STAR INDIA (P) LTD. versus SOCIETY OF CATALYSTS & ANR. on 23 January 2020

1188

[2020] 2 S.C.R. 1188

SUPREME COURT REPORTS

[2020] 2 S.C.R.

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STAR INDIA (P) LTD.

v.

SOCIETY OF CATALYSTS & ANR.

(Civil Appeal No. 6597 of 2008)

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JANUARY 23, 2020

[MOHAN M. SHANTANAGOUDARAND R. SUBHASH REDDY, JJ.]

Consumer Protection Act, 1986 – s.2(1)(r)(3)(a) – Unfair tradepractice – A television channel-Star India (P) Ltd used to broadcastCthe programme ‘KBC’ and the programme was sponsored by acellular mobile service provider-Airtel – During the telecast of thisprogramme, a contest ‘HSHS’ contest was conducted, in which theviewers of programme were invited to participate and viewers whowished to participate were required to send in the correct answer,Dinter alia through SMS services, offered by the cellular mobile serviceproviders to a specified number – It was alleged that the appellantshad created a false impression in viewers’ minds that participationin ‘HSHS’ contest was free of cost, whereas the cost of organizingthe contest as well the prize money was reimbursed from the increasedrate of SMS charges and profits were shared by the cellular mobileEservice provider with television channel – Hence, they werecommitting ‘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 fromincreased SMS charges, the appellants had committed an unfairFtrade practice u/s. 2(1)(r)(3)(a) of the Act, 1986 – On appeal, held:On perusal of the services-cum-sponsorship agreement, it revealsthat cellular mobile service provider had the sole and exclusiveright to charge fees or charges towards the services rendered by itto facilitate participation in the ‘HSHS’ contest, through SMS,telecalling etc., and thus, television channel had no role inGdetermining the same – Further, cellular mobile service providerwas liable to pay a monthly lump sum as fees to television channel,irrespective of whether such amount was realized from its subscribersor not – There was no provision in the agreement for the revenue-sharing between the parties or requiring the cellular mobile serviceH

provider to finance any part of the prize money paid by televisionchannel, towards the ‘HSHS’ contest – Thus, it is evident thattelevision channel was liable to pay the prize money irrespective ofthe profits earned by cellular mobile service provider – There is nobasis to conclude that the prize money for the HSHS contest waspaid directly out of the SMS revenue earned by cellular mobileservice provider or that parties had colluded to increase the SMSrates 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-sponsorshipagreement, it reveals that Cellular Mobile Service Provider-Airtelhad the sole and exclusive right to charge fees or charges towardsthe services rendered by it to facilitate participation in the HSHScontest, through SMS, telecalling, etc., and thus, televisionchannel-Star India had no role in determining the same. Further,Cellular Mobile Service Provider was liable to pay a monthlylumpsum as fees to the television channel, irrespective of whethersuch amount was realized from its subscribers or not. There isno provision in the agreement for revenue-sharing between theparties, or requiring Cellular Mobile Service Provider to financeany part of the prize money paid by television channel towardsthe HSHS contest. [Para 11.1][1198 G-H; 1199 A-B]

2. Thus, it is evident that television channel India was liableto pay the prize money irrespective of the profits earned byCellular Mobile Service Provider. It is needless to say that thesponsorship money paid by Cellular Mobile Service Providerwould come from various sources of revenue, which includes themoney earned from the tariff rates for the HSHS contest. Similarly,television channel may have had many sources of revenue fromwhich the prize money could have been paid. This is a part andparcel of the ordinary business dealings of the Appellants, andthe complainant has failed to establish any direct linkage betweenthe increased SMS tariff rates and the prize money so as to showthat the prize money was deceptively recovered in the guise ofincreased SMS rates charged to the participants. Further, since AB

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Athe National Commission failed to conduct any inquiry whatsoeverinto the breakup of the price of Rs. 2.40 per SMS fixed for thepurpose of participation in the HSHS contest, this Court is of theview that the finding of the National Commission that the SMSservice offered by Cellular Mobile Service Provider under theHSHS contest did not constitute a value-added service is liableBto be set aside. Indeed, the services-cum-sponsorship agreementreveals that Cellular Mobile Service Provider was liable to setup the hardware and software required for the HSHS contest atits own cost, which suggests that the services regarding theparticipation in the HSHS contest through SMSes offered byCCellular Mobile Service Provider constituted a value-addedservices separate from its ordinary SMS service. It is reasonableto assume that such cost would have been recovered by CellularMobile Service Provider, at least in part, through the increasedcost of SMSes sent by subscribers participating in the HSHScontest. The direction on ‘Premium Rate Services’ datedD3.5.2005, issued by TRAI, which was referred to by theAppellants, also states that televoting and participating in quizzes,etc. through SMS constitutes a value added service, and that inmost of these cases, the charges for these services are morethan the normal tariff rate. [Para 11.2 and 12][1199 B-D;E1199 B-H]3. Hence, the complainant has clearly failed to dischargethe burden to prove that the prize money was paid out of SMSrevenue, and its averments on this aspect appear to be based onpure conjecture and surmise. This Court is of the view that there Fis no basis to conclude that the prize money for the HSHS contestwas paid directly out of the SMS revenue earned by CellularMobile Service Provider, or that parties had colluded to increasethe SMS rates so as to finance the prize money and share theSMS revenue, and the finding of the commission of an “unfair trade practice” rendered by the National Commission on thisGbasis is liable to be set aside. [Para 14][1201 D-F]

HMM Ltd. v. Director General, Monopolies & Restrictive TradePractices Commission (1998) 6 SCC 485; General Motors(India) Private Limited v. Ashok Ramnik Lal Tolat (2015) 1SCC 429 : [2014] 11 SCR 16 - referred to.H

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6597of 2008.

From the Judgment and Order dated 11.09.2008 of the NationalConsumer Disputes Redressal Commission, New Delhi in ComplaintNo. 83 of 2007.

With

Civil Appeal No. 6645 of 2008

Gaurav Pachnanda, Sr. Adv., Ms. Ruby Singh Ahuja, Ms. SwikritiSinghania, Ms. Kritika Sachdeva, Utarsh Maria, Ashutosh P. Shukla,Ms. Jyotika Jain, Ms. Ishna Kumar, Ms. Avni Sharma, Mrs. ManikKaranjawala, Aditya Narain, Ms. Anushree Narain, Arnav Narain,Ms. Mishra Raj Sekhar, Ms. Amanda Chakravarti, Ms. SubhashreeMohapatra, Siddharth Raj Agarwal, Dinesh Chander Trehan, VineetKumar, Ms. Astha Tyagi, Advs. for the Appellant.

Ms. Madhumita Bhattacharjee, Ms. Srija Choudhury, Advs. forthe Respondents.

The Judgment of the Court was delivered by MOHAN M. SHANTANAGOUDAR, J.

1. These appeals arise out of the judgment dated 11.9.2008 of theNational Consumer Disputes Redressal Commission (“NationalCommission”) allowing the consumer complaint filed by Respondent No.1 in both these appeals against the Appellants.

2. The brief facts giving rise to these appeals are as follows:

2.1 Star India (P) Ltd., the Appellant in C.A. No. 6597/2008(hereinafter “Star India”) used to broadcast the programme ‘KaunBanega Crorepati’ (“KBC”) between 22.1.2007 and 19.4.2007.The programme was sponsored by Bharti Airtel Limited, theAppellant in C.A. No. 6645/2008 (hereinafter “Airtel”), amongstothers. During the telecast of this programme, a contest called‘Har Seat Hot Seat’ (“HSHS contest”) was conducted, in which A

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the viewers of KBC were invited to participate. An objective-type question with four possible answers was displayed on thescreen during each episode, and viewers who wished to participatewere required to send in the correct answer, inter alia throughSMS services, offered by Airtel, MTNL and BSNL, to a specifiednumber.

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2.2 The winner for each episode was randomly selected out ofthe persons who had sent in the correct answers, and awarded aprize money of Rs. 2 lakhs. There was no entry fee for the HSHScontest. However, it is not disputed that participants in the HSHScontest were required to pay Rs. 2.40 per SMS message to Airtel,which was higher than the normal rate for SMSes. Hence,Respondent No. 1, which is a consumer society (hereinafter “thecomplainant”), filed a complaint before the National Commissionagainst Star India and Airtel (but not against BSNL and MTNL),contending that they were committing an ‘unfair trade practice’within the meaning of Section 2(1)(r)(3)(a) of the ConsumerProtection Act, 1986 (“the 1986 Act”). It was alleged that theAppellants had created a false impression in viewers’ minds thatparticipation in the HSHS contest was free of cost, whereas thecost of organizing the contest as well the prize money was beingreimbursed from the increased rate of SMS charges, and the profitsfrom these charges were being shared by Airtel with Star India.

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2.3 Further, it was alleged that an unfair trade practice had alsobeen committed inasmuch as the contest was essentially a lotteryas the questions were simple, and the winners were finally pickedby random selection. The purpose of this contest was to promoteFthe business interests of the Appellants by increasing the viewershipand Television Rating Points (TRP’s) of the KBC programme,and thus to command higher advertising charges, and also byincreasing the revenue earned from SMS messages. Hence theAppellants were culpable for conducting a lottery-like contest toGpromote their business interests under Section 2(1)(r)(3)(b) ofthe 1986 Act.

2.4 It is relevant to note that the complainant is only a voluntaryconsumer organization which has filed this complaint as part of itsobjective of furthering the consumer protection movement. It isnot their case that they have participated in the HSHS contest H

and incurred any loss on account thereof. It is further relevant tonote that the complainant’s assertions are solely based on a surveywhich it had carried out, in which the majority of participantsapparently stated that they were under the impression thatparticipation in the HSHS contest was free and the SMS chargeswere retained only by the service provider, i.e. Airtel and most ofthe viewers felt that the contest was carried out to increase thepopularity of the KBC programme. The conclusions of this surveywere apparently confirmed by a newspaper report dated 15.7.2007published by the Hindustan Times. As per this newspaper report,Airtel received 58 million SMS messages, and the revenue earnedfrom the SMSes was shared by Star India and Airtel.

3. The National Commission in the impugned judgment observedthat though the Appellants had not disclosed the revenue earned fromthe HSHS contest on grounds of confidentiality of proprietary information,it was apparent that they had created an impression that the prize moneywas being given free of charge, even though they had not disputed thatthe prize money for the HSHS contest was paid out of the money collectedthrough SMS charges. The Commission relied upon the figures stated inthe newspaper article dated 15.7.2007 (supra), and found that since theAppellants had not denied that they had received 58 million SMSes, theywould have collected Rs. 13.92 crore from the participants of the HSHScontest for such messages, whereas a total sum of only Rs. 1.04 croreswas paid as prize money. Thus, the gross earnings of the Appellantswere disproportionate to the cost of the prizes offered.

3.1 The Commission further found that no viewer could discernfrom the on-screen advertisements that the costs of the contestwere being met through the SMS charges, and the Appellants hadclearly not notified viewers about the same. It found a contradictionbetween the Appellants’ stances as to whether the HSHS contestwas advertised as ‘free’ or not. It was also observed that theAppellants had not brought any evidence on record to show thatthe transmission of SMS messages for the HSHS contest was avalue added service such that the higher SMS cost was justified,and hence the same could not be construed as a value addedservice. It was presumed by the National Commission that thespecial business relationship between Star India and Airtel includedan undisclosed revenue sharing agreement.

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SUPREME COURT REPORTS

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A3.2 Hence, it was held that since the prize money for the HSHScontest was fully or partly covered by the revenue earned fromincreased SMS charges, the Appellants had committed an unfairtrade practice under Section 2(1)(r)(3)(a) of the 1986 Act. Inlight of this finding, the National Commission found it unnecessaryto deal with the complainant’s contention regarding commissionBof an unfair trade practice under Section 2(1)(r)(3)(b).

3.3 The National Commission additionally held that the complaintwas maintainable under the 1986 Act and need not have beenpreferred before the Telecom Disputes Settlement and AppellateTribunal (“TDSAT”) under the Telecom Regulatory Authority ofCIndia Act, 1997 (“TRAI Act”). Further, it was held that thecomplaint was not bad for non-joinder of parties as there wasnothing on record to suggest that BSNL and MTNL had alsorecovered large amounts from the SMS charges for the HSHScontest and that the amount so recovered by them was used forDsharing the cost of the prize money.

3.4 Hence, the complaint was accordingly allowed by the NationalCommission. Since the complainant is only a consumerorganization, the National Commission observed that there wereno grounds for granting compensation. However, it awardedEpunitive damages of Rs. 1 crore under the Proviso to Section14(1)(d) of the 1986 Act, for which both Appellants were heldjointly and severally liable. The National Commission also directedthem to pay litigation costs of Rs. 50,000 to the complainant. Hencethese appeals before us.

F4. Learned senior counsel for Star India, Shri Gaurav Pachnanda,submitted that the entire finding of ‘unfair trade practice’ was based oninferences and speculation, and on reliance on a newspaper report withoutcorroboration of its contents, which was impermissible. He disputed thefinding of the National Commission that the Appellant had admitted thatthe prize money was paid out of the revenue earned from increasedGSMS rates. It was stressed that the National Commission had omitted toinquire into the source of the prize money. It was also stressed thatAirtel had not shared the revenue earned from the increased SMS rateswith Star India at all. The only monetary flow between them was a fixedperiodic lumpsum to be paid by Airtel under the services-cum-sponsorshipHagreement between them, which bore no relation to the revenue received from the SMSes, and that there was no evidence to suggest that theSMS revenue was used to pay the prize money. The learned counselemphatically argued that the expression “covered by the amount chargedin the transaction as a whole” under Section 2(1)(r)(3)(a) of the 1986Act only meant direct recovery from the price paid for the transaction,and not from advertisements or sponsorship, citing the decision of thisCourt in HMM Ltd. v. Director General, Monopolies & RestrictiveTrade Practices Commission, (1998) 6 SCC 485.

4.1 It was further submitted that Airtel was entitled to charge ahigher rate for the SMSes sent in pursuance of the HSHS contest,since the transmission of SMSes to register options in a multiplechoice question game required a special software, the use of whichconstituted a value-added service; and that Star India had compliedwith the relevant TRAI regulations mandating that such increasedtariff be displayed on the television screen as well as on the KBCprogramme website. Therefore, though the participants bore thecost of sending the SMS messages, they were duly informed ofthe same, while participation in the contest itself remained free ofcharge. In such circumstances, the National Commission couldnot have attributed recovery of prize money to the increased tariffrate of the SMSes without even inquiring into the breakup of cost,value addition and profit in the tariff.

4.2 The learned counsel also challenged the award of damages,for lack of proof of loss or legal injury to the participants in thecontest, which he submitted was required as per Section 14(1)(d)of the 1986 Act. Lastly, he argued that “punitive damages” couldnot have been awarded without a specific prayer for the same inthe complaint.

5. Learned counsel for Airtel, Shri Aditya Narain, urged that asfar as the commission of an unfair trade practice was concerned, theonly finding rendered by the National Commission was regarding thecreation of a wrongful impression that the contest was conducted freeof charge, which is covered under the second part of Section 2(1)(r)(3)(a)of the 1986 Act, and that the same was not attracted in the present case.He took us through the TRAI direction regarding advertisement ofpremium rate services, pleading compliance with the same. Finally, hesubmitted that the jurisdiction of the consumer fora was ousted by Section14(a)(iii) read with Section 15 of the TRAI Act, which provide that any A

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Adispute between telecom service providers and “a group of consumers”have to be referred to the TDSAT, and that the complainant organisationwas essentially nothing but a group of consumers since it was purportingto represent the interest of consumers at large.

6. Learned Counsel for the complainant, Ms. MadhumitaBBhattacharjee, on the other hand, argued in favour of the decision of theNational Commission, submitting that the Appellants had given thewrongful impression to consumers that the HSHS contest prize moneywas not paid out of the revenue generated from increased SMS tariffrates. She also averred that the complaint contained a prayer as to punitivedamages, and thus the National Commission had not erred in awardingCpunitive damages. Finally, she submitted that the complaint wasmaintainable under the 1986 Act since the complainant had filed anindividual complaint under the Act, and not acted on behalf of a group ofconsumers, thus attracting the exemption available to individual consumersunder proviso (B) to Section 14 (a)(iii) of the TRAI Act.

D7. We have heard all the parties and given due consideration tothe material on record.

8. It is apparent that the crucial question to be determined in theinstant case is whether an unfair trade practice has been committed bythe Appellants in the conduct of the HSHS contest, in terms of SectionE2(1)(r)(3) of the 1986 Act. We hasten to emphasize at this juncture itselfthat though the complainant had also pleaded violation of Section2(1)(r)(3)(b) of the 1986 Act in their complaint, there was no expressfinding rendered on this issue by the National Commission, andsubsequently, no contentions were made before us in this respect. Thus,Fthe limited question before us is whether an unfair trade practice hasbeen committed only within the meaning of Clause (a) of Section2(1)(r)(3). It would be useful to begin by referring to the relevant portionof the definition of “unfair trade practice” under Section 2(1)(r)(3):

“(r) ”unfair trade practice” means a trade practice which, forGthe purpose of promoting the sale, use or supply of any goods orfor the provision of any service, adopts any unfair method or unfairor deceptive practice including any of the following practices,namely;—

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(3) permits—

(a) the offering of gifts, prizes or other items with the intentionof not providing them as offered or creating impression thatsomething is being given or offered free of charge when it is fullyor partly covered by the amount charged in the transaction as awhole;…”

8.1 Evidently, the mischief that the clause seeks to address maybe in two forms: firstly, the offering of gifts, prizes or other itemswith the intention of not providing them as offered, and secondly,the creation of the impression that something (i.e. a gift, prize orother item) is being given or offered free of charge in spite of thecost of the item actually being covered either fully or partly by theamount charged in the relevant transaction, as a whole. This wouldbe, for example, where the vendor of a good or service deceptivelyincreases the price of the good or service being sold, and coversthe cost of a prize or gift offered for ‘free’ along with the good orservice through such increased price.

8.2 In the instant matter, the controversy regarding the commissionof an unfair trade practice pertains to the second part of the clause.This is because the Appellants are questioning the conclusion ofthe National Commission that the amount of prize money paid inthe HSHS contest was in fact at least partly covered by theincreased SMS tariff rate charged to participate in the contest,and that the Appellants had created a false impression to thecontrary, i.e., that participation in the HSHS contest was free ofcharge. Thus, the primary bone of contention between the partiesis the source of the funds out of which the prize money has beenpaid by Star India.

9. At the outset, after going through the written submissions ofthe Appellants before the National Commission, we are compelled toconclude that the National Commission had no basis to hold that theAppellants had admitted that the prize money for the HSHS contest wasdistributed out of the revenue collected from the SMSes sent in pursuanceof the contest. It is true that the Appellants had not specifically deniedthat the prize money was paid out of the increased SMS charges.However, they had clarified in their submissions that Airtel was merelya sponsor/advertiser of the program, and the commercial arrangement A

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Abetween the parties was that Airtel would pay sponsorship charges,whereas Star India would be independently liable for paying the prizemoney out of its pocket regardless of the revenue earned by Airtel.

10. Importantly, we further find that apart from the aforementionedfacts, there is no other cogent material on record upon which the NationalBCommission could have placed reliance to render the finding of ‘unfairtrade practice’ under Section 2(1)(r)(3)(a) of the 1986 Act. The NationalCommission had sought to rely on the newspaper report dated 15.7.2007published in the Hindustan Times (supra) regarding the amount of revenueand profit earned by the appellants from the HSHS contest. We are ofthe considered opinion that such reliance was unwarranted, inasmuchCas there was absolutely no corroboration for the allegations therein withrespect to the number of SMSes received, and the breakup of revenueearned into cost, value addition from service, and profit. Moreover, thesurvey report on the basis of which these allegations were made wasnot even produced before the National Commission or before us.

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11. It is further relevant to note that there exists a services-cum-sponsorship agreement between the Appellants, which contains thespecific details of the commercial arrangement between them. They didnot produce the same before the National Commission, claiming that thesaid agreement contained a confidentiality clause, and could only beEproduced in accordance with law if required. The Appellants’ case isthat they would have offered to produce the agreement if the NationalCommission had given a specific direction to that effect. However, nosuch direction was rendered at any point during the proceedings beforethe National Commission. Even the complainant did not, throughout thecourse of the proceedings, seek a direction to the Appellants to produceFthe services-cum-sponsorship agreement. Be that as it may, to establishwhether there was any substance in the National Commission’sconclusion that the prize money was paid out of the revenue earnedfrom Airtel’s SMS services during the HSHS contest, we deemed it fitto examine the agreement ourselves.G11.1 Our perusal of the services-cum-sponsorship agreementreveals that Airtel had the sole and exclusive right to charge feesor charges towards the services rendered by it to facilitateparticipation in the HSHS contest, through SMS, telecalling, etc.,and thus, Star India had no role in determining the same. Further, H

Airtel was liable to pay a monthly lumpsum as fees to Star India,irrespective of whether such amount was realized from itssubscribers or not. There is no provision in the agreement forrevenue-sharing between the parties, or requiring Airtel to financeany part of the prize money paid by Star India towards the HSHScontest.

11.2 Thus, it is evident that Star India was liable to pay the prizemoney irrespective of the profits earned by Airtel. It is needlessto say that the sponsorship money paid by Airtel would comefrom various sources of revenue, which includes the money earnedfrom the tariff rates for the HSHS contest. Similarly, Star Indiamay have had many sources of revenue from which the prizemoney could have been paid. This is a part and parcel of theordinary business dealings of the Appellants, and the complainanthas failed to establish any direct linkage between the increasedSMS tariff rates and the prize money so as to show that the prizemoney was deceptively recovered in the guise of increased SMSrates charged to the participants.

12. Further, since the National Commission failed to conduct anyinquiry whatsoever into the breakup of the price of Rs. 2.40 per SMSfixed for the purpose of participation in the HSHS contest, we are of theview that the finding of the National Commission that the SMS serviceoffered by Airtel under the HSHS contest did not constitute a value-added service is liable to be set aside. Indeed, the services-cum-sponsorship agreement reveals that Airtel was liable to set up thehardware and software required for the HSHS contest at its own cost,which suggests that the services regarding the participation in the HSHScontest through SMSes offered by Airtel constituted a value-addedservices separate from its ordinary SMS service. It is reasonable toassume that such cost would have been recovered by Airtel, at least inpart, through the increased cost of SMSes sent by subscribersparticipating in the HSHS contest. The direction on ‘Premium RateServices’ dated 3.5.2005, issued by TRAI, which was referred to by theAppellants, also states that televoting and participating in quizzes, etc.through SMS constitutes a value added service, and that in most of thesecases, the charges for these services are more than the normal tariffrate. The notification is reproduced below:

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“F. No. 305-8/2004-QOS

TELECOM REGULATORY AUTHORITY OF INDIA

A-2/14, Safdarjung Enclave, New Delhi-110029

Dated : 3[rd] May, 2005

To,

All Cellular Mobile Service Providers

All Unified Access Service Providers

Subject : Direction on Premium Rate Services.

1. The Authority has observed that in the last few months, a numberof operators and also some independent agencies have startedproviding value added services like quiz, ringtones, televoting etc.through SMS. In most of these cases, the charges for theseservices are more than the normal published tariffs. The customersare informed about these value added premium rate servicesthrough SMS, advertisements in newspaper or T.V. But in thiscommunication, the cost implication of the service is not intimated.Sometimes the messages are only followed by wordings “T&CApply”.

2. In the present multi-operator multi service scenario, suchpremium rate services have increased considerably. The serviceprovider is aware of the pulse rate for these services as either theservice provider is providing such services or it has an agreementwith the provider of such premium services. However, the costfor such premium services is generally known to the customeronly after the service has been utilized and the bill is received.This practice of service providers is against the interest of theconsumers.

3. In view of the above, in the consumer’s interest, the Authorityin exercise of its power conferred upon it under Section 13 readwith Section 11(1)(b)(i) and (v) of the Telecom RegulatoryAuthority of India Act, 1997 and clause 9 and 11 of theTelecommunication Tariff Order 1999 hereby directs all theCellular Mobile Service Providers and Unified Access ServiceProviders to publish in all communications/advertisements relatingto premium rate services, the pulse rate/tariff for the service.

This issues with the approval of the Authority.

(Sudhir Gupta)

Advisor (QOS)”

13. However, we need not dwell on this issue much longer, sincenot much turns upon it with regard to the determination of the commissionof an unfair trade practice, except to note that the transmission of SMSesfor the purpose of the HSHS contest being a value added service, theAppellants had also taken care to comply with the TRAI direction dated3.5.2005 (supra) which mandated the communication/advertisement ofany increase in the cost of cellular services on account of the renderingof such a value-added service. Thus, even if the SMS charge is taken asthe ‘cost’ of participating in the contest for the purpose of Section2(1)(r)(3)(a) of the 1986 Act, it cannot be said that the Appellants hadwrongfully advertised the charges for the same.

14. Hence, we find that the complainant has clearly failed todischarge the burden to prove that the prize money was paid out of SMSrevenue, and its averments on this aspect appear to be based on pureconjecture and surmise. We are of the view that there is no basis toconclude that the prize money for the HSHS contest was paid directlyout of the SMS revenue earned by Airtel, or that Airtel and Star Indiahad colluded to increase the SMS rates so as to finance the prize moneyand share the SMS revenue, and the finding of the commission of an“unfair trade practice” rendered by the National Commission on thisbasis is liable to be set aside.

15. With regard to the award of punitive damages made by theNational Commission, the same could not have been done in as much asthe complainant in the present case had not prayed for punitive damagesin the complaint or proved that any actual loss was suffered by consumers(See General Motors (India) Private Limited v. Ashok Ramnik LalTolat, (2015) 1 SCC 429). However, we need not delve further into thisaspect since we have found that there was no unfair trade practicecommitted by the Appellants in the first place.

16. On an ancillary note, it was briefly contended before us by thelearned counsels for the Appellants, as mentioned supra, that the NationalCommission did not have jurisdiction over the complaint and it shouldhave been referred to the TDSAT. However, this argument was notseriously pressed by either of the parties. Hence, we do not find it relevant A

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Ato adjudicate upon this issue for the purpose of the present matter.However, the question of law, as regards the maintainability of complaintsfiled by consumer organisations against telecom service providers beforeconsumer fora may be kept open.

17. Thus, we find that the finding of the commission of an unfairBtrade practice under Section 2(1)(r)(3)(a) in the impugned judgement isbad in law. The appeals are allowed and the impugned judgement is setaside in the aforesaid terms.

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Ankit Gyan

Appeals allowed.

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