1996 (5) TMI 432 - HC - Companies Law

Summary

Issues Involved:
1. Alleged disparagement and defamation of the plaintiff's product through advertisements.
2. Plaintiff's claim for an injunction against the defendant's advertisements.
3. Defendant's defense and counter-claims regarding the advertisements.

Summary:

Issue 1: Alleged Disparagement and Defamation
The plaintiff, a manufacturer of Cherry Blossom Premium Liquid Wax Polish, alleged that the defendant's advertisements for their "KIWI" brand liquid polish were designed to malign the plaintiff's product. The advertisements depicted a bottle labeled "Brand X" that allegedly resembled the plaintiff's product and suggested that "Brand X" drips while "KIWI" does not. The plaintiff claimed this was defamatory and malicious, likely to damage their market share and reputation.

Issue 2: Plaintiff's Claim for Injunction
The plaintiff sought an injunction u/r Order 39 Rules 1 and 2 CPC to restrain the defendant from continuing the advertisements. They argued that the advertisements falsely claimed that "KIWI" had more natural wax and better qualities than the plaintiff's product, which could mislead consumers and harm the plaintiff's business.

Issue 3: Defendant's Defense and Counter-Claims
The defendant countered that their advertisements did not specifically reference the plaintiff's product and were not defamatory. They claimed the statements in the advertisements were true, supported by laboratory tests showing "KIWI" had more natural wax and higher viscosity than the plaintiff's product. The defendant also agreed to withdraw "Point of Sale" posters and remove the red blob from the "Brand X" bottle in the advertisements, which the plaintiff argued resembled a cherry on their product.

Judgment:
The court noted that while a manufacturer can claim their product is the best or better than competitors, they cannot defame or disparage competitors' products. The court found that after the defendant's agreement to remove the red blob from the "Brand X" bottle, the advertisement would not likely be linked to the plaintiff's product by consumers. Therefore, the court modified the interim order to restrain the defendant from using the red blob in advertisements but allowed the advertisements without it.

Conclusion:
The application for an injunction was disposed of with the modification that the defendant is restrained from using the red blob on the "Brand X" bottle in advertisements. The observations made in this order will not affect the merits of the case.