Madras High Court
Vinod K. Sharma vs Coomi Sorab Warden And Others
O.A.No.511 of 2011 & A.No.3077 of 2011 in C.S.No.404 of 2011 VINOD K. SHARMA,J.
The plaintiff / applicant has filed O.A.No.511 of 2011 & A.No.3077 of 2011, praying therein as under:
i) O.A.No.511 of 2011 - To grant temporary injunction restraining the respondent, their directors, executives, distributors, marketers, franchisees, dealers, agents, stockists, representatives, advertisers, successors-in-business, assigns or any one claiming through or under them from disseminating wrong or misleading information about Nimesulide formulations, in any manner, either directly or indirectly, by means of allusion or insinuation in their television commercials, newspaper advertisement, internet website publication, handouts, brochures, user manual or any other promotional literature and / or publicity materials.
ii) A.No.3077 of 2011 - To issue an order of interim mandatory injunction, directing the respondent to issue a corrigendum that Nimeslide is not banned in India for adults pending disposal of the suit. 2. The plaintiff / applicant filed a suit for permanent injunction, restraining the defendant from disseminating wrong or misleading information that Nimesulide formulations are banned in India, or from disseminating any other misleading information in any manner either directly or indirectly by means of allusion or insinuation in their pamphlets, newspaper advertisement, television commercials, internet website publications, handouts, brochures, user manual or any other promotional literature and / or publicity materials. The prayer is also made for issuance of mandatory injunction, directing the defendant to surrender to the plaintiff for destruction brochures, handouts, user manuals, advertisements, CDs, print materials, pamphlets, screen prints, promotional literature, schemes or such other material containing wrong or misleading information about Nimesulide formulations. Prayer is also made for issuance of mandatory injunction, directing the defendant to issue a corrigendum stating that Nimesulide as such has not been banned in India and the Notification dated 10.02.2011 issued by the Ministry of Health and Family Welfare only prohibits the manufacture, sale and distribution of Nimesulide formulations for human use in children below 12 years of age.
3. The plaintiff is a pharmaceutical company, which is registered under the Companies Act, 1956. The pharmaceuticals products of the plaintiff have a global presence with focus on the markets in India, US, Europe and Russia. The plaintiff company is listed on the New York Stock Exchange, Bombay Stock Exchange and the National Stock Exchange. Besides pharmaceutical products, the plaintiff is a market leader in the manufacture of Nimesulide formulations, which are marketed under the brand name "Nise". The product is being manufactured since 1996 and the actual turnover of "Nise" runs about Rs.80 crores.
4. On 10.02.2011, the Ministry of Health and Family Welfare, Government of India, in exercise of powers under Section 26-A of the Drugs and Cosmetics Act, 1940, issued a notification, prohibiting the manufacture, sale and distribution of certain items including Nimesulide formulations for human use in children below 12 years. The relevant portion of the notification dated 10.02.2011 reads as under
"Now, therefore, in exercise of the powers conferred by Section 26A of the Drugs and Cosmetics Act, 1940 (23 of 1940), the Central Government hereby prohibits the manufacture, sale and distribution of the following drugs with immediate affect namely:-
1. Nimesulide formulations for human use in children below 12 years of age".
5. It is the case of the plaintiff that notification dated 10.02.2011 was challenged in two writ petitions filed by the Confederation of Indian Pharmaceutical Industry and the Indian Drug Manufacturers Association in this Court, wherein, the interim order was passed:
"In that view of the matter, there will be an order of interim stay of the impugned order, in so far as the impugned order relates to prohibition regarding sale of these two drugs for a period of two weeks"
6. The case of the plaintiff is that notification having been stayed, is not in force. The defendant on the other hand is marketing different formulation under the brand name "TUVACE". The defendant, taking advantage of the notification, started publishing and distributing pamphlets across Chennai and other cities claiming that Nimesulide is altogether a banned drug in India, which was contrary to the content of notification dated 10.02.2011 and in any case contrary to the stay order granted by this Court.
7. One of pamphlets of the defendant stated that Nimesulide is banned in India and reference is also made to the Indian Express Newspaper report dated 19.02.2011. It is the case of the plaintiff that information given by defendant by pamphlets is totally misleading, as it does not add the word 'paediatric use' for the children below age of 12 years, thus, the pamphlet issued by the defendant is not only misinformative, but wholly untrue and was intentionally and deceptively to mislead the general public and the medical fraternity.
8. This attempt was to throttle the business of plaintiff and to gain undue advantage in the market share of Indian Market through illegal and unfair means. Not only this, in the pamphlet, the defendant has declared as under:
i."WHEN ONE DOOR CLOSES, ANOTHER ONE OPENS"
ii."DEAR DOCTOR, TUVACE TACKLES PAIN TWO WAYS, IS NOT AVAILABLE AT YOUR NEAREST RETAILER!"
iii."A SAFER, EFFICACIOUS OPTION THAT TACKLES PAIN TWO WAYS. ALLOW ME TO TELL YOU MORE ABOUT IT. PFIZER"
The above captions clearly establish that the intent and motive of the defendant in publishing such pamphlet's is to promote the sale of the defendant's own product TUVACE by propagating false and misleading facts amongst the medical fraternity and the public, disparaging the alternative drug, Nimesulide a banned and unsafe drug."
The case of the plaintiff is that the pamphlet is issued to boost the sale of its product "TUVACE" by false and wholly misleading facts. On the pleadings referred to above, the plaintiff has prayed for injunction and also filed application praying for grant of injunction as referred to above.
9. Learned senior counsel for the respondent at the outset stated that the impugned pamphlet and advertisement showing the persons reading the newspaper with caption that when one door closes, another one opens, has since been withdrawn and substituted by another pamphlet.
10. Learned senior counsel for the plaintiff on the other hand submitted that in spite of withdrawing the impugned advertisement, the respondent again issued another pamphlet mentioning therein that when one door closes, other one opens, which again cannot be said to be bonafide and an attempt to take benefit of the established market of the plaintiff.
11. The stand of the learned senior counsel for the respondent on the other hand was that second pamphlet nowhere refers to the plaintiff's product and have no grievance to the issuance of the said pamphlet. However, the said pamphlet is no longer in circulation, as new pamphlet without making any reference to the name Nimesulide formulation is being circulated. It is also the contention of the learned senior counsel that the plaintiff is not entitled to seek any injunction, as what has been reproduced in the pamphlet is the report of study conducted, which is always open to be published. Learned senior counsel for the defendant also placed reliance on the judgment of the Hon'ble Supreme Court in the case of Dorab Cawasji Warden vs. Coomi Sorab Warden and others, AIR 1990 SC 867, to contend that interim mandatory injunction can only be granted under the following circumstances:
(1)The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.
(3)It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money (5)The balance of convenience is in favour of the one seeking such relief.
12. The contention of the learned senior counsel was that the case of the plaintiff does not fall within the criteria laid down by the Hon'ble Supreme Court. The law with regard to grant of injunction in this type of cases stands settled by the Hon'ble Delhi High Court in the case of Kanak Bhai Bhatt vs. Union, laying down as under:
"68. In fine, the following principles emerge namely
(a) Publication of advertisements being free commercial speech, is protected by Article 19(1)(a) of the Constitution, as per the dictum of the Apex Court in Tata Press case.
(b) There are a few restrictions on the aforesaid right, which would satisfy the test of reasonableness under Article 19(2). These restrictions could be traced to the definition of the term "unfair trade practice" in Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 and Section 2(1)(r) of the Consumer Protection Act, 1986.
(c) Therefore, only if a case of disparaging advertisement falls within the definition of the term "unfair trade practice", an action may lie. It would like before a Consumer Forum, at the instance of a consumer or a group of consumers or a voluntary consumer association or even the Central or the State Government (see the definition of the word "complainant" under Section 2(1)(b) of the Consumer Protection Act). It may even lie before the MRTP Commission. (or the Competition Commission after it is constituted).
(d) An action may lie against such an advertisement before a civil court both at the instance of a manufacturer or marketer and at the instance of a consumer (since Section 3 makes the Consumer Protection Act an additional law and not a law in derogation of any other law), provided that the advertisement in question contains a false representation coming within the 4 corners of sub-clauses (i) to (x) of Clause (1) of Section 2(1)(r) of the Consumer Protection Act.
(e) A careful scrutiny of all the sub-clauses in Section 2(1)(r) of the Consumer Protection Act would show that 4 types of representations are categorised as "unfair trade practices" namely (1) false representations falling under sub-clauses (i), (ii) and (iii); (2) representations which may not necessarily be false but are nevertheless incorrect coming under sub-clauses (iv) and (v); (3) warranty or guarantee coming under sub-clauses (vii) and (viii); and (4) false or misleading representations falling under sub-clauses (vi), (ix) and (x). If an advertisement contains a false representation within the meaning of sub clauses (i) to (iii) or an incorrect representation within the meaning of sub clauses (iv) and (v) or a warranty or guarantee within the meaning of sub clauses (vii) and (viii) or a false or misleading representation or fact within the meaning of sub clauses (vii), (ix) and (x) of Clause (1) of Section 2(1)(r) of the Consumer Protection Act, then the action may lie.
(f) In the light of the above statutory prescription, it is doubtful if false claims by traders, about the superiority of their products, either simplicitor or in comparison with the products of their rivals, is permissible in law. In other words, the law as it stands today, does not appear to tolerate puffery anymore. I do not know if "Puffing" which is only a twin sister of 'bluffing", permitted by English courts in the past, still has the sanction of law even in England, after the advent of 'legacy regulators' such as CAP, Oftel, Ofcom, Clearcast etc., and the issue of The Control of Misleading Advertisement Regulations, 1988 (as amended by Regulations of 2000) and the enactment of the Communications Act, 2003.
(g) An advertisement which tends to enlighten the consumer either by exposing the falsity or misleading nature of the claim made by the trade rival or by presenting a comparison of the merits (or demerits) of their respective products, is for the public good and hence cannot be taken to be an actionable wrong, unless 2 tests are satisfied namely (i) that it is motivated by malice and (ii) that it is also false. This is on account of the fact that a competitor is more well equipped to make such an exposure than anyone else and hence the benefit that would flow to the society at large on account of such exposure, would always outweigh the loss of business for the person affected. If 2 trade rivals indulge in puffery without hitting each other, the consumer is misled by both, unless there is increased awareness or Governmental intervention. On the other hand, if both are restrained from either making false representations / incorrect representations / misleading representations or issuing unintended warranties (as defined as unfair trade practice under the Consumer Protection Act), then the consumer stands to gain. Similarly, permitting 2 trade rivals to expose each other in a truthful manner, will also result in consumer education."
13. The contention of the learned senior counsel for the defendant was that advertisement issued by the defendant is to enlighten the consumer, therefore, cannot be taken to be wrong, therefore, the case of the defendant is within the categorization 'g' referred to above, which does not entitle to plaintiff to claim injunction.
14. On consideration of the matter, I find that it would not be appropriate at this stage to direct the respondent to comply with the mandatory injunction as prayed for, but at the same time, the plaintiff is entitled to injunction, restraining the defendant from publicity, which affects marketing of the product of the plaintiff. The impugned pamphet issued by the defendant did not depict the correct information, as it failed to disclose that Nimesulide formulation was only banned for 'paediatric patient' below 12 years of age, which clearly shows that the pamphlet is motivated by malice and was not bonafide. The defendant have also failed to disclosed the factum that the stay was granted and also the fact the ban imposed on Nimesulide formulationi also stands set aside. The plaintiff, thus, is entitled to injunction, restraining the respondent from disseminating wrong or misleading information about Nimesulide formulations, in any manner, either directly or indirectly, by means of allusion or insinuation in their television commercials, newspaper advertisement, internet website publication, handouts, brochures, user manual or any other promotional literature and / or publicity materials.
VINOD K. SHARMA,J.
ar
15. Consequently, O.A.No.511 of 2011 is ordered as prayed for. Whereas A.No.3077 of 2011 is dismissed at this stage, as it is always open to the applicant / plaintiff to publish their stand about drug being not banned. No costs.
23.01.2012 Index: Yes Internet: Yes ar Note: Issue order copy on 23.01.2012.
Pre-Delivery Order in O.A.No.511 of 2011 & A.No.3077 of 2011 in
C.S.No.404 of 2011