goods or refusal to sell the goods, if such act tends to raise or is intended to raise the cost of those or other similar goods or services.
20. As already noted above, Mr. Aggarwal, in his order, interpreted the words "and thereby causes loss or injury to the consumers" of the opening part of Section 36A in a particular manner. He held that these words do not mean that actual loss or injury should be caused to the consumer. He, on the other hand, held that they are words of description which indicate that the trade practices described in Section 36A of the Act are vehicles of loss or injury. On the other hand, Mr. Gupta took the view that the opening part of Section 36A necessarily implied that a trade practice mentioned in one or the other five paragraphs of Section 36A would not amount to an unfair trade practice unless it causes loss or injury to the consumer of goods or services whether by eliminating or restricting competition or otherwise. These are the two views which are competing for our acceptance. Before proceeding to examine in detail which of the two views is correct, it would be advantageous to refer to certain other provisions of the Monopolies and Restrictive Trade Practices Act Prior to its amendment in 1984 which amendment came into force with effect from August 1, 1984, Section 33 of the Monopolies and Restrictive Trade Practices Act did not make a deeming provision that the agreements mentioned in Section 33 were agreements relating to restrictive trade practices. Despite this, a Full Bench of this Commission had taken the view that every agreement in Section 33 as it stood prior to the amendment in 1984 necessarily related to restrictive trade practices. It held that every trade practice mentioned in the agreements referred to in Section 33 was per se a restrictive trade practice independent of what was contained in Section 2(o) of the Act. This view was overruled by the Supreme Court in Tata Engineering and Locomotive Co. Ltd. v. Registrar of Restrictive Trade Agreements [1977] 47 Comp Cas 520 ; AIR 1977 SC 973. In particular, the Supreme Court held that the definition of "restrictive trade practice" was exhaustive and not inclusive. The question whether a particular trade practice is restrictive or not has to be decided by applying the rule of reason. For example, restriction on an area or price is not per se restrictive. It was further pointed out that what was mentioned in Section 33 must first fall within the definition of "restrictive trade practice" as per Section 2(o) of the Monopolies and Restrictive Trade Practices Act. All the restrictive trade practices mentioned in the unamended Section 33 of the Act did not necessarily fall within the definition of restrictive trade practice as contained in Section 2{o) of the Act. The per se doctrine which was adopted by the Full Bench of the Commission was thus struck down by the Supreme Court in the case referred to above.
21. This view was repeated by the Supreme Court in Mahindra and Mahindra Ltd. v. Union of India [1979] 49 Comp Cas 419 ; AIR 1979 SC 798. The question was whether the sole distributorship agreement amounted to a restrictive trade practice. A "cease and desist" order had been passed by the Commission. Subsequently, an application for review had been filed by the company under Section 13(2) of the Monopolies and Restrictive Trade Practices Act by relying upon the judgment in TELCO's case [1977] 47 Comp Cas 520 ; AIR 1977 SC 973. That application was turned down by the Commission. Hence, the company approached the Supreme Court. The Supreme Court held that, in view of the law laid down by it in the case of TELCO's case [1977] 47 Comp Cas 520 ; AIR 1977 SC 973, the review ought to have been allowed. It further pointed out that every trade practice in restraint of trade was not necessarily a restrictive trade practice. That particular practice must fall within the definition as contained in Section 2(o) of the Monopolies and Restrictive Trade Practices Act. It was reiterated that the definition contained in the Act was result-oriented and it is the rule of reason and not any doctrinaire approach that must prevail while interpreting the provisions of the Monopolies and Restrictive Trade Practices Act.
22. It was after this that Section 33 was amended and the opening part of the said Section as it now stands reads as follows :
"33(1). Every agreement falling within one or more of the following categories shall be deemed, for the purposes of this Act, to be an agreement relating to restrictive trade practices and shall be subject to registration in accordance with the provisions of this Chapter, namely :--..."
23. It is now made clear by legal fiction that every agreement mentioned in Section 33 of the Act shall be deemed to be an agreement relating to a restrictive trade practice irrespective of the fact whether the trade practice covered by that agreement strictly falls within the definition of Section 2(o) of the Act. The amendment to Section 33 of the Act was made by Act No. 30 of 1984. The amendment came into force with effect from August 1, 1984. Part B of Chapter V of the Act containing the list of unfair trade practices was also inserted by the same Amending Act.
24. It has been pointed out to us that the Sachar Committee had suggested certain practices as unfair trade practices without introducing in the concept of the unfair trade practice the element of loss or injury to the consumer in one way or the other. In other words, it is suggested that, if the Sachar Committee recommendations had been accepted, the trade practices mentioned therein would have been per se unfair trade practices subject to the exceptions provided. Parliament which reintroduced in one sense the per se doctrine of restrictive trade practice in Section 33 by Act No. 30 of 1984 did not deem it necessary to enumerate the unfair trade practices as recommended by the Sachar. Committee. On the other hand, by providing certain important words in the opening part of Section 36A of the Act, Parliament has not accepted the concept of per se unfair trade practice.
25. It is suggested, therefore, that the use of the words "thereby causes loss or injury to the consumers" necessarily meant that mere adoption of one or another of the practices mentioned in paragraphs 1 to 5 of Section 36A was not enough to constitute an unfair trade practice. The use of the abovesaid words necessarily indicated an intention on the part of Parliament that a trade practice which adopts one or the other practices mentioned in the subsequent paragraphs of the Section should cause loss or injury to the consumers by eliminating or restricting competition or otherwise. Parliament, it is argued, does not use words which are unnecessary or surplus. The words "thereby causes loss or injury" cannot be regarded, therefore, as superfluous or surplus.
26. Mr. Ravindra Narain relied upon Black's Law Dictionary, fifth edition, for the meaning of the word "thereby" which is as follows :
"By that means ; in consequence of that".
27. In other words, the words "and thereby causes" must necessarily mean that, as a result of the adoption of the trade practice referred to in the opening part of Section 36A, loss or injury must necessarily result. It is not enough that the said practice has a tendency of causing loss or injury. In this connection, he also compared the definition of unfair trade practice contained in Section 36A of the Act with the definition of "restrictive trade practice" contained in Section 2(o) of the Act, which in so far as it is relevant is as follows :
"'restrictive trade practice' means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner . . ."
28. According to Mr. Ravindra Narain, when the Legislature wanted to provide tendency of a trade practice, it did so by specific words as in the definition of "restrictive trade practices". Such a provision is not to be found in the opening part of Section 36A of the Act.
29. We have considered these arguments carefully and we find that they are not relevant while interpreting the provisions of Section 36A of the Act which is a self-contained section. Ultimately, we must interpret a Section in the light of the language of that Section by bearing in mind the objects of the Legislature in enacting the legal provision.
30. Mr. Dua, learned counsel appearing for the Director-General, canvassed for our acceptance the view that the contest which is mentioned in Clause (b) of paragraph (3) of Section 36A of the Act need not actually cause loss or injury to the consumer. In this connection, he relied on several paragraphs from a chapter called "Sales Promotion" in a book called Honesty and Competition by Professor George J. Alexander. We do not think it necessary to refer to the various paragraphs of this book on which Mr. Dua has placed reliance because those paragraphs are by way of commentary on law prevalent in the United States and in particular they are comments upon Section 5 of the Federal Trade Commission Act. Section 5 of the Federal Trade Commission Act reads as follows :
"5(a)(1). Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce are hereby declared unlawful."
31. The language of Section 36A is in marked contrast to the language of the American Act. Commentary upon the latter is not of much assistance in interpreting the provisions of the Act enacted by the Indian Parliament. We will be justified in arriving at the proper meaning of the definition contained in Section 36A of the Act by analysing the said Section carefully.
32. We will be reverting to Section 36A again a little later in the judgment but, before that, some of the judgments on "contest" which have been delivered by the Commission need to be examined. We have already mentioned above that some of the judgments are not consistent with each other necessitating the placing of this enquiry before the Full Bench. One judgment delivered by a Bench of two members has been cited not only before us but before other Benches which have taken note of the same. That judgment dated March 27, 1987, is one delivered in UTPE No. 25 of 1985 (Oswal Agro Mills Ltd., In re). In that case also, a contest had been organised by the respondent. One of the pre-conditions for participating in the contest was the purchase of a soap manufactured by the respondent. The contention of the respondent was that holding of the contest by the respondent has not resulted in any loss or injury to the consumer. It was further contended that there had been no rise in the price of the soap immediately before, during or after the contest. It was also urged that the contest was not held for the purpose of promoting the sales or business interest of the respondent. The Commission held that the conduct of any contest came within the ambit of Section 36A(3)(b) of the Monopolies and Restrictive Trade Practices Act. The contest was admittedly held. The only question was whether it caused any loss or injury to the consumer. It was argued on behalf of the respondent that there had been no loss to the consumer. This argument was held to be a very restricted view of the concept of the loss or injury to the consumer. The beneficiaries of the contest were no more than about 12,500 as against over one lakh who entered the contest. Only an extremely small percentage of the contestants benefited as a result of the contest while the bulk of them had to suffer disappointment. Proceeding further, the Commission said that the total expenditure on the contest was as much as 5% of the annual turnover. In other words, the same amount that was expended in conducting the contest could have been utilised for a general reduction in prices of 10 to 12 paise on a cake of soap, thereby extending the benefit of lower prices to all the consumers.
33. Proceeding further, the Commission said that the question of loss or injury is to be seen from another angle also. To the extent a consumer purchases two soap cakes to be able to send an entry, and may eyen have purchased more than two to send more than one entry, it will affect the sale of other brands not necessarily owing to quality and any sort of concession in price but in the hope of getting a costly prize. This will egg on other manufacturers also to resort to a like prize scheme with the result that a few may be benefited at the cost of the much larger consumer populace. With these observations, the Commission held that the contest had resulted in loss to the consumers. Proceeding further, it held that the methods adopted for promotion of sales unrelated to improvement in quality or lowering of prices, which directly benefit the consumers detract from advancement of public interest. Hence, an unfair trade practice was prejudicial to public interest.
34. A similar reasoning has been adopted in UTPE No. 6 of 1985 (Meco-Tronics Pvt. Ltd., In re). In paragraph 9 of the judgment in that case, the nature of the scheme involved was examined and it was held that it was covered by Section 36A(3)(b) of the Act. Every contest for the promotion of sale or the business interest was covered by the said provision. In paragraph 13 of the judgment, it was held that part of the price increase was intended to cover the cost of gifts/prizes, at least partially if not wholly. In view of this finding, it was felt that there was a justification for taking the view that consumers have suffered a direct loss in the form of unjustified increase in prices of the products by participating in the gift scheme. It was also held that there was a strong element of what may be described as invisible loss or injury in any scheme which benefits a few and disappoints many.
35. In UTPE No. 52 of 1985 (Parle Products Pvt. Ltd., In re), a single Member Commission took the view that even though no consumer had complained of loss or injury having been suffered by him as a result of the contest organised by the respondent, it was reasonable to infer from the particular facts of that case that the contest had caused loss or injury to the consumers. The reasons given were as follows :
Firstly, there was a peculiar in-built characteristic of the contest which would require a contestant to purchase much larger number of products than he would normally consume, thereby increasing unnecessary expenditure and financial loss if he was not a lucky winner of a prize. Secondly, the contest promoted excessive consumption of sweets which created dental problems for consumers. The explanation given by the respondent that the contest was for the purpose of enabling the consumers to distinguish the healthy product of the respondent from spurious products was not given its due value. It is not necessary to multiply the judgments which have taken this particular view. We must now turn to some judgments which have taken a somewhat contrary view.
36. In UTPE No. 1 of 1985 (Society for Civic Rights v. Kothari Chemicals), dated June 12, 1987, by Mr. D. C. Aggarwal, the question whether the element of loss or injury to the consumer is a necessary ingredient of an unfair trade practice was left to be decided by an authoritative decision. Until such time as there was an authoritative decision on this aspect of the matter, it was said that this element of loss or injury to the consumer as per the preamble to Section 36A should be kept in mind in the matter of deciding whether the trade practice of conducting any contest is prejudicial to the public interest or to the interest of the consumers. On the facts of that case, it was noticed that it had not been brought out as to what saving to the consumer on the purchase of a particular package of pan parag could result if the amount spent on the prize scheme had been diverted to reducing the price of the product. The view seems to have been that the amount spent on the gift scheme or the contest would have been very well utilised in the reduction of the price of the product.
37. In UTPE No. 124 of 1986 (British Airways, In re), it was found that the trade practice followed by the respondent was not an unfair trade practice. The facts of the case were as follows : An advertisement on behalf of the respondent had been published. According to that advertisement, students who were flying by British Airways to the U.SA for studies on or before September 15, 1986, would have an opportunity to win one of the ten free tickets valid for travel between India and the United States up to March 31, 1988. The entry form which had to be filled in required the participant in the contest to write a paragraph of not more than 50 words on how "he believes his further studies in the U.SA will help". The panel of judges who were to choose the best ten entries were Shri Khushwant Singh, Prof. Moonis Raza and Dr. Vinay Bharat Ram.
38. To the charge of indulging in an unfair trade practice, the respondent replied that the objective of the programme was to give an opportunity to Indian students visiting the USA for studies to keep in touch with India, that there was no change in the ticket fare during the period and, therefore, the programme was at no additional cost to the participants. On the basis of these facts, it was held that the contest did not cause any injury or loss to the consumers. On the other hand, some participants benefited by having the opportunity of travelling from USA to visit their home and parents within the next two years.
39. In UTPE No. 50 of 1985 (Mid-Day Publications Pvt. Ltd., In re) dated March 12, 19,86, a contest which invited the readers of newspapers to pick a team was the subject-matter of enquiry. An advertisement had been issued in the Indian Express dated May 16, 1985, announcing the launching of a "pick-a-team" contest under which a contestant was to pick the ideal World XI Cricket Team using an entry form available in an issue of Mid-Day, the organiser of the contest. This team was to be matched with the team selected by the experts. Three prizes were awarded. It was held that it was no doubt a contest and was bound to promote, directly or indirectly, the business interests of the respondent. It may be that the contest did not have any discernible effect on sales of the sponsoring respondent. It was also on record that although there was no entry fee, the contestant had to purchase a copy of Mid-Day to obtain the entry form. The only loss or injury was the purchase of a copy of the Mid-Day priced at 50 paise. Thus, the loss, if any, was very nominal. It was further held that it was difficult to hold that the particular contest was prejudicial to public interest or to the interest of any consumer or consumers generally. It was accepted that the contest in question was planned with the primary objective of involving sports loving readers and creating some excitement at a time when the Indian cricket team was performing in one-day cricket in a manner which brought honour and glory to the country.
40. In UTPE No. 7 of 1985 (Competition Success Review Pvt. Ltd., In re), the concept of loss or injury was examined especially in paragraph 5 of the order. It was noticed that there was no entry fee for the contest but the entry form for the contest was contained in the issue of the magazine itself. In view of this, each aspiring entrant would have to acquire a copy of the magazine which costs Rs. 5. However, there was no additional cost to the readers. Therefore, it was held that this peculiar aspect may necessitate a departure from the view that loss or injury is inherent in contests which fall within the ambit of Section 36A(3)(b).
41. The facts of Santosh Kalra v. India Book House Pvt. Ltd. [1988-89] 1 MRTPR 477 should be stated in order to understand the point of law decided by a Division Bench of this Commission. The respondent inserted an advertisement in the Indian Express announcing that it was conducting in their magazine Amar Chitra Katha a contest. The entry form as annexed to the magazine was to be filled in. The contest involved prizes worth Rs. 20,000. The participant was required to answer four questions and also complete a slogan using not more than ten additional words explaining why he or she liked Amar Chitra Katha. Issues were framed in that enquiry in which the respondent was charged with an unfair trade practice under Section 36A(3)(b). Issues were framed as follows :
(1) Has the respondent indulged in the unfair trade practice as alleged in the notice of enquiry ?
(2) If answer to issue No. 1 is in the affirmative, is the unfair trade practice prejudicial to public interest or to the interest of any consumer or consumers generally ?
42. There was no dispute about the fact that the respondent had inserted the advertisement in the Indian Express and was conducting the quiz contest. The advertisement stated that the entry form was available in an Amar Chitra Katha issue. Therefore, every contestant was required to purchase the magazine in which the entry form was available. In paragraph 5 of the order, it was held that the purchase of Amar Chitra Katha entailed no loss to the consumer because the consumer got his money's worth. Moreover, it was held that the so called loss of Rs. 5 was too nominal to be taken into account.
43. Learned counsel for the complainant wanted the Commission to take the view that every contest causes loss or injury to the consumer and was, therefore, per se an unfair trade practice. This view did not commend itself to the Commission. Learned counsel for the complainant also relied upon the decision of the Commission in UTPE No. 43 of 1984 (Avon Cycles Pvt. Ltd., In re [1986] 60 Comp Cas 1036 (MRTPC)). The Commission, after going through the order in Avon Cycles Pvt. Ltd. [1986] 60 Comp Cas 1036 did not find that it came very close to taking the view that loss is inherent in every contest. It was noted that, in Avon Cycles Pvt. Ltd.'s case [1986] 60 Comp Cas 1036 (MRTPC) what clinched the issue against the respondent was that a saving of Rs. 10 could result to every consumer if the amount spent on the prize scheme would have been directed to reducing the price of the cycle. It was, therefore, held in India Book House, In re [1988-89], 1 MRTPR 477 that there was no unfair trade practice.
44. At this stage, we think it necessary to take notice of the fact that, in some of the orders, it has been observed that the cost of contest could have very well been utilised towards reducing the price of the product. In some cases, it has also been mentioned that the amount spent on advertising should be utilised in reducing the price of the product so that the consumer may benefit. In our opinion, this is a wrong approach to the problem of advertising.
45. When to advertise, where to advertise and how much to advertise--these are questions properly within the management of every company. It cannot be the subject-matter of a judgment by the Commission as to where and as to how much a particular company should advertise. Advertising is a well-recognised market strategy. In a competitive market, it has a definite role to play. Different companies manufacturing the same or similar products have to compete for the attention of the consumers. This they can do by indulging in advertising. The extent of advertisement required in a particular field or for a particular product will naturally depend upon the nature of the field and the nature of product. It cannot be, however, gainsaid that advertising serves the need for information about the identity and location of the seller, about the types of goods available in the market and the terms of the sale of the products. Advertisement may be pursu-asive, it may be educative. It cannot be said that an advertiser should insert an advertisement once or twice and leave it to the consumer to decide whether his product commends itself to the consumer. The advertiser has to repeat the message relating to his product over and over because the class of consumers is a fluctuating one. It may happen many times that some consumers might have missed an advertisement. In order to educate such consumers, the advertisement may have to be repeated. Advertisement, therefore, promotes rather than restricts or prevents competition. If this is so, one cannot take the view that, by spending money on a contest which is basically an advertisement, the organiser of the contest is causing loss or injury to the consumer by restricting or preventing competition or otherwise. The cost involved in the advertisement is wholly irrelevant to determine whether the contest under Section 36A(3)(b) causes loss or injury to the consumer or not.
46. After reading some of these judgments to which we have made reference above, it is noticed that sometimes a view has been taken that the fact that the consumer has to purchase a product in order to participate in a contest is a loss to the consumer. Sometimes, a view has been taken that the purchase of the product or an Article in which the entry form is to be found does not cause loss because the purchaser has got his money's worth. A view has also been taken that the fact that a large number of persons compete whereas only few gain in the contest is itself a factor which shows that contests cause loss to the consumer. Any increase in the price of a product round about the time the contest is organised has been legitimately interpreted as a factor causing loss to the consumer. Somewhat surprisingly, though unfortunately, in none of the judgments to which we have made reference or in some judgments to which our attention was otherwise drawn, has analysis of Section 36A been made. It would, therefore, not be inappropriate to subject the Section to a detailed analysis.
47. It must in the first place, be accepted that the drafting of Section 36A is not very happy. However, a careful reading of the Section shows the intention of Parliament. A proper analysis of the said Section will lead us to the correct meaning of the words "unfair trade practice". An unfair trade practice must necessarily mean a trade practice as defined in Section 2(u) of the Act. In order that a trade practice becomes an unfair trade practice, several ingredients are to be satisfied as required by Section 36A of the Act.
48. For the purpose of disposal of this enquiry, we may note the broad features. An unfair trade practice must, in the first place, adopt one or more of the practices mentioned in paragraphs 1 to 5 of the section. Paragraph 1 of the Section itself contains ten practices adoption of any one of which is sufficient to make the trade practice an unfair trade practice subject of course to the satisfaction of the other requirements of the section. Paragraph 3 contains two practices. They are in Clauses (a) and (b). In the present case, we ate concerned with Clause (b). The other paragraphs contain one practice each. In all, therefore, there are 15 practices mentioned in paragraphs 1 to 5 of Section 36A. A trade practice, on its way to becoming an unfair trade practice, must, in the first place, adopt one or the other of the said 15 practices mentioned in paragraphs 1 to 5 of the section.
49. The adoption of such a practice in the next place should be for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services. This is the second step in the trade practice becoming an unfair trade practice. The most important ingredient of an unfair trade practice is that the trade practice, by adopting one or the other of the several practices mentioned in paragraphs 1 to 5 of the section, has the quality of causing loss or injury to the consumer.
50. Most of the debate before us has centred on the correct meaning of the words "and thereby causes loss or injury to the consumers of such goods or services". We will refer to these words as the key phrase in the subsequent paragraphs of this judgment. It has been suggested on behalf of the respondent that the phrase necessarily means that the trade practice must cause loss or injury to the consumers before it can be branded an unfair trade practice. On the oiher hand, it has been contended on behalf of the Director-General and on behalf of the complainant that the phrase does not actually mean, looking to the different provisions of Section 36A, that actual loss or injury should be caused. It is enough if the trade practice has the innate character of causing loss or injury to the consumer if it adopts one or the other of the practices mentioned in subsequent paragraphs of Section 36A.
51. If one goes strictly by the literal meaning of the words used, it is possible to agree that actual loss or injury to consumers must be caused by the adoption of one or the other of the practices mentioned in Section 36A. A strict literal interpretation of the key phrase in the instant case becomes incongruous when one notices the provisions relating to the practices mentioned in Section 36A of the Act Take for example paragraph 5 of Section 36A which is as follows:
"Permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale, or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise the cost of those or other similar goods or services."
52. In the practice as described in paragraph 5 of Section 36A, there is inherent loss or injury to the consumer. One cannot insist in such a case that, in order to prove a trade practice which adopts the practice mentioned in paragraph 5 of Section 36A, it must actually cause loss or injury. How can one, for example, prove actual loss or injury by the practice of refusing to sell the goods as mentioned in paragraph 5. It is obvious, therefore, that the adoption of the practice in paragraph 5 has the capacity or the tendency to cause loss or damage to the consumer. Though actual loss or damage is not necessary to be proved, yet it is an unfair trade practice.
53. Paragraph 4 provides another example which suggests that actual loss or injury is not an essential ingredient of an unfair trade practice as defined in Section 36A. Paragraph 4 is as follows:
"Permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, construction, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods."
54. Broadly speaking, the said paragraph deals with the sale or supply of sub-standard goods. Here again, it is wholly unnecessary to insist that, by the sale or supply of sub-standard goods, actual loss or injury was caused to the consumer.
55. If we now turn to Clause (a) of paragraph 3, we notice that it deals with the practice of offering of gifts, prizes or other items with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole. Implicit in this transaction is the loss or injury to the consumer. The key phrase as interpreted on behalf of the respondent does not become relevant in the case of the practice mentioned in paragraph 3(a). Similarly, in our opinion, the publication of any advertisement for the sale or supply, at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price is a practice which has the capacity to cause loss or injury to the consumer. The publication of such an advertisement referred to in paragraph 2 of Section 36A by itself amounts to an unfair trade practice.
56. An analysis of the above provisions of Section 36A shows that the practices mentioned in the said paragraphs are capable of or have got the innate quality of causing loss or injury to the consumers. None of the examples which we have analysed had actually caused loss or injury in order to become an unfair trade practice. If this is the meaning in respect of the provisions which we have examined, then we do not see why the same meaning cannot be attributed to Clause (b) of paragraph 3 of Section 36A. The key phrase must mean the same thing for different paragraphs. It cannot mean one thing for a practice mentioned in one paragraph and mean another thing for the practice mentioned in another paragraph. We are, therefore, of the opinion that even in respect of the practice mentioned in paragraph 3(b) of Section 36A, actual loss or injury need not be caused. It is sufficient if the practice mentioned in the said provision has a tendency or the capacity to cause loss or injury.
57. Returning to the opening part of Section 36A, we are of the opinion that the key phrase does not require the causing of actual loss or injury to the consumer. On the other hand, we are of the opinion that the key phrase is a part of the definition which implies that in. every trade practice which adopts one or the other of the practices mentioned in the subsequent paragraphs of Section 36A, loss or injury is implicit.
58. We are not unaware of the argument that, in that case", the Legislature would have merely enumerated the practices without inserting the key phrase in the opening part of Section 36A. Our answer to this argument is that the insertion of the key phrase is the legislative style or device of making it known why it regards a trade practice which adopts any of the practices as an unfair trade practice. The Legislature intended to convey that a trade practice which adopts one or more of the following practices has got the innate capacity or inherent quality of causing loss or injury to the consumers of the goods and services. It is permissible to depart in certain cases from the strict or literal meaning of the words used, if the context requires to do so. Analysing the different provisions of the paragraphs contained in Section 36A of the Act, we find that the causing of actual loss or injury is not contemplated. It is in this sense that Mr. Aggarwal held, and we agree with him, that the words "and thereby causes loss or injury to the consumers" are words of description which indicate that the trade practices described in Section 36A of the Act are vehicles of loss or injury.
59. There is no dispute that the impugned contest in the present case is a contest for the purpose of promoting, directly or indirectly, the sale of the product of the respondent, In any case, it can be held that the contest is for the purpose of promoting the business interest of the respondent. It is thus a contest which clearly falls in Clause (b) of paragraph 3 of Section 36A. The respondent has followed a trade practice which, for the purpose of promoting the sale of its product or for promoting the business interest, adopted the practice mentioned in paragraph 3(b) of Section 36A.
60. We have already held above as a proposition of law that implicit in such adoption of one or the other practices mentioned in the subsequent paragraphs of Section 36A is the concept of loss or injury to the consumer. It may be mentioned that, in some of the paragraphs, there is loss and in some of the paragraphs there is injury. Loss as we have held above does not mean actual loss. Injury does not necessarily mean physical injury ; it may mean even mental harm.
61. It can conceivably be argued that even an innocent contest will be hit by the provisions of Section 36A(3)(b). We do not think that this apprehension is reasonable. The contest referred to in 3{b) is a contest which is for the purpose of promoting directly or indirectly the sale, use or supply of any product or any business interest. The contest ceases to be innocent if it is held for the purpose of promoting the sale or the business interests of the organiser of that contest. Some of the features of the contest under examination may be noted. The contest induces the consumer to buy a minimum of two tooth brushes to enable him to participate in the contest. If he wants to send more entries, he is naturally required to purchase a proportionately greater number of tooth brushes. There is no ceiling on the number of entries to be sent by one contestant. An obnoxious feature of this contest is about the prizes which were awarded to the persons whose entries were received early in the week. This aspect of the contest has nothing to do with skill and was based totally on chance. The number of losers in terms of money in this part of the contest cannot be insignificant. The "early bird" aspect of the contest was purely in the nature of a lottery.
62. It was next urged by Mr. Ravindra Narain that, in the instant case, no order under Section 36D(1) be passed because it is not established that the contest which is now held to be an unfair trade practice is prejudicial to the public interest or to the interest of any consumer or consumers generally. We are reluctant to accept this submission. The fact that a large number of persons are persuaded to part with their money in the hope of getting some prizes is not in the public interest. We are also of the opinion that looking to the nature of the contest held by the respondent, it is definitely a matter of prejudice to the interest of the consumers. An order under Section 36D(1) is, therefore, warranted on the facts and circumstances of this case.
63. We have mentioned earlier in the judgment that an issue relating to restrictive trade practice was raised and was answered in the negative by Mr. H. C. Gupta. Mr. Aggarwal did not differ from Mr. Gupta on that issue. We must, therefore, proceed on the basis that issue No. 1 relating to restrictive trade practice is answered in the negative. We uphold the said finding.
64. In the light of the discussion which we have made above, we hold that issues Nos. 2 and 3 are both answered in the affirmative.
65. Since the contest is already over, the only order that can be passed is as follows :
The respondent is hereby directed that it shall not repeat the unfair trade practice of holding a contest for the purpose of promotion of sale of its products for the purpose of promoting its business interests in future.
66. There will be no order as to costs.
N.C. Gupta, Member
67. I have had the advantage of reading the order to be delivered by my Lord, Justice R. A. Jahagirdar. In conclusion, it holds that the contest in this case organised by the respondent is covered by Clause 3(b) of Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (for short, "the Act"), and is an unfair trade practice which is also prejudicial to the public interest. Hence, it has been directed that the respondent shall not repeat the unfair trade practice of holding contests for the purpose of promotion of sale of its products or for the purpose of promoting its business interests in future. I respectfully agree with the conclusion arrived at in this order. However, a reading of the order makes it apparent that the per se doctrine has been applied for the interpretation of the aforesaid legal provision and not the rule of reason as enunciated by the Supreme Court in the case of Tata Engineering and Locomotive Co. Ltd. [1977] 47 Comp Cas 520 ; AIR 1977 SC 798 and reaffirmed in the case of Mahindra and Mahindra [1979] 49 Comp Cas 419 ; AIR 1979 SC 798. These two cases pertained to the interpretation of Section 33 of the Act as it originally stood prior to the amendment by Act No. 30 of 1984. Section 33 was amended in the year 1984 to narrow down the effect of these two judgments for future cases by adopting a well-known legislative device to introduce a deeming provision therein. After amendment, it was stated that every agreement falling within one or more enumerated categories shall be deemed for the purpose of the Act to be agreements relating to restrictive trade practices and shall be subject to registration. However, this deeming provision was made use of only for requiring a particular type of agreement to be registered with the Director-General (Investigation and Registration). The definition of "restrictive trade practice" as appearing in Section 2(o) of the Act remained intact even after the said amendment. The net result is that, in order to label a trade practice as a restrictive trade practice, the same must satisfy the requirements of Section 2(o) of the Act.
68. Part B was added to Chapter V of the Act to deal exclusively with "unfair trade practices". Section 36A which enumerates 17 practices in all contains the definition of "unfair trade practice". The key phrase appearing therein "and thereby causes loss or injury to the consumers of such goods or services, whether by eliminating or restricting competition or otherwise . . ." (emphasis supplied) is actually the bone of conflicting interpretation in the various decisions given by the Commission so far. During arguments, a large number of orders earlier passed by the Commission relating to interpretation of this key phrase and its effect on the legality or otherwise of the impugned trade practice were cited before us.
69. We are not called upon to examine the correctness or otherwise of those decisions. This Full Bench was constituted to resolve the difference of opinion appearing in the order passed by the then Member Shri D. C. Aggarwal and that of Shri H. C. Gupta. In the present leading judgment, the Commission has followed the line of argument adopted by Shri D. C. Aggarwal in preference to the views expressed by Shri H. C. Gupta. However, in my opinion, the order passed by Shri D. C. Aggarwal is also not based on the per se doctrine, meaning that if an impugned trade practice squarely falls under any of the Clauses (or say paragraphs, as stated in the leading judgment), the same shall be deemed to be an unfair trade practice even if no loss or injury is perceivable in the practice. It is because he has discussed the various aspects of the impugned contest in detail to hold that the harm to the consumer is inherent therein. Even otherwise, I am unable to accept this approach for interpreting the key phrase both on the basis of the language used therein and also on the transcendental logic of prudence.
70. The aforesaid phrase starts with the expression "and thereby causes" which means that an impugned trade practice even falling under any of the enumerated practices should also be such which is the cause of actual, potential or inherent harm to the consumers. It has been held in the Commission's earlier judgments as also in two earlier orders of the two Hon'ble Members that loss or injury contemplated in the key phrase need not be restricted to a monetary loss or physical injury but will encompass within its ambit all types of harm actual or inherent. My difficulty in accepting the approach adopted by the leading judgment lies in the fact that, therein, the inherent harm contemplated in the key phrase is deemed to have been invariably present in all situations covered by various paragraphs while, according to me, it is an independent ingredient to be perceived from the overall effect of the impugned trade practice in a given situation.
71. It is no doubt true that, while enumerating the various categories of trade practices in Section 36A of the Act, the Legislature appears to have been influenced by the inherent harm to the consumer deemed to be present in such practices. However, it is well-nigh impossible to contemplate and conceive of all types of situations which may fall under any of the enumerated categories. It is for this purpose that the Legislature seems to have taken care to include the ingredient of actual or inherent harm to the consumers as an essential element of an unfair trade practice. Herein lies the difference between the per se doctrine and the rule of reason as enunciated by the Supreme Court in the aforesaid two rulings. While the practices enumerated in paragraph I, including all its sub-paragraphs, paragraphs 3(a), 4 and 5 deal with practices where the harm to the consumers is inherent, it does not appear to be so with respect to paragraphs 2 and 3(b) of this section. Paragraph 2 describes the trade practice pertaining to "bargain price". It states : "permits the publication of any advertisement, whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement". Apparently, in this paragraph, the harm, actual or inherent, flowing from this trade practice, has been left to be determined or perceived by the authority who adjudicates upon the nature of the trade practice. In a given set of circumstances, it may be possible to perceive actual or inherent harm to the consumer but, in another set, it may not be there. It is because the reasonability depends upon the period of sale, quantity offered for sale having regard to the nature of market and nature/size of business and also the nature of the advertisement. All these factors will have to be taken into consideration to perceive the inherent harm to the consumer before holding the impugned trade practice as an unfair trade practice. For instance, a sale organised offering reasonable quantity of the product for a reasonable length of time at a price which is shown to be less than the normal price may not satisfy the ingredient of actual or inherent harm to the consumer. However, a sale organised by the advertiser wherein only leftover or spoiled goods are offered at the same or marginally lower prices than those at which the real goods are available, may be held to cause inherent harm to the consumer and as such an unfair trade practice. So it will all depend upon the totality of circumstances attendant upon or preceding the impugned trade practice.
72. Now, coming to paragraph 3(b), it is an omnibus provision relating to the "conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest". It is indisputable that the considerations which would apply to a contest in the nature of lottery are necessarily different from those applying to a pure game of skill even though the latter is also organised for promoting indirectly the sale, use or supply of any product without much element of chance or gambling instinct. Normally, no business house or manufacturer/seller of a product would conduct even a game of skill without the intention of promoting at least indirectly the sale or supply of his product. While the inherent loss or injury by eliminating or restricting competition to the consumers of the product is inherent in a case of lottery or game of chance, it cannot be said to be so in a pure game of skill. Therefore, a game of pure skill organised by the manufacturer of a product will not per se be an unfair trade practice in terms of Section 36A unless, on the facts of the case, it is held that the loss or injury to the consumer is inherent in it. It is probably for this reason that both in the orders of Shri D. C. Aggarwal and Shri H. C. Gupta and also the above leading judgment, the nature of the contest organised by the respondent has been discussed in detail to come to the conclusion that the cumulative effect of this contest includes an inherent or innate quality of causing loss or injury to the consumers. It follows that it would not have been possible to hold the impugned contest as an unfair trade practice unless it was found to cause inherent loss to the consumer. Therefore, the presence of inherent loss or injury in the impugned practice cannot be a matter of presumption. Had it been otherwise, the Legislature would, in all probability, have adopted the same legislative technique of deeming provision in this Section in line with the amendment of Section 33 which was carried out at one and the same time.
73. Therefore, with all the humility at my command, I am of the view that while holding an impugned trade practice as an unfair trade practice, the actual or inherent harm to the consumer must be perceivable and perceived therein and not merely presumed. Subject thereto, I agree with the conclusion arrived at in the leading judgment.
74. I concur in the order to be made.