While clearly observing that malicious falsehood can’t become freedom of speech, the Delhi High Court in FIITJEE Limited Vs Vidya Mandir Classes Ltd & Ors in CS(OS) 656/2021 : 2022 LiveLaw (Del) 119 delivered recently on February 16, 2022 has maintained that care is to be exercised in order to avoid disparagement of another’s products or denigration of the goodwill and reputation built by a competitor while engaging in advertising one’s own products. This must be adhered to in totality. The Court was dealing with a plea filed by FIITJEE Limited which is a company engaged in imparting education to students for securing admission to various educational institutions, seeking an ex-parte injunction against the defendants, Vidya Mandir Classes, requiring them to immediately take down an allegedly defamatory and scandalous YouTube video.
To start with, this judgment authored by Hon’ble Ms Justice Asha Menon of Delhi High Court first and foremost states in para 1 that, “This order will dispose of I.A No.16173/2021 under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure, 1908 (“CPC” in short) filed by the plaintiff for interim relief.”
To put things in perspective, the Bench then envisages in para 3 that, “The plaintiff describes itself as a company registered under the Companies Act, 2013, constituted in the year 1992 for the purpose of imparting quality education to students so that they gain adequate skills to secure admission to various premier educational institutions in the country such as the Indian Institute of Technology. It claims to have developed a unique method of teaching and formulating various programs, which ensures a high rate of success amongst its pupils in gaining admission to these premier institutions of higher education. Over a period of time, on account of hard work put in by the teachers at its 80 centers spread across the country, it has been declared to be India’s number one coaching institute for Engineering Entrance Examinations in 2019.”
While delving on the root of the matter, the Bench then lays bare in para 4 that, “The grievance that has led to the filing of the present suit is a video that has been uploaded on YouTube by the defendant No.2, which according to the plaintiff contained falsities. The defendant no.2 is seen in the video (the transcripts have been placed at pages 26-64 of the plaintiff’s documents) introducing the topic as akin to the battle between ‘Sri Ram’ and ‘Ravan’, certainly suggesting that the plaintiff was in the position of ‘Ravan’, by not heeding to the warnings of defendant No.1 on previous occasions, to refrain from disparaging it and thus inviting upon itself the strong rebuttal by defendant No.2. The plaintiff has been painted in a completely negative light by the use of such metaphors. Words such as ‘gumrah’ have been used against the plaintiff, the public is told that the plaintiff misled the parents, held the parents and children hostages, was focused only on making money, indulged in kidnapping and extortion, while at the same time ill-treating its teachers by not paying salaries and so on. There is also a comment on the refund policy of the plaintiff and other malpractices have been alleged. It is also claimed that there is a Central Bureau of Investigation (‘CBI’ in short) case against the plaintiff.”
Simply put, the Bench then lays bare in para 11 that, “The plaintiff and the defendants are in the field of education. They both have developed programs that tutor students for competitive examinations such as ‘JEE’. They claim to be well-known, having built their reputation over decades. As traditionally, transfer of knowledge has been considered as the highest of all human action and does not involve accumulation of wealth, one is hesitant to use the word “business” rivals to describe the plaintiff and the defendants but since both are incorporated entities, there appears to be no other apt word to describe them. Considering that the pool for both of them is the same i.e. the young students in the Higher Secondary Schools, who are desirous of joining premier engineering colleges and institutions, they seek to exert themselves to attract more and more from the common pool. In normal course, such competition would work for the improvement in the quality of the services and must be welcomed.”
Simply stated, the Bench then stipulates in para 12 that, “However, there are occasions when competition takes an ugly turn. To take a cue from the preamble to the Competition Act, 2002, practices having adverse effect on competition need to be prevented but at the same time competition must be promoted and sustained to protect the interest of consumers and to ensure freedom of trade carried by all participants in the markets, here the field of education.”
Needless to say, the Bench then points out in para 13 that, “While competing with one another, it is but natural that each player would portray themselves to be the best in the field. It is equally possible that while doing so, they may adversely comment on their competitors. Allegations and counter-allegations of disparagement, defamation, injury to reputation and similar issues then crop up. This is one such case.”
Quite relevantly, the Bench then concedes in para 16 that, “It is true, as submitted by the learned senior counsel for the plaintiff, that the defence of justification is not of the same caliber as the defence of truth. Truth is an absolute defence and no injunction can follow when truth is pleaded. But it is undeniable that justification can be established only at trial and a defendant ought to have an opportunity to establish it through evidence. When the plea of justification is taken, the courts are slow in issuing injunctions against publication. The general view taken is that if the defendants fail to substantiate their defence of justification, then the plaintiff would become entitled to damages. In Fraser v. Evans, [1969] 1 QB 349 Lord Denning MR stated the law as follows:
“The court will not restrain the publication of an article, even though it is defamatory, when the defendant says he intends to justify it or to make fair comment on a matter of public interest. That has been established for many years ever since Bonnard v. Perryman. The reason sometimes given is that the defences of justification and fair comment are for the jury, which is the constitutional tribunal, and not for a judge. But a better reason is the importance in the public interest that the truth should come out. … There is no wrong done if it is true, or if [the alleged libel] is fair comment on a matter of public interest. The court will not prejudice the issue by granting an injunction in advance of publication…””
Be it noted, the Bench then postulates in para 25 that, “Having said that, there is however a limitation to the exercise of this commercial free speech (also see Tata Sons Limited Vs. Greenpeace International) (supra). While engaging in advertising once own products, care is to be exercised to avoid disparagement of another’s products or denigration of the goodwill and reputation built by a competitor. Malicious falsehood cannot become freedom of speech. The learned senior counsel for the plaintiff urged that because the video was in response to a comparative advertisement issued by the plaintiff, the content of the video was malicious. However, no such inference can be drawn, as there are portions in the video which relies on some material on the basis of which the defendants plead justification.”
Of course, the Bench then rightly points out in para 26 that, “Since it is the case of the plaintiff that the video is in response to the advertisement of the plaintiff, the video though of some length can also be considered as an audio-visual advertisement of the defendants, to assure their students and their parents of the quality of education imparted in their institutions. The content of the video would then have to be assessed on the three Tests that have been laid down by the Division Bench of this court in Pepsi Co., Inc. v. Hindustan Coca Cola Ltd., 2003 SCC OnLine Del 802 to decide the question of disparagement, namely (i) intent of the commercial; (ii) manner of the commercial; (iii) storyline of the commercial and the message sought to be conveyed by the commercial. A fourth factor has been included by the Co-ordinate Bench of this court in Reckitt Benckiser India Private Limited Vs. Hindustan Unilever Limited 2021 SCC OnLine Del 4896 viz., (iv) while glorifying its product, an advertiser may not denigrate or disparage a rival product.”
No doubt, the Bench then clarifies in para 27 that, “While some latitude is to be given for hyperbole and commendatory expression for oneself with an attempt to show down the competitor, there can be no license to anyone to denigrate the competitor. The courts have protected parties who have been at the receiving end of such negative advertisements.”
As we see, the Bench then stipulates in para 29 that, “So the only question to be seen is, whether the video in question contains any disparagement or defamatory matter. It is then apparent in the video, that the defendant No.2 has used very offensive words alleging that the plaintiff would “kidnap” and take the students “hostage” and put them under such pressure and indulge in “extortion”—allegations that are serious, as indicating that the plaintiff has no qualms in indulging in crime for money.”
It is worth noting that the Bench then enjoins in para 30 that, “Whether there is one disgruntled teacher or several, as are the varying stances of the plaintiff and the defendants, there may be some material for the defendants to have claimed that the teachers were dissatisfied. It would be an inquiry during trial whether, on whatever material the defendants had relied on, such an inference can be drawn and statements made. Similarly, criticizing the refund policy on the basis of the decisions of the Consumer Disputes Redressal Forum prima facie does not appear to be defamatory and that too of a scale which would require immediate directions to pull down the video. Criticism of the various programs of the plaintiff in this video and the elaboration of how the defendant No.1 conducts its programs would also be only in the nature of competitive advertisement. The comparison would naturally be tested during the trial to determine whether the inferences drawn were justified.”
For sake of clarity, the Bench then clarifies in para 31 that, “But, to accuse someone of kidnapping, extortion etc. is different. Use of such strong words is inappropriate to say the least. It directly impacts the parent who would be discouraged with such negative description of the plaintiff. These words ex facie are untrue. These words cannot be allowed to remain. This Court, however, does not agree with the submission of the learned senior counsel for the plaintiff that removal of the offensive words will not be sufficient to meet the ends of justice at this interim stage.”
Quite remarkably, the Bench then holds in para 32 that, “In conclusion, while the defendants have established that the balance of convenience is in their favour as no harm would be caused to the plaintiff if the video remained, that cannot be compensated through award of damages, this Court is of the considered view that the defendants will have to take down the aforementioned sentences in the video and ensure that no version with such content is in circulation, depicting the plaintiff as a set of criminals.”
Furthermore, the Bench then directs in para 33 that, “Accordingly, an affidavit shall be filed by the defendants to this effect that they have edited out the aforementioned offending words and sentences that have been used in the video. The same be filed within four weeks.”
Going ahead, the Bench then also directs in para 39 that, “List before the court for framing of issues on 10th May, 2022.”
Last but not the least, the Bench then also directs in para 40 that, “The order be uploaded on the website forthwith.”
In a nutshell, this remarkable, robust and rational judgment by the single Judge Bench of Hon’ble Ms Justice Asha Menon of Delhi High Court minces no words to make it absolutely clear that malicious falsehood can’t become freedom of speech. It was also made clear that care has to be exercised to avoid denigration of competitor’s goodwill while advertising. There can be no denying it!
Sanjeev Sirohi