Calcutta High Court
Reckitt & Colman Of India Ltd. vs Jyothi Laboratories Ltd. & Ors. on 19 April, 1999
Equivalent citations: (1999)2CALLT230(HC)
Author: Ruma Pal
Bench: Ruma Pal
JUDGMENT
The Court
1. The appellant manufactures ultra marine indigo (neel) both in llqutd and powder form under the trade name of Robin Blue (referred to as the product). The product is used for whitening fabric. The respondent No. I also sells a whitening agent which is an "Insta violate concentrate" under the trade name 'Ujala'. The respondent No.2 is the respondent No. 1's advertising agency.
2. This is the third round in a tussle between the respondent No. 1 and the appellant with regard to the advertisements issued by the respondent No.1 to promote its -product. The first was in respect of a printed advertisement which was in Bengali. The Advertisement gave reasons why neel should never be used. This advertisement was the subject matter of a suit in this court. An exparte interim order was passed restraining the publication of the advertisement. This was confirmed after the filing of affidavits on 24th March, 1998. According to the respondent No.1, pursuant to this order that particular advertisement was not being published in the earlier manner. According to the appellant even in its present form the advertisement continued to disparage the appellant's product.
3. The second round was in respect of a television commercial which also, according to the appellant, denigrated its product. The appellant filed a compliant under section 36B of the Monopolies and Restrictive Trade Practices Act, 1969 (referred to as the Act) before the MRTP Commission, New Delhi. The Commission initially granted an exparte order of injunction restraining the publication of the offending advertisement. This was vacated after the filing of statements and hearing the parties. An appeal was preferred before the Supreme Court under section 55 of the Act which was dismissed summarily.
4. The subject matter of this appeal is in respect of a third advertisement. The offending advertisement is a commercial in Hindi and is broadcast on television. Briefly the story bourd shows that 'neel' leaves blue patches on a child's uniform which subjects the child to ridicule in his school. He is tauntingly called "Dhabba Master" by the other school children. According to the appellant "Dhabba" in Hindi means patch or stamp and is an obvious reference to the blue patches on the white shirt. The child complains to his mother. His mother is in despair with the effect of "Neel". A lady in a dazzling white saree then enters with a bottle of "Ujala" to the accompaniment of a Jingle which praises "Ujala" as a whitening agent. The commercial then shows a scientist saying that "Ujala" dissolves in the water which brings, such whiteness to clothes which neel can never achieve. The next shot shows the mother holding up the child's shirt exclaiming on its new colour of whiteness. The next few shots show several children in while uniforms participating in a flat race. The child wins. Finally the child says that in whiteness Ujala was first, while the mother says that Neel 'failed'. According to the appellant, the commercial was directed to promote the product of the respondent No. 1 by deprecating the use of neel and by deliberately misrepresenting the quality and efficacy of the appellant's product.
5. On the allegation that the respondent No.1's third advertisement as well as the altered form of the first advertisement denigrated the appellant's product, the appellant filed a suit in this court. In its interlocutory application it has claimed an injunction against the respondents from advertising "Ujala" in a manner which disparaged the appellant's product. An ad-interim order was passed on 39th March, 1999 restraining the respondents from advertising their product in a manner which made may disparaging reference to the appellant's product. This interim order was vacated at the instance of the respondent No. 1 before the filing of an affidavit on 7th April, 1999 on the ground that "the quality of the plaintiff's product has not been specifically disparaged in the impugned order". The learned Judge also directed affidavits to be filed and the application is due to appear in the list on 26th April 1999.
6. The appeal was moved on notice to the respondent on 9th April, 1999. The appeal was admitted and on the statement of counsel appearing on behalf of the respondent No. 1 that no steps would be taken to punish the offending advertisement till Wednesday no interim order was passed staying the operation of the order dated 7th April, 1999. The matter was directed to appear on 13th April. 1999 when, with the consent of the parties, it was directed that the appeal itself would be heard and disposed of on the basis of the papers available before the court. However, despite the respondent's counsels assurance, the offending advertisement continued to be shown. As such, on 16th April, 1999 when the hearing was concluded, the court stayed the order under appeal and revived the earlier order of injunction passed by the learned single Judge.
7. The respondent No. 1 raised several preliminary objections. The first was that the appeal was not maintainable. According to the respondent No. 1 no appeal lies from an exparte ad interim order or an order vacating the exparte ad-interim order.
8. The submission is unacceptable. All interim orders, including exparte ones are granted under Order 39 Rules 1 and 2 of the Code of Civil Procedure and may be vacated under Order 39 Rule 4. Orders under both these provisions are expressly appealable under Order 43 Rule 1 sub-rule (r). No distinction is drawn between the kinds of interim orders, whether exparte or on contest (See: Motilal Singh v. Shib Chandra Base : 75 CWN 233].
9. The decisions cited by the Respondent No.1, namely Shah Babulal Khimji v. Jayaben D. Kania : : Nurul Hoda v. Amir Hasan : (FB) and LCTLPL Palaniappa Chettiar v. M.R. Krishnamurthy Chetty : (DB) do not hold to the contrary. In Shah Babulal Khimji's case it was made clear that the Civil Procedure Code applied to internal appeals in the High Court and that the provisions of the Code did not curtail but gave an additional right of appeal to those available under Clause 15 of the Letters Patent. An order which is expressly appealable under the Code does not have to fulfil the requirement of being a "Judgment" under Clause 15. This is lucidly expressed in the following passage of A.N. Sen-J :
"This right of appeal under Clause 15 of the Letters Patent is in no way curtailed or affected by section 104 of the Code of Civil Procedure and section 104 seeks to confer the right of preferring an appeal in respect of the various orders mentioned therein. In order words, by virtue of the provisions contained in section 104(1), a litigant enjoys the right of preferring an appeal in respect of various orders mentioned therein, even though such order may or may not be appealable under Clause 15 of the Latters Patent as a Judgment and the right of appeal under Clause 15 of the Latters Patent remains clearly unimpairted."
10. In the Calcutta and Madras High Court decisions cited, the only queslion was whether a particular order which was not otherwise appealable under the Code was a 'Judgment' under Clause 15 of the Letters Patent. The cases have no bearing in this case as the order challenged is appealable under the Code.
11. Both respondents submitted that the appellate court should not interfere at this stage when the interlocutory application was pending disposal by the learned single Judge. It is well established, and as held in Wanger Ltd. v. Antox India P. Ltd. : 1990 SCC Supp. 727, that the appellant court would normally not be justified interfering with the exercise of discretion by a single Judge 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 the appellate court would have taken a different view may not Justify interference with the trial court's exercise of discretion. But. as said, by GaJendragadkar-J in Printers (Mysore) Pvt. Ltd. v. Pothar Joseph : , the difficulty arises in the application of these principles to an individual case. In this case the learned Judge has expressed himself finally on an issue which should have been left till the disposal of the application after the filing of affidavits. He in effect held that unless an advertisement specifically refers to the appellant's product, the appellant had no cause of action and that the appellant had failed to establish that the advertisement specifically referred to the appellant's product.
12. On the other hand there is the final and reasoned decision dated 24th August 1998 of another learned single Judge of this court in connection with the first advertisement:
"Assuming in the advertisements insinuations were not made against Robin Blue and the same was directed to all blues as has been stated in no uncertain terms in the affidavits, can it be said that it was not made against Robin Blue? The answer is a definite "no", because Robin Blue is also a blue."
13. No reason has been given in the order under appeal why a contrary view was taken. It was, in any event, not open to the learned Judge to have taken such a contrary view without referring the matter to a larger Bench.
14. Furthermore, the only materials before the learned single Judge on record were the uncontroverted statements in the appellant's petition supported by the survey conducted by the IMRB which showed that 75% of the persons surveyed were of the view that the particular commercial referred to Robin Powder Blue and 25% thought that it referred to Robin Liquid Blue. This was the material on the basis of which the exparte order had been passed a week earlier on 30th March 1999. What persuaded the learned Judge to reject the material on 7th April 1999? it is this absence of reasoning in support of a diametrically opposite and final conclusion which compels us to consider the matter albeit at an ad-interim stage.
15. The third preliminary objection taken by the respondent is that the Supreme Court had dismissed the appeal preferred from the order of the MRTP Commission in respect of the second advertisement and the matter was res judicata.
16. The objection is rejected on the ground that the advertisements are admittedly different. Besides, the order of the MRTP Commission was an interim order and has not conclusively decided any issue. It is also debatable whether the order of the Supreme Court that 'the appeal is dismissed' either affirmed the findings of fact arrived at by the MRTP Commission or indeed the law so as to operate as res judlcata. The statutory appeal to the Supreme Court under section 55 of the Act is permissible, like section 100 of the Code, only on substantial questions of law. The dismissal of the appeal may have been occasioned because the questions raised were not questions of law at all in which case there would be no question of res Judicala. In these circumstances, as observed in Pujari Bai v. Madan Gopal :
"The technical rule of res judicata. although a wholesome rule based upon public policy, cannot be stretched too far to bar the trial of identical issues in a separate proceeding merely on an uncertain assumption that the issues must have been decided. It is not safe to extend the principle of res judicata to such an extent so as to found it on mere guesswork."
17. Before considering the merits, we make it clear that we are, for the purpose of this appeal, limiting ourselves to considering whether the appellant had a prima facie case, and if so, where the balance of convenience lies.
18. The appellant has based its cause of action on the tort of injurious falsehood. It is claimed that three conditions are required to be established by a plaintiff in order to succeed in such a case :
1. That the representation made by the defendant concerned the plaintiffs product;
2. That the representation disparaged the plaintiffs product and were untrue; and
3. That the representations were intended to be taken seriously.
19. It is submitted that the advertisement referred to the appellants product viz. "Neel" disparagingly. It has relied on a survey conducted by the IMRB to show that a large percentage of the persons interviewed thought that the offending advertisement referred to the appellant's products, as leaving blue stains on clothes. According to the appellant it has an established reputation in neel and it has given its sales figures over the years to prove this. It is said that the representations disparaged the appellant's product not only by saying that "Neel" left ugly blue patches on clothes, but also that it "failed" as a whitening agent.
20. To support its contention that the advertisement made false representations the appellant has relied on the opinion of Dr. Asim Kumar Roy Chowdhury, whose qualifications are "M. Tech. (IIT Delhi), Ph.D.Tech. (Calcutta) Taxtile Chemist, Colour Scientist Certificate in German & Russian Language, Member institute of Engineers (India) Research Committees, American Association of Taxtile Chemist & Colourist (USA), Textile Association (India), Indian Thermal Analysis Society, Indian Society of Analytical Scientists" and who is a Senior Lecturer in the College of Textile Technology at Srirampore. Dr. Roy Chowdhury says after conducting tests "no unevenness or patches detected on treated clothes". The institute of Jute Technology has also certified on the basis of tests conducted not only that the appellant's product was an effective whitening agent, but also that it was superior to "Ujala". The appellant has said that there could be no dispute that the representations made by the respondent No. 1 in the offending advertisement were intended to be taken seriously and were in fact so taken by the public.
21. The respondents have submitted that in an action for slander of goods the burden was heavily on the plaintiff to show that the offending advertisement referred specifically to the plaintiffs goods. According to the respondents in the offending advertisement there is no reference even remotely, to the appellant's product. It is then said that onus was also on the appellant to prove that the representations were untrue. The respondents who have filed an affidavit before this court, have relied on (i) a report of the Srlram Institute for Industrial Research that tests showed the appellant's product formed sediments at the bottom of a solution and that "Jjala" was a superior whitening agent and that the clothes treated with the appellant's product turned "bluish in shade"; (11) An analysis on dyes and dyeing of the Central Silk Technology Research Institute; and (111) An opinion of Dr. C.B. Jagannath Rao interpreting (I) and (11). On the basis of this, it is submitted that there was sufficient material to show that the representations made in the offending advertisement were true. It is also submitted that if a defendant believes as offending statement to be true and is willing to offer evidence in support of the statement no injunction should be granted. Finally, it is submitted that an action for slander of goods would lie only if the publication causes the plaintiff to suffer special damages. In this case, the appellant has not pleaded special damage nor that it has in fact suffered any damage by reason of the advertisement.
22. The respondent has submitted that the English Common Law did not allow the passing of an interim injunction when a defendant to an action for injurious falsehood claimed that it would Justify its stand. In Bestobell Paints Ltd. v. Bigg : 1975 FSPLR 421 a learned single Judge of the High Court in England said-
"There is an old and well established principle which is still applied in modern times and which is in no way affected by the recent decision by the House of Lords in American Cyanamid Corporation v. Ethicon, that no interlocutory injunction will be granted in defamation proceedings, where the defendant announces his intention of Justifying, to restrain him from publishing the alleged defamatory statement until its truth or untruth has been determined at the trial, except in cases where the statement is obviously untruthful and libellous. That was established towards the end of the last century and it has been asserted over and over again."
23. It is debatable whether this is in fact the law. G.K. Milter J. after considering several English decisions in National Sugar Mills v. Asutosh : said :
"The result of the English authorities is that before the court can be called upon to exercise its jurisdiction on an interlocutory application to grant the injunction, it must be satisfied that the plaintiff has made out a prima facie case that the libel is untrue. If the court has materials before it to take the view that the defendant may be able to prove the truth of the libellous statement at the trial, it ought not to exercise the Jurisdiction."
24. However, one of the reasons for the rule as noted in Bestobell's case is that in England actions for defamation and libel are tried with a Jury and the reason behind the rule was the undesirability of expressing a judicial view before the verdict of a Jury. In India on the other hand, there is no question of trial by any Jury and it is the judge in the first instance and in the last who has to determine the matter finally. It is therefore not unreasonable to assume that English Law even if it as stated in Bestobell's case might not be applicable in this country. It is for the learned single Judge to consider and determine this. But it can at least be said that the appellant has an arguable case.
25. The general principle of grant of interlocutory order has been stated in Wander Ltd. v. Antox India P. Ltd. (supra) as :
"Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated :
"... is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the balance of convenience lies".
The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case."
26. We are not persuaded to hold at this stage that different considerations apply in actions for injurious falsehood as contended by the respondents. This court is only called upon to decided whether the appellant has a prima facie case not only on facts but also on law.
27. Prima facie it appears that the appellant is right in its submission that the English law on the question of grant of injunctions in cases of injurious falsehood may not strictly be applicable in the Indian context. For example the requirements for pleading and proving special damage in English law may be said to be inapplicable to this country because section 38 of the Specific Relief Act, 1963 allows a permanent injunction, as has been prayed for in the appellant's suit, to be granted where in fact compensation in money would not be adequate relief. That has been pleaded in the appellant's plant and petition. As far as interim preventive relief is concerned, section 37(1) of the Specific Relief Act, 1963 subjects the grant only to the Code of Civil Procedure where there is no requirement to establish damage.
28. Besides, in England the earlier requirement in English Common Law that special damage must be averred has been virtually done away with by section 3(1) of the Defamation Act, 1952 which provides :
"In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege to prove special damage-
(a) if the words upon which the action is found are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or
(b) if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication."
29. It may be, therefore, arguable that the decisions in Timothy White v. Gustar Mellin : 1895 AC 154 and Hubback v. Wilkinson : (1899) 1 QB 86 which hold that special damage must be averred and proved are not in fact essential to the tort of injurious falsehood.
30. We do not at this stage consider the several decisions cited by the appellant to contend that even prior to the Defamation Act, under the common law as it stood earlier--where disparagement was clearly made out and it would appear that damage would necessarily arise from any publication intended by the defendants, special damage was not required to be proved. We leave the question for the learned single Judge to determine. Suffice it to say that at this prima facie stage, it cannot be said that the appellant has no case at all.
31. But the English decisions have consistently held that it is for the plaintiff to show that the statements are untrue. At the interlocutory stage what is required is not proof beyond reasonable doubt, as contended by the respondents. The onus on the plaintiff may be discharged if he reasonably satisfies the court that the plea of Justification taken by the defendant has no basis or in other words the plaintiff must adduce as much proof as may reasonably be expected at an interlocutory stage. Significantly, in Abdul Wahab Galadari v. Indian Express Newspapers (Bombay), Limited : , the learned Judge considered the defence of truth and found it prima Jade satisfying. The appellant has adduced some positive evidence and at the same time has also criticized the evidence put forward by the respondent No. 1 in support of its claim for Justification that the certificates and analysis relied upon by the respondent No. 1 do not show either that the appellant's product leaves blue patches or is a failure as a whitening agent. Before the learned Judge there was no conflicting evidence as was the case in Bestobell Points Ltd. v. Bigg (supra). Was the learned Judge dissatisfied with the evidence? He does not say so. If the appellant's case that the representations are untrue are to be believed and if the learned Judge comes to the conclusion that the evidence adduced by the respondent did not support their representation about blue, malice may be inferred. Using words with the knowledge that the words are false or inaccurate is evidence of malice. And when a trader makes a statement about the efficacy of a rivals goods it is not unreasonable to hold that the claim would be taken seriously by reasonable persons [See Beers Abrasive Products v. International General Electric Co. of New York (supra)). Before us the respondent No.1 has relied upon the literature on a Robin Blue Carton to the following effect :
"If by any chance excess Robin has been used and patches appear on cloths, just rinse them away in clean water."
32. It does not appear to us that this is an admission that Robin Blue used in the right quality or that the appellant's product invariably left blue patches on the washed cloth.
33. The next question is does the offending advertisement speak disparagingly of 'neel' is it merely a case of the respondent No. 1 claiming that it is a better product? If it is the latter, then it is not actionable. The line, even though thin, exists. According to De Beers Products v. Electric Co. of New York : 1975 2 All ER 599 if what is said is "My goods are better than X's. because X's are absolute rubbish", then, as established by dicta in White v. Mellin (supra), the statement would be actionable. Similarly in London Ferro-Concrete Company Ltd. v. Justice. Z (supra) when the defendant not only said that his methods were better than the plaintiffs, but also said that the plaintiffs methods were inadequate. it was held that an action lay. In Young v. Macros (Agency) : (1892) 32 LJQB 6 at page 9 it was said :
"If the declaration had averred that the defendant had falsely represented that the oil of the plaintiffs had a reddish brown tinge, was much thicker and that it had a more disagreeable odour an action might have been maintained."
34. And according to Lord Shand in While v. Mellin : [1895] A.C. 154 at 171 said :
"If there had been in this case a statement that Mellin's Food was positively injurious or that it contained deleterious ingredient and would be hurtful if it were used, I think there would have been a good ground of action".
35. The very purpose of Neel would not be achieved if in the process it left blue patches and to say that Neel 'failed' might be construed as inability to achieve that the purpose of whitening at all. However it would be disparagement of Neel only if the statements are untrue. The learned single Judge has not rejected the appellant's evidence. Since he has not, we assume that he was satisfied that the use of "neel" did not leave blue patches nor did it fall to whiten.
36. The final question is whether the offending advertisement could be said to refer to the appellant's product. In Knupffer v. London Express Newspaper Ltd. : [1944] A.C. 116 a defamatory statement had been made about a group called Young Russia which consisted of emigrant Russian. According to the defamatory statement the group was established in France and the United States of America. The plaintiff was a Russian resident in London and claimed to be the appointed representative of the party in Great Britain and the head of the British Branch. He claimed that the defamatory statement referred to him individually. He brought an action against the respondent for damages for libel. The House of Lords said :
"Where the plaintiff is not named, the test which decides whether the words used refer to him is the question whether the words are such as would reasonably lead persons acquainted with the plaintiff to believe that he was the person referred to. There are cases in which the language used in reference to a limited class may be reasonably understood to refer to every member of the class. in which case every member may have a cause of action. A good example is Browne v. D.C. Thomson & Co. : 1912 SC 359, where a newspaper article stated in Queenstown "instructions were issued by the Roman Catholic religious authorities that all Protestant shop assistants were to be discharged", and where seven pursuers who averred that they were the sole persons who exercised religious authority in the name and on behalf of the Roman Catholic Church in Queenstown were held entitled to sue for libel as being individually defamed."
As Lord Porter said :
"Each case must be considered according to its own circumstances. I can imagine it being said that each member of a body, however large, was defamed where the libel consisted in the assertion that no one of the members of a community was elected a member unless he had committed a murder."
37. The plaintiff in Knupgfer v. London Express Newspaper Ltd. (supra) however rejected the view that every member of the Young Russia Group could bring to his own action to the words complained of and relief on own prominence and claimed that the libel as established by the word were directed to himself. The House of Lords found that the statement was not made concerning a particular individual but about a group of people. Having regard to the language used it was incapable of referring to the plaintiff individually.
38. The learned single Judge did not consider this aspect of the matter at all. At least the IMRB survey, which was yet to be controvered by the respondents, showed that a very large percentage of the persons interviewed thought that the advertisement referred to the appellant's product.
39. Given this prima facie view of the matter there still remains the question of balance of convenience. The appellant has said that the offending advertisement, if continued, will affect its considerable reputation and goodwill and that it can never claim damages as the damage would be irreparable and impossible of quantification in terms of money. On the other hand, the respondents have claimed the constitutional right of freedom of speech. The right to freedom of speech is not an unrestricted one and it is doubtful whether it would extend to protecting a person against a claim for slander. The respondent's reliance on Tata Press Limited v. Manager Telephone Nigam Limited : dealt with the right of a private organisation to print and publish a list of telephone subscribers. The facts are distinguishable, but it would appear that jn cases of libel the endeavour of the court should be to protect the plaintiff without unduly restricting the defendant's right of free speech. In this case the respondents are not being restrained from advertising their product. They are merely being asked to postpone the advertisement of their product in a particular way till the interlocutory application is disposed of. This tilts the scale of convenience in favour of the appellant.
40. In the absence of any satisfactory reasons given in support of the order under appeal and for the reasons stated we vacate the order under appeal and revive the order dated 30th March 1999 which will continue until the disposal of the interlocutory application. We have limited ourselves and dealt with the matter purely as if this court were dealing with the issue at the ad interim stage. Necessarily our observations both on fact and law in this judgment should not be taken as final even for the purposes of the interlocutory application and it will be open to the learned single Judge to take a contrary view in his discretion as he may think fit uninhibited by this order.
M.K. Basu J.
I agree.
Stay prayed for and the same is refused.
Let a xerox copy of this Judgment duly singed by the Assistant Registrar of this court be made available to the parties upon their undertaking to apply for and obtain certified copy thereof on payment of usual charges.
41. Appeal allowed