False efficacy claims and commercial freedom of speech: What Delhi High Court held in Patanjali case

The Delhi High Court recently held that advertisements relating to regulated drugs such as Chyawanprash must adhere to stricter standards of scrutiny and cannot rely on puffery or misleading comparisons under the guise of commercial speech [Dabur India Limited vs. Patanjali Ayurved Limited]..Justice Mini Pushkarna ruled that the standards to be applied in respect of misleading advertisements for drugs and cosmetics must be higher and a stricter approach must be adopted."The consumer must not be misled to believe in false efficacy or superiority of a regulated drug in the name of commercial freedom of speech, especially, if the drug or medicinal preparation in question is known to be widely consumed and such misrepresentation is made with the knowledge of its capacity of confusion and alteration of financial transactional behaviour of consumer in respect of such drug or medicine.".The dispute arose after Patanjali ran an advertisement featuring its founder Swami Ramdev, in which he is seen questioning the authenticity of other Chyawanprash products in the market. The advertisement states:“Jinko Ayurved aur Vedo ka gyaan nahi, Charak, Sushrut, Dhanwantari aur Chyawanrishi ke parampara mei ‘original’ Chyawanprash kaise bana payenge?” [How can those who have no knowledge of the Vedas claim to make the original Chyawanprash?].Dabur also objected to specific references in Patanjali's advertisements calling a 40-herb Chyawanprash “ordinary.”It was contended that this was a direct reference to Dabur’s product, which advertises itself as using “40+ herbs,” and holds over 60% of the Chyawanprash market. Dabur argued that such statements constitute three-fold disparagement - misrepresenting Patanjali's own formulation, questioning Dabur’s adherence to Ayurvedic tradition and branding Dabur's product as inferior.To label other brands as “ordinary” is both misleading and harmful, Dabur contended. It also flagged concerns that the ad insinuates health risks from consuming non-Patanjali products, thereby raising issues of public safety..On July 3, the Delhi High Court restrained Patanjali from airing the allegedly disparaging advertisement.In its order, the Court ruled that advertisements cannot mislead consumers by disparaging competitors, especially in the case of Ayurvedic, Siddha and Unani (ASU) drugs governed by the Drugs and Cosmetics Act, 1940.“What might be permitted by way of comparison or puffery in case of a toilet cleaner might not be permissible when the product involved is a regulated drug...The consumer must not be misled to believe in false efficacy or superiority of a regulated drug in the name of commercial freedom of speech.”.The Court held that such representations amounted to both specific and generic disparagement.“While it may be open for the defendants to state that ‘Patanjali Special Chyawanprash’ is the best, it is not open for them to state that other manufacturers…lack the necessary knowledge and technical know-how,” the Court said.It found that the statement made in the ad created a false impression that other manufacturers lacked authenticity, despite the fact that under Section 3(a) of the Drugs and Cosmetics Act, any licensed manufacturer using recognised Ayurvedic formulations is qualified to produce Chyawanprash..The Court also rejected Patanjali’s defence that the ads amounted to “puffery”. It observed that the use of the term “ordinary” in reference to rival products, coupled with exaggerated claims of superiority, crossed the line into actionable misrepresentation, especially in the context of a drug regulated under law.“There cannot be ‘ordinary’ Chyawanprash...to claim these are two classes of Chyawanprash—‘ordinary’ and ‘special’—amounts to disparaging the entire class."Justice Pushkarna emphasised that ASU drugs like Chyawanprash are governed by specific statutory and regulatory frameworks, and that the Ministry of AYUSH had in 2021 issued an advisory against misleading advertisements that denigrate classical formulations..Citing the established jurisprudence on commercial disparagement and consumer protection, the Court held that advertisements for such products must be truthful, substantiated and must not distort facts in a way that alters consumer behaviour or economic decision-making..Dabur was represented by Senior Advocate Sandeep Sethi with Advocates R Jawahar Lal, Anirudh Bakhru and Meghna Kumar..Patanjali was represented by Senior Advocates Rajiv Nayar and Jayant Mehta with Advocates Rohit Gandhi, Simranjeet Singh, Saurabh Seth, Neha Gupta, Rishabh Pant, Yajat Gulia and Tina Aneja..[Read Order]