* IN THE HIGH COURT OF DELHI AT NEW DELHI + LPA No. 1649/2006 Reserved on: 23rd September, 2008 Date of Decision: 21st November, 2008 BUREAU OF INDIAN STANDARDS ..... Appellant Through: Mr. B. Datta, ASG with Mr. Jose Chiramel, Mr. R.K. Tripathi, Advs. Versus PEPSICO INDIA HOLDINGS P. LTD. & ANR. ..... Respondents Through: Mr. Arun Jaitley, Sr. Adv. Mr. A.S. Chandihoke, Sr. Adv. with Mr. Amar Gupta, Mr. Deeraj Nair, Mr. Mayank Mishra, Mr. Divyam Agarwal, Advs. CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL HON'BLE MR. JUSTICE MANMOHAN 1. Whether the Reporters of local papers may be allowed to see the judgment? YES 2. To be referred to the Reporter or not? YES 3. Whether the judgment should be reported in the Digest? YES % J U D G M E N T MUKUL MUDGAL , J . 1. This Letters Patent Appeal by the Bureau of Indian Standards arises out of the impugned judgment and order dated 08.05.2006 delivered by the Learned Single Judge, whereby it was held that the use of the words ‘PURE’, ‘CRISP’, ‘REFRESHING’, ‘PURIFIED’ AND ‘PURITY GUARANTEED’ and the pictorial depiction of snow-capped mountain and the sun on the label of Respondent No.1 M/s Pepsico India Holdings Pvt. Ltd. for packaged drinking water, was not misleading, and was not prohibited by any law, and that the impugned letters including those dated 24.04.2001, 13/14.09.2005, 05.10.2005 and 07.10.2005 cannot be enforced by the Appellant. The appeal has been preferred on the ground that the pictorial device “SNOW-CAPPED MOUNTAIN” and the expression “PURITY GUARANTEED” as used in the label of Respondent No. 1 creates confusion in the mind of general public regarding the origin nature, composition and properties of the Respondent No.1’s product and suggest that the origin of the water being in the mountains, the product of the Respondent No. 1 is mineral water when admittedly the product of the Respondent No. 1 is only ‘packaged drinking water’ and not ‘packaged mineral water’. 2. The learned Single Judge by his impugned judgment and order dated 08.05.2006 held as follows:- a) The definition of the word ‘PURE’ and its cognates as well as the definition contained in the PFA Rules leaves no room for doubt that the correct connotation of the words ‘packaged drinking water’ is not what is envisaged in Chemistry. b) The meaning ascribed to the word ‘PURE’ must be seen in the context of the standard prescribed by the Bureau or under the Prevention of Food Adulteration Act and Rules, since no useful purpose would be served at all in considering it in its absolutely pure state viz. distilled, as per the stance of the Bureau itself. c) When an ordinary consumer reads the words “PURITY GUARANTEED” the thought which would come to his mind is that it is totally safe for human consumption and/or fully compliant with the standards set down by the Bureau. The impugned label assures the consumer nothing more than this. There is, therefore, no justification whatsoever for the prohibiting the use of the words ‘PURITY GUARANTEED’. d) No infraction that Rule 37 of the Prevention of Food Adulteration Act, 1955 (hereinafter referred to as “the PFA Act”) mandates such justification has been established by the Bureau. So far as Rule 41 is concerned the subject food product, namely, packaged drinking water, is not an imitation. e) If the argument of the Bureau is to be sustained, a blanket ban would come into effect on the use of the word ‘pure’ thereby rendering the phrase ‘imitation of any food’ totally otiose. Such an interpretation is not permissible. Today, various chemicals are employed in food articles especially for flavor. It is in that context that use of the word ‘pure’ is not allowed. f) The primary function of consuming water is to quench ones thirst, which is the same as preventing dehydration. The common perception in hot or tropical countries is that cold water is not only satiating but also refreshing. Even so, the stand of the Respondent No. 1 that the pictorial device or artwork on the label showing snow clad mountains misleads the consumer is stretching the argument beyond reasonable limits. 3. The Learned Single Judge in Para 18 of the impugned judgment held as follows:- “For these manifold reasons I am satisfied that the writ petition is well founded. It is declared that the use of the words “PURE”, “CRISP”, “REFRESHING”, “PURIFIED” and “PURITY GUARANTEED” on a label pertaining to packaged drinking water does not offend any provisions of law. It is further held that the use of the pictorial device/artwork on the label is not misleading and is not prohibited by any law. The impugned letters including those dated 24.09.2001, 13/14.09.2005, 05.10.2005 and 07.10.2005 cannot be enforced by the Respondent.” 4. The brief facts of the case as per the Appellant are as follows:- a) The Appellant Bureau of Standards is a statutory body established under the Bureau of Indian Standards Act 1986 (hereinafter referred to as the ‘BIS Act’) to promote harmonious development of the activities of standardization, marking and quality certification of goods and matters incidental thereto, throughout the country. The Respondent No.1 is Pepsico India Holdings Pvt. Ltd. and the objectionable label ‘AQUAFINA’ affixed to its packaged drinking water which contains a pictorial depiction of snow capped mountains is being manufactured and marketed by Respondent No.1. b) Standards are established as per procedure provided for in the Act and the Rules framed there-under. c) The Directorate General of Health Services vide letter dated 27.04.2001 informed the Appellant that the words ‘pure’, ‘crisp’ and ‘refreshing’ would contravene Rule 37 of the Prevention of Food Adulteration Rules 1955 (hereinafter referred as ‘PFA Rules’) as they would be misleading the public. The Appellant was therefore directed to take appropriate actions as such words are not allowed to be used on the label/ advertisement of these products. d) The Appellant Bureau in the circumstances vide letter dated 23.07.2001 directed Respondent No. 1 not to use labels for Packaged Drinking Water with the words “Pure”, “Crisp” and “Refreshing” beyond 29.09.2001. The Respondent No. 1 therefore represented to the Ministry of Health vide letter dated 13.09.2001, followed by letter dated 19.09.2001 requesting them to reconsider the decision and to allow them to continue to use terms such as ‘pure’ etc. in the label for Packaged Drinking Water. e) The Government did not accede to the said requests of Respondent No. 1, and instead, the Directorate General of Health Services vide letter 24.09.2001 informed the Bureau that any product that is in accordance with the PFA standards cannot be treated as purer than others that also comply with the same standards, and hence use of the objectionable words by Respondent No. 1 in its labels could mislead public in general. f) The Respondent No. 1 changed the words, ‘pure’, ‘crisp’ and ‘refreshment’ into ‘purified drinking water’ which was found equally objectionable, and hence Respondent No. 1 was directed by the Lucknow Branch of the Bureau vide letter dated 25.02.2002 to discontinue the same. On receipt of the letter, Respondent No. 1 vide reply dated 15.02.2002 sought permission from the Bureau to continue the same. g) The Bangalore Branch of the Bureau found that Respondent No. 1 used the words “Purity Guaranteed” and “Purified” on the label, which was objected to by the Branch which directed Respondent No. 1 not to use such words on the label vide letter dated 11.04.2002. The Respondent No. 1 did not object to the same, but rather vide reply dated 24.04.2002 informed the Bureau that they had changed the words ‘purified drinking water’ to ‘packaged drinking water’ on the label. h) The Respondent No. 1 continued to use the label with the snow- capped mountain and the sun at the background, with words such as ‘Purity Guaranteed’. i) Hence the Respondent No. 1 was called upon by the Bangalore Branch of the Bureau vide letters dated 24.03.2005, and 21.04.2004 to discontinue use of the same. j) The Respondent No. 1 vide their replies dated 22.04.2004 and 26.04.2004 to the aforesaid letters, informed the Bureau that it would take at least 3 to 4 months for them to exhaust the existing inventory of labels, after having got the same printed according to their whims and fancies. k) In view of the above categorical stand taken by the Government, the Respondent No. 1 vide letter dated 28.03.2005 submitted a fresh label for approval. Though the said label was also found by the Bureau to be objectionable, the Bureau decided to take up the matter once again with the Government, and in the meanwhile allowed Respondent No. 1 to continue to use the existing labels as an interim measures. l) The Bureau not to permit any claims on the labels of packaged drinking water and mineral water with immediate effect. The headquarters of the Bureau therefore instructed its branches throughout the country accordingly. m) The Bangalore branch of the Bureau therefore vide letter dated 05.10.2005 repeated the direction to the Respondent No. 1 to discontinue the objectionable words within 21 days of receipt thereof, followed by similar letters dated 07.10.2005 issued by the Calcutta, Lucknow, Mumbai and Ahmadabad branches of the Bureau to Respondent No. 1. n) The Appellant in view of the Respondent No. 1 having not complied with the direction contained in the Bangalore Branch Office letter dated 05.10.2005 to discontinue the use of the offensive labels within 21 days of receipt vide letter dated 27.10.2005 called upon the Respondent No. 1 to discontinue use of the labels which contained the objectionable words, and also to inform the Bureau regarding the stocks of unapproved labels lying with them. o) The Respondent No. 1 No.1 thereafter filed Civil Writ Petition No. 20909 of 2005 before this Court, challenging the letter dated 27.10.2005, as also letters dated 24.09.2001, 25.02.2002, 19.10.2004, 05.10.2005 and 07.10.2005 of the Bureau. 5. The allowing of the writ petition by the learned Single Judge by the impugned judgment dated 8th May, 2007 has led to the present appeal. 6. The learned Additional Solicitor General Shri B. Datta appearing on behalf of the appellant Bureau of Indian Standards contended as follows:- (a) The centre of controversy in the present appeal is the label “Aquafina” which is used by the Respondent No. 1. It is objected to by the appellant on the ground that the pictorial device “SNOW-CAPPED MOUNTAIN” as used in the label suggests that the Packaged Drinking Water being manufactured and marketed by the Respondent No. 1 has its origin in the mountains indicating the product to be sourced from the mountains which is therefore a misleading claim regarding the origin of the water. The other objection is on the expression ‘PURITY GUARANTEED’ which creates confusion in the mind of the general public regarding nature, composition and properties of the Packaged Drinking Water. (b) He laid emphasis on the genesis of power and authority of Bureau of Indian Standards (BIS). The jurisdiction of BIS is not only with regard to laying down standards but also labelling. To strengthen his argument he emphasized on the provisions of law under the various Acts and Rules. BIS is empowered under Section 10(1) (a) of the BIS Act, to establish, publish and promote the Indian Standard, in relation to any article or process. ‘Indian Standard’ has been defined under section 2 (g) of the Act to mean the standard (including any tentative or provisional standard) established and published by the Bureau, in relation to any article or process indicative of the quality and specification of such article or process and includes any standard recognized by the Bureau under clause (b) of section 10 and any standard established and published, or recognized, by the Indian Standards Institution and which is in force immediately before the date of establishment of the Bureau. ‘Mark’ has been defined under section 2 (l) of the Act which include a device, brand, heading, label, ticket, pictorial representation, name, signature, word, letter or numeral or any combination thereof. ‘Specification’ has been defined under section 2 (s) of the Act to mean a description of an article or process as far as practicable by reference to its nature, quality, strength, purity, composition, quantity, dimensions, weight, grade, durability, origin, age, material, mode of manufacture of other characteristics to distinguish it from any other article or process (emphasis supplied). ‘Standard Mark’ means the Bureau of Indian Standards Certification Mark specified by the Bureau to represent a particular Indian Standard and also includes any Indian Standards Institution Certification Mark specified by the Indian Standards Institution. BIS is also empowered under Section 10(1) (d) of the Act to grant, renew, suspend or cancel a licence for the use of the Standard Mark. BIS under section 10 (p) of the Act can perform such other functions as may be prescribed. If the Central Government notifies under Section 14 of the Act that an article or process should conform to the Indian Standard and directs the use of the Standard Mark under a licence as compulsory on such article or process than licence under the Act is mandatory. Standard Mark under a licence for ‘Packaged Drinking Water’ has been made mandatory under Rule 49(28) PFA Rules. Section 11(2) of the BIS Act states that no person can use in relation to any article or process the Standard Mark or any colorable imitation thereof unless such article or process conforms to the Indian Standard. Section 24 (1) of the Act states that the Bureau in the exercise of its powers or the performance of its functions under the Act, will be bound by such directions on questions of policy as the Central Government may give in writing to it from time to time. Section 24(2) of the Act further states that the decision of the Central Government whether on a question of policy or not would be final. (c) The BIS standard for the packaged drinking water is defined in IS 14543: 2004. Clause 3.2 states that water derived from any source of potable water is subject to certain treatments. Clause 5.2 states that the treatments require bringing the article within certain permissible parameters, (1) Organoleptic and Physical, (2) General, (3) toxic substances and (4) radio- active residues. Clause 7.2.3 of IS : 14543 : 2004 deals with the labelling prohibition that the use of any statement or of any pictorial device which may create confusion in the mind of the public or in any way mislead the public about the nature, origin, composition and properties of drinking water is prohibited. Rule 37 of the PFA Rules 1955 provides that the labels shall not contain any statement, claim, design or device which is false or misleading in any particular concerning the food contained in the package, in relation to the place of origin of the said food. Entry No. A-33, Appendix B of the PFA Rules 1955 which is at par with the labelling prohibitions under Clause 7.2.3 of IS : 14543 : 2004, also does not allow any misleading claim regarding nature, origin, composition and properties of water put on sale. Therefore, he contended that the objectionable expression ‘purity guaranteed’ on the label of the Respondent No. 1 for Packaged Drinking Water is a misleading claim regarding nature, composition and properties of the water, while the depiction of the snow-capped mountain in the background therein is a misleading claim regarding the origin of the water. (d) The learned counsel for the appellant contended that Packaged Drinking Water (as per IS 14543: 2004) is derived from potable water drawn from any source, and it undergoes treatment, whereas Packaged Mineral Water (as per IS 13428: 1998) is drawn only from the mountain, and hardly undergoes any treatment. Packaged Drinking Water merely conforms to the parameters of residues as per requirements specified in IS 14543: 2004, and therefore cannot be described as ‘pure water’. At the most it can be said to be conforming to the Indian Standard IS 14543: 2004 and no further. The word ‘pure’ would even otherwise be confusing, as there are three formulated Indian Standard namely (1) Packaged Drinking Water as per IS 14543 : 2004, (2) Packaged Mineral Water as per IS 13428 : 1998 and (3) Drinking Water as per IS 10500 : 1991, all three of which are distinct and separate. Water is not a single homogenous unit (like oil etc.) so as to be declared as ‘pure’. The pure water (where the residues as per various parameters prescribed are nil) would only be distilled water used in batteries, which is not fit for human consumption, as it will pull out all the minerals from the body. (e) The expression “Pure” is misleading and confusing, particularly when there are three different standards prescribed by BIS, i.e. Packaged Drinking Water, Packaged Mineral Water and Drinking Water i.e. Tap Water. At the most the Respondent No. 1 could only say that the Packaged Drinking Water conforms to IS 14543: 2004 and no further, whereas by the impugned judgment, the Respondent No. 1 has been permitted to use a false, misleading and confusing expression “Purity Guaranteed’, which is not permissible under rule 37 of the PFA Rules 1955 or the specifications for IS 14543: 2004. The learned Single Judge has merely expressed a subjective view on the matter, rather than examining as to whether the expression “Purity Guaranteed” violated Clause 7.2.3 of specifications for IS 14543 : 2004 (equivalent to Entry No. A-33, Appendix of the PFA Rules, 1955) with regard to statement which may create confusion in the mind of the public or in any way mislead the public about the nature, composition and properties of the water put on sale. The ordinary consumer can only be given the assurance by the Respondent No. 1 that the Packaged Drinking Water conforms to IS 14543: 2004 formulated by BIS, and no further. The Respondent No. 1 cannot be the torchbearer of a different standard, much less under the banner of “Purity Guaranteed” as if they would be the entity to decide as to what purity is. (f) The learned Senior Counsel further contended that the Central Government raised an objection on the label vide letters dated 27.04.2001 and 24.09.2001 objecting to use of words such as ‘pure’ on the label of drinking water, and vide letter dated 14.09.2005 directed BIS not to allow any claims on labels of Packaged Drinking Water. Further, an Expert Group on Packaged Drinking Water and Mineral Water set up by the Government in its meeting on 19.10.2004 came to the conclusion that claims of the type ‘pure’, ‘purity guaranteed’ were misleading and violative of the labelling prohibitions under the PFA Rules, 1955: hence recommended that the same ought not to be allowed on the labels of these products. Pursuant to the above directions of the Central Government BIS directions to the Respondent No. 1 No. 1 regarding the label vide letter dated 25.02.2002, 11.04.2002, 05.10.2002, 07.10.2005 and 27.10.2005 directed the Respondent No. 1 No. 1 not to use expressions such as ‘pure’, ‘purity guaranteed’ etc. on the labels of Packaged Drinking Water. BIS vide letter dated 07.10.2005 directed the Respondent No. 1 not to use the label with the words ‘purity guaranteed’ and the pictorial device depicting of snow-capped mountain at the back, as it suggested that the water was drawn from the mountain- which could have been used only in respect of Packaged Mineral Water. The Respondent No. 1 vide letter dated 24.4.2002 informed the BIS that the objectionable words “Purified drinking water” had been removed and replaced with “Packaged drinking water” which was factually not correct since the Respondent No. 1 vide letter dated 26.4.2004 sought 3-4 months time to exhaust the existing labels. The Respondent No. 1 vide letter dated 24.10.2005 agreed to remove the words “Purity granted” but sought 6 months time to exhaust the existing labels. (g) The Respondent No. 1 holds BIS Licence No. CM/L-9372890 for ‘Packaged Drinking Water’ as per IS 14543: 2004. Therefore, in view of the various relevant provisions of the BIS Act and the PFA Rules, BIS not only has jurisdiction in regard to laying down the standards but also impose labeling prohibitions. 7. Mr. Arun Jaitley and Mr. A.S. Chandhioke, the learned senior counsel for the Respondent No. 1 while defending the conclusions of the learned Single Judge contended that:- (a) BIS does not have any jurisdiction to deal with issues concerning labeling. The BIS Act is restricted only to laying down and regulating standards of articles and does not deal with labeling of articles. The Statement of Objects and Reasons provides that the Bureau is set up as a statutory institution for formulating standards in quality of goods. Powers conferred upon BIS pertain only to standardization and quality of goods. (b) The entire Act deals with only laying down and regulating standards of articles and is alien to labeling provisions or prohibition. It is well settled that a statutory authority must act within the four corners of the statute. Any action taken by a statutory authority has to be in pursuance of a statutory provision. A Statutory authority cannot act beyond the statutory provision and any such action would be ultra vires. (c) To strengthen his above contention that BIS can only lay down standards and regulate standards alone, he relied upon relevant provisions of the various Acts. There is no other reference to “labels” or the manner/mechanism to regulate labels, in the entire Act, except for reference to the words device, label and pictorial representation in Section 2 (1) of the Act, which defines ‘mark’. Section 10 (p) of the Act which gives general power to the Bureau to perform such other functions as may be prescribed cannot be understood to mean that BIS can regulate even those areas which are not covered within the purview, scope and extent of the Act. Section 10 (p) of the Act has to be read in context of the principle of ejusdem generis with the various other provisions of the Act. Section 10 (p) of the Act draws color from the preceding sections, as the general follows the specific. The powers referred to in sub section 10 (p) refers to powers of like nature as enumerated specifically in sub sections (a) to (o) of Section 10 and cannot mean to include powers not possibly contemplated or inconsistent with discernable objects and the purpose of the Act. (d) Section 11 (2) of the Act deals with the Indian Standard Mark only and not with regard to any other mark. The instant section relates to deceptive similarity to ISI mark and does not pertain to alleged deception as sought to be conveyed. Reference to Section 11 of the Act, made by the Appellant during the course of arguments, is completely misplaced and erroneous. Section 11 deals with prohibition of improper use of standard mark and not any other “mark”, as is normally envisaged. Standard mark has been defined under Section 2 (t), to mean the Bureau of Indian Standards Certification Mark specified by the BIS, and does not mean “mark” as defined under Section 2(1) of the Act. (e) Reliance cannot be placed on section 24 of the Act also as it deals with the policy directions only. It is submitted that Section 24 of the Act, requires the BIS to follow such directions on questions of policy issued by the Central Government in exercise of its powers or the performance of ‘its functions under the Act’. The wording of Section 24 is clear and unambiguous, insofar as carrying out the directions of the Central Government is concerned. However, the power, which can be so exercised under Section 24 is restricted to the power and functions conferred under the Act and not to powers which are beyond the scope and purview of the Act. As stated above, there is no power or provision in the Act, which confers power on BIS to regulate labeling provisions and therefore assuming that