Horlicks Limited & Anr. vs Zydus Wellness Products Limited

Horlicks Limited & Anr. vs Zydus Wellness Products Limited
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About the Author:

Pratik Maitra is a law student currently studying in Symbiosis Law School, Hyderabad.

Petitioner: Horlicks Limited & Anr.

Respondent: Zydus Wellness Products Limited

Citation: AIR CC 2416

Date of Judgment: 14/05/2020

Bench:  Mukta Gupta, J.

ABSTRACT

Advertisements are a fundamental pedigree for cultivating consciousness and awareness about any particular product or service in a primarily capitalist country like ours. There has, however, been a paradigm change. Advertisements are also shown on radios, televisions, news media, and social media channels, and there is still a strong demand from consumers. Companies are pursuing an innovative and radical approach in order to draw consumers and increase profits. Corporates have a tendency to promote their brand in such a way that they appear to be superior to their rivals during this process.

Horlicks Limited vs. Zydus Wellness Products Limited is a recent case of misleading advertising in which the Delhi High Court dealt with the rule of misleading advertisement and depreciation. A misleading advertisement, broadly defined, is any promotion (publicity, propaganda, marketing, and selling) as well as advertisement through traditional media, such as radio and television, or electronic media, such as newspapers, posters, banners, and wall-writing, to muddle or falsify the nature, attributes, standard, or topographical genesis of goods and services with an intemperate intent. Advertisements that are misleading misrepresent competition and the consumer’s option.

Thirty years after the Consumer Protection Act of 1986 was passed, and a model conveyance from Caveat Emptor to Caveat Venditor was developed, Indian consumers are still being abused by service providers across the board. Many ads these days are used to deceive the general public or become a nuisance feature. Customers, their businesses, and staff, as well as the perception of competition, are all affected by deceptive advertising. Customers can be misinformed about a product or service as a result of these misleading ads, leading to poor decisions. Thus we will analyze the same in our article in detail, and would look forward to making a conclusion on the same after getting a deep insight of the legalities substantial to our topic.

INTRODUCTION

Due to a variety of factors, including increased consumer awareness, increased alternatives, and tighter government regulations, the demand for malt-based beverages in India has seen a substantial decline in recent years. In such a dynamic market, businesses have resorted to aggressive marketing tactics to outmanoeuvre their competitors. Advertising, as a form of commercial speech, is covered under Article 19(1)(a) of the Indian Constitution, which guarantees freedom of speech and expression.

Comparative advertising is a form of advertising in which one party advertises its products and services by contrasting them to those of another.Although there are no clear constitutional provisions in India that address comparative ads, Indian courts have paved the way for the resolution of such disputes through their decisions. Comparative ads are often organised in such a way that disparaging comments are used to defame rivals and their goods. It is up to the courts to distinguish between legally acceptable ads and those that disparage a competitor’s products.It causes the consumer to waste their hard-earned money on the wrong product or service, leaving them totally unsatisfied while also causing chaos.

These deceptive ads also hurt their businesses as well as their employees.If a customer is dissatisfied with their goods or services, they complain, and derogatory reports about the business emerge, permanently destroying the company’s image. They are often subjected to harsh legal proceedings as a result of this.A deceptive advertising, as the name suggests, is one that deceives, manipulates, or is likely to deceive or exploit the user. These ads have the potential to cause significant harm to customers as well as rivals, and therefore must be limited. In different cases, the courts have attempted to strike a balance between the right to commercial expression and the interests of customers and rivals.In Horlicks Limited and Ors. v. Zydus Wellness Products Ltd., the High Court of Delhi recently enjoined the Respondent/Defendant, Zydus Wellness Products Ltd., from broadcasting its television commercial (TVC) before the case was resolved, claiming that it was prima facie disparaging to the Appellant/Plaintiff Horlicks Limited.

FACTS

The plaintiff and the defendant are companies, which are incorporated in India. They are primarily into selling and manufacturing nutritional drinks under the trademarks of Horlicks and Zyduss wellness Products ltd. There has been a series of facetious litigations between the parties in various forums. In the year 2019, around mid-July the plaintiff observed a TV commercial trivializing its product Horlicks. The impeached TVC( television commercial ) was being telecasted in various languages including, English, Tamil, Bengali on various television channels. In the impugned TVC, the component which got the plaintiff’s eyes was, it said one cup of complan has the same amount of proteins as two cups of Horlicks.

In the present case, the storyline and the manner of the derogatory TVC show the very motive of the defendant behind the launch and was telecasting the same to denigrate the plaintiff’s product i,e Horlicks.Abused by the activity of the litigant, offended parties recorded a suit being wherein the educated Single Judge of this Court allowed an ex-parte temporary request limiting the respondent from distributing the said ad dependent on the assertion given by the respondent.

ISSUES

Horlicks referenced in their plaint that the said TVC created incertitude and perplexity in the brains of the clients by giving a deceptive ramification to them. The TVC additionally didn’t outfit any voiceover for the disclaimer and the commercial was route short for the client to investigate the printed disclaimer. The offended party battled that the motivation behind the TVC was to demonize and disparage their item.

The Zydus Company expressed that the gross intention of the said TVC was to enlighten thecustomers about the protein content that one cup of Complan contained which was equal to the protein content that Horlicks (the offended party) contained in two cups. The litigant further fought that they should be given the freedom to have imaginative scope to which the offended party ought not to go about as easily affected. It further expressed that per size cup correlation was a perceived methodology of examination.

KEY ISSUES BEFORE THE HIGH COURT.
  1. Whether disclaimer, as put in the print advertisement, is visible and audible in the impugned electronic medium ?
  2. Whether the advertisement is disparaging or not?

Court held that

  1. The Delhi High Court ruled that when the TV commercial is played, there is no voiceover for the disclaimer about the serve size, and there isn’t enough time to read the disclaimer. In light of this, the current electronic media advertising is obviously disparaging, since a viewer just sees a contrast of one cup of COMPLAN vs. two cups of HORLICKS with no relation to the serve scale.
  2. The Court also stated that the electronic medium is a very effective medium of communication that leaves an indelible impression on the viewer’s mind. As a result, the Court finds that the plaintiffs (HORLICKS) have established a prima facie case in their favour, and that the plaintiffs will suffer irreparable harm if an interim injunction is not issued.

ANALYSIS

  1. The High Court considered and relied on a plethora of judgments on misleading advertising, disparagement, and the law regulating the publishing of advertisements on television in reaching its interim relief decision, including
  2. Dabur India v. Colortek Meghalaya Pvt. Ltd [1]: When dealing with the issue of misleading advertising, the Delhi High Court developed the following guiding principles

1.Advertisements are protected as commercial speech under Article 19(1)(a);

2.An advertisement must not be false, misleading, or deceptive; 

3.However, there are certain cases where the advertisement must not be taken as false, but rather as a glorious representation of one’s own product; and

 4.Only where the impugned advertisement goes beyond glorifying its product, and is deceptive and misleading, the precluded advertisement is subject to the precluded advertisement.

  1. When dealing with the principles of law of disparagement developed in Pepsi Co. Inc. v. Hindustan Coca-Cola Ltd[2]., the High Court held that:

(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed. (2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product? In this context, it must be kept in mind that while promoting its product, the advertiser may, while comparing it with a rival or a competing product, make an unfavourable comparison, but that might not necessarily affect the story line and message of the advertised product or have that as its overall effect. (3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.”

  1. Reckitt & Colman of India Ltd. v. M.P. Ramchandran[3]:In this case, the Calcutta High Court held that a seller can declare that his products are the best or better than those of a competitor, even if the declaration is false. When making such a declaration, he may compare the benefits and drawbacks of his products to those of competitors; however, the seller is not allowed to disparage the goods of his competitors, and if there is no defamation, the competitor would have no cause of action to bring a case of false advertising and disparagement.
  2. In Havells India Ltd. v. Amritanshu Khaitan[4]:The distinction between comparative advertisement, deceptive advertising, and disparagement has been explained by the Delhi High Court. Comparative advertising is healthy and promoted in the spirit of competition, but disparagement is not, and a cause of action must occur in the case of a false advertisement, according to the court.
  3. In Gillette India Limited v. Reckitt Benckiser (India) Private Limited[5]:When deciding cases of disparagement, the Madras High Court made a distinction between electronic and print media. It concluded that electronic media, as opposed to print media, has a greater ability to leave a lasting impression on audiences, and that a “catchy expression, a well-enacted skit or storey line, or even distinctive sounds or distinctive collocation of colours create a lasting effect, particularly when viewed repeatedly.”
  4. The High Court held that the impugned advertisement was deceptive and disparaging, even though the disclaimer was included in the advertisement, it was not explicit, and the advertisement gave the impression that one cup of Complan was equivalent to two cups of Horlicks, without taking the serve size into account. Based on the above, the High Court determined that the balance of convenience was in favour of Horlicks, who would suffer irreparable harm if the impugned advertisement’s telecast was not halted, and issued an interim injunction.
  5. This particular Order significantly differentiated between the gradations of advertisements published in print media in contrast to electronic media. It exhibited that an uncongealed viewpoint was a prerequisite in determining similar content of advertisements when manifested in divergent categories of media. This judgment also provides a basis on which courts and companies/manufacturers can bank while deciding and programming advertisements discreetly.
  6. This break request of the Delhi High Court significantly recognized the subtleties of publicizing in electronic media when contrasted with print media. It showed that a liquid point of view was fundamental in making a decision about indistinguishable substance of commercials when communicated in various types of media. It additionally sets the establishment on which courts and sponsors can depend on while arbitrating and broadcasting notices separately. The Court accentuates the way that TV viewership is nonstop. Consequently, the equilibrium of comfort lies for the offended parties. Additionally, the customer saw it consistently. Henceforth, every new individual who sees the promotion would be unmistakably misdirected.
  7. The law concerning  deceptive notices is quickly evolving. It could be interesting to see that the Delhi High Court had before allowed the course of a comparative sort of promotion (Horlicks Ltd. and Anr. v. Heinz India Pvt. Ltd.) as print media however repressed a similar when broadcasted as electronic media. This happened on the grounds that commercials through electronic media should make a more profound effect on the crowd than through print media. Electronic media includes a consolidation of both sound and visual presentation which all the more probably impacts the crowd and which is the reason it needs exact guidelines. Moreover, an examination of the case laws alluded above shows that the law identifying with misdirecting ads is incredibly abstract and a little adjustment in the reality may influence the result. Apparently while it isn’t deriding and misdirecting for a dealer to contrast his items and his rival’s and even case that his item is in a way that is better than those of his competitor’s, it could be decrying and deceiving if the contender’s products are demonstrated to be mediocre compared to the seller’s.
  8. As obvious from the name, a deceptive promotion is one that deludes, controls, or is probably going to mislead or control the purchaser. These commercials can cause genuine harm to the customers, just as contenders, and thus are needed to be controlled. The courts, while choosing different cases, have attempted to find some kind of harmony between securing the privilege to business discourse and the interest of purchasers and contenders.

CONCLUSION

The law on misdirecting commercials is truly advancing and the HC judgment in Horlicks case is an expansion to the considerable rundown of decisions on deceiving notice. It is fascinating to note that the High Court permitted the course of a similar ad on paper media, nonetheless, limited the broadcast of the equivalent. We comprehend that the separation between print media and electronic media lies in their effect on the crowd.

Since electronic media utilizes a mix of general media procedures, it is bound to impact its crowds and consequently requires stricter guidelines. Consequently, a similar commercial was permitted to be distributed on paper media, in any case, limited from being broadcast on TV. Furthermore, an examination of the case laws cited above reveals that the law governing misleading ads is highly subjective, and even minor changes in the facts may have a significant impact on the result. Although it appears that comparing a seller’s product to that

of a competitor’s and even claiming that his product is better than the competitor’s is not disparaging or misleading, it appears that showing the competitor’s goods to be inferior to the seller’s is disparaging and misleading.


[1]Dabur India v. Colortek Meghalaya Pvt.Ltd. , 2010 SCC OnLine Del 391

[2]Pepsi Co. Inc.  v. Hindustan Coca Cola Ltd. , 2003 SCC OnLine Del 802

[3]Reckitt & Colman of India Ltd. v. M.P. Ramchandran , 1998 SCC OnLine Cal 422

[4]Havells India Ltd. v. Amritanshu Khaitan , 2015 SCC OnLine Del 8115

[5]Havells India Ltd. v. Amritanshu Khaitan , 2015 SCC OnLine Del 8115

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