Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
2024 INSC 328
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 4422/2024
(ARISING OUT OF SLP (C) No. 14475/2021
YASH RAJ FILMS PRIVATE LIMITED …. APPELLANT(S)
VERSUS
AFREEN FATIMA ZAIDI & ANR. …RESPONDENT(S)
J U D G M E N T
PAMIDIGHANTAM SRI NARASIMHA, J.
1. What are the legal implications of a promotional trailer,
popularly known as a ‘promo’, or a teaser that is circulated before
the release of a movie? Does it create any contractual relationship
or obligations akin to it? Is it an unfair trade practice if the
contents of the promotional trailer are not shown in the movie?
These questions have arisen in the context of a consumer dispute
wherein the consumer courts have allowed the complaint alleging
deficiency of service based on a ‘contractual obligation’ and ‘unfair
trade practice’. For the reasons to follow, we have held that
promotional trailers are unilateral and do not qualify as offers
Signature Not Verified
eliciting acceptance, and as such they do not transform into
Digitally signed by
satish kumar yadav
Date: 2024.04.22
17:20:55 IST
Reason:
promises, much less agreements enforceable by law. We have also
1
held that the facts do not indicate adoption of an unfair trade
practice under the Consumer Protection Act, 1986. Before we delve
into the analysis to draw our conclusions, the short facts
necessary for the case are as follows.
2. The appellant is a known film producer. It 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 a song in the form of a video.
2.1 The respondent no. 1 (‘complainant’), a teacher in a school in
Aurangabad, states that having watched the promotional trailer of
the film, she decided to go to watch the movie on the silver screen
with her family. However, she found that the movie did not contain
the song, even though the song was widely circulated for promoting
and publicising the movie. She filed a consumer complaint before
the District Consumer Redressal Forum wherein she has stated
that she decided to watch the movie after watching the song in the
promotional trailer, with the expectation of watching the song in
the theatre. However, to her disappointment, she found that the
song was not played in the movie. She alleges that due to this, she
felt cheated and deceived by the appellants and has undergone
mental agony. In view of the above, she claimed Rs. 60,550 as
damages.
2
3. In a short order dated 29.04.2016, the District Consumer
Redressal Forum dismissed the complaint on the ground that
there is no relationship of consumer and service provider.
3.1 Against the above order, the complainant filed an appeal
before the State Commission, which was allowed by order dated
22.09.2017. The State Commission held that entertainment
services are covered under the definition of ‘service’ and the
appellant is a service provider. Apart from holding that there is
deficiency in service, the State Commission held that the appellant
has engaged in an unfair trade practice as the song in the
promotional trailer was widely circulated but not shown in the film.
Under these circumstances, the State Commission awarded Rs.
10,000 as compensation for mental harassment and Rs. 5,000 as
cost to the complainant.
3.2 The appellant carried the matter to the National Consumer
1 2
Disputes Redressal Commission . By the order impugned, the
NCDRC held that a consumer would feel deceived if a song that is
shown in the promotional trailer is not played in the film, thereby
amounting to an unfair trade practice. Further, there is deficiency
of service as playing the song in the trailer leads to an implied
1
Hereinafter ‘NCDRC’.
2
In Revision Petition No. 156 of 2018, order dated 18.02.2020.
3
promise that it will be played in the film. In its own words, the
NCDRC held as follows:
“ 7. When the producer of a movie shows the promos of
the said movie on TV Channels, etc. and such promos
include a song, any person watching the promo would be
justified in believing that the movie would contain the
song shown in the said promos, unless the promo itself
contains a disclaimer that the song will not be a part of
the movie. If a person likes the song shown in the promo
and based upon such liking decides to visit a cinema hall
for watching the said movie for a consideration, he is
bound to feel deceived, disappointed and dejected if the
song shown in the promo is not found in the film. The
practice of including a song in the promo of a film shown
widely on TV Channels but excluding the said song while
exhibiting the movie, in my opinion, constitutes an unfair
trade practice. The obvious purpose behind such an
unfair trade practice is to draw the potential viewers to
the cinema hall by luring them with the song which forms
part of the promo and thereby making gain at the cost of
the viewer if the song does not form part of the movie for
which consideration is paid by the viewer. The exclusion
of the song from the movie will also constitute a
deficiency, as defined in Section 2(1)(g) of the C.P. Act, if
the song is impliedly promised, but is later omitted while
exhibiting the movie. ”
4. Before we proceed to delineating and applying the test for
‘deficiency of service’ and ‘unfair trade practice’ under the
3
Consumer Protection Act, 1986 , it is necessary to set out the
context in which a promotional trailer would or would not create a
contractual relationship or any other right or liability between the
producer and the consumer.
5. A promotional trailer is an advertisement for a film. It is a
settled position of law that commercial speech, which includes
3
Hereinafter ‘the Act’.
4
advertisements, is protected through freedom of speech under
Article 19(1)(a) of the Constitution, subject to the reasonable
4
restrictions in Article 19(2). It is also a settled position that
commercial speech that is deceptive, unfair, misleading, and
untruthful is excluded from such constitutional protection and
5
can be regulated and prohibited by the State. Subject to these
restrictions, the producer/ advertiser has the freedom to creatively
and artistically promote his goods and services.
6. Information dissemination is one of the primary purposes of
advertising: an advertisement informs existing and potential
consumers about the presence and availability of certain goods
and services in the market, their features and qualities, and their
uniqueness and comparability with market competitors and
substitutes. However, that is not the only purpose of an
advertisement. An advertisement is not only informational but also
a means of creative and artistic expression. It can allure, entice,
capture the attention, and pique the interest of consumers through
features that may not directly relate to information about the
product or service. Advertisements build brand loyalty and
reputation, and promote an image and ethos of not only the
4
Tata Press Ltd v. Mahanagar Telephone Nigam Limited , (1995) 5 SCC 139, paras 17-18 and
25.
5
ibid, para 17.
5
product being advertised but also the manufacturer/ service
provider. Advertisements contain unique taglines, jingles, visuals,
etc. that are intended to grab the attention of the viewer and
become associated and synonymous with the product or service
itself.
7. A song, dialogue, or a short visual in a promotional trailer
may be seen in the context of the multifarious uses of
advertisements. These could be used to popularise or to create a
buzz about the release of the film, rather than to purely represent
information about the contents of the film. Viewers could associate
these with the film and may be interested or encouraged to watch
the film. However, the kind of right or liability a promotional trailer
creates would entirely depend on the civil and statutory legal
regime. The complainant has invoked the jurisdiction of the
consumer court and therefore, it is necessary to analyse the issues
in view of the provisions of the Consumer Protection Act, 1986.
8. The Consumer Protection Act has been enacted to protect the
interests of consumers and for that purpose, to establish
authorities for the settlement of consumer disputes. A ‘consumer’
has been defined in Section 2(1)(d) as a consumer of goods or
services. A consumer of goods is one who buys any goods, and a
consumer of a service is one who hires or avails of any service, for
6
a consideration, except when such goods or services are for a
6
commercial purpose. A consumer can file a ‘complaint’, which is
7
defined in Section 2(1)(c) of the Act, alleging inter alia ‘deficiency
in service’ and ‘unfair trade practice’.
9. Deficiency of Service : In this context, the definition of
‘deficiency’ and ‘service’ are important. The term ‘service has been
defined in Section 2(1)(o) of the Act as follows:
“ 2. Definitions.— (1) In this Act, unless the context
otherwise requires,—
(o) “service” means service of any description which is
made available to potential users and includes, but not
limited to, the provision of facilities in connection with
banking, financing insurance, transport, processing,
supply of electrical or other energy, board or lodging or
both, housing construction, entertainment, amusement or
the purveying of news or other information, but does not
6
Section 2(1)(d) of the Act defines ‘consumer’ as follows’:
“ 2. Definitions .—(1) In this Act, unless the context otherwise requires,—
(d) “consumer” means any person who,—
(i) buys any goods for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes
any user of such goods other than the person who buys such goods for
consideration paid or promised or partly paid or partly promised, or under any
system of deferred payment, when such use is made with the approval of such
person, but does not include a person who obtains such goods for resale or for any
commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred
payment and includes any beneficiary of such services other than the person who
hires or avails of the services for consideration paid or promised, or partly paid and
partly promised, or under any system of deferred payment, when such services are
availed of with the approval of the first mentioned person but does not include a
person who avails of such services for any commercial purpose ”
7
The relevant portion of Section 2(1)(c) of the Act defining ‘complaint’ is as follows’:
“ (c) “complaint” means any allegation in writing made by a complainant that—
(i) an unfair trade practice or a restrictive trade practice has been adopted by any
trader or service provider;
*
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer
from deficiency in any respect;
*
with a view to obtaining any relief provided by or under this Act; ”
7
include the rendering of any service free of charge or
under a contract of personal service;”
There is no doubt about the fact that any person watching a movie
after remitting the necessary consideration becomes a consumer
of service. The service in this case is that of entertainment.
10. The question for our consideration is whether there is any
‘deficiency’ in the provision of the entertainment service that the
consumer has availed by paying the consideration through the
purchase of a ticket. The complainant alleges that there is
‘deficiency’ in the service because what was shown in the film was
not as per what was promised. Now, the definition of ‘deficiency’
becomes relevant and it is defined in Section 2(1)(g) of the Act as
follows:
“ 2. Definitions.— (1) In this Act, unless the context
otherwise requires,—
(g) “deficiency” means any fault, imperfection,
shortcoming or inadequacy in the quality, nature and
manner of performance which is required to be
maintained by or under any law for the time being in force
or has been undertaken to be performed by a person in
pursuance of a contract or otherwise in relation to any
service;”
11. As per the definition, there is deficiency when there is a fault,
imperfection, shortcoming or inadequacy in the quality, nature,
and manner of performance that is required to be maintained
8
8
either in terms of a law or in terms of a contract . To appreciate the
allegation of deficiency, it is necessary to refer to certain portions
of the complaint:
“3. The Complainant states that, her children are big fans
of Shahrukh Khan and after watching the promos of the
song ‘Jabra Fan’ they decided to go to the movie ‘Fan’ to
watch the song ‘Jabra Fan’ on silver screen. She had
given 2 option (1) Jungle Book and the second one was
‘Fan’ to both the children namely Nabeel and Flora. Out
of two option they preferred the later one because of song
‘Jabra Fan’ to enjoy on celluloid.
4. The Complainant states that, she accordingly
convinced her mother-in-law, father-in-law, sister and
brother-in-law for the movie by saying that, the film is
looking great and the song ‘Jabra Fan’ which is now
become jingle, is also there for the entertainment which
will feel great on the silver screen. She bought 7 Tickets
of first day first show on 15.04.2016, show time 6.10
p.m. Friday of PVR Cinema of the row G-4 to G-10 of Rs.
150/- each which cost her Rs. 1050/. The copy of all the
Tickets are dated 15.04.2016 are annexed herewith and
marked as Annexure ‘A’.
*
7. The Complainant states that, as the song was not
shown in the entire movies the family members and in
started teasing her that, why she planned for such a
movie which is not having a single song and a song
‘Jabra Fan’ which become anthem is shown in promos of
the film. She has gone through mental agony because of
Respondents act.”
It is evident from the above that the deficiency alleged in the
complaint arises out of the complainant’s own expectation that the
song would be a part of the movie. It is assumed that there is
deficiency of service as the movie did not contain the song.
8
Arulmighu Dhandayudhapaniswamy Thirukoil, Palani, Tamil Nadu v. Deptt. of Post Offices,
(2011) 13 SCC 220, para 18.
9
12. The fallacy in this argument is in assuming that a
promotional trailer is an offer or a promise. It is under this
misplaced assumption that the complainant has assumed that the
subsequent formation of a contract to watch the movie is not in
compliance with the promise allegedly made through the
promotional trailer. We will explain this in terms of the law of
contracts.
13. The essential element of an ‘offer’ or ‘proposal’ for the
formation of a contract has not been satisfied in the present case.
A person makes an offer or ‘proposal’ when he signifies his
willingness to do something with a view to obtain the assent of
9
another person. When the other person signifies his assent, the
10
proposal gets accepted and becomes a ‘promise’. A proposal is
11
therefore a prerequisite to a ‘promise’ and a ‘contract’.
9
Section 2(a) of the Indian Contract Act, 1872 defines ‘proposal’ as follows:
“ 2. Interpretation-clause .—In this Act the following words and expressions are
used in the following senses, unless a contrary intention appears from the
context:—
(a) When one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that other to such act or
abstinence, he is said to make a proposal;”
10
Section 2(b) of the Indian Contract Act, 1872 defines ‘promise’ as follows:
“(b) When the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted. A proposal, when accepted, becomes a promise;”
11
Section 2(h) of the Indian Contract Act, 1872 defines ‘contract as follows:
“ (h) An agreement enforceable by law is a contract; ”
‘Agreement’ has been defined in Section 2(e) as follows:
“ (e) Every promise and every set of promises, forming the consideration for each
other, is an agreement; ”
10
14. A promotional trailer is unilateral. It is only meant to
encourage a viewer to purchase the ticket to the movie, which is
an independent transaction and contract from the promotional
trailer. A promotional trailer by itself is not an offer and neither
12
intends to nor can create a contractual relationship. Since the
promotional trailer is not an offer, there is no possibility of it
becoming a promise. Therefore, there is no offer, much less a
contract, between the appellant and the complainant to the effect
that the song contained in the trailer would be played in the movie
and if not played, it will amount to deficiency in the service. The
transaction of service is only to enable the complainant to watch
the movie upon the payment of consideration in the form of
purchase of the movie ticket. This transaction is unconnected to
the promotional trailer, which by itself does not create any kind of
right of claim with respect to the content of the movie.
15. Unfair Trade Practice : While we have held that no contract is
formed on the basis of the promotional trailer and as such, there
is no deficiency of service, there is a further question for our
consideration, i.e., whether it is an ‘unfair trade practice’ giving
12
It is well-established in contractual jurisprudence that an advertisement generally does not
constitute an offer and is merely an ‘invitation to offer’ or ‘invitation to treat’. See Halsbury’s
Laws of England , vol 22 (5th edn, LexisNexis 2012), para 240; Pollock and Mulla, The Indian
Contract and Specific Relief Acts , vol I (14th edn, LexisNexis 2013), p. 42.
11
rise to a cause of action. If it is found to be an unfair trade practice,
the Act provides for compensation and other remedies.
16. The term ‘unfair trade practice’ is defined in Section 2(1)(r) of
the Act and the relevant portions are as follows:
“ 2. Definitions.— (1) In this Act, unless the context
otherwise requires,—
(r) “unfair trade practice” means a trade practice which,
for the purpose of promoting the sale, use or supply of
any goods or for the provision of any service, adopts any
unfair method or unfair or deceptive practice including
any of the following practices, namely:—
(1) the practice of making any statement, whether orally
or in writing or by visible representation which,—
*
(ii) falsely represents that the services are of a particular
standard, quality or grade;
*
(iv) represents that the goods or services have
sponsorship, approval, performance, characteristics,
accessories, uses or benefits which such goods or
services do not have;”
13
17. In various decisions, this Court has held that a false
statement that misleads the buyer is essential for an ‘unfair trade
14
practice’. A false representation is one that is false in substance
and in fact, and the test by which the representation must be
judged is to see whether the discrepancy between the represented
fact and the actual fact would be considered material by a
15
reasonable person. Further, “ statements of the nature which are
13
Lakhanpal National Ltd v . MRTP Commission , (1989) 3 SCC 251, para 7; KLM Royal Dutch
Airlines v . Director General of Investigation and Registration , (2009) 1 SCC 230, paras 16-20;
Ludhiana Improvement Trust, Ludhiana. v. Shakti Cooperative House Building Society Ltd ,
(2009) 12 SCC 369, paras 18-23.
14
ibid.
15
Lakhanpal National Ltd (supra), para 7.
12
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
16
representation. ” Therefore, only substantive and material
discrepancies are covered under ‘unfair trade practice’.
18. The ingredients of ‘unfair trade practice’ under Section
2(1)(r)(1) are not made out in this case. The promotional trailer
does not fall under any of the instances of “unfair method or unfair
and deceptive practice” contained in clause (1) of Section 2(1)(r)
that pertains to unfair trade practice in the promotion of goods and
services. Nor does it make any false statement or intend to mislead
the viewers. Furthermore, the burden is on the complainant to
17
produce cogent evidence that proves unfair trade practice but
nothing has been brought on record in the present case to show
the same. Therefore, no case for unfair trade practice is made out
in the present case.
19. There is another important distinction that we must bear in
mind, i.e., the judicial precedents on this point do not relate to
16
KLM Royal Dutch Airlines (supra), para 20.
17
Ludhiana Improvement Trust (supra), para 23.
13
transactions of service relating to art. Services involving art
necessarily involve the freedom and discretion of the service
provider in their presentation. This is necessary and compelling by
the very nature of such services. The variations are substantial,
and rightly so. Therefore, the standard by which a court of law
judges the representation, followed by the service, must be
different and must account for the creative element involved in
such transactions.
20. In view of the above reasons and conclusions, we set aside
the findings of the impugned order that there is deficiency of
service and unfair trade practice, and allow the present appeal.
21. Pending applications, if any, stand disposed of.
……………………………….... J.
[PAMIDIGHANTAM SRI NARASIMHA]
……………………………….... J.
[ARAVIND KUMAR]
NEW DELHI;
APRIL 22, 2024.
14