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TMI Blog2020 (2) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... other cogent material on record upon which the National Commission could have placed reliance to render the finding of unfair trade practice under Section 2(1)(r)(3) (a) of the 1986 Act. There exists a services cum-sponsorship agreement between the Appellants, which contains the specific details of the commercial arrangement between them. They did not produce the same before the National Commission, claiming that the said agreement contained a confidentiality clause, and could only be produced in accordance with law if required. The Appellants case is that they would have offered to produce the agreement if the National Commission had given a specific direction to that effect. However, no such direction was rendered at any point during the proceedings before the National Commission. Even the complainant did not, throughout the course of the proceedings, seek a direction to the Appellants to produce the services cum-sponsorship agreement. Thus, it is evident that Star India was liable to pay the prize money irrespective of the profits earned by Airtel. It is needless to say that the sponsorship money paid by Airtel would come from various sources of revenue, which includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Star India (P) Ltd., the Appellant in C.A. No. 6597/2008 (hereinafter Star India ) used to broadcast the programme Kaun Banega Crorepati ( KBC ) between 22.1.2007 and 19.4.2007. The programme was sponsored by Bharti Airtel Limited, the Appellant in C.A. No. 6645/2008 (hereinafter Airtel ), amongst others. During the telecast of this programme, a contest called Har Seat Hot Seat ( HSHS contest ) was conducted, in which the viewers of KBC were invited to participate. An objective- type question with four possible answers was displayed on the screen during each episode, and viewers who wished to participate were required to send in the correct answer, inter alia through SMS services, offered by Airtel, MTNL and BSNL, to a specified number. 2.2 The winner for each episode was randomly selected out of the persons who had sent in the correct answers, and awarded a prize money of ₹ 2 lakhs. There was no entry fee for the HSHS contest. However, it is not disputed that participants in the HSHS contest were required to pay ₹ 2.40 per SMS message to Airtel, which was higher than the normal rate for SMSes. Hence, Respondent No. 1, which is a consumer society (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat though the Appellants had not disclosed the revenue earned from the HSHS contest on grounds of confidentiality of proprietary information, it was apparent that they had created an impression that the prize money was being given free of charge, even though they had not disputed that the prize money for the HSHS contest was paid out of the money collected through SMS charges. The Commission relied upon the figures stated in the newspaper article dated 15.7.2007 (supra), and found that since the Appellants had not denied that they had received 58 million SMSes, they would have collected ₹ 13.92 crore from the participants of the HSHS contest for such messages, whereas a total sum of only ₹ 1.04 crores was paid as prize money. Thus, the gross earnings of the Appellants were disproportionate to the cost of the prizes offered. 3.1 The Commission further found that no viewer could discern from the on screen advertisements that the costs of the contest were being met through the SMS charges, and the Appellants had clearly not notified viewers about the same. It found a contradiction between the Appellants stances as to whether the HSHS contest was advertised as free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid out of the revenue earned from increased SMS rates. It was stressed that the National Commission had omitted to inquire into the source of the prize money. It was also stressed that Airtel had not shared the revenue earned from the increased SMS rates with Star India at all. The only monetary flow between them was a fixed periodic lump-sum to be paid by Airtel under the services- cum-sponsorship agreement between them, which bore no relation to the revenue received from the SMSes, and that there was no evidence to suggest that the SMS revenue was used to pay the prize money. The learned counsel emphatically argued that the expression covered by the amount charged in the transaction as a whole under Section 2(1)(r)(3)(a) of the 1986 Act only meant direct recovery from the price paid for the transaction, and not from advertisements or sponsorship, citing the decision of this Court in HMM Ltd. v. Director General, Monopolies Restrictive Trade Practices Commission, (1998) 6 SCC 485. 4.1 It was further submitted that Airtel was entitled to charge a higher rate for the SMSes sent in pursuance of the HSHS contest, since the transmission of SMSes to register options in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a prayer as to punitive damages, and thus the National Commission had not erred in awarding punitive damages. Finally, she submitted that the complaint was maintainable under the 1986 Act since the complainant had filed an individual complaint under the Act, and not acted on behalf of a group of consumers, thus attracting the exemption available to individual consumers under proviso (B) to Section 14 (a)(iii) of the TRAI Act. 7. We have heard all the parties and given due consideration to the material on record. 8. It is apparent that the crucial question to be determined in the instant case is whether an unfair trade practice has been committed by the Appellants in the conduct of the HSHS contest, in terms of Section 2(1)(r)(3) of the 1986 Act. We hasten to emphasize at this juncture itself that though the complainant had also pleaded violation of Section 2(1)(r)(3)(b) of the 1986 Act in their complaint, there was no express finding rendered on this issue by the National Commission, and subsequently, no contentions were made before us in this respect. Thus, the limited question before us is whether an unfair trade practice has been committed only within the meaning of Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contest was distributed out of the revenue collected from the SMSes sent in pursuance of the contest. It is true that the Appellants had not specifically denied that the prize money was paid out of the increased SMS charges. However, they had clarified in their submissions that Airtel was merely a sponsor/advertiser of the program, and the commercial arrangement between the parties was that Airtel would pay sponsorship charges, whereas Star India would be independently liable for paying the prize money out of its pocket regardless of the revenue earned by Airtel. 10. Importantly, we further find that apart from the aforementioned facts, there is no other cogent material on record upon which the National Commission could have placed reliance to render the finding of unfair trade practice under Section 2(1)(r)(3) (a) of the 1986 Act. The National Commission had sought to rely on the newspaper report dated 15.7.2007 published in the Hindustan Times (supra) regarding the amount of revenue and profit earned by the appellants from the HSHS contest. We are of the considered opinion that such reliance was unwarranted, inasmuch as there was absolutely no corroboration for the allegat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prize money could have been paid. This is a part and parcel of the ordinary business dealings of the Appellants, and the complainant has failed to establish any direct linkage between the increased SMS tariff rates and the prize money so as to show that the prize money was deceptively recovered in the guise of increased SMS rates charged to the participants. 12. Further, since the National Commission failed to conduct any inquiry whatsoever into the breakup of the price of ₹ 2.40 per SMS fixed for the purpose of participation in the HSHS contest, we are of the view that the finding of the National Commission that the SMS service offered by Airtel under the HSHS contest did not constitute a value added service is liable to be set aside. Indeed, the services- cum- sponsorship agreement reveals that Airtel was liable to set up the hardware and software required for the HSHS contest at its own cost, which suggests that the services regarding the participation in the HSHS contest through SMSes offered by Airtel constituted a value added services separate from its ordinary SMS service. It is reasonable to assume that such cost would have been recovered by Airtel, at leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This issues with the approval of the Authority. (Sudhir Gupta) Advisor (QOS) 13. However, we need not dwell on this issue much longer, since not much turns upon it with regard to the determination of the commission of an unfair trade practice, except to note that the transmission of SMSes for the purpose of the HSHS contest being a value added service, the Appellants had also taken care to comply with the TRAI direction dated 3.5.2005 (supra) which mandated the communication/advertisement of any increase in the cost of cellular services on account of the rendering of such a value added service. Thus, even if the SMS charge is taken as the cost of participating in the contest for the purpose of Section 2(1)(r)(3)(a) of the 1986 Act, it cannot be said that the Appellants had wrongfully advertised the charges for the same. 14. Hence, we find that the complainant has clearly failed to discharge the burden to prove that the prize money was paid out of SMS revenue, and its averments on this aspect appear to be based on pure conjecture and surmise. We are of the view that there is no basis to conclude that the prize money for the HSHS contest was paid directly out o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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