Supreme Court: In an appeal concerning a consumer dispute, wherein National Consumer Disputes Redressal Commission (‘NCDRC’) have allowed the complaint alleging deficiency of service based on a ‘contractual obligation’ and ‘unfair trade practice’, the division bench of PS Narasimha* and Aravind Kumar, JJ. while setting aside the impugned order, held that promotional trailers are unilateral and do not qualify as offers eliciting acceptance, and as such they do not transform into promises, much less agreements enforceable by law. Further, the facts do not indicate adoption of an unfair trade practice under the Consumer Protection Act, 1986. (‘Act’)
Background:
Yash Raj Films (‘YRF’) produced a film called ‘Fan’ in 2016. Before the film’s release, YRF circulated a promotional trailer, both on television and online, which contained a video song. The complainant, a teacher in a school in Aurangabad, stated that having watched the promotional trailer of the film, she decided to go to watch the movie on the silver screen with her family. However, she found that the movie did not contain the song, even though the song was widely circulated for promoting and publicising the movie. Thus, she filed a consumer complaint before the District Consumer Redressal Forum as she felt cheated and deceived by YRF and has undergone mental agony. Therefore, she claimed Rs. 60,550 as damages.
The District Consumer Redressal Forum dismissed the complaint on the ground that there is no relationship of consumer and service provider.
Aggrieved, the complainant filed an appeal before the State Commission, wherein it was held that entertainment services are covered under the definition of ‘service’ and YRF is a service provider. Further, it was held that YFR is engaged in an unfair trade practice, as the song in the promotional trailer was widely circulated but not shown in the film. Thus, the State Commission awarded Rs. 10,000 as compensation for mental harassment and Rs. 5,000 as cost to the complainant.
Thereafter, the matter was before NCDRC. It held that a consumer would feel deceived if a song shown in the promotional trailer is not played in the film, amounting to an unfair trade practice. Aggrieved, YRF filed the present appeal.
Issues and Analysis:
Whether there is any ‘deficiency’ in the provision of the entertainment service that the consumer has availed by paying the consideration through the purchase of a ticket?
Defining promotional trailer, the Court said that a promotional trailer is an advertisement for a film. Further, the Bench reiterated that a commercial speech, which includes advertisements, is protected through freedom of speech under Article 19(1)(a) of the Constitution, subject to the reasonable restrictions in Article 19(2). However, a commercial speech that is deceptive, unfair, misleading, and untruthful is excluded from such constitutional protection and can be regulated and prohibited by the State. Subject to these restrictions, the producer/ advertiser has the freedom to creatively and artistically promote his goods and services.
The Court said that a song, dialogue, or a short visual in a promotional trailer could be used to popularise or to create a buzz about the release of the film, rather than to purely represent information about the contents of the film. Viewers could associate these with the film and may be interested or encouraged to watch the film. However, the kind of right or liability a promotional trailer creates would entirely depend on the civil and statutory legal regime.
After taking note of the objective of the Act the Court examined the definition of ‘consumer’, ‘complaint’, and ‘Deficiency of Service’.
While examining the definition of ‘service’, the Court said that there is no doubt about the fact that any person watching a movie after remitting the necessary consideration becomes a consumer of service. The service in this case is that of entertainment.
After taking note of the definition of ‘deficiency’, the Court said that there is deficiency when there is a fault, imperfection, shortcoming or inadequacy in the quality, nature, and manner of performance that is required to be maintained either in terms of a law or in terms of a contract.
The Court referred to certain portions of the complaint and said that the deficiency alleged in the complaint arises out of the complainant’s own expectation that the song would be a part of the movie. It is assumed that there is deficiency of service as the movie did not contain the song.
The Court said there is a fallacy in assuming a promotional trailer is an offer or a promise. Under this misplaced assumption, the complainant assumed that the subsequent formation of a contract to watch the movie does not comply with the promise allegedly made through the promotional trailer.
Explain this in terms of the law of contracts, the Court said that the essential element of an ‘offer’ or ‘proposal’ for the formation of a contract has not been satisfied in the present case.
The Court said that a promotional trailer is unilateral. It is only meant to encourage a viewer to purchase the ticket to the movie, which is an independent transaction and contract from the promotional trailer. A promotional trailer by itself is not an offer and neither intends to nor can create a contractual relationship.
Further, the Court said that, as the promotional trailer is not an offer, there is no possibility of it becoming a promise. Therefore, there is no offer, much less a contract, between YRF and the complainant to the effect that the song contained in the trailer would be played in the movie and if not played, it will amount to deficiency in the service. The transaction of service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket. This transaction is unconnected to the promotional trailer, which by itself does not create any kind of right of claim with respect to the content of the movie.
Thus, the Court held that no contract is formed based on the promotional trailer and as such, there is no deficiency of service.
Whether it is an ‘unfair trade practice’ giving rise to a cause of action?
The Court took note of the term ‘unfair trade practice’ in the Act and said that only substantive and material discrepancies are covered under ‘unfair trade practice’.
The Court said that the ingredients of ‘unfair trade practice’ under Section 2(1)(r)(1) of the Act are not made out in this case. The promotional trailer does not fall under any of the instances of “unfair method or unfair and deceptive practice” contained in clause (1) of Section 2(1)(r) that pertains to unfair trade practice in the promotion of goods and services. Nor does it make any false statement or intend to mislead the viewers.
Furthermore, the Court noted that the burden is on the complainant to produce cogent evidence that proves unfair trade practice, however, nothing has been brought on record to show the same. Therefore, the Bench held that no case for unfair trade practice is made out in the present case.
The Court clarified that the judicial precedents on this point do not relate to transactions of service relating to art. Services involving art necessarily involve the freedom and discretion of the service provider in their presentation. This is necessary and compelling by the very nature of such services. The variations are substantial. Therefore, the Court emphasised that the standard by which a court of law judges the representation, followed by the service, must be different and must account for the creative element involved in such transactions.
Thus, the Court set aside the impugned order of NCDRC.
[Yash Raj Fims Private Limited v. Afreen Fatima Zaidi, 2024 SCC OnLine SC 578, decided on 22-04-2024]
*Judgment Authored by: Justice PS Narasimha
Advocates who appeared in this case :
For Appellant(s): Abhishek Malhotra, Adv., Subhalaxmi Sen, Adv., Sonali Jain, AOR
For Respondent(s): Aishwarya Bhati, ASG, Poornima Singh, Adv., BLN Shivani, Adv., Mohd. Zahid Hussain, AOR, Mumtaz Javed Shaikh, Adv., Zeeshan Zaidi, Adv.
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