# COLGATE PALMOLIVE (INDIA) LTD v. HINDU ST AN LEVER LTD

- **Citation:** [1999] Supp. 1 S.C.R. 560
- **Court:** Supreme Court of India
- **Decided:** 1999-08-18
- **Case number:** Civil Appeal No. 2620of1998
- **Bench:** B.N. Kirpal, U.C. Banerjee
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/colgate-palmolive-india-ltd-v-hindu-st-an-lever-ltd-16777
- **Pages:** 31

## Headnote

Monopolies and Restrictive Trade Practices Act, 1969:
Section 12A (as amended by MRTP Amendment Act, 1984):
c
Grant of temporary injunction by the Commission-Scope of -In a
complaint being lodged by trader in respect of unfair trade practice-Held,
if Commission comes to a finding that there is likelihood of deception to the
public, then and in that event only, the question of grant of injunction would
arise-To appreciate the powers under Section 12A and to read the same in
D its proper perspective, Regulations 76 and 77(2) ought also to be noticedRegulation 76 provides that such application ought to be supported by an
affidavit stating the circumstances under which the trade practices can be
ascribed to be prejudicial to the interest of the public, consumer etc.-
Whereas Regulation 77(2) provides a safeguard that before making an order,
. E the Commission may direct an investigation by the DG-lnvestigation and to
submit a report to it, and upon consideration thereof, an appropriate order
may be passed by the Commission-Section 36-A-MRTP Regulations 1991,
Regulations 76 and 77(2).
Grant of temporary injunction-Commission's power under-Held,
. F somewhat akin to that of the Civil Court under Rules 2A to 5 of Order XXXIX
of the Code of Civil Procedure-A/so held the jurisdiction of Commission is
purely discretionary in nature though ordered only on the exigencies of the
situation and not as a matter of course in accordance with known principles
of law-Civil Procedure Code, 1908, Order 39 Rules 2A to 5-Grant of
temporary injunction-Delay/latches in approaching the Commission-Effect
G of-Held, a relevant factor for grant or refusal to grant such injwiction and
such delay cannot be ignored.
Section 36-A-unfair trade practice-Trade advertisement-Simple
commendation of the quality of goods by the seller, unless intended to be a
H warranty, would not amount to unfair trade practice-Extent of latitude
560
~-
I
;
COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD.
561
allowed in an advertisement.
A
Civil Procedure Code, 1908:
Order 39-/njunction--Object of-Held, to protect the plaintiff against
the injury by reason of violation of his right and relief by way of interlocutory
injunction granted to mitigate the risk of injustice to the plaintiff during the B
period before the uncertainty could be resolved
Order 39-:Temporary Injunction-Grant of-Advertisement issued by
appellant claiming that Colgate Dental Cream acts as germs fighter, fights
tooth decay and stop bad breath and hence provides a safety ring around
family as "Suraksha Chakra"-Respondent made a complaint to the C ·
Commission that the claims of the appellant was highly misleading qua the
consumers and trade-No allegation in the complaint against the term
"Suraksha Chakra", not notice of inquiry containing any reference that this
being unfair trade practice-Held, in the absence of any evidence regarding
the basic a/legation of germs fighting, tooth decay. and bad breath-No D
prima facie case made out warranting issue of temporary injunction against
use of words "Suraksha Chakra" against the appellantMaxims- "Simplex commendatio non obligate-Meaning of
Appellant started its advertisement campaign for 'Colgate Dental Cream' E
using the phrase "Stop bad breath" and "Fight tooth decay" from 1960. The
user of the words "Suraksha Chakra" commenced however, from 1985. In
March 1997, the respondent complained to the Advertising Standard Council
of India (ASCI) against Appellant's advertisement in respect of Colgate
Dental Cream. The Consumer Complaint Council of ASCI scrutinised the
appellant's advertisement in detail and came to a finding that the same does F
not in any way be termed to be unfair or deceptive. Significantly, however,
though there was a provision for review, respondent did not choose to proceed
with the matter and allowed the matter to be set at rest.
On October 15, 1997, appellant filed a complaint before the MRTP G
Commission against respondent by reason of the re

## Text

_Characters 0–39,693 of 76,202. This is a partial read: ask again with offset=39693 for what follows._

A
COLGATE PALMOLIVE (INDIA) LTD.
v.
HINDU ST AN LEVER LTD.
AUGUST 18, 1999
B
[B.N. KIRPAL AND U.C. BANERJEE, JJ.]
Monopolies and Restrictive Trade Practices Act, 1969:
Section 12A (as amended by MRTP Amendment Act, 1984):
c
Grant of temporary injunction by the Commission-Scope of -In a
complaint being lodged by trader in respect of unfair trade practice-Held,
if Commission comes to a finding that there is likelihood of deception to the
public, then and in that event only, the question of grant of injunction would
arise-To appreciate the powers under Section 12A and to read the same in
D its proper perspective, Regulations 76 and 77(2) ought also to be noticedRegulation 76 provides that such application ought to be supported by an
affidavit stating the circumstances under which the trade practices can be
ascribed to be prejudicial to the interest of the public, consumer etc.-
Whereas Regulation 77(2) provides a safeguard that before making an order,
. E the Commission may direct an investigation by the DG-lnvestigation and to
submit a report to it, and upon consideration thereof, an appropriate order
may be passed by the Commission-Section 36-A-MRTP Regulations 1991,
Regulations 76 and 77(2).
Grant of temporary injunction-Commission's power under-Held,
. F somewhat akin to that of the Civil Court under Rules 2A to 5 of Order XXXIX
of the Code of Civil Procedure-A/so held the jurisdiction of Commission is
purely discretionary in nature though ordered only on the exigencies of the
situation and not as a matter of course in accordance with known principles
of law-Civil Procedure Code, 1908, Order 39 Rules 2A to 5-Grant of
temporary injunction-Delay/latches in approaching the Commission-Effect
G of-Held, a relevant factor for grant or refusal to grant such injwiction and
such delay cannot be ignored.
Section 36-A-unfair trade practice-Trade advertisement-Simple
commendation of the quality of goods by the seller, unless intended to be a
H warranty, would not amount to unfair trade practice-Extent of latitude
560
~-
I
;
COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD.
561
allowed in an advertisement.
A
Civil Procedure Code, 1908:
Order 39-/njunction--Object of-Held, to protect the plaintiff against
the injury by reason of violation of his right and relief by way of interlocutory
injunction granted to mitigate the risk of injustice to the plaintiff during the B
period before the uncertainty could be resolved
Order 39-:Temporary Injunction-Grant of-Advertisement issued by
appellant claiming that Colgate Dental Cream acts as germs fighter, fights
tooth decay and stop bad breath and hence provides a safety ring around
family as "Suraksha Chakra"-Respondent made a complaint to the C ·
Commission that the claims of the appellant was highly misleading qua the
consumers and trade-No allegation in the complaint against the term
"Suraksha Chakra", not notice of inquiry containing any reference that this
being unfair trade practice-Held, in the absence of any evidence regarding
the basic a/legation of germs fighting, tooth decay. and bad breath-No D
prima facie case made out warranting issue of temporary injunction against
use of words "Suraksha Chakra" against the appellantMaxims- "Simplex commendatio non obligate-Meaning of
Appellant started its advertisement campaign for 'Colgate Dental Cream' E
using the phrase "Stop bad breath" and "Fight tooth decay" from 1960. The
user of the words "Suraksha Chakra" commenced however, from 1985. In
March 1997, the respondent complained to the Advertising Standard Council
of India (ASCI) against Appellant's advertisement in respect of Colgate
Dental Cream. The Consumer Complaint Council of ASCI scrutinised the
appellant's advertisement in detail and came to a finding that the same does F
not in any way be termed to be unfair or deceptive. Significantly, however,
though there was a provision for review, respondent did not choose to proceed
with the matter and allowed the matter to be set at rest.
On October 15, 1997, appellant filed a complaint before the MRTP G
Commission against respondent by reason of the respondent's advertisement
wherein it was stated that the respondents' product "New Peposodent" had
102% more germs fighting capability as compared to the 'leading toothpaste'.
According to the appellant this 'leading toothpaste' could not but referred
to 'Colgate Toothpaste' and as such the advertisement was directly aimed at ·
disparagement of the appellant's product namely Colgate Dental Cream. On H
562
SUPREME COURT REPORTS [1999) SUPP. I S.C.R.
'A October 22, 1997, the respondent also filed a complaint before MRTP
Commission against appellant's advertisement in respect of 'Colgate Dental
Cream', which was ascribed to be purely as a counter blast. The main
grievance of the respondent before the Commission was that the appellant's
claim that its toothpaste was a "Germ fighter" having the ability to "stop bad
B breath" and "fight tooth decay" were highly misleading qua the consumers
and the trade. However, the Commission took the view that without going
through the evidence it was neither feasible nor proper. to pass any order in
respect of the alleged claim of the appellant that Colgate D~ntal Cream
fights germs and tooth decay and stops bad breath but passed an order
restraining the appellan,t from displaying the ring round the family as
C "Surksha Chakra" in appellant's hoarding, print advertisements and on T.V.
Hence this appeal.
It was contended by the appellants that the ring could not but be termed
as an incidental issue of the three broad heads of grievance, no injunction
D was warranted; that the allegations of unfair and restrictive trade practices
being a rather serious allegation of misconduct as regards the trade, there
ought to be specific pleading in the complaint as also in the notice of inquiry
together with full particular thereof and the absence thereof, the question
of any credence would not arise, far less the grant of an order of injunction;
the Commission as a matter of fact was persuaded to issue interim order
E pertaining to "Suraksha Chakra" by reason of the factum of an order of
injunction granted by the Federal Trade Commission in the USA wherein a
complaint was made by the respondent's parent company in USA in respect
of Colgate Dental Cream with Gardol, that in the US advertisement, there
was an invisible shield protecting the tooth whereas in the present impugned
F advertisement, there was no such protection but it was the resultant effect
of the foaming action which helped in stopping bad breath and tooth decay;
that Hindi word "Suraksha" has meaning in common acceptation and implied
safety and the Hindi word "Chakra" meant a wheel or a disc and the words
put together could not be equated or understood to mean an invisible shield
which wo~ld protect the tooth as was available in the US advertisement; and
G that the advertisement of invisible shield and representation as to the degree
or extent of protection was found to be false, misleading and deceptive by
Federal Trade Commission and an order was passed directing the respondent's
parent company to cease and desist from representing directly or by ·
implication that Colgate Dental Cream with Gardol afforded to users complete
H protection against tooth decay or development of cavities in their teeth.
COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD.
563
Allowing the appeal, the Court
A
HELD: 1.L MRTP Act as originally framed d_id not confer any.iJOwer
to the Commission to grant temporary injunction during the coutse of
inquiry. The Sachhar Committee report however, recorded that p~wer to
issue temporary injunction order ought to be made available to the Commission
in order to give effect and strengthen the jurisdiction and, authority of the B
Commission and it is by reason therefor the legislature thought it fit to
incorporate Section 12 A in the body of the Act by MRTP Amendment Act,
1984 conferring such a power to the Commission. [567-D-F]
1.2. While it is true that the conferment of power, under Section 12~., C
has very wide remifications but the legislature was itself conscious ebough
to record in the body of the Section certain in-built requirement to be
fulfilled in order to clothe the Commission with the authority and jurisdiction
in the matter of grant of an order of injunction and it is on this perspective
that Section 12A ought to be noticed. [567-F-GJ
1.3. The Commissions power can be invoked under Section 12A within
however such limits and restrictions as provided in the Section itself. For
D
an appreciation of powers under Section 12A and to read the same in its
proper perspective, Regulation 76 and 77(2) of the MRTP Regulations 1991
ought also to be noticed. Regulation 76 provides that an application (or the
grant of temporary injunction ought to be supported ·by an ~ffidavit stating E
therein the circumstances under which the trade practices can be ascribed
to be prejudicial to the interest of the public, consumer etc. and Regulation
77(2) provides a safeguard to the effect that the Commission before making
an order under Section 12A, may direct the Director General of investigation
to make an investigation and submit a report to the Commission afid the F
Commission, upon consideration thereof, may pass appropriate orders in
regard thereto. (569-A-C]
1.4. In the event of a complaint being lodged by a trader in respect of
unfair trade practice, it is for the trader to convince by way of 'evidencesufficient' that there is involved an element of public interest in the complaint, G
in order to obtain an order of injunction in terms of Section 12A and the
Commission in its turn, has thus to consider as to whether or not, the public
are being deceived or likely to be deceived and in the event, the Commission
. comes to a finding that there is likelihood of such a deception, then and in
that event only, the question of grant of an order of injunction would. arise.
The Commission's powers to grant temporary injunction is somewhat akin H
564
SUPREME COURT REPORTS [1999] SUPP. 1 S.C.R.
A to that of the Civil Court under Rules 2A to 5 of Order X:XXIX of the Code
of Civil Procedure. [569-D-F)
.1.5. The bro~d legislative perspective in the matter of conferment of
power and authority to th.e Commission in regard to the grant of injunctionbe it statutory or otherwise-involving equitable considerations and the same
B being purely discretionary in nature though ordered only on the exigencies
of the situation and not as a matter of course in accordance with the known
principles of law. (569-F-H]
2. The object of interlocutory injunction is to protect the plaintiff
against injury by reason of violation of his right and relief by way of
C interlocutory injunction is granted to mitigate the risk of injustice to the
plaintiff during the period before the uncertainty could be resolved. Generally,
however, the interlocutory remedy by way of grant of an order of injunction
is intended to preserve and maintain in status quo the rights of the parties
and to protect the plaintiff, being the initiator, of the action against incursion
D of his rights and for which there is no appropriate compensation being
quantified in terms of damages. The basic principle of the grant of an order
of injunction is to assess the right and need of the plaintiff as against that
of the defendant and a duty incumbent on to the law courts to determine as
to where the balance lies. Another redeeming feature in the matter of grant
of interlocutory injunction is .that, in the event of a grant of injunction in
E regard to a party defendant where the latter's enterprise has commenced and
in that event the consideration may be somewhat different from that where
the defendant is yet to commence its enterprise. 1570-A-CJ
Wander ltd. v. Antox India, (P) Ltd., (1990) Supp SCC 727; Power
F Con,trol Appliances v. Sumeet Machines (P) Ltd., (.1994) 2 SCC 448 and
Gujarat Bottling Co. Ltd. v. Coca Cola Co., (19951 5 SCC 545: AIR [1995)
SC 2372, referred to.
American Cyanamid Co. v. Ethican Ltd., (1975)1 ALL ER 504; J.T.
Stratford & Sons Ltd. v. Lindley, (1965)AC 269; Dimbleby & Sons Ltd. v.
G National Union of Journalists, (1984) I All ER 751; Series 5 Software v.
Clarke & Ors., (1996) 1 All ER 853 and Hubbardv. Vosper, (1972) I All ER
1023: (1972) 2 QB 84, referred to.
3. A distinction shall always have to be made as latitude is allowed in
the event of there being an advertisement to gain a purchaser or two. The
H latitude spoken of, however, cannot and does not mean any misrepresentation
COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD.
565
by description of permissible assertion. Further, assuming there was in fact A
(567-D-F)an express warranty but that by itself would necessarily result
from a "simple commendation of the quality of goods by the seller": for in
this case the rule of civil law, "simplex commendatio non obligate" - simple
commendation can only be regarded as a mere invitation to a customer
without any obligation as regards the quality of goods: every seller will B
naturally try and affirm that his wares are otherwise good to be purchased
unless of course the same appears to be on evidence that the commendation
was intended to be a warranty. The popular English saying "in a purchase
without warranty, one's eyes tastes and senses must be his protector" has
its definite connotation and its application is a matter of the nature as the
present one. (581-G-H; 582-D-E)
C
Lakhanpal National Ltd. v. MR.T.P. Commission, (1989) 3 SCC 251,
relied on.
Tata Press Ltd. V. Mahanagar Telephone Nigam Ltd., [1995) 5 SCC
139; HMM Ltd. v. MR. T.P. Commission, (1998) 6 SCC 485, referred to.
D
Dimmack v. Hallett, f 18661LR2, Ch. App. 2 and Smith v. Land & House
Property Corporation, (1884) 28 Ch. D. 7, referred to.
Anson's law of Contract, (27th Edn.), referred to.
4.1. The allegations in the complaint filed by the respondent stand
restricted or confined to Colgate's claim of "germ fighting", "bad breath"
and "tooth decay~·. The Commission rightly took the view that without going
through the evidence, it is neither feasible nor proper in any event to pass
any orders thereon at that juncture. [581-B; 589-C)
4;2. While not disturbing the three specific features available in the
complaint, viz. germ fighting, tooth decay and bad breath, by reason of lack
of evidence, the commission erred in taking up for consideration the issue
E
F
of Suraksha Chakra which was an incidental issue wholly d.ependant upon
those three specific features and issuing the injunction, when there was no G
allegation in the complaint against the term "Suraksha Chakra" more even
an allegation that the same is misleading or an unfair trade practice. The
notice of enquiry also does not contain any reference to "Suraksha Chakra"
as unfair trade practice or there being any involvement or any falsity or that
. in any way the same tantamounts to a misleading information to the people
at large. There was no evidence of a single consumer being misled or not H
'\
566
SUPREME COURT REPORTS [1999] SUPP. 1 S.C.R.
A a whiisper as to what-constituted an unfair trade practice pertaining to
"Sur~ksha Chakra". The Commission also thought it fit not to record any
reaSOfl or justification for the grant of an interim order of injunction •.
.
(581-A-B; E)
4.3. The factum of non-availability of any explanation for more than 13
B years' delay has also not been delved into by the Commission at all. It is not
possible to accept the contention that the complaint pertains to vindication
of a public right and since the public interest is involved, the question of ~ny
delay for moving the Commission does not arise and more so, it is a remedy
to put>lic wrong and not a personal relief. Public wrong, if any, needs to be
C asses$ed and proved, without which the question of having an order of
injunction would not arise. While it is true that the relief prayed for is
statutory in nature but that does not clothe the Commission with power to
pass orders dehors the basic principles of law. [588-F-H; 589-F)
· 4.4. Moreover, the- submission as regards the bona jides of the
D
appli~ation under Section 12-A cam~ot also-be brushed aside and non-
. consideration thereof by the Commission ha~ resulted in a clear error on
. the part of the Commission. The fact that with.in a period of 10 days of the
. appli~ation by.the appellant before the Commission, the respondent filed the
inStatft complaintwith an application for an interim prayer-though, however,
·this l'Suraksha Chakra" admittedly is available in .the commercial
E adve.rtisement since 1985 and irithe visual advertisement in Hindi at least
since 1987- there was no lodgement of any protest or complaint in public
inter~st but it was only filed as a backlash on the appellant's complaint and
the motive therein cannot also be ruled out..Therefore, the question of there
being any order of injunction at this stage of the proceedings on the face of
F
th~ findings as passed by the Commissfon itself does not and cannot arise.
[589-A-B; Fl
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2620of1998
Etc.
G
From the Judgment and Order dated 30.4.98 of the M.R.T.P. Commission,
New Pelhi in U.T.P.E. No.415of1997.
Kapil Sibal, Dr. A.M. Singhvi, Ashok H. Desai, R.N. Karanjawala, S.
Ganei;h, G.aurab Banerjee, Ms. Nandini Gore, Ms. Ruby Singh Ahuja and Ms.
Manil< Karanjawala, for the Appellant in C.A. No. 2620/98 and for Respondent
H No. 1 in C.A. No. 3288/98
1
COLGATE PALMOLIVE(INDIA) LTD. v. HINDUSTAN LEVER LTD. [BANERJEE, J.] 567
Rakesh Dwivedi, Harish N. Salve, Dalip Kumar Malhotra and Rajesh A
Malhotra, for the Respondent in C.A.No.2620/98 and for appellant in C.A. No.
3288198.
P. Parmeswaran, (NP) for the Respondent No. 2 in C.A.No. 3288/98
The Judgment of the Court was delivered by
B
BANERJEE, J. These two appeals under Section 55 of the Monopolies
and Restrictive Trade Practices Act (hereinafter referred to as the 'MRTP
Act') are directed against the order of the Monopolies and Trade Practices
Commission under Section 12 A of the MRTP Act dated 30th April, 1998 in C
matter No. UTPE 415 of 1997. The matter pertains to colgate toothpaste, a
product of Colgate Palmolive India Limited and by reason of a complaint from
M/s. Hindustan Lever Limited being the Appellant in the 2nd appeal. Whereas
CA No.2620 of 1998 is against the order of the Commission containing an
order of restraint as regards the display of the ring round the family as
"Suraksha Chakra" in Colgate Palmolive's hoardings, print advertisements D
and T.V. commercials, the CA No. 3288of1998 filed by M/s. Hindustan Lever
Limited is against the order of refusal on the part of the Commission to put
a total ban on the product of the Colgate Palmolive as noticed above.
Before adverting to the rival contentions, be it noted that the M.R.T.P.
Act as originally framed did not confer any power on to the Commission to E
grant temporary injunction during the course of inquiry. The Sachhar Committee
report however, recorded that power to issue temporary injunction order
ought to be made available to the Commission in order to give effect and
strengthen the jurisdiction and authority of the Commission and it is by
reason therefor the legislature thought it fit to incorporate Section 12A in the F
body of the Act by MRTP Amendment Act 1984 conferring such a power to
the Commission.
While it is true that the conferment of power, under Section 12A, has
very wide ramifications but the legislature was itself conscious enough to
record in the body of the section certain in-built requirements to be fulfilled G
in order to clothe the Commission with the authority and jurisdiction in the
matter of grant of an order of injunction and it is on this perspective that
Section 12A ought to be noticed at this juncture. Section 12A reads as
below:-
"12A Power of the Commission to grant temporary irijunctionsH .··
568
A
B
c
SUPREME COURT REPORTS [1999) SUPP. I S.C.R.
(1) Where, during an inquiry before the Commission, it is proved,
whether by the complainant, Director General, any trader or class of
traders. or any other person, by affidavit or otherwise, that any
undertaking or any person is carrying on, or is about to carry on, any
monopolistic or any restrictive, or unfair, trade practice and such
monopolistic or restrictive, or unfair trade practice is likely to affect
prejudicially the public interest or the interest of any trader, class of
traders or traders generally or of any consumer or consumers generally,
the Commission may, for the purposes of staying or preventing the
undertaking or, as the case may be, such person from causing such
prejudicial effect, by ·order, grant a temporary injunction restraining
such undertaking or person from carrying on any monopo1istic or
restrictive, or unfair, trade practice until the conclusion of such inquiry
or until further orders.
(2) The provisions of rules 2A to 5 (both inclusive) of order XXXIX
of the First Schedule to the Code of Civil Procedure, 1908 ( 5 of 1908)
D
shall, as far as may be, apply to a temporary injunction issued by the
Commission under this section, as they apply to a temporary injunction
issued by a Civil Court, and any reference in any such rule to a suit
shall be construed as a reference to an inquiry before the Commission.
[Explanation I- For the purposes of this section an inquiry shall be
E
deemed to have commenced upon the receipt by the Commission of
any complaint, reference or as the case may be, application or upon
its own knowledge or information reduced to writing by the
Commission.
Explanation II-For the removal of doubts, it is hereby declared thatthe
F
power of the Commission with respect to temporary injunction includes
power to grant a temporary injunction without giving notice to the
opposite party.]"
G
On a plain reading of the provision the following requirements thus
emerge:-
(a)
Temporary injunction can be granted only during an inquiry.
(b)
There must be proof of certain practices mentioned therein to
have been carried on or are about to be carried on by the person
specified therein.
H
(c)
Such practices are likely to affect prejudicially the public interest
..
-
-·
COLGATEPALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD. [BANERJEE, J.] 569
and there must be some evidence either by way of an affidavit A
or otherwise.
The situation thus after the incorporation of the Act of 1984, in the
Statute Book emerges that the Commission's power can be invoked under
Section l 2A within however such limits and restrictions as noticed above. Be
it placed on record, that for an appreciation of the powers under Section I2A B
and to read the same in its proper perspective, Regulations 76 and 77 (2) of
the MRTP Regulations 1991 ought also to be noticed. Regulations 76 provides
that an application for grant of temporary injunction ought to be supported
by an affidavit stating therein the circumstances under which the trade
practices can be ascribed to be prejudicial to the interest of the public, C
consumer etc. and Regulation 77(2) provides a safeguard to the effect that the
Commission before making an order under Section 12A, may direct the DirectorGeneral of Investigation to makt an investigation and submit a report to the
Commission and the Commission, upon consideration thereof, may pass
appropriate orders in regard thereto.
D
Incidentally, be it noted that in the event of a complaint being lodged
by a trader in respect of unfair trade practice, it is for the trader to convince
by way of 'evidence-sufficient' that there is involved an element of public
interest in the complaint, in order to obtain an order of injunction in terms of
Section l 2A and the Commission in its turn, has thus to consider as to E
whether or not, the public are being deceived or likely to be deceived and in
the event, the Commission comes to a finding that there is likelihood of such
a deception, then and in that event only, the question of grant of an order
of injunction would arise.
Needless to record here that the Commission's powers to grant temporary F
injunctions is somewhat akin to that of the Civil Court under Rule 2A to 5
of order XXXIX of the Code of Civil Procedure.
Having dealt with however, the broad legislative perspective in the
matter of conferment of power and authority on to the Commission in regard G
to the grant of injunctions and whilst on the subject let us however discuss
the state of the law in the matter of grant of an order of injunction be it
statutory or otherwise involving equitable considerations and the same being
purely discretionary in nature though ordered only on the exigencies of the
situation and not as a matter of course in accordance with the known principles
~~
H
570
SUPREME COURT REPORTS [1999) SUPP. I S.C.R.
A
Generally, however, the interlocutory remedy by way of a grant of an
order of injunction is intended to preserve and maintain in status quo the
rights of the parties and to protect the plaintiff, being the initiator, of the .
action against incursion of his rights and for which there is no appropriate
comp~nsation being quantified in terms of damages. The basic principle of the
B grant of an order of injunction is to assess the right and need of the plaintiff
as against that of the defendant and it is a duty incumbent on to the law
courts to determine as to where the balance lies.
Another redeeming feature in the matter of grant of interlocutory
injunction is that, in the event of a grant of 'injunction in regard to a party
C defendant where the latter's enterprise has commenced and in that event the
consideration may be somewhat different from that where the defendant is yet
to commence its enterprise.
D
E
G
The decision of this Court in Wander Ltd v. Antox India P. Ltd., [1990]
-
.Supplement sec 727 lend support to the observations as above.
This Court in paragraph 9 of the Report observed:
"Usually, the prayer for grant of an interlocutory ·injunction is at a
stage when the existence of the legal right asserted by the plaintiff
and its alleged violation are both contested and uncertain and remain
uncertain till they are established at the trial on evidence. The court,
at this stage, acts on certain well settled principles of administration
of this form of interlocutory remedy which is both temporary and
discretionary. The object of the interlocutory injunction, it is stated
" .. is to protect the plaintiff against injury by violation of his rights
for which he could not adequately be compensated in damages
recoverable in the action ifthe uncertainty were resolved in his favour
at the trial. The need for such protection must be weighed against the
corresponding peed of the defendant to be protected against injury
resulting from his having been prevented from exercising his own
legal rights for which he could not be adequately compensated. The
Court must weigh one need against another and determine where the
'balance of convenience' lies."
The interlocutory remedy is intended to preserve in status quo,
the rights of parties which may appear on a prima facie case. The
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court also, in restraining a defendant from exercising what he considers
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COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD. [BANERJEE, J.] 571
his legal right but what the plaintiff would like to be prevented, puts A
into the scales, as a relevant consideration whether the defendant has
yet to commence his enterprise or whether he has already been do"ing
so in which latter case considerations somewhat different from those
that apply to a case where the defendant is yet .to commence his
enterprise, are attracted."
Incidentally, the House of Lords prior to the decision in American
Cyanamid Co. v. Ethican Ltd, [1975] I All ER 504 in J.T. Stratford & Sons
Ltd v. Lindley, (I 965) AC 269 in no uncertain terms laid down that the plaintiff
B
had to show a strong prima facie case that his rights has been infringed and
thereafter the plaintiff was required to show that the damages would not be C
an adequate remedy in the event of there being a success of the plaintiff at ·
the trial and that the balance of convenience favoured the grant. This
requirement, however, in the matter of grant of an injunction so far as the
English Courts are concerned, stands slightly diluted by reason of the decision
in American Cyanamid's case (supra) which records that in the event of there
being a serious issue to decide, the grant would be available to a plaintiff on D
however, compliance with the other fundamentals as noticed below. A strong
prima facie case, therefore, stands substituted by a serious issue to be
decided.
At this juncture, however, the decision of the House of Lords in American
Cyanamid's case though raised certain eye-brows lately, ought to be considered E
in slightly more greater detail.
Lord Dip/ock in Cyanamid's case laid down the following guiding
principles for the grant of interlocutory injunction:
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(I) "The plaintiff must first satisfy the Court that there is a serious F
issue to decide and that if the defendants were not restrained
and the plaintiff won the action, damages at common law would
be inadequate compensation for the plaintiffs loss.
(2) The Court, once satisfied of these matters will then consider
whether the balance of convenience lies in favour of granting G
injunction or not, that is, whether justice would be best served
by an order of injunction.
(3)
The Court does not and cannot judge the merits of the parties's
respective cases and that any decision of justice will be taken
in a state of uncertainty about the parties' rights."
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SUPREME COURT REPORTS [1999] SUPP. I S.C.R.
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It would seem to follow therefore, that what should be borne in mind,
in addition to what has been phrased in Lord Diplock's speech, is that ifthere
is uncertainty, the Court should be doubly reluctant to issue an injunction,
the effect of which is to settle the parties' rights once for all.
On a clear analysis of the speech of Lord Diplock, it appears that if
B damages, recoverable at common law, would be an adequate remedy and the
defendant Would be in a financial position to pay the same, no interlocutory
injunction should normally be granted, howsoever strong the plaintiffs claim
appear to be at that stage. Lord Diplock went on to observe further that in
the event of there being any doubt, as to the adequacy of the respective
C remedies and damages available to either party or both, then and in that
event, the question of balance of convenience arises and the same will vary
from case to case.
Similar view has also been expressed by the House of Lords in the case
of Dimbleby & Sons Ltd v. National Union of Journalists, ( 1984) l ALL ER .
D 751).
E
F
G
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In Power Control Appliances v. Su meet Machines Ltd., [1994] 2 SCC
448) this Court did follow the decision of this Court in Antox India's case
(supra) and expressly approved the main dicta of the House of Lords in
American Cyanamid's case.
In Gujarat Bottling Co. Ltd. v. Coca Cola Co. and Ors., [1995] 5 SCC
545: AIR (1995) SC 2372 this Court however sounded a different note, though
however, emphasised the discretionary power in the malter of grant of
interlocutory injunction and in paragraph 43 this Court observed:
"43. The grant of an interlocutory injunction during the pendency of
legal proceedings is a matter requiring the exercise of discretion of the
court. While exercising the discretion the court applies the following
tests - {i) whether th.e plaintiff has a prima facie case; (ii) whether the
balance of convenience is in favour of the plaintiff; and (iii) whether
the plaintiff would suffer an irreparable injury if his prayer for
interlocutory injunction is disallowed. The decision whether or not to
grant an interlocutory injunction has to be taken at a time when the
existence of the legal right assailed by the plaintiff and its alleged
violation are both contested and uncertain and remain uncertain till ..
they are established at the trial on evidence. Relief by way of
interlocutory injunction is granted to mitigate the risk of injustice to
--
....
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COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER LTD. [BANERJEE, J.] 573
the plaintiff during the period before that uncertainty could be resolved. A
The object of the interlocutory injunction is to protect the plaintiff
against injury by violation of his right for which he could not be
adequately compensated in damages recoverable in the action if the
uncertainty were resolved in his favour at the trial. The need for such
protection, has, however, to be weighed against the corresponding
need of the defendant to be protected against injury resulting from his B
having been prevented from exercising his own legal rights for which
he could not be adequately compensated. The court must weigh one
need against another and detennine where the "balance of convenience"
lies. (see: Wander Ltd v. Antox India, (P.) Ltd, [1990] (supp.) SCC at
pp. 731-32.) In order to protect the defendant while granting an C
interlocutory injunction in his favour the court can require the plaintiff
to furnish an undertaking so that the defendant can be adequately
compensated if the uncertainty were resolved in his favour at the
trial".
As noted above, lately the 'triable issue concept' as introduced by Lord D __.
Diplock in Cyanamid's case has been thought to be much too rigid and wide
even conceptually and doubts are even raised as to its legal efficacy having
regard to the facts of adequate compensation theory. As a matter of fact the
Courts in England have even gone to the extent of ascribing the judgment
to be beneficial for the richer sections of the society! We however can not E
subscribe to such a view, neither find any justification for such uncharitable
comments and it seems that Cynamid's decision has been more misunderstood
than understood and in this regard we record our concurrence with the views
expressed by Laddie J. in Series 5 Software v. Clarke and Others in, (1996)
1 ALL ER 853 wherein the learned Judge has explained the judgment of
American Cyanamid with extreme competency and in our view also correctly F
Laddie, J. observed:
"In many cases before American Cyanamid the prospect of success
was one of the important factors taken into account in assessing the
balance of convenience. The courts would be less willing to subject
the plaintiff to the risk of irrecoverable loss which would befall him G
if an interlocutory injunction was refused in those cases where it
thought he was likely to win at the trial than in those cases where it
thought he was likely to lose. The assessment of the prospects of
success therefore was an important factor in deciding whether the
court should exercise its discretion to grant interlocutory relief. It is H
574
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SUPREME COURT REPORTS [1999] SUPP. I s.'c.R.
this consideration which American Cyanamid is said to have prohibited
in all but the most exceptional case. So it is necessary to consider with
some care what was said in the House of Lords on this fasue.
Lord DiplockSaid, (1975) l ALL ER504 at 511, [1975] AC 396 at409:
' .. if the extent of the uncompensatable disadvantage to each party
would not differ widely, it may not be improper to take into .account
in tipping the balance the relative strength of each party's case as
revealed by the affidavit evidence adduced on the hearing of the
application.. The court is not justified in embarking on anything
resembling a trial of the action on conflicting affidavits in order to
evaluate the strength of either party's case.'
It appears to me that there is nothing in ·this which is inconsistent
with the old practice. Although . couched in terms 'it may not be
improper', this means that it is legitimate for the court to look at the
relative strength of the parties' case as disclosed by the affidavit!\.
The warning contained in the second of the quoted senten~es is to
avoid courts at the interlocutory stage engaging in mini-trials, which
is what happened, at least in the Court of Appeal, in American
Cyanamid itself. Interlocutory applications are meant to come on quickly
and to be disposed of quickly.
The supposed problem with American Cyanamid centres on the
following statement by Lord Diplock, ((1975) AC 396 at 409):
'[Asssessing the relative strength of the parties' cases], however,
should be done only where it is apparent upon the facts disclosed by
evidence as to which there is no credible dispute that the strength of
one party's case is disproportionate to that of the other party.'
If this means that the court cannot take into account its view of the
strength of each party's case if there is any dispute on the evidence,
as suggested by the use of the words 'only' and 'no credible dispute',
then a new inflexible rule has been introduced to replace that applied
by the Court of Appeal. For example, all a defendant would have to
do is raise a non-demurable dispute as to releva!lt facts in his affidavit
evidence and then he could invite the court to ignore the apparent
strength of the plaintiffs case. This would be inconsistent with the
flexible approach suggested in Hubbard v. Vosper, [ 1972] l ALL ER
1023, [1972] 2 QB 84 which was cited with approval earlier in American
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COLGATE PALMOLIVE (INDIA) LTD. v. HINDUSTAN LEVER L Tl). [BANERJEE, J.] 575
Cyanamid, (1975) 1 ALL ER 504 at 510, (1975) AC 396 at 407. A
Furthennore, it would be somewhat strange, since American Cyanamid
directs courts to assess the adequacy of damages and the balance of
convenience, yet these too are topics which will almost always be the
subject of unresovled conflicts in the affidavit evidence.
In my view Lord Diplock did not intend by the last-quoted B
passage to exclude consideration of the strength of the cases in most
applications for interlocutory relief It appears to me that what is
intended is that the court should not attempt to resolve dif!icult
issues of fact or law on an application for interlocutory relief If, on
the other hand, the court is able to come to a view as to the strength C
of the parties ' cases on the credible evidence, then it can do so.
(Emphasis supplied)."
The learned Judge, thereafter went on to record that the House of Lords
in American Cyanamid did not suggest that it was changing the basis upon
which most courts had approached the exercise of discretion in this important D
/ area.
Thus on an analysis of the decisions as noticed above, there does not
seem to be any difficulty in appreciating the view as expressed by Lord
Diplock in American Cynamid. As a matter of fact, laddie, J. 's decision in
Series 5 Software case (supra) has been able to resolve the issue without any E
departure from the true perspective of the judgment as noticed above.
We, however, think it fit to note herein below certain specific
considerations in the matter of grant of interlocutory injunction, the basic
being-non~expression of opinion as to the merits of the matter by the Court,
since the issue of grant of injunction usually, is at the earliest possible stage F
so far as the time frame is concerned. The other considerations which ought
to weigh with the Court hearing the application or petition for the grant of
injunctions are as below:-
(i)
Extent of damages being an adequate remedy;
(ii)
Protect the plaintiffs interest for violation of his rights though
however having regard to the injury that may be suffered by the
defendants by reason therefor;
G
(iii) The court while dealing with the matter ought not to ignore the
factum of strength of o_pe' party's case being stronger than the H
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SUPREME COURT REPORTS [1999] SUPP.