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Star India(P) Ltd. v. Society of Catalysts and Another

Civil Appeal · 2020 INSC 81Decided 23 Jan 2020
Civil Appeal No. 6597 of 2008
Justice Mohan M. Shantanagoudar · Justice R. Subhash Reddy

Background

Star India broadcast the TV show "Kaun Banega Crorepati," during which a contest called "Har Seat Hot Seat," sponsored by Bharti Airtel, invited viewers to answer simple questions via premium-rate SMS (charged at Rs. 2.40, higher than the normal rate) for a chance to win Rs. 2 lakh. A consumer organization, Society of Catalysts, alleged this amounted to an unfair trade practice, claiming viewers were misled into thinking participation was free when the prize money was actually funded through the inflated SMS charges, and the National Consumer Disputes Redressal Commission agreed, awarding Rs. 1 crore in punitive damages against Star India and Airtel.

Decision Breakdown

The Supreme Court set aside the National Commission's finding. It held the Commission had wrongly relied on an uncorroborated newspaper report and speculative inferences rather than actual evidence to conclude that the prize money came from SMS revenue. On examining the companies' own sponsorship agreement, the Court found Airtel paid Star India a fixed sponsorship fee unrelated to SMS revenue, and that Star India was independently liable for the prize money regardless of Airtel's earnings, so no deceptive linkage was established. It further held the higher SMS charge was for a legitimate TRAI-recognized value-added service that had been properly disclosed, so no unfair trade practice was made out. The Court also held that punitive damages could not have been awarded in any event, since none had been specifically claimed in the complaint and no actual consumer loss had been proven.

Lesson Learnt

A consumer forum cannot hold a company liable for deceiving the public based on media reports and conjecture alone: it must examine the actual underlying contracts and evidence; and charging a higher, properly disclosed rate for a genuine value-added service is not by itself an unfair trade practice.

Official source (sci.gov.in)View Judgment (PDF)

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