Day 9: Arguments before the Karnataka HC on validity of Health Warnings for Tobacco Product Packaging

September 8, 2016

On Day 9, the Counsel for the Tobacco Institute of India continued his arguments. The arguments focused on the 2014 Rules.


Citing Rule 3(1)(b) juxtaposed with Section 7(4) read with Section 20 of COTPA, the Counsel argued that the Rules had the effect of amending Section 7(4). This was because the literal meaning of ‘not less than one panel’ under Section 7(4) means that as long as the health warning is printed on at least one side of the package, the manufacturers have passed muster of the Act. Rule 3(1)(b) by prescribing that both panels should carry the health warning, travels beyond the stated parameters of the COTPA. Further, not conforming to the rules attracts punishment under Section 20. Therefore, the rule has the effect of creating an additional offence, which was not envisaged by the COTPA.  Additionally, Section 7(4) of the COTPA allows the manufacturers the discretion to choose the number of panels on which the warning would be printed. Rule 3(1)(b) by requiring both panels to carry the health warning takes away the discretion under Section 7(4).


Justice Patil asked whether “Not less than one” could be considered as equivalent to both sides of the packaging. To this, the Counsel replied that it would mean both panels of the product package. While Section 7 confers discretion upon the manufacturer, the Rules have the effect of taking away this discretion and mandating display of the specified health warning on both sides of the packaging.


Justice Patil then wanted to clarify whether “not less than” is followed by the words, “as prescribed by the Rules”, as in Section 7(1). The Counsel responded that this was not so and therefore Section 7 does not give any authority to mandate the size, etc. of the warnings. Any such provision is only made under Section 7(4) of the COTPA. Therefore, Rule 3(1)(b) of the 2014 amendment rules, by mandating the health warnings to be put on both sides of the panel, go beyond the scope of the parent legislation.


The Counsel for the Respondent Central Government, Mr. Dixit sought to clarify that Section 3(o) in its definition states that “specified warnings” can be prescribed as per the Rules. To this, the Counsel for the Petitioner Tobacco Institute of India responded by saying that Section 3(o) serves only a definitional purpose, where as the details can be found in Section 8, which is the substantive provision.


Rotation of Health Warning under Rule 5:


It was argued by the Counsel that the 2 months grace period given under Rule 5, which provides for rotation of the specified health warning is unjustified as it causes undue hardship on the fundamental right to freedom and trade under Article 19(1)(g) of the Constitution. This is because manufacturers, retailers and sellers are faced with an undue burden of having to dispose of their cigarette packets in the limited time of 2 months. It was argued that such a regulation by imposing an artificial cut-off date under Rule 5 (5), in the guise of grace period, is prohibiting the sale or distribution of cigarettes by the manufacturers beyond those 2 months. Such a measure as prescribed under the rules violates Article 19(1)(g) since it restricts the time period for selling the commodity. A debate then ensued as to the effects of this prescription for rotation of the specified health warnings.


Justice Patil at first pointed out that the manufacturers, knowing of the prescribed rotation and also of the grace period well in advance, could manufacture the new packs with the new warnings. Justice Nagarathna added another point to this. She stated that after year 1 and year 2, the previous warnings would rotate and be applicable once again in year 3. Thus, by the end of this period, and along with the grace period, the manufactured pack warnings would merge.


The Counsel responded to the Judges by saying that as per Section 7(1), the manufacturer cannot even anticipate and produce the products with the new warnings, because they would not constitute the required “specified warning”. He added that by the time the products reach the retailer in far-flung places, 2 months would have passed, and hence the specified warnings to be displayed would change.


To this, Justice Nagarathna pointedly asked whether the products would become illegal because of the outdated warnings. Justice Patil, on his part asked whether manufacturing the new warnings would indeed violate Section 7(1) of the COTPA. To these queries, the Counsel replied in the affirmative and re-emphasized that the Rules cannot restrict the mandate of the Act. As crores of packets are manufactured, it would take time to sell off the packs with the old specified warning requirements.


Justice Nagarathna then asked whether the 2 months grace period is for disposing the old stock, or for printing of the new warnings. The Counsel responded that if the packs are manufactured with the appropriate warnings, and not sold within the 2 month grace period, they would be illegal thereafter and is therefore a restriction.


Justice Patil at this point sought to highlight that the grace period allows the manufacturer the print the new image. Hence the grace period is not a restriction, but in fact, enables the disposing and sale of the old packs.


The Counsel again stated in his response that Section 5(5) mandates that no one can sell the packs after the 2 months grace period, and that the Rules go beyond this section and the Act. Thus, if the rotation were not there, the packs could be sold in turn, even after 3 years, in conformity with the specified health warning.


At this point, Justice Patil sought to make clear that Rule 5 and all its sub-rules should be read together as a whole. The grace period is provided to aid the manufacturers. Following up with this, the Judge asked as to what would happen in there was no grace period?


The Counsel responded that there was no problem with the grace period, as long as the products could be legally sold. Justice Patil again stated that the purport of the grace period is that the old packs would not be sold after 2 months, in the interest of the consumers and for public health. The Senior Counsel for the Petitioners Mr. Vijayashankar pointed out that such an object of the Rules was arbitrary. He argued that both the pictorial warnings would not be allowed in the market at the same time.


Justice Nagarathna then asked, that if the 2 images are being rotated every year, then the public would soon be immune to them, and hence, why should they be rotated? Also, what should happen to the old packs?


The Counsel again emphasized in his answer that the Rules travel well beyond the parent legislation. The descriptions that the manufacturer uses are his commercial speech and he cannot be restricted in this manner.


Prohibition of use of specific words or descriptors:


The Counsel stated that the COTPA has a positively worded mandate, in that, it provides for a textual and pictorial warning, and that nothing should detract from this warning. The Counsel proceeded to draw the court’s attention to Section 9(2) of the COTPA, which provides that a matter or statement must not detract from the specified warning. Thus, while generally, advertisement is restricted, the manufacturer may do so, on the package of his own product, given it has a trade interest and is an advertisement of his “brand”. The Counsel submitted that the limitation prescribed by Section 9(2) is not just a limitation on the manufacturer, but also upon the Central Government, as it cannot possibly tell the manufacturer not to use “slim”, on its own subjective analysis.


Justice Patil sought to emphasize that as one cannot promote or advertise tobacco products as provided under section 5 (1) of the Act, the Rules can further such an objective by disallowing the usage of words such as “slim”, “mild”, etc. and that, this must be kept in mind in order to analyse the impugned sections of the COTPA and the 2014 Amendment Rules.


Arguments against Rule 3(1)(g):


The Counsel then referred to Rule 3(1)(g). The Counsel emphasized that what is prevented is the used of words like “slim” and similar words or descriptors; graphics intended to be associated with these descriptors and even product package design characteristics associated with the descriptors. The Counsel explained his submission using the example of the word “Slim”, saying that, in effect, a manufacturer will be unable to use a slim packet for his slim cigarettes.


Justice Patil then asked as to what will be the case for “mild” cigarettes.


The Senior Counsel who was present, responded to this question and explained that cigarettes are made of different types of tobacco, wherein their flavour as well as processing is not common. Each manufacturer has a different way of producing the cigarettes, and that “mild” would be a description as against “strong”.


Justice Patil asked whether “mild” suggests that it is safer than “strong”.


The Senior Counsel replied that such a Rule would only have the effect of barring the manufacturer from making a mild cigarette, given that he cannot propagate its characteristics and make.


Justice Patil clarified that while mild cigarettes can be manufactured, people can propagate it amongst themselves, but the manufacturer cannot say this.


The Counsel then went on with his arguments as to the controversial aspects of section 3(1)(g). He stated that as similar words, graphics associated with “slim” and such product design characteristics cannot be used, the rule prevents a manufacturer from giving correct product information to consumers. The Counsel hence submitted that such a Rule travels well beyond the parent legislation, i.e., COTPA and that the descriptors constitute a manufacturer’s commercial speech.


Justice Patil stated that while an objection to the word “slim” may be tenable, to say that the entirety of Rule 3(1)(g) is excessive or against the parent act, would be a bit far fetched.


On Justice Nagarathna’s question to indicate what could other similar words or descriptors be, and who would decide these, the Counsel responded by saying that there is no guidance, and that there is vagueness and use of uncanonised subordinate rule-making power.


Arguments against Rule 3(1)(d):


The Counsel then submitted that Rule 3(1)(d) expands the scope of Section 9(2). While section 9(2) only restricts that which detracts from the specified health warning, Rule 3(1)(d) goes beyond this and bans the advertisement of a particular brand by the manufacturer. This is so, even though it is protected by the proviso to Section 5(2).


Justice Nagarathna stated that the Rule has to be read as a whole in consonance with Section 9(2), and that there needn’t be any conflict between the two provisions. The word, “which” implies that the matter stated on the product should not be inconsistent with the specified health warnings. Justice Patil agreed, stating that the provisions have to be read in harmony.


Arguments against Rule 3(1)(c )


The Counsel then argued his next point, which related to “extraordinary hardship and impossibility to perform”. He stated that as per Rule 3(1)(c), the specified health warning must not be severed when the packaging is opened. The Counsel submitted that while this doesn’t pose any problem as regards a 40% health warning, imposition of an 85% health warning on the cigarette box type, with its hinge lids would not be possible. Hence, the boxes themselves would have to be changed, to comply with the Rule. The Counsel thus emphasized that such a mandate does not constitute a “least restrictive methodology”.


Arguments against Rule 3(1)(h)


The Counsel then went on to make his argument as to Rule 3(1)(h). The Counsel argued that the specification of particular information such as product type, name, manufacturer’s address, etc. does not emanate from the COTPA, but the Legal Metrology Act. He then explained, by way of example, how the latter enactment provides an exemption for the beedi industry, and that in light of this the Central Government cannot impose the information requirements upon beedi manufacturers.


The Counsel then emphasized on sub-section (f) of Rule 3(1)(h), wherein he stated lied the bigger difficulty. He emphasized upon the sentence, “Any other matter… in accordance with international practice.” He stated that such a provision indicates self-empowerment by the executive.  Referring to the Framework Convention on Tobacco Control (FCTC), the Counsel stated that it is only for the Parliament, under Article 253, to decide whether an international instrument should be employed within domestic law. The COTPA, which is the parent act, does not implement the FCTC, and thus, the subordinate legislation can be struck down in lieu of this extraordinary delegation of power.


At this point, Justice Nagarathna stated that if the health warning is to be printed as per international practice, it might even go beyond 85%. The Judge also asked what constituted the international practice in this regard.


The Counsel in his response referred to the mandate in Australia to print the “Quit Tobacco” helpline, to encourage quitting of tobacco consumption. He then drew attention to Section 31(1) of the COTPA, which says, “Rules will be made to give effect to the provisions of the Act.”


The Senior Counsel also added to this by drawing attention to the contextual aspects involved in applying international practices. He stated, that Australia has plain packaging because it has no Fundamental Rights similar to Part III of the Indian Constitution. Similarly, the UK does not have a written Constitution and thus, the application of the rights under the Freedom of speech would differ in the context of each nation.


With this, the Counsel summed up his challenge to the specific section and rules of the impugned legislations.


The Counsel, towards the end of the day, placed certain case law before the court. These were:

  1. Indian express newspapers (Bombay) v. UoI, 1986 AIR SC 515: This case was cited to point out that subordinate legislation does not carry the same immunity as that passed by the legislatures. Thus, it may be questioned on the ground that it does not confirm to the statute under which it is made, or that it is manifestly arbitrary.
  2. State of Kerala v. Unni, Appeal AIR 2007 SC 819: That there would be a presumption as to the unreasonableness of legislation, if it imposes conditions which are impossible to be performed.
  3. Kerala Samsthanam v. State of Kerala, AIR 2006 SC 3480: Delegated legislation cannot be exercised to frame a new policy, and can only be done to carry out the provisions of the parent act.
  4. Agricultural Market Committee v. Shalimar Chemicals, (1997) 5 SCC 516: Rules cannot constrict or widen the scope of the Act. Rules must restrict themselves to the mode of implementation.


Thus, with these cases, the Counsel for the Tobacco Institute of India, ended his arguments for the day.