As Delhi HC says Vimal Elaichi case fit for Maharashtra, surrogate advertising in focus again

Show-cause notice to Bollywood stars Shah Rukh Khan, Ajay Devgn and Tiger Shroff rekindles debate on misuse of brands to promote products that can’t be advertised under the law.

Vimal Elaichi case puts spotlight on surrogate advertising

New Delhi: A show-cause notice issued to Vimal Elaichi’s brand ambassadors—Bollywood actors Shah Rukh Khan, Ajay Devgn and Tiger Shroff—may now be challenged in Maharashtra as the Delhi High Court has refused to entertain the challenge against them as all three live in Maharashtra.

Justice Swarana Kanta Sharma on Monday noted that the “courts in Maharashtra are the more appropriate and convenient forum” for the challenge.

Led by Commissioner Tukaram Mundhe, the Maharashtra Food and Drug Administration (FDA) on 11 August accused the three actors of ‘surrogate advertising’ for their famous pan masala advertisement of Vimal Elaichi which is owned by PB Agro LLP.  It directed them to stop endorsing Vimal Elaichi, questioning whether the product was being advertised independently or was being used as a surrogate communication for Vimal pan masala or tobacco-related products.

The FDA also sought details of the actors’ due diligence, endorsement agreements and campaign material.

What is surrogate advertising?

There’s no single statute on this, and courts have grappled with the concept case after case. Surrogate advertising broadly refers to the promotion of a product that is on the face of it, legal to advertise but uses the brand name, imagery and distinctive features associated with a product whose advertising is prohibited or restricted.

A company may, for instance, advertise an apparently permissible product such as elaichi, soda or music CDs while prominently using a brand name that consumers also associate with a tobacco or alcohol product. The legal restrictions come from different statutes and rules depending on the product involved.

For tobacco, the legal basis is much more explicit. The Cigarettes and Other Tobacco Products Act, 2003 (COTPA) prohibits advertising of cigarettes and other tobacco products, including advertising that ‘directly or indirectly’ promotes them through the use of their brand names for other goods, services or events.

It also states that “directly or indirectly” language is important when discussing surrogate advertising. Thus, companies are prevented from using established tobacco brand names or logos on non-tobacco goods and products and services which is often referred to as surrogate advertising, for instance, promoting pan masala, card games or even clothing under the brand name of a cigarette.

 

In 2024, the Delhi High Court, while dealing with a separate Vimal Elaichi matter, specifically examined this network and said that Rule 2(e) is the relevant provision for examining a case of surrogate advertising. Here, Justice Dharmesh Sharma dealt with a challenge concerning advertisements for Vimal Elaichi in Directorate General of Health Services  (DGHS) v. Som Pan Products. The case involved allegations that the indirect use of the Vimal brand in an advertisement amounted to surrogate advertising for a tobacco product.

The court dismissed appeals moved by the DGHS against trial court orders that had stayed show-cause notices issued to two pan masala/mouth freshener manufacturers – Som Pan Products Private Limited (regarding its brand, Dilbagh) and Vishnu Pouch Packaging Private Limited (the manufacturer associated with Vimal Elaichi).

In this matter, the authorities had issued a show-cause notice over a large front-page Times of India advertisement for Vimal Elaichi. The allegation was that ‘Vimal’ was a tobacco-product brand and that advertising Vimal Elaichi amounted to an indirect/surrogate advertisement for tobacco products, violating Section 5 of COTPA.

The court said Section 5 of COTPA itself does not expressly use the words “surrogate advertisement”; the concept of “indirect advertisement” comes through Rule 2(e) of the COTPA Rules. Rule 2(e)(i), the court noted, prohibits using the name or brand of a tobacco product for marketing, promoting or advertising other goods, services or events.

In 2023, the Delhi high court bench of Justice Subramonium Prasad dealt with a plea by the TV Today Network against Ministry of Information and Broadcasting orders requiring the network to run apology scrolls for surrogate liquor advertising, like ‘All Seasons’ club soda acting as surrogate advertising for whisky. The court refused to interfere with the ministerial orders enforcing the apology scroll.

In another Allahabad High Court ruling in 2019, the Public Interest Litigation concerned alleged surrogate advertising by liquor companies. The court described the issue as whether something that appears to promote one product is actually promoting another product that remains latent or suggested.

“Sponsoring of activities like cultural, sports, music, etc. by itself cannot be said to be illegal, unlawful or otherwise prohibited but sponsoring of such events with an objective to use a well-known liquor brand, in our view, would fall within the category of ‘Surrogate Advertisements’ ,” said the court.

Dealing with a United Breweries case concerning advertisements for Bagpiper Soda and London Pilsner in 2006, the Advertising Standards Council of India (ASCI) had found the advertisements—displayed on train coaches—to be surrogates for alcoholic beverage brands. The ASCI had concluded that the advertisement was misleading.

The Mumbai Grahak Panchayat had complained and then the Commission penalised the company and ordered them to display corrective advertisements on railway coaches at their own expense, carrying messages discouraging liquor consumption and promoting natural drinks.

What laws are used then?

All of these cases depict that ‘surrogate advertising’  isn’t an offence by itself. The legal basis comes from a combination of laws and regulations on advertising, dependent on the product being advertised and the medium of advertising.

For television advertising, the key provision is Rule 7(2)(viii) of the Cable Television Networks Rules, 1994 which prohibits advertisements of “products which are banned for production, sale or distribution under the law”. This provision is used relevantly in alcohol and tobacco advertisements as their advertisements are prohibited.

Next, the Consumer Protection Act, 2019 gives the Central Consumer Protection Authority (CCPA) powers against false or misleading advertisements. Here, the CCPA can direct an advertiser to discontinue or modify a misleading advertisement and impose penalties in appropriate cases.

The CCPA has given the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements in 2022 which establish standards for what constitutes a misleading advertisement and recognise that an advertisement cannot evade legal restrictions merely by presenting itself as something else.

(Edited by Nardeep Singh Dahiya)