Press Limited Vs. Mahanagar Telephone-Nigam Limited & Ors  INSC 358 (3 August 1995)
Singh (J) Kuldip Singh (J) Hansaria B.L. (J) Majmudar S.B. (J) Kuldip Singh,J.
1995 AIR 2438 1995 SCC (5) 139 JT 1995 (5) 647 1995 SCALE (4)595
appeal has arisen from a civil suit instituted before the Bombay by the Mahanagar
Telephone Nigam Limited (the Nigam) and the Union of India for a declaration
that they alone have the right to print/publish the list of telephone subscribers
and that the same cannot be printed or published by any other person without
express permission of the Nigam/Union of India. A further declaration was
sought that the TATA Press Limited (TATAs) have no right whatsoever to print,
publish and circulate the compilation called "TATA Press Yellow
Pages" (TATA- pages). A permanent injunction restraining the TATAs, their
agents and servants from printing and/or publishing and/or circulating the
"TATA - Pages" being violative of the Indian Telegraph Act, 1885 (the
Act) and the Indian Telegraph Rules, 1951 (the rules) - was also sought from
the Court. The City
Civil Court, Bombay by its judgment dated August 7, 1993 dismissed the suit.
appeal filed by the Nigam and the Union of India was heard by a learned single
judge of the Bombay High Court and the learned judge by the judgment dated April 27, 1994 allowed the appeal, set aside the
judgment of the trial court and decreed the suit. Letters Patent Appeal filed
by the TATAs was dismissed by a Division Bench of the Bombay High Court by the
impugned judgment dated September
appeal, by way of special leave, is against the judgment of the Division Bench
of the High Court upholding the learned single judge.
is a Government company substantially controlled by the Government of India.
The Government holds 80% of the total shares of the company. The Nigam is a
licensee under the Act and as such is required to establish, maintain and
control the telecommunication services within the territorial jurisdiction of
the Union Territory of Delhi and the areas covered by the Municipal
Corporations of Bombay, New Bombay and the Thane. Till 1987 the Nigam/Union of India used to publish and distribute, on
its own, the telephone directory consisting of white pages only. However, of
late, the Nigam started entrusting the publication of its telephone-directory
to outside contractors. From 1987 onwards, the Nigam has permitted such
contractors to raise revenue for themselves. by procuring advertisements and
publishing the same as "Yellow Pages" appended to the telephone
directory. In other words, the telephone directory published and distributed by
the Nigam consists of the white pages which contain alphabetical list of
telephone subscribers and also "Yellow Pages" consisting of
advertisements procured by the contractor to meet the expenses incurred by the
contractor in printing, publishing and distributing the directory.
are engaged in the publication of the TATA - pages which is a buyers-guide
comprising of a compilation of advertisements given by businessmen, traders and
professionals duly classified according to their trade, business or profession.
It is not disputed that the said compilation includes unpaid advertisements in
which the category/type of business, trade or profession of the advertiser is
listed. It is stated by the appellant that the advertisements are published in
the TATA - pages on the application of the party concerned. The only criterion
for inclusion of advertisements in the said compilation is that the advertiser
must be engaged in a trade, profession or business. Three editions of TATA -
Pages have already been published in Bombay in 1992, 1993 and 1994. According to the appellant such Yellow
Pages/buyers guides have been published in India since 1984 and follow generic international pattern which was
introduced in the USA as far back as 1880. Since 1984 a
large number of parties - details have been placed on the record - are engaged
in the publication of Yellow Pages/ trade directories/ buyers guides in India.
452, 453, 457, 458 & 459 of the Rules which are relevant, are reproduced
hereunder:- "452. Supply of telephone directories. A copy of the telephonedirectory
shall be supplied free of charge for each telephone, extension or party line,
rented by the subscriber from an exchange system or private branch exchange or
a private branch exchange or a private exchange. A copy shall also be supplied
free of charge for each extension (including extension) from an extension
working from a public call office. Additional copies supplied shall be charged
for at such rate as may be fixed by the Telegraph Authority from time to time.
Entries in telephone directories. - For each direct telephone line rented (i.e.
for main connections, direct extensions and PBX junction lines) ordinarily only
one entry not exceeding one line will be allowed free of charge in the
telephone directory to every subscriber. Such entry shall contain the telephone
number, the initials, the surname and the address of the subscriber or user. No
word which can intelligibly be abbreviated shall be allowed to be printed in
lines may be allowed by the Telegraph Authority at its discretion.
General. - Any telephone directory provided by the Department shall remain its
exclusive property and shall be delivered to it on demand. The department
reserves the right to amend or delete any entries in the telephone directory at
any time and undertakes no responsibility for any omission; and it shall not
entertain any claim or compensation on account of any entry in or omission from
the telephone directory or of any error therein.
Publishing of telephone directory.
with the permission of the Telegraph Authority no person shall publish any list
of telephone subscribers.
Advertisements. The Telegraph Authority may publish or allow the publication of
advertisements in the body of the telephone directory." As stated above,
the learned trial judge dismissed the suit filed by the Nigam and the Union of
India. The learned judge compared the advertisements published in the TATA-
Pages with the Telephone directory and found as a fact that the `TATA-Pages'
was a compilation of advertisements given by the businessmen, traders and
professionals and as such did not constitute a list of telephone subscribers as
contemplated in Rule 458 of the Rules. The learned judge based his conclusions
on the reasoning that the source for the advertisements published in the TATA-Pages
was different from the telephone directory, some advertisements in the TATA-Pages
did not list telephone numbers, the criterion for listing in the telephone
directory and for publication in the TATA-Pages was different for telephone
directory the person/party must be a telephone subscriber whereas for the TATA-Pages
the advertiser must be a trader, professional or businessmen - and the
telephone directory was restricted to the area of service by the Nigam wheras
the advertisements in the TATA-Pages relate to parties outside the local
against the Trial Court judgment was heard by a learned Single Judge of the
High Court. The Learned Judge agreed with the Trial Court that the white pages
of the Telephone Directory constituted the `List of Telephone Subscribers'
whereas the yellow pages consisted of the advertisements given by the telephone
subscribers and others. He further accepted that the criterion for listing of
entries in the white pages was different from the criterion for inclusion of
advertisements in the yellow pages. The learned judge, however, held that Rule
458 covered all parts of the telephone directory including the yellow pages.
According to the learned judge the publication of advertisements in the form of
yellow pages, appended to the white pages, was within the bar contained in Rule
458 of the Rules. The learned judge accordingly allowed the appeal and
restrained the appellant from publishing the TATA-Pages.
Letters Patent Bench of the Bombay High Court hearing the appeal filed by the TATAs
against the judgment of the learned single judge posed the question to be
considered by the Bench in the following words:- "There should be no doubt
that a publication in order to amount to a contravention of the Rules, as
quoted above, must in substance be a "list of telephone subscribers",
for it is the substance that must count and must outweigh and take precedence
over mere appearance. Before restraining the defendant TATA Press Ltd. from
publishing or circulating or in any way dealing with the "TATA Press
Yellow Pages", we have to be satisfied that in substance and in effect the
same is a "list of telephone subscribers" or a "telephone
directory". The case at hand involves questions, not so much of law but
rather of semantics and common sense." The Bench while dealing with the
question observed as under:- "a list of telephone subscribers" would
obviously mean a list of persons to whom telephone services have been provided
by means of an installation under the Telegraph Rules or under an agreement. Suppose
we, in this High Court, print or publish a Book containing a list of our judges
and officers containing their names.
departments they are attached to, their office as well as residential addresses
and also their telephone numbers in the office as well as in their residence.
Or, suppose, a Bar Association or a Medical Association prints or publishes a
Book containing the names of their members, their specialisation, addresses of
their offices, chambers and residences along with their respective telephone
numbers, we are inclined to think that such Books as aforesaid may not amount
to "a list of subscribers" if the dominant purpose for such
publication is not to notify the telephone numbers only, but mainly to notify
who these persons are along with their designations and/or qualifications or specialisation;
and addresses at which they would be available during as well as after office
hours and the telephone numbers published in such Books would be there only to
provide a full or an more complete picture. The High Court or the Bar
Association or the Medical Association in such cases may not be proceeded
against for violation of Rule 458 of the Indian Telegraph Rules, for publishing
such books, if the primary object thereof is not to provide the telephone
numbers also along with various other relevant matters. If in such books as
aforesaid, the names of such officers or members, who are not subscribers of
telephones, are also published, the same would further go to show that such
books would be not be a list of subscribers." The Bench finally upheld the
judgment of the learned Single Judge on the following reasoning:- "We have
given our best and very serious considerations to the arguments advanced by Mr.
Nariman. We have already indicated, we will have to scrutinise and examine the
publication TATA Press Yellow Pages and would have to come to our conclusion as
to whether the same is a Telephone Directory or a List of Telephone Subscribers
from the point of view of the main object and the dominant purpose of the
publication. The fact that has weighed with us most is that even though there
are some features which may distinguish the "TATA Press Yellow Pages"
from a mere Telephone Directory or a more List of Telephone Subscribers, the
publication would nevertheless be of little or no use if the telephone numbers
printed therein are omitted or deleted. It may be that the "TATA Press
Yellow Pages" may not be a Telephone Directory or a List of Telephone
Subscribers only, but we are nevertheless of the clear view that the same is a
Telephone Directory or a List of Telephone Subscribers also.......
the provisions of Rules 452, 458 & 459 together, we will have to hold that
even if a telephone directory or List of Telephone Subscribers contain advertisements,
may be in large numbers, publication thereof would nevertheless come within the
prohibition of Rule 458 as in such a case the publication, even though not
merely a Telephone Directory or a List of Telephone Subscribers, is also
nevertheless such a telephone directory or List of Telephone Subscribers."
Learned counsel for the appellant has drawn our pointed-attention to the above
quoted observations of the Division Bench of the High Court and has vehemently
contended that the examination of TATA-pages, even in the light of the Test
laid-down by the High Court, would show that the said compilation is not a
Telephone Directory. A Bar Association or a Medical Association can publish a
List of their respective members. Similarly, according to the learned counsel,
the Associations of professionals, traders or businessmen can publish Lists of
their respective members. The TATA-pages, he contended, which is a compilation
of advertisements, given by businessmen, traders and professionals, cannot be
equated with a "list of Telephone Subscribers." It is contended that
the TATA-Pages was a Buyer's guide/Trade Directory and its content, character
and function are different from the Telephone Directory. The primary purpose of
reference to a Telephone Directory is to find out the telephone number of a
particular telephone-subscriber whereas the primary purpose of a Buyer's guide
such as the TATA - Pages is to enable a consumer/buyer to find out the parties
engaged in a particular business or trade for providing a particular service.
There is plausibility in the contention of the learned counsel but cannot, by
itself, tilt the balance in favour of the appellant.
of the view that the answer to the question whether the TATA - Pages is a
Telephone Directory within the meaning of Rule 458 or is a Buyers Guide/Trade
Directory outside the scope of the said Rule, depends upon the determination of
the larger issue whether a simple "commercial advertisement" comes
within the concept of "freedom of speech and expression" guaranteed
under Article 19(1)(a) of the Constitution of India. We, therefore, proceed to
deal with the constitutional question.
Singhvi, learned counsel supporting the case of the appellant, has contended
that the "commercial speech" is protected under Article 19(1)(a) read
with Article 19(2) of the Constitution. Mr. Venugopal and Mr. Arun Jaitley,
learned counsel appearing for the respondents have, however, contended that a
purely commercial advertisement is meant for furtherance of trade or commerce
and as such is outside the concept of freedom of speech and expression.
Reliance was placed by the learned counsel on the judgment of this Court in Hamdard
Dawakhana (WAKF) Lal Kuan, Delhi and Another v Union of India and others [SCR
1960 (2) 671]. A Constitution Bench of this Court speaking through Kapur, J.
held as under:
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(1) which it seeks to
aid by bringing it to the notice of the public. When it takes the form of a
commercial advertisement which has an element of trade or commerce it no longer
falls within the concept of freedom of speech for the object is not propagation
of ideas social, political or economic or furtherance of literature or human
thought; but as in the present case the commendation of the efficacy, value and
importance in treatment of particular diseases by certain drugs and medicines.
In such a case, advertisement is a part of business even though as described by
Mr. Munshi its creative part, and it was being used for the purpose of
furthering the business of the petitioners and had no relationship with what
may be called the essential concept of the freedom of speech. It cannot be said
that the right to publish and distribute commercial advertisements advertising
an individual's personal business is a part of freedom of speech guaranteed by
the Constitution. In Lewis J. Valentine v. F.J. Chrestensen it was held that
the constitutional right of free speech is not infringed by prohibiting the
distribution in city streets of handbills bearing on one side a protest against
action taken by public officials and on the other advertising matter. The
object of affixing of the protest to the advertising circular was the evasion
of the prohibition of a city ordinance forbidding the distribution in the city
streets of commercial and business advertising matter. Mr. Justice Roberts,
delivering the opinion of the court said:
court has unequivocally held that the streets are proper places for the
exercise of the freedom of communicating information and disseminating opinion
and that, though the states and municipalities may appropriately regulate the
privilege in the public interest, they may not unduly burden or prescribe its
employment in these public thoroughfares. We are equally clear that the
Constitution imposes no such restraint on government as respects purely
commercial advertising ....... If the respondent was attempting to use the
streets of New York by distributing commercial
advertising, the prohibition of the Code provisions was lawfully invoked
against such conduct." It cannot be said therefore that every advertisement
is a matter dealing with freedom of speech nor can it be said that it is an
expression of ideas. In every case one has to see what is the nature of the
advertisement and what activity falling under Art. 19(1) it seeks to further.
The advertisements in the instant case relate to commerce or trade and not to
propagating of ideas; and advertising of prohibited drugs or commodities of
which the sale is not in the interest of the general public cannot be speech
within the meaning of freedom of speech and would not fall within Art. 19(1)
(a). The main purpose and true intent and aim, object and scope of the Act is
to prevent self- medication or self-treatment and for that purpose
advertisements commending certain drugs and medicines have been prohibited. Can
it be said that this is an abridgement of the petitioners' right of free
speech. In our opinion it is not. Just as in Chamarbaughwala's case 1957 SCR
930 it was said that activities undertaken and carried on with a view to
earning profits e.g. the business of betting and gambling will not be protected
as falling within the guaranteed right of carrying on business or trade so it
cannot be said that an advertisement commending drugs and substances as
appropriate cure for certain diseases is an exercise of the right of freedom of
speech. Freedom of speech goes to the heart of the natural right of an organised
freedom-loving society to "impart and acquire information about that
limitation is placed which results in the society being deprived of such right
then no doubt it would fall within the guaranteed freedom under Art. 19(1) (a).
But if all it does is that it deprives a trader from commending his wares it
would not fall within that term. In John W. Rast v. Van Deman & Lewis
Company, Mr. Justice Mckenna, dealing with advertisements said:-
"Advertising is merely identification and description, apprising of
quality and place. It has no other object than to draw attention to the article
to be sold and the acquisition of the article to be sold constitutes the only
inducement to its purchase." As we have said above advertisement takes the
same attributes as the object it seeks to promote or bring to the notice of the
public to be used by it.
can be multiplied which would show that advertisement dealing with trade and
business has relation with the item "business or trade" and not with
"freedom of speech". Thus advertisements sought to be banned do not
fall under Art. 19(1) (a).
Court in Hamdard Dawakhana's case primarily relied on the judgment of the
United States Supreme Court in Valentine v Chrestensen for the proposition that
"purely commercial advertising" is not protected by Article 19(1) (a)
of the Constitution. Dr. Singhvi has placed reliance on series of judgments of
the United States Supreme Court since 1942 when Chrestensen's case was decided
to show that the Courts in United States have step-by-step moved away from the
Rule in Chrestensen's case, and as on today "purely commercial
advertising" is entitled to full "First Amendment'/ protection. We
may refer to some of the cases.
1964 United States Supreme Court ruled in New York Times v Sullivan 376 U.S.
254 that editorial advertising, that is, advertising to promote an idea such as
"Save Whale", "Stop War" or "Ban Pesticides"
rather than a product like used cars or spaghetti is protected by the First
Amendment. In the year 1975 in Bigelow v Virginia 421 U.S. 804 the United States Supreme Court reversed the
conviction of a Virginia newspaper editor who had been found
guilty of publishing an advertisement which offered assistance to women seeking
abortion. Abortion was illegal in Virginia in 1971 when the advertisement was published. The women Pavilion, a New York group, urged women who wanted an
abortion to come to New
York. Blackmun, J. analysing
earlier judgments of the Court observed that speech does not lose the
protection of the First Amendment merely because it appears in the form of a
in 1976 the United States Supreme Court has provided a clearer answer in
Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc. 425
US 748. The appealees in the said case
attacked, as violative of the First Amendment, that part of the statute which
provided that a pharmacist licensed in Virginia was guilty of unprofessional
conduct if he "publishes, advertises or promotes, directly or indirectly,
in any manner whatsoever, any amount, price, fee, premium, discount, rebate or
credit terms..... for any drugs which may be dispensed only by
prescription." The District Court declared the quoted portion of the
statute "void and of no effect". The appellants before the Supreme
Court contended that the advertisement of prescription drug price was outside
the protection of the First Amendment because it was "commercial
speech". Rejecting the argument the Court speaking through Blackmun, J.
held as under:- "There can be no question that in past decisions the Court
has given some indication that commercial speech is unprotected. In Valentine v
Chrestensen, supra, the Court upheld a New York statute that prohibited the distribution of any "handbill,
circular .... or other advertising matter whatsoever in or upon any
street." The Court concluded that, although the First Amendment would
forbid the banning of all communication by handbill in the public
thoroughfares, it imposed "no such restraint on government as respects
purely commercial advertising". 316 US, at 54, 86 L ED 1262, 62 S Ct 920.
Further support for a "commercial speech" exception to the First
Amendment may perhaps be found in Breard v Alexandria, 341 US 622, 95 L Ed
1233, 71 S Ct 920, 46 Ohio Ops 74, 62 Ohio L Abs 210, 35 ALR 2d 335 (1951),
where the Court upheld a conviction for violation of an ordinance prohibiting
door-to-door solicitation of magazine subscriptions. The Court reasoned:
"The selling...brings into the transaction a commercial feature", and
it distingushed Martin v Struthers, supra, where it had reversed a conviction
for door-to-door distribution of leaf-lets publicizing a religious meeting, as
a case involving "no element of the commercial." 341 US, at 642-643,
95 L Ed 1233, 71 S Ct 920, 46 Ohio Ops 74, 62 Ohio L Abs 210, 35 ALR2d
335................. Since the decision in Breard, however, the Court has never
denied protection on the ground that the speech in issue was "commercial
speech". That simplistic approach, which by then had come under criticism
or was regarded as of doubtful validity by Members of the Court.
Term, in Bigelow v Virginia, 421 US 809, 44 L Ed 2d 600, 95 S Ct 2222 (1975), the notion of unprotected
"commercial speech" all but passed from the scene. We reversed a
conviction for violation of a Virginia
statute that made the circulation of any publication to encourage or promote
the processing of an abortion in Virginia a misdemeanor. The defendant had published in his newspaper the
availability of abortions in New York. The
advertisement in question, in addition to announcing that abortions were legal
in New York, offered the services of a referral
agency in that State. We rejected the contention that the publication was
unprotected because it was commercial.
continued validity was questioned, and its holding was described as
"distinctly a limited one" that merely upheld "a reasonable
regulation of the manner in which commercial advertising could be
distributed." Here, in contrast, the question whether there is a First
Amendment exception for "commercial speech" is squarely before us.
Our pharmacist does not wish to editorialize on any subject, cultural,
philosophical, or political.
does not wish to report any particularly newsworthy fact, or to make
generalized observations even about commercial matters. The "idea" he
wishes to communicate is simply this: "I will sell you the X prescription
drug at the Y price". Our question, then, is whether this communication is
wholly outside the protection of the First Amendment.
question is whether speech which does "no more than propose a commercial
transaction." Pittsburgh Press Co. v Human Relations comm'n, 413 US, at
385, 37 L Ed 2d 669, 93 S Ct 2553, is so removed from any "exposition of
ideas", Chaplinsky v New Hampshire, 315 US 568, 572, 86 L Ed 1031, 62 S Ct
766 (1942), and from "truth, science, morality, and arts in general, in its
diffusion of liberal sentiments on the administration of Government." Roth
v United States, 354 US 476, 484, 1 L Ed 2d 1498, 77 S Ct 1304, 14 Ohio Ops 2d 331 (1957), that
it lacks all protection. Our answer is that it is not.
society also may have a strong interest in the free flow of commercial
information. Even an individual advertisement, though entirely
"commercial," may be of general public interest. The facts of decided
cases furnish illustrations: advertisements stating that referral services for
legal abortions are available, Bigelow v Virginia, supra;
manufacturer of artificial furs promotes his product as an alternative to the
extinction by his competitors of fur-bearing mammals, see Fur Information &
Fashion Council, Inc. v. E.F. Timme & Son, 364 F supp 16 (SDNY 1973); and
that a domestic producer advertises his product as an alternative to imports
that tend to deprive American residents of their jobs.
there is another consideration that suggests that no line between publicly
"interesting" or "important" commercial advertising and the
opposite kind could ever be drawn.
however tasteless and excessive it sometimes may seem, is nonetheless
dissemination of information as to who is producing and selling what product,
for what reason, and at what price. So long as we preserve a predominantly free
enterprise economy, the allocation of our resources in large measure will be
made through numerous private economic decisions. It is a matter of public
interest that those decisions, in the aggregate, be intelligent and well
informed. To this end, the free flow of commercial information is
indispensable........ And if it is indispensable to the proper allocation of
resources in a free enterprise system, it is also indispensable to the
formation of intelligent opinions as to how that system ought to be regulated
even if the First Amendment were thought to be primarily an instrument to
enlighten public decision making in a democracy, we could not say that the free
flow of information does not serve that goal." It is, thus, obvious that
the United States Supreme Court in Virginia Board case has virtually overruled
Valentine's case decided in 1942. The Court has ruled in clear terms that the Virginia statute which had the effect of
prohibiting pharmacies from advertising the price of prescription drugs
violated the First Amendment protection.
John R. Bates and Van o'Steen vs. State Bar of Arizona 53 L. Ed. 2nd 810, two
attorneys licensed to practice law in Arizona placed an advertisement in a
phoenix newspaper, stating that they were offering "legal services at very
reasonable fees" and listing their fees for various matters. The
advertisement was in violation of disciplinary rules of the Supreme Court of
Arizona which prohibited Arizona lawyers from publicizing
themselves, their partners or their associates by "commercial" means.
On a complaint filed by the President of the State Bar, the Board of Governors
recommended a one week suspension for each attorney. The two lawyers then
sought review in the Supreme Court of Arizona which rejected their contention
that the disciplinary rules infringed their First Amendment rights.
appeal, the United States Supreme Court reversed the judgment of the Supreme
Court of Arizona on the question of First Amendment rights. Speaking for the
court Blackmun, J. held that the blanket suppression of advertising by
attorneys violated a free speech clause of First Amendment.
Court rejected arguments that such advertising would have an adverse effect on
professionalism, would be inherently misleading, would have an adverse effect
on the administration of justice, would produce undesirable economic effects,
and would have an adverse effect on the quality of legal services. The Court,
however, further held that such advertising, if false, deceptive or misleading
could continue to be restrained, and that, as with other varieties of speech,
such advertising could be made subject to reasonable restrictions on the time,
place and manner of such advertising.
the decision in Virginia Board case, it is almost settled law in the United States that "commercial speech"
is entitled to the First Amendment protection. The Supreme Court has, however,
made it clear that Government was completely free to recall "commercial
speech" which is false, misleading, unfair, deceptive and which proposes
illegal transactions. A political or social speech and other public- affairs -
oriented discussions are entitled to full First Amendment protection whereas a
"commercial speech" may be restricted more easily whenever the
government can show substantial justification for doing so.
recent judgments of the Supreme Court of Unites States in Central Hudson Gas
& Electric Corp. v. Public Service Commission 447 US 557, Posadas de Puerto
Rico Associates v. Tourism Company of Puerto Rico 92 L Ed. 2nd 266 and Board of
Trustees of the State University of New York vs. Todd Fox 106 L Ed. 388 clearly
indicate that in "commercial speech" cases a four-part analysis has
developed. At the outset, it must be determined whather the advertising is
protected by the First Amendment. For commercial speech to come within that
provision it must concern lawful activity and not be misleading. Next it is seen
whether the asserted governmental interest is substantial. If both inquiries
yield positive answers then it must be determined whether the regulation
directly advances the governmental interest asserted and whether it is more
extensive than is necessary to serve that interest.
the First Amendment under the United States Constitution, our Constitution
itself lays down in Article 19(2) the restrictions which can be imposed on the
fundamental right guaranteed under Article 19(1) (a) of the Constitution. The
"Commercial speech" which is deceptive, unfair, misleading and
untruthful would be hit by Article 19(2) of the Constitution and can be
regulated/prohibited by the State.
Court in Hamdard Dawakhana's case was dealing with advertising of prohibited
drugs and commodities. The Court came to the conclusion that the sale of
prohibited drugs was not in the interest of the general public and as such
"could not be a speech" within the meaning of freedom of speech and
expression under Article 19(1) (a) of the Constitution. The Court further held
in the said case that 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. Hamdard Dawakhana's case was considered by this Court in Indian
Express Newspapers (Bombay) Private Ltd. & Ors. etc. etc.
vs. Union of India & Ors. etc.etc.
1985(2) SCR 287. The observations in Hamdard Dawakhana's case to the effect
that advertising by itself would not come within Article 19(1) (a) of the Constitution,
were explained by this Court in Indian Express Newspapers's case in the
have carefully considered the decision in Hamdard Dawakhana's case (supra). The
main plank of that decision was that the type of advertisement dealt with there
did not carry with it the protection of Article 19(1) (a). On examining the
history of the legislation, the surrounding circumstances and the scheme of the
Act which had been challenged there namely the Drugs and Magic Remedies
(Objectionable Advertisement) Act, 1954 (21 of 1954) the Court held that the
object of that Act was the prevention of self-medication and self-treatment by
prohibiting instruments which may be used to advocate the same or which tended
to spread the evil.... In the above said case the Court was principally dealing
with the right to advertise prohibited drugs, to prevent self-medication and
self-treatment. That was the main issue in the case. It is no doubt true that
some of the observations referred to above go beyond the needs of the case and
tend to affect the right to publish all commercial advertisements.
broad observations appear to have been made in the light of the decision of the
American Court in LEWIS J. Valentine vs. F.J. Chrestensen
is worthy of notice that the view expressed in this American case has not been
fully approved by the American Supreme Court itself in its subsequent
decisions. We shall refer only to two of them. In his concurring judgment in
William B. Cammarano v. United
States of America
Justice Douglas said "Valentine vs. Chrestensen..... held that business of
advertisements and commercial matters did not enjoy the protection of the First
Amendment, made applicable to the States by the Fourteenth. The ruling was
casual, almost off hand. And it has not survived reflection". In Jeffrey Gole
Bigelow v. Commonwealth of Virginia the American Supreme Court held that the holding in Lewis
J. Valentine v. F.J. Chrestensen (supra) was distinctly a limited one. In view
of the foregoing, we feel that the observations made in the Hamdard Dawakhana's
case (supra) too broadly stated and the Government cannot draw much support
from it. We are of the view that all commercial advertisements cannot be denied
the protection of Article 19(1) (a) of the Constitution merely because they are
issued by businessmen." The combined reading of Hamdard Dawakhana's case
and the Indian Express Newspapers's case leads us to the conclusion that
"commercial speech" cannot be denied the protection of Article 19(1) (a)
of the Constitution merely because the same are issued by businessmen.
is considered to be the cornerstone of our economic system. Low prices for
consumers are dependent upon mass production, mass production is dependent upon
volume sales, and volume sales are dependent upon advertising.
from the lifeline of the free economy in a democratic country, advertising can
be viewed as the life blood of free media, paying most of the costs and thus
making the media widely available. The newspaper industry obtains 60/80% of its
revenue from advertising. Advertising pays a large portion of the costs of
supplying the public with newspaper.
democratic press the advertising "subsidy" is crucial.
advertising, the resources available for expenditure on the "news"
would decline, which may lead to an erosion of quality and quantity. The cost
of the "news" to the public would increase, thereby restricting its
Constitution Bench of this Court in Sakal Papers (p) Ltd. and others. vs. Union
of India AIR 1962 SC 305 considered the constitutional validity of the
Newspaper (Price and Page) Act, 1956. The said Act empowered the Government to
regulate the prices of newspaper in relation to their pages and sizes and to
regulate allocation of space for advertisement matter. This Court held that the
Act placed restraints on the freedom of press to circulate. This Court further
held that the curtailment of the advertisements would bring down the
circulation of the newspaper and as such would be hit by Article 19(1) (a) of
the Constitution of India. In Sakal Papers's case it was argued before this
Court that the publication of advertisements was a trading activity. The
diminution of advertisement revenue could not be regarded as an infringement of
the right under Article 19(1) (a). It was further argued before this Court that
devoting large volume of space to advertisements could not be the lawful
exercise of the right of freedom to speech and expression or the right of dissemination
of news and views. It was also contended that instead of raising the price of
the newspaper the object could be achieved by reducing the advertisements.
Court rejected the contentions and held as under:- "Again S.3(1) of the
Act in so far as it permits the allocation of space to advertisements also
directly affects freedom of circulation. If the area for advertisements is
curtailed the price of the newspaper will be forced up. If that happens, the
circulation will inevitably go down. This would be no remote, but a direct
consequence of curtailment of advertisements ...If, on the other hand, the
space for advertisement is reduced the earnings of a newspaper would go down
and it would either have to run at a loss or close down or raise its price.
object of the Act in regulating the space for advertisements is stated to be to
prevent 'unfair' competition. It is thus directed against circulation of a
newspaper. When a law is intended to bring about this result there would be a
direct interference with the right of freedom of speech and expression
guaranteed under Article 19 (1) (a)." This Court in Bennett Coleman &
Co. & Ors. vs.Union of India & Ors. 1973 2 SCR 757 held as under:-
"The law which lays excessive and prohibitive burden which would restrict
the circulation of a newspaper will not be saved by Article 19 (2). If the area
of advertisements is restricted, price of paper goes up. If the price goes up
circulation will go down. This was held in Sakal Papers case (supra) to be the
direct consequence of curtailment of advertisement. The freedom of a newspaper
to publish any number of pages or to circulate it to any number of persons has
been held by this Court to be an integral part of the freedom of speech and
expression. This freedom is violated by placing restraints upon it or by
placing restraints upon something which is an essential part of that freedom. A
restraint on the number of pages, a restraint on circulation and a restraint on
advertisements would affect the fundamental rights under Article 19 (1) (a) on
the aspects of propagation, publication and circulation." Advertising as a
"commercial speech" has two facets.
which is no more than a commercial transaction, is nonetheless dissemination of
information regarding the product-advertised. Public at large is benefitted by
the information made available through the advertisement. In a democratic
economy free flow of commercial information is indispensable. There cannot be
honest and economical marketing by the public at large without being educated
by the information disseminated through advertisements. The economic system in
a democracy would be handicapped without there being freedom of
"commercial speech". In relation to the publication and circulation
of newspapers, this Court in Indian Express newspaper's case, Sakal paper's
case and Bennett Coleman's case has authoritatively held that any restraint or
curtailment of advertisements would affect the fundamental right under Article
19(1) (a) on the aspects of propagation, publication and circulation. Examined
from another angle, the public at large has a right to receive the
"Commercial speech". Article (19) (1) (a) not only guarantees freedom
of speech and expression, it also protects the rights of an individual to
listen, read and receive the said speech. So far as the economic needs of a
citizen are concerned, their fulfilment has to be guided by the information
disseminated through the advertisements. The protection of Article 19(1)(a) is
available to the speaker as well as to the recipient of the speech. The
recipient of "commercial speech" may be having much deeper interest
in the advertisement than the businessman who is behind the publication. An
advertisement giving information regarding a life saving drug may be of much
more importance to general public than to the advertiser who may be having
purely a trade consideration.
therefore, hold that "commercial speech" is a part of the freedom of
speech and expression guaranteed under Article 19(1) (a) of the constitution.
to the question whether TATA's compilation is a telephone directory as
envisaged under the Rules, we may examine the scheme of the Rules. Rule 452
provides that a copy of the telephone directory shall be supplied free of
charge for each telephone, extension or party line, rented by the subscriber.
Although the expression "Telephone Directory" has not been defined
under the Rules, but Rule 453 clearly provides that an entry in the Telephone
Directory shall contain the telephone number, the initials, the sir-name and
the address of the subscriber or user. Rule 457 makes a telephone directory to
be the property of the department. It provides that the telephone directory
shall remain the exclusive property of the department and shall be delivered to
it on demand. The department reserves the right to amend or delete any entry in
the telephone directory at any time and undertakes no responsibility for any
shall not entertain any claim or compensation on account of any entry in or omission
from the telephone directory or of an error therein. Then come the two crucial
rules. Rule 458 under the heading "Publishing of Telephone Directory"
provides that except with the permission of the telegraph authority, no person
shall publish any list of telephone subscribers. Rule 459 deals with
"advertisements" and lays down that the telegraph authority may
publish or allow the publication of advertisements in the body of the telephone
directory. It is no doubt correct that a telephone directory is an essential
instrumentality in connection with the peculiar service which the Union of
India offers for the public benefit and convenience. It is as much so as is the
telephone receiver itself, it would be practically useless for the receipt and
transmission of messages without the accompaniment of such directories. The
telephone service being a public utility service, the telephone authority has
rightly been given powers under the Act and the Rules to regulate the form and
contents of the telephone directory.
development of this form of public utility service, the telegraph authority has
found it practicable and profitable to diminish the cost and increase the
profits of operation by making use of its directories as a means and form of
advertising available to its subscribers. In the typical classified telephone
directory, or the "yellow pages" section of the directory published
by the Nigam, there are alphabetical light-faced type listing (for which there
is usually no charge), alphabetical bold faced type listings, alphbetical
in-column business card listings and display advertising. "Yellow
pages" of the telephone directory are wholly paid advertising. It cannot
be disputed that the paid advertising,apart from the light-faced free listing,
is not in the nature of a service rendered by a utility. The "Yellow
Pages" attached to the telephone directory issued by the Nigam cannot be a
part of the Nigam's public telephone service.
458 and 459 of the Rules have to be interpreted in the light of our findings
that "commercial speech" by itself is a fundamental right under
Article 19(1) (a) of the Constitution and the paid advertisements comprising
"Yellow Pages" attached to the telephone directory is not a public
to freedom of speech and expression guaranteed under Article 19(1)(a) of the
Constitution can only be restricted under Article 19(2). The said right can not
be denied by creating a monopoly in favour of the government or any other
authority. "Publication of advertisements" which is a
"commercial speech" and protected under Article 19(1)(a) of the
Constitution cannot be denied to the appellants on the interpretation of rule
458 and 459 of the Rules. The plain language of the Rules indicate that the
prohibition under rule 458 of the Rules is only in respect of publishing
"any list of telephone subscribers". By no stretch of imagination
"publication of advertisements" can be equated with a "list of
telephone subscribers A "list" is a number of names having something
in common written out systematically one beneath the other. "List of
telephone subscriber" in terms of Rule 458 of the Rules would have to be
compiled only on the criterion of the persons listed being telephone
subscribers. No person who is not a telephone subscriber could be eligible for
inclusion. The said list would necessarily be restricted to the area serviced
by the Nigam. On the other hand "TATA Press yellow pages" is a
Buyer's Guide comprising of advertisements given by traders, businessmen and
professionals and the only basis/criterion applied for acceptance/ publication
of advertisements is that an advertiser should be a trader, businessman or
of the Rules make it clear that advertisements are treated differently under
the Rules from "list of telephone subscribers". Rule 458 of the Rules
intends to protect the exclusive property rights of Nigam/Union of India
created under Rule 457 in respect of the telephone directory prepared in terms
of Rule 453.
of advertisements" being a non-utility service cannot come within the
prohibition imposed by Rule 458 of the Rules.
therefore, hold that the Nigam/union of India cannot restrain the appellant from publishing "TATA Press yellow
pages" comprising paid advertisements from businessmen, traders and
professionals. We are, however, of the view that the appellants cannot publish
any "list of telephone subscribers" without the permission of the
telegraph authority. Rule 458 of the Rules is mandatory and has to be complied
with. The appellant shall not publish in the "TATA Press yellow
pages" any entries similar to those which are printed in the 'white Pages'
of the "telephone directory" published by the Nigam under the Rules.
We make it clear that the appellant cannot print/publish an entry containing
only the telephone number, the initials, the surname and the address of the
businessmen, trader or professional concerned.
allow the appeal in the above terms and set aside the judgments of the learned
Single Judge and the Division Bench of the High Court. While holding that Rule
458 of the Rules is mandatory, we dismiss the suit filed by the respondents. We
leave the parties to bear their own costs.