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PETITIONER: TATA PRESS LIMITED

       Vs.

RESPONDENT: MAHANAGAR TELEPHONE-NIGAM LIMITED & ORS.

DATE OF JUDGMENT03/08/1995

BENCH: KULDIP SINGH (J) BENCH: KULDIP SINGH (J) HANSARIA B.L. (J) MAJMUDAR S.B. (J)

CITATION:  1995 AIR 2438            1995 SCC  (5) 139  JT 1995 (5)   647        1995 SCALE  (4)595

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Kuldip Singh,J.      This appeal  has arisen  from a  civil suit  instituted before the  Bombay by  the Mahanagar Telephone Nigam Limited (the Nigam)  and the  Union of  India for a declaration that they alone  have the  right to  print/publish  the  list  of telephone subscribers and that the same cannot be printed or published by  any other person without express permission of the Nigam/Union  of India.  A further declaration was sought that the Tata Press Limited (Tatas) have no right whatsoever to print, publish and circulate the compilation called "Tata Press Yellow  Pages" (Tata-  pages). A  permanent injunction restraining  the  Tatas,  their  agents  and  servants  from printing and/or  publishing and/or  circulating the  "Tata - Pages" being  violative of  the Indian  Telegraph Act,  1885 (the Act) and the Indian Telegraph Rules, 1951 (the rules) - was also sought from the Court. The City Civil Court, Bombay by its  judgment dated  August 7,  1993 dismissed  the suit. First appeal  filed by  the Nigam and the Union of India was heard by a learned single judge of the Bombay High Court and the learned  judge by  the judgment  dated  April  27,  1994 allowed the  appeal, set  aside the  judgment of  the  trial court and  decreed the  suit. Letters Patent Appeal filed by the Tatas  was dismissed  by a  Division Bench of the Bombay High Court by the impugned judgment dated September 8, 1994. This appeal,  by  way  of  special  leave,  is  against  the judgment of  the Division  Bench of the High Court upholding the learned single judge.      The  Nigam   is  a   Government  company  substantially controlled by  the Government of India. The Government holds 80% of  the total  shares of  the company.  The Nigam  is  a licensee under the Act and as such is required to establish, maintain and  control the  telecommunication services within the territorial jurisdiction of the Union Territory of Delhi

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and the  areas covered  by  the  Municipal  Corporations  of Bombay, New  Bombay and the Thane. Till 1987 the Nigam/Union of India  used to  publish and  distribute, on  its own, the telephone directory consisting of white pages only. However, of late, the Nigam started entrusting the publication of its telephone-directory  to   outside  contractors.   From  1987 onwards, the  Nigam has  permitted such contractors to raise revenue for  themselves.  by  procuring  advertisements  and publishing the  same  as  "Yellow  Pages"  appended  to  the telephone directory. In other words, the telephone directory published and distributed by the Nigam consists of the white pages  which   contain  alphabetical   list   of   telephone subscribers  and   also   "Yellow   Pages"   consisting   of advertisements  procured  by  the  contractor  to  meet  the expenses incurred  by the contractor in printing, publishing and distributing the directory.      The Tatas  are engaged in the publication of the Tata - pages which is a buyers-guide comprising of a compilation of advertisements   given    by   businessmen,    traders   and professionals duly  classified  according  to  their  trade, business or  profession. It  is not  disputed that  the said compilation includes  unpaid  advertisements  in  which  the category/type  of  business,  trade  or  profession  of  the advertiser is listed. It is stated by the appellant that the advertisements are  published in  the Tata  - pages  on  the application of  the party  concerned. The only criterion for inclusion of  advertisements in the said compilation is that the advertiser  must be  engaged in  a trade,  profession or business. Three  editions of  Tata - Pages have already been published in Bombay in 1992, 1993 and 1994. According to the appellant  such   Yellow  Pages/buyers   guides  have   been published  in   India  since   1984   and   follow   generic international pattern which was introduced in the USA as far back as 1880. Since 1984 a large number of parties - details have been  placed  on  the  record  -  are  engaged  in  the publication  of  Yellow  Pages/  trade  directories/  buyers guides in India.      Rules 452,  453, 457,  458 & 459 of the Rules which are relevant, are reproduced hereunder:-      "452. Supply of telephone directories. A      copy of  the telephonedirectory shall be      supplied  free   of  charge   for   each      telephone,  extension   or  party  line,      rented  by   the  subscriber   from   an      exchange  system   or   private   branch      exchange or a private branch exchange or      a private exchange. A copy shall also be      supplied  free   of  charge   for   each      extension (including  extension) from an      extension working  from  a  public  call      office. Additional copies supplied shall      be charged  for at  such rate  as may be      fixed by  the Telegraph  Authority  from      time to time.      453. Entries in telephone directories. -      For each  direct telephone  line  rented      (i.e.  for   main  connections,   direct      extensions  and   PBX  junction   lines)      ordinarily only  one entry not exceeding      one line  will be allowed free of charge      in  the  telephone  directory  to  every      subscriber. Such entry shall contain the      telephone  number,   the  initials,  the      surname   and   the   address   of   the      subscriber or  user. No  word which  can

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    intelligibly  be  abbreviated  shall  be      allowed   to   be   printed   in   full.      Additional lines  may be  allowed by the      Telegraph Authority at its discretion.      457. General.  - Any telephone directory      provided by  the Department shall remain      its  exclusive  property  and  shall  be      delivered   to   it   on   demand.   The      department reserves  the right  to amend      or delete  any entries  in the telephone      directory at  any time and undertakes no      responsibility for  any omission; and it      shall  not   entertain  any   claim   or      compensation on  account of any entry in      or omission from the telephone directory      or of any error therein.      458. Publishing  of telephone directory.      Except  with   the  permission   of  the      Telegraph  Authority   no  person  shall      publish   any    list    of    telephone      subscribers.      459.   Advertisements.   The   Telegraph      Authority  may   publish  or  allow  the      publication  of  advertisements  in  the      body of the telephone directory."      As stated  above, the learned trial judge dismissed the suit filed  by the Nigam and the Union of India. The learned judge compared  the advertisements  published in  the  Tata- Pages with  the Telephone directory and found as a fact that the ‘Tata-Pages’  was a  compilation of advertisements given by the  businessmen, traders  and professionals  and as such did not  constitute  a  list  of  telephone  subscribers  as contemplated in  Rule 458  of the  Rules. The  learned judge based his  conclusions on  the reasoning that the source for the advertisements published in the Tata-Pages was different from the  telephone directory,  some advertisements  in  the Tata-Pages did not list telephone numbers, the criterion for listing in  the telephone  directory and  for publication in the Tata-Pages  was different  for telephone  directory  the person/party must  be a telephone subscriber whereas for the Tata-Pages the  advertiser must be a trader, professional or businessmen -  and the telephone directory was restricted to the area  of service  by the Nigam wheras the advertisements in the  Tata-Pages  relate  to  parties  outside  the  local area/Bombay.      Appeal against  the Trial Court judgment was heard by a learned Single  Judge of  the High  Court. The Learned Judge agreed with  the Trial  Court that  the white  pages of  the Telephone  Directory  constituted  the  ‘List  of  Telephone Subscribers’ whereas  the  yellow  pages  consisted  of  the advertisements  given   by  the  telephone  subscribers  and others. He  further accepted  that the criterion for listing of entries  in  the  white  pages  was  different  from  the criterion for  inclusion of  advertisements  in  the  yellow pages. The  learned  judge,  however,  held  that  Rule  458 covered all  parts of  the telephone directory including the yellow pages. According to the learned judge the publication of advertisements  in the  form of yellow pages, appended to the white pages, was within the bar contained in Rule 458 of the Rules.  The learned judge accordingly allowed the appeal and restrained the appellant from publishing the Tata-Pages.      The Letters  Patent Bench  of  the  Bombay  High  Court hearing the  appeal filed  by the TATAs against the judgment of the  learned  single  judge  posed  the  question  to  be considered by the Bench in the following words:-

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    "There  should   be  no   doubt  that  a      publication in  order  to  amount  to  a      contravention of  the Rules,  as  quoted      above, must  in substance  be a "list of      telephone subscribers",  for it  is  the      substance  that   must  count  and  must      outweigh and  take precedence  over mere      appearance.   Before   restraining   the      defendant   Tata    Press   Ltd.    from      publishing or  circulating or in any way      dealing  with  the  "TATA  Press  Yellow      Pages", we  have to be satisfied that in      substance and  in effect  the same  is a      "list of  telephone  subscribers"  or  a      "telephone directory".  The case at hand      involves questions,  not so  much of law      but  rather   of  semantics  and  common      sense." The Bench while dealing with the question observed as under:-           "a list  of telephone  subscribers"      would obviously  mean a  list of persons      to whom  telephone  services  have  been      provided by  means  of  an  installation      under the  Telegraph Rules  or under  an      agreement.  Suppose  we,  in  this  High      Court,   print   or   publish   a   Book      containing a  list  of  our  judges  and      officers   containing    their    names.      designations,   departments   they   are      attached to,  their office  as  well  as      residential  addresses  and  also  their      telephone numbers  in the office as well      as in  their residence.  Or, suppose,  a      Bar Association or a Medical Association      prints or  publishes a  Book  containing      the  names   of  their   members,  their      specialisation,   addresses   of   their      offices, chambers  and residences  along      with their respective telephone numbers,      we are inclined to think that such Books      as aforesaid  may not  amount to "a list      of subscribers"  if the dominant purpose      for such  publication is  not to  notify      the telephone  numbers only,  but mainly      to notify  who these  persons are  along      with    their     designations    and/or      qualifications  or  specialisation;  and      addresses  at   which  they   would   be      available during as well as after office      hours   and    the   telephone   numbers      published in  such Books  would be there      only  to  provide  a  full  or  an  more      complete picture.  The High Court or the      Bar   Association    or   the    Medical      Association in  such cases  may  not  be      proceeded against  for violation of Rule      458 of  the Indian  Telegraph Rules, for      publishing such  books, if  the  primary      object thereof  is not  to  provide  the      telephone  numbers   also   along   with      various other  relevant matters.  If  in      such books  as aforesaid,  the names  of      such officers  or members,  who are  not      subscribers  of   telephones,  are  also

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    published, the  same would further go to      show that  such books  would be not be a      list of subscribers." The Bench finally upheld the judgment of the learned Single Judge on the following reasoning:-      "We have given our best and very serious      considerations to the arguments advanced      by  Mr.   Nariman.   We   have   already      indicated, we  will have  to  scrutinise      and examine  the publication  Tata Press      Yellow Pages  and would  have to come to      our conclusion as to whether the same is      a  Telephone  Directory  or  a  List  of      Telephone Subscribers  from the point of      view of the main object and the dominant      purpose of  the  publication.  The  fact      that has  weighed with  us most  is that      even  though  there  are  some  features      which may  distinguish the  "TATA  Press      Yellow  Pages"  from  a  mere  Telephone      Directory or  a more  List of  Telephone      Subscribers,   the   publication   would      nevertheless be  of little  or no use if      the telephone  numbers  printed  therein      are omitted  or deleted.  It may be that      the "TATA Press Yellow Pages" may not be      a  Telephone  Directory  or  a  List  of      Telephone Subscribers  only, but  we are      nevertheless of  the clear view that the      same is  a Telephone Directory or a List      of  Telephone   Subscribers  also.......      reading the provisions of Rules 452, 458      & 459  together, we  will have  to  hold      that even  if a  telephone directory  or      List of  Telephone  Subscribers  contain      advertisements, may be in large numbers,      publication thereof  would  nevertheless      come within  the prohibition of Rule 458      as in  such a case the publication, even      though not  merely a Telephone Directory      or a  List of  Telephone Subscribers, is      also  nevertheless   such  a   telephone      directory   or    List   of    Telephone      Subscribers."      Learned  counsel   for  the  appellant  has  drawn  our pointed-attention to  the above  quoted observations  of the Division  Bench   of  the  High  Court  and  has  vehemently contended that  the examination  of Tata-pages,  even in the light of  the Test  laid-down by  the High Court, would show that the  said compilation  is not  a Telephone Directory. A Bar Association  or a Medical Association can publish a List of their  respective members.  Similarly, according  to  the learned counsel,  the Associations of professionals, traders or  businessmen   can  publish  Lists  of  their  respective members.  The   Tata-pages,  he   contended,  which   is   a compilation of advertisements, given by businessmen, traders and  professionals,  cannot  be  equated  with  a  "list  of Telephone Subscribers."  It is contended that the Tata-Pages was  a   Buyer’s  guide/Trade  Directory  and  its  content, character and  function are  different  from  the  Telephone Directory. The  primary purpose  of reference to a Telephone Directory  is   to  find  out  the  telephone  number  of  a particular telephone-subscriber  whereas the primary purpose of a  Buyer’s guide  such as the Tata - Pages is to enable a consumer/buyer  to   find  out  the  parties  engaged  in  a

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particular business  or trade  for  providing  a  particular service. There  is plausibility  in the  contention  of  the learned counsel  but cannot,  by itself, tilt the balance in favour of the appellant.      We are  of the  view that  the answer  to the  question whether the Tata - Pages is a Telephone Directory within the meaning of  Rule 458  or is  a Buyers  Guide/Trade Directory outside the  scope  of  the  said  Rule,  depends  upon  the determination  of   the  larger   issue  whether   a  simple "commercial  advertisement"  comes  within  the  concept  of "freedom of  speech and expression" guaranteed under Article 19(1)(a)  of  the  Constitution  of  India.  We,  therefore, proceed to deal with the constitutional question.      Dr. Abhishek  Singhvi, learned  counsel supporting  the case of  the appellant,  has contended  that the "commercial speech"  is  protected  under  Article  19(1)(a)  read  with Article 19(2)  of the  Constitution. Mr.  Venugopal and  Mr. Arun Jaitley,  learned counsel appearing for the respondents have,  however,   contended   that   a   purely   commercial advertisement is  meant for furtherance of trade or commerce and as  such is outside the concept of freedom of speech and expression. Reliance  was placed  by the  learned counsel on the judgment  of this  Court in Hamdard Dawakhana (WAKF) Lal Kuan, Delhi  and Another  v Union  of India  and others [SCR 1960 (2)  671]. A  Constitution Bench of this Court speaking through Kapur, J. held as under:      "    An advertisement is no doubt a form      of speech  but  its  true  character  is      reflected  by   the   object   for   the      promotion of  which it  is employed.  It      assumes the  attributes and  elements of      the activity  under Art.  19(1) which it      seeks to  aid  by  bringing  it  to  the      notice of  the public. When it takes the      form of a commercial advertisement which      has an  element of  trade or commerce it      no longer  falls within  the concept  of      freedom of  speech for the object is not      propagation of  ideas social,  political      or economic or furtherance of literature      or human  thought; but as in the present      case the  commendation of  the efficacy,      value and  importance  in  treatment  of      particular diseases by certain drugs and      medicines. In such a case, advertisement      is a  part of  business even  though  as      described by  Mr.  Munshi  its  creative      part, and  it was  being  used  for  the      purpose of  furthering the  business  of      the petitioners and  had no relationship      with what  may be  called the  essential      concept of  the freedom  of  speech.  It      cannot be said that the right to publish      and distribute commercial advertisements      advertising  an   individual’s  personal      business is  a part of freedom of speech      guaranteed by the Constitution. In Lewis      J. Valentine  v. F.J. Chrestensen it was      held that  the constitutional  right  of      free  speech   is   not   infringed   by      prohibiting  the  distribution  in  city      streets of handbills bearing on one side      a protest against action taken by public      officials and  on the  other advertising      matter. The  object of  affixing of  the

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    protest to  the advertising circular was      the evasion of the prohibition of a city      ordinance forbidding the distribution in      the  city   streets  of  commercial  and      business advertising matter. Mr. Justice      Roberts, delivering  the opinion  of the      court said:      "This court  has unequivocally held that      the streets  are proper  places for  the      exercise of the freedom of communicating      information  and  disseminating  opinion      and  that,   though   the   states   and      municipalities     may     appropriately      regulate the  privilege  in  the  public      interest, they  may not unduly burden or      prescribe its employment in these public      thoroughfares. We are equally clear that      the   Constitution   imposes   no   such      restraint  on   government  as  respects      purely commercial advertising ....... If      the respondent was attempting to use the      streets  of  New  York  by  distributing      commercial advertising,  the prohibition      of  the  Code  provisions  was  lawfully      invoked against such conduct."      It cannot  be said  therefore that every      advertisement is  a matter  dealing with      freedom of  speech nor  can it  be  said      that it  is an  expression of  ideas. In      every case  one has  to see  what is the      nature of  the  advertisement  and  what      activity falling  under  Art.  19(1)  it      seeks to  further. The advertisements in      the instant  case relate  to commerce or      trade and  not to  propagating of ideas;      and advertising  of prohibited  drugs or      commodities of  which the sale is not in      the  interest   of  the  general  public      cannot be  speech within  the meaning of      freedom of  speech and  would  not  fall      within Art. 19(1)  (a). The main purpose      and true  intent  and  aim,  object  and      scope of  the Act  is to  prevent  self-      medication  or  self-treatment  and  for      that purpose  advertisements  commending      certain drugs  and medicines  have  been      prohibited. Can  it be said that this is      an abridgement of the petitioners’ right      of free  speech. In  our opinion  it  is      not. Just  as in  Chamarbaughwala’s case      1957 SCR 930 it was said that activities      undertaken and carried on with a view to      earning profits  e.g.  the  business  of      betting  and   gambling  will   not   be      protected   as    falling   within   the      guaranteed right of carrying on business      or trade  so it  cannot be  said that an      advertisement   commending   drugs   and      substances  as   appropriate  cure   for      certain diseases  is an  exercise of the      right of  freedom of  speech. Freedom of      speech goes  to the heart of the natural      right  of  an  organised  freedom-loving      society   to    "impart   and    acquire      information about that common interest".

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    If  any   limitation  is   placed  which      results in the society being deprived of      such right  then no  doubt it would fall      within the guaranteed freedom under Art.      19(1) (a). But if all it does is that it      deprives a  trader from  commending  his      wares it  would  not  fall  within  that      term. In  John W.  Rast v.  Van Deman  &      Lewis  Company,   Mr.  Justice  Mckenna,      dealing with advertisements said:-      "Advertising  is  merely  identification      and description,  apprising  of  quality      and place.  It has  no other object than      to draw  attention to  the article to be      sold and  the acquisition of the article      to  be   sold   constitutes   the   only      inducement to its purchase."      As  we  have  said  above  advertisement      takes the  same attributes as the object      it seeks  to promote  or  bring  to  the      notice of  the public  to be used by it.      Examples can  be multiplied  which would      show  that  advertisement  dealing  with      trade and business has relation with the      item "business  or trade"  and not  with      "freedom of speech". Thus advertisements      sought to  be banned  do not  fall under      Art. 19(1) (a).      This Court in Hamdard Dawakhana’s case primarily relied on the  judgment of  the  United  States  Supreme  Court  in Valentine v  Chrestensen for  the proposition  that  "purely commercial advertising"  is not  protected by  Article 19(1) (a) of  the Constitution. Dr. Singhvi has placed reliance on series of judgments of the United States Supreme Court since 1942 when  Chrestensen’s case  was decided  to show that the Courts in  United States  have step-by-step  moved away from the Rule  in Chrestensen’s  case, and  as on  today  "purely commercial  advertising"   is  entitled   to   full   "First Amendment’/ protection.  We may  refer to some of the cases. In 1964  United States Supreme Court ruled in New York Times v Sullivan 376 U.S. 254 that editorial advertising, that is, advertising to  promote an  idea such as "Save Whale", "Stop War" or  "Ban Pesticides"  rather than  a product  like used cars or  spaghetti is  protected by  the First Amendment. In the year  1975 in Bigelow v Virginia 421 U.S. 804 the United States Supreme  Court reversed  the conviction of a Virginia newspaper editor  who had been found guilty of publishing an advertisement which  offered  assistance  to  women  seeking abortion. Abortion  was illegal in Virginia in 1971 when the advertisement was  published. The women Pavilion, a New York group, urged  women who  wanted an  abortion to  come to New York. Blackmun,  J. analysing earlier judgments of the Court observed that  speech does  not lose  the protection  of the First Amendment  merely because  it appears in the form of a commercial advertisement.      Finally, in  1976 the  United States  Supreme Court has provided  a  clearer  answer  in  Virginia  State  Board  of Pharmacy v  Virginia Citizens  Consumer Council, Inc. 425 US 748. The  appealees in  the said case attacked, as violative of the  First Amendment,  that part  of  the  statute  which provided that  a pharmacist  licensed in Virginia was guilty of unprofessional  conduct if  he "publishes,  advertises or promotes, directly  or indirectly, in any manner whatsoever, any amount,  price, fee, premium, discount, rebate or credit terms..... for  any drugs  which may  be dispensed  only  by

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prescription."  The   District  Court  declared  the  quoted portion  of  the  statute  "void  and  of  no  effect".  The appellants before  the  Supreme  Court  contended  that  the advertisement of  prescription drug  price was  outside  the protection of the First Amendment because it was "commercial speech". Rejecting  the argument  the Court speaking through Blackmun, J. held as under:-      "There can  be no  question that in past      decisions  the   Court  has  given  some      indication  that  commercial  speech  is      unprotected. In Valentine v Chrestensen,      supra,  the  Court  upheld  a  New  York      statute that prohibited the distribution      of any "handbill, circular .... or other      advertising matter whatsoever in or upon      any street."  The Court  concluded that,      although  the   First  Amendment   would      forbid the  banning of all communication      by handbill in the public thoroughfares,      it  imposed   "no  such   restraint   on      government as respects purely commercial      advertising". 316  US, at  54, 86  L  ED      1262, 62 S Ct 920. Further support for a      "commercial  speech"  exception  to  the      First Amendment  may perhaps be found in      Breard v Alexandria, 341 US 622, 95 L Ed      1233, 71  S Ct  920, 46  Ohio Ops 74, 62      Ohio L  Abs 210,  35 ALR  2d 335 (1951),      where the  Court upheld a conviction for      violation of  an  ordinance  prohibiting      door-to-door  solicitation  of  magazine      subscriptions. The Court  reasoned: "The      selling...brings into  the transaction a      commercial feature", and it distingushed      Martin v  Struthers, supra, where it had      reversed a  conviction for  door-to-door      distribution of  leaf-lets publicizing a      religious meeting,  as a  case involving      "no element of the commercial."  341 US,      at 642-643,  95 L  Ed 1233, 71 S Ct 920,      46 Ohio  Ops 74,  62 Ohio  L Abs 210, 35      ALR2d  335.................   Since  the      decision in  Breard, however,  the Court      has  never   denied  protection  on  the      ground that  the  speech  in  issue  was      "commercial  speech".   That  simplistic      approach, which  by then  had come under      criticism or was regarded as of doubtful      validity by Members of the Court.           Last Term,  in Bigelow  v Virginia,      421 US 809, 44 L Ed 2d 600, 95 S Ct 2222      (1975),  the   notion   of   unprotected      "commercial speech"  all but passed from      the scene.  We reversed a conviction for      violation of  a  Virginia  statute  that      made the  circulation of any publication      to encourage  or promote  the processing      of   an    abortion   in    Virginia   a      misdemeanor. The defendant had published      in his  newspaper  the  availability  of      abortions in New York. The advertisement      in question,  in addition  to announcing      that abortions  were legal  in New York,      offered  the   services  of  a  referral      agency in  that State.  We rejected  the

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    contention  that   the  publication  was      unprotected because  it was  commercial.      Chrestensen’s  continued   validity  was      questioned,   and    its   holding   was      described as  "distinctly a limited one"      that   merely   upheld   "a   reasonable      regulation  of   the  manner   in  which      commercial    advertising    could    be      distributed."           Here,  in  contrast,  the  question      whether  there   is  a  First  Amendment      exception  for  "commercial  speech"  is      squarely before  us. Our pharmacist does      not wish to editorialize on any subject,      cultural, philosophical,  or  political.      He  does   not  wish   to   report   any      particularly newsworthy fact, or to make      generalized  observations   even   about      commercial matters. The "idea" he wishes      to communicate  is simply  this: "I will      sell you  the X prescription drug at the      Y price". Our question, then, is whether      this communication is wholly outside the      protection of the First Amendment.           Our  question   is  whether  speech      which  does  "no  more  than  propose  a      commercial   transaction."    Pittsburgh      Press Co.  v Human Relations comm’n, 413      US, at  385, 37  L Ed  2d 669,  93 S  Ct      2553, is so removed from any "exposition      of ideas",  Chaplinsky v  New Hampshire,      315 US  568, 572,  86 L Ed 1031, 62 S Ct      766 (1942),  and from  "truth,  science,      morality, and  arts in  general, in  its      diffusion of  liberal sentiments  on the      administration of  Government."  Roth  v      United States,  354 US  476, 484, 1 L Ed      2d 1498,  77 S  Ct 1304,  14 Ohio Ops 2d      331   (1957),    that   it   lacks   all      protection. Our  answer is  that  it  is      not.           Generalizing, society also may have      a strong  interest in  the free  flow of      commercial    information.    Even    an      individual     advertisement,     though      entirely "commercial," may be of general      public interest.  The facts  of  decided      cases       furnish       illustrations:      advertisements  stating   that  referral      services   for   legal   abortions   are      available, Bigelow  v  Virginia,  supra;      that a  manufacturer of  artificial furs      promotes his  product as  an alternative      to the  extinction by his competitors of      fur-bearing mammals, see Fur Information      & Fashion  Council, Inc. v. E.F. Timme &      Son, 364 F supp 16 (SDNY 1973); and that      a  domestic   producer  advertises   his      product as  an  alternative  to  imports      that tend  to deprive American residents      of their jobs.           Moreover,    there    is    another      consideration that suggests that no line      between   publicly    "interesting"   or      "important" commercial  advertising  and

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    the opposite  kind could  ever be drawn.      Advertising,   however   tasteless   and      excessive  it  sometimes  may  seem,  is      nonetheless dissemination of information      as to  who is producing and selling what      product, for  what reason,  and at  what      price.  So   long  as   we  preserve   a      predominantly free  enterprise  economy,      the allocation of our resources in large      measure will  be made  through  numerous      private  economic  decisions.  It  is  a      matter of  public  interest  that  those      decisions,   in    the   aggregate,   be      intelligent and  well informed.  To this      end,  the   free  flow   of   commercial      information is indispensable........ And      if it  is indispensable  to  the  proper      allocation  of   resources  in   a  free      enterprise   system,    it    is    also      indispensable  to   the   formation   of      intelligent  opinions  as  to  how  that      system ought to be regulated or altered.      Therefore, even  if the  First Amendment      were  thought   to   be   primarily   an      instrument to  enlighten public decision      making in  a democracy, we could not say      that the  free flow  of information does      not serve that goal."      It is,  thus, obvious  that the  United States  Supreme Court  in   Virginia  Board  case  has  virtually  overruled Valentine’s case  decided in  1942. The  Court has  ruled in clear terms  that the  Virginia statute which had the effect of prohibiting  pharmacies from  advertising  the  price  of prescription drugs violated the First Amendment protection.      In John  R. Bates  and Van  o’Steen vs.  State  Bar  of Arizona 53  L.  Ed.  2nd  810,  two  attorneys  licensed  to practice law in Arizona placed an advertisement in a phoenix newspaper, stating  that they  were offering "legal services at very  reasonable fees" and listing their fees for various matters. The  advertisement was in violation of disciplinary rules of  the Supreme  Court  of  Arizona  which  prohibited Arizona lawyers  from publicizing themselves, their partners or their  associates by  "commercial" means.  On a complaint filed by  the President  of the  State  Bar,  the  Board  of Governors  recommended   a  one  week  suspension  for  each attorney. The  two lawyers then sought review in the Supreme Court of  Arizona which  rejected their  contention that the disciplinary rules  infringed their  First Amendment rights. On an  appeal, the  United States Supreme Court reversed the judgment of  the Supreme Court of Arizona on the question of First Amendment  rights. Speaking for the court Blackmun, J. held  that   the  blanket   suppression  of  advertising  by attorneys violated  a free speech clause of First Amendment. The Court  rejected arguments  that such  advertising  would have  an   adverse  effect   on  professionalism,  would  be inherently misleading,  would have  an adverse effect on the administration  of   justice,  would   produce   undesirable economic effects,  and would  have an  adverse effect on the quality of  legal services. The Court, however, further held that such  advertising, if  false, deceptive  or  misleading could continue  to be  restrained, and  that, as  with other varieties of  speech, such advertising could be made subject to reasonable  restrictions on the time, place and manner of such advertising.      After the decision in Virginia Board case, it is almost

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settled law in the United States that "commercial speech" is entitled to  the First  Amendment  protection.  The  Supreme Court has,  however,  made  it  clear  that  Government  was completely free  to  recall  "commercial  speech"  which  is false, misleading,  unfair,  deceptive  and  which  proposes illegal transactions. A political or social speech and other public- affairs  - oriented discussions are entitled to full First Amendment protection whereas a "commercial speech" may be restricted  more easily  whenever the government can show substantial justification for doing so.      More recent  judgments of  the Supreme  Court of Unites States in  Central Hudson  Gas &  Electric Corp.  v.  Public Service Commission  447  US  557,  Posadas  de  Puerto  Rico Associates v.  Tourism Company  of Puerto  Rico 92 L Ed. 2nd 266 and  Board of  Trustees of  the State  University of New York vs.  Todd Fox  106 L  Ed. 388  clearly indicate that in "commercial  speech"   cases  a   four-part   analysis   has developed. At  the outset, it must be determined whather the advertising  is   protected  by  the  First  Amendment.  For commercial speech  to come  within that  provision  it  must concern lawful  activity and  not be  misleading. Next it is seen  whether   the  asserted   governmental   interest   is substantial. If  both inquiries  yield positive answers then it  must  be  determined  whether  the  regulation  directly advances the  governmental interest  asserted and whether it is more extensive than is necessary to serve that interest.      Unlike the  First Amendment  under  the  United  States Constitution, our  Constitution itself  lays down in Article 19(2)  the   restrictions  which   can  be  imposed  on  the fundamental right  guaranteed under Article 19(1) (a) of the Constitution. The  "Commercial speech"  which is  deceptive, unfair, misleading and untruthful would be hit by Article 19(2) of the Constitution and can be regulated/prohibited by the State.      The Court  in Hamdard Dawakhana’s case was dealing with advertising of  prohibited drugs  and commodities. The Court came to the conclusion that the sale of prohibited drugs was not in the interest of the general public and as such "could not be a speech" within the meaning of freedom of speech and expression under  Article 19(1) (a) of the Constitution. The Court further held in the said case that an advertisement is no doubt  a  form  of  speech  but  its  true  character  is reflected by  the object  for the  promotion of  which it is employed. Hamdard  Dawakhana’s case  was considered  by this Court in  Indian Express  Newspapers (Bombay) Private Ltd. & Ors. etc.  etc. vs.  Union of  India & Ors. etc.etc. 1985(2) SCR 287. The observations in Hamdard Dawakhana’s case to the effect that  advertising by  itself would  not  come  within Article 19(1)  (a) of  the Constitution,  were explained  by this Court  in  Indian  Express  Newspapers’s  case  in  the following words:      "We  have   carefully   considered   the      decision  in  Hamdard  Dawakhana’s  case      (supra). The main plank of that decision      was that the type of advertisement dealt      with there  did not  carry with  it  the      protection  of  Article  19(1)  (a).  On      examining    the    history    of    the      legislation,       the       surrounding      circumstances and  the scheme of the Act      which had  been challenged  there namely      the    Drugs    and    Magic    Remedies      (Objectionable Advertisement)  Act, 1954      (21 of  1954) the  Court held  that  the      object of that Act was the prevention of

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    self-medication  and  self-treatment  by      prohibiting  instruments  which  may  be      used  to  advocate  the  same  or  which      tended to  spread the  evil....  In  the      above   said    case   the   Court   was      principally dealing  with the  right  to      advertise prohibited  drugs, to  prevent      self-medication and self-treatment. That      was the main issue in the case. It is no      doubt true that some of the observations      referred to above go beyond the needs of      the case and tend to affect the right to      publish all  commercial  advertisements.      Such broad  observations appear  to have      been made  in the  light of the decision      of  the   American  Court  in  LEWIS  J.      Valentine vs.  F.J. Chrestensen (supra).      But it is worthy of notice that the view      expressed in  this American case has not      been  fully  approved  by  the  American      Supreme Court  itself in  its subsequent      decisions. We shall refer only to two of      them.  In  his  concurring  judgment  in      William B. Cammarano v. United States of      America Justice  Douglas said "Valentine      vs. Chrestensen.....  held that business      of advertisements and commercial matters      did not  enjoy  the  protection  of  the      First Amendment,  made applicable to the      States by the Fourteenth. The ruling was      casual, almost  off hand. And it has not      survived reflection".  In  Jeffrey  Gole      Bigelow v.  Commonwealth of Virginia the      American Supreme  Court  held  that  the      holding in  Lewis J.  Valentine v.  F.J.      Chrestensen  (supra)  was  distinctly  a      limited one.  In view  of the foregoing,      we feel  that the  observations made  in      the Hamdard Dawakhana’s case (supra) too      broadly stated and the Government cannot      draw much support from it. We are of the      view that  all commercial advertisements      cannot  be   denied  the  protection  of      Article 19(1)  (a) of  the  Constitution      merely  because   they  are   issued  by      businessmen."      The combined  reading of  Hamdard Dawakhana’s  case and the  Indian  Express  Newspapers’s  case  leads  us  to  the conclusion that  "commercial speech"  cannot be  denied  the protection of  Article 19(1)  (a) of the Constitution merely because the same are issued by businessmen.      Advertising is  considered to be the cornerstone of our economic system. Low prices for consumers are dependent upon mass production,  mass production  is dependent  upon volume sales, and  volume sales  are  dependent  upon  advertising. Apart from  the lifeline of the free economy in a democratic country, advertising can be viewed as the life blood of free media, paying  most of  the costs  and thus making the media widely available.  The newspaper  industry obtains 60/80% of its revenue  from  advertising.  Advertising  pays  a  large portion of the costs of supplying the public with newspaper. For a democratic press the advertising "subsidy" is crucial. Without advertising, the resources available for expenditure on the "news" would decline, which may lead to an erosion of quality and  quantity. The  cost of the "news" to the public

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would  increase,   thereby  restricting   its   "democratic" availability.      A Constitution  Bench of this Court in Sakal Papers (p) Ltd. and  others.  vs.  Union  of  India  AIR  1962  SC  305 considered the  constitutional  validity  of  the  Newspaper (Price and  Page) Act,  1956. The  said  Act  empowered  the Government to  regulate the  prices of newspaper in relation to their pages and sizes and to regulate allocation of space for advertisement  matter. This  Court  held  that  the  Act placed restraints on the freedom of press to circulate. This Court   further   held   that   the   curtailment   of   the advertisements would  bring  down  the  circulation  of  the newspaper and  as such  would be hit by Article 19(1) (a) of the Constitution  of India.  In Sakal  Papers’s case  it was argued  before   this  Court   that   the   publication   of advertisements was  a trading  activity. The  diminution  of advertisement  revenue   could  not   be  regarded   as   an infringement of  the right  under Article  19(1) (a). It was further argued  before this Court that devoting large volume of space  to advertisements could not be the lawful exercise of the  right of  freedom to  speech and  expression or  the right of  dissemination of  news  and  views.  It  was  also contended that instead of raising the price of the newspaper the object could be achieved by reducing the advertisements. This Court rejected the contentions and held as under:-      "Again S.3(1) of the Act in so far as it      permits  the   allocation  of  space  to      advertisements  also   directly  affects      freedom of  circulation. If the area for      advertisements is curtailed the price of      the newspaper will be forced up. If that      happens, the circulation will inevitably      go down.  This would be no remote, but a      direct  consequence  of  curtailment  of      advertisements ...If, on the other hand,      the space  for advertisement  is reduced      the earnings  of a  newspaper  would  go      down and  it would either have to run at      a loss or close down or raise its price.      The object  of the Act in regulating the      space for advertisements is stated to be      to prevent  ’unfair’ competition.  It is      thus directed  against circulation  of a      newspaper. When  a law  is  intended  to      bring about this result there would be a      direct interference  with the  right  of      freedom   of   speech   and   expression      guaranteed under Article 19 (1) (a)."      This Court in Bennett Coleman & Co. & Ors. vs.Union of India & Ors. 1973 2 SCR 757 held as under:-      "The  law   which  lays   excessive  and      prohibitive burden  which would restrict      the circulation  of a newspaper will not      be saved  by Article 19 (2). If the area      of advertisements  is restricted,  price      of paper  goes up.  If the price goes up      circulation will  go down. This was held      in Sakal  Papers case  (supra) to be the      direct  consequence  of  curtailment  of      advertisement.   The    freedom   of   a      newspaper to publish any number of pages      or to  circulate it  to  any  number  of      persons has  been held  by this Court to      be an  integral part  of the  freedom of      speech and  expression. This  freedom is

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    violated by  placing restraints  upon it      or by  placing restraints upon something      which  is  an  essential  part  of  that      freedom. A  restraint on  the number  of      pages, a  restraint on circulation and a      restraint on advertisements would affect      the fundamental  rights under Article 19      (1) (a)  on the  aspects of propagation,      publication and circulation."      Advertising as  a "commercial  speech" has  two facets. Advertising which  is no more than a commercial transaction, is nonetheless  dissemination of  information regarding  the product-advertised. Public  at large  is benefitted  by  the information made  available through  the advertisement. In a democratic economy  free flow  of commercial  information is indispensable.  There   cannot  be   honest  and  economical marketing by  the public  at large without being educated by the information  disseminated  through  advertisements.  The economic system  in a democracy would be handicapped without there being  freedom of  "commercial speech". In relation to the publication and circulation of newspapers, this Court in Indian Express  newspaper’s case,  Sakal  paper’s  case  and Bennett Coleman’s  case has  authoritatively held  that  any restraint or  curtailment of advertisements would affect the fundamental right  under Article 19(1) (a) on the aspects of propagation, publication and circulation.    Examined   from another angle,  the public  at large  has a right to receive the "Commercial  speech". Article  (19)  (1)  (a)  not  only guarantees  freedom   of  speech  and  expression,  it  also protects the  rights of  an individual  to listen,  read and receive the  said speech.  So far as the economic needs of a citizen are  concerned, their fulfilment has to be guided by the information disseminated through the advertisements. The protection of  Article 19(1)(a)  is available to the speaker as well  as to the recipient of the speech. The recipient of "commercial speech"  may be  having much  deeper interest in the advertisement  than the  businessman who  is behind  the publication. An advertisement giving information regarding a life saving  drug may  be of much more importance to general public than  to the  advertiser who  may be  having purely a trade consideration.      We, therefore,  hold that "commercial speech" is a part of the  freedom of  speech and  expression guaranteed  under Article 19(1) (a) of the constitution.      Adverting to the question whether Tata’s compilation is a telephone  directory as  envisaged under the Rules, we may examine the  scheme of  the Rules.  Rule 452 provides that a copy of  the telephone  directory shall  be supplied free of charge for  each telephone,  extension or party line, rented by  the   subscriber.  Although  the  expression  "Telephone Directory" has  not been  defined under  the Rules, but Rule 453  clearly   provides  that  an  entry  in  the  Telephone Directory shall  contain the telephone number, the initials, the sir-name and the address of the subscriber or user. Rule 457 makes  a telephone  directory to  be the property of the department. It  provides that  the telephone directory shall remain the exclusive property of the department and shall be delivered to it on demand. The department reserves the right to amend  or delete  any entry in the telephone directory at any time  and undertakes no responsibility for any omission. It shall  not entertain any claim or compensation on account of any  entry in or omission from the telephone directory or of an  error therein.  Then come the two crucial rules. Rule 458 under  the heading  "Publishing of  Telephone Directory" provides that  except with  the permission  of the telegraph

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authority, no  person shall  publish any  list of  telephone subscribers. Rule  459 deals  with "advertisements" and lays down that  the telegraph  authority may publish or allow the publication of  advertisements in  the body of the telephone directory. It is no doubt correct that a telephone directory is an  essential  instrumentality  in  connection  with  the peculiar service  which the  Union of  India offers  for the public benefit  and convenience.  It is as much so as is the telephone receiver  itself, it  would be practically useless for the  receipt and  transmission of  messages without  the accompaniment of  such directories.  The  telephone  service being a  public utility service, the telephone authority has rightly been  given powers  under the  Act and  the Rules to regulate the  form and  contents of the telephone directory. In the  development of  this form of public utility service, the  telegraph   authority  has  found  it  practicable  and profitable to  diminish the cost and increase the profits of operation by  making use  of its  directories as a means and form of  advertising available  to its  subscribers. In  the typical  classified  telephone  directory,  or  the  "yellow pages" section  of the  directory published  by  the  Nigam, there are  alphabetical light-faced  type listing (for which there is  usually no  charge), alphabetical  bold faced type listings, alphbetical  in-column business  card listings and display  advertising.   "Yellow  pages"   of  the  telephone directory are wholly paid advertising. It cannot be disputed that the  paid advertising,apart  from the  light-faced free listing, is  not in  the nature  of a  service rendered by a utility.  The  "Yellow  Pages"  attached  to  the  telephone directory issued  by the  Nigam cannot  be  a  part  of  the Nigam’s public telephone service.      Rules 458  and 459  of the Rules have to be interpreted in the  light of  our findings  that "commercial  speech" by itself is a fundamental right under Article 19(1) (a) of the Constitution and  the paid advertisements comprising "Yellow Pages" attached  to the  telephone directory is not a public utility service.      Right to  freedom of  speech and  expression guaranteed under Article  19(1)(a) of  the  Constitution  can  only  be restricted under  Article 19(2).  The said  right can not be denied by creating a monopoly in favour of the government or any other  authority. "Publication  of advertisements" which is  a   "commercial  speech"  and  protected  under  Article 19(1)(a)  of  the  Constitution  cannot  be  denied  to  the appellants on  the interpretation of rule 458 and 459 of the Rules. The  plain language  of the  Rules indicate  that the prohibition under  rule 458  of the Rules is only in respect of publishing  "any list  of telephone  subscribers". By  no stretch of  imagination "publication  of advertisements" can be equated  with a  "list of telephone subscribers  A "list" is a  number of names having something in common written out systematically one  beneath the  other. "List  of  telephone subscriber" in  terms of Rule 458 of the Rules would have to be compiled  only on  the criterion  of the  persons  listed being  telephone   subscribers.  No  person  who  is  not  a telephone subscriber  could be  eligible for  inclusion. The said list  would  necessarily  be  restricted  to  the  area serviced by  the Nigam. On the other hand "Tata Press yellow pages" is a Buyer’s Guide comprising of advertisements given by traders,  businessmen  and  professionals  and  the  only basis/criterion  applied   for  acceptance/  publication  of advertisements is  that an  advertiser should  be a  trader, businessman or professional.      The  scheme   of  the   Rules  make   it   clear   that advertisements are  treated differently under the Rules from

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"list of  telephone subscribers".  Rule  458  of  the  Rules intends  to   protect  the   exclusive  property  rights  of Nigam/Union of  India created  under Rule  457 in respect of the telephone  directory prepared  in  terms  of  Rule  453. "Publication of  advertisements" being a non-utility service cannot come  within the  prohibition imposed  by Rule 458 of the Rules.      We, therefore,  hold  that  the  Nigam/union  of  India cannot restrain  the appellant  from publishing  "Tata Press yellow   pages"    comprising   paid   advertisements   from businessmen, traders  and professionals. We are, however, of the view  that the  appellants cannot  publish any  "list of telephone  subscribers"   without  the   permission  of  the telegraph authority.  Rule 458 of the Rules is mandatory and has to be complied with. The appellant shall not  publish in the "Tata  Press yellow  pages" any entries similar to those which are  printed in  the ’white  Pages’ of  the "telephone directory" published  by the  Nigam under the Rules. We make it clear  that the  appellant cannot  print/publish an entry containing only  the telephone  number,  the  initials,  the surname and  the  address  of  the  businessmen,  trader  or professional concerned.      We allow  the appeal  in the  above terms and set aside the judgments  of the  learned Single Judge and the Division Bench of  the High Court. While holding that Rule 458 of the Rules is  mandatory,  we  dismiss  the  suit  filed  by  the respondents. We leave the parties to bear their own costs.