1999 (4) TMI 634 - HC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the appeal.
2. Preliminary objections by the respondents.
3. Prima facie case and balance of convenience.
4. Tort of injurious falsehood.
5. Reference to the appellant's product in the advertisement.
6. Disparagement and truthfulness of the representations.
7. Applicability of English Common Law principles.
8. Balance of convenience and irreparable harm.

Detailed Analysis:

1. Maintainability of the Appeal:
The respondents argued that the appeal was not maintainable, claiming that no appeal lies from an ex parte ad interim order or an order vacating such an order. The court rejected this argument, stating that all interim orders, including ex parte ones, are appealable under Order 43 Rule 1 sub-rule (r) of the Code of Civil Procedure. The court cited precedents to support this view, emphasizing that the Civil Procedure Code provides an additional right of appeal.

2. Preliminary Objections by the Respondents:
The respondents raised several preliminary objections, including the claim that the Supreme Court's dismissal of an appeal from the MRTP Commission's order rendered the matter res judicata. The court rejected this, noting that the advertisements in question were different and that the MRTP Commission's order was interim, not conclusive. The court emphasized that the principle of res judicata should not be extended based on mere assumptions.

3. Prima Facie Case and Balance of Convenience:
The court focused on whether the appellant had a prima facie case and where the balance of convenience lay. It noted that the appellant had made a prima facie case based on the tort of injurious falsehood, supported by survey evidence indicating that the offending advertisement referred to the appellant's product. The court also considered the balance of convenience, concluding that the appellant would suffer irreparable harm if the advertisement continued, while the respondents' right to advertise was not unduly restricted.

4. Tort of Injurious Falsehood:
The appellant based its cause of action on the tort of injurious falsehood, requiring proof that the representation concerned the appellant's product, was disparaging and untrue, and was intended to be taken seriously. The appellant provided survey evidence and expert opinions to support its claims. The court found that the appellant had made a prima facie case for injurious falsehood.

5. Reference to the Appellant's Product in the Advertisement:
The court considered whether the offending advertisement referred specifically to the appellant's product. It noted that the IMRB survey showed a significant percentage of respondents believed the advertisement referred to the appellant's product. The court found that the learned single judge had not adequately addressed this aspect and that the appellant had made a prima facie case that the advertisement referred to its product.

6. Disparagement and Truthfulness of the Representations:
The court examined whether the representations in the advertisement were disparaging and untrue. The appellant provided expert opinions and survey evidence to show that the representations were false. The respondents provided their own evidence, but the court found that the learned single judge had not adequately considered the appellant's evidence. The court concluded that the appellant had made a prima facie case that the representations were untrue and disparaging.

7. Applicability of English Common Law Principles:
The respondents argued that English Common Law principles precluded the granting of an interim injunction in cases of injurious falsehood. The court found that these principles might not strictly apply in the Indian context, noting differences in procedural law and the absence of jury trials in India. The court concluded that the appellant had an arguable case and that English law might not be applicable in this context.

8. Balance of Convenience and Irreparable Harm:
The court weighed the balance of convenience, noting that the appellant would suffer irreparable harm if the advertisement continued, while the respondents' right to advertise was not unduly restricted. The court emphasized the need to protect the appellant's reputation and goodwill and found that the balance of convenience favored the appellant.

Conclusion:
The court vacated the order under appeal and revived the earlier order of injunction, which would continue until the disposal of the interlocutory application. The court limited its observations to the ad interim stage and allowed the learned single judge to take a contrary view based on further evidence. The appeal was allowed, and the stay was refused.