Madras High Court
N.R.Swaminathan vs Union Of India on 14 March, 2002
Author: A.K. Rajan
Bench: A.K. Rajan
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 14/03/2002
CORAM:
THE HON'BLE MR.JUSTICE A.K. RAJAN
W.P.No. 18635 of 1994
N.R.Swaminathan,
Publisher,
Dinamani,
Express Gardens,
No.137, Kamarajar Salai,
Madurai-625009. .. Petitioner
vs.
1. Union of India, represented
by Secretary to Government,
Ministry of Food & Civil Supplies,
(Department of Civil Supplies),
New Delhi.
2. The District Consumers Disputes
Redressal forum, Madurai District
Court Campus, Madurai, represented
by its Presiding Officer.
3.The Federation of Consumer
Organisation of Tamil Nadu,
represented by its General Secretary,
Henry Tiphagne,
No.57, American College Building,
Goripalayam, Madurai-625002. .. Respondents
Petition filed under Article 226 of the Constitution of India,
for the issuance of Writ of Declaration, as stated therein.
For Petitioner : Mr.S.Vijayaraghavan
For Respondents : Mr. N.S.Sivam, for R.3
Mr. V.T.Gopalan,
Additional Solicitor General,
For R.1
For Mr.K.Rajendran.
:O R D E R
The writ petition is for issue of writ of declaration, that Section 2(1)(r) (3)(b) of the Consumers Protection Act 1986 introduced by Amendment Act(Act 50/1993) is void, unconstitutional and ultra vires.
2. Petitioner is the Printer and Publisher of the Tamil Daily, "
DINAMANI" under the Indian Express Group of Publications. It has a high reputation in Tamil Nadu. It is published for more than 60 years. It has acquired special status for its quality and accuracy. It wanted to celebrate its Diamond Jubilee (completion of 60 years), in a grand manner considering the expectation of the public. The Diamond Jubilee commenced in 1993 and concluded with a final function in which several eminent public figu res also participated. The Diamond Jubilee commemorative volume of "Dinamani" was priced at Rs.50/-; It contained a coupon; The readers who purchased this were entitled to write a sentence in about 15 words explaining why they enjoy reading "Dinamani". Several prizes were announced. This contest essentially depends upon the skill and that was made clear in the scheme itself. The quality of the entry was to be evaluated by, " content/depth of the meaning and elegance of language"
("Sol Nayam" and "Karuththazham"). The ultimate winner was to be selected on the basis of the excellence of the entry evaluated by an eminent panel of Judges; it is not a gambling, based on luck.
3. In the meanwhile, the third respondent wrote a letter stating that the competition announced by the petitioner was a game of chance and was offending the Prize Competitions Act, 1955, Tamil Nadu Lotteries and Prize Schemes (Prohibition) Act, 1978 and the Prize Chits and Money Circulations Scheme (Banning) Act, 1978 and Consumer Protection Act, 1986. A suitable reply was given to the third respondent. However, subsequently another communication was received from the third respondent that the petitioner does not violate the other Acts, but, still violate the Consumer Protection Act and therefore filed C.P.O.P.No.47 of 1994 on the file of the second respondent, against the petitioner as well as the editor of "Dinamani". In the complaint, the third respondent stated that the scheme which is essentially a prize competition based upon the skill is an unfair trade practice under Section 2(1)(r) (3)(b) of the Consumer Protection Act, 1986, as amended in the year 1993. The third respondent admitted that it is a game of skill, but still stated that it is an unfair trade practice, it has to be discontinued and sought amongst other prayers that the cash value of all the prizes should be distributed to all the persons who had sent in entries for the contest.
4. Under Section 14 of the Consumer Protection Act, all practices coming within the definition of "Unfair Trade Practices" are to be stopped by appropriate orders by various Consumer Redressal Forums/ Commissions under the Act.
Section 2(1)(r)(3)(b) which treats the prize competition even though based upon skill as unfair trade practice and imposing a total ban on the scheme violates the Fundamental Rights to carry on business guaranteed under Article 19(1)(g) as well as Fundamental Right of Freedom of Press guaranteed under Article 19(1)(a) of the Constitution. Therefore, Section 2(1)(r) (3)(b) which was introduced by the Amending Act, is void, unconstitutional and ultra vires and hence it is liable to be struck down. The conduct of the prize competition to promote the business is part of business activity. The total ban even on conducting prize competition based upon skill cannot be considered as reasonable restriction within the meaning of Article 19 (6) of the Constitution. The prize competition of the petitioner is not an unfair practice. It is not gambling. It was primarily intended to boost the circulation of the newspaper. When the circulation is increased, the sale price of the newspaper is reduced. Therefore, it benefits the consumer ultimately. The scheme was announced as early as 22.7.1994 . The Diamond Jubilee Commemorative volume was released as early as on 27.9.1994. There has been widespread publicity and thousands of readers who purchased those volumes and entered into the contest are eagerly awaiting the results of the Judges and distribution of the prizes. At this stage, if the scheme itself is stopped it would cause serious loss to the prestige of the Newspaper besides causing embarrassment to the general public. Therefore, the petitioner prays for issue of writ of declaration that Section 2(1)(r) 3(b) of the Consumer Protection Act is void, unconstitutional and ultra vires.
5. No counter was filed by any one of the respondents.
6. Counsel for the petitioner submitted that the petitioner has got the right to advertise its products and it has got a right to increase the turn-over by adopting novel ideas and such steps cannot be prohibited by the State except, in accordance with the Constitutional provisions. Further, the petitioner is a newspaper. Therefore, the petitioner has also got a right guaranteed under Article 19(1)(a) which includes the right to increase the circulation. Such a right cannot be restricted by imposing the prohibition which exceeds the power and grounds on which that right can be restricted. He submitted that in the decision in R.M.D.C. v. Union of India (A.I.R. 1957, S.C. 628), the Supreme Court has laid down that, " As regards competitions which involve substantial skill, however, different considerations arise. They are business activities, the protection of which is guaranteed by Art.19(1)(g)..."
In the above case, the Supreme Court upheld the validity of the law prohibiting the prize competition which is purely gambling in nature; but struck down the law in so far as it relates to prize competitions which involve skill, as violative of Article 19(1)(g). Relying upon this judgment, the counsel for the petitioner submitted that the amendment introduced in the year 1993 to the Consumer Protection Act which included sub-section 3(b) to 2(1)(r) which defines Unfair Trade Fair Practice so as to include even a game of skill, is ultra vires the Constitution as it violates the provisions of Article 19(1)(g). On the rights guaranteed under Article 19(1)(g), a reasonable restriction can be imposed only under Sub-Article 6 to 19, i.e., only in the interest "general public". Hence, the provisions of S.2(1)(r) 3 (b), in so far as it includes the conduct of game of skill as an unfair trade practice as unconstitutional.
7. The Additional Solicitor General appearing for the Union of India, the first respondent herein, submitted that even assuming that the prize competition announced by the petitioner is not purely in the nature of gambling, but also involves skill, yet the Parliament in its wisdom considered that even conduct of such game of skill for the purpose of promotion of business was to be considered as an Unfair Trade Practice. The wisdom, power and right of the Parliament in defining Unfair Trade Practice cannot be questioned. It is also not justiciable. The petitioner while publishing its souvenir and conducting the prize competition was trying to attract more purchasers. Therefore, it is purely to increase the business of the petitioner. The argument that the right to Freedom of Press guaranteed under Article 19(1 )(a) is violated is not acceptable in view of the fact that the State has not imposed any restriction on improving the quality of the news or reporting. Such Unfair Trade Practice would result in affecting the other newspapers; the conduct of the prize competition is not in the interest of the general public. It is only a business activity. Therefore, the State has got a right to im pose restriction on such a right of Freedom of Trade or Business in the interest of public. Therefore, it cannot be said to be in violation of the rights guaranteed under Article 19(1)(g). The Additional Solicitor General further submitted that the object of the amendment of the Consumer Protection Act is only to protect the consumers from exploitation by Unfair Trade Practice. As per section 2(1)(r) 3(b), a prize competition, even if it involves game of skill, if it is intended "directly or indirectly" for the purpose of promoting the business, it is an Unfair Fair Trade Practice.
8. The Additional Solicitor General referred to the decision Sanjeev Coke Mfg. Co. v. M/s. Bharath coking Coal Limited (A.I.R. 1983, Supreme Court, 239), where it was held, " Validity of legislation is not to be judged merely by affidavits filed on behalf of the State, but by all the relevant circumstances which the court may ultimately find and more especially by what may be gathered from what the legislature has itself said. "
Therefore, the counsel argued that the non-filing of the counteraffidavit will not give any benefit to the petitioner. Further, he also relied upon a decision in Delhi cloth & General Mills Ltd. v. S. Paramjit Singh ((1990) 4 S.C.C. 723, wherein it was held that the legislature's policy and wisdom cannot be questioned. Further in the case State of Kerala v. Gwalior Rayon Silk Mfg. (Wvg.) Company ((1973) 2 S. C.C. 713, it was held, " It is presumed that the legislature knows the need of its people and will balance the present advantages against possible future disadvantages. "
.......
In this field, the legislature is the policy maker and the Court cannot assume the role of an economic advisor or censor competent to pronounce whether a particular programme of agrarian reform is good or bad from the point of view of the needs of the community. The sole issue for the Court is whether it is in fact a scheme of agrarian reform and if it is, the prudence or folly thereof falls outside the orbit of judicial review being a blend of policy, politics and economics ordinarily beyond the expertise and proper function of the Court. "
Therefore, the Additional Solicitor General argued that the Parliament has right to define what is Unfair Trade Practice and it cannot be questioned. Further, he relied upon a decision in People's Union for Civil Liberties v. Union of India (1997) (1) S.C.C. 301, where the Supreme Court held that the conduct of the prize scheme has nothing to do with the exercise of the freedom of press/publication. Therefore, the Additional Solicitor General submitted that the Amendment to the Consumer Protection Act is not ultra vires and it is not a restriction on the Freedom of Press or Freedom of profession/trade.
9. The counsel appearing for the third respondent submitted that by this amendment, no restriction on the Freedom of Press has been imposed. The readers would not buy the commemorative volume, but for the prizes announced; Therefore, it is only to induce the people to purchase the commemorative volume. Therefore, the prize scheme was announced only to sell the volume. There is no restriction imposed by the State to bring out the commemorative volume. The prize competition announced was only to increase the sale; there is no restriction even on the game of skill. The petitioner is free to conduct the game of skill in any other manner.
10. The counsel appearing for the petitioner in his reply submitted that the Supreme Court in the famous case, Sakal Papers (P) Limited and Others v. The Union of India (1962 S.C.R. 842) held that any action which affects the circulation of newspapers is a restriction on the right guaranteed under Article 19(1)(a). Circulation is the necessary feature of Freedom of Press. In that case, the Supreme Court followed its earlier decision in Express Newspapers (Private) Limited., v. The Union of India ((1959) S.C.R. 12, where it was held, " While there is no immunity to the press from the operation of the general laws, it would not be legitimate to subject the press to laws which take away or abridge the freedom of speech and expression or adopt measures calculated and intended to curtail circulation and thereby narrow the scope of dissemination of information or fetter its freedom to choose its means of exercising the right or would undermine its independence by driving it to seek Government aid.
It referred to the decision in Romesh Thapar v. State of Madras ((1950) S.C.R. 594), where it was held, " ....freedom of speech and expression includes freedom of propagation of ideas and that this freedom is ensured by the freedom of circulation. In that case, this Court has also pointed out that freedom of speech and expression are the foundation of all democratic functioning of the processes of democracy. "
.........
" It is not open to the State to curtail or infringe the freedom of speech of one for promoting the general welfare of a section or a group of people unless its action could be justified under a law competent under Clause (2) of Article 19. "
" It may well be within the power of the State to place, in the interest of the general public, restrictions upon the right of a citizen to carry on business but it is not open to the State to achieve this object by directly and immediately curtailing any other freedom of that citizen guaranteed by the Constitution and which is not susceptible of abridgment on the same grounds as are set out in Clause (6) of Article 19. Therefore, the right of freedom of speech cannot be taken away with the object of placing restrictions on the business activities of a citizen. Freedom of Speech can be restricted only in the interests of the security of the State, friendly relations with foreign State, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence. It cannot, like the freedom to carry on business, be curtailed in the interest of the general public. If a law directly affecting it is challenged it is no answer that the restrictions enacted by it are justifiable under cls. (3) to (6). For the scheme of Art.19 is to enumerate different freedoms separately and then to specify the extent of restrictions to which they may be subjected and the objects for securing which this could be done. A citizen is entitled to enjoy each and every one of the freedoms together and cl.(1) does not prefer one freedom to another. That is the plain meaning of this clause. It follows from this that the State cannot make a law which directly restricts one freedom even for securing the better enjoyment of another freedom. All the greater reason, therefore for holding that the State cannot directly restrict one freedom by placing an otherwise permissible restriction on another freedom. "
........
The impugned law far being one, which merely interferes with the right of freedom of speech incidentally, does so directly though it seeks to achieve the end by purporting to regulate the business aspect of a newspaper. "
...........
The legitimacy of the result intended to be achieved does not necessarily imply that every means to achieve it is permissible; for even if the end is desirable and permissible, the means employed must not transgress the limits laid down by the Constitution, if they directly impinge on any of the fundamental rights guaranteed by the Constitution it is no answer when the constitutionality of the measure is challenged that apart from the fundamental right infringed the provision is otherwise legal. "
Relying upon the above passages in the judgment, the counsel for the petitioner submitted that in the guise of imposing reasonable restriction on the freedom of business or trade, the State actually imposed restriction on the freedom of Press. Reasonable restriction on the freedom of Press can be imposed only on the ground specified in Clause 19(2); under this, reasonable restriction can be imposed in the interests of Sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of Court, defamation or incitement to an offence. The restriction now imposed by the State on the prize competition involving skill does not fall under any of these categories mentioned in 19(2). This restriction is in fact a restriction the freedom of speech and press and therefore, the provisions of Section 2(1)
(r) 3(b) of Act 50 of 1993 is ultra vires the provisions contained in Article 19(1)(a).
11. He further referred to the judgment of the Supreme Court in Indian Express Newspapers v. Union of India (A.I.R. 1986, S.C.
515), where it was held, " While there can be no tax on the right to exercise freedom of expression, tax is leviable on profession, occupation, trade, business and industry. Hence, tax is leviable on newspaper industry. But when such tax transgresses into the field of freedom of expression and stifles that freedom, it becomes unconstitutional. "
" The delicate task of determining when it crosses from the area of profession, occupation, trade, business or industry into the area of freedom of expression and interferes with that freedom is entrusted to the Courts. "
The counsel for the petitioner submitted, that the petitioner newspaper has the right to increase its circulation, which is an essential feature of freedom of press. It can be restricted reasonably on the grounds specified under Article 19(2). The petitioner also has the right guaranteed under Article 19(1)(g), the freedom of trade which can be restricted reasonably on any of the grounds specified under Article 19(6). In the name of restricting the freedom of trade and business, the State cannot impose unreasonable restrictions on the freedom of press. In the present case, in the guise of restricting the freedom of trade, the State in fact restricts the freedom of press. The restriction crosses the line and in fact imposes unreasonable restrictions on the freedom of press. Therefore, restricting the petitioner from conducting the prize competition involving skill is in fact a restriction on increasing the circulation and therefore, an unreasonable restriction on the freedom of press and therefore, in so far as the petitioner is concerned, the provisions of Section 2(1)(r) (3) (
b) of the Consumer Protection Act is ultra vires, as it violates the provisions of Act 19(1)(a) read with 19(2) and it is invalid and unenforceable against the petitioner.
12. Admittedly, the purpose for which this prize scheme was conducted to increase the circulation of the newspaper. The argument of the petitioner is that by imposing the restriction on the prize scheme, the attempt or steps taken by the petitioner to increase its circulation is curtailed. According to the petitioner, in view of the judgment of the Supreme Court in Sakal Papers (P) Limited and Others v. The Union of India (1962 S.C.R. 842) any restriction on the circulation would amount to restriction on the freedom of press; Therefore, no restriction can be imposed on the circulation. Inasmuch as the conduct of prize schemes involving skill, is not unconstitutional, defining such prize schemes as Unfair Trade Practice amounts to infringement of the freedom of press. The argument of the State is, that the petitioner under the guise of freedom of press, indulge in Unfair Trade Practice. The argument of the third respondent is that, but for the prize competition, most of the purchasers would not have purchased the commemorative volume. Therefore, only in order to sell those volumes, the prize scheme has been introduced. Therefore, it is Unfair Trade Practice.
13. The Supreme Court in Sakal Papers (P) Limited and others v. The Union of India (1962 S.C.R. 842) struck down the direction issued by the Government that no newspaper can print more than eight pages. In that case, the newspaper company was not even permitted to make use of the news print allotted to some other edition from being utilised for printing more pages of another edition; that is, even without exceeding the total quota of newsprint, it could not print more than eight pages; the Supreme Court held in that case, that such a restriction on the number of pages resulted in restriction in its publishing more advertisements and more news items. Therefore, it was held to be unconstitutional as it infringes on the right to circulation. Only in that context, the Supreme Court held infringement of the freedom of circulation resulted in freedom of speech and expression. But, in the present case, the State has not imposed any restriction on its circulation, but it only defines the conduct of any contest, lottery, game of chance or skill for the purpose of promoting, directly or indirectly the sale of any product as Unfair Trade Practice. As per the decision of the Supreme Court in 1973 2 S.C.C. 713 cited above, legislature is the policy maker and it could define Unfair Trade Practice. The wisdom of Parliament cannot be questioned on this aspect. All that the State has done in the present case to define Unfair Trade Practice as to include the conduct of any contest, lottery, game of chance or skill. This definition does not prohibit the conduct of a game of skill, it is free to do that, directly as a business. The petitioner can conduct any contest or game of skill, such as conduct of horse racing etc. It can also collect entry fee. But, it cannot conduct any contest, even if it involves skill for the purpose of increasing the sale of its product. Parliament in its wisdom thought that it is the prize money that is the attraction for the participation in such contests. There is no restriction whatsoever imposed by the State to publish any number of commemorative volume and prizing it as it likes. Only when it is coupled with prize competition or contests, in order to improve the business directly or indirectly, it falls within the definition of Unfair Trade Practice; the Parliament thought it fit to classify such a contest as Unfair Trade Practice. That wisdom of Parliament cannot be questioned.
14. The Consumer Protection Act is a special Act for the purpose of protecting the interest of the consumers. The argument of the petitioner that the Prize Scheme Act is a special Act and the Consumer Protection Act is a general Act and the general Act is subject to the definition of Prize Scheme Act is not acceptable. By this definition, the Parliament actually impose a restriction on the freedom of trade only. The reasonable restriction can be imposed on the freedom of trade and business in the interest of the general public. This definition of Unfair Trade Practice has been made only for the purpose of protecting the interests of the general public. Therefore, it is a valid and reasonable restriction within the meaning of Article 19(6). Therefore, it is not unconstitutional or ultra vires.
15. The argument that this indirectly affects the freedom of press/expression guaranteed under Article 19(1)(a) of the Constitution is not acceptable. It is true that the restriction on the fundamental right cannot be imposed either directly or indirectly. But in the present case, there is no restriction on the freedom of speech and expression either directly or indirectly.
16. When a question was put to the counsel for the petitioner that, in case a similar scheme was announced by an ordinary trading company which only sells commercial goods, whether such scheme could not be restricted, the counsel did not give any answer. In case, a trading organization which does not have right under Article 19(1)(a) of the Constitution conducts such a contest or game of skill, that cannot be said to be ultra vires. Merely because such a contest is conducted by a newspaper which has got a right of freedom of press as well, it does not make the scheme any more different. If an act is Unfair Trade Practice when done by a trading company, it is also an Unfair Trade Practice when done by a newspaper company. The provisions of Section 2(1)(r) (3)(b) which defines conduct of any contest including game of skill as Unfair Trade Practice is not ultra vires or illegal; it does not infringe any of the fundamental rights guaranteed under Article 19(1) of the Constitution.
17. Even then, when acts are done in contravention or in violation of the Consumer Protection Act, no person, such as the third respondent has a right to send a notice stating that it is illegal or in violation of the provisions of the Consumer Protection Act and to call upon them to stop that act. Such an action is not permissible nor contemplated under the Act. One can approach the District Consumer Redressal Forum or State Commission and plead his case by filing a complaint as contemplated under the Act.
18. Only by a vigilant public, by taking timely and appropriate action, the rights of the people guaranteed by the Constitution and the laws can be protected; the initiative taken by the third respondent in filing a complaint before the District Forum is to be appreciated.
19. In the result, the writ petition is dismissed.
Parties do bear their own costs. Consequently, W.M.P.28310 of 1994 is closed.
14-3-2002 Index: Yes/No Internet : Yes vs Sd/ Assistant Registrar.
True copy Sub-Assistant Registrar.
TO:
1. Union of India, represented by Secretary to Government, Ministry of Food & Civil Supplies, (Department of Civil Supplies), New Delhi.
2. The District Consumers Disputes Redressal forum, Madurai District Court Campus, Madurai, represented by its Presiding Officer.
3.The Federation of Consumer Organisation of Tamil Nadu, represented by its General Secretary, Henry Tiphagne, No.57, American College Building, Goripalayam, Madurai-625002.
A.K. RAJAN, J.
O R D E R in W.P.18635 OF 1994