DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) vs Godrej Soaps Limited

SHRI A.V. Lele, resident of Pashchim Vihar, New Delhi made a complaint to the Commission stating that lured by an advertisement in the Hindustan Times to the effect that Godrej hair dye was a permanent dye, he purchased a carton of the hair dye and used it for dying his hair, but contrary to the claim made by the respondent, Godrej Soaps Limited his hair turned grey after about 20 days or so and he had to use it again as it was not a permanent hair dye and the respondent''s claim in the advertisement to that extent was deceptive and misleading. Director General (Investigation and Registration) (DG) was directed to investigate and submit a Preliminary Investigation Report (PIR). DG after investigation submitted a PIR concluding that the claim of total safety and permanent character of the hair dye was not factually correct and the respondent''s claim in respect of these characteristics of the hair dye were false, misleading and deceptive and he also recommended that a Notice of Enquiry be issued to the respondent.

A Notice of Enquiry was accordingly issued on 19.2.1991 to the respondent Godrej Soaps Limited, the manufacturer of the hair dye charging it with misleading the consumers and making claims which were false and deceptive within the meaning of Section 36 A (1)(i), (iv) and (vi) of the Monopolies and Restrictive Trade Practices Act, 1969 (the Act for brief). In reply the respondent denied the allegation of adoption of or indulgence in any unfair trade practice and stated that the PIR was based on complaint of Shri A.V. Lele who neither produced the cash memo nor the empty bottle of the hair dye so as to enable the respondent to ascertain whether the product used by him was genuine. It was further mentioned that the word "permanent" appearing on the carton or the bottle was not intended to be understood in its literal connotation but in the sense in which it is used in the context of cosmetics and hair dyes. It was also stated that in this case no loss or injury to the consumer was proved and the allegation of unfair trade practice could not be established unless loss or injury as a consequence, was demonstrated to have been caused to him.

On completion of pleadings, the following issues were framed on 30.7.1991. (1) Whether the Notice of Enquiry is not maintainable as alleged ? (2) Whether the respondent has induled in and/or is indulging in the unfair trade practice as alleged in the Notice of Enquiry ? (3) If answer to Issue No. 2 is in the affirmative, whether the said practice is prejudicial to the interest of the public or to the consumer or consumers in general ? (4) Relief.

IN support of the allegations, DG produced the complainant, Shri Lele as a witness while Dr. S.G. Bhatt and Shri M.S. Thakur appeared as witnesses for the respondent. IN his oral evidence, Shri Lele stated that he was influenced by the advertisement that the hair dye was permanent in the sense that if used once, his hair would turn black permanently but when he used it he found that after some time his hair became grey - whitish grey again and the dye was therefore not permanent. He further deposed that his belief that the hair dyed with the respondent''s hair dye would remain permanently black was shattered and he suffered a loss because the purpose for which he had purchased the hair dye was defeated. IN his cross-examination, he stated that he had used the hair dye in accordance with the directions contained in the leaflet inside the carton and according to the directions he washed his hair half an hour after the application of the hair dye. He also stated that in the leaflet it was mentioned that the duration of blackness was 30 days whereas he found that within 10 days after first application, the black colour started fading. He further stated that he used the hair dye 4-5 times. 6.The respondent''s witness Shri Manmohan Shanker in his deposition testified that he had 40 years experience in the field of soaps, detergents and cosmetics and till an year ago was employed as Senior Vice-President (Research and Development) with Godrej Soaps Limited. He further stated that hair dyes were classified into three categories - temporary, semi-permanent and permanent; and while temporary dyes were washed off during the first shampooing, semi-permanent dyes lasted for 6 to 12 shampooings and permanent hair dyes for more than 12 shampooings. He added that the word "permanent" on the carton of hair dye conveyed the meaning that the hair dye in question belonged to the third category and if the word "permanent" was not printed on the carton, the consumer would not know as to which type of the hair dye he had bought. He further stated that the leaflet inside the carton made this differentiation between the hair dyes amply clear. Further, it was stated that the hair dyes used in INdia and abroad mentioned the word "permanent" on the carton to denote the above meaning. He also produced the cartons of ROCO, Naturene, Simeo, Nice and Easy, Park Avenue, Tru Tone, Black-Bird, Dark Lovely, Sure and Simple in support of this connotation of "permanent" in the context of hair dyes. 7. The other witness Dr. S.G. Bhatt stated that he was a part-time Professor in the Department of Chemical Technology, Bombay University. He further stated that there were three types of hair dyes - temporary, semi permanent and permanent and he too gave the same definition and connotation of these three types. According to him permanent dyes do not last a life-time because hair grows at the rate of inch or 1 cm. in a month and new growth will have the natural colour of hair.

We have heard the learned Advocates for the DG as well as the respondent and perused the Court record. It has been stated by the learned Advocate for the respondent that the Notice of Enquiry contained only one allegation that the respondent''s hair dye is a permanent hair dye. The other allegations that it is self-spreading and it is safe to use have not been not mentioned in the Notice of Enquiry. He has referred to the dictionary meaning of the word "permanent" and has drawn our attention to the meaning in the New Webster''s Dictionary of the English Language and argued that the word "permanent" in the context of cosmetics does not have the same connotation of continuing in the same state or durability and in the case of hair a permanent wave would mean a wave set in the hair lasting for several months. His submission is that "permanent is understood in this context as lasting for a few months. He has also clarified that word "permanent" in respect of hair dyes is used and understood in the sense that it will last for 12 or more shampooings and this connotation has been confirmed in their testimony by reputed experts such as Dr. Bhatt and Shri Manmohan Shanker who appeared as witnesses for the respondent. It has also been mentioned that since hair grows at the rate of half an inch or one centimetre in a month, hair could not possibly remain black by the application of a hair dye as the new growth would not have the colour which a hair dye imparts. Further, it has been highlighted that world over, this is the accepted connotation of a permanent hair dye and therefore, there is no case of adopting or indulging in an unfair trade practice by the respondent.

Learned Advocate for the DG however has stated that the complainant is the actual consumer and as has been deposed by him he has been lured by the advertisements in respect of the respondent''s product and has used the hair dye and he has found that the claim made by the respondent is false and misleading as according to his understanding, a permanent hair dye if used once would make the hair black permanently. It has been further stated that the respondent during, the enquiry has offered to clarify further in the leaflet and on the carton that the word "permanent" has the meaning that the effect of the hair dye will last for a month or so.

The issues which we have to consider and decide are whether the present enquiry maintainable and whether the respondent has indulged in an unfair trade practice. It transpires from the record that the complaint has been made by the actual consumer of the respondent''s hair dye and what he understood to be the connotation of the word "permanent" and what he perceived to be the characteristic of the hair dye. He has stated that he purchased it as he was under the impression that by using it, his hair would become black in colour permanently. He has also stated that he used the hair dye according to the directions printed in the leaflet contained inside the carton. According to the directions, it is clear that permanence is for a month or so and it reads as under : "Now wait for thirty minutes. For permanence of a month or more, the dye must remain on the hair for 30 minutes. During this period, the hair should not be dried with a hair dryer."

Thus, it is clear from the directions printed in the leaflet that the effect of the hair dye would last for 30 days and consumers are expected to read these directions before using the hair dye. 11. On the testimony of the experts who appeared on behalf of the respondent, it has been clearly brought out that hair dyes are divided into three categories : temporary, semi-permanent and permanent. Temporary hair dyes lose their effect after a single shampooing while semi-permanent last for 6 to 12 shampooings and permanent are good for 12 or more shampooings. It has also been brought to our attention that these connotations are universally understood and word "permanent" is used by other manufacturers of hair dyes to denote that its effect will last for 12 or more shampooings. Thus the word "permanent" in the context of hair dyes has the connotation of lasting for 12 or more shampooings as distinguished from temporary or semi-permanent. It is a connotation that is understood by the trade and is intended to be understood by the consumers as well who are supposed to read the directions in the leaflet inside the carton. The advertisements claiming permanence in respect of hair dyes cannot therefore, be construed to be false or misleading and deceptive within the meaning of Section 36A(i), (iv) and (vi) of the Act. Even if a consumer by looking at the carton gets the impression that a permanent hair dye would turn the hair black permanently in the sense of long-lasting, the true connotation of the word "permanent" would down on him when he reads the directions in the leaflet inside the carton. It also transpires that the directions are not only in English but in several other regional languages so that the consumers read and follow the directions before applying the hair dye. 12. As mentioned above, the notice of enquiry in this case was issued on 19.2.1991 pursuant to the complaint of Shri A.V. Lele and the PIR submitted by the DG prior to the amendment to Section 36 A of the Act. An essential ingredient of Section 36A prior to the amendment was loss or injury to the consumer as a consequence of the alleged unfair trade practice as is obvious from a plain reading of the words in the relevant section which is reproduced below : "36A. Definition of unfair trade practice- IN this part, unless the context otherwise requires, "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 one or more of the following practices and thereby causes loss or injury to the consumers, of such goods or services whether by eliminating competition or restricting competition or otherwise namely : The essential requirement for bringing home the charge of an unfair trade practice in the instant case is to prove loss or injury to the consumer of the hair dye. It has to be borne in mind that the PIR was filed before the amendment to Section 36A of the Act and even the NOE was issued before the amendment was introduced and therefore, the present enquiry will be under the relevant provisions of Section 36A as it stood before the amendment. IN the instant case, only Shri Lele has made the complaint. There are no other consumers who have made a grievance of the alleged unfair trade practice by the respondent and even Shri Lele has not complained of any loss or injury caused to him by the use of the hair dye. As no loss or injury, as a consequence of the alleged unfair trade practice has been proved, the respondent can''t be said to have adopted or indulged in an objectionable trade practice and a cease and desist order can''t be passed against the respondent."

It may be stated here that during the pendency of the enquiry the respondent offered to modify and clarify its claim of permanent hair dye as it was considered to be somewhat vague and likely to be misconstrued by the consumers who were using for the first time or who understood the word "permanent" in its literal sense of durable and long-lasting. The respondent offered to clarify the word permanent by qualifying it to mean permanent for 30 days or so. Even the Advocate for the DG also at the time of arguments has conceded that if the claim of permanence is clarified to mean permanent for 30 days or so, the grievance of the consumers like Shri A.V. Lele would perhaps be redressed and the respondent''s claim would not remain misleading or deceptive and there would no need to pass a cease and desist order. It appears fair that the word "permanent" even though it has a different connotation in the context of hair dyes and cosmetics but may not be so understood by certain consumers may be clarified to have the meaning of lasting for about 30 days or so or 12 or more shampooings. If the word permanent is so clarified in the advertisements on the cartons and the bottles of its hair dye as offered by the respondent in the affidavit of 20th February, 1996, there would be no scope for any vagueness or deception. While it is true that the claim made by the respondent has to be examined in the context of the hair dyes and the word permanent has to be understood to imply 12 or more shampooings, the respondent''s gesture is worthy of appreciation as the consumers who are gullible would be enlightened about the meaning of the word "permanent". 14. To sum up our findings on the issues whether the respondent indulged in unfair trade practices and also whether any prejudice was caused to be consumer or consumers generally are that the allegations have not been substantiated and a case of unfair trade practice by the respondent has not been proved. There is neither any evidence of loss or injury to the consumer or consumers of the hair dye nor any prejudice appears to have been caused to public interest or interest of the consumers in general. IN view of the above discussion, the notice of enquiry deserves to be and is hereby discharged. However, we direct the respondent to clarify in its advertisements, instruction booklets and cartons that its hair dye is permanent to the extent that it will last for 12 or more shampooings or 30 days as offered in the affidavit of 20th February, 1996. Enquiry discharged.