Yash Raj Films Private Limited vs Afreen Fatima Zaidi

REPORTABLE 2024 INSC 328 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 4422/2024 (ARISING OUT OF SLP (C) No. 14475/2021

YASH RAJ FILMS PRIVATE LIMITED …. APPELLANT(S)

VERSUS

AFREEN FATIMA ZAIDI & ANR. …RESPONDENT(S)

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. What are the legal implications of a promotional trailer,

popularly known as a ‘promo’, or a teaser that is circulated before

the release of a movie? Does it create any contractual relationship

or obligations akin to it? Is it an unfair trade practice if the

contents of the promotional trailer are not shown in the movie?

These questions have arisen in the context of a consumer dispute

wherein the consumer courts have allowed the complaint alleging

deficiency of service based on a ‘contractual obligation’ and ‘unfair

trade practice’. For the reasons to follow, we have held that

promotional trailers are unilateral and do not qualify as offers Signature Not Verified

eliciting acceptance, and as such they do not transform into Digitally signed by satish kumar yadav Date: 2024.04.22 17:20:55 IST Reason:

promises, much less agreements enforceable by law. We have also

1 held that the facts do not indicate adoption of an unfair trade

practice under the Consumer Protection Act, 1986. Before we delve

into the analysis to draw our conclusions, the short facts

necessary for the case are as follows.

2. The appellant is a known film producer. It produced a film

called ‘Fan’ in the year 2016. Before the release of the film, the

appellant circulated a promotional trailer, both on television and

online, which contained a song in the form of a video.

2.1 The respondent no. 1 (‘complainant’), a teacher in a school in

Aurangabad, states 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. She filed a consumer complaint before

the District Consumer Redressal Forum wherein she has stated

that she decided to watch the movie after watching the song in the

promotional trailer, with the expectation of watching the song in

the theatre. However, to her disappointment, she found that the

song was not played in the movie. She alleges that due to this, she

felt cheated and deceived by the appellants and has undergone

mental agony. In view of the above, she claimed Rs. 60,550 as

damages.

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3. In a short order dated 29.04.2016, the District Consumer

Redressal Forum dismissed the complaint on the ground that

there is no relationship of consumer and service provider.

3.1 Against the above order, the complainant filed an appeal

before the State Commission, which was allowed by order dated

22.09.2017. The State Commission held that entertainment

services are covered under the definition of ‘service’ and the

appellant is a service provider. Apart from holding that there is

deficiency in service, the State Commission held that the appellant

has engaged in an unfair trade practice as the song in the

promotional trailer was widely circulated but not shown in the film.

Under these circumstances, the State Commission awarded Rs.

10,000 as compensation for mental harassment and Rs. 5,000 as

cost to the complainant.

3.2 The appellant carried the matter to the National Consumer

Disputes Redressal Commission1. By the order impugned,2 the

NCDRC held that a consumer would feel deceived if a song that is

shown in the promotional trailer is not played in the film, thereby

amounting to an unfair trade practice. Further, there is deficiency

of service as playing the song in the trailer leads to an implied

1 Hereinafter ‘NCDRC’.

2 In Revision Petition No. 156 of 2018, order dated 18.02.2020.

3 promise that it will be played in the film. In its own words, the

NCDRC held as follows:

“7. When the producer of a movie shows the promos of the said movie on TV Channels, etc. and such promos include a song, any person watching the promo would be justified in believing that the movie would contain the song shown in the said promos, unless the promo itself contains a disclaimer that the song will not be a part of the movie. If a person likes the song shown in the promo and based upon such liking decides to visit a cinema hall for watching the said movie for a consideration, he is bound to feel deceived, disappointed and dejected if the song shown in the promo is not found in the film. The practice of including a song in the promo of a film shown widely on TV Channels but excluding the said song while exhibiting the movie, in my opinion, constitutes an unfair trade practice. The obvious purpose behind such an unfair trade practice is to draw the potential viewers to the cinema hall by luring them with the song which forms part of the promo and thereby making gain at the cost of the viewer if the song does not form part of the movie for which consideration is paid by the viewer. The exclusion of the song from the movie will also constitute a deficiency, as defined in Section 2(1)(g) of the C.P. Act, if the song is impliedly promised, but is later omitted while exhibiting the movie.”

4. Before we proceed to delineating and applying the test for

‘deficiency of service’ and ‘unfair trade practice’ under the

Consumer Protection Act, 19863, it is necessary to set out the

context in which a promotional trailer would or would not create a

contractual relationship or any other right or liability between the

producer and the consumer.

5. A promotional trailer is an advertisement for a film. It is a

settled position of law that commercial speech, which includes

3 Hereinafter ‘the Act’.

4 advertisements, is protected through freedom of speech under

Article 19(1)(a) of the Constitution, subject to the reasonable

restrictions in Article 19(2).4 It is also a settled position that

commercial speech that is deceptive, unfair, misleading, and

untruthful is excluded from such constitutional protection and

can be regulated and prohibited by the State.5 Subject to these

restrictions, the producer/ advertiser has the freedom to creatively

and artistically promote his goods and services.

6. Information dissemination is one of the primary purposes of

advertising: an advertisement informs existing and potential

consumers about the presence and availability of certain goods

and services in the market, their features and qualities, and their

uniqueness and comparability with market competitors and

substitutes. However, that is not the only purpose of an

advertisement. An advertisement is not only informational but also

a means of creative and artistic expression. It can allure, entice,

capture the attention, and pique the interest of consumers through

features that may not directly relate to information about the

product or service. Advertisements build brand loyalty and

reputation, and promote an image and ethos of not only the

4 Tata Press Ltd v. Mahanagar Telephone Nigam Limited, (1995) 5 SCC 139, paras 17-18 and

25. 5 ibid, para 17.

5 product being advertised but also the manufacturer/ service

provider. Advertisements contain unique taglines, jingles, visuals,

etc. that are intended to grab the attention of the viewer and

become associated and synonymous with the product or service

itself.

7. A song, dialogue, or a short visual in a promotional trailer

may be seen in the context of the multifarious uses of

advertisements. These 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. The complainant has invoked the jurisdiction of the

consumer court and therefore, it is necessary to analyse the issues

in view of the provisions of the Consumer Protection Act, 1986.

8. The Consumer Protection Act has been enacted to protect the

interests of consumers and for that purpose, to establish

authorities for the settlement of consumer disputes. A ‘consumer’

has been defined in Section 2(1)(d) as a consumer of goods or

services. A consumer of goods is one who buys any goods, and a

consumer of a service is one who hires or avails of any service, for

6 a consideration, except when such goods or services are for a

commercial purpose.6 A consumer can file a ‘complaint’, which is

defined in Section 2(1)(c) of the Act,7 alleging inter alia ‘deficiency

in service’ and ‘unfair trade practice’.

9. Deficiency of Service: In this context, the definition of

‘deficiency’ and ‘service’ are important. The term ‘service has been

defined in Section 2(1)(o) of the Act as follows:

“2. Definitions.—(1) In this Act, unless the context otherwise requires,—

(o) “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not

6 Section 2(1)(d) of the Act defines ‘consumer’ as follows’:

“2. Definitions.—(1) In this Act, unless the context otherwise requires,—

(d) “consumer” means any person who,—

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose”

7 The relevant portion of Section 2(1)(c) of the Act defining ‘complaint’ is as follows’:

“(c) “complaint” means any allegation in writing made by a complainant that—

(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;

***

(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;

*** with a view to obtaining any relief provided by or under this Act;”

7 include the rendering of any service free of charge or under a contract of personal service;”

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.

10. The question for our consideration is 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. The complainant alleges that there is

‘deficiency’ in the service because what was shown in the film was

not as per what was promised. Now, the definition of ‘deficiency’

becomes relevant and it is defined in Section 2(1)(g) of the Act as

follows:

“2. Definitions.—(1) In this Act, unless the context otherwise requires,—

(g) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;”

11. As per the definition, 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

8 either in terms of a law or in terms of a contract.8 To appreciate the

allegation of deficiency, it is necessary to refer to certain portions

of the complaint:

“3. The Complainant states that, her children are big fans of Shahrukh Khan and after watching the promos of the song ‘Jabra Fan’ they decided to go to the movie ‘Fan’ to watch the song ‘Jabra Fan’ on silver screen. She had given 2 option (1) Jungle Book and the second one was ‘Fan’ to both the children namely Nabeel and Flora. Out of two option they preferred the later one because of song ‘Jabra Fan’ to enjoy on celluloid.

4. The Complainant states that, she accordingly convinced her mother-in-law, father-in-law, sister and brother-in-law for the movie by saying that, the film is looking great and the song ‘Jabra Fan’ which is now become jingle, is also there for the entertainment which will feel great on the silver screen. She bought 7 Tickets of first day first show on 15.04.2016, show time 6.10 p.m. Friday of PVR Cinema of the row G-4 to G-10 of Rs.

150/- each which cost her Rs. 1050/. The copy of all the Tickets are dated 15.04.2016 are annexed herewith and marked as Annexure ‘A’.

***

7. The Complainant states that, as the song was not shown in the entire movies the family members and in started teasing her that, why she planned for such a movie which is not having a single song and a song ‘Jabra Fan’ which become anthem is shown in promos of the film. She has gone through mental agony because of Respondents act.”

It is evident from the above 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.

8 Arulmighu Dhandayudhapaniswamy Thirukoil, Palani, Tamil Nadu v. Deptt. of Post Offices,

(2011) 13 SCC 220, para 18.

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12. The fallacy in this argument is in assuming that a

promotional trailer is an offer or a promise. It is under this

misplaced assumption that the complainant has assumed that the

subsequent formation of a contract to watch the movie is not in

compliance with the promise allegedly made through the

promotional trailer. We will explain this in terms of the law of

contracts.

13. The essential element of an ‘offer’ or ‘proposal’ for the

formation of a contract has not been satisfied in the present case.

A person makes an offer or ‘proposal’ when he signifies his

willingness to do something with a view to obtain the assent of

another person.9 When the other person signifies his assent, the

proposal gets accepted and becomes a ‘promise’.10 A proposal is

therefore a prerequisite to a ‘promise’ and a ‘contract’.11

9 Section 2(a) of the Indian Contract Act, 1872 defines ‘proposal’ as follows:

“2. Interpretation-clause.—In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context:—

(a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;”

10 Section 2(b) of the Indian Contract Act, 1872 defines ‘promise’ as follows:

“(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;”

11 Section 2(h) of the Indian Contract Act, 1872 defines ‘contract as follows:

“(h) An agreement enforceable by law is a contract;” ‘Agreement’ has been defined in Section 2(e) as follows:

“(e) Every promise and every set of promises, forming the consideration for each other, is an agreement;”

10

14. 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.12 Since 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 the appellant 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.

15. Unfair Trade Practice: While we have held that no contract is

formed on the basis of the promotional trailer and as such, there

is no deficiency of service, there is a further question for our

consideration, i.e., whether it is an ‘unfair trade practice’ giving

12 It is well-established in contractual jurisprudence that an advertisement generally does not

constitute an offer and is merely an ‘invitation to offer’ or ‘invitation to treat’. See Halsbury’s Laws of England, vol 22 (5th edn, LexisNexis 2012), para 240; Pollock and Mulla, The Indian Contract and Specific Relief Acts, vol I (14th edn, LexisNexis 2013), p. 42.

11 rise to a cause of action. If it is found to be an unfair trade practice,

the Act provides for compensation and other remedies.

16. The term ‘unfair trade practice’ is defined in Section 2(1)(r) of

the Act and the relevant portions are as follows:

“2. Definitions.—(1) In this Act, unless the context otherwise requires,—

(r) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:— (1) the practice of making any statement, whether orally or in writing or by visible representation which,— ***

(ii) falsely represents that the services are of a particular standard, quality or grade;

***

(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;”

17. In various decisions,13 this Court has held that a false

statement that misleads the buyer is essential for an ‘unfair trade

practice’.14 A false representation is one that is false in substance

and in fact, and the test by which the representation must be

judged is to see whether the discrepancy between the represented

fact and the actual fact would be considered material by a

reasonable person.15 Further, “statements of the nature which are

13 Lakhanpal National Ltd v. MRTP Commission, (1989) 3 SCC 251, para 7; KLM Royal Dutch

Airlines v. Director General of Investigation and Registration, (2009) 1 SCC 230, paras 16-20; Ludhiana Improvement Trust, Ludhiana. v. Shakti Cooperative House Building Society Ltd, (2009) 12 SCC 369, paras 18-23.

14 ibid.

15 Lakhanpal National Ltd (supra), para 7.

12 wilfully made knowingly false, or made recklessly without honest

belief in its truth, and made with the purpose to mislead or deceive

will definitely constitute a false or misleading representation. In

addition, a failure to disclose a material fact when a duty to disclose

that fact has arisen will also constitute a false or misleading

representation.”16 Therefore, only substantive and material

discrepancies are covered under ‘unfair trade practice’.

18. The ingredients of ‘unfair trade practice’ under Section

2(1)(r)(1) 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 burden is on the complainant to

produce cogent evidence that proves unfair trade practice17 but

nothing has been brought on record in the present case to show

the same. Therefore, no case for unfair trade practice is made out

in the present case.

19. There is another important distinction that we must bear in

mind, i.e., the judicial precedents on this point do not relate to

16 KLM Royal Dutch Airlines (supra), para 20.

17 Ludhiana Improvement Trust (supra), para 23.

13 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,

and rightly so. Therefore, 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.

20. In view of the above reasons and conclusions, we set aside

the findings of the impugned order that there is deficiency of

service and unfair trade practice, and allow the present appeal.

21. Pending applications, if any, stand disposed of.

………………………………....J. [PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J. [ARAVIND KUMAR]

NEW DELHI;

APRIL 22, 2024.

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