Supreme Court Division Bench, set aside National Commission’s order, in Star India (P) Ltd. v. Society of Catalysts & Anr, directing Star India and Bharti Airtel to collectively pay punitive damages amounting to Rs. 1 crore to the complainant organisation for unfair trade practice in their extremely popular TV game show ‘KBC’ (Kaun banega Crorepati). The Supreme Court has termed as "bad in law" the NCDRC verdict, directing Star India (P) Ltd and Bharti Airtel Ltd to pay punitive damages of Rs 1 crore for alleged "unfair trade practice" in a contest for the "Kaun Banega Crorepati" (KBC)
In the instant case, Star India (P) Ltd., used to broadcast the programme ‘Kaun Banega Crorepati’. The programme was sponsored by Bharti Airtel Limited, during the telecast of this programme, a contest called ‘Har Seat Hot Seat’ was conducted, in which the viewers of KBC were invited to participate. There was no entry fee for the HSHS contest. However, it is not disputed that participants in the HSHS contest were required to pay Rs. 2.40 per SMS message to Airtel, which was higher than the normal rate for SMS. . It was alleged that the creators of the show had deceived the viewers by creating an impression that the participation in the contest conducted at the end of each episode of KBC called “Har Seat Hot Seat” was free of cost, whereas the cost of organising the contest as well as the prize money was being reimbursed from the increased SMS rates by the sponsor company Airtel which was being shared with Star India. The complainant company grounded its allegations on a survey which it conducted and it was also published in the national daily “Hindustan Times” where consumers said that they were under the impression that participation to the contest was free of cost.
Respondent which is a consumer society, filed a complaint before the National Commission against Star India and Airtel, contending that they were committing an ‘unfair trade practice’ of the Consumer Protection Act, 1986. The consumer commission in its order observed that the defendant company refused to disclose the show revenue earned by the said contest under confidentiality of proprietary information and they had created an impression that the participation in the contest was free of cost. Star in its defence said that the findings are based on inferences and speculations, and on reliance on a newspaper report without corroboration of its contents, which was impermissible and appealed before the SC.
The bench comprising Justice Mohan M. Shantanagoudar & Justice R. Subhash Reddy found that 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. The Apex Court further said 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 Airtel, Airtel and Star India 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.
The court said that the National Commission had no basis to hold Star and Bharti Airtel guilty, although they had not specifically denied that the prize money was paid out of the increased SMS charges, but they had clarified in their submissions that Airtel was merely a sponsor/advertiser of the program. The commercial arrangement between the parties was that Airtel would pay sponsorship charges, whereas Star India would be independently liable for paying the prize money out of its pocket regardless of the revenue earned by Airtel. Further the court said that reliance on the newspaper report from Hindustan times is unwarranted. The court setting aside the commission’s order and relieving the companies of the punitive damages said “the complainant in the present case had not prayed for punitive damages in the complaint or proved that any actual loss was suffered by consumers."
Written by: Ankur Saha, Head- Legal, VOICE