Malicious Falsehood Cannot Become Freedom Of Speech - Delhi High Court In Counter Advertisement Case

The Delhi High Court has in a counter advertisement case observed that while engaging in advertising one's 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.

Further, the Court also held that malicious falsehood cannot become freedom of speech.

The observation came from a  bench of Justice Asha Menon, which was hearing an interim application filed by Plaintiff under Order XXXIX Rules 1 & 2 CPC seeking interim relief against a video posted on youtube, by the Defendants allegedly defaming the Plaintiffs under the garb of comparative advertisements. 

The facts that gave rise to the filing of the present application are that Plaintiff is a company that came into being in 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. Over a period of time, the Plaintiff company's network spread across 80 centers, and now it has acquired the status of being the number one coaching institute for the engineering entrance examination. The grievance of Plaintiff is that Defendant no 2,  uploaded a video on youtube in which they claimed that Plaintiff, misled the parents and they were only focused on making money and further they  "kidnapped" children.

Mr. Sudhir Nandrajog, Senior Counsel for Plaintiff contended that the use of contemptuous words in the video, such as "kidnapping" was highly offensive, particularly when Plaintiff and Defendants were in the same field of business and were competitors. He further contended that the intent of the video was retribution borne out of malice because the Plaintiff gave an advertisement in which comparative performance was published and the Defendant was shown in poor light.

Mr. Jayant K. Mehta, Senior Counsel appearing on behalf of Defendant no.1 submitted that they were raising the defense of justification. It was further submitted that the video relied upon material that was disclosed in the description box of the youtube video and therefore the statements made in the video were not baseless. It was also submitted that no final relief can be granted at an interim stage.

The Court noted 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 reputation, and similar issues then crop up. This is one such case."

The Court held, "If a competitive performance has been listed by the plaintiff to show their better performance, then a response to the advertisement by way of the video is to be seen as a counter advertisement. Thus, what is good for the goose should be equally good for the gander."

The Court then relied on Tata Press Limited Vs. Mahanagar Telephone Nigam Limited and Others assert the fact, that comparative advertisements are allowed and are covered under the ambit of commercial speech.

The Court in this context observed that "While engaging in advertising one 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 Court relied on Pepsi Co., Inc. v. Hindustan Coca Cola Ltd and Reckitt Benckiser India Private Limited Vs. Hindustan Unilever Limited to note the disparagement tests which were as follows 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 (iv) while glorifying its product, an advertiser may not denigrate or disparage a rival product.

Further, the Bench opined, "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 Court finally noted that "To accuse someone of kidnapping, extortion, etc. is different. The use of such strong words is inappropriate, to say the least. It directly impacts the parent who would be discouraged with such a negative description of the plaintiff. These words ex facie are untrue."

Accordingly, the Court directed the Defendants to remove certain words such as kidnapping and extortion from the youtube video and file an affidavit for the same, and disposed of the application.

Click here to read/download the Order