Kaun Banega Crorepati: No unfair practice by Star India, Airtel rules Supreme Court

The Supreme Court has set aside a ruling of the National Consumer Disputes Redressal Commission (NCDRC) that had ordered Star India and Airtel to pay punitive damages over alleged “unfair trade practices” in collecting funds to build up the cash prize for the popular quiz programme, Kaun Banega Crorepati (KBC)..A consumer society, Society of catalysts, had registered a complaint over SMSes being charged more than the usual rate, at Rs. 2.4 per message for the Hot Star Hot Seat (HSHS) contest, by which participants are randomly selected to participate in the next level of the KBC show.The society alleged that the cost of organising the programme and the prize money for KBC were recovered from the profits made out of these enhanced charges. The profits from these charges were being shared by Airtel and Star India, it was complained..The Bench of Justices MM Shantanagoudar and R Subhash Reddy on Thursday held,.“… there is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by Airtel, or that Airtel and Star India had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue, and the finding of the commission of an 'unfair trade practice' rendered by the National Commission on this basis is liable to be set aside.”Supreme Court.Consumer forum ruling.In 2008, the NCDRC had ruled in favour of the society's complaint that Star India and Airtel had created a false impression that the ‘Hot Star Hot Seat’ contest was free of cost..The NCDRC ruled against Airtel and Star India in the dispute, since they had not denied the specific allegation that they would have collected around Rs 13.92 crores through 58 million SMSes sent for the HSHS contest (while the price money for KBC was only Rs 1.04 crore)..It was held by the NCDRC that the special business relationship between Star India and Airtel included an undisclosed revenue sharing agreement..Further, it was held that since the prize money for the HSHS contest was fully or partly covered by the revenue earned from increased SMS charges, the appellants had committed an unfair trade practice under Section 2(1)(r)(3)(a) of the Consumer Protection Act, 1986..The NCDRC also imposed Rs 50,000 on Star India and Airtel as punitive damages. This prompted the two parties to approach the Supreme Court in appeal..Supreme Court finds consumer forum had no basis for its conclusions.After hearing submissions by all the parties concerned, the Supreme Court eventually found merit in the submissions advanced for the appellants that the NCDRC had little basis for its adverse findings against Star India and Airtel..“… the National Commission had no basis to hold that the Appellants had admitted that the prize money for the HSHS contest was distributed out of the revenue collected from the SMSes sent in pursuance of the contest…”Supreme Court.At the outset, the Supreme Court took critical note that the NCDRC ought not to have assumed that the appellants had recovered undisclosed profits from the SMSes sent for the HSHS contest, only because they had not specifically denied that the prize money was paid out of the increased SMS charges. In this regard, the Bench also pointed out,.“… they [Appellants] had clarified in their submissions that Airtel was merely a sponsor/advertiser of the program, and the commercial arrangement between the parties was that Airtel would pay sponsorship charges, whereas Star India would be independently liable for paying the prize money out of its pocket regardless of the revenue earned by Airtel.”.The Supreme Court went on to observe that the consumer forum has also not examined the agreement between Star India and Airtel at any stage to discern whether the allegations found support therein..On a perusal of this agreement, the Supreme Court found that there was no provision in the agreement for revenue sharing between the parties, or requiring Airtel to finance any part of the prize money paid by Star India towards the HSHS contest..In view of the same, the Bench concluded that it is evident that Star India was liable to may the prize money irrespective of the profits earned by Airtel..Further, the Court also found merit in Airtel’s submissions that the specialised software involved in directing messages for the HSHS contest justified the enhanced charges. Airtel also informed the Court that it had complied with the relevant regulations issued by the Telecom Regulatory Authority of India (TRAI) before enhancing the SMS charges thus..Overall, the Court opined that the NCDRC did not have any cogent material on record to conclude that the appellants had committed an unfair trade practice..“… the complainant has clearly failed to discharge the burden to prove that the prize money was paid out of SMS revenue, and its averments on this aspect appear to be based on pure conjecture and surmise.”.Therefore, the Supreme Court set aside the consumer forum ruling against Star India and Airtel..Senior advocate Gaurav Pachnanda appeared for Star India, briefed by Ruby Singh Ahuja, Senior Partner along with Swikriti Singhania, Utkarsh Maria , Kritika Sachdeva and Ashutosh P. Shukla from Karanjawala & Co. Airtel was represented by advocate Aditya Narain and advocate Madhumita Bhattacharjee made arguments for the complainant society/respondent..[Read the Judgment]