Case: Lakhanpal National Ltd Vs. M.R.T.P. Commission And Another

and unfair trade practices. By providing for measures against restric­tive and monopolistic trade practices, it was perhaps assumed that the consu­mers also, as a result, will get a fair deal. However, experience indicated otherwise, and following the recommendations of a Committee, it was considered necessary to amend the Act. In the fast changing modern world of today advertising goods is a well-recognised marketing strategy, The consumers also need it, as the articles which they require for their daily life are of a great variety and the knowledge of an ordinary man is imperfect. If the manufactures make available, by proper publicity, necessary details about their products, they come as great help to the man in the street. Un­fortunately, some of the advertisements issued for this purpose make exaggerated and sometime baseless representations about the quality, standard and performance, with an object of attracting purchasers, It was therefore considered necessary to have statutory regulations insisting that, while advertising the seller must speak the truth. Accordingly sections 36-A to 36-B in part B were inserted in Chapter V of the Act by an amendment in 1984. 7. However, the question in controversy has to be answered by construing the relevant provisions of the Act. The definition of “unfair trade Practice” in Section 36-A mentioned above is not inclusive or flexible, but specific and limited in its contents. The object is to bring honesty and truth in the relationship between the manufacturer and the consumer. When a problem arises as to whether a particular act can be condemned as an unfair trade practice or not, the key to the solution would be to examine whether it contains a false statement and is misleading and further what is the effect of such a representation made by the manufacturer on the common man? Does it lead a reasonable person in the position of a buyer to a wrong conclusion? The issue cannot be resolved by merely examining whether the representation is correct or incorrect in the literal sense. A representation containing a statement apparently correct in the technical sense may have the effect of misleading the buyer by using tricky language Similarly a statement, which be inaccurate in the technical literal sense can convey the truth and sometimes more effectively than a literally correct statement. It is, therefore, necessary to examine whether the representation, complained of, contains the element of misleading the buyer. Does a reasonable man on reading the advertisement form a belief different from what the truth is? The position will have to be viewed with objectivity, in an impersonal manner. It is stated in Halsbury’st Laws of England (Fourth Edition, paragraphs 1044 and 1045) that a representation will be deemed to be false if it is false in substance and in fact; and the test by which the representation is to be judged is to see whether the discrepancy between the fact as represented and the actual fact is such as would be considered material by a reasonable represented. “Another way of stating the rule is to say that substantial falsity is, on the one hand, necessary, and, on the other, adequate, to establish a misrepresentation” and “that where the entire representation is a faithful picture or transcript of the essential facts, no falsity is established, even though there may have been any number of in­accuracies in unimportant details. Conversely, if the general impression conveyed is false, the most punctilious and scrupulous accuracy in im­material minutiae will not render the representation true.” Let us examine the relevant facts of this case in this background.8. The Mitsushita Ltd. is not a popular name in this country while its products “National” and “Panasonic” are. An advertisement mentioning merely Mitsushsita Ltd. may, therefore, fail to convey anything to an ordinary buyer unless he is also told that it is the same Company which manufactures products known to him by the names “National” and “Panasonic”. If such were the position, there would not have been any scope for objection. However, in our view the same effect is produced by the impugned advertisements, it has to be remembered that there is no other company with the name of “National” and “Panasonic” and there is no scope for any confusion on that scope. Where the reference is being made to the standard, of the quality, It is not material whether the manufacturing Company is indicated by its accurately correct name or by its description with reference to its products. We, therefore, hold that the erroneous des­cription of the manufacturing Company in the advertisements in question does not attract Section 36-A of the Act, although we would hasten to add that it would be more proper for the appellant Company to give the full facts by referring to Mitsushita Ltd. by its correct name and further stating that its products are known by the names “National” and “Panasonic.” 9. The learned counsel for the respondent Commission suggested that the appellant was not entitled to claim “collaboration” with the Japanese Company on the basis of the agreement mentioned earlier. As the appellant Company is only getting technical knowledge and assistance under the agreement it is not permissible to claim Novino batteries as the product of joint venture. The argument was rightly repelled on behalf of the appel­lant on the ground that this aspect cannot be examined in the present case in view of the limited scope of the charges as mentioned in the show cause notice quoted above. If so advised, the Commission will have to hold a fresh inquiry after issuing another show cause notice if it desires to pursue this aspect. 10. The learned counsel for the appellant also raised several other points in support of the appeal, one of them being that from the facts and circumstances of the case it cannot be held that the impugned advertisements are capable of causing any loss or injury to the consumers. In view of our decision, as mentioned earlier, it is not necessary to deal with the other arguments.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. However, the question in controversy has to be answered by construing the relevant provisions of the Act. The definition ofin Section 36-A mentioned above is not inclusive or flexible, but specific and limited in its contents. The object is to bring honesty and truth in the relationship between the manufacturer and the consumer. When a problem arises as to whether a particular act can be condemned as an unfair trade practice or not, the key to the solution would be to examine whether it contains a false statement and is misleading and further what is the effect of such a representation made by the manufacturer on the common man? Does it lead a reasonable person in the position of a buyer to a wrong conclusion? The issue cannot be resolved by merely examining whether the representation is correct or incorrect in the literal sense. A representation containing a statement apparently correct in the technical sense may have the effect of misleading the buyer by using tricky language Similarly a statement, which be inaccurate in the technical literal sense can convey the truth and sometimes more effectively than a literally correct statement. It is, therefore, necessary to examine whether the representation, complained of, contains the element of misleading the buyer. Does a reasonable man on reading the advertisement form a belief different from what the truth is? The position will have to be viewed with objectivity, in an impersonal manner. It is stated inLaws of England (Fourth Edition, paragraphs 1044 and 1045) that a representation will be deemed to be false if it is false in substance and in fact; and the test by which the representation is to be judged is to see whether the discrepancy between the fact as represented and the actual fact is such as would be considered material by a reasonable represented.way of stating the rule is to say that substantial falsity is, on the one hand, necessary, and, on the other, adequate, to establish aat where the entire representation is a faithful picture or transcript of the essential facts, no falsity is established, even though there may have been any number ofin unimportant details. Conversely, if the general impression conveyed is false, the most punctilious and scrupulous accuracy inminutiae will not render the representationLet us examine the relevant facts of this case in this background.8. The Mitsushita Ltd. is not a popular name in this country while its productsare. An advertisement mentioning merely Mitsushsita Ltd. may, therefore, fail to convey anything to an ordinary buyer unless he is also told that it is the same Company which manufactures products known to himby the namesIf such were the position, there would not have been any scope for objection. However, in our view the same effect is produced by the impugned advertisements, it has to be remembered that there is no other company with the name ofand there is no scope for any confusion on that scope. Where the reference is being made to the standard, of the quality, It is not material whether the manufacturing Company is indicated by its accurately correct name or by its description with reference to its products. We, therefore, hold that the erroneousof the manufacturing Company in the advertisements in question does not attract Section 36-A of the Act, although we would hasten to add that it would be more proper for the appellant Company to give the full facts by referring to Mitsushita Ltd. by its correct name and further stating that its products are knownby the names9. The learned counsel for the respondent Commission suggested that the appellant was not entitled to claimwith the Japanese Company on the basis of the agreement mentioned earlier. As the appellant Company is only getting technical knowledge and assistance under the agreement it is not permissible to claim Novino batteries as the product of joint venture. The argument was rightly repelled on behalf of theon the ground that this aspect cannot be examined in the present case in view of the limited scope of the charges as mentioned in the show cause notice quoted above. If so advised, the Commission will have to hold a fresh inquiry after issuing another show cause notice if it desires to pursue this aspect.The learned counsel for the appellant also raised several other points in support of the appeal, one of them being that from the facts and circumstances of the case it cannot be held that the impugned advertisements are capable of causing any loss or injury to the consumers. In view of our decision, as mentioned earlier, it is not necessary to deal with the other arguments.