SUPREME COURT SETS ASIDE THE NCRDC ORDER THAT HELD PROMOTIONAL TRAILERS ARE BINDING CONTRACTS

INTRODUCTION

A two-Judge Bench of the Supreme Court comprising of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar passed an Order dated 22.04.2024 in Civil Appeal No. 4422/2024 (Arising Out Of SLP (C) No. 14475/2021 in Yash Raj Films Private Limited Vs. Afreen Fatima Zaidi & Anr and held that promotional trailers are unilateral and do not qualify as offers eliciting acceptance, and as such they do not transform into promises, much less agreements enforceable by law.

FACTS

i) The Appellant, Yash Raj Films Private Limited produced a Film called “Fan” in the year 2016. Before the release of the Film, the Appellant circulated a promotional trailer, both on television and online, which contained the song “Jabra Fan” in the form of a video.

ii) The Complainant, Afreen Fatima Zaidi (Respondent No. 1), is a teacher at a school in Aurangabad. She asserted that after viewing the promotional trailer of a film, she decided to watch the movie with her family. However, upon watching the film, she discovered that the song “Jabra Fan”, extensively featured in the promotion, was absent. Consequently, she lodged a Consumer Complaint with the District Consumer Redressal Forum, contending that she felt misled and disappointed by the absence of the song, which led to mental distress. As redress, she sought damages totaling Rs. 60,550/-.

iii) The District Consumer Redressal Forum issued a brief Order dated 29.04.2016, dismissing the Complaint. The basis for dismissal was the absence of a consumer-service provider relationship.

iv) Aggrieved by the Order of the District Consumer Redressal Forum, the Respondent No. 1 filed an Appeal before the State Commission, which was allowed vide Order dated 22.09.2017. The State Commission determined that entertainment services fall within the scope of the definition of ‘service’, and thus, the Appellant was qualified as a service provider. Furthermore, the Commission found evidence of deficient service, noting that the Appellant engaged in an unfair trade practice by featuring a song prominently in the promotional trailer but failing to include it in the Film. Consequently, the State Commission awarded Rs. 10,000 as compensation for mental distress and Rs. 5,000 as costs to the Complainant.

v) The Appellant, aggrieved by the Order dated 22.09.2017, filed a Revision Petition No. 156 of 2018 before the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC vide Order dated 18.02.2020 affirmed that consumers would rightly feel misled if a song featured in a promotional trailer was omitted from the film, constituting an unfair trade practice. Moreover, the NCDRC ruled that such an omission constitutes a deficiency in service, as the inclusion of the song in the trailer implies a promise that it will also be featured in the film itself.

vi) Aggrieved by the Order of the NCRDC, the Appellant filed Civil Appeal No. 4422/2024 (Arising Out of SLP (C) No. 14475/2021 before the Supreme Court.

SUPREME COURT ANALYSIS

The Supreme Court vide Order dated 22.04.2024, made the following observations:

1) The Apex Court stated that the concept of a promotional trailer constitutes an advertisement for a film. It is established that commercial speech, including advertisements, is safeguarded by the freedom of speech under Article 19(1)(a) of the Constitution, with limitations outlined in Article 19(2) of the Constitution. However, it is also firmly established that commercial speech that is deceptive, unfair, misleading, or untruthful is not protected under this constitutional provision and can be subject to regulation or prohibition by the State. Within these boundaries, producers and advertisers maintain the freedom to creatively and artistically promote their goods and services.

2) Further the Bench observed that information dissemination indeed stands as one of the primary objectives of advertising. An advertisement serves to inform both existing and potential consumers about the presence and availability of specific goods and services in the market. It highlights their features, qualities, uniqueness, and how they compare with competitors and substitutes. However, advertising serves a broader purpose beyond mere information provision. Advertisements are not solely informational; they also serve as vehicles for creative and artistic expression. They aim to allure, entice, and captivate consumers, often employing features that may not directly convey product or service information. Through advertisements, brands build loyalty, reputation, and project an image and ethos not only for the product but also for the manufacturer or service provider. Unique elements such as taglines, jingles, and visuals are crafted to seize the viewer’s attention and establish an association and synergy with the product or service itself. In this way, advertisements become emblematic and synonymous with the brands they represent, contributing to their recognition and identity in the market.

3) The Apex Court further stated that a song, dialogue, or a brief visual snippet featured in a promotional trailer can be viewed within the broader context of the diverse uses of advertisements. These elements might serve to generate excitement or anticipation for the release of the film, rather than solely providing information about its contents. Such promotional materials can create an association in viewers’ minds with the film, potentially sparking their interest and motivating them to watch it. However, the kind of right or liability a promotional trailer creates would entirely depend on the civil and statutory legal regime. The nature of rights or liabilities stemming from a promotional trailer would vary depending on these legal parameters. In this case, the Complainant had invoked the jurisdiction of the Consumer Court, necessitating an analysis of the issues in light of the provisions outlined in the Consumer Protection Act, 1986.

4) The Bench further observed that a promotional trailer is unilateral. It is only meant to encourage a viewer to purchase the ticket of the movie, which is an independent transaction and contract from the promotional trailer. The Court further stated that a promotional trailer does not constitute an offer, nor does it create a contractual relationship or promise between the producer and the consumer regarding the content of the film. As such, there is no legal basis for a consumer to claim deficiency in service based on the content of the trailer. The transaction of purchasing a movie ticket is separate from the promotional trailer and does not imply any obligation on the part of the producer to fulfill the expectations raised by the trailer. Therefore, the Court concluded that the promotional trailer itself does not confer any rights or claims on the consumer regarding the content of the movie, and thus cannot be the basis for a complaint of deficient service.

5) While the Supreme Court held that there was no contractual obligation on the part of the Appellant and there was no deficiency in service, the next question was whether it was an unfair trade practice on the part of the Appellant that gave rise to the cause of action.

6) The Court relied on the case Lakhanpal National Ltd v. MRTP Commission, (1989) 3 SCC 251 wherein the Supreme Court held as follows:

“23. Statements of the nature which are wilfully made knowingly false, or made recklessly without honest belief in its truth, and made with the purpose to mislead or deceive will definitely constitute a false or misleading representation. In addition, a failure to disclose a material fact when a duty to disclose that fact has arisen will also constitute a false or misleading representation”

7) The Supreme Court observed that the elements of ‘unfair trade practice’ as defined in Section 2(1)(r)(1) of the Consumer Protection Act, 1986 (“unfair trade practice”) are not evident in this case. The promotional trailer does not fit into any of the categories of “unfair method or unfair and deceptive practice” outlined in clause (1) of Section 2(1)(r) related to the promotion of goods and services, nor does it contain false statements or intend to mislead viewers. Moreover, the burden lies on the Complainant to provide compelling evidence of unfair trade practices, yet no such evidence had been presented in this case. Therefore, the Court held that there was no basis for alleging unfair trade practices.

ORDER

The Apex Court after considering the facts and circumstances of the case set aside the findings of the Order dated 18.02.2020 of the NCRDC that there was a deficiency of service and unfair trade practice thereby allowing the Appeal of the Appellant.

 

Kartik Khandekar

Associate

The Indian Lawyer & Allied Services

 

Editor’s Comments

This case is a classic example of meaningless litigation. Surprisingly, the litigant fought for 8 long years over such a trivial point based on a promotional video made by the promotional team. The litigant was not even able to prove that there was unfair trade practice and this is a waste of not only her time but also the time of the overburdened Court. The Apex Court has correctly concluded and held that a promotional campaign cannot be deemed to be a contract between the parties where one party can enforce it over the other.

 

Sushila Ram Varma

Chief Consultant

The Indian Lawyer