Delhi High Court Upholds Stay On Action Against Companies Over 'Surrogate Advertisements' For Promoting 'Vimal Elaichi', 'Dilbagh Pan Masala'

The Delhi High Court today upheld the stay on the show cause notices issued to two companies in 2018 by the Director General of Health Services (DGHS) over the allegations of indulging in surrogate advertisements for promoting their products Dilbagh Pan Masala and Vimal Elaichi.

Justice Dharmesh Sharma dismissed the appeals moved by DGHS against the trial court orders which granted stay on the show cause notices in the suits filed by the companies, Som Pan Products Private Limited and Vishnu Pouch Packaging Private Limited.

The court observed that the two companies have a fundamental right to carry on business under Article 19(1)(g) of the Constitution of India for sale and marketing of pan masala sans tobacco, so long as it has constitutional sanction.

“When that legal right exists, certainly the appellant/defendant could only take action for banning publicity or advertisement of such permitted items if their action falls within the four corners of law,” the court said.

It added: “Indeed, there is the issue of public health hazard but then when the government has not chosen to ban it, both parameters of balance of convenience and irreparable loss tilt towards the respondent/plaintiff.”

A show cause notice was issued to Som Pan Products for displaying a board display of Dilbagh Pan Masala at a flyover for an event and a community marriage function.

Another show cause notice was issued to Vishnu Pouch Packaging for putting up a huge and strategic display of Vimal Elaichi on the front page of the Times of India newspaper.

The DGHS alleged that the advertisements or publicity for the promotion of the two products was an indirect or surrogate advertisement, and therefore, was in violation of Section 5 of The Cigarettes and Other Tobacco Products (Prohibition of Advertising and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003.

In December 2021, the trial court stayed the operation of the show cause notices, and the two companies were allowed to carry out their advertisement campaign with regard to their products, till the final disposal of the suit.

Upholding the trial court order, Justice Sharma noted that both companies were not engaged in the manufacturing, marketing, or sale of tobacco, gutka, bidi, or zarda in any manner in the country.

“In other words, the plea that in order to circumvent the ban on the sale of gutka and pan masala containing tobacco, the same or other sister manufacturers and traders are selling pan masala sans tobacco with flavored chewing tobacco in separate sachets but often conjointly sold together by the same vendors from the same premises, is a matter of evidence to be decided during the trial,” the court said.

It added that it is a matter of evidence whether or not the use of brand names for selling articles such as pan masala and Elaichi would amount to indirect or surrogate advertisement so as to promote, sell, or imply marketing of banned items in the nature of gutka or tobacco, which incidentally is not banned for export from India.

“In view of the foregoing discussion, both the above-noted appeals filed by the appellant/defendant are dismissed,” the court said.

Counsel for Appellant: Mr. Anupam Srivastava, ASC for GNCTD with Ms. Sarita Pandey Adv

Counsel for Respondents: S. Jaina & Associates represented by Advocate Dushyant K. Mahant

Title: DIRECTORATE GENERAL OF HEALTH SERVICES v. SOM PAN PRODUCT PVT. LTD. and other connected matter

Citation: 2024 LiveLaw (Del) 96

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