Case: Tata Press Limited Vs. Mahanagar Telephone Nigam Limited And

drug may be of much more importance to general public than to the advertiser who may be having purely a trade consideration.25. We, therefore, hold that "commercial speech" is a part of freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution.26. Adverting to the question whether Tatas compilation is a telephone directory as envisaged under the Rules, we may examine the scheme of the Rules. Rule 452 provides that a copy of the telephone directory shall be supplied free of charge for each telephone, extension or party line, rented by the subscriber. Although the expression "Telephone Directory" has not been defined under the Rules, but Rule 453 clearly provides that an entry in the Telephone Directory shall contain the telephone number, the initials, the surname and the address of the subscriber or user. Rule 457 makes a telephone directory to be the property of the department. It provides that the telephone directory shall remain the exclusive property of the department and shall be delivered to it on demand. The department reserves the right to amend or delete any entry in the telephone directory at any time and undertakes no responsibility for any omission. It shall not entertain any claim or compensation on account of any entry in or omission from the telephone directory or of an error therein. Then come the two crucial rules. Rule 458 under the heading "Publishing of Telephone Directory" provides that except with the permission of the telegraph authority, no person shall publish any list of telephone subscribers. Rule 459 deals with "advertisements" and lays down that the telegraph authority may publish or allow the publication of advertisements in the body of the telephone directory. It is not doubt correct that a telephone directory is an essential instrumentality in connection with the peculiar service which the Union of India offers for the public benefit and convenience. It is as much so as is the telephone receiver itself, it would be practically useless for the receipt and transmission of messages without the accompaniment of such directories. The telephone service being a public utility service, the telephone authority has rightly been given powers under the Act and the Rules to regulate the form and contents of the telephone directory. In the development of this form of public utility service, the telegraph authority has found it practicable and profitable to diminish the cost and increase the profits of operation by making use of its directories as a means and form of advertising available to its subscribers. In the typical classified telephone directory, or the "yellow pages" section of the directory published by the Nigam, there are alphabetical light-faced type listing (for which there is usually no charge), alphabetical bold faced type listings, alphabetical in-column business card listings and display advertising. "Yellow Pages" of the telephone directory are wholly paid advertising. It cannot be disputed that the paid advertising, apart from the light-faced free listing, is not in the nature of a service rendered by a utility. The "Yellow Pages" attached to the telephone directory issued by the Nigam cannot be part of the Nigams public telephone service.27. Rules 458 and 459 of the Rules have to be interpreted in the light of our findings that "commercial speech" by itself is a fundamental right under Article 19(1)(a) of the Constitution and the paid advertisements comprising "Yellow Pages" attached to the telephone directory is not a public utility service.28. Right to freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution can only be restricted under Article 19(2). The said right cannot be denied by creating a monopoly in favour of the Government or any other authority. "Publication of advertisements" which is a "commercial speech" and protected under Article 19(1)(a) of the Constitution cannot be denied to be appellants on the interpretation of Rule 458 and 459 of the Rules. The plain language of the Rules indicate that the prohibition under Rule 458 of the Rules is only in respect of publishing "any list of telephone subscribers". By no stretch of imagination "publication of advertisements" can be equated with a "list of telephone subscribers". A "list" is a number of names having something in common written out systematically one beneath the other. "List of telephone subscribers" in terms of Rule 458 of the Rules would have to be compiled only on the criterion of the persons listed being telephone subscribers. No person who is not a telephone subscriber could be eligible for inclusion. The said list would necessarily be restricted to the area serviced by the Nigam. On the other hand "Tata Press Yellow Pages" is a Buyers Guide comprising of advertisements given by traders, businessmen and professionals and the only basis/criterion applied for acceptance/publication of advertisements is that an advertiser should be a trader, businessman or professional.29. The scheme of the Rules make it clear that advertisements are treated differently under the Rules from "list of telephone subscribers". Rules 458 of the Rules intends to protect the exclusive property right of Nigam/Union of India created under Rule 457 in respect of the telephone directory prepared in terms of Rule 453. "Publication of advertisements" being a non-utility service cannot come within the prohibition imposed by Rule 458 of the Rules.30. We, therefore, hold that the Nigam/Union of India cannot restrain the appellant from publishing "Tata Press Yellow Pages" comprising paid advertisements from businessmen, traders and professionals. We are, however, of the view that the appellants cannot publish any "list of telephone subscribers" without the permission of the telegraph authority. Rule 458 of the Rules is mandatory and has to be complied with. The appellant shall not publish in the "Tata Press Yellow Pages" any entries similar to those which are printed in the White Pages of the "telephone directory" published by the Nigam under the Rules. We make it clear that the appellant cannot print/publish an entry containing only the telephone number, the initials, the surname and the address of the businessmen, trader or professional concerned.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]13. It is, thus, obvious that the United States Supreme Court in Virginia Board case has virtually overruled Valentines case decide in 1942. The Court has ruled in clear terms that the Virginia statute which had the effect of prohibiting pharmacies from advertising the price of prescription drugs violated the First Amendment protection.After the decision on Virginia Board case, it is almost settled law in the United States that "commercial speech" is entitled to the First Amendment protection. The Supreme Court has, however, made it clear that Government was completely free to recall "commercial speech" which is false, misleading, unfair, deceptive and which proposes illegal transactions. A political or social speech and other public-affairs - oriented discussions are entitled to full First Amendment protection whereas a "commercial speech" may be restricted more easily whenever the Government can show substantial justification for doing so.Unlike the First Amendment under the United States Constitution, our Constitution itself lays down in Article 19(2) the restrictions which can be imposed on the fundamental right guaranteed under Article 19(1)(a) of the Constitution. The "commercial speech" wh ptive, unfair, misleading and untruthful would be hit by Article 19(2) of the Constitution and can be regulated/prohibited by the State.The combined reading of Hamdard Dawakhanas case and the Indian Express Newspapers case leads us to the conclusion that "commercial speech" cannot be denied the protection of Article 19(1)(a) of the Constitution merely because the same are issued by businessmen.20. Advertising is considered to be the cornerstone of our economic system. Low prices for consumers are dependent upon mass production is dependent upon volume sales, and volume sales are dependent upon advertising. Apart from the lifeline of the free economy in a democratic country, advertising can be viewed as the life blood of free media, paying most of the costs and thus making the media widely available. The newspaper industry obtains 60/80 percent of its revenue from advertising. Advertising pays a large portion of the costs of supplying the public with newspaper. For a democratic press the advertising "subsidy" is crucial. Without advertising, the resources available for expenditure on the "news" would decline, which may lead to an erosion of quality and quality. The cost of the "news" to the public would increase, thereby restricting its "democratic" availability.Advertising as a "commercial speech" has two facets. Advertising which is no more than a commercial transaction, is nonetheless dissemination of information regarding the product advertised. Public at large is benefited by the information made available through the advertisement. In a democratic economy free flow of commercial information is indispensable. There cannot be honest and economical marketing by the public at large without being educated by the information disseminated through advertisements. The economic system in a democracy would be handicapped without there being freedom of "commercial speech." In relation to the publication and circulation of newspapers, this Court in Indian Express Newspapers case, Sakal Papers case and Bennett Colemans case has authoritatively held that any restraint or curtailment of advertisements would affect the fundamental right under Article 19(1)(a) on the aspects of propagation, publication and circulation.24. Examined from another angle, the public at large has a right to receive the "commercial speech". Article 19(1)(a) not only guarantees freedom of speech and expression, it also protects the rights of an individual to listen, read and receive the said speech. So far as the economic needs of a citizen are concerned, their fulfilment has to be guided by the information disseminated through the advertisements. The protection of Article 19(1)(a) is available to the speaker as well as to the recipient of the speech. The recipient of "commercial speech" may be having much deeper interest in the advertisement than the businessman who is behind the publication. An advertisement giving information regarding a life saving drug may be of much more importance to general public than to the advertiser who may be having purely a trade consideration.25. We, therefore, hold that "commercial speech" is a part of freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution.26. Adverting to the question whetherTatas compilation is a telephone directory as envisaged under thewe may examine the scheme of the Rules. Rule 452 provides that a copy of the telephone directory shall be supplied free of charge for each telephone, extension or party line, rented by the subscriber. Although the expression "Telephone Directory" has not been defined under the Rules, but Rule 453 clearly provides that an entry in the Telephone Directory shall contain the telephone number, the initials, the surname and the address of the subscriber or user. Rule 457 makes a telephone directory to be the property of the department. It provides that the telephone directory shall remain the exclusive property of the department and shall be delivered to it on demand. The department reserves the right to amend or delete any entry in the telephone directory at any time and undertakes no responsibility for any omission. It shall not entertain any claim or compensation on account of any entry in or omission from the telephone directory or of an error therein. Then come the two crucial rules. Rule 458 under the heading "Publishing of Telephone Directory" provides that except with the permission of the telegraph authority, no person shall publish any list of telephone subscribers. Rule 459 deals with "advertisements" and lays down that the telegraph authority may publish or allow the publication of advertisements in the body of the telephone directory. It is not doubt correct that a telephone directory is an essential instrumentality in connection with the peculiar service which the Union of India offers for the public benefit and convenience. It is as much so as is the telephone receiver itself, it would be practically useless for the receipt and transmission of messages without the accompaniment of such directories. The telephone service being a public utility service, the telephone authority has rightly been given powers under the Act and the Rules to regulate the form and contents of the telephone directory. In the development of this form of public utility service, the telegraph authority has found it practicable and profitable to diminish the cost and increase the profits of operation by making use of its directories as a means and form of advertising available to its subscribers. In the typical classified telephone directory, or the "yellow pages" section of the directory published by the Nigam, there are alphabetical light-faced type listing (for which there is usually no charge), alphabetical bold faced type listings, alphabetical in-column business card listings and display advertising. "Yellow Pages" of the telephone directory are wholly paid advertising. It cannot be disputed that the paid advertising, apart from the light-faced free listing, is not in the nature of a service rendered by a utility. The "Yellow Pages" attached to the telephone directory issued by the Nigam cannot be part of the Nigams public telephone service.27. Rules 458 and 459 of the Rules have to be interpreted in the light of our findings that "commercial speech" by itself is a fundamental right under Article 19(1)(a) of the Constitution and the paid advertisements comprising "Yellow Pages" attached to the telephone directory is not a public utility service.28. Right to freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution can only be restricted under Article 19(2). The said right cannot be denied by creating a monopoly in favour of the Government or any other authority. "Publication of advertisements" which is a "commercial speech" and protected under Article 19(1)(a) of the Constitution cannot be denied to be appellants on the interpretation of Rule 458 and 459 of the Rules. The plain language of the Rules indicate that the prohibition under Rule 458 of the Rules is only in respect of publishing "any list of telephone subscribers". By no stretch of imagination "publication of advertisements" can be equated with a "list of telephone subscribers". A "list" is a number of names having something in common written out systematically one beneath the other. "List of telephone subscribers" in terms of Rule 458 of the Rules would have to be compiled only on the criterion of the persons listed being telephone subscribers. No person who is not a telephone subscriber could be eligible for inclusion. The said list would necessarily be restricted to the area serviced by the Nigam. On the other hand "Tata Press Yellow Pages" is a Buyers Guide comprising of advertisements given by traders, businessmen and professionals and the only basis/criterion applied for acceptance/publication of advertisements is that an advertiser should be a trader, businessman or professional.29. The scheme of the Rules make it clear that advertisements are treated differently under the Rules from "list of telephone subscribers". Rules 458 of the Rules intends to protect the exclusive property right of Nigam/Union of India created under Rule 457 in respect of the telephone directory prepared in terms of Rule 453. "Publication of advertisements" being a non-utility service cannot come within the prohibition imposed by Rule 458 of the Rules.30. We, therefore, hold that the Nigam/Union of India cannot restrain the appellant from publishing "Tata Press Yellow Pages" comprising paid advertisements from businessmen, traders and professionals. We are, however, of the view that the appellants cannot publish any "list of telephone subscribers" without the permission of the telegraph authority. Rule 458 of the Rules is mandatory and has to be complied with. The appellant shall not publish in the "Tata Press Yellow Pages" any entries similar to those which are printed in the White Pages of the "telephone directory" published by the Nigam under the Rules. We make it clear that the appellant cannot print/publish an entry containing only the telephone number, the initials, the surname and the address of the businessmen, trader or professional concerned.