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 revenuesharing between the parties or requiring the cellular mobile service 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 the National Commission failed to conduct any inquiry whatsoever into the breakup of the price of Rs. 2.40 per SMS fixed for the purpose of participation in the HSHS contest, this Court is of the view that the finding of the National Commission that the SMS service offered by Cellular Mobile Service Provider 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 Cellular Mobile Service Provider was liable to set up the hardware and software required for the HSHS contest at its own cost, which suggests that the services regarding the participation in the HSHS contest through SMSes offered by Cellular Mobile Service Provider constituted a value-added services separate from its ordinary SMS service. It is reasonable to assume that such cost would have been recovered by Cellular Mobile Service Provider, at least in part, through the increased cost of SMSes sent by subscribers participating in the HSHS contest. The direction on ‘Premium Rate Services’ dated 3.5.2005, issued by TRAI, which was referred to by the Appellants, also states that televoting and participating in quizzes, etc. through SMS constitutes a value added service, and that in most of these cases, the charges for these services are more than the normal tariff rate. [Para 11.2 and 12][1199 B-D; 1199 B-H]
3. Hence, the complainant has clearly failed to discharge the burden to prove that the prize money was paid out of SMS revenue, and its averments on this aspect appear to be based on pure conjecture and surmise. This Court is of the view that 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, and the finding of the commission of an “unfair trade practice” rendered by the National Commission on this basis is liable to be set aside. [Para 14][1201 D-F] HMM Ltd. v. Director General, Monopolies & Restrictive Trade Practices Commission (1998) 6 SCC 485; General Motors (India) Private Limited v. Ashok Ramnik Lal Tolat (2015) 1 SCC 429 : [2014] 11 SCR 16 - referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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