{"id":269961,"date":"2002-11-20T00:00:00","date_gmt":"2002-11-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/hindustan-ciba-geigy-vs-union-of-india-ors-on-20-november-2002"},"modified":"2015-07-14T07:14:46","modified_gmt":"2015-07-14T01:44:46","slug":"hindustan-ciba-geigy-vs-union-of-india-ors-on-20-november-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/hindustan-ciba-geigy-vs-union-of-india-ors-on-20-november-2002","title":{"rendered":"Hindustan Ciba Geigy vs Union Of India &amp; Ors on 20 November, 2002"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Hindustan Ciba Geigy vs Union Of India &amp; Ors on 20 November, 2002<\/div>\n<div class=\"doc_author\">Author: S.B. Sinha<\/div>\n<div class=\"doc_bench\">Bench: Cji, H.K. Sema, S.B. Sinha..<\/div>\n<pre id=\"pre_1\">           CASE NO.:\nAppeal (civil)  3224 of 1993\n\nPETITIONER:\nHindustan Ciba Geigy\n\nRESPONDENT:\nUnion of  India &amp; Ors.\n\nDATE OF JUDGMENT: 20\/11\/2002\n\nBENCH:\nCJI,H.K. Sema &amp; S.B. Sinha..\n\nJUDGMENT:\n<\/pre>\n<p id=\"p_1\">J U D G M E N T<\/p>\n<p>S.B. SINHA, J :\n<\/p>\n<p id=\"p_1\">The substantial question of law involved in this appeal under Section<br \/>\n55 of the Monopolies and Restrictive Trade Practices Act, 1969 (&#8216;the Act&#8217;) is<br \/>\nwhether under Section 36A of the Act, (as it stood then), causation of loss or<br \/>\ninjury to the consumer of goods or service is a sine qua non for initiation of a<br \/>\nproceeding thereunder.\n<\/p>\n<p id=\"p_2\">One H.D. Murzello made a complaint before the Director General of<br \/>\nInvestigation and Registration alleging unfair trade practice against the<br \/>\nappellant herein as regards an advertisement issued by them which appeared<br \/>\nin &#8220;The Times of India&#8221; dated 16th September, 1986 to the following effect:\n<\/p>\n<p id=\"p_3\">\t\t&#8220;Aerocol&#8217;s family background:\n<\/p>\n<p id=\"p_4\">Aerocol&#8217;s credibility as a wonder wood adhesive<br \/>\nstems from 2 facts<\/p>\n<p>*\t An addition to the Araldite and Aerolite family, it<br \/>\nis a product from Hindustran Ciba Geigy;.\n<\/p>\n<p id=\"p_5\">*\tAlready a market leader in UK, it is known for<br \/>\nliving up to its promise.&#8221;\n<\/p>\n<p id=\"p_6\"> On the said complaint, the Director General was directed to make a<br \/>\npreliminary enquiry.  Upon such inquiry, a report was submitted on 15th<br \/>\nApril, 1987.  On the basis of the recommendations made in the said<br \/>\ninvestigation report, a Notice of Enquiry was issued by the Commission on<br \/>\n30th July, 1987 against the appellant herein; the relevant portion thereof is as<br \/>\nunder :-\n<\/p>\n<p id=\"p_7\">&#8220;The respondent abovementioned is engaged in<br \/>\nselling adhesive under the trade name Aerocol.\tIt had<br \/>\nissued an advertisement that appeared in Times of<br \/>\nIndia dated 16.9.1986, making claim that the product<br \/>\nis manufactured by it.\tIt has come to the notice of the<br \/>\nCommission that the said product is manufactured by<br \/>\nM\/s Kiran Industries.  The respondent by<br \/>\nmisrepresenting to the public that the product\tis<br \/>\nmanufactured by it while it is manufactured by some<br \/>\nother company has caused loss and injury to the<br \/>\nconsumers and thereby indulged in the unfair trade<br \/>\npractice falling within the purview of Section<br \/>\n36A(1)(v) of the Act.\n<\/p>\n<p id=\"p_8\">The respondent had also claimed that its product is the<br \/>\nmarket leader in United Kingdom.  It has come to the<br \/>\nnotice of the Commission that the claim made by the<br \/>\nrespondent has not been duly substantiated by it.  The<br \/>\nrespondent, by making such tall claim, has caused<br \/>\nloss and injury to the consumer and indulged in the<br \/>\nunfair trade practice falling within the meaning of<br \/>\nSection 36A(1)(i) of the Act.&#8221;\n<\/p>\n<p id=\"p_9\">Pursuant to or in furtherance of the aforementioned Notice of<br \/>\nEnquiry, the appellant filed their reply not only controverting the allegations<br \/>\nraised therein but also raised preliminary objection as regards maintainability<br \/>\nthereof; whereupon the Commission, framed the following issues:-\n<\/p>\n<p id=\"p_10\">&#8220;1) Is the enquiry not legally maintainable?\n<\/p>\n<p id=\"p_11\">2)\tDid the respondent indulge in any unfair trade<br \/>\npractice as alleged in the N.I.E. and PIR?\n<\/p>\n<p id=\"p_12\">3)\tIn case Issue No.2 is decided in the affirmative,<br \/>\nis the unfair trade practice prejudicial to the<br \/>\npublic interest or to the interest of any consumer<br \/>\nor consumers generally?\n<\/p>\n<p id=\"p_13\">4)\tRelief.&#8221;\n<\/p>\n<p id=\"p_14\">The Commission accepted the arguments raised on behalf of the<br \/>\ncounsel for the Director General and held that the words &#8220;thereby causes loss<br \/>\nor injury to the consumer&#8221; would not mean actual loss or injury.  The<br \/>\nCommission in aid of its aforementioned finding, relied upon the decision of<br \/>\nlarger Bench in Colgate Palmolive (India) Ltd. v. M.R.T.P. Commission &amp;<br \/>\nOrs. in U.T.P.E. No.41 of 1984 decided on  19th June, 1991.\n<\/p>\n<p id=\"p_15\">\t\tSection 36A of the Act, as it stood then, reads as under :-\n<\/p>\n<p id=\"p_16\">&#8220;36A. Definition of unfair trade practice.- In this<br \/>\nPart, unless the contest otherwise requires, &#8220;unfair<br \/>\ntrade practice&#8221; means a trade practice which, for the<br \/>\npurpose of promoting the sale, use or supply of any<br \/>\ngoods or for the provision of any services, adopts<br \/>\none or more of the following practices and thereby<br \/>\ncauses loss or injury to the consumers of such goods<br \/>\nor services, whether by eliminating or restricting<br \/>\ncompetition or otherwise, namely :-\n<\/p>\n<p id=\"p_17\">\t\t\t\t\t\t&#8221;\n<\/p>\n<p id=\"p_18\">A bare perusal of the aforementioned provision would clearly go to<br \/>\nshow that an unfair trade practice would mean a trade practice which for the<br \/>\npurpose of promoting the sale, use or supply of any goods or for the provision<br \/>\nof any services, adopts one or more of the practices specified therein\tadopted<br \/>\nand as a result thereof loss or injury has been caused to the consumers of such<br \/>\ngoods or services, either by eliminating or restricting competition or<br \/>\notherwise.  It would furthermore clearly go to show that the two conditions<br \/>\nprecedent mentioned therein are required to be read conjunctively and not<br \/>\ndisjunctively.\n<\/p>\n<p id=\"p_19\"> Thus, the aforementioned provision, in our considered opinion,<br \/>\nleaves no manner of doubt that an inquiry can be initiated against the noticee<br \/>\nnot only when it adopts or one or more practices specified therein but also<br \/>\nthereby it must cause loss or injury to the consumers.\n<\/p>\n<p id=\"p_20\">Furthermore from a perusal of the notice dated 30.7.1987 itself it<br \/>\nwould appear that definite allegations were made therein that by reason of the<br \/>\nimpugned action on the part of the Appellant, the consumers suffered loss or<br \/>\ninjury.\n<\/p>\n<p id=\"p_21\">The Commission, therefore, in our opinion, committed a manifest<br \/>\nerror in holding that the actual loss or injury need not be caused to the<br \/>\nconsumers.  This aspect of the matter has been considered by this Court in<br \/>\n<a href=\"\/doc\/1984410\/\" id=\"a_1\">H.M.M. Ltd. v. Director General, Monopolies and Restrictive Trade Practices<br \/>\nCommission<\/a>  [(1998) 6 SCC 485],\t wherein it was held :\n<\/p>\n<p id=\"p_22\">&#8220;For holding a trade practice to be an unfair<br \/>\ntrade practice, therefore, it must be found that it<br \/>\ncauses loss or injury to the consumer.\tInsofar as<br \/>\nprizes are concerned, there has to be the intention of<br \/>\nnot providing them as offered or creating the<br \/>\nimpression that they are being given  or are being<br \/>\noffered free of charge when in fact they are fully or<br \/>\npartly covered by the amount charged in the<br \/>\ntransaction as a whole.\t The conduct of a lottery for<br \/>\nthe purpose of promoting the sale, use or supply of a<br \/>\nproduct is an unfair trade practice.  It is difficult to<br \/>\nsee clear sustainable findings on the these aspects in<br \/>\nthe judgment under appeal.&#8221;\n<\/p>\n<p id=\"p_23\">Be it noted that the decision of the larger Bench of the Commission in<br \/>\nColgate Palmolive (India) Ltd., whereupon the Commission relied upon has<br \/>\nbeen reversed by this Court in Civil Appeal Nos.891 of 1993 etc. by a<br \/>\njudgment delivered this date.\n<\/p>\n<p id=\"p_24\">For the aforementioned reasons, the impugned judgment  cannot be<br \/>\nsustained, which is set aside accordingly.  The appeal is allowed but in the<br \/>\nfacts and circumstances of the case, there will be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Hindustan Ciba Geigy vs Union Of India &amp; Ors on 20 November, 2002 Author: S.B. Sinha Bench: Cji, H.K. Sema, S.B. Sinha.. CASE NO.: Appeal (civil) 3224 of 1993 PETITIONER: Hindustan Ciba Geigy RESPONDENT: Union of India &amp; Ors. DATE OF JUDGMENT: 20\/11\/2002 BENCH: CJI,H.K. Sema &amp; S.B. Sinha.. JUDGMENT: J [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-269961","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hindustan Ciba Geigy vs Union Of India &amp; Ors on 20 November, 2002 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/hindustan-ciba-geigy-vs-union-of-india-ors-on-20-november-2002\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hindustan Ciba Geigy vs Union Of India &amp; 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