Supreme Court clarifies promotional trailers are not offers in consumer dispute: Yash Raj Films vs. Afreen Fatima Zaidi (2024) INSC 328 (22 April 2024)

Date of the Judgment: 22 April 2024
Citation: 2024 INSC 328
Judges: Pamidighantam Sri Narasimha, J., Aravind Kumar, J.

Can a promotional trailer for a movie create a legal obligation on the producer to include all the scenes and songs shown in the trailer in the final movie? The Supreme Court of India recently addressed this question in a consumer dispute, clarifying the legal implications of promotional trailers and whether their content creates a binding contract or constitutes an unfair trade practice if not included in the film. This case examines the relationship between film producers and consumers, specifically focusing on the promises made through promotional material.

Case Background

The appellant, Yash Raj Films, produced the movie ‘Fan’ in 2016. Before the movie’s release, they circulated a promotional trailer featuring a song. The respondent, Afreen Fatima Zaidi, watched the trailer and decided to watch the movie with her family, expecting to see the song in the film. However, the song was not included in the movie, leading her to file a consumer complaint, claiming she felt cheated and suffered mental agony.

The complainant sought damages of Rs. 60,550.

Timeline:

Course of Proceedings

The District Consumer Redressal Forum initially dismissed the complaint, stating there was no relationship between consumer and service provider. However, the State Commission allowed the appeal, holding that entertainment services fall under the definition of ‘service’ and that the appellant was a service provider. The State Commission also found that the appellant had engaged in an unfair trade practice by circulating a song in the promotional trailer that was not included in the film. They awarded Rs. 10,000 for mental harassment and Rs. 5,000 as costs to the complainant.

The National Consumer Disputes Redressal Commission (NCDRC) upheld the State Commission’s decision, stating that a consumer would feel deceived if a song shown in the promotional trailer was not in the film, thus amounting to an unfair trade practice and a deficiency of service. The NCDRC reasoned that showing the song in the trailer implied a promise that it would be in the film.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 2(1)(c) of the Consumer Protection Act, 1986: Defines ‘complaint’ as an allegation in writing made by a complainant that an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider, or that the services hired or availed of suffer from deficiency.
• Section 2(1)(d) of the Consumer Protection Act, 1986: Defines ‘consumer’ as a person who buys goods or hires services for a consideration, excluding commercial purposes.
• Section 2(1)(g) of the Consumer Protection Act, 1986: Defines ‘deficiency’ as any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance required by law or contract.
• Section 2(1)(o) of the Consumer Protection Act, 1986: Defines ‘service’ as service of any description made available to potential users, including entertainment.
• Section 2(1)(r) of the Consumer Protection Act, 1986: Defines ‘unfair trade practice’ as a trade practice that adopts any unfair method or deceptive practice, including false representations about the standard, quality, or characteristics of services.
• Section 2(a) of the Indian Contract Act, 1872: Defines ‘proposal’ as a person’s willingness to do or abstain from doing something with a view to obtain the assent of another.
• Section 2(b) of the Indian Contract Act, 1872: Defines ‘promise’ as an accepted proposal.
• Section 2(h) of the Indian Contract Act, 1872: Defines ‘contract’ as an agreement enforceable by law.

The Court also noted that commercial speech, including advertisements, is protected under Article 19(1)(a) of the Constitution, subject to reasonable restrictions under Article 19(2). Deceptive or misleading commercial speech is not protected and can be regulated.

Arguments

Appellant’s Submissions:

• The appellant argued that a promotional trailer is merely an advertisement and does not constitute an offer.
• They contended that the transaction for service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket.
• The appellant submitted that there is no contractual obligation to include the song in the movie just because it was shown in the promotional trailer.
• The appellant argued that the promotional trailer did not make any false statement or intend to mislead the viewers.
• The appellant submitted that the burden is on the complainant to produce cogent evidence that proves unfair trade practice, which was not done in the present case.

Respondent’s Submissions:

• The respondent argued that the promotional trailer created an implied promise that the song would be in the movie.
• The respondent contended that the exclusion of the song from the movie constituted a deficiency in service and an unfair trade practice.
• The respondent submitted that she felt deceived and suffered mental agony because the song was not in the movie.
• The respondent argued that she decided to watch the movie after watching the song in the promotional trailer, with the expectation of watching the song in the theatre.

Innovativeness of the Argument: The appellant’s argument that a promotional trailer is not an offer but an invitation to offer and that the transaction of service is only to enable the complainant to watch the movie upon the payment of consideration is a novel approach to the issue.

Issues Framed by the Supreme Court:

The Supreme Court framed the following issues for consideration:

1. What are the legal implications of a promotional trailer, popularly known as a ‘promo’, or a teaser that is circulated before the release of a movie?
2. Does it create any contractual relationship or obligations akin to it?
3. Is it an unfair trade practice if the contents of the promotional trailer are not shown in the movie?

Treatment of the Issue by the Court:

Authorities

The Court considered the following authorities:

Judgment

How each authority was viewed by the Court:

• Tata Press Ltd v. Mahanagar Telephone Nigam Limited [CITATION]: The Court used this authority to establish the principle that commercial speech is protected under Article 19(1)(a) of the Constitution, but deceptive speech is not.
• Arulmighu Dhandayudhapaniswamy Thirukoil, Palani, Tamil Nadu v. Deptt. of Post Offices [CITATION]: The Court used this authority to define the term ‘deficiency’ in service, emphasizing the need for a fault or shortcoming in performance as required by law or contract.
• Lakhanpal National Ltd v. MRTP Commission [CITATION]: The Court used this authority to define ‘unfair trade practice’ and highlighted that a false statement is essential to prove such a practice.
• KLM Royal Dutch Airlines v. Director General of Investigation and Registration [CITATION]: The Court used this authority to further define ‘unfair trade practice’, emphasizing that the representation must be false in substance and fact.
• Ludhiana Improvement Trust, Ludhiana v. Shakti Cooperative House Building Society Ltd [CITATION]: The Court used this authority to reiterate that the burden of proof lies on the complainant to prove an unfair trade practice.
• Halsbury’s Laws of England and Pollock and Mulla: The Court used these authorities to establish that an advertisement is generally not an offer but an invitation to offer.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the understanding that a promotional trailer is an advertisement and not a contractual offer. The Court emphasized that the purpose of a trailer is to promote a film and not to create a binding promise about its content. The Court also underscored that the consumer’s expectation of seeing a particular song in the movie, based on the trailer, does not create a legal obligation on the producer. The Court further noted that the service provided is the screening of the movie, and the absence of a song does not constitute a deficiency in that service. Additionally, the Court highlighted that there was no evidence of any false representation or intent to mislead the viewers, which is necessary for establishing an unfair trade practice. The Court also considered the creative freedom of the service provider in the context of art.

Logical Reasoning:

The Court considered the argument that the promotional trailer created an implied promise but rejected it, stating that a promotional trailer is unilateral and not an offer. The court reasoned that the transaction of service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket. This transaction is unconnected to the promotional trailer, which by itself does not create any kind of right of claim with respect to the content of the movie. The court also considered the creative freedom of the service provider in the context of art.

The Court rejected the argument that there was a deficiency of service, stating that the service was the screening of the movie and not the inclusion of a specific song. The Court also rejected the argument that there was an unfair trade practice, as there was no false statement or intention to mislead the viewers. The Court also emphasized that the burden of proof lies on the complainant to prove an unfair trade practice.

The Court stated:

“A promotional trailer is unilateral. It is only meant to encourage a viewer to purchase the ticket to the movie, which is an independent transaction and contract from the promotional trailer. A promotional trailer by itself is not an offer and neither intends to nor can create a contractual relationship.”

“The transaction of service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket. This transaction is unconnected to the promotional trailer, which by itself does not create any kind of right of claim with respect to the content of the movie.”

“The ingredients of ‘unfair trade practice’ under Section 2(1)(r)(1) are not made out in this case. The promotional trailer does not fall under any of the instances of “unfair method or unfair and deceptive practice” contained in clause (1) of Section 2(1)(r) that pertains to unfair trade practice in the promotion of goods and services.”

Key Takeaways

• Promotional trailers for movies are considered advertisements and not contractual offers.
• Movie producers are not legally obligated to include all content shown in the trailer in the final film.
• Consumers cannot claim a deficiency of service or unfair trade practice solely based on the exclusion of trailer content from the movie.
• The judgment emphasizes the creative freedom of service providers, especially in the context of art.

Potential Future Impact: This judgment clarifies the legal position of promotional trailers and sets a precedent that they do not create contractual obligations. This will impact how producers create and use promotional material and how consumers perceive them. It may lead to more disclaimers on trailers and a more realistic expectation from consumers about the content of the movie.

Directions

No specific directions were given by the Supreme Court in this judgment.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

Ratio Decidendi: The ratio decidendi of this case is that a promotional trailer for a movie does not constitute an offer and does not create a contractual obligation on the producer to include all content shown in the trailer in the final film. Furthermore, the exclusion of such content does not amount to a deficiency of service or an unfair trade practice.

This judgment clarifies the legal position of promotional trailers and sets a precedent that they do not create contractual obligations. This judgment also clarifies the scope of the Consumer Protection Act, 1986, in the context of entertainment services.

Conclusion

The Supreme Court held that promotional trailers are not offers and do not create contractual obligations. Therefore, the exclusion of content shown in the trailer from the movie does not constitute a deficiency of service or an unfair trade practice. The Court set aside the orders of the State Commission and the NCDRC, ruling in favor of Yash Raj Films.