Granting relief to the Star TV and Bharti Airtel, the Supreme Court has set aside the ruling of National Consumer Dispute Redressal Commission (NCDRC) which directed them to pay punitive damages of Rs 1 Crore for an alleged ‘unfair trade practices’ in collecting funds to enhance the cash prize for the quiz broadcast ‘Kaun Banega Crorepati (KBC).’
In August 2007, the consumer society of Catalysts filed a complaint before the National Consumer Dispute Redressal Commission against Star India and Bharti Airtel, contending that SMS’s have been charged more than the usual rate, i.e. at Rs 2.4 per message for the contest Har Seat Hot Seat, which obliged the participants to be randomly selected for participating in the next level of the KBC show. They referred that it was an unfair trade practice under the Consumer Protection Act, 1986.
However, Star India argued that the Consumer Protection Act does not declare genuine sponsorships as an unfair trade practice, merely because prizes are being distributed by Star from sponsorships received from its sponsors, such as Airtel. It was also contended that Star has not recovered any charge from the participants of KBC or Har Seat Hot Seat.
The two-judge bench of Supreme Court headed by Justices MM Shantanagoudar and R Subhash Reddy observing the appellants’ contention held that “there is no basis to conclude that the prize money for the contest of Har Seat Hot Seat was paid directly out of the SMS revenue earned by the Airtel, or that Airtel and Star India had colluded to increase the SMS rates to finance the prize money and share the SMS revenue.” The court further added that the finding of the commission of an ‘unfair trade practice’ rendered by the National Commission on this basis is liable to be set aside.
In 2008, the NCDRC ruled in favor of the consumer society of Catalysts and held that Star India and Airtel had created a false impression that the ‘Hot Star Hot Seat’ contest was free of cost. It was contended by the complaint society that the Star India and Airtel would have collected around Rs 13.92 crores through 58 million SMS’s which were sent with regards to the HSHS contest, even though the price money for KBC was only Rs 1.04 crores.
However, Star India argued that neither any documentary proof nor any evidence was produced by the society, which supported the alleged allegations of unfair trade practice. They further stated that the ‘Sponsorship’ of Kaun Banega Crorepati or its Har Seat Hot Seat component is not an ‘unfair trade practice’ within the meaning of Section 2(1)(r)(3)(a) of the Consumer Protection Act, 1986. Further, the NCDRC also imposed Rs 50,000 on Star India and Airtel as punitive damages.
This prompted the Star India and Bharti Airtel to approach the Supreme Court in appeal, which in response has set aside the NCDRC’s ruling.