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Judgment
THIS enquiry commenced with an application filed by the Director General (Investigation & Registration) [DG] under Section 36B(c) of the MRTP Act, 1969 alleging that the respondent M/s. Kedia Electrical Industries had indulged in certain unfair trade practices attracting Section 36A(1) of the Act. The respondent is in the business of manufacturing and selling air-conditioners. In his application, the DG has alleged that Shri Kamal Kedia, Proprietor of the respondent had at Press conference in Oct.,87, made "fraudulent claims about the quality and price" of its air-conditioners, furnishing certain details of the alleged misrepresentations.
BASED on the application of the DG, a Notice of Enquiry (NOE) was issued on 9th Jan., 89. In the NOE, four specific misrepresentations and claims of the respondent about its product have been listed. The said claims are: 1. The respondent is the only unit in the country manufacturing air-conditioners with heating arrangements. 2. It is a new unit and exempt from Central Excise Duty. Its air-conditioners are cheaper than any other brand air-conditioner by Rs. 11,000/- as the respondent need not pay U.P. Sales Tax and Central Excise Duty.
It manufactured 170 air-conditioners last year and all the parts used in the manufacture are ISI marked. Note: The expression "last year" in item-4 above has to relate to the year 1986-87 as the purported Press conference held by Shri Kamal Kedia was in Oct.,87. 3. The NOE has categorically stated that the false or misleading claims of the respondent causing loss or injury to the consumers attract the provisions of Section 36A(l)(i), (iv) and (vi) of the Act and that the alleged practices are prejudicial to public interest. 4. According to the DG, two reports were published in two Hindi dailies, of the Press conference held by Shri Kamal Kedi. One appeared in "Gandiv", a Hindi daily of date 21st Oct.,87 and the other appeared in Danik Jagran, a Hindi daily of date 19th Oct.,87. These two Press reports are the basis on which the DG has supported his allegations in the application preferred by him in this Commission.
ON receipt of the NOE and a copy of the DG''s application, the respondent furnished its detailed reply. In its reply, the respondent has contended essentially as summarised here in under: 1. There was a Press conference as reported in a section of Press but what was published was only the edited version of the editors "who were not present at the Press conference". ONly the reporters were present at the conference and there was misreporting by them. 2. The respondent did not claim that it is the only unit manufacturing air-conditioners "with heating arrangements". ONe of the models manufactured by the respondent is provided with "in-built heating arrangement". Other companies provide heating arrangement in their air-conditioners "as an optional item at extra cost". The Press reporters omitted this distinction and misreported. 3. The respondent has not claimed that it was exempt from Central Excise Duty being a new unit. What was stated at the Press conference was that the respondent had applied for exemption from sales tax on its products and that the U.P. Government could notify exempting the respondent from payment of sales tax for a period for three years. It was further claimed at the Press conference that Excise Duty was not chargeable on the products of small scale industries. 4. The price of air-conditioners manufactured by the respondent during the relevant period was Rs. 16,000/- whereas the price of other brands ranged from Rs. 21,000/- and Rs. 25,000/- thus making the former cheaper by approximately Rs. 10,000/- than the latter. 5. The respondent did not claim that it had manufactured 170 air-conditioners during the year prior to the year when the Press conference was held. ON the other hand it had claimed that it had 170 satisfied customers in the context of the respondent undertaking service contracts for air-conditioners. The Press had misreported.
The respondent has not claimed that all the parts of the air-conditioners manufactured by it were ISI marked. It is, however, true that certain basic parts of air-conditioners like the compressor and the motor were ISI marked. The other components match the required standards for a good air-conditioners. The Press has not conveyed this correctly.
THE respondent did not release any Press advertisement. 6. THE respondent has also stated in its reply that it could voluntarily take all correctional measures as may be directed by the Commission "so as to repel the misgivings". 7. THE DG has relied on the two Press reports referred to above and the respondent''s letter dated 23rd May, 88 addressed to him in support of the charges in the NOE. Of these, the respondent admitted only its letter dated 23rd May, 88 which has been marked Exhibit A-l, THE DG did not adduce any other evidence. THE respondent originally proposed to examine Shri Kamal Kedia, its proprietor, but did not produce him as witness. THE Counsel for the respondent stated at the bar on 9th Sept.,92 that he had no instructions from the respondent regarding leading evidence.
The following issues were framed after the pleadings were completed: 1. Whether the respondent is or has been indulging in the unfair trade practices as stated in the application of the DC u/Section 36B(c) of the MRTP Act and the NOE ? 2. If reply to issue No. 1 is in the affirmative, whether the aforesaid unfair trade practices are prejudicial to the public interest or to the interest of the consumer or consumers in general ? 3. Relief.
We gave a hearing to Dr. K.S. Yadav, ADG for the DG and Mr. Subhash Sharma, Counsel for the respondent.
THE area of controversy is quite narrow. THE Counsel for the respondent very ably argued that a Press conference is just a Press conference and not a specific Press release. THE respondent in its reply in para 5 has categorically submitted that it did not release any advertisement. Much of what the respondent has said in its reply is that the Press Reporters had misreported and omitted to covey what was stated by its proprietor Mr. Kamal Kedia at the Press conference. THErefore, what crystallises as the main issue in this case is whether what was reported in the Press after a Press conference can be attributed to the respondent and if so whether what is attributed to the respondent will constitute unfair trade practices.
IN his arguments, the main refrain of Dr. K.S. Yadav, ADG for the DG was the inconsistency between what appeared in the Press and what is factual. Dr. Yadav stressed the wrong claims in the Press reports relating to heating arrangement. Excise duty, cheaper price and ISI mark. IN respect of all these claims, the respondent''s reply summarised earlier is an effective answer. IN other words, the respondent has disclaimed what has appeared in the Press reports stating that the Press Reporters have misreported. On a query from the Bench, as to why the Press reports were not rebutted by the respondent, Mr. Subhash Sharma, the Counsel for the respondent answered that it would not be possible for a party to go on rebutting false statements which appear in the newspapers. He drew our attention to a statement made in the reply of the respondent at para 5 to the effect that it assures the Commission "that in future whenever any report in the section of the Press in regard to the Company''s affairs or products is made and if the same is found to be wrongly reported or misreported, the respondent shall rebut the same". (The expression "Company" in the quotation should actually read as "firm").
It has been held by the Supreme Court in its judgment dated 26th April, 1988 in Criminal Appeal 36 of l987, AIR 1988 SC 1274 - Laxmi Raj Shetty and Another v. State of Tamil Nadu, that judicial notice cannot be taken of the facts stated in a news item being in the nature of hearsay secondary evidence, unless proved by evidence aliunde. A report in a newspaper is only hearsay evidence. A newspaper is not one of the documents referred to in Section 78(2) of the Evidence Act, 1872 by which an allegation of fact can be proved. The presumption of genuineness attached under Section 81 of the Evidence Act to a newspaper report cannot be treated as proved of the facts reported therein. A statement or facts contained in a newspaper is merely hearsay and, therefore, inadmissible in evidence in the absence of the maker of the statement appearing in Court and deposing to have perceived the fact reported.
IN another case Samant N. Balakrishna v. George Fernandez, AIR 1969 SC 1201, the Apex Court observed as follows: "A Newspaper report without any further proof of what had actually happened through witnesses is of no value. It is at best a second-hand secondary evidence. It is well known that Reporters collect information and pass it on to the Editor who edits the news item and then publishes it. IN this process the truth might get perverted or garbled. Such news items cannot be said to prove themselves although they may be taken into account with other evidence if the other evidence is forcible".
From the observations of the Supreme Court in the two cases referred to above, a news item is in the nature of hearsay secondary evidence unless proved by evidence aliunde. In other words, evidence drawn from sources exterior to the Press reports themselves like the testimony of the maker of the statements is necessary before placing reliance on the Press reports. In the instant case, no such evidence has been adduced by the DG and it is fraught with risk to reply on uncorroborated Press reports and indict the respondent. In the premises, we do not hold the charge in the NOE as proved or established. The first issue is, therefore, decided in the negative and in favour of the respondent. The other issues, therefore, do not arise. The NOE shall stand discharged with the direction that in future, if there is a wrong reporting or misreporting in the Press of the respondent''s products or affairs, the respondent shall take appropriate steps to rebut the same as agreed to in para 5 of its reply to the NOE. There shall be no order as to costs. Enquiry discharged.