Bench:
S.J Kathawalla (J)
Issues:
I) Whether the defendant made false, malicious or reckless statements?
II) Whether special damages are suffered by the Plaintiff?.
Facts:
• Marico Ltd. Is one of the leading players in FMCG market in India. Plaintiff's one of the most well-known and prestigious trademarks is PARACHUTE under which it markets inter alia its edible coconut oil.
• Plaintiff has also obtained necessary licenses under the Food Safety and Standards Act, 2006 and has compiled with the provisions relating to ingredients, formulation and labeling under the extant regulations.
• The plaintiff is the market leader in the category of edible coconut oils and holds 46.7% of the market share in respect of the same.
• The defendant is a YouTuber/ V-Blogger who has a channel titled “Bearded Chokra" on YouTube. On the channel the defendant reviews products of various manufacturers. On or about 1st September 2018, the Defendant published a video titled “Is Parachute Coconut Oil 100% Pure?", wherein the defendant reviewed the Plaintiff's Parachute coconut oil.
• It is Plaintiff's Case that in the impugned video the Defendant makes claims and statements with regard to the Plaintiff's Parachute edible oil, which are false and unsustainable. The video is disparaging and denigrating in nature according to the Plaintiff.
• A lot of emailed were exchanged between both the parties regarding the impugned video and its contents. The Plaintiff first filed a suit and made an application for urgent ad-interim reliefs. The Defendant filed its Affidavit in return. The Plaintiff then filed a Affidavit in Rejoinder and the Defendant fled a Supplementary Affidavit in Reply.
• The Pleadings in the matter were complete, by consent of both the sides, the Court took up the Notice of Motion for final hearing.
Arguments of the Plaintiff:
• Defendant's video is a targeted attack directed against the Plaintiff's product, made with an attempt to attract more viewers towards his video. The Impugned Video provides incorrect information and deceives the viewers into believing that the tests conducted therein substantiate the claim of the Defendant that the Plaintiff's product is of inferior quality or is inferior to other oils.
• Impugned video as a whole is disparaging and denigrating in nature. It comprises of words and visuals, in respect of the aforesaid coconut oil, are false in nature and have denigrated the Plaintiff's product and likely caused special damages to the Plaintiff.
• Defendant promotes a competing product to be pure and sure organic cold pressed coconut oil in his video in substitution of Plaintiff's product which urges the viewers to stop using the Plaintiff's product.
• Defendant seeks to promote two other competing products by providing links for purchasing these products from online retailers. The Acts of Defendant fall under the category of ‘commercial activities' and not general review of the product by an ordinary consumer.
• Defendant in his video is spreading a false message with respect to the Plaintiff's product insinuating inter alia that, the packaging plaintiff's product is inferior, the cap is fimsy, fragrance is very strong and smells like rotten coconut, packaging does not mention the grade of the coconut used, place of extraction and from which coconut it is extracted. From the tests conducted by the Defendant, the Plaintiff's product is inferior to organic cold pressed oils, flavour of the oil suggests that it is made from poor quality coconut or is heated on a high temperature, the oil contains impurities and the same can be seen once frozen. There is vast difference between the nutritional value of a virgin coconut oil and that of Plaintiff's Parachute Coconut oil, said the Defendant.
• It is inconceivable that the Defendant claims that he promotes pure and sure coconut oil which he uses regularly and the plaintiff's product of which he used only one bottle is in a position to make a bold statement that the cap often breaks. On the contrary, the Plaintiff has received the India Star Packaging Award 2017 across 12 categories.
• Defendant's insinuation that the Plaintiff's product is made of rotten coconuts is not an honest or fair opinion and cannot be equated in any manner or form with a hyperbole not to be taken literally. The aroma of Parachute Coconut Oil is natural and characteristic of Copra.
• Since the packaging of the Plaintiff's product does not mention the grade of the coconut used, where they have been extracted and from which coconut, the defendant is attempting to imply that there is some information sought to concealed by the Plaintiff since the coconuts used are of inferior quality, which is factually incorrect.
• The defendant fails to mention the nature of impurities in Plaintiff's product. Sedimentation and particulate matter is in fact characteristic of any coconut oil.
• The defendant admits that the Parachute Oil is unrefined and therefore has not undergone any processing but makes a contradictory claim that the antibacterial properties or anti-fungal properties and nutrients in Parachute Coconut Oil is less due to the processing it undergoes.
• Defendant should have conducted proper research or relied on lab reports before coming to the conclusion and making the video. Atleast the defendant could have done was to have conducted enquiries with the Plaintiff to ascertain the truth/facts before making false, reckless and disparaging statements in the video since the impression given by the use of forceful, decisive and assertive statements/phrases in the impugned video is that the defendant is an expert and has undertaken extensive research and is drawing conclusions on the basis of sound and through ground network.
• Defendant's malice is evidenced by the denigrating replies posted by the defendant on the comments of the video.
• Defendant knew fully well the contents of the Impugned Video constituted the tort of malicious falsehood and slander of goods, that for these reasons the defendant offered to delete some parts of the video, where he sought to make comparison and also offered to make completely fresh video after a re-evaluation of a fresh product of the Plaintiff.
• The only test conducted by the defendant to check the quality of the Plaintiff's product is the frozen test, which is wrong and the comparison is also wrong comparison. He hasn't conducted any test for testing the nutritional value of the product. The defendant has sought to deliberately mislead the consumers by inserting sudden inconsequential references to virgin coconut oil.
• There is a difference between an action for defamation and an action for disparagement, slander of goods, malicious falsehood which was considered by this Court and held that defences of defamation would not be available in the case of action for disparagement.
• Special damage does not mean special in terms of quantum but special in terms of nature of the damage which is simple monetary loss that cannot be valued and compensated. Mere fact that the loss caused cannot be evaluated in monetary terms itself could constitute ‘special' damage and it is impossible to ascertain the nature of the damage caused.
• Defendant's intention is not merely to educate his audience as falsely claimed by the Defendant. Defendant through his impugned video seeks to malign the Plaintiff's product which is apparent from the landing screen of the video which states, “It Is Not As Good As You Think! I'll Prove It!!!!"
• If the Defendant intended to create an educative video with the consumers interest in mind and to bust the tricks used by companies to fool consumers, the Defendant should have approached any independent laboratory to conduct tests and to give verified results to the consumers.
• The Food Safety Standards Act, 2006 in Section 40 provides for a remedy whereby a Purchaser can have a food analyzed by a Food Analyst on payment of a fee and can receive a report in respect of the product from the Food Analyst.
• The false reason given during the course of the hearing for not taking this recourse was high costs, whereas, the fee prescribed for the procedure under the said Act is only Rs.5000/-
• Defendant's argument that he could not be forced to take action before making a comment since it would it would amount to placing a prior restraint is misplaced since, the intent is not to place a prior restraint but to test the bonafides of the Defendant in the context that bald, false, reckless and malicious statements have been made with regard to the Plaintiff's product without due diligence.
• As per the depiction in the Impugned Video, the impression which is created by the Defendant is that the oil used by the Defendant for the purposes of comparison with the Parachute Coconut Oil and for performing the tests is a cold pressed organic coconut oil which is also made from Copra. However, the Defendant in its Affidavit in Reply has stated that the he used "...pure, unrefined, unprocessed, virgin, cold pressed coconut oil" in the video.
• The Defendant has in fact passed of virgin coconut oil as cold pressed organic oil in the Impugned Video and poured the same in the glass marked "ORGANIC" to falsely depict and create an impression that organic cold pressed oil made from copra was clear and to thereafter draw an incorrect conclusion that the Parachute Coconut Oil which is also made from copra was yellowish and hence of inferior quality. The material produced by the Defendant is not for cold pressed organic oil, but for virgin coconut oils which is another category altogether.
• The Defendant's argument that he believed the Plaintiff's product was virgin coconut oil made from wet coconuts is fallacious.
• The device of two coconuts splashing on the packaging of Parachute Coconut Oil is not misleading or meant to mislead. The said device is not a depiction of a wet coconut with water splashing but is a depiction of oil between the coconuts. It is a registered trademark of the Plaintiff and the Plaintiff is entitled to use the same.
• The Impugned Video the Defendant purported to demonstrate the freeze test between organic cold pressed coconut oil and Parachute Coconut Oil both of which are made from Copra. The link in the description of the Impugned Video and all other material that has been produced over the course of hearing relates to virgin coconut oil and is irrelevant.
• Not a single article produced by the Defendant mentions that pure unrefined organic cold pressed coconut oil or the unrefined organic cold pressed oil or normal unrefined cold pressed coconut oil should be colourless or thatcoloration suggests impurity or inferior quality.
• The veracity of documents over the internet is the same as newspaper reports which are hearsay in nature and are inadmissible in law even at an ad-interim stage - at least as the sole basis for refusal of interim reliefs. The material produced along with the suit is mostly primary evidence in the form of one on one correspondence or direct evidence. However, the reports and articles of the nature referred to above which place reliance on further other material are always hearsay in nature.
• Statements made by the Defendant are not hyperbolic or rhetoric or in the nature of exaggeration but are assertive statements made as a matter of fact, albeit falsely so.
• Every visit to the links and / or broadcast of the same and each day of continuance of the Impugned Video has a grossly damaging effect on the Plaintiffs product and the reputation of the Plaintiff and its product.
• Defendant is unauthorizedly using the Plaintiffs registered mark PARACHUTE in the course of trade in the manner set out above. Such unauthorized use of the Plaintiffs registered mark in the Impugned Video takes unfair advantage of and is contrary to honest practices in industrial or commercial matters.
• Such an unauthorized use of the mark PARACHUTE is detrimental to its distinctive character and is against the reputation of the mark. He submitted that the continuation of the Impugned Video would result in further loss of customers and loss of reputation and good will and special damage to the Plaintiff.
• It is incorrect on the part of the Defendant to argue that the law of disparagement is not applicable to him or that this is not a case of trade libel since he is not a rival trader or competitor. He has admitted that making and posting videos on the internet i.e. on his YouTube channel, Bearded Chokra, is his only source of revenue and that the Impugned Video was also therefore a part of his occupation / calling and created in the course of his trade.
Defendant's Arguments:
• Defendant did not delete adverse comments against his video shows that wanted to educate his viewers. Plaintiff has used a trick of showing a wet coconut alongside its product in order to foll consumers into thinking that its product was derived from wet coconut instead of copra.
• The statements made by defendant in his video are true and constitute his opinion. The defendant offered to delete to some parts of the video was a concession/good faith attempt to finally settle the matter, not an admission of wrong doing.
• The email correspondence between the parties establishes that the defendant is not in business of taking money from companies for endorsing their products and of merely becoming their mouthpiece. This shows that the statements made in the impugned video were not made at the behest of a competitor.
• Products provided in the links below the impugned video are organic or virgin organic cold pressed coconut oil and are rivals of each other.
• When the viewers click on the links provided, the defendant receives commission from the e-commerce platform and not the owners of the product company.
• The defendant has also reviewed two products of the plaintiff, without receiving any money from the plaintiff, wherein, his review was favourable to the Plaintiff.
• The plaintiff's product is not marketed as being ‘copra oil' which is how such an oil is known. Plaintiff's packaging merely uses generic term ‘coconut oil' and the bottle shows a coconut with water gushing out. The advertisement of the product suggests that its oil is extracted from wet coconuts and therefore its comparison with virgin or organic cold pressed coconut oil is justified.
• He relied on several articles, wherein it was clinically proved that copra oil is inferior to virgin coconut oil.
• The statement that the smell of the Plaintiff's product is similar to a dried or rotten coconut oil is an exaggeration and not be taken literally.
• The plaintiff has not suffered any special damages arising out of the impugned video and unlike an ordinary case of defamation, damage to the plaintiff from a false/defamatory statement cannot be presumed in cases involving the tort of disparagement of goods.
• The plaintiff has not adduced any evidences whatsoever to show that the Plaintiff has suffered any damages arising out of the impugned video. There is no proof that the revenue of the plaintiff has gone down after the uploading of the video and same is the result of the impugned video. The mere fact that someone has viewed the video does not mean that they have been influenced into refusing to buy the Plaintiff's product.
• The defendant is neither a trader/manufacturer nor a rival a rival of the Plaintiff's goods and as such, the tort of disparagement of goods does not apply to him.
• Though prior restraints are legal in India, they can only be imposed if the statute itself clearly prescribes a prior restraint. Section 40 of the Food Safety and Standards Act, 2006, does not impose any prior restraints; such a restrain would impose an unduly harsh and onerous burden on the freedom of speech and expression.
• To hold that newspaper reports cannot be relied upon at the interim stage because they are hearsay would mean that virtually no document can be relied upon unless the author of the document is the deponent who has verified the pleadings.
Judgment:
The Court was satisfied that the Plaintiff has made a prima facie case for grant of interim reliefs. The balance of convenience was in favour of the Plaintiff. The Court granted an interim injunction, asking to take down the impugned video. The court in the impugned judgment stated that “the fundamental right to freedom of speech and expression is not an unfettered right," and “while it is absolutely necessary to maintain and preserve the freedom of speech and expression," it is equally necessary to have some restrictions on this freedom “for the maintenance of social order in democracy". It was held that the number of subscribers to the channel does not matter, it is the responsibility of the Video Blogger to not publish anything harmful or offensive. The bench included commercial speech within the domain of Freedom of Speech and Expression under Article 19(1)(a), however, it does not give the right to malign or disparage any product. Court gave the defendant a week's time to appeal against the order, post that time he would have to remove the video from all the platforms. However, the Court denied to pass any order which creates a bar on the defendant to post any video; stating that it would depend on the particular case.
The Notice of Motion was made absolute in terms of prayer, except the bracketed portion, which is reproduced here,
"a. That pending hearing and final disposal of the present suit, the Defendant his employees, representatives, agents and all other persons claiming under him or acting in concert with him or on his behalf or acting on his instructions be directed by an order and injunction of this Court to take down / remove and / or block / restrict access to the Impugned Video from the URLs set out in the Plaint (i.e. https://www.youtube.com) or any other URL on the YouTube platform or on any other medium whatsoever including on the internet or any other platform and to cease and desist from in any manner either directly or indirectly creating, producing, hosting, telecasting or broadcasting or otherwise howsoever communicating to the public or publishing the Impugned Video or any part thereof (or any other audio or video of a similar nature in any language) or in any manner causing the Impugned Video or any part thereof (or any other audio or video of a similar nature in any language) to be created, produced, hosted, telecast or broadcast or communicated to the public or published in any manner."
Relevant Paragraphs:
Paragraphs 15, 17.1, 18-22.2, 23.1, 23.2, 24-28 of Marico Limited vs Abhijeet Bhansali, decided on January 15, 2020.
