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

2. The Nigam is a Government company substantially controlled by the Government of India. The Government holds 80% of the total shares of the company. The Nigam is a licensee under the Act and as such is required to establish, maintain and control the telecommunication services within the territorial jurisdiction of the Union Territory of Delhi and the areas covered by the Municipal Corporations of Bombay, New Bombay and the Thane. Till 1987 the Nigam/Union of India used to publish and distribute, on its own, the telephone directory consisting of white page only. However, of late, the Nigam started entrusting the publication of its telephone-directory to outside contractors. From 1987 onwards, the Nigam has permitted such contractors to raise revenue for themselves, by procuring advertisements and publishing the same as "Yellow Pages" appended to the telephone directory. In other words, the telephone directory published and distributed by the Nigam consists of the white pages which contain alphabetical list of telephone subscribers and also "Yellow Pages" consisting of advertisements procured by the contractor to meet the expenses incurred by the contractor in printing, publishing and distributing the directory.3. The Tatas are engaged in the publication of the Tata-pages which is a buyers-guide comprising of a compilation of advertisements given by businessmen, traders and professionals duly classified according to their trade, business or profession. It is not disputed that the said compilation includes unpaid advertisements in which the category/type of business, trade or profession of the advertiser is listed. It is stated by the appellant that the advertisements are published in the Tata-pages on the application of the party concerned. The only criterion for inclusion of advertisements in the said compilation is that the advertiser must be engaged in a trade, profession or business. Three editions of Tata-Pages have already been published in Bombay in 1992, 1993 and 1994. According to the appellant such Yellow Pages/buyers guides have been published in India since 1984 and follow generic international pattern which was introduced in the USA as far back, as 1880. Since 1984 a large number of parties - details have been placed on the record - are engaged in the publication of Yellow Pages/trade directories/buyers guides in India.4. Rules 452, 453, 457, 458 and 459 of the Rules which are relevant, are reproduced hereunderSupply of telephone directories. - A copy of the telephone directory shall be supplied free of charge for each telephone, extension or party line, rented by the subscriber from an exchange system or private branch exchange or a private exchange. A copy shall also be supplied free of charge for each extension (including extension from an extension) working from a public call office. Additional copies supplied shall be charged for at such rate as may be fixed by the Telegraph Authority from time to time.453. Entries in telephone directories. - For each direct telephone line rented (i.e. for main connections, direct extensions and PBX junction lines) ordinarily only one entry not exceeding one line will be allowed free of charge in the telephone directory to every subscriber. Such entry shall contain the telephone number, the initials, the surname and the address of the subscriber or user. No word which can intelligibly be abbreviated shall be allowed to be printed in full. Additional lines may be allowed by the Telegraph Authority at its discretion.457. General. - Any telephone directory provided by the Department shall remain its exclusive property and shall be delivered to it on demand. The Department reserves the right to amend or delete any entries in the telephone directory at any time and undertakes no responsibility for any omission and it shall not entertain any claim or compensation on account of any entry in or omission from the telephone directory or of any error therein.458. Publishing of telephone directory. - Except with the permission of the Telegraph Authority no person shall publish any list of telephone subscribers.459. Advertisements. - The Telegraph Authority may publish or allow the publication of advertisements in the body of the telephone directory.As stated above, the learned trial Judge dismissed suit filed by the Nigam and the Union of India. The learned Judge compared the advertisements published in the Tata-Pages with the telephone directory and found as a fact that the Tata-Pages was a compilation of advertisements given by the businessmen, traders and professional and such did not constitute a list of telephone subscribers as contemplated in Rule 458 of the Rules. The learned Judge based his conclusions on the reasoning that the source for the advertisements published in the Tata-pages was different from the telephone directory, some advertisements in the Tata-Pages did not list telephone numbers, the criterion for listing in the telephone directory and for publication in the Tata-Pages was different - for telephone directory the person/party must be a telephone subscriber whereas for the Tata-Pages the advertiser must be a trader, professional or businessmen - and the telephone directory was restricted to the area of service by the Nigam whereas the advertisements in the Tata-Pages relate to parties outside the local area/Bombay.6. Appeals against the Trial Court judgment was heard by a learned Single Judge of the High Court. The learned Judge agreed with the Trial Court that the white pages of the telephoned directory constituted the List of Telephone Subscribers whereas the yellow pages consisted of the advertisements given by the telephone subscribers and others. He further accepted that the criterion for listing of entries in the white pages was different from the criterion of inclusion of advertisements in the yellow pages. The learned Judge, however, held that Rule 458 covered all parts of the telephone directory including the yellow pages. According to the learned Judge the publication of advertisements in the form of yellow pages, appended to the white pages, was within the bar contained in Rule 458 of the Rules. The learned Judge accordingly allowed the appeal and restrained the appellant from publishing the Tata Pages.7. The Letters Patent Bench of the Bombay High Court hearing the appeal filed by the Tatas against the judgment of the learned Single Judge posed the question to be considered by the Bench in the following wordsamount to a contravention of the Rules, as quoted above, must in substance be a "list of telephone subscribers", for it is the substance that must count and must outweigh and take precedence over mere appearance. Before restraining the defendant "Tata Press Ltd. from publishing or circulating or in any way dealing with the Tata Press Yellow Pages", we have to be satisfied that in substance and in effect the same is a "list of telephone subscribers" or a "telephone directory". The case at hand involves questions, not so much of law but rather of semantics and commonBench while dealing with the question observed as under"A list of telephone subscribers" would obviously mean a list of persons to whom telephone services have been provided by means of an installation under the Telegraph Rules or under an agreement. Suppose we, in this High Court, print or publish a Book containing a list of our Judges and officers containing their names, designations, departments they are attached to their office as well as residential addresses and also their telephone numbers in the office as well as in their residence. Or, suppose, a Bar Association or a Medical Association prints or publishes a Book containing the names of their members, their specialisation, addresses of their offices, chambers and residences along with their respective telephone numbers, we are inclined to think that such Books as aforesaid may not amount to "a list ofif the dominant purpose for such publication is not to notify the telephone numbers only, but mainly to notify who these persons are along with their designations and/or qualifications or specialisation and addresses at which they would be available during as well as after office hours and the telephone numbers published in such Books would be there only to provide a full or a more complete picture. The High Court or the Bar Association or the Medical Association in such cases may not be proceeded against for violation of Rules 458 of the Indian Telegraph Rules, for publishing such books, if the primary object thereof is not to provide the telephone numbers only, but, may be, the telephone numbers also alongwith various other relevant matters. If in such books as aforesaid, the names of such officers or members, who are not subscribers of telephones, are also published, the same would further go to show that such books would be not a list of subscribers."Bench finally upheld the judgment of the learned Single Judge on the following reasoninghave given our best and very serious considerations to the arguments advanced by Mr. Nariman. We have already indicated, we will have to scrutinise and examine the publication Tata Press Yellow Pages and would have to come to our conclusion as to whether the same is a Telephone Directory or a List of Telephone Subscribers from the point of view of main object and the dominant purpose of the publication. The fact that has weighed with us most is that even though there are some features which may distinguish the "Tata Press Yellow Pages" from a mere Telephone Directory or a mere List of Telephone Subscribers, the publication would nevertheless be of little or no use if the telephone numbers printed therein are omitted or deleted. It may be that the "Tata Press Yellow Pages" may not be a Telephone Directory or a List of Telephone Subscribers only, but we are nevertheless of the clear view that the same is a Telephone Directory or a List of Telephone Subscribers also .... reading the provisions of Rules 452, 458 and 459 together, we will have to hold that even if a telephone directory or List of Telephone Subscribers contain advertisement, may be in large numbers, publication thereof would nevertheless come within the pr 58 as in such a case the publication, even though not merely a Telephone Directory or a List of Telephone Subscribers, is also nevertheless such a telephone directory or List of Telephone Subscribers." *

Court's reasoning:
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.