FALSE AND MISLEADING ADVERTISEMENTS — LEGAL PERSPECTIVES

Author(s): Farooq Ahmad

Source: Journal of the Indian Law Institute , APRIL-JUNE 1996, Vol. 38, No. 2 (APRIL-
JUNE 1996), pp. 168-183
Published by: Indian Law Institute

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 FALSE AND MISLEADING ADVERTISEMENTS -
LEGAL PERSPECTIVES

Farooq Ahmad *

I Introduction

IN ANCIENT times, advertising was not known because marketing was a

entirely unknown, whatever was produced was consumed easily. There
surplus. With advancement in civilisation and social needs extra producti
achieved which was sold to other persons. This marked the begining of marke
Since market place was relatively small, and because most buyers were illi
the original advertiser sought to attract their attention by voice, drum, horn
samples of the merchandise offered. Advancement in civilisation brought thro
mechanical progress, education. The development of communication, trans
tion and postal systems have changed the form but not the nature of advertisem
Attention has how turned to more dignified radios and television commer
Print media has also played an important role for advertising the products. Th
fact has become a world wide phenomenon. In America the advertising expend
swelled from twelve and half billion dollars in 1962 to eighteen billion do
1969. 3 In Canada, although advertising expenditure is smaller, it has increased
128 per cent between 1954 and 1965 and grew relatively as a percentage of the
national product from 1.60% in 1954 to 1.75 per cent in 1965.4 In India TV rev
through ads in 1993 was 430 crores and in 1994 it came to 530 crores. Th
media's ads revenue in 1993 was 200 crores and in 1994 it was 2500 crores .5

TABLE I

Top five spenders on advertising and publicity in India in the year,

X Company Net sales Advt., Publicity

Hindustan lever 1,50,658 4,468
ITC 98,457 2,561
Brooke Bond 63,877 2,109
Godfrey Philips 48,085 1,705
I C I 69,278 1,628

* Lecturer, Deptt. of Law, Uni

1. For general discussion on e
Advertising Management (1994
2. Rudoff Callmann, The Law
(3rd ed. 1971).
3. Newsweek, 18 Aug. 1969, p
4. D.B.S. Advertising Expendi
tions of Advertising 34-8 (196
5. The Times of India , 8 Aug
6. The Economic Times, 25 J

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1996] FALSE AND MISLEADING ADVERTISEMENTS 169

Divergent views have been expressed relating to the

vis-a-vis consumers. Thus two schools of thought deve
advertising creates noxious values to impel the (citizen
consumer'. Advertising has single handedly transform
a passive, lazy, greedy, sensual, woolly minded mater
depraved, whose head has become a TV tube and who
Another view is expressed by a Russian writer Kuruin

Thanks to well organised advertising, the consumer can

the goods needed by him, purchase them with small ex
and select the goods according to his taste... The presum
product needs no advertising is dying : the latter s
clobbered so hard in recent years by over whelming ho
to the contrary that it is really on its last legs.8

Leaving aside the juristic views, a survey conducte

WOP Market research9 shows that consumers were ju
unadvertised products, and a clear majority thought m
misleading or dishonest.

TABLE II

Consumer views of advertising

Agree Agree Dis - Disagree Nei

Strongly agree strongly ther DK
Rather buy an
advertised product 2% 32% 39% 2% 21% 4%
Advertisements
tell the truth 1% 23% 52% 9% 13% 2%

7. Jones, "The Cultural and social impact of adver

L.J. 65 at 69 (1970). Similarly as early as 1 800, William
of falsehood, filth and obscenity. Richar Higgart wr
emotionally abusing its audiences. Pat Gierth of a well
"has its own quotas of visual, verbal and mental pollut
at 159. Duggan opines : Advertising, which superficial
manipulative device which creates a scheme of want
Purchasers are induced not by the presentation of pro
consumer, but by appealing to his suceptibilities and s
in Advertising : In pursuit of the Hidden Persuader
8. See, Marshall Goldman, Product Differentiation
Experience in speaking of Advertising 352 - 53 (1963
on Consumer Problem and Inflation 252-3 {the Prarice
sion says that advertisements provide five services to
variety of existing products : acquaintance with new p
of knowledge to save time and to better arm the cons
acquaintance with claims of producers.
9. Consumerism, Political . Social, Economic Rev. 2

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1 70 JOURNAL OF THE INDIAN LA W INSTITUTE [Vol .38:2

A survey basecd on interviews with nearly 9,500 consum

EEC, including Britian confirms that although believing that a
useful information, they are still highly sceptical of it.10
In India the Consumer's Complaints Council (CCC), a win
ing Standard Council of India (ASCI) received more th
against misleading advertisments since its inception in 198
cent of these were misleading.1 1
Keeping in view the various points the truth of the matter
is no need to question product characteristics available
responding to incentives generated in the market place, there
many areas where key information necessary for consume
choice between rival brands or to decide whether to buy
absent.110
Traders in order to convince the consumers that their product is having added
advantage, unscrupulously resort to an advertising campaign which quite often is
either false or misleadinhg. The guises under which false or misleading advertise-
ments appear are as varied as they are ingenious.12
The term false or misleading advertisement has not been defined either under
the Monopolies and Restrictive Trade Practices Act13 1969 or under Consumer

TABLE III

Opinion on advertising in Europe

Agree Agree on Disagree on Disagree Do not

entirely the whole the whole entirely know
no reply

Advertising provides
consumers with
useful information 10% 40% 29% 17% 4%

Advertising often
makes consumers
buy goods which
they do not really need 38% 39% 14% 6% 3%

Advertising often
misleads consumers
as to the quality
of the products 38% 38% 15% 3% 6%

10. Brussels : Commission of European Communities,

Ross Cranston, Consumers and the Law 4 (1978).
11. The Times of India 21-5-1993 (New Delhi).
11 a. Robber Pitofsky, "Beyond Nader : Consumer Protec
H. L. R. vol. 90, no. 4, p. 664 (1977).
12. Lapointe Machine Tool Co. v. J N Lapointe Co , 1 1
13. Hereinafter referred to as MRTP Act 1969.

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1996] FALSE AND MISLEADING ADVERTISEMENTS 171

Protection Act 1986. 14 The term "false" means

deceive"16, "contrary to fact"17 and the term "misl
"false" means capable of leading into error.18 These
tisements have kept courts elsewhere in the world bu
issues surrounding them, but in India no plausible ju
oped. So in this paper an attempt is made to discuss var
and misleading advertisements. In order to augmen
opinions expressed by the courts in other countries
quoted.

II Constitutional protection to advertisements

Till date only one case19 has come up before the Supreme Court which has
decided the constitutional protection to commercial advertisements. The case
impugned the constitutionality of Drug and Magic Remedies (objectionable
Advertisements) Act 1954 on the ground that unreasonable restrictions have been
imposed on freedom of speech. It was held :

An advertisement is no doubt a form of speech but its true character is

reflected by the object for the promotion of which it is employed. It
assumes the attributes and elements of the activity under Art. 19(a) which
it seeks to aid by bringing it to the notice of public. When it takes the form
of commercial advertisement which has element of trade or commerce it
no longer falls within the concept of freedom of speech, for the object is
not the propagation of ideas, social, political or economic or furtherance
of literature or human thought, but the commendation of the efficacy, and
importance of certain goods.20

The advertisements prohibited by section 3 of Act of 21 of 1954 relate to

commerce or trade and not to propagation of ideas; and advertising of
prohibited drugs or commodities of which the sale is not in the interest
of the general public which cannot be speech within the meaning of
freedom of speech and would not fall within Art. 19(l)(a).21

14. Hereinafter rfeferred to as C P Act 1986. The term false advertisement has been defined under
s. 1 5(a) of the Federal Trade Commission Act, 1914 of U S A in the following words : The term false
advertisement means an advertisement other than labelling which is misleading in material respect; and
in determining whether any advedrtisement is misleading there shall be taken in to account (among
other things) not only representations made or suggested by statement, word, design device sound or
any consideration thereof but also the extent to which the advertisement fails to reveal facts material
in the light of such representations or material with respect to consequences which may result from the
use of the Commodity to which the advertisement relates under the conditions described in said
advertisement, or under such conditions as are customary or usual.
15. State v. Arnett, 338 MO 907, 92 S.W. Ad 897 at 900.
16. Sential Life Insurance Co. v. Blackmer, C.C.A. Colo, 77 F.2d 347 at 352.
17. In re Davis , 349 Pa 651, 37 A.2d 498 at 499.
18. Donáis and Heydon, Trade Practices Law, vol. 2, p. 553 (1978).
19. Hamdard Dawakhana v. Union of India, A.I.R. 1960 S.C., 551.
20. Id. at 563.
2 1 . Ibid.

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1 72 JOURNAL OF THE INDIAN LA W INSTITUTE [Vol .38:2

It is submitted that the judgment of the Supreme Cou

that an information not in the interest of general public can
of guarantee enshrined in article 19 (l)(a) is one thin
information with a motive to promote commercial interest
"speech" so as to enjoy the constitutional guarantee of
different.
The importance of information to the operation of effici
fairly well accepted. For the proper utilisation of money
decision, the consumer must have information. Advert
information and persuasion, providing much of the day
facilitating the flexible allocation of resources necessary to f
Neither profit motivation nor desire to influence priva
necessarily distinguishes the peddler from the preacher
politician.23 However, this should not be interpreted to m
has a right to be wrong but there should be no censure
truthful information needed by the large section of th
consumers, merely on the ground that it has commerc
naturally need the gleaning of information necessary for
from that which is false, deceptive or misleading.
The above cited opinion of the Supreme Court was fo
expressed in Valentine v. Chrestensen 24 of US Supreme Cou
down that the Constitution imposes no such restraint on
purely commercial advertising. It is amazing to note th
already been overruled when the court quoted25 it with
In Cammarano v. United States ,26 it was stated that, Vale
ruling was casual and almost offhand. Also that it had n
Later on the US Supreme Court in a number of cases27
advertisements do enjoy protection of the first Amendment
protection is by no means absolute. This was made clear
in Virginia State Board of Pharmacy v. Virginia Citizen
Inc.}% where it was observed :
We of course do not hold that (Commercial speech) ca
lated in any way. Some forms of commercial speech regul
permissible.29
22. For detailed discussion on the need of consumer information, see,
Efficient Regulation of consumer Information", J. L. and Eco., vol. X
23. "Developments in the law Deceptive Advertising", 80 Harv. L. Re
24. 316 U.S. 52, 62 S.Ct. 920, 86 L. Ed, 1261 (1942).
25. See. supra note 13 at 563.
26. 358 U.S. 498. 513 - 14 (1959).
27. For instance, in Pittsburgh Press Co v. Pittsburgh Common on Human Relations, 37L. Ed. 2nd
669 (1973), an ordinance that forbade newspapers from running help wanted ads in sex designated
columns was upheld. Nevertheless, it was conceded that these ads through classic examples of commer-
cial speech were not entirely without first amendment protection. Similarly in Bigelow v. Virginia, 44
L. Ed. 2d 600 (1975), the court invalidated a state statute which prohibited the advertising of abortion
services and made such advertising misdemeaner.
28. 425 U.S. 748 S.Ct. 1817, 48 L. Ed. 2d 346 (1976).
29. Id. at 1830.

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1 996] FALSE AND MISLEADING ADVERTISEMENTS 1 73

In Central Hudson Gas & Electric Corporation v. Pub

of New York ,30 the test to be applied was summarised i

In Commercial Speech cases, then, a four-part analysis

the outset, we must determine whether the expression is
first Amendment, for Commercial Speech to come within
it at least must concern lawful activity and not be m
ask whether the asserted governmental interest is s
inquiries yield positive answers, we must determine w
tion directly advances the governmental interest asserted
is not more extensive than is necessary to serve that i

Ill Mens rea and advertisements

Since the famous case of Pasley v. Freeman ,31 the liability under comm
for false representation makes essential scienter or knowledge of falseh
common law principle however, is not extended by the Court in the
aiming at protecting consumers, which are silent on the requirement of
In USA as a general rule courts do not inquire into good or bad faith
advertiser or purpose of the advertisement in ruling upon its truth or falsi
point for consideration in such cases is whether under the facts and circum
in connection with the publication of the advertisement, the language
itself, without regard to good or bad faith is calculated to deceive th
public.32 "Calculated" however, does not mean "intended" but "apt" to d
The rationale of this principle is that even innocent misrepresentation
some element of fraud, they (representors) must therefore extricate th
from it by purging their business methods of a capacity to deceive.34
In Australia in order to make it clear that the intention is not necessary
priscription of a trade practice as deceptive or false, the words "or is l
mislead or deceive" were inserted in section 5235 of the Trade Practices
through an amendment in the year, 1977. It is now made clear through the
gloss that intention to deceive is not necessary.36 This is so, where it i

30. 447 U.S. 557, 100 S. Ct. 2343, 65L.Ed. 2d 341 (1980). For the application of these tes
U.S. 60, 103 S.Ct 2875, 77 L.Ed. 2d 469 (1983); Bolger v. Youngs Drug Products Corp
Posadas De Puerto Rico Associates v. Tourism Company of Puerto Rico. 478 U.S. 328, 106
92 L.Ed. 2d 266(1986).
31. (1789) 3 T. R. 51.
32. Ford Motor Co. v. F.T.C. , 120 F 2d 175. See also, F.T.C, v. Real Product Corp., 90
L&C Mayers Co. v. F.T.C. , 97 F 2d 365; Bear Mill Mfg. v. F.T.C. , 98 F 2d 67.
33. Common Wealth v. Slone , 321 Mass 713, 75 N.E. 2d 517 (1947).
34. E.T.C, v. Algome Lumber Co., 291 U.S. 67, 81, 78 L.Ed. 655, 54 S.Ct 315 (1934).
35. S. 52 now reads : "A Corporation shall not in trade or commerce, engage in condu
misleading or deceptive or likely to mislead or deceive..."
36. Puxu Ltd. v ." Parkdale Custom Built furniture Pty Ltd., (1979) 31 A. L. R. 73, 5 T.P.C
Firona Pty Ltd. v. Hersfield Holdings, (1981) 6 T.P.C. 414; Brown v. Jam Factory Pty Ltd
A.L.R. 79; Diary Vale Metro Co-operative Ltd. v. Brownes Dairy Ltd., (1981) 6 T. P.C. 79

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174 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 38 : 2

that, (/) the conduct in question was in fact misleading or dece

likely to mislead or deceive.37
In Canada section 33 (c)38 of Combines Investigation Ac
representation relating to price if that representation is mater
Ontario Supreme Court in R. v. Allied Towers Merchants Lt
nothing in the express language of section 33 C(l) disclosin
mens rea , in the sense that the materially misleading represen
known to be such by the accused, as an essential ingredien
In UK, it is an offence to make knowingly or recklessly a f
the services, accomodation or facilities.40
So also if it is made regardless of whether it is true or f
the person making it had reasons for believing that it might b
clear in MFĪ warehouse Ltd v. Nattrass ,42 that recklessly d
estly. The prosecution need only show that the defendant d
the truth or falsity of his statement even though it cann
deliberately closed his eyes to the truth. This rather diminishe
rea requirement.43 In view of the difficulties surroundin
perhaps, not without significance that it has been omitted fro
similar Hong Kong Trade Descriptions Ordinance 1980. 44
In India Section 36- A of MRTP Act, 1969 and section 2-(
Unfair Trade Practice. Through out this definition words like
ally46 and knowingly47 have been used. These words deno
rea.4* Then should mens rea be imported in the definition of
and in its absence should the trader not be held liable to co
or injury to consumer, etc., under section 12(2?) of the MR
of the CP Act. The answer to this question should be flatly
reasons.

The class of practices legislated in the Act are not cri

but are practices prohibited under penalty. The efficacy of

37. Taperwell, Vermeesch and Harland, Trade Practices and Consum

1414 (1983).
38. S. 33 C(l) runs "Every one who, for the purpose of promoting the
any materially misleading representation to the public by any means w
which such or like articles have been, are, or will be, ordinarily sold, is
on summary conviction..."
39. (1965) 20. R. 628; (1966) 1 C.C.C. 220.
40. S. 14, Trade Description Act 1968.
41. S. 14(2)(b).
42. (1973) 1 All E.R. 762.
43. Brain Harvey and Deborah L. Parry, The Law of Consumer Protec
ed. 1992).
44. Id. at 341.
45. For instance, sub clause (/) states : "falsely represents that the goods are of particular standard,
quality grade, composition, style or model; see also, sub. clauses (//). (iii), (vi).
46. Cl. 2,3, 5.
47. Cl. 4.
48. G. Scidasivan Nair, Mens rea in Consumer Offences, Leela Krishnan (ed.), Legal Control of
Consumer Protection 293.

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1996] FALSE AND MISLEADING ADVERTISEMENTS 175

attritioned by reading mens rea in the liability for compe

who has suffered loss due to the false representation. The
tangible remedy available under the two Acts to deter the
other remedy available, i.e., 'cease and desist order' in
to the future conduct.
The Supreme Court while interpreting the provisions of another consumer
protection legislation, i.e., Prevention of Food Adulteration Act 1955 which
involves criminal prosecution, excluded the application of mens rea in the of-
fences under the Act.49 If mens rea can be excluded in the criminal offences, why
cannot the same be dispensed with in the misrepresentations involving only
penalty?
In Australia under section 53 of the Trade Practices Act 1977 and in Canada,
section 33 C(l) of Combines Investigation Act 1933, criminal prosecution can be
launched against the accused and the liability is strict. These enactments deal with
the same subject matter as the Indian MRTP Act and CP Act and similar phrases
as falsely, intentionally and knowingly have been used but these phrases were
interpreted as not including mens rea.
Sachar Committee had recommended some defences50 under section 36 A , but
these defences did not find the favour of legislature when the chapter on Unfair
Trade Practice was incorporated in the MRTP Act. This shows that Parliament
also in its wisdom thought it inadvisable to make this compensatory remedy
available only in the presence of mens rea.

IV Standard of protection

One of the objectives behind the law aiming to curb unfair Trade Practices is
to protect the general public from false and misleading advertisements. The
question is whose intelligence in the general public should be treated as a standard
in order to determine the character of an advertisement. The choices include : "the
reasonably intelligent consumer", the "average consumer", and the "most naive
hypothetical consumer".
In USA it is foolhardy to claim that advertising literature will only be read by
a certain part of the public. Thus it is a worthless argument that "one putative
audience will not read and the other will not head to an advertisement".51 The

49. See, Sarjood Prasad v. State of VP , A.I.R. 1961 S.C. 631; Pyarali K. Tejani v. M. R. Dange ,
A.I.R. 1974 SC. 228; A. P. Grain and Seed Merchants Association v . Union of India, A.I.R. 1971 S.C.
2346; State v. Udipi Co-operative Milk Society, A.I.R. 1960 Mys 80; Public Prosecutor v. Dhanapal,
(1962) 2 M.L.J. 271.
50. For cl. (1) of s. 36-A defences recommended were :
(1)(tf) that the act or omission giving rise to the offence was a result of a bonafide error; or ( b ) that
he took reasonable precaution and exercised due diligence to prevent the occurrence of such error and
that he took reasonable measures forthwith, after the representation was made, to bring the error to the
attention of the class of persons likely to have been reached by the representation.
(2) The persons whose business it is to publish or arrange for publication of advertisement and did
not know or had reason to suspect that its publication would amount to contravention of any such
provision shall not be liable under the Act. See for further details, Report of the High-Powered Expert
Committee on Companies and MRTP Acts 271 (1978).
51. Belmont Laboratories v. Federal Trade Commission , 103 F. 2d 538 (C.C.A. 3rd, 1939).

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176 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 38 : 2

advertisement must not mislead the general public, which has

vast multitude which includes the ignorant, the unthinking a
in making purchases do not stop to analyse but too of
appearances and general impressions.52 The average purcha
characterised as, (/) not straight thinking;53 (zz) subject
uneducated;55 (zv) grossly uniformed;56 (v) influenced by
stition; and (vi) wishfully believing in miracles, allegedly
in science.58 The purchaser is not duty bound to suspect or di
claims,59 and the vendor knowing this must act accordin
purchaser is not conversant with the technical ary of th
untrained in the law.61 The language of the ordinary pu
unaffected. He is not an expert in grammatical construc
analytical reader63 and therefore, he does not normally subjec
advertisement to careful study.64
In India Sacher Committee had also endorsed the "aver
dard"65 as a test to determine the character of a trade pra
Court In re Lakhanpal National Ltd . v. MRTP Commission
any clear cut principle. The apex court started from a "co
ended in a "reasonable man's intelligence" as a standard.6
The judgment was influenced by the law as stated i
England* 8 relating to representation. Therein it is stated
representation is to be judged is to see whether the discrep
52. Florence Mfg. Co. v. J. C. Dowd and Co., 178 F. 2d. 73 (CCA 2nd, 1
F.T.C. , 149 F. 2d (CCA 2nd, 1945); Gulf Oil Corp. v. F.T.C. , 150F.2d 106
Co. v. F.T.C. , 186 F. 2d 52 (CCA 4th, 1950); American Life and Accident
(CA 8th, 1958); Colgate Palmolive Co. v. F.T.C. , 310 F. 2d 89 (C A 1st. 1
53. Charles of the Ritz Distributors Corp v. F.T.C. , 143 F. 2d 676 (CC
54. Stanley Laboratories v. F.T.C. , 138 F. 2d 388 (CCA 9th. 1943).
55. Aronberg v. F.T.C. , 132 F. 2d 65 (CCA 7th, 1942).
56. Berkey and Gay Furniture Co. v. F.T.C. , 42 F. 2d 427 (CCA 6th, 1
57. Benton Announcement v. F.T.C. , 130 F. 2d 254 (CCA 2nd, 1942).
58. In the matter of Great Britain Spiritualist Church, 29 F.T.C. 782 (
59. Supra note 46 at 680.
60. F.T.C, v. Standard Education Society, 302 U.S. 112, 822 Ed. 141.
61. F.T.C, v. Algoma Lumber Co., 291 U.S. 67 L. Ed 655, 54 S. Ct 31
62. D.D.D. Corp v. F.T.C., 125 F. 2d 679 (CCA 7th, 1942); Sebvone Co
(CCA 7th, 1943).
63. Supra note 55.
64. Chairman Miller of the Federal Trade Commission suggested that s. 5
that a deception be material; (2) preclude a challange to a statement of
grounds; and (3) requires that deceptiveness be tested on the basis of p
consumer standard rather than the most gullible consumer standard sugge
construing section 5. However, other members showed disagreement with
the commissions power to attack deception further limited. See, BWA Ant
(1982).
65. Supra note 50 at 263.
66. A.I.R. 1989 S.C. 1 692. This is the first case which Supreme Court deci
s. 3 6-A of the MRTP Act.
67. Id. at 1695.
68. Quoted with approval at 1695.

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1996] FALSE AND MISLEADING ADVERTISEMENTS 177

as represented and the actual fact is such as would

reasonable representee.69
It is submitted that the law enunciated in that tex
caveat emptor. This time-honoured doctrine has now
caveat venditor. Both, MRTP Act and CP Act relfec
"reasonable representee" standard cannot hold wate
There is no denying the fact that Indian consumers a
ignorant, ill informed and ill advised, they are also
Consumers are not conscious about the surreptious meth
are fully in the know of the plight of the consumers. T
the maximum. So it will not serve any worthwhile p
standard is upheld, leaving the vast majority of credulo
unprotected. However, this "common man's" test can
standard applicable in all situations. The context in
addressed should also be taken into account. For exam
for a specialised equipment is directed at an expert g
standard will be different as against the advertiseme
consuming public or directed to children.

V Puffing in advertisements

The defence of puffing has roots in common law and

of torts and sale of Goods Act. In the Sale of Good
caveat emptor doctrine.71 By virtue of the defence o
allowed to traders in extolling the qualities of the
Purchasers are expected to be capable of exercising
discrimination and they cannot complain merely becaus
goods may fall far below that of the seller. So long
confines himself to general praise of his goods, he is
exaggerated his praise may be.72 The rationale of p
explained in Kirchner v. FTC ,73 in the following wo

True, as has been reiterated many times, the comm

is to prevent deception of the gullible and cre
cautious and knowledgeable... This principle loses i

69. Halsbury's Laws of England , para 1044 (4th ed.).

70. MRTP Commission in Director General v. Iyer and Sons P L
that when a problem arises as to whether a particular act can be con
or not, the key to the solution would be to examine whether it
misleading and further what is the effect of such representation o
71 . An American commentator opines : the term which grew up i
the view that the buyer should expect a considerable amount of act
of their goods. See, "Developments in the Law - Deceptive Ad
(1967).
72. Bishop, Advertising and the Law Al (2nd ed.). It is also said abo
to lie his head off, so long as he says nothing specific, on the theo
influenced by such talk". See, Prosser, Hanbook of the Law of To
73. 63 F.T.C. 1282 (1963).

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178 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 38 : 2

if it is applied uncritically or pushed to an absurd extreme.

cannot be charged with liability with respect of every c
conception, however outlandish, to which his Depresent
subject among the foolish or feeble - minded... A represe
become "false and deceptive" merely because it will be
misunderstood by an insignificant and unrepresentative
class of persons to whom the representation is addresse

The defence of puffing which was the concomitant resu

was surprisingly received by the courts in various countrie
on the issues involving consumer. In India MRTP commiss
puffing as defence. In Re Weston Electronics Ltd.76
The underlying argument in the defence of puffing is that
shall believe such advertisement as true. But this defence cannot reconcile with
the "common man's" test as enunciated in determining the character of an
advertisement. When we say law is meant to protect those who believe in
miracles,77 inexperienced and credulous,78 puffing defence cannot find the niche
in the citadal of consumer protection laws. After all an advertiser will not resort
to puffing unless he has a faith that gullible consumers will be allured by his
campaign.79 It is obvious that the fatuous may be deceived by claims that the more
intelligent or experienced purchaser will readily recognise as mere puffing.80 The
remarks of Handler on this point deserve mention : the maxim that a reasonable
latitude must be conceded to the salesman and advertiser in boasting his own
product, presupposes a defeatist attitude and an analytically fallacious approach.81
Thus it is believed that modern courts will be less willing than some of the older
cases suggest to encourage eulogistic statements where there is a real risk of

74. Id. at 1290.

75. In Germany, a claim of the florist that he has the most beautiful flowers in the world was
considered as mere puff. 3 Reimber 385. In England, a land partly useless was discribed as very fertile
and improvable was held as puffin Dimmockv. Hallett , (1886) L.R. 2 Ch. App. 21. In America it ha
been held as merely puffing to describe a tooth paste as being one which will beautify the smile or to
claim that a particular motor oil was the perfect lubrication which would enable a motor car to travel
an amazing distance. See, Bristol Meyers. F.T.C. 1950 - 51 Trade cases 62, 722 (1950); Kidder Oil Co.
v. F.T.C. , 117 F. 2d 892 (1941).
76. In Re Western Electronics Ltd., UTP Enqiry No. 20/1985, order dated : 24-6-1983. See also, DG
v. Cement Corporation of Gujarat , (1992) 2 Comp LJ 331; D.G. v. Milkfood Ltd. Patiala , (1994) 2
Comp. L.J. 373.
77. Supra note 58.
78. Supra note 52.
79. An American author, Preston, argues that advertisers would not puff unless they thought that
some consumers would believe their claims. As a result Preston would prefer to make the puffing
advertiser fully liable for his claim; see Preston, The Great American Blowups' puffery in advertising
And Se Hing (1975); See also, Kinter, A Primer on the Law of Deceptive Practices 97, 192-93 (2nd ed
1978).
80. Supra note 2 at 67 1 .
81. Handler, "False Advertising under the Wheelerlea Act", 6 Law and Contemp. Prob. 91 at 99
(1939).

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1996] FALSE AND MISLEADING ADVERTISEMENTS 179

deception. 82It is pertinent to mention here that British

Act 1974 under section 2(3) makes commercial puffery
one is reminded of the opinion expressed by an Australian
the Consumer Protection Act 1969 (N.S.W) :

It is for the Act to control advertisers and not for what are claimed to be
present advertising standards to mould the law.84

VI Television commercials

Television commercials have given a new dimension to the false and

ing advertisements. Some times is is not possible to advertise a product
natural colour or with the composed substances for example true colours of
organs juice and iced tea are lost in transmission on a television sc
artificial substance must be substituted to obtain a natural look. The hot television
lights require the use for example, of mashed potatoes for ice cream, and shaving
cream to get the kind of head that is normal on a glass of beer.85 This problem was
authoritatively resolved by US Supreme Court in F.T.C, v. Colgate-Palmolive
Co.%5a In this case the advertiser sought to demonstrate that its shaving cream had
super-moisturising properties which permitted the shaving of sand paper, and thus
it would be effective in shaving the toughest beards. Since on television screen
sandpaper appears as plain colourd paper, the cream was applied instead to
plexiglass covered with sand, which was then swept clean by a razor. The record
showed that sand paper could not be shaved unless it had been soaked for some
eighty minutes. The following principles were laid down :

(1) If it becomes impossible or impractical to show simulated demon-

stration on television in a truthful manner, this indicates that
television is not a medium that lends itself to this type of commer-
cial, not that the commercial must survive at all costs;

(2) If the inherent limitation of a method do not permit its use in the
way a seller desires, the seller cannot by material representation
compensate for those limitations;

(3) Where in order to substantiate an asserted claim, test, experiment

or demonstration is made which is false. In otherwords test,
experiment or demonstration is not what is claimed in a commer-
cial, the commercial will be misleading;
(4) Where the Prop is not being used for additional proof of the
product claim, e.g. mashed potato in place of ice-cream, it will not

82. Supra note 37 at 616.

83. See, s. 2(3).
84. CRWPty Ltd. v. Sweden. 1972 A.R. (N.S.W.) 17 at 36-7.
85. Jonathan M. Purver, et al., Business Law Text and Cases 101 1 (1983).
85a. 380 U.S. 374, 85 S. Ct., 1035, 13L. Ed. 2nd. 904.

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180 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 38 : 2

be misleading but where the purpose is to give the v

tive proof of the claims made, e.g. in Rapid Shaving
commercial will be misleading.86

VII Corrective advertisements

False or misleading advertisement once viewed has a life of its own.

false or deceptive advertisement has been successful in creating an imag
the masses there will be residual effects of the unlawful advertising wh
continue to influence the consumer's decision whether to purchase it ev
the unlawful advertising itself has been discontinued.87 Studies have in
that there is normally a delayed response by consumers to advertisements.88
delayed consumer response to or residual effect of an advertisement is a rec
phenomenon in advertising and has been analogised to a capital asset w
predictable rate of depreciation.89 The cease and desist order rightly ca
order "to go and sin nor more"90 is often ineffectual, as it does not h
dissipate the false impression previously created by the false or misle
advertisement.
The premise of corrective advertising is that it can prevent this continuing
deception by eliminating the false impression that may result from the lingering
effect of a false or misleading advertisement. It is aimed at correcting this false
impression in a manner calculated to gain exposure equal to that of the initial
deception.91
Federal Trade Commission Act of USA does not expressly provide any power
to the Federal Trade Commission to order for corrective advertisement, like
MRTP Act(previous to Amendment) and CP Act.Initial move of the Federal Trade
Commission to order corrective advertisement was disputed by the court of
appeals for the District of Columbia in Alberty v. FTC.92 The first final order93
requiring corrective advertising was passed by Federal Trade Commission in ITT
Continental Baking Co 94 when it went beyond the traditional cease and desist
order.

86. For a comment on the judgment see. Robert Pitsofsky, "Beyond Nader : Consumer Protection
and the Regulation of Advertising", Harv. L.Rev. vol. 90, p. 687 (1977).
87. Gerald J. Thain. "Consumer Protection : Advertising - The F.T.C. Response", The Business
Lawyer 894 (April 1972).
88. International Encyclopedia of the Social Sciences Advertising 107-108 (1968). See also, Charlton
and Fawcett, " The FTC and False advertising" , 17 UK. L. Rev. 599 at 600 (1969).
89. Id. at 108.
90. Supra note 86 at 692.
91. "Corrective Advertising - The new Response to Consumer Deception", 72 Colum, L. Rev. 415
at 41 6 (1972). However, in England the Trade Description Act, 1968 Review Committee recommended
against corrective advertising. For criticism of this view see, Ross Cranston, Consumers and the Law
60 (1978). In Australia order for corrective Advertisements is provided under section 80 (A) of the
Trade Practices Act 1974.
92. 182 F. 2d 36 (D S Cir), 340 U.S. 818 (1950).
93. Prior to this case, the Federal Commission had asserted several times that it has the authority t
impose corrective advertising. See, for instance, Compbell Soup Co., 11 F.T.C. 664, 668 (1970).
94. 36 FED, REG. 18, 522 (1971).

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1996] FALSE AND MISLEADING ADVERTISEMENTS 181

It is submitted that this judgment has militated to a

effect of the corrective advertisement by providing opt
advertise his product for one year. Since the objective o
is to dissipate the lingerling effect of false or misleadin
residual effect can be removed by simply stopping the
the product for one year?95
The circumstances in which corrective advertisem
been outlined in Warner - Lambert Co. v. Federal Tra
held:

If a deceptive advertisement has played a substantial role in creating or

reinforcing in the public mind a false and material belief which lives on
after the false advertising ceases, there is clear and continuing injury to
competition and to the consuming public as consumers continue to make
purchasing decisions based on the false belief. Since this injury cannot be
averted by merely requiring respondent to cease dis-seminating the ad-
vertisement, we may approprately order respondent to take affirmative
action designed to terminate the otherwise continuing ill effects of the
advertisement.96"

The case of Warner - Lambert, it is submitted, has laid down a high standard
for invoking the corrective advertisement remedy. This case was unusual. It had
disseminated advertisement for fifty years and broadcast to the date of suit. The
manufacturer had claimed that the mouthwash was effective in amerliorating,
preventing and curing cold and sore throats. There was pursuasive evidence that
the claim was believed by purchasers at least upto the time of suit. So record did
support each of those findings, it is very difficult to apply this standard in hard
cases. Even in America it has been argued that if these issues are made relevant
in the corrective advertising context and the burden of proof for each is placed on
the commission staff, the remedy would be imposed rarely.97
Robert Pitofsky has proposed that in order to invoke the remedy of corrective
advertisement the Commission should prove :

(1) the existence of a material fraud or deception with respect to major

advertising theme;
(2) that this fraud created in a substantial number of consumers a
misconception about the product consistent with the fraud; and
(3) that this misconception significantly influenced the purchasing
decisions of these consumers at the time suit was brought.98

95. The FTC has already recognised that in certain cases the option of refraining from advertising
for a year should not be available, New York Times, 3 Dec, 1971 p. 27. Cf. supra note 91 at 431.
96. 1977, 562 F. 2d. 749.
96 a. Ibid.
97. Supra note 78 at 697.
98. Id. at 698.

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1 82 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 38:2

Even Pitofsky's proposition will not at present suit In

Clauses (2) and (3) will require objective analysis of con
through consumer surveys which at present in India is a
MRTP commission previous to the amendment in the
only one order of corrective advertisement that too at the
himself in Parle Beverages Pvt. Ltd." and in Monica Elec
advertisement about the foreign collaboration was publis
corrigendum in the same newspaper was regarded as an
away the prejudicial effect of advertisement.
Through MRTP (Amendment) Act 1991 clause (c) was
( d) which runs as follows :

Any information statement or advertisement relating to

Practice shall be disclosed, issued or published as the case
manner as may be specified in the order.

Thus whether a corrective advertisement can be orde

commission's own assessment of the situation. If situation demands, commission
has now express powers to issue corrective advertisement which is independent
of the consumer perceptions, and is in accord with the overall approach adopted
by the MRTP commission.
Similar amendment was not made in the CP Act, for the reasons, that under
the CP Act there is no provision to pass cease and desist order against the false
or misleading advertisement and different remedies are available under CP Act
against such false or misleading advertisement.101
In the passing it may be mentioned here that since it was suggested above that
constitutional protection should be extended to the commercial advertisements,
corrective advertisements will not infringe this constitutional protection. As the
commission will not regulate truthful speech enjoying the constitution protection
but will require certain statements which if not present in current and future
advertisements, would render those advertisements themselves part of a continu-
ing deception of the public.

VIII Conclusion

Advertisements without gainsay serve as a vehicle for consumer inform

In order to reach a right purchasing decision, save time and money in glea
article, for knowing before hand the usefulness of a product, advertiseme
an important and effective role. These advertisements although bole
commercial intersts of an advertiser, should be regulated only when warra
the public good. Mere commercial motive when freedom of trade and
is itself a fundamental right, should not strip off an advertisement from
the status of "speech" and thus a fundamental right. However, this con

99. UTP Enquiry No. 297/1987 order dated 15-09-1989.

100. UTPENo. 180 Cf. 1987 order dated 25-03-1985.
101. See. s. 14 of CP Act.

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1 996] FALSE AND MISLEADING ADVERTISEMENTS 1 83

protection cannot be extended to false or misleading adve

larger interest of public that such practices should be
no closing of truthful-information but closing can be per
tion is the likely result of an advertisement. On the
advertisements also will not infringe the constitutional p
to commercial ads.
While interpreting an advertisement, traders plea of absence of mens r
should not deprive the consumer of compensation. This fact is not only universaly
recognised but well suited to Indian conditions.
Keeping in view the vulnerablity of the Indian consumers to false a
misleading advertisements, the low intellegence test propounded in the Ameri
cases should also hold field in India, but the puffing defence which can
reconcile with the low intellegence test should be discarded.
Express provision on corrective advertisement has given teeth to the la
aiming to curb false and misleading advertisements but mere enactment of l
will not help unless judicious use of it is made. It is, therefore, hoped that MR
commission will make use of this provision wherever warranted by the circu
stances. It is suggested that similar provision dealing with the corrective adv
tisement should be incorporated in the CP Act. And provisions relating to ce
and desist order and temporary injunction should be provided in the C.P. Act
order to deal effectively with the false or misleading advertisements.

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