LAKHANPAL NATIONAL LTD. versus M.R.T.P. COMMISSION AND ANOTHER

Citation: [1989] 2 S.C.R. 979 · Decided: 02-05-1989 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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LAKHANPAL NATIONAL LTD. 
v. 
M.R.T.P. COMMISSION AND·ANOTHER 
MAY 2, 1989 
[LAUT .MOHAN SHARMA AND 
S. RATNAVEL PANDIAN, JJ.) 
Monopolies and Restrictive Trade Practices Act, 1969: Section 
36A(l)(i) and (v)-Unfair Trade practice-Test to be applied-
Examine whether representation contains a false statement-Contains 
an element of misleading a reasonable person. 
A 
c 
The MRTP Commission-respondent-in the appeal issued a 
show cause notice under Section 36-B of the Monopolies and Restrictive 
Trade Practices Act, 1969 to the appellant company informing that a 
proceeding had been instituted for making an inquiry whether the said 
Company was indulging in certain unfair trade practices prejudicial to D 
the public interest within the meaning of s. 36-A of the Act. It was 
alleged in the notice that although the appellant company was manu-
facturing 'Novino' Batteries in collaboration with M/s Mitsushita 
Electric Industrial Co. Ltd. and not with National Panasonic of Japan, 
it was issuing advertisements announcing that 'Novino' Batteries were 
manufactured in collaboration with National Panasonic of Japan using 
E 
National Panasonic techniques, and that the said representation was 
false and misleading and thereby ·causing loss or injury to the 
consumers. 
The Company in its reply to the said notice denied having made 
any wrong representation in its advertisement, and asserted that the f' 
company had actually entered into a collaboration agreement with M/s 
Mitsushita Electric Industrial Ltd. for the manufacture of dry cell bat-
teries, and was adopting the process employed by Mitsushita Ltd .. for 
manufacturing 'Novino' Batteries. The Company further stated that 
Mitsushita Ltd. of Japan was bette~ known by i.ts products described by 
the names 'National' and 'Panasonic' and that there was therefore 110 
O 
question of misleading anybody by the description of the Japanese 
Company by its products. 
Rejecting the Company's explanation the Commission held that 
bearing in mind the Indian conditions the use of 'National' and 'Pana-
sonic' to signify collaboration will have a misleadi.ng effect on the minds 
H 
979 
A 
B 
c 
D 
E 
F 
980 
SUPREME COURT REPORTS 
(1989] 2 S.C.R. 
of common class of customers particularly when Novino Batteries is 
projected and advertised side by side with National, Panasonic and 
Techics Batteries iu advertisements. The Commission also refused to 
accept the plea of the Company that the advertisements have mentioned 
the brand names instead of the manufacturing company since 
'National' and 'Panasonic' were well known names in India while the 
manufacturing company Mitsushita Ltd. was not as a plea of good 
defence. 
On the question whether the appellant company indulged in J 
unfair trade practice under clauses (i) and (v) of s. 36-A(l) of the 
M.R.T.P. Act, 1962. 
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Allowing the appeal, the Court, 
HELD: l.(a) The M.R.T.P. Act as it originally stood did not 
contain any provision for protection of consumers against false or 
misleading advertisements or other similar and unfair trade practices. 
By providing for measures against restrictive and monopolistic trade 
practices, it was perhaps assumed that the consumers also, as a result, 
will get a fair deal. However, experience indicated otherwise, and 
following the recommendations of a Committee, it was considered 
necessary to amend the Act. Accordingly, sections 36-A to 36-E in 
part B were inserted in Chapter V of the Act by an amendment in 
1984. [984E-F; G] 
2. It would be more proper for the appellant Company to give the 
full facts by referring to Mitsnshita Ltd. by its correct name and further 
stating that its products are known by the name "National" and 
"Panasonic". [986C] 
3. An advertisement mentioning merely Mitsushita Ltd. may, 
therefore, fail to convey anything to an ordinary buyer unless be is also 
told that it is the same Company which manufactures products known 
to him by the names "National" and "Panasonic". If such were the 
position there would not have been any scope for objection. However, 
G 
the same effect is produced by the impugned advertisements. There is no 
other company with the name of 'National' and 'Panasonic', and there 
is no scope for any confusion on that score. [985G-H; 986A] 
4. Where the reference is being made to the standard of the 
quality, it is not material whether the manufacturing company is indi-
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cated by its actually correct name or by its description 

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