Landmark judgements on Misleading Ads

Ishan Baranwal & Ayaskanta Parida

When running a business, advertising is one of the main activities and is just as important as manufacturing something using raw material, or as resources, manpower, preparing, organizing goods or services, etc.

Basically, what the company provides to the targeted consumers is advertisement, which is an important part of marketing, and a necessary precondition for sale. It is achieved with a broad population and involves coordinating and applying media assisted by human skills, talent and technology. Multifaceted skills and ideas are used by advertising firms to carry out successful campaigns. It has emerged as an organized industry with the immense creative growth of electronic media.

In recent times, the Indian advertising industry has been reshaped by regulatory and technological changes, as it did not have many opportunities before. It has been able to acquire a lot of promise with the advent of radio, TV, print and outdoor media and further innovation through internet and digital media. The development of FM radio deregulation, Direct to Home network, digital innovation ushering in smartphones, Conditional Access System (CAS) implementation, and foreign direct investment have made the industry much larger than before.

It can hence be realized that sometimes in such a field there would be instances where certain products would be exaggerated way beyond of what they are able to do so. The following instances describe it well-

  • When an edible oil advertisement gives you the impression that you are free of heart problems so long as you are using that particular oil, then it is misrepresenting facts.
  • When an advertisement for a detergent says that it can remove grease in just one wash- it should be able to do just that and the manufacturer should be able to prove this. Or else, it is an incorrect statement or a false advertisement.
  • If an advertisement for a face cream claims that it removes dark spots on the face and even prevents them from coming back, the manufacturer should be able to prove this. Or else, it is a deceptive advertisement.

This is where the phrase ‘misleading advertisement’ comes into the picture. As per the Consumer Protection Act, 2019, misleading advertisements can be defined as an advertisement which-

  1. falsely describes such product or service; or
  2. gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or
  3. conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice;
  4. or deliberately conceals important information;There have been many classic cases of misleading advertisements in India. False or misleading advertisements, or advertisements that create false associations, are prohibited by law, namely the Consumer Protection Act and the Advertising Standards Council of India (ASCI) Code.

Following are some of the laws and regulations in place to counter misleading advertisements:

  • Consumer Protection Act, 2019

Section 21 of the Consumer Protection Act, 2019 (hereinafter referred to as the ‘CP Act) deals with the Power of Central Authority to issue directions and penalties against false or misleading advertisements.

  • The Cable Television Network Rules, 1994

The Advertising Code, drawn up under Rule 7 of the Cable Television Network Rules, provides that all advertisements must adhere to the laws of the land. The products and services advertised should not suffer from any defect or deficiency as mentioned in the Consumer Protection Act, 1986 and further, they must not contain any references which are likely to lead public to infer that the product advertised or any of its ingredients occupy some special or supernatural or miraculous property or quality which is difficult to prove.

  • The Cable Television Network Regulation Act, 1995

Section 6 of the Cable Television Network Regulation Act, Chapter II of the Cable Television Networks (Regulation) Act, 1995 says that no person is allowed to transmit or re-transmit through a cable service, any advertisement, unless such advertisement is in conformity with the prescribed advertising code.

The following steps show the process of registration of complaints on the web portal designed by the Ministry of Consumer Affairs to address complaints against such advertisements:

What should you do as a consumer when you see such Advertisements?

You can register a complaint along with a copy/video/audio of such advertisement through the web portal of the Government of India at http://gama.gov.in to bring it to the notice of the government.

How do I register my complaint?

Step 1: A onetime registration is required for lodging a complaint. For registration, go to the web portal http://gama.gov.in and click on the login link and register yourself, verify through your email / mobile and create User Id and Password.

Step 2: Using this User Id and Password, enter into the portal and fill in required details attaching necessary audio / video / paper clip / photograph (if available).

How do I track the status of my complaint?

Log in using user id and password and you can track the status.

What action do I expect on my complaint?

Your complaint will be forwarded to the concerned authority for action against the misleading advertisement.

Who are the authorities?

The Government Departments / Self-regulating Authorities / Ombudsmen are the authorities.

However, it has often happened that in order to resolve a dispute regarding a misleading advertisement, the help of judiciary has been taken. The following cases show the take of the Indian Courts and tribunals against false infomercials in various instances.

Reckitt Benckiser (India) Ltd. vs Hindustan Unilever ltd

In the midst of the Covid-19 p andemic, popular soap manufacturer Reckitt Benckiser (India) Pvt Ltd which owns the brand Dettol, amidst the Coronavirus outbreak broadcasted an advertisement which indicated that washing hands with soap cakes was an inefficient means to fight disease causing germs while their handwash offered better protection.

Later, Hindustan Unilever Limited (HUL), manufacturing soap and related products under the brand name Lifebuoy contested against Reckitt Benckiser before the High Court of Bombay and contended that the impugned advertisement advocated false claims. Subsequently, Reckitt Benckiser removed the advertisement from public domain.

In this case, we can see that through comparative advertising, one brand was trying to show itself superior in comparison to others through unsubstantiated claims. Subsequently, the former had to drop the commercial as per the court’s orders.

Francis Vadakkan v A-One Medicals & others 

In this case brought before a consumer court in the state of Kerala, the complainant saw an advertisement which assured that the use of the product (hair cream) for six weeks would lead to lush hair growth. Since the promise was not fulfilled despite using the cream for required period, the complainant alleged ‘deficiency in service’ against the manufacturers of the product, the actor who promoted the product, and the medical store from where it was bought. The court directed all the defendants to pay compensation to the client for making ‘false promises’ and also directed the actor to promote a product only after ensuring its credibility and effectiveness.

Bhupesh Khorana vs Vishwa Buddha Parishad

A class action suit was filed by twelve students who had joined the BDS course offered by the Buddhist Mission Dental College run by Vishwa Buddha Parishad. The students’ complaint was that the college, in its advertisement and prospectus inviting applications for the course, had given the impression that it was affiliated to Magadh University, Bodh Gaya and recognized by the Dental Council of India and was fully equipped to give the degree of Bachelor of Dental Science. However, after joining the college and attending classes, the students found to their dismay that the annual examinations were not being held because the college was neither affiliated to Magadh University, Bodh Gaya and nor recognised by the Dental Council of India.

As a result, the students lost two precious academic years, but also spent money on fees, hostel charges, etc. holding the college to be deficient the National Commission directed it to refund the admission expenses of all the twelve students along with interest of 12 percent.

Reckitt & Colman of India Ltd. v. M. P. Ramchandran

In this case, the Calcutta High Court held that a seller is allowed to declare that his goods are the best or better than that of his competitor’s, despite the said declaration being false. While making such declaration, he may also compare the advantages and disadvantages of his products and that of the competitors; however, the seller is not permitted to defame the goods of his competitors and if there is no defamation, the competitor will have no cause of action to file a case of misleading advertisement and disparagement.

Ajay Gautam v. Amritsar Eye Clinic and 6/6 Lasik Laser Centre, Dehradun & others

NCDRC held that doctors cannot advertise anything that would mislead a person into going for a treatment based merely on the doctor’s claim that he/she would be cured completely. As per the facts in the judgement, Dr. Dinesh Sharma of Amritsar Eye Clinic, Dehradun had advertised that his laser surgery could correct visual acuity and therefore one could get rid of spectacles. Upholding a fine of Rs 1 lakh on the doctor, the commission, found the doctor and the hospital where the surgery was done “guilty of adopting unfair trade practice”, and violating the MCI code of ethics by publishing “misleading advertisement”. The doctor was fined Rs 1 lakh for publishing misleading advertisement.

Nadiya v. Proprietor, Fathima Hospital & Others

In this case, brought before the Kerala State Consumer Disputes Redressal Commission, it was alleged by the complainant that tempted by an advertisement, which claimed to increase a person’s height, Nadiya, a Class VIII student having a height of 135 cm got admitted to Fathima Hospital for surgery in 1996, for increasing her height. The surgery was conducted and a ring fixator was fixed on the legs which had to be adjusted every six hours.

To her dismay Nadiya found her left leg shorter by ½ inches, and therefore she could not walk. By September 1996, the pain had increased and the complainant was bed-ridden till March, 1998. The Commission held the hospital and the doctors negligent, deficient in their service and guilty for the advertisement and directed them to pay Rs 5,00,000 with costs amounting to Rs 2,000 to the complainant.

Rajiv Sharma v. Maruti Udyog Limited

Indian automobile maker Maruti Udyog Ltd (MUL) was asked by the Delhi District Consumer Forum to pay Rs one lakh as compensation to the complainant as compensation for “inducing” him to buy a car through misleading advertisements on its mileage. The advertisement showed the car of MUL to provide mileage of 16.7 km/litre but in reality provided 10.2 km/litre.

Dabur India v. Colortek Meghalaya Pvt. Ltd.

In this case, the Delhi High Court laid down the following guiding principles while dealing with the issue if misleading advertisements:

  • Advertisements are protected under Article 19(1)(a) as commercial speech;
  • An advertisement must not be false, misleading or deceptive;
  • However, there are certain cases where the advertisement must not be taken as false, but as glorious representation of one’s own product; and
  • Only when the impugned advertisement goes beyond glorifying its product, and is deceptive and misleading, the protection under Article 19(1)(a) would not be available.

Havells India Ltd. v. Amritanshu Khaitan

The Delhi High Court clarified the difference between comparative advertising and misleading advertising and disparagement. It observed that comparative advertising is healthy and encouraged in the spirit of competition, however, disparagement is not; and a cause of action shall arise in case of a misleading advertisement.

Horlicks Limited vs Zydus Wellness Products Limited

Horlicks Limited (“Horlicks”) approached the Delhi High Court, seeking a permanent injunction restraining Zydus Wellness Products (“Zydus”) from telecasting its advertisement, which showed that one glass of Complan (a Zydus Product) is equivalent to two glasses of Horlicks. The advertisement in contention was being telecast on multiple channels. Aggrieved by the advertisement, Horlicks approached the High Court on the ground that the advertisement was misleading and amounted to disparagement.

Zydus, on the other hand contended that the advertisement was not misleading as the information provided was accurate and was subject to the recommended serving size of both the drinks.

The High Court held that the impugned advertisement was misleading and disparaging, even though the disclaimer was provided in the advertisement, the same was not clear and the advertisement created an impression that one cup of Complan was equal to two cups of Horlicks, without considering the serve size.

The High Court, based on the above observation, held that the balance of convenience was in favour of Horlicks, who would suffer an irreparable injury if telecast of the impugned advertisement was not restrained and hence, granted the relief of interim injunction.