LexSTAR INDIA (P) LTD. versus SOCIETY OF CATALYSTS & ANR.
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A B C D E F G H 1188 SUPREME COURT REPORTS [2020] 2 S.C.R. STAR INDIA (P) LTD. v. SOCIETY OF CATALYSTS & ANR. (Civil Appeal No. 6597 of 2008) JANUARY 23, 2020 [MOHAN M. SHANTANAGOUDAR AND R. SUBHASH REDDY, JJ.] Consumer Protection Act, 1986 – s.2(1)(r)(3)(a) – Unfair trade practice – A television channel-Star India (P) Ltd used to broadcast the programme ‘KBC’ and the programme was sponsored by a cellular mobile service provider-Airtel – During the telecast of this programme, a contest ‘HSHS’ contest was conducted, in which the viewers of programme were invited to participate and viewers who wished to participate were required to send in the correct answer, inter alia through SMS services, offered by the cellular mobile service providers to a specified number – It was alleged that the appellants had created a false impression in viewers’ minds that participation in ‘HSHS’ contest was free of cost, whereas the cost of organizing the contest as well the prize money was reimbursed from the increased rate of SMS charges and profits were shared by the cellular mobile service provider with television channel – Hence, they were committing ‘unfair trade practice’ u/s. 2(1)(r)(3)(a) of Act, 1986 – The National Commission held that the prize money for the ‘HSHS’ contest was fully or partly covered by the revenue earned from increased SMS charges, the appellants had committed an unfair trade practice u/s. 2(1)(r)(3)(a) of the Act, 1986 – On appeal, held: On perusal of the services-cum-sponsorship agreement, it reveals that cellular mobile service provider had the sole and exclusive right to charge fees or charges towards the services rendered by it to facilitate participation in the ‘HSHS’ contest, through SMS, telecalling etc., and thus, television channel had no role in determining the same – Further, cellular mobile service provider was liable to pay a monthly lump sum as fees to television channel, irrespective of whether such amount was realized from its subscribers or not – There was no provision in the agreement for the revenue- sharing between the parties or requiring the cellular mobile service 1188 [2020] 2 S.C.R. 1188 A B C D E F G H 1189 provider to finance any part of the prize money paid by television channel, towards the ‘HSHS’ contest – Thus, it is evident that television channel was liable to pay the prize money irrespective of the profits earned by cellular mobile service provider – There is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by cellular mobile service provider or that parties had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue – Thus, finding of the National Commission of as ‘unfair trade practice’ set aside. Allowing the appeals, the Court HELD: 1. On perusal of the services-cum-sponsorship agreement, it reveals that Cellular Mobile Service Provider-Airtel had the sole and exclusive right to charge fees or charges towards the services rendered by it to facilitate participation in the HSHS contest, through SMS, telecalling, etc., and thus, television channel-Star India had no role in determining the same. Further, Cellular Mobile Service Provider was liable to pay a monthly lumpsum as fees to the television channel, irrespective of whether such amount was realized from its subscribers or not. There is no provision in the agreement for revenue-sharing between the parties, or requiring Cellular Mobile Service Provider to finance any part of the prize money paid by television channel towards the HSHS contest. [Para 11.1][1198 G-H; 1199 A-B] 2. Thus, it is evident that television channel India was liable to pay the prize money irrespective of the profits earned by Cellular Mobile Service Provider. It is needless to say that the sponsorship money paid by Cellular Mobile Service Provider would come from various sources of revenue, which includes the money earned from the tariff rates for the HSHS contest. Similarly, television channel may have had many sources of revenue from which 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. Further, since STAR INDIA (P) LTD. v. SOCIETY OF CATALY
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