Day 10: Arguments before the Karnataka HC on validity of Health Warnings for Tobacco Product Packaging

September 9, 2016

Day 10 saw the Counsel for the Tobacco Institute of India continue his arguments, challenging the 2014 Amendment Rules as being arbitrary and ultra vires the parent Act.


The Counsel cited Cellular Operators Association of India v. TRAI  [Civil Appeal No. 5017 of 2016 (Arising out of S.L.P. (Civil) No.6521 of 2016)], to highlight the parameters of judicial review of subordinate legislation on the following grounds:


Manifest arbitrariness: The Counsel argued that the Rules must satisfy the test of Article 14. The arguments in support of the impugned telecom regulation which sough to penalise service providers for call drops, in the Cellular Operators case, had cited public interest as a consideration. The Counsel submitted that, as per the judgment, the regulations must also pass the separate and independent test of not being manifestly arbitrary.


Justice Nagarathna stated that this meant that the legislation must be in the interest of the public, but however, not be arbitrary. The Counsel replied that therefore there exists an independent threshold of unreasonableness and manifest arbitrariness. Justice Patil then clarified that it is so in the context of Article 19(1)(g) and not 19(1)(a). The Counsel stated that it is so, because public interest is not the fulcrum on which Article 19(1)(a) rests. Justice Nagarathna then asked if the Counsel agreed that there could be regulation in the interest of the public, as long as it isn’t arbitrary. The Counsel replied, “Yes, but to what extent it impinges my right is to be considered.” He said that public interest has multiple sectors, and not just public health and that the Union would display a dangerous over-dependence if it were to defend the impugned rules from only a health perspective. He stated that the public interest of the farmer and economy is also involved, as India is a tobacco growing country wherein 4 crore people are engaged in the growth of tobacco.


Lack of intelligent care and deliberation: It was argued that the impugned Rules were drafted without intelligible care and deliberation. In the present tobacco litigation, the Counsel stated that there is no material to show that tobacco necessarily causes cancer. He then said that several Ministries expressed their views before the Parliamentary Committee on Subordinate Legislation (PCSL). The Global Adult Tobacco Survey (GATS) was also produced to argue that a number of people (percentages of various groups, such as students, non-smokers, etc.) have seen the notification and earlier warnings on the tobacco products: Hence, the warnings occupying 40% of the pack were indeed legible, prominent and conspicuous. Yet, as the impugned and excessive Rules were still brought about, it showed the lack of intelligent care and deliberation.


Justice Patil sought to re-confirm that, as stated by the Counsel by relying upon GATS, up to 90% of persons have seen the warning. The Counsel responded by adding that these persons are also aware of the health warning and believe that smoking causes illness.


Justice Nagarathna said that while one function of the impugned 85% health warnings is to generate awareness, they also attempt to discourage people from tobacco consumption. The Counsel promptly responded that discouragement is not an objective found within the subordinate legislation. He also stated that this would make the regulations repugnant to the TBA. The Counsel argued that the question of proportionality would apply. He stated, that while the 40% health warnings were being duly adhered to by the ITC – which is possibly one of the largest companies in the tobacco industry in India – it was the imposition of an 85% health warning that generated such a challenge.


One of the advocates for the Respondents sought to point out that not even a single cigarette brand entirely belongs to the ITC.


The Counsel responded sharply, stating that the Central government itself has a huge stake in the tobacco industry (citing the example of the Life Insurance Corporation). The Counsel then went on a tangent and explained that about 7 foreign companies have a controlling stake in most food brands in the world. He then referred to the uniqueness of Patanjali products which is built and marketed as a purely Indian brand, and that ITC also seeks to do just that. He then stated that every litigation against the ITC is controlled by foreign resources and that the ‘Bill and Melinda Gates Foundation’ has put in 2 Billion dollars (12 thousand crores) to fight tobacco regulation outside America.


At this point, one of the Counsels for the Petitioners pointed out that they have put material on record to show that the NGOs involved in the present litigation are not acting in public interest.


The Respondent Counsel representing the Cancer Patients Aid Association replied that they have no such foreign contributions.


Justice Patil intervened saying that the matter is of a huge magnitude, and that respective submissions will be allowed later on.


The Counsel on behalf of the Petitioners stated that third parties have not been entertained in similar matters wherein subordinate legislation was challenged, as only the Union would be required to defend it.


Justice Patil said that each of the impleading applicants would be heard on their locus. He said that the bench is interested in the gravity of the legislation and the extent to which it affects the public. Thus, relevant studies by a health-related organisation would not be unwelcome.


The Counsel for the Cancer Patients Aid Association stated at this juncture, that they have been permitted by the Supreme Court to implead themselves, and that they treat cancer patients and hence, seek to inform the court.


Justice Nagarathna stated that the difference of the various petitions, in terms of them being PILs, as well as impleaders, must be kept in mind. She stated that who is entitled to be a party in a petition under Article 226 is a matter to be considered. Justice Patil said that the court would not dilate upon this matter today, but the Petitioners can take up their preliminary objections once the impleaders and parties present in public interest start arguing.


Thus, the Counsel went back to his arguments in relation to ‘intelligent care and consideration’. The Counsel went on to explain that the COTPA and the TBA are both laws made under Entry 52 of the Union List, to control and regulate the tobacco industry. Referring to the Cellular operators case, the Counsel stated that the court must take into account all contemporaneous legislation passed and then judge the reasonableness of the law.


The interim order of the Rajasthan HC and the need for pre-legislative consultation:


The Counsel again compared the factual scenario of the Cellular Operators case with the present litigation and argued that the recommendations of the Parliamentary Committee on Subordinate Legislation (PCSL) were not taken into account, ostensibly on the ground that there was a PIL which led to the passing of an interim ex-parte order for vacating the stay on the Notification and for enforcement of the impugned 2014 Amendment Rules (and subsequent contempt petition for non-adherence) in the Rajasthan High Court.


Justice Nagarathna asked whether any steps were taken for vacating the interim order. The Counsel said they weren’t, and that tobacco growers from Karnataka had impleaded themselves in the case to draw attention to the findings of the PCSL. The Counsel stated that the impugned 2014 Amendment Rules had come into force against this background and context.


The Counsel pointed out another aspect. He said that when the interim report of the PCSL had come out, the implementation of the impugned Rules was stalled, but once contempt proceedings commenced against the Health Minister in the Rajasthan High Court, the impugned Rules were notified, without any consideration for the final report of the PCSL.


Justice Patil asked the Counsel to list the dates on which the interim and final reports of the PCSL came out which were on 18th March 2015 and 15th March 2016, respectively, and when the interim order of the Rajasthan High Court was issued. The Counsel said this was on 3rd July, 2015.


Having gathered this information, Justice Patil asked on what basis the Counsel inferred that the impugned amendments were brought into effect as a result of the contempt petition. The Counsel stated that the Solicitor General had stated in the contempt proceedings, that if given time, the impugned Rules would be brought into force.


The Counsel then went on to argue that the Union of India had filed an affidavit that they were considering the final report furnished by the PCSL. Thus, while they brought the impugned Rules into force on the one hand, on the other hand, the Union said that they were considering the report.


The Counsel then referred to how the Supreme Court, in Cellular Operators, had stated that transparency is an important element in subordinate legislation. Thus, openness in governance is also essential, as pointless discretion conferred by a statute demolishes accountability in decision making. Justice Nagarathna asked how the Counsel was linking these factors to the case at hand. The Counsel replied saying that the last notification issued by the Ministry of Health and Family Welfare did not reference any of the stakeholders in the tobacco industry. Thus, a pre-legislative consultation policy for the subordinate legislation was not followed.


Justice Patil asked how the law would not be considered as transparent and open? The Counsel for the Petitioner referenced the US Administrative Procedure Act which requires such transparency, and that the Standing Committee in the Parliament could be considered its equivalent, in India. That, in the Cellular operators case, it was said that when a consultative process is conducted, the result must be taken into account. When material is available in public fora, transparency is eroded, if it is not given due consideration.


The Counsel states that legislation in India, along the parameters of the US Administrative Procedures Act would obviate the need for persons to approach the court to challenge the arbitrariness of subordinate legislation.


Justice Nagarathna thus pointed out that what we have is a post-legislative process, where the Bill is tabled before the Parliament, but what might be required is a pre-legislative process.


The Counsel concluded his arguments on these aspects by saying that for imposition of the 2008 Rules, a consultative process was conducted, and a Group of Ministers constituted, who submitted a report in favour of 40% warnings. It was on this basis that the 2008 Rules were brought into effect. One of the other Counsels for the Petitioners emphasized that the whole scheme of the Constitution is one of checks and balances and that such processes cannot be ignored.


Section 5 and its effect on advertising by Tobacco manufacturers:


The Counsel proceeded to bring the Court’s attention back to section 5 of the COTPA, to drive in his argument that section 5(1) imposes a general prohibition on any advertisement by the manufacturer in electronic or print media, or any such medium. Upon reading section 5(1), the Counsel said that the manufacturer is absolutely restricted from advertising on third-party media. This however, must not restrict him from advertising on his own media.


Justice Patil was not convinced however, and stressed on the connectors (“and”) in this sub-section to state that it cannot be understood that the prohibition is only as regards third party media.


Justice Nagarathna informed the court that the control over “medium” is for media houses. The Counsel replied that the restriction would apply to him, a manufacturer, as well as a media house.


Justice Nagarathna continued on her line of thought, and said that it would probably apply to a model as well. The Counsel accepted this statement and said that one could consider Amitabh Bachchan. Thus, the 1st prohibition would be on a manufacturer. The second would suggest that Amitabh Bachchan cannot do anything via any medium which directly or indirectly advertises tobacco consumption.


Justice Patil would not accept this interpretation, and said that a manufacturer simply cannot advertise in a manner that promotes, encourages or suggests the consumption of tobacco products because no form of media can be used for this.


The Counsel said that if the words “through that medium” were to precede “cigarettes or other tobacco products” then the purport of the Section would be much larger.


The Counsel tried to explain that the prohibition related to the practice of surrogate advertising. In that light, section 5(2) says that it will not be displayed or advertised by the manufacturer, on his own private property, in such a manner. Justice Patil then said that, in effect, 5(1) bears no relation to the manufacturer’s own property. The Counsel agreed and responded that Section 5(1) prohibits the manufacturer from advertising cigarettes or other tobacco products on any public medium.


Justice Patil stated to the Counsel that the manufacturer can do so on his own product, to which the Counsel said yes, as it is not media, but his own property.


Thus, attention was drawn to Section 5(2), which the Counsel said refers to the manufacturer’s private property. He explained that this sub-section controls everything “which is not media as is understood in law.” Thus, the proviso allows the manufacturer to advertise only on a certain specific private property, that is, his product.


Justice Patil asked whether the manufacturer will thus promote consumption through his own packet. The Counsel responded in the affirmative. Justice Patil said that one is however barred from advertising. Justice Nagarathna also drew attention to how the Proviso is limited by Section 9(2) that one cannot detract from the warning, as a manufacturer.


At this point, Justice Patil conceded that there could be a possibility of understanding the Counsel’s view. He then asked whether, in support of this argument, the Counsel would state that ornamental packs constitute an advertisement. The Counsel said that while Section 3(a) defines advertisement, it only does so in terms of methodology, and there is no substantive provision.


Justice Patil said that, as per his contention, Section 5(1) does not ban the manufacturer from advertising on his own cover, but prohibits advertisement on any other media. Thus, Justice Patil stated that on a third reading, he would be more inclined to see the Counsel’s point of view.


Upon Justice Patil’s stating, that for pecuniary benefits, the manufacturers could display or advertise on their packaging, [in accordance with the Proviso to section 5(2)], he received an emphatic “Yes” from the advocates for the Petitioners.


The Counsel for the Petitioner representing the Cancer Patients Aid Association interjected to state that an enticing cigarette packet would detract from the health warning, as was contended in the Rajasthan High Court, by Health for Millions, in a PIL.


With all these arguments, the Counsel for the Tobacco Institute of India concluded his arguments on this matter.