MAHARASHTRA NATIONAL LAW UNIVERSITY,

AURANGABAD.

COLGATE PALMOLIVE LIMITED V. HINDUSTAN

LEVER PRIVATE LIMITED (APPELLANT)

SUBMITTED BY: ARPIT GOYAL

ROLL NO. 10

B.A.LL. B (Hons.) V Semester

MAHRASHTRA NATIONAL LAW UNIVERSITY,

AURANGABAD

UNDER THE GIUDANCE OF

Mrs. NEHA TRIPATHI

ASSISTANT PROFESSOR OF LAW

ABSTRACT

The manuscript deals with the extensive study of the case law of Colgate Palmolive Limited V.
Hindustan Lever Private Limited.

The writer has tried to explain the concept of Delegate Legislation, it’s definition, understanding
and the control over it under which head this case law can be studied. The writer has tried to
cover the facts which lead to the rise of the case, give an insight on the case and presented the
argument for the same.

The writer has his take on the same and tried to cover the recent development in the law after the
judgement had been passed.

- Arpit Goyal

(17BALLB10)

TABLE OF CONTENTS

HEAD PAGE NUMBER

PART-I

INTRODUCTION

PART- II

FACTS

ISSUES RAISED

ARGUMENTS ADVANCED

JUDGEMENT

PART-III

ANALYSIS

DEVELOPMENT OF THE LAW

 PART- I

INTRODUCTION

This manuscript will be dealing with the case law of “Colgate Palmolive India Ltd. V.
Hindustan Lever Ltd.” The case so concerned deals with the concept of delegated legislation.

Delegation as defined by Black’s Law Dictionary means the act of entrusting another with
authority or empowering another to act as an agent or representative.

Subordinate Legislation means “Legislation that derives from any authority other than sovereign
power in a state and that depends for its continued existence and validity on some superior or
supreme authority.”

Salmond defined subordinate legislation as that “legislation which proceeds from any authority
other than the sovereign power, and is therefore dependent for its continued existence and
validity on some superior or supreme authority[1]”.

Delegated Legislation is at times referred to as “Ancillary,” “Subordinate,” “Administrative

Legislation” or “Quasi- Legislation.” Delegated legislation is a technique which relives pressure
on legislature’s time so that it can concentrate on principles and formulation of policies.
With great power comes great responsibility so even delegated legislation has its control. There
are three ways of control over delegated legislation, namely:

1. Parliamentary Control

2. Procedural Control

3. Judicial Control

PART- II

FACTS

The facts of the case of “Colgate Palmolive India Ltd. V. Hindustan Lever Ltd.” are as follows:

The two appeals are directed against the order of the Monopolies and Trade Practices
Commission, pertaining to Colgate toothpaste, a product of Colgate Palmolive India Ltd. On a
complaint from Hindustan Lever Ltd, the Commission passed an order of interim injunction
regarding the display of the ring around the family known as ‘suraksha chakra’ in Colgate’s
advertisements. Colgate appealed against this order. Hindustan Lever appealed against the
order of refusal on the part of the Commission to put a total ban on the products of Colgate.
Colgate started its advertisement campaign for Colgate Dental Cream using the phrases stops
bad breath and fights tooth decay from 1960. The use of the words ‘suraksha chakra’
commenced, however from the year 1985. In 1997, Hindustan Lever complained to the
Advertising Standards Council of India (ASCI) against the Colgate Dental Cream advertisement.
The ASCI scrutinised the advertisement and came to a finding that the same could not in any
way be termed deceptive. However, there was a provision for review which Hindustan Lever did
not pursue. Subsequently, Colgate filed a complaint before the Commission against Hindustan
Levers advertisement which stated that the Hindustan Lever product ‘New Pepsodent’ had 102
per cent more germ-fighting capability as compared to a leading toothpaste. According to
Colgate this leading toothpaste referred to Colgate Dental Cream. It was only thereafter, that
Hindustan Lever filed a complaint before the MRTP Commission against Colgate’s
advertisement in respect of Colgate Dental Cream. The allegations in the complaint filed by
Hindustan Lever were confined to Colgate’s claim in respect of germ fighting, bad breath and
tooth decay. The principal grievance of Hindustan Lever before the Commission was that the
claim of Colgate that its toothpaste was a germ fighter having the ability to stop bad breath and
fight tooth decay were highly misleading as they mislead both the consumers and the trade.

ISSUES RAISED

I. Whether the Monopolies and Restrictive Trade Practices Commission under

Monopolies and Restrictive Trade Practices Act was right in granting
injunction?
 ARGUMENTS ADVANCED

I. Whether the Monopolies and Restrictive Trade Practices Commission

under Monopolies and Restrictive Trade Practices Act was right in
granting injunction?

The council from the side of the Appellants here by put forth before the Hon’ble Supreme Court
of India that Section 12A of the Monopolies and Restrictive Trade Practice Act, 1969 states that:

“Where, during an inquiry before the Commission, it is proved, whether by the complainant,
Director General, any trader or class of traders or any other person, by affidavit or otherwise,
that any undertaking or any person is carrying on, or is about to carry on, any monopolistic or
any restrictive, or unfair, trade practice and such monopolistic or restrictive, or unfair trade
practice is likely to affect prejudicially the public interest or the interest of any trader, class of
traders or traders generally or of any consumer or consumers generally, the Commission may,
for the purposes of staying or preventing the undertaking or, as the case may be, such person
from causing such prejudicial effect, by order, grant a temporary injunction restraining such
undertaking or person from carrying on any monopolistic or restrictive, or unfair, trade practice
until the conclusion of such inquiry or until further orders.”

This shows that the Monopolies and Restrictive Trade Commission can grant injunction only
after an enquiry, there must be proof of unfair or restrictive or monopolistic trade practices by
the person and the unfair or restrictive or monopolistic practises should affect the public interest.

Using of ‘suraksha chakra’ in the advertisement is only an indication to show that their product
will protect their consumer teeth from tooth decay and will fight germs removing bad breath.
Using of ‘suraksha chakra’ would not fall under the definition of unfair trade practices as defined
in Section 36A of the act and neither is the public being affected at large.

Further, it should be observed by the Hon’ble court that there was delay on the part of the
Respondent to file the complaint as ‘suraksha chakra’ has been used by the appellants since
1985 but the Respondent only filed the complaint in 1997 after the Appellants had complained.
This clearly shows the malice on the part of the Respondents.

Since, there is no unfair or monopolistic or restrictive trade practices and using ‘suraksha chakra’
does not affect the public interest at large and its usage only depicts that by using the product the
consumer’s teeth would be protected from tooth decay and germs and bad breath, hereby
concludes that the Commission was indeed wrong to grant injunction.
 JUDGEMENT

The court held, allowing the appeal of Colgate and dismissing the appeal of Hindustan Lever.
The interlocutory remedy by way of a grant of an order of injunction is intended to preserve and
maintain status quo in the rights of the parties and to protect the plaintiff, being the initiator, of
the action against incursion of his rights and for which there is no appropriate compensation
being quantified in terms of damages. The basic principle of the grant of an order of injunction is
to assess the right and need of the plaintiff as against that of the defendant and it is a duty
incumbent on the law courts to determine as to where the balance lies. The object of
interlocutory injunction is to protect the plaintiff against the injury by reason of violation of his
right. The relief by way of interlocutory injunction is granted to mitigate the risk of injustice to
the plaintiff during the period before the uncertainty can be resolved. In this case, however,
specific features available in the complaint have not in any way been disturbed by reason of lack
of evidence but an incidental issue wholly dependent upon those three specific features has been
taken up for consideration and an order of injunction granted. This is where the Commission is in
error. The case with which a party comes to court ought to be considered in all fairness, in its
proper perspective but unfortunately there is a total lack of the same in the instant matter.
Admittedly the suraksha chakra featured continuously in Colgate’s advertisement since the year
1985 without any demur or protest from any quarter and not even from the complainant. The
complaint was filed as late as in 1997 immediately after the appellants complaint against the
advertisement in respect of New Pepsodent. Hindustan Lever filed the complaint with an
application for an interim prayer within ten days of the application by Colgate before the
Commission only as a back lash to the appellants complaint and the motive therein cannot be
ruled out. The observation of the Commission runs counter to the order of injunction granted by
the Commission. The averments unmistakably therefore, depict that it is on the basis of
laboratory tests that Hindustan Lever found that the representation was not correct. On a perusal
of the complaint suraksha chakra cannot be said to be within ambit of the foaming action and has
been referred therein only to complete the advertisement portion as an incidental issue and
obviously the Commission was persuaded more by the FTCs report rather than consideration of
the allegations in the complaint itself. There is no claim that the toothpaste would act as a shield
against any hard substance which may tantamount to misleading the common unwary purchaser.
This suraksha chakra refers two basic elements, namely, tooth decay and germ fighting coupled
with the stopping of bad breath. No evidence has been led as to whether there would be
avoidance of tooth decay or germ fighting with the use of the toothpaste and without rendering
evidence on these two basic elements in our view, the question of there being a prima facie case
for establishment for the grant of interlocutory injunction cannot arise. The Commission was
obsessed with the FTCs finding in regard to the invisible shield without however any factual
support in the matter under consideration. The Commission misapplied the observations of FTC
since there is no factual similarity between the two. A prima facie case or at least an arguable
case does not and cannot possibly suggest an order of injunction without any factual support.
There ought to be some such support on facts without which there would not be any justification
for grant of an interim order. Public wrong, if any, needs to be assessed and proved, without
which the question of an order of injunction would not arise. While it is true that the relief
prayed for is statutory in nature, that does not allow the Commission to pass orders de hors the
basic principles of law. There is no evidence of a single consumer being misled and not a
whisper as to what constitutes an unfair trade practice pertaining to the suraksha chakra. The
Commission also thought it fit not to record any reason or justification for the grant of an interim
order of injunction in spite of finding as above and before the matter is investigated and
complaint is finally heard. This apart, the factum of non-availability of any explanation for the
delay of more than 13 years, has also not been delved into by the Commission at all. The
question of there being any order of injunction at this stage of the proceeding on the face of the
finding as passed by the Commission itself does not and cannot arise.

PART- III

ANALYSIS

In the case of Colgate Palmolive Ltd. V. Hindustan Lever, the Monopolistic and Restrictive
Trade Practices Commission was vested with the power to grant temporary injunction if the
Commission is hereby satisfied after a proper enquiry conducted by them that the person so
charged has been involved in Monopolistic or Restrictive or Unfair trade practises which tries to
bring down the other competitor or affects the public at large. In such cases the Commission is to
grant temporary injunction.

This is an example of Delegated Legislation as here the authority is being delegated to the
Commission to grant injunction. It is clearly valid in the eyes of law as the commission gets this
power from the parent act and in order for delegated legislation to work and to be valid then it is
a requirement that the power of delegation must come from an authority and here the power of
delegation comes to the Monopolistic and Restrictive Trade Practices Commission from Section
12A of the Monopolistic and Restrictive Trade Practices Act, 1969 which states that the
commission has the power to grant temporary injunction.

In this case the Monopolistic and Trade Practices Commission had the power to grant temporary
injunction but it’s decision was turned down by the Hon’ble Supreme Court because ‘suraksha
chakra’ used by Colgate Palmolive in the advertisement was just an indication that their product
would help the consumers prevent their teeth from tooth decay and germs and bad breath. Such
usage of advertisement does not include any Monopolistic or Restrictive or Unfair trade practices
nor does it affect the interest of the public as was seen in the case of Dabur India Ltd. V.
Colorktek Meghalaya Pvt. Ltd[2]. wherein the court stated that if and only if the advertisement
extends the grey area and becomes misleading, unfair or deceptive then, such an advertisement
would not have any protection of the law . So, the Monopolistic and Restrictive Trade Practices
Commission was here wrong in granting injunction.

In the case of Hindustan Unilever Ltd. V. Gujarat Co-operative Milk Marketing Federation Ltd.
[3] wherein the defendant was involved in unfair trade practices and thereby confusing
consumers and disseminating incorrect information. Therein, the plaintiff was granted interim
relief against the defendant.

Had there been a situation wherein Colgate Palmolive was involved in Monopolistic or
Restrictive or Unfair trade practices and then the Commission after an enquiry granted an
injunction, it would have been perfectly valid as the Commission has the power as mentioned
under Section 12A of the Monopolistic and Restrictive Trade Practices Act. The authority has
been delegated to the Commission and the Commission thereby gets the power from the parent
act.
 DEVELOPMENT OF THE LAW

Delegated Legislation in India has been a very debatable issue. There have been many
contradicting views of the scholar in case of delegation of power to legislate. For instance,
Cooley expressed a critical view of the power to delegate. He said that the constitution confers
power on the legislature to make laws and the same could not be delegated to any other body or
authority. However, the fact still remains the same that this is a general practice followed in all
modern democratic countries.

There are various reasons for the growth of delegated legislation. These are:

i. Pressure Upon Parliamentary Time

Due to the expanding horizons of state activity, the burden on legislation is so great that it
is not possible for them to devote sufficient time to discuss all the matters in detail. Legislature,
therefore, formulates the general policy and empowers the executive to fill in ‘the detail’ by
issuing necessary rules, regulations, by-laws, etc.

ii. Technicality
The subject-matter of modern legislation is very often of a technical nature. Legislature
itself being a common man cannot be expected to discuss and legislate on the same which results
in the conferring of powers to the experts to deal with the technical problems. Example gas,
atomic energy, drugs, electricity.

iii. Flexibility

Legislative process is slow and technical. At the time of passing any legislative
enactment, it is impossible to foresee all the contingencies which may arise in future. A
legislative amendment is a slow and a cumbersome process, but by the device of delegated
legislation, the executive can meet the situation expeditiously, eg. Bank-rate, police regulations,
export and import, Foreign exchange etc.

iv. Experiment

The method of delegated legislation permits the rapid utilisation of experience and
implementation of necessary changes in application of the provisions in the light of such
experience. In road traffic matters, an experiment may be conducted and in the light of its
application necessary changes can be made.
 v. Emergency

In times of emergency, quick action is required to be taken. The legislative process is not
equipped to provide for urgent solution to meet the emergency situation. Delegated legislation is
the only convenient remedy.

[1] M.P. Jain & S.N. Jain: Principles of Administrative Law, 6 th Edition, 2007, Volume II

[2] 2010 (42) PTC 88 (Del)

[3] 2017(71)PTC396(Bom)