CHAPTER-V

ADVERTISEMENTS: ACTIVITIES, SERVICES AND THE

ROLE OF REGULATORY BODIES

5.1 INTRODUCTION

Advertising is a multi-faceted subject matter undergoing continuous

deliberations which cannot be constrained within boundaries. It performs diverse
functions and comprehends abundant other sub-disciplines that call for skilled
talents and acquaintance with the issue in hand. Advertising articulates a thought,
delivers a message or a belief to commoners within seconds with the aid of
assorted means. The message to be conveyed might be either financial or
communal. Five key players1 operate in the advertising industry:

a) Advertisers
b) Advertising Agencies
c) Support Organizations
d) Media
e) Consumers

The advertisers always use advertising agencies which are backed by a

support of the organization’s plan, manufacturing strategies, and placement of the
ads via mass media to prevail upon the potential consumers. An advertising
agency is an outside firm that focuses on the creation, production, and/or
placement of an advert and also, sometimes, provides other services to facilitate
the advertising & endorsement process. Advertising agencies work for the client.
The advertising agencies adhere to the standard of practice provided by the
Advertising Agencies Association of India, Bombay. From retailers to big
business houses, rely on advertising agencies to promote their goods & services.2

1
Mrs. Vaishali Kathuria Billa, “Advertising Agencies, Advertising Standards Council of
India & Case Studies” available at :
http://www.ddegjust.ac.in/studymaterial/pgdapr/pgdapr-103.pdf (Visited on January 15,
2019).
22
Ibid.

1
 In recent years, India has witnessed tremendous competition in the field of
the advertising industry as there has been a mushroom growth of the advertising
agencies all over the country.3 The existence of a huge population coupled with
their ever-increasing purchasing capacity has created a profitable market in India
which has led to cut-throat competition between the advertisers vis-à-vis their
support systems. Thus, every competitor in such a money-spinning market wants a
piece of the cake, which often compels the sellers to make false and misleading
claims about their products and services through the advertisements.4

There has been a substantial rise in the occasions of false and misleading
advertisements recently. Companies need to show they have morals when
advertising to consumers because it makes them aware of the fact that a company
cares about what they need. The customers feel protected by the business houses
and it makes a difference to the community in which they operate. Companies
need to work in a sustainable way and keep all their stakeholders happy. Like
other nations, India also has a voluntary Self-Regulation organization, i.e., The
Advertising Standards Council of India, which was established in the year 1985 to
promote honest advertising and fair competition in the market in order to protect
the interests of the consumers. It thrives to propagate responsible advertising.
Besides ASCI, there exist other regulators as well like, RBI, SEBI, IRDI, TRAI,
RERA, BCI, IMA, and many more which have, by and large, dealt with false
advertising in India. The chapter deals with the role, functions, and powers of the
regulators named before in detail.5

5.2 THE ADVERTISING STANDARD COUNCIL OF INDIA (ASCI)

The Advertising Standards Council of India (ASCI) is a self-regulatory

organisation. It was established in the year 1985 to regulate the Advertising
industry and also to safeguard the interest of the consumers. The mission of
ASCI is to

3
R Singh & Sangeeta Sharma, Advertising and Implementation 179 (Prentice Hall India
Learning Private Limited, Delhi, 1st edn., 2006).
4
Harshit Dave, “India: An Insight into the Jurisdiction of ASCI” available at:
http://www.mondaq.com/india/x/688910/advertising+marketing+branding/An+Insight+In
to+The+Jurisdiction+Of+ASCI (Visited on August16, 2018).
5
T homas O’Guinn, Chris Allen, et.al., Advertising and Integrated Brand Promotion with
Course Mate 231 ( Cengage Learning India Pvt. Ltd., Delhi, 2015).

2
maintain and enhance the public's confidence in Advertising.6The ASCI was
formed with the concerted efforts of the four main sectors of the advertising
industry- Advertisers, Advertising Agencies, the Media (which includes the
Broadcasters and the Press), and other associated organizations such as PR
Agencies, Market Research Companies etc. The ASCI is registered as a 'Not-for-
Profit Company' under Section 25 of the Indian Companies Act of 1956.7 The
ASCI is not a Government body. It does not formulate rules for the public or the
relevant industries. Its mandate is that all advertising material must be truthful,
legal and honest, decent and not objectify women, safe for consumers especially
children, and fair to their competitors.8 Apart from ASCI, there is no other non-
governmental body in India which regulates the advertising content that is
released in India. ASCI looks into complaints across ALL MEDIA such as Print,
TV, Radio, hoardings, SMS, Emailers, Internet/web-site, product packaging,
brochures, promotional material and point of sale material etc., ASCI’s role has
been acclaimed by various Government bodies including the Department of
Consumer Affairs (DoCA), Hon’ble Supreme Court of India, Food Safety and
Standards Authority of India (FSSAI), Ministry of AYUSH as well as the
Ministry of Information and Broadcasting. The association with these Government
bodies is to co-regulate and curb misleading and objectionable advertisements in
the respective sectors. In January 2017, the Supreme Court of India in its
judgement has also affirmed and recognized the self-regulatory mechanism as a
valuable defensive step to statutory provisions in the sphere of advertising content
regulation for TV and Radio in India. ASCI is a part of the Executive Committee
of International Council on Ad Self- Regulation (ICAS). Among several awards
bestowed by the European Advertising Standards Alliance (EASA), ASCI,
recently, bagged two Gold Global Best Practice

6
See, “Mission of ASCI” available at: https://ascionline.org/index.php/mission.html
(Visited on January 16, 2019).
7
Ibid.
8
Rajiv Sarin, Advertising, Electronic Media and Telecom Laws 337-341 (ABC Press, New
Delhi, 1st edn., 2016).

3
Awards for the Mobile App “ASCIonline” (2016) which reduces the time taken to
process complaints.9 The composition of ASCI is as follows:

 ASCI’s team consists of the Board of Governors, the Consumer

Complaints Council (CCC) and, its Secretariat.

 ASCI has 12 members in its the Board of Governors, four each

representing the key sectors such as Advertisers, advertising agencies,
media and, allied professions such as market research, consulting, business
education etc.,10

 The CCC currently has about 21 members: 9 are from within the
industry and 12 are from civil society like well-known doctors, lawyers,
journalists, academicians, consumer activists, etc. The CCC’s decision on
a complaint against any ad is final.11

 ASCI also has its independent Secretariat of 5 members which is

headed by the Secretary

5.2.1 The Self-Regulation Code

Almost all professional fields have self-regulatory bodies governing their

activities. For the advertising fraternity, until 1985 there was none. Due to this,
there was a lot of false, misleading, and offensive advertising. This led to
consumers losing faith in advertising and hence resenting it. It was decided that if
this continued it would not take time for statutory regulations such as censorship
to be imposed on advertising content. The ASCI has also adopted a Code for Self-
regulation in advertising. Self-Regulation implies regulation; hence, it is not
imposed by any external body or agency and is considered to be the best kind of a
control mechanism. The ASCI Code for Self-Regulation of Advertising content in
India was drawn up by the people in professions and industries in or connected
with

9
See, “Advertising Standard council Of India” available at :
https://en.wikipedia.org/wiki/Advertising_Standards_Council_of_India (Visited on
August 17, 2018).
10
See, “ASCI Members” available at : https://ascionline.org/index.php/asci-board-
members.html (Visited on January 17, 2019).
11
See, “CCC Members” available at: https://ascionline.org/index.php/asci-ccc-
members.html (Visited on January 17, 2019).

4
advertising, in consultation with the representatives of the people affected by
advertising, and was accepted by the individuals, corporate bodies, and
associations engaged in or concerned with the practice of advertising. 12 ASCI
seeks to ensure that advertisements conform to its Code for Self-Regulation,
which requires advertisements to be legal, decent, honest and truthful and not
hazardous or harmful while observing fairness in competition.

As the Code becomes increasingly accepted and observed pro-actively,

three things are expected to happen:

1. Less false or misleading claims

2. Fewer unfair advertisements
3. Increasing respectability.

This ASCI Code applies to advertisements read, heard or viewed in India

even if they originate or are published abroad so long as they are directed to
consumers in India or are exposed to a significant number of consumers in
India. The ASCI Code is also a part of the Cable Television Networks Rules, 1994
(Rules). Rule 7 (9) states that "No advertisement which violates the Code for self-
regulation in advertising, as adopted by the Advertising Standards Council of
India (ASCI), Mumbai for public exhibition in India, from time to time shall be
carried in the cable service." This amendment in the Rules has now increased the
power of the ASCI. The ASCI has MOU with the Department of Consumer
Affairs and the Food Safety and Standards Authority of India. Another much-
awaited step is still pending, i.e. the understanding The Competition Commission
which falls under the Ministry of Corporate Affairs.

5.2.2 ASCI Code aims to provide the following:-

1. To ensure the truth in the claims made by advertisements.

2. To safeguard the interest of the consumers against misleading

advertisements.

12
See, “Principles and guidelines” available at: https://ascionline.org/index.php/principles-
guidelines.html (Visited on January 17, 2019).

5
 3. To ensure that advertisements are not offensive to generally accepted
standards of public decency.

4. To protect against the blanket use of advertising for the promotion of

products that are regarded as hazardous to the society or to the individuals.

5. To ensure that advertisements promote fair competition among the

producers and manufacturers so that the consumers are better informed on
choices available in the market-place and also ensure the adherence of the
generally accepted competitive behaviour norms in business.

6. The Code applies to advertisers, advertising agencies, and media.

5.2.3 Attributes of the Code13

The code laid-down by ASCI has the following characteristics:

1. Extent of Application: The code applies to all the advertisements that appear
in any media. It may be on television, over radio, in cinema or posters; the
code applies on all of them.

2. Code and the Consumers: The code does not permit any advertisement which
misleads the consumers. The advertisements which are not true or give false
information are not allowed. If any such advert is presented to the consumers,
they can bring it to the notice of ASCI.

3. Aim of the Code: The code is framed with a pious aim to ensure public
protection and safeguard them against false, misleading, or deceptive
advertisements.

4. Responsibility of Media Owner: Any media owner must view each

advertisement offered for publication to the public from the view-point of the
code. If they believe that any particular advert is against the code, they can
approach the ASCI. If ASCI detects the violation of code, the media owner
must not circulate the advertisement.

13
See, “The Code of Self-Regulation of Advertising content in India” available at:
https://ascionline.org/index.php/ascicodes.html (Visited on January 17, 2019).

6
 5. Ads for Children: The ASCI code also controls the adverts designed especially
for children. Such ads should not contain any information or idea either by
way of an illustration, graphics, cartoons, or words, which might cause moral,
physical, or mental harm to the innocent minds of the children.

6. Code and Foreign Ads: The ASCI code is limited to advertisements published
in India only. It does not apply to advertisements on foreign media.

7. Identical Ads: The code also requires that an ad should not be just a copy of
other advertisements. It should not be identical in respect of general layout,
copy clogs, visual, presentation, music, etc. This restriction is put in order to
avoid confusion and misleading consumers. The code broadly talks about the
following goals and is divided into chapters as follows:

 Chapter-I

The chapter deals with truthfulness and honesty in the representations and
claims made by advertisements and also provides for safeguard against misleading
advertisements.14

 Chapter-II

This chapter states that advertisement should not contain anything indecent,
vulgar, especially portrayal of women, or nothing repulsive which will, in the light
of generally prevailing standards of decency and propriety, cause grave or
widespread offence.15

 Chapter-III

This chapter provides for the safeguard against the indiscriminate use of
advertising in situations or of the Promotion of Products which are regarded as
Hazardous or Harmful to society or to individuals, particularly minors, to a degree
or of a type which is Unacceptable to Society at Large.16

14
Ibid.
15
Ibid.
16
Supra note 10 at 2.

7
  Chapter-IV

This chapter provides that advertisements must observe the rules of fair
competition and provide ample information to the consumers to enable them to
make an informed decision and also to prevent plagiarism in advertising.17

In order to keep its commitment towards ensuring greater transparency in

the advertising industry, ASCI launched the Online Complaint & Monitoring
Service (OCMS). ASCI also offers pre-production/pre-release advertising advice
to its members as well as non-members. Such advice is given by a panel of
experienced persons who have

a) In-depth knowledge of the ASCI Code and Rules, and

b) Experience in working with ASCI Board and/or its Consumer Complaints

Council (CCC).

‘Advertising Advice’ is a confidential, non-binding pre-publication/pre-

release advice about a specific advertising proposal, provided by ASCI to its
member/non-member advertiser, agency, or media. The advertising advice may be
in any form but it has two essential features:

 it is non-binding
 it concerns a specific advertising proposal (i.e. an advertisement with copy
and visuals).

Advertisers who are members of ASCI may ask for advertising advice
directly or through their advertising agencies free of cost. Non-Advertiser
Members can avail such advice on payment of fees i.e. INR 25,000 per creative by
sending their request to ASCI on [email protected]

5.2.4 ASCI Guidelines

1. Automotive and Safety: the advertisers are persuaded to create the

advertisements in such a way which promote safety measures like wearing a

17
Ibid.
18
Available at : https://ascionline.org/index.php/advertising-advice.html (Visited on January
17, 2019).

8
 helmet, seat belts, following speed limits, don’t drink and drive, not using
mobile phones while driving, etc.

2. Educational Institutions: parents, throughout the world, make sacrifices to

give the best education to their children. Hence it is the primary duty of
educational institutions to provide the best possible information about the
courses offered by them to enable the students to make a prudent choice about
their careers. Now the educational institutions will not be able to make false
commitments of guaranteed results, job placements, fancy packages, etc to
the prospective students. Misleading ads and incomplete information by the
educational institutions will now be under the scanner if the ASCI.

3. Food and Beverages: advertising can influence a healthy lifestyle, sound

eating habits and inculcate the habit of physical activity among the consumers
and advertisers should make the best possible use of their techniques in
promoting good health of the people. Hence, extra care should be taken while
advertising foods and beverages, especially, which contain a high amount of
fat, carbohydrates, sodium, etc.

4. Disclaimers in an advertisement: generally, while viewing advertisements,

viewers often ignore the ‘disclaimer clause’ contained in them which provides
essential information. The time duration of such a clause should be sufficient
enough so as to be legible and understood by the viewers. The use of words
‘super’, ‘caution’, ‘terms and conditions apply’, etc. must be mentioned
clearly.

5. Awards and Rankings in an ad: recently in January 2020, ASCI has issued
guidelines which are effective from February 1, 2020, that deal with the use
of claims of awards and rankings by the advertisers in their respective
advertisements. “Now, brands and services need to ensure that the accrediting
bodies involved in disseminating or presenting awards or rankings are
authentic and credible while validating their claims in advertisements. The
new guidelines aim to curb the "superiority claims" in advertising for the
products and services based on awards and rankings received, which
"sometimes misled

9
 into believing" by the consumers, the ad regulator said in a statement.” 19 "The
guidelines will lend assistance to advertisers for appropriate and correct usage
of reference to awards or rankings in advertising; to ensure that their claims
are not misleading," said the ASCI. It further said: "The guidelines will also
assist the advertiser to understand the rigor required for claim substantiation
and pitfalls to avoid so that their claims pass the muster with ASCI's
Consumer Complaints Council (CCC)."20 These guidelines have special
relevance for the healthcare and the educational sector which tend to use such
superiority or leadership claims.

ASCI will not accept any of the advertisements which violate the provisions
of the acts of Government of India or various State Governments. All over the
nation, advertisers, advertising agencies, and media are expected not to
commission, create, place, or publish any advertisement which is against the
provisions of the Code. The Code is not in competition with existing or
prospective laws. The provisions of the law can determine the form or the content
of an advertisement.21

The detailed provisions of the Self-Regulatory code have been annexed as

Annexure I herewith.

5.3 OTHER ACTIVITIES/SERVICES AND THEIR REGULATORS

The advertising industry is not just associated with selling products.

Multiple services are provided by diverse sectors across different sectors that rely
on extensive advertising due to cut-edge competition. To control the services
provided by various service-providers, there exist diverse regulators in the specific
fields. Various sectors which hinge upon the adverts include:

19
See, “ASCI announce new code for brands to claim awards, rankings in ads” available at:
https://retail.economictimes.indiatimes.com/news/industry/asci-announces-new-code-for-
brands-to-claim-awards-rankings-in-ads/73437393 (Visited on January 31, 2020).
20
Ibid.
21
See “Advertising Standard Council of India” available at :
http://www.indianmediastudies.com/the-advertising-standards-council-of-india-asci-code/
(Visited on January 19, 2019).

10
5.3.1 Television and Radio Advertising and the Prasar Bharati & the
Doordarshan/AIR Code

Prasar Bharati is India’s largest public broadcasting agency which consists

of Doordarshan and All India Radio. Earlier, both were media units of the
Ministry Of Information and Technology. The Prasar Bharati (Broadcasting
Corporation of India) Act, 1990 was passed with a motive to provide freedom to
electronic media
i.e. the All India Radio and Doordarshan. Being a public service provider, it
permits the broadcast of various social messages like- taking babies to healthcare
centers for free polio drops or spreading the movement of Swachh Bharat. As a
regulator, it also ensures the balanced development of broadcasting on radio and
television.22

Doordarshan is an autonomous public service broadcaster established by

the Government of India. Its motto is “Satyam Shivam Sundaram”. It is owned by
the Broadcasting Ministry of India and is one of two divisions of Prasar Bharati. 23
The Doordarshan is India's one of the largest broadcasting organisations in terms
of studio and transmitter infrastructure. It was established on 15 September
1959.24 Doordarshan is the largest terrestrial network in the world covering 92 per
cent of the population.25 Doordarshan operates 34 channels:

 Two All India channels- DD National and DD News.

 16 regional language satellite channels, 11 state networks, an international

channel, a sports channel- DD Sports, DD Bharati, DD Urdu & DD Kisan.

There exists a general broadcasting code that is applicable upon both,

Doordarshan and All India Radio. The code gives a plain definition of the term
‘advertisement’. It says that an ‘Advertisement includes any item of publicity for

22
See, “Prasar Bharati (Broadcasting Corporation of India) Act, 1990 – An Overview”
available at: at: https://blog.ipleaders.in/prasar-bharati-broadcasting-corporation-of-
india- act-1990-an-overview/ (Visited on January 19, 2019).
23
See ‘Doordarshan’ available at: https://en.wikipedia.org/wiki/Doordarshan (Visited on
January 19, 2019).
24
See ‘Doordarshan turns 57; watch video of its first telecast plus 7 lesser-known facts
about DD’ available at:
https://www.indiatoday.in/television/top-stories/story/doordarshan- turns-57-watch-video-
of-its-first-telecast-plus-7-lesser-known-facts-about-dd-lifetv- 341215-2016-09-15

11
 (Visited on January 19, 2019).
25
Ibid.

12
goods or services inserted in the programs broadcast by the competent authority in
consideration of payment to Doordarshan or All India Radio’. Thus, any can be
publicized by paying the prescribed fees or the rate. Under the code, the Director-
General is the sole judge to determine the suitability of an advertisement or a
sponsored program for broadcast and also for selling of broadcast time to an
advertiser or an advertising agency. The code prescribes that advertisements must
be capable of being distinguished from the programs. The code clearly provides
that “Advertising is an important and legitimate means for the seller to awaken
interest in his goods and services. The success of advertising depends on public
confidence; hence no practice should be permitted which tends to impair this
confidence”. The observance of the code depends equally upon the advertiser and
the advertising agency.

Rule 126 of the code prescribes that the advertisements broadcasted must
conform with the existing laws applicable to the subject matter of advertisements.
Further, it also states that the advertisements must not be immoral, indecent, or
offensive to the religious sentiments of the countrymen. Rule 2 27 of the code
prescribes that broadcast of any advertisement will not be permitted if it ridicules
any race, caste, colour, creed, or nationality; or is against the provisions of the law
of the land, i.e. the Constitution of India. It also provides that advertisements must
not present any form of criminality or anything that disturbs or hampers the
friendly

26
The Code For Commercial Advertising Over All India Radio, rule 1 Advertising shall be
so designed as to confirm to the laws of the country and should not offend against
morality, decency and religious susceptibilities of the people.
27
Rule 2- No advertisement shall be permitted which:-
i. derides any race, caste, color, creed and nationality;
ii. is against any of the directive principles, or any other provision of the Constitution of
India;
iii. tends to incite people to crime, cause disorder or violence, or breach of law or glorifies
violence or obscenity in any way;
iv. presents criminality as desirable;
v. adversely affects friendly relations with foreign States;
vi. exploits the national emblem, or any part of the constitution or the person or personality
of a national leader or State Dignitary;
vii. relates to or promotes cigarettes and tobacco products, liquor, wines and other
intoxicants;

13
relations with the foreign states. It also says that no advertisement should be
presented in the form of news.28

Rule 429 of the code prohibits any religious or political advertisements but
subject to certain exceptions. Any advertisement relating to the services of money
lenders, chit funds, savings schemes, lotteries (otherwise than legally permitted),
fortune tellers or hypnotists, foreign goods or foreign banks, etc. are not accepted
under rule 530 of the code. Any advertisement which makes the audience believe
that the product being advertised has some special or supernatural ingredients is
not permitted.31 The code requires the advertisers or the advertising agencies to
possess sufficient evidence to substantiate the claims made by them at all given
times.32

28
The Code For Commercial Advertising Over All India Radio, rule 3.
No advertisements message shall in any way be presented as News.
29
The Code For Commercial Advertising Over All India Radio, rule 4
No advertisements shall be permitted the objects whereof are wholly or mainly of a
religious or political natures; advertisement must not be directed towards any religious or
political end or have any relation to any industrial dispute.
Proviso: "But advertisements in the form of spots and jingles on payment of prescribed
fees, from Political parties / Candidates / any other person shall be accepted only in
respect of General Elections to Lok Sabha / General Elections to the State Assemblies /
General Elections to Local bodies during the period when the model Code of Conduct is
in force. Such advertisements shall be subject to pre-broadcast scrutiny by the Election
Commission of India / authorities under the Election Commission of India in respect of
elections to Lok Sabha and the State Assemblies and State Election Commissions in the
case of Local bodies. " (As per DG: AIR's I.D.No. 15/3/2008-PIV dated November 20,
2008).
30
The Code For Commercial Advertising Over All India Radio, rule 5
Advertisements for services concerned with the following shall not be
accepted:-
i. Money lenders;
ii. Chit funds;
iii. Saving schemes and lotteries other than those conducted by Central and State
Government Organisations, Nationalised or recgonised banks and Public Sector
Undertakings;
iv. Unlicenced employment services;
v. Fortune tellers or sooth-sayers etc. and those with claims of hypnotism;
vi. Foreign goods and foreign banks.
vii. Betting tips and guide books etc. relating to horse-racing or the other games of chance.
31
The Code For Commercial Advertising Over All India Radio, rule 7
No advertisement shall contain references which are likely to lead the public to infer that
the product advertised or any advertised or any of its ingredients has some special or
miraculous or super-natural property or quality, which is difficult of being proved, e.g.
cure for baldness, skin whitener, etc.
32
The Code For Commercial Advertising Over All India Radio, rule 9
Advertisers or the agents must be prepared to produce evidence to substantiate any claims

14
or illustrations. The Director General reserves the right to ask for such proofs and get
them examined to his full satisfaction. In case of goods covered by mandatory quality
control

15
Advertisements containing any derogatory remarks, comparisons, or reductions
are not accepted.3334 Even the advertisements relating to any jewellery except the
artificial jewellery 35
and the advertisements containing any exaggerated claims 36
are not permitted. The code stresses upon that the advertising shall be truthful and
it should avoid distorting the real facts and misleading the public by means of
implications by false statements, as to:

i. The character of the merchandise, i.e. its utility, materials, ingredients,

origin, etc.

ii. The price of the merchandise, its value, its suitability, or terms of purchase.

iii. The services accompanying purchase, including delivery, exchange, return,

repair, upkeep, etc.

iv. Personal recommendations of the article or service.

v. The quality or the value of competing goods or trustworthiness of a

statement made by others.

The code vide rule 2537 says that any method of advertising which is likely
to cause confusion in the minds of the audience shall not be used. The

orders, the advertiser shall produce quality certificate from the institutions recognized by
the Government for this purpose.
33
The Code For Commercial Advertising Over All India Radio, rule 10
Advertisements shall not contain disparaging of derogatory references to another product
or service.
34
The Code For Commercial Advertising Over All India Radio, rule 11
Advertisements indicating price comparisons or reductions must comply with relevant
laws.
35
The Code For Commercial Advertising Over All India Radio, rule 12
No advertisement of any kind of jewellery (except artificial jewellery) or precious stones
shall be accepted.
36
The Code For Commercial Advertising Over All India Radio, rule 24
No advertisement shall be permitted to contain any claim so exaggerated as to lead
inevitably to disappointment in the minds of the public.
37
The Code For Commercial Advertising Over All India Radio, rule 25
Methods of advertising designated to create confusion in the mind of the consumer as
between goods by one maker and another maker are unfair and shall not be used. Such
methods may consist in:
i. the imitation of the trademark of the name of competition or packaging or labeling of
goods; or
ii. the imitation of advertising devices, copy, layout or slogans.

16
advertisements must not contain any indecent, vulgar, suggestive, repulsive or
offensive content or any material which is considered as objectionable.38

The provisions of the code are in addition to the ASCI Code as well as the
laws governing the advertisements in India. The code in detail is annexed as
Annexure-II which contains the detailed rules to be observed by advertisers and
advertising agencies while choosing the Doordarshan or All India Radio as their
medium of advertising.

5.3.2 Banking Services and the Reserve Bank of India (RBI)

The banking industry in India covers traditional banking practices as well

as modern practices. Banking in India, indeed, has a very long history is achieving
new heights in the digital world. The exploitation of technology in traditional
banking services has brought a revolution in the functioning of the banks. All the
same, the elementary aspect of banking i.e. trust and the confidence of the people
on a bank remains the same. The majority of the banks strive harder to sustain the
confidence of the shareholders as well as their other stakeholders. However, with
the changing scenario of banking services, banks face a new kind of risk exposure.
The Government of India has initiated several policies and has always been
playing an active role in the economic upliftment of the nation. This resulted in
more participation of the state in diverse segments of the economy including
banking and finance. Banking, being an important and most dependable service
hired by the consumers, needs to be regulated to prevent fraudulent and
misleading claims.

The Reserve Bank of India is the central Banking and Monetary Authority
in India and also acts as the Regulator and Supervisor of the Commercial Banks in
India.3940 RBI was established on April 1, 1935, as per the provisions of the
Reserve Bank of India Act, 1934. Initially set up as a privately owned bank,
RBI after

38
The Code For Commercial Advertising Over All India Radio, rule 26.
Indecent, vulgar, suggestive, repulsive or offensive themes or treatment shall be avoided
in all advertisements. This also supplies to such advertisements which themselves are not
objectionable as defined above, but which advertise objectionable books, photographs or
other matter and thereby lead to their sale and circulation.
39
Ujjawala Sahi, Banking in India: Past, Present & Future 8(New Century Publications, New
Delhi, 2013).
40
Vidya Sree, “Understanding Financial Regulatory Bodies in India” Dated 20 th August,
2014 available at : https://www.marketcalls.in/market-regulations/understanding-

17
financial-regulatory-bodies-in-india.html (Visited on January 19, 2019).

18
nationalization is owned by the Government of India. It performs a number of
developmental and promotional functions. It also assists the government in
economic planning.41 The preamble of the Reserve Bank of India Act, 1934
highlights the following objectives42 of the RBI:

i. To issue bank notes;

ii. To strengthen the monetary condition of the nation;

iii. To control the deposit funds; and

iv. To carry on the currency and credit system for the benefit of the

country.43 As a regulator, controller, and supervisor of the financial system

in India, the
RBI exercises the power to cut back false and misleading advertisements by
various financial institutions prevalent in India. Chapter III B of the RBI Act deals
with “Provisions relating to non-banking institutions receiving deposits and
financial institutions”.44 Under this chapter 45 J45 gives the Central Bank the
power to regulate and prohibit the issue of prospectus or advertisement soliciting
deposits of money from the general public. In exercise of the powers vested in the
Bank under

41
Dr. B.R. Sharma & Dr. R.P. Nainta, Banking Law and Negotiable Instruments Act 18
(Allahabad Law Agency, Faridabad, Haryana, 2006).
42
R. N. Chaudhary, Banking Laws 313 (Central Law Publications, Allahabad, 1st edn., 2016).
43
Ibid.
44
Supra note 547.
45
The Reserve Bank of India Act, 1934, s.45J
Bank to regulate or prohibit issue of prospectus or advertisement soliciting deposits of
money
The bank may, if it considers necessary in the public interest so to do, by general or
special order-
(a) regulate or prohibit the issue by any non-banking institution of any prospectus or
advertisement soliciting deposits of money from the public; and

19
(b) specify the conditions subject to which any such prospectus or advertisement, if not
prohibited, may be issued.

20
Sections 45J, 45K46, and 45L47 of the act, RBI has notified detailed directions on
advertisements issued by non-banking financial companies, miscellaneous non-

46
The Reserve Bank of India Act, 1934, s.45K
Power of bank to collect information from non-banking institutions as to deposits and to
give directions
(1) The bank may at any time direct that every non-banking institution shall furnish to the
bank, in such form, at such intervals and within such time, such statements, information
or particulars relating to or connected with deposits received by the non-banking
institution, as may be specified by the bank by general or special order.
(2) Without prejudice to the generality of the power vested in the bank under sub-section
(1), the statements, information or particulars to be furnished under sub-section (1), may
relate to all or any of the following matters, namely, the amount of the deposits, the
purposes and periods for which, and the rates of interest and other terms and conditions
on which, they are received.
(3) The bank may, if it considers necessary in the public interest so to do, give directions
to non-banking institutions either generally or to any non-banking institution or group of
non-banking institutions in particular, in respect of any matters relating to or connected
with the receipt of deposits, including the rates of interest payable on such deposits, and
the periods for which deposits may be received.
(4) If any non-banking institution fails to comply with any direction given by the bank
under sub-section (3), the bank may prohibit the acceptance of deposits by that non-banking
institution.
(6) Every non-banking institution receiving deposits shall, if so required by the bank and
within such time as the bank may specify, cause to be sent at the cost of the non-banking
institution a copy of its annual balance-sheet and profit and loss account or other annual
accounts to every person from whom the non-banking institution holds, as on the last day
of the year to which the accounts relate, deposits higher than such sum as may be
specified by the bank.
47
The Reserve Bank of India Act, 1934, s.45L
Power of bank to call for information from financial institutions and to give directions
(1) If the bank is satisfied for the purpose of enabling it to regulate the credit system of
the country to its advantage it is necessary so to do, it may-
(a) require financial institutions either generally or any group of financial institutions or
financial institution in particular, to furnish to the Bank in such form, at such intervals and
within such time, such statements, information or particulars relating to the business of
such financial institutions or institution, as may be specified by the bank by general or
special order;
(b) give to such institutions either generally or to any such institution in particular,
directions relating to the conduct of business by them or by it as financial institutions or
institution.
(2) Without prejudice to the generality of the power vested in the bank under clause (a) of
sub-section (1), the statements, information or particulars to be furnished by a financial
institution may relate to all or any of the following matters, namely, the paid-up capital,
reserves or other liabilities, the investments whether in government securities or
otherwise, the persons to whom, and the purposes and periods for which, finance is
provided and the terms and conditions, including the rate of interest, on which it is
provided.
(3) In issuing directions to any financial institution under clause (b) of sub-section (1), the
bank shall have due regard to the conditions in which, and the objects for which, the
institution has been established, its statutory responsibilities, if any, and the effect the
business of such financial institution is likely to have on trends in the money and capital
markets.

21
banking companies, and residuary non-banking companies. As per the guidelines
provided by the RBI, besides complying with the Non-banking Financial
Companies and Miscellaneous Non-banking Companies (Advertisement) Rules,
1977, they also have to give certain information specified by the RBI, while
issuing advertisements seeking deposits from the public. For instance, they have
to specify the mode of payment, actual rate of return by way of interest, premium,
bonus or other advantage to the depositor, the terms and conditions subject to
which a deposit will be returned, etc. And the advertisements have to state that the
deposits being solicited are not insured. Further, the NBFC’s while granting
finance to the housing/development projects should stipulate as a part of the terms
and conditions that:

(i) The builder/developer/owner/company would disclose in the Pamphlets/

Brochures/advertisements etc., the name(s) of the entity to which the
property is mortgaged.

(ii) The builder/developer/owner/company should indicate in the pamphlets/

brochures, that they would provide No Objection Certificate (NOC)/
permission of the mortgagee entity for sale of flats/property, if required.48

Protection of the interests of the depositors is one of the mandates of the

Reserve Bank. The services provided by the banking sector nowadays are not
limited to only deposit services. There is a rapid increase in the nature of financial
services which necessitates not only regulation but also imparting consumer
education to protect and empower consumers in the banking arena. There is also
an extension of banking services to underserved sections of the population, whose
financial literacy is low. The complexity of financial products and the use of
technology are increasing the risk of frauds in the banking sector. Financial

48
See, RBI circular on “Finance for Housing Projects – Incorporating clause in the terms
and conditions to disclose in pamphlets/brochures/advertisements, information regarding
mortgage of property to the NBFC.” RBI/2009-10/450 DNBS (PD) C.C No. 174
/03.10.001/2009-10 available at :
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5660&Mode=0 (Visited on
January 19, 2019).

22
consumer protection is being reinforced and integrated with financial education
policies. Taking these factors into account, Reserve Bank has expressed its core
purpose and vision to regulate financial markets and institutions under its ambit to
ensure financial system stability and consumer protection.

The RBI has also released a ‘Charter of Customer Rights’, which enshrines
broad principles for the protection of customers and provides five basic rights of
customers.49 These are (i) Right to Fair Treatment; (ii) Right to Transparency; Fair
and Honest Dealing; (iii) Right to Suitability; (iv) Right to Privacy; and (v) Right
to Grievance Redress and Compensation. The Reserve Bank has also advised the
Indian Banks’ Association (IBA) and the Banking Codes and Standards Board of
India (BCSBI) to formulate a ‘Model Customer Rights Policy’ encapsulating the
principles enshrined in the Charter. All the scheduled commercial banks, regional
rural banks, and urban co-operative banks are required to prepare their Board
approved policy incorporating the five basic rights of the Charter which, among
other things, would contain a monitoring and oversight mechanism for ensuring
adherence to such policy.50

Apart from issuing instructions to banks, the Reserve Bank also issues
cautionaries to members of the general public against the use of mobile apps for
banking services and preventing direct financial losses to them. Most Indians are
ignorant of their rights and are therefore taken for a ride by the bankers. As a
regulator, RBI is conscious of this position and it constantly pays attention upon
financial consumer protection, more specifically the protection of the vulnerable,
defenseless retail consumers.

5.3.3 The Securities Market and the Securities and Exchange Board of
India (SEBI)

Savings and investments are two imperative tools by way of which a

person aims to raise his standard of living. The securities market offers the best
possible

49
Shri R Gandhi, Speech on “Financial Consumer (Depositor) Protection – Reflections on
Some Lingering Questions” available at :
https://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=973 (Visited on January 19,
2019).
50
Ibid.

23
avenues to the people for parking their extra money. If it provides lucrative offers
to the investors, it involves a huge amount of risk as well. The securities market
consists of various monetary instruments, derivatives, bonds, mutual funds,
shares, and other liquid and fixed investment opportunities which carry with them
more returns as compared to banking instruments. But, most of the times the
investments are subject to market risks. It implies that the investors will not be
guaranteed what is highlighted. In a free market, it became difficult for investors
to protect themselves against the false and deceptive claims of the money market
players. Hence, the need for a regulator was much envisaged. But this need was
fulfilled much later in the year 1992 with the setup of the statutory body named
Securities and Exchange Board of India.

The securities and Exchange Board of India is the key regulator of the
securities market in India. It was established in 1988 by the Government of India
and is established and incorporated through section 3 of SEBI Act, 1992. The
preamble of SEBI Act, 1992 states its objectives. 51 The primary objective of SEBI
is to promote the healthy and orderly growth of the securities market in India and
secure investor protection.52 However, other objectives53 of SEBI include:-

i.To ensure fair practices in the securities market.

ii.To promote efficient, competitive, and professional services by merchant
bankers, brokers, advisors, underwriters, portfolio managers, and other
intermediaries.
iii.To formulate rules and regulations for the securities market in
India. iv.To settle investor’s grievances in the securities market.

SEBI, upon various instances, has framed regulations to protect the

interests of the consumers inverting in the money market. Such regulations
provide for misleading and deceptive advertisements by the players in the
money market. It

51
See Preamble- “An Act to provide for the establishment of a Board to protect the interests
of investors in securities and to promote the development of, and to regulate, the
securities market and for matters connected therewith or incidental thereto”.
52
See, “SEBI: Introduction, Objectives and Functions” available at:
http://legalmoksha.blogspot.com/2013/07/sebi-introduction-objectives-and.html (Visited
on January 21, 2019).
53
See, the Preamble of the Act, also see the objects and reasons.

24
ensures that all the advertisement is fair and concise. SEBI makes the best
possible efforts to educate the investors so that they are competent to make
judicious choices between the securities offered by different companies and opt
for the most profitable ones. SEBI also provides guidelines to investigate cases of
fraud and insider trading. To prohibit fraudulent and unfair trade practices, SEBI
has issued the Securities and Exchange Board of India (Prohibition of Fraudulent
and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. The
regulations, here, provide for the prohibition of manipulative, fraudulent, and
unfair trade practice.54 Herein sub-section 2(k) specifically prohibits the
dissemination of misleading or distorted information to the investors.

54
Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade
Practices Relating to Securities Market) Regulations, 2003, s. 4
Prohibition of manipulative, fraudulent and unfair trade practices- (1) Without prejudice
to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade
practice in securities.
(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it
involves fraud and may include all or any of the following, namely:-
(a) indulging in an act which creates false or misleading appearance of trading in the
securities market;
(b) dealing in a security not intended to effect transfer of beneficial ownership but
intended to operate only as a device to inflate, depress or cause fluctuations in the price of
such security for wrongful gain or avoidance of loss;
(c) advancing or agreeing to advance any money to any person thereby inducing any other
person to offer to buy any security in any issue only with the intention of securing the
minimum subscription to such issue;
(d) paying, offering or agreeing to pay or offer, directly or indirectly, to any person any
money or money’s worth for inducing such person for dealing in any security with the
object of inflating, depressing, maintaining or causing fluctuation in the price of such
security;
(e) any act or omission amounting to manipulation of the price of a security;
(f) publishing or causing to publish or reporting or causing to report by a person dealing
in securities any information which is not true or which he does not believe to be true
prior to or in the course of dealing in securities.
(g) entering into a transaction in securities without intention of performing it or without
intention of change of ownership of such security;
(h) selling, dealing or pledging of stolen or counterfeit security whether in physical or
dematerialized form;
(i) an intermediary promising a certain price in respect of buying or selling of a security
to a client and waiting till a discrepancy arises in the price of such security and retaining
the difference in prices as profit for himself;
(j) an intermediary providing his clients with such information relating to a security as
cannot be verified by the clients before their dealing in such security;
(k) an advertisement that is misleading or that contains information in a distorted manner
and which may influence the decision of the investors;

25
 Further, SEBI has also issued The Securities and Exchange Board of India
(Disclosure and Investor Protection) Guidelines, 2000 which provides for the
definition of ‘advertisement55’ under chapter-I. Chapter- IX56 provides detailed

(l) an intermediary reporting trading transactions to his clients entered into on their behalf
in an inflated manner in order to increase his commission and brokerage;
(m) an intermediary not disclosing to his client transactions entered into on his behalf
including taking an option position;
(n) circular transactions in respect of a security entered into between intermediaries in order
to increase commission to provide a false appearance of trading in such security or to
inflate, depress or cause fluctuations in the price of such security;
(o) encouraging the clients by an intermediary to deal in securities solely with the object
of enhancing his brokerage or commission.
(p) an intermediary predating or otherwise falsifying records such as contract notes.
(q) an intermediary buying or selling securities in advance of a substantial client order or
whereby a futures or option position is taken about an impending transaction in the same
or related futures or options contract.
(r) planting false or misleading news which may induce sale or purchase of securities.
55
Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines,
2000, cl. 1.2, Definitions- 1.2.1
In these Guidelines, unless the context otherwise requires;
iii “Advertisement” includes notices, brochures, pamphlets, circulars, show cards,
catalogues, hoardings, placards, posters, insertions in newspaper, pictures, films, cover
pages of offer documents or any other print medium, radio, television programmes
through any electronic medium;
56
Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines,
2000, chapter IX Guidelines on Advertisement
9.0 The Lead Merchant Banker shall ensure compliance with the guidelines on
Advertisement by the issuer company.
9.1 Guidelines on Advertisements
9.1.0 An issue advertisement shall be truthful, fair and clear and shall not contain any
statement which is untrue or misleading.
9.1.1 Any advertisement reproducing or purporting to reproduce any information
contained in an offer document shall reproduce such information in full and disclose all
relevant facts and not be restricted to select extracts relating to that item.
9.1.2 An issue advertisement shall be considered to be misleading, if it contains - a)
Statements made about the performance or activities of the company in the absence of
necessary explanatory or qualifying statements, which may give an exaggerated picture of
the performance or activities, than what it really is. b) An inaccurate portrayal of past
performance or its portrayal in a manner which implies that past gains or income will be
repeated in the future.
9.1.3 a) An advertisement shall be set forth in a clear, concise and understandable language.
b) Extensive use of technical, legal terminology or complex language and the inclusion of
excessive details which may distract the investor, shall be avoided.
9.1.4 An issue advertisement shall not contain statements which promise or guarantee
rapid increase in profits. 9.1.5 An issue advertisement shall not contain any information
that is not contained in the offer document.
9.1.6 No models, celebrities, fictional characters, landmarks or caricatures or the likes
shall be displayed on or form part of the offer documents or issue advertisements.

26
guidelines for advertisements so as to make proper, full, and truthful disclosure to
the investors about the entities and their financial status in the market. It precisely
provides for the proper disclosure of the risk factors involved in the prospective
investments. It provides that an advertisement must be clear, concise, and
understandable by all the sections of the investors which implies less use of the
complicated and technical language in the ads. All the documents and public
communications of the company offering its securities must be available on the
website of SEBI. All the measures provide for stringent control over the
advertisements in the securities market.

In addition to these, SEBI has also framed an exclusive advertising code for
mutual funds under the SEBI (Mutual Funds) Regulations 1996. And as a
supplement to the code, it has also published detailed guidelines for
advertisements on mutual funds under Schedule Sixth57 appended to it. As
per the amended

9.1.8 Issue advertisements shall not appear in the form of crawlers (the advertisements
which run simultaneously with the programme in a narrow strip at the bottom of the
television screen) on television.
9.1.8 A In case of issue advertisement on television screen: (a) the risk factors shall not be
scrolled on the screen; and (b) the advertisement shall advise the viewers to refer to the
red herring prospectus or other offer document for details.
9.1.9 No advertisement shall include any issue slogans or brand names for the issue
except the normal commercial name of the company or commercial brand names of its
products already in use.
9.1.10 No slogans, expletives or non-factual and unsubstantiated titles shall appear in the
issue advertisements or offer documents.
9.1.11 If any advertisement carries any financial data, it shall also contain data for the
past three years and shall include particulars relating to sales, gross profit, net profit,
share capital, reserves, earnings per share, dividends and the book values.
9.1.12 (a) All issue advertisements in newspapers, Magazines, brochures, pamphlets
containing highlights relating to any issue shall also contain risk factors given equal
importance in all respects including the print size. (b) The print size of highlights and risk
factors in issue advertisements shall not be less than point (7) size. (c) Subject to section
66 of the Companies Act, 1956, any advertisement made by an issuer namely Pre – Issue
advertisement, advertisement for opening or closure of the issue, shall be in the format
and contain the minimum disclosures as given in the relevant part of Schedule XX – A.
(d) Any pre–issue advertisement made under clause 5.6A or advertisement made in
connection with opening or closing of any issue by the issuer, which is displayed in a
billboard shall not contain any information apart from that mentioned in the relevant part
of Schedule XX –
A. 9.1.13 No issue advertisement shall be released without giving “Risk Factors” in
respect of the concerned issue. Provided that an issue opening/closing advertisement
which does not contain the highlights need not contain risk factors.
57
Advertisement Code (As provided in the SIXTH SCHEDULE)
(a) Advertisements shall be accurate, true, fair, clear, complete, unambiguous and concise.
27
guidelines, “advertisement shall include all forms of communication issued by or
on behalf of the asset management company/mutual fund that may influence
investment decisions of any investor/prospective investors”.58 It states that the
offer document and advertisement materials relating to the mutual funds shall not
be misleading or contain any statement or opinions which are incorrect or false. 59
The guidelines also provide the disclosures to be made under the infrastructure
debt fund schemes under Regulation 49S.60 SEBI has also brought merchant
banking under its regularity framework. The merchant bankers are required to
follow the code of

(b) Advertisements shall not contain statements which are false, misleading, biased or
deceptive, based on assumption/projections and shall not contain any testimonials or any
ranking based on any criteria.
(c) Advertisements shall not be so designed as likely to be misunderstood or likely to
disguise the significance of any statement. Advertisements shall not contain statements
which directly or by implication or by omission may mislead the investor.
(d) Advertisements shall not carry any slogan that is exaggerated or unwarranted or
slogan that is inconsistent with or unrelated to the nature and risk and return profile of the
product.
(e) No celebrities shall form part of the advertisement.
(f) Advertisements shall not be so framed as to exploit the lack of experience or
knowledge of the investors. Extensive use of technical or legal terminology or complex
language and the inclusion of excessive details which may detract the investors should be
avoided.
(g) Advertisements shall contain information which is timely and consistent with the
disclosures made in the Scheme Information Document, Statement of Additional
Information and the Key Information Memorandum.
(h) No advertisement shall directly or indirectly discredit other advertisements or make
unfair comparisons.
(i) Advertisements shall be accompanied by a standard warning in legible fonts which states
‗Mutual Fund investments are subject to market risks, read all scheme related documents
carefully.‘ No addition or deletion of words shall be made to the standard warning.
(j) In audio-visual media based advertisements, the standard warning in visual and
accompanying voice over reiteration shall be audible in a clear and understandable
manner. For example, in standard warning both the visual and the voice over reiteration
containing 14 words running for at least 5 seconds may be considered as clear and
understandable.
58
Substituted by the SEBI (Mutual Funds) (Amendment) Regulations, 2012, w.e.f. 21-2-
2012. Prior to its substitution, clause (b) read as under; "(b) ―advertisement‖ includes
every form of advertising, whether in a publication, by display of notices, signs, labels or
by means of circulars, catalogues or other documents, by an exhibition of pictures or
photographic films, by way of sound broadcasting or television, or in any other manner;"
59
SEBI Mutual Fund Regulations, 1996, regulation 31.
60
SEBI Mutual Fund Regulations, 1996, regulation 49S
Disclosures in offer document and other disclosures- (1) The offer documents of
infrastructure debt fund schemes shall contain disclosures which are adequate for
investors to make informed investment decisions and such further disclosures as may be
specified by the Board. (2) The portfolio disclosures and financial results in respect of an
infrastructure debt fund schemes shall contain such further disclosures as may be
28
specified by the Board.
(3) Advertisements in respect of infrastructure debt fund schemes shall conform to such
guidelines as may be specified by the Board.

29
conduct issued by SEBI in respect of pricing and premium fixation of issues.
Thus, SEBI has attempted to introduce improved trading practices and greater
transparency in both the primary and secondary segments of the securities market
in India.

5.3.4 The Telecom Services in India and the Telecom Regulatory Authority
of India (TRAI)

The telecom industry of India is the world’s second-largest wireless market

consisting of nearly 900 million subscribers as it provides for lowest call-tariffs in
the world facilitated by super telecom operators like Reliance, Airtel, Vodafone,
etc and hectic competition prevailing among them to give the best internet, call-
rates, sms, and other services to the customers. The telecom sector, along with
other services, has contributed much to the technological development of the
nation. During the first quarter of 2018, India has become the world’s fastest-
growing mobile applications market. The government is also providing an impetus
to the telecom industries by fast-tracking its reforms for growth for telecom
companies. The Government is soon going to come out with a new National
Telecom Policy 2018 to make up for the rapid technological expansion in the
sector over the past decade. Low tariffs and direct customer interface have made
the advertisers to reckon to telecom services for marketing of their
products/services. However, it involves some serious issues like loss of privacy,
irritable repetition of messages, etc.

According to sources in the telecommunication industry in India, there were

more than 1,200 million telecom and mobile subscribers in India by the beginning
of 2018.61 The Indian telecom sector is becoming more competitive each year. 62

The entry of private service providers brought with it the inevitable need for
independent regulation. The Telecom Regulatory Authority of India (TRAI) was,
thus, established with effect from 20th February 1997 by an Act of Parliament,
called the Telecom Regulatory Authority of India Act, 1997, “to regulate telecom

61
See, “Top 10 Telecom Companies in India: 2018 Overview and Analysis” available at:
https://www.bizvibe.com/blog/industry-analysis-top-10-telecom-companies-in-
india/(Visited on January 21, 2019).
62
Ibid.

30
services, including fixation/revision of tariffs for telecom services which were
earlier vested in the Central Government.”63 The mission of TRAI is “to create and
nurture conditions for the growth of telecommunications in the country in a
manner and at a pace which will enable India to play a leading role in an emerging
global information society.”64 One of the main objectives of TRAI is “to provide a
fair and transparent policy environment which promotes a level playing field and
facilitates fair competition.” As a result, TRAI has issued from time to time a
large number of regulations, orders, and directives to deal with a wide range of
subjects including tariff, interconnection, and quality of service as well as
governance of the Authority.

TRAI takes a serious note of the telecom operators who present long-
winded ads about their schemes and plans which are not easily understood by the
customers. In order to curtail unsolicited commercial communications and provide
for efficient machinery to do the needful, TRAI issued The Telecom Commercial
Communications Customer Preference Regulations in December 2010. All the
provisions of the Regulations came into force in September 2011. These
regulations provide a procedure for telecom consumers to exercise their
preferences upon commercial communication. In other words, if the telecom
consumers do not want these unwanted calls, they can avoid this by registering
their numbers on the ‘Do Not Call Registry’.65 Essentially, the regulations provide
for severe action against those telemarketers who do not respect the wishes of the
consumers who do not want to be disturbed with unnecessary promotional calls at
all times.

63
See “History – telecom Regulatory Authority of India” available at:
https://www.trai.gov.in/about-us/history (Visited on January 21, 2019).
64
Ibid.
65
The Telecom Commercial Communications Customer Preference Regulations, regulation
4
Provider Customer Preference Register.―(1) Every Access Provider shall maintain and
operate a register to be called the Provider Customer Preference Register for registering
the preference of the subscriber under - (a) fully blocked category; or (b) partially blocked
category,- in accordance with the procedure specified in Schedule-I to these regulations;
Provided that the request of the subscriber for not receiving unsolicited commercial
communications registered in the Private Do Not Call List set up under regulation 4 of the
Telecom Unsolicited Commercial Communications Regulations, 2007 (4 of 2007) shall
continue to be valid, for the purpose of these regulations, under the ‘fully blocked’
category.

31
(2) Every Access Provider shall maintain in duplicate the Provider Customer Preference
Register in at least two places having regard to the security of the database.

32
 TRAI had also issued Direction on Preventing Misleading Tariff
Advertisement in March 2012 for the telecom service providers. As per the
direction issued, a tariff advertisement is considered to be misleading, which is
likely to induce the consumers to subscribe to a tariff plan, which he would not
have subscribed; or contains an untrue statement; or omits a material fact having a
bearing on the subscriber’s decision, and fails to disclose attached limitations and
restrictions.66

Through this Direction, TRAI mandated that all the advertisements

published by telecom access service providers should be transparent, non-
misleading, and unambiguous; disclose all material information in an
unambiguous manner; contain the website address and customer care number of
the telecom access service provider, and the ads issued in vernacular languages
contain all mandatory disclosures in the same language.67 It also mandated that
service providers report compliance to the Authority on a half-yearly basis.
Further, the service providers have been mandated to maintain an advertisement
register which must include a specimen of every tariff-related advertisements, and
carry out an internal audit to ensure that they are complying with all aspects of
this Direction and to report compliance to the Authority on a half-yearly basis.68

Prior to this, on April 8, 1999, the Authority had, in the exercise of the
powers conferred upon it under sub-section 2 of Section 11 of the Telecom
Regulatory Authority of India Act, 1997 read with Clauses 7 & 9 of the
Telecommunications Tariff Order, 1999, issued the Telecommunications Tariff
(Publication and Reporting) Requirement. Under this, it had directed service
providers to ensure the public that tariffs contain all the relevant information that a
subscriber may need to know. These included:69 “(a) Registration and installation
charges, security deposit,

66
See, “TRAI takes steps to Stop Misleading Tariff Advertisements” Press Information
Bureau, Government of India, Ministry of Communications available at:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=81763 (Visited on August 20, 2018).
67
See, Information note to the Press (Press Release No. 67/2012), TRAI issues a Direction
on Preventing Misleading Tariff Advertisements New Delhi, 26th March, 2012
68
Ibid.
69
See, “The Telecommunication Tariff Order 1999, General Rules” available at:
https://trai.gov.in/sites/default/files/Main_Regulations_09_Mar_1999.pdf (Visited on
January 21, 2019).

33
rentals, the tariffs for local, domestic and international long-distance calls, special
services, rebates, and discounts. (b) Timings of peak and off-peak hours and
tariffs applicable thereto. (c) Billing cycles, mode of payment, and consequences
of delayed payment and non – payment. (d) The terms and conditions under which
a service may be obtained are utilized and terminated. (e) Addresses and
telephone numbers of the offices of the service provider and names and addresses
of the authorised representatives of the service provider for further information
and clarification. (f) The choice of tariff packages available to a subscriber along
with the details of the procedure prescribed for exercising the choice. (g) The
alternative packages, if any, available to the subscriber and the manner in which
they differ from the standard packages, including a comparison of its financial
implications to enable the subscriber to make an informed choice.”70

Consequently, the TRAI had hauled up operators for failing to issue tariff
information in the advertisements in the manner prescribed by the Authority. The
authority had also issued directions to the operators to discontinue or modify
advertisements found to be misleading or false and not in the interest of the
consumer.

The existence of a regulator such as TRAI is indispensable in the case of

multiple entrants in the telecom sector. The Government as well as TRAI has to
make combined efforts to protect the customers and they should become active
trustees of the public. Thus, TRAI is constantly ensuring the orderly growth of the
telecom sector in India vis-a-vis protecting the interests of both, the telecom
service providers and telecom consumers.

In August 2018, TRAI has issued strict directions to the telecom industries
to check misleading advertisements being issued by them. It has also clarified its
stance on misleading advertisements. As per to TRAI, "A tariff advertisement is
considered to be misleading, which in any way, is likely to induce the consumer to
subscribe to a tariff plan, which he would not have subscribed; contains an untrue

70
Id., at 56.

34
statement; omits a material fact having bearing on the subscriber's decision, and
fails to disclose attached limitations and restrictions".71

As a common practice, now telecom operators will present those

advertisements which are apparent and non-misleading, and explicit; reveal all
material information in unambiguous terms; contain the web-address and
customer- care contact details of the telecom access service provider. To keep a
check on the observance of this new directive, the service providers have been
commanded to maintain an advertisement register and to include therein a
specimen of every advertisement linked with tariff. They are also required to
conduct internal-audit to make sure that they are abiding by all aspects of this
directive and report its compliance to the authority on a half-yearly basis.

5.3.5 The Insurance Services and the Insurance Regulatory and

Development Authority of India (IRDAI)

Insurance is a regulated affair not only in India but worldwide. Insurers

regulate extensive advertising material about their policies and their benefits,
premiums, savings, future plans, tax benefits, etc. through print as well as oral
media which gears up the role of the insurance sector in the mobilization of
savings along with the development of the nation. Various policies are propagated
including life insurance, fire insurance, marine insurance, property insurance, etc.
Though the insurance sector is governed by the LIC Act or the GIC Act along
with the Consumer Protection Act, still, it could not curb the misleading and hyper
ads by the insurance companies. 72

Insurance Regulatory and Development Authority of India is an

autonomous body set up under the IRDA Act, 1999. Its Mission is to protect the
interests of policyholders and to regulate and develop the insurance industry. It
was set up to regulate the Indian insurance industry in order to protect the
innocent interests of

71
Rahul Gupta, “Stop misleading mobile tariff advertisements: TRAI” Posted on August 16,
2018 available at: https://www.themobileindian.com/news/stop-misleading-mobile-tariff-
advertisements-trai-4446 (Visited on January 21, 2019).
72
See, “Who We Are, The Insurance Regulatory and Development Authority of India”
available at: http://www.policyholder.gov.in/Who_We_Are.aspx# (Visited on January
21, 2019).

35
the policyholders and also work for the systematic growth of the industry in the
country.73 In order to achieve its objectives, IRDAI performs various functions
and duties as set out in section 1474 of the IRDA Act, 1999. The insurance industry
of India consists of 53 insurance companies of which 24 are in the life insurance
business and 29 are non-life insurers.75 In the exercise of the powers conferred by
section 26 of the IRDA Act, the authority has made IRDA (Advertisements and

73
Ibid.
74
IRDA Act, 1999, s. 14
Duties, Powers and Functions Of Authority
(1) Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the
insurance business and re-insurance business.
(2)Without prejudice to the generality of the provisions contained in sub-section (1), the
powers and functions of the Authority shall include, -
(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or
cancel such registration;
(b) protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts of insurance;
(c) specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
(d) specifying the code of conduct for surveyors and loss assessors;
(e) promoting efficiency in the conduct of insurance business;
(f) promoting and regulating professional organisations connected with the insurance and
re-insurance business;
(g) levying fees and other charges for carrying out the purposes of this Act;
(h) calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries and
other organisations connected with the insurance business;
(i) control and regulation of the rates, advantages, terms and conditions that may be
offered by insurers in respect of general insurance business not so controlled and
regulated by the Tariff Advisory Committee under section 64U of the Insurance Act,
1938 (4 of 1938);
(j) specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance intermediaries;
(k) regulating investment of funds by insurance companies;
(l) regulating maintenance of margin of solvency;
(m) adjudication of disputes between insurers and intermediaries or insurance
intermediaries;
(n) supervising the functioning of the Tariff Advisory Committee;
(o) specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organisations referred to in clause (f);
(p) specifying the percentage of life insurance business and general insurance business to
be undertaken by the insurer in the rural or social sector; and
(q) exercising such other powers as may be prescribed.
75
See, “Indian Insurance Market” available at :
http://www.policyholder.gov.in/Indian_Insurance_Market.aspx. (Visited on January 21,
2019).

36
Disclosure) Regulations, 2000. Regulation 2(b) therein defines ‘Insurance
Advertisement”76 and “Unfair or Misleading Advertisement”. 77 The regulations
vide Regulation 3 provides for the compliance of certain provisions by every

76
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 2(b)
"insurance advertisement" means and includes any communication directly or indirectly
related to a policy and intended to result in the eventual sale or solicitation of a policy
from the members of the public, and shall include all forms of printed and published
materials or any material using the print and or electronic medium for public
communication such as:
i) newspapers, magazines and sales talks;
ii) billboards, hoardings, panels;
iii) radio, television, website, e-mail, portals;
iv)representations by intermediaries;
v) leaflets;
vi)descriptive literature/
circulars; vii)sales aids flyers;
viii) illustrations form letters;
ix)telephone solicitations;
x)business cards;
xi) videos;
xii)faxes; or
xiii) any other communication with a prospect or a policyholder that urges him to purchase,
renew, increase, retain, or modify a policy of insurance.
Explanation: The following materials shall not be considered to be an advertisement
provided they are not used to induce the purchase, increase, modification, or retention of a
policy of insurance:— (i) materials used by an insurance company within its own
organization and not meant for distribution to the public; communications with
policyholders other than materials urging them to purchase, increase, modify surrender or
retain a policy; materials used solely for the training, recruitment, and education of an
insurer's personnel, intermediaries, counselors, and solicitors, provided they are not used
to induce the public to purchase, increase, modify, or retain a policy of insurance.
77
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 2(d)
"unfair or misleading advertisement" will mean and include any
advertisement:
(i) that fails to clearly identify the product as insurance;
ii) makes claims beyond the ability of the policy to deliver or beyond the reasonable
expectation of performance;
iii)describes benefits that do not match the policy provisions; uses words or phrases in a
way which hides or minimizes the costs of the hazard insured against or the risks inherent
in the policy; omits to disclose or discloses insufficiently, important exclusions,
limitations and conditions of the contract; gives information in a misleading way;
illustrates future benefits on assumptions which are not realistic nor realisable in the light
of the insurer's current performance; where the benefits are not guaranteed, does not
explicitly say so as prominently as the benefits are stated or says so in a manner or form
that it could remain unnoticed; implies a group or other relationship like sponsorship,
affiliation or approval, that does not exist; makes unfair or incomplete comparisons with
products which are not comparable or disparages competitors.

37
insurer, or intermediary, or an insurance agent.78 Further Regulation 479 states that
any amendment in the advertisement will be considered as a new advertisement.
Advertisements by the insurance companies are regulated by Regulation 5.80
Regulation 6 further deals with the advertisement by insurance agents.81 Only

78
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 3
Compliance and control-(1)Every insurer or intermediary or insurance agent shall —
(i)have a compliance officer, whose name and official position in the organisation shall be
communicated to the Authority, and he shall be responsible to oversee the advertising
programme;
(ii)establish and maintain a system of control over the content, form, and method of
dissemination of all advertisements concerning its policies.
(iii)maintain an advertising register at its corporate office which must include:
(a) a specimen of every advertisement disseminated, or issued or a record of any broadcast
or telecast, etc.;
(b) a notation attached to each advertisement indicating the manner, extent of distribution
and form number of any policy advertised, and
(iv)maintain a specimen of all advertisements for a minimum period of three years.
(v)file a copy of each advertisement with the Authority as soon as it is first issued,
together with information:
(a) an identifying number for the advertisement;
(b) the form number(s) of the policy(ies) advertised and when the product/s were
approved by the Authority;
(c) a description of the advertisement and how it is used.
(d) the method or media used for dissemination of the advertisement.
(vi) file a certificate of compliance with their annual statement stating that, to the best of
its knowledge, advertisements disseminated by the insurer or by its intermediaries during
the preceding year have complied with the provisions of these regulations and the
advertisement code as stated in regulation 12.
(2) The advertisement register shall be subject to inspection and review by the Authority for
content, context, prominence and position of required disclosures, omissions of required
information, etc.
79
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 4
Changes in advertisement- (1) Any change in an advertisement would be considered a new
advertisement.
(2) All the provisions of regulation 3 shall apply mutatis mutandis to advertisement
referred to in sub regulation (i).
(3) The Authority shall be informed at the time of filing the advertisement the extent of
change the original advertisement
80
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 5
Insurance company advertisements- (1)Every insurance company shall be required to
prominently disclose in the advertisement and that part of the advertisement that is
required to be returned to the company or insurance intermediary or insurance agent by a
prospect or an insured the full particulars of the insurance company, and not merely any
trade name or monogram or logo.
(2) Where benefits are more than briefly described, the form number of the policy and the
type of coverage shall be disclosed fully.
81
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 6
Advertisements by insurance agents — (1) Every advertisement by an insurance agent
that affects an insurer must be approved by the insurer in writing prior to its issue;

38
properly licensed intermediaries are permitted to advertise or solicit insurance
through advertisements.82 Regulation 8 further provides conditions for advertising
on the internet by the insurer or an intermediary.83 Regulation 10 provides that
every advertisement for insurance shall clearly state that insurance is the subject
matter of the solicitation and also state the full registered name of the insurer/
intermediary/ insurance agent. If an advertisement is found not in conformity with
the regulations issued by the authority, then the procedure to file a complaint
against such an ad is prescribed under Regulation 11.84 The regulations require
every insurer or intermediary to follow recognised standards of professional
conduct as prescribed

(2) It shall be the responsibility of the insurer while granting such approval to ensure that
all advertisements that pertain to the company or its products or performance comply with
these regulations and are not deceptive or misleading.
Explanation: An agent shall not be required to obtain written approval of the company
prior to issue for:—
(i)those advertisements developed by the insurer and provided to the agents; generic
advertisements limited to information like the agent's name, logo, address, and phone
number; and advertisements that consist only of simple and correct statements describing
the availability of lines of insurance, references to experience, service and qualifications
of agents; but making no reference to specific policies, benefits, costs or insurers.
82
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 7
83
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 8
Advertising on the Internet- (1) Every insurer or intermediary's web site or portal shall —
(i) include disclosure statements which outline the site’s specific policies vis-á-vis the
privacy of personal information for the protection of both their own businesses and the
consumers they serve.
(ii)display their registration/ license numbers on their web sites.
(2) For the purposes of these regulations, except where otherwise specifically excluded or
restricted, no form or policy otherwise permissible for use shall be deemed invalid or
impermissible if such form or policy accurately reflects the intentions of the parties in
such form or policy as published electronically or transmitted electronically between
parties.
84
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 11
Procedure for action in case of complaint- (1) If an advertisement is not in accordance with
these regulations the Authority may take action in one or more of the following ways:
(i)issue a letter to the advertiser seeking information within a specific time, not being more
than ten days from the date of issue of the letter;
(ii) direct the advertiser to correct or modify the advertisement already issued in a manner
suggested by the Authority with a stipulation that the corrected or modified advertisement
shall receive the same type of publicity as the one sought to be corrected or modified;
(iii) direct the advertiser to discontinue the advertisement forthwith;
(iv) any other action deemed fit by the Authority, keeping in view the circumstances of
the case, to ensure that the interests of the public are protected.
The advertiser may seek additional time from the Authority to comply with the directions
justifying the reasons therefor. The Authority, may, however, refuse to grant extension of
time if it feels that the advertiser is seeking time only to delay the matters.
Any failure on the part of the advertiser to comply with the directions of the Authority
may entail the Authority to take such action as deemed necessary including levy of
39
penalty.

40
by the Advertisement Standards Council of India (ASCI) and to discharge its
functions in the interest of the policyholders.85

On April 5, 2011 IRDAI had issued Guidelines on Distance Marketing of

Insurance Products. These guidelines are applicable on every activity of
solicitation (including lead generation) and sale of insurance products through the
following modes: (i) Voice mode, which includes telephone-calling; (ii) Short
Messaging Service (SMS); (iii) Electronic mode which includes e-mail, internet
and interactive television (DTH); (iv) Physical mode which includes direct postal
mail and newspaper & magazine inserts; and, (v) Solicitation through any means
of communication other than in person. These Guidelines cover distance
marketing activities of insurers/brokers and corporate agents (with specific
approval of insurers) at the stages including offer, negotiation as well as the
conclusion of the sale.86 Regulation 2(xii) defines the term ‘Solicitation’.87 The
guidelines direct that every insurer prepares a standardized script for the purpose
and file this with the regulator.88 The script has to incorporate all key features of
the product, including the benefits, features, and disclosures, and all solicitations
and sale activities should strictly be in line with the script.89 The customer over the
telephone must be given the liberty to choose the language and informed that the
call will be recorded.90 Full

85
IRDA (Advertisements and Disclosure) Regulations, 2000, regulation 12.
86
See, “Guidelines on Distance Marketing of Insurance Products,
IRDA/ADMN/GDL/MISC/059/04/2011” available at :
http://www.policyholder.gov.in/uploads/CEDocuments/Guidelines%20on%20Distance%
20Marketing.pdf (Visited on January 21, 2019).
87
Guidelines on Distance Marketing of Insurance Products 2011, regulation 2(xii)
“Solicitation” – For the purpose of these guidelines, solicitation is defined as the approach
of a client by an insurer or an intermediary with a view to induce the client to purchase an
insurance policy.
88
Guidelines on Distance Marketing of Insurance Products 2011, regulation 9.1
Standardized Script (i) Insurers/Brokers shall prepare standardized scripts for presentation
of benefits, features and disclosures under each of the products proposed to be sold over
the distance modes. Solicitation and lead generation under distant mode shall be in line
with the standardized script. (ii) The scripts shall be incorporating all the Key Features of
the product and shall be approved by the compliance officers of the respective insurers.
The scripts shall be filed with the Authority under “Use & File” procedure within 15 days
of their approval by the compliance officer.
89
Ibid.
90
Guidelines on Distance Marketing of Insurance Products 2011, regulation 9.3
Consent of the client (i) The tele caller and the authorized verifier shall ascertain if the
client is interested in continuing with the subject, and the process of solicitation shall
proceed further only on receiving the consent in explicit terms. (ii) The client shall be
given
41
disclosures must be made to the customer during the telephonic conversation. In
case of a dispute, insurers cannot deny the false promises made to customers over
the phone. The guidelines also provide for a voice copy to be provided to the
consumer, if demanded, at any time during the term of the policy or until a
satisfactory settlement of a claim, whichever is later.

IRDAI has associated itself with the “JAGO GRAHAK JAGO” campaign
of the Ministry of Consumer Affairs, Food and Public Distribution, Government
of India, which aims to educate the consumers. In this campaign, advertisements
for consumer information and education about initiatives like The Insurance
Ombudsman channel for dispute resolution have been published and also
telecasted via different media. It has also launched the Insurance Repository
System, Integrated Grievances Management System, Insurance Grievance Call
Center, and the Animation Films of the Comic Strips on Consumer Education
which facilitates in-depth and simple understanding of the concepts of insurance.

5.3.6 The Doctors, Healthcare Service Providers, and the Medical Council
of India (MCI)

Doctors often considered to be the reincarnation of the god on earth, have a

pious duty to protect the life of the patients. Since decades, we have been
witnessing the mushroom growth in the services provided by the doctors ranging
from cancer treatment and IVF to beautification services. We come across
pamphlets, brochures, ads in newspapers about slashed rates of check-ups, lab
tests, surgeries, etc. to inform the people about the medical services available near
them. There is extensive advertising on Facebook, Whatsapp, Linkedin, etc. to
attract modern tech-savvy

an option to continue with the subject or exit the page at every stage in case of electronic
modes. The hours during which calls are made shall be in accordance with orders issued
by TRAI/DoT from time to time. (iii) In case of telephonic solicitation the name of the
caller shall be disclosed and the language options available must be indicated. The
subsequent communication shall continue only in the language chosen by the client. (iv)
Tele callers shall inform clients that the call is being recorded and that the client is
entitled to a voice copy, if he so desires, at any time during the term of the policy or until
a satisfactory settlement of claim, whichever is later. (v) No inconvenience, nuisance or
harm shall be caused to the clients in the course of solicitation or thereafter. Full
disclosures shall be made to the clients under all modes of distance marketing and the
requirements of confidentiality, privacy and non-disclosure shall be complied with.

42
patients. However, doctors and healthcare service providers cannot make high
claims about any procedure.

India has also become a land full of players in the healthcare industry who
provide treatments exclusively of their own brand or sometimes endorse other
brands too. It includes beauty clinics like VLCC, hospitals, medical devices like
Lasers, telemedicine, medical tourism, slimming diets, and techniques, etc.. In
India, people tend to spend more on health care than on traditional medication as
it is considered to be consumer-friendly. The healthcare brands advertise their
products and services through newspaper inserts, health check-up camps, radio
ads, promotional offers, social platforms, etc..

The Medical Council of India is a statutory body established for setting

uniform and high standards of medical education and medical ethics in India. The
Medical Council of India was first established in 1934 under the Indian Medical
Council Act, 1933. The Council was later reconstituted under the Indian Medical
Council Act, 1956. The provisions of The Indian Medical Council Act were not
adequate to meet the challenges posed by the very fast development and
advancement of medical education in the country. As a result, in 1956, the old Act
was repealed and a new one was enacted. The act was further modified in the
years 1964, 1993, and 2001.91 The objectives of the Council are as follows:-

i. “Maintenance of uniform standards of medical education, both

undergraduate and postgraduate.
ii. Recommendation for recognition/de-recognition of medical qualifications
of medical institutions of India or foreign countries.
iii. Permanent registration/provisional registration of doctors with recognized
medical qualifications.
iv. Reciprocity with foreign countries in the matter of mutual recognition of
medical qualifications.”92

91
See, “About MCI, Introduction” available at: https://www.mciindia.org/CMS/about-
mci/introduction (Visited on January 21, 2019).
92
Ibid.

43
 In the exercise of the powers conferred under section 20A read with section
33(m) of the Indian Medical Council Act, 1956, the Medical Council of India,
with the previous approval of the Central Government, MCI has issued The Indian
Medical Council (Professional Conduct, Etiquette, and Ethics) Regulations, 2002.
Chapter 6 of the code93 deals with ‘Advertisements’ which contains the conditions
imposed upon the medical practitioners.94 The regulations also provide that a
physician should not contribute to the lay press articles and give interviews
regarding diseases and treatments which may have the effect of advertising
himself or soliciting practices; but is open to write to the lay press under his name
on matters of public health, hygienic living or to deliver public lectures, give
talks on the

93
Purushotam Behera, Medical Laws and Ethics 136 (Mittal Publications, New Delhi, 1st
edn., 2007).
94
The Indian Medical Council (Professional conduct, Etiquette and Ethics) Regulations,
2000, chapter 6
6. UNETHICAL ACTS :
A physician shall not aid or abet or commit any of the following acts which shall be
construed as unethical–
6.1 Advertising:
6.1.1 Soliciting of patients directly or indirectly, by a physician, by a group of physicians
or by institutions or organisations is unethical. A physician shall not make use of him /
her (or his / her name) as subject of any form or manner of advertising or publicity
through any mode either alone or in conjunction with others which is of such a character
as to invite attention to him or to his professional position, skill, qualification,
achievements, attainments, specialities, appointments, associations, affiliations or honours
and/or of such character as would ordinarily result in his self aggrandizement. A
physician shall not give to any person, whether for compensation or otherwise, any
approval, recommendation, endorsement, certificate, report or statement with respect of
any drug, medicine, nostrum remedy, surgical, or therapeutic article, apparatus or
appliance or any commercial product or article with respect of any property, quality or
use thereof or any test, demonstration or trial thereof, for use in connection with his name,
signature, or photograph in any form or manner of advertising through any mode nor shall
he boast of cases, operations, cures or remedies or permit the publication of report thereof
through any mode. A medical practitioner is however permitted to make a formal
announcement in press regarding the following:
1. On starting practice.
2. On change of type of practice.
3. On changing address.
4. On temporary absence from duty.
5. On resumption of another practice.
6. On succeeding to another practice.
7. Public declaration of charges.
6.1.2 Printing of self photograph, or any such material of publicity in the letter head or on
sign board of the consulting room or any such clinical establishment shall be regarded as
acts of self advertisement and unethical conduct on the part of the physician. However,
printing of sketches, diagrams, picture of human system shall not be treated as unethical.

44
radio/TV/internet chat for the same purpose and send an announcement of the
same to lay press.95 Further, an institution run by a physician for a particular
purpose such as a maternity home, nursing home, private hospital, rehabilitation
center or any type of training institution, etc. may be advertised in the lay press,
but such advertisements should not contain anything more than the name of the
institution, type of patients admitted, type of training and other facilities offered
and the fees.96 However, a doctor can publicise about an institution run for a
particular purpose such as a maternity home or a rehabilitation center can be
advertised mentioning the name of the institution, type of patients admitted, type
of training and other facilities offered, and also the fees; or a clinic by a doctor can
display only name, qualification, name of medical college, university, and the
medical council registration number; or a personal website can be maintained
containing feedback and reviews from patients and office location, working hours,
staff details, etc.; Special lectures, seminars, and conferences can be organised.

The basic objective, thus, of MCI is to perk up the system and to trim down
any ambiguity in the interpretation and implementation of the rules and
procedures. Needless to say, such guidelines, procedures, and directives issued by
the MCI from time-to-time need to be transparent and implementable for effective
control of the medical profession in India. On the parallel lines works the Central
Council of Homeopathy which regulates the conduct of the homeopathic
doctors.97 Until

95
Regulation 7.11
96
Regulation 7.12
97
See, “Central Council of Homoeopathy (CCH) Regulation on advertising”
Available at: http://www.cchindia.com/code-of-ethics-regulations.html (Visited on
January 21, 2019).
The regulation prohibits:
Solicitation of patients directly or indirectly by a practitioner of Homoeopathy either
personally or by advertisement in the newspapers, by placards or by the distribution of
circular cards or handbills is unethical. A practitioner of Homoeopathy shall not make use
of, or permit others to make use of, him or his name as a subject of any form or manner of
advertising or publicity through lay channels which shall be of such a character as to
invite attention to him or to his professional position or skill or as would ordinarily result
in his self-aggrandizement provided that a practitioner of Homoeopathy is permitted
formal announcement in press about the following matters, namely :-
 the starting of his practice;
 change of the type of practice;
 change of address;
 temporary absence from duty;.

45
recently, physicians generally considered themselves accountable only to
themselves, to their colleagues, or the god if they are religious minded. Nowadays,
they have additional accountabilities to their patients, to third parties such as
hospitals and healthcare organisations, to the regulators, and also to the courts of
law.

5.3.7 The Advocates and the Bar Council of India (BCI)

One of the most controversial issues relating to professional ethics is

whether lawyers should advertise their services or solicit clients or not? While on
one hand advertising is necessary for providing information to the public about the
legal services available thereby enhancing access to justice, on the other hand, it
sometimes involves practices which give rise to mistrust and discredit the legal
profession.98 Traditionally the lawyers have been prohibited from solicitation and
advertising and such practices have been a part of the ethics of the legal
profession. An advocate is a person who possesses skills and knowledge of the
law and gives advice on legal matters and also acts on behalf of his clients in the
court of law. If an advocate is required to be diligent, even minor neglect can drag
him to dire consequences. The services of a lawyer can be challenged under the
Consumer Law in India. Apart from it, The Bar Council of India is the regulator
of the profession nationwide.

 resumption of practice
 succeeding to another’s practice.
(2)He shall further not advertise himself directly or indirectly through price lists or publicity
materials of manufacturing firms or traders with whom he may be connected in any
capacity, nor shall he publish cases, operations or letters of thanks from patients in non-
professional newspapers or journals provided it shall be permissible for him to publish his
name in connection with a prospectus or a director’s or a technical expert’s report
PROFESSIONAL MISCONDUCT as per CCH regulations
 if he claims to be a specialist without possessing a special qualification in the
branch concerned;
 if he publishes the names or photographs of doctor running or attending the clinic or
institution in the advertisement;
 if he advertises or notifies the name of the institution or clinic in which no facility is
offered, names of the diseases not treated;
98
Raju Ramachandran, Professional ethics: Changing Profession, Changing Ethics 107
(Lexis Nexis, Butterworths Wadhawa, Nagpur, 2009).

46
 The Bar Council of India is a statutory body created by Parliament under
the Advocates Act, 1961 to regulate and represent the Indian bar. It performs the
regulatory function by prescribing standards of professional conduct and etiquette
and also exercising disciplinary jurisdiction over the bar.99 It also sets standards
for legal education and grants recognition to Universities imparting legal
education in India. Thousands of lawyers graduate every year from almost 900
law colleges spread across the country.100 The majority of the lawyers practicing in
the courts of law represent their clients in courts and other judicial bodies,
working either individually or in a family-run concern.

Advocates, in addition to being professionals, are also officers of the courts

and play a vital role in the administration of justice. Therefore, BCI has framed
certain rules, by virtue of the power conferred upon it by section 49 101 of the
Advocates Act, that governs their professional conduct arise out of the duty that
they owe to the court, the client, their opponents, and other advocates.102 What was
prohibited under the rules was ‘Legal Advertising’. Legal advertising means
advertising by the lawyers, of the services they provide in the court of law. The
legal profession is considered as a reputable and principled profession in India.
Bar Council of India restricted the judges and advocates to make their expert sites
and distribute their commercials on the web, as per its functions under Section
7(1)(b) of the Advocate’s Act.103 As per Rule 36104 given under Section IV of
the Bar

99
See, “About the Council, The Bar Council of India” available at :
http://www.barcouncilofindia.org/about/about-the-bar-council-of-india/ (Visited on
January 21, 2019).
100
See, “About the Profession, The Bar Council of India”. Available at :
http://www.barcouncilofindia.org/about/about-the-legal-profession/ (Visited on January
21, 2019).
101
The Advocates Act, 1961, s. 49
General Powers to make rules- (1) The Bar Council of India may make rules for discharging
its functions under this Act, and, in particular, such rules may prescribe – (c) the
standards of professional conduct and etiquette to be observed by advocates.
102
See, “Rules on Professional Standards, The Bar Council of India” available at:
http://www.barcouncilofindia.org/about/professional-standards/rules-on-professional-
standards/ (Visited on January 21, 2019).
103
The Advocates Act, 1961, s. 7
Bar Council of India- (1) The functions of the Bar Council of India shall be – (b) to lay
down standards of professional conduct and etiquette for advocates.
104
Bar Council of India Rules, rule 36
Duty to Colleagues- An Advocate shall not solicit work or advertise, either directly or
indirectly, whether by circulars, advertisements, touts, personal communications,

47
Council of India Rules, there is an absolute deterrence on the publicizing or
exposure by the lawyers. However, this rule was amended after a writ petition was
filed in the Hon’ble Supreme Court of India in the year 2008. Subsequently,
choice was given to advocates to advertise on the internet. BCI determined that
advocates could provide the data on their chosen website. It permitted the lawyers
to furnish information on the website like their names, addresses, telephone
numbers, email ID, enrolment number, date of enrolment, the name of the State
Bar Council where they originally enrolled, the name of the State Bar Council on
whose roll they are now, the name of the Bar Association of which they are
members, and professional and academic qualifications and areas of practice. so
as to enable the prospective clients to pick the best available lawyer.

Irrespective of severe restrictions on advertising, the legal community has

been successful in finding innovative ways to advertise through sponsoring moot
court competitions focusing on a particular field of law, highlighting the cases
they are dealing with under the garb of a research article, making use of the social
media, and so on. Nowadays, several large law firms operate mostly from major
commercial centers, providing advice on transactions.105 Many lawyers have also
been employed by industry to work in-house. Legal process outsourcing has also
received a great amount of attention during the last few years. Therefore
restricting legal advertising is something contradictory to competitive business
practices.

5.3.8 The Journalists and the Press Council of India (PCI)

Press Council is machinery provided for the Press to regulate itself. The
rationale behind establishing this unique institution is rooted in the concept that in
a democratic state where the press needs to be free, it has to be responsible as
well.

interviews not warranted by personal relations, furnishing or inspiring newspaper

comments or producing his photograph to be published in connection with cases in which
he has been engaged or concerned. His sign-board or name plate should be of a
reasonable size. The sign-board or name-plate or stationery should not indicate that he is
or has been President or Member of a Bar Council or of any Association or that he has
been associated with any person or Organisation or with any particular cause or matter or
that he specialises in any particular type of work or that he has been a Judge or an
Advocate General.
105
See, Somesh Dutt, “A case to relax advertising restrictions for legal practitioners”, The
Hindu, Dated 9th July, 2018 available at: https://www.thehindu.com/opinion/op-ed/a-

48
case- to-relax-advertising-restrictions-for-legal-practitioners/article24372921.ece (Visited
on January 22, 2019).

49
In order to protect the sanctity of the press, the Press Council of India Act, 1965
was passed to establish the Press Council of India as an autonomous, statutory &
quasi-judicial body in India that will govern the conduct of the print media and
secure the freedom of press unfettered by any organisation, authority or
individual.106 The act was repealed during the emergency period in India and was
replaced later on with the new act. Currently, the institution receives its sanction
from the Press Council of India Act, 1978. Section 13107 prescribes in detail the
objects and functions of the PCI. Thus, the PCI helps newspapers and news
agencies

106
See, “History, Press Council of India” available at:
http://presscouncil.nic.in/Content/29_3_History.aspx (Visited on January 22, 2019).
107
Press Council of India Act, 1965 s. 13
Objects and functions of the Council- (1) The objects of the Council shall be to preserve
the freedom of the Press and to maintain and improve the standards of newspapers and
news agencies in India.
(2) The Council may, in furtherance of its objects, perform the following functions,
namely:—
(a) to help newspapers and news agencies to maintain their independence;
(b) to build up a code of conduct for newspapers, news agencies and journalists in
accordance with high professional standards;
(c) to ensure on the part of newspapers, news agencies and journalists, the maintenance of
high standards of public taste and foster a due sense of both the rights and responsibilities
of citizenship;
(d) to encourage the growth of a sense of responsibility and public service among all
those engaged in the profession of journalism;
(e) to keep under review any development likely to restrict the supply and dissemination
of news of public interest and importance;
(f) to keep under review cases of assistance received by any newspaper or news agency in
India from any foreign source including such cases as are referred to it by the Central
Government or are brought to its notice by any individual, association of persons or any
other organisation: Provided that nothing in this clause shall preclude the Central
Government from dealing with any case of assistance received by a newspaper or news
agency in India from any foreign source in any other manner it thinks fit;
(g) to undertake studies of foreign newspapers, including those brought out by any
embassy or other representative in India of a foreign State, their circulation and impact.
Explanation.—For the purposes of this clause, the expression “foreign State” has the
meaning assigned to it in section 87A of the Code of Civil Procedure, 1908 (5 of 1908);
(h) to promote a proper functional relationship among all classes of persons engaged in
the production or publication of newspapers or in news agencies: Provided that nothing in
this clause shall be deemed to confer on the Council any functions in regard to disputes to
which the Industrial Disputes Act, 1947 (14 of 1947), applies;
(i) to concern itself with developments such as concentration of or other aspects of
ownership of newspapers and news agencies which may affect the independence of the
Press;
(j) to undertake such studies as may be entrusted to the Council and to express its opinion
in regard to any matter referred to it by the Central Government;
(k) to do such other acts as may be incidental or conducive to the discharge of the above
functions.

50
to maintain their independence and also builds up a code of conduct for
newspapers, news agencies, and journalists. On various occasions, the government
or its agencies have come to the rescue of the PCI seeking its opinion over
different matters like it had received references from the Law Commission of
India regarding astrology advertisements, Election Commission of India
approached the Council for providing some concrete parameters to adjudge Paid
News, etc.

The Press Council of India under the power conferred upon it by virtue of
Section 13(2)(b)108 of the Press Council Act, 1978 has framed a set of guidelines
to smooth the progress of Media. Of these, the guidelines on coverage of
HIV/AIDS- related matter were drawn up in 1993. The press should take care not
to promote myths related to prevention and transmission of HIV or to claims that
advertise protection from the infection. Nor should it give any credence to
traditional cures that have no scientific verification. False hopes are raised by
reporting claims around cures. Researchers have been working hard for decades
yet there is no known cure for HIV or AIDS although the infection is treatable
with a positive impact on the quality of life. The media should include telephone
numbers of HIV and AIDS helplines/counselling services. Advertisements related
to HIV, STIs, skin diseases, tuberculosis, and other opportunistic infections can be
potentially misleading and should be carefully checked. PCI has also issued
“Model Guidelines for Publishing Overseas Advertisements in Accordance With
Emigration Act 1983”, whereby it mandates the Registered Recruiting Agents to
display their registration certificate number while inserting any advertisement
relating to recruitment. Similarly, Foreign Employers and Project Exporters will
also have to indicate the permit number while inserting advertisements.109 A copy
of the registration certificate in case of recruiting agents and permit letter in case
of foreign employers and project exporters may be asked to be attached with the
advertisement form as proof of their being genuine persons. Further, the
advertisers are required to make full disclosure in the advertisement regarding
Registration Certificate

108
Ibid.
109
See, the official website of PCI available at:
http://presscouncil.nic.in/Content/63_1_GuidelinesIssues.aspx (Visited on January 22,

51
2019).

52
Number/Permit Number; Full address with Telephone Number, Post Box Number,
e-mail address; Fee to be charged from the applicant; Name of the Posts/jobs;
Number of Position/vacancies in each category; and Salary offered to each
category of job. PCI has also framed Norms of Journalist Conduct in 2010
wherein vide regulation 36 it provides for the ‘Advertisements’. 110 It provides a
plethora of restrictions placed on the press when it comes to advertising.

110
Norms of Journalist Conduct, regulation 36
Advertisements- i) Commercial advertisements are information as much as social,
economic or political information. What is more, advertisements shape attitude and ways
of life at least as much, as other kinds of information and comment. Journalistic propriety
demands that advertisements must be clearly distinguishable from news content carried in
the newspaper. ii) No advertisement shall be published, which promotes directly or
indirectly production, sale or consumption of cigarettes, tobacco products, wine, alcohol,
liquor and other intoxicants. iii) Newspaper shall not publish advertisements, which have
a tendency to malign or hurt the religious sentiments of any community or section of
society.
iv) Advertisements which offend the provisions of the Drugs and Magical Remedies
(Objectionable Advertisement) Act as amended in 2002, or any other statute should be
rejected. v) Newspapers should not publish an advertisement containing anything which
is unlawful or illegal, or is contrary to public decency, good taste or to journalistic ethics
or propriety. vi) Journalistic propriety demands that advertisements must be clearly
distinguishable from editorial matter carried in the newspaper. Newspapers while
publishing advertisements should specify the amount received by them. The rationale
behind this is that advertisements should be charged at rates usually chargeable by a
newspaper since payment of more than the normal rates would amount to a subsidy to the
paper. vii) Publication of dummy or lifted advertisements that have neither been paid for,
nor authorised by the advertisers, constitute breach of journalistic ethics specially when
the paper raises a bill in respect of such advertisements. viii) Deliberate failure to publish
an advertisement in all the copies of a newspaper offends against the standards of
journalistic ethics and constitutes gross professional misconduct. ix) There should be total
co- ordination and communication between the advertisement department and the
editorial department of a newspaper in the matter of considering the legality propriety or
otherwise of an advertisement received for publication. x) The editors should insist on
their right to have the final say in the acceptance or rejection of advertisements, especially
those which border on or cross the line between decency and obscenity. xi) Newspapers
to carry caution notice with matrimonial advertisements carrying following text- “Readers
are advised to make appropriate thorough inquiries before acting upon any advertisement.
This newspaper does not vouch or subscribe to claim and representation made by the
advertiser regarding the particulars of status, age, income of the bride/bridegroom”. xii)
An editor shall be responsible for all matters, including advertisements published in the
newspaper. If responsibility is disclaimed, this shall be explicitly stated beforehand.
xiii) Tele-friendship advertisements carried by newspapers across the country inviting
general public to dial the given number for ‘entertaining’ talk and offering suggestive
tele- talk tend to pollute adolescent minds and promote immoral cultural ethos. The Press
should refuse to accept such advertisements. xiv) Classified advertisements of health and
physical fitness services using undignified languages, indicative of covert soliciting, are
violative of law as well as ethics. The newspaper should adopt a mechanism for vetting
such an advertisement to ensure that the soliciting advertisements are not carried. xv)
Advertisements of contraceptive and supply of brand item attaching to the advertisement
is not very ethical, given the social milieu and the traditional values held dear in our
country. A newspaper has a sacred duty to educate people about precautionary measures
to avoid

53
 Where the freedom of press is very well mandated under the constitution
itself, the liability of true advertising is rest upon various regulators including the
PCI which has performed its functions and making a full endeavour to achieve the
objective as enshrined in the Press Council Act.

5.3.9 The Advertisers and the Advertising Agencies Association in India

(AAAI)

As the Advertising Standard Council of India came into existence much

later, AAAI had been regulating and monitoring the working of the advertising
industry much before. It is an official national organisation formed to promote the
interests of the advertisers so as to enable them to render their services in an
efficient and prudent manner. AAAI is a true representative of the small, medium,
large-sized agencies as its members who account for approximately 80% of the
advertising business in India. It is recognized at all platforms wherein advertisers,
media owners, associations and even the Government participate freely in
advertising. It has established a healthy bond with the Indian Society of
Advertisers. On several occasions, AAAI has landed a dispute resolution
mechanism to its members by way of arbitration. It also represents its members at
various forums, may it be dialogues with the Government, media personnel, or the
advertisers, to protect their business interests. It also provides training facilities for
the advertising professionals, applauds the creativity of the advertisers through
awards (Triple-A Awards), and honours the efforts and dedication of the
outstanding advertising men (AAAI-

AIDS and exhibit greater far sight in accepting advertisement even though issued by
social welfare organisation. (xvi) Employment News which is trusted as a purveyor of
authentic news on government jobs should be more careful in accepting advertisements of
only bonafide private bodies. (xvii) While accepting advertisements of educational
institutes newspapers may ensure that such advertisements carry the mandatory statement
that the concerned institutes are recognized under the relevant enactments of law. xviii)
Advertisements play extremely vital role in shaping the values and concerns of the
present day society and as more and more lenient view is taken of what is not the norm, the
speedier may be acceptability of such matters in ‘public perception’ but at what cost is the
essential point for consideration. It should be borne in mind that in the race to be globally
relevant we do not leave behind the values that have earned India the unique place it
enjoys globally on moral and ethical plane. It should be borne in mind that in the race to
be globally relevant we do not leave behind the values that have earned India the unique
place it enjoys globally on moral and ethical plane.

54
Premnarayan Award).111 The AAAI was established to fulfill the following
objectives:

i. “To benefit the consumers by ensuring them that the advertisements will be
honest and in good taste
ii. To benefit the Indian advertisers by promoting their sales, their
productivity and profitability to stimulate the business and industrial
activity.
iii. To benefit the media by establishing sound business practices among the
media and the advertising agencies.
iv. To benefit the nation by the medium of good advertising of the country, its
citizens, its government and its policies, by propagating social welfare of
the people.
v. To encourage the youth to participate in the communication business, to
impart them education and training.
vi. To assist the members on various issues relating to advertising. Non-
members can avail the assistance of AAAI bt paying a nominal fee.
vii. To build a common platform to build and sustain the prestige of the
advertising profession and save it from unnecessary attacks and
restrictions from different corners.
viii. To connect and cooperate effectively with the government and its organs
to help them understand the role of advertisers, advertising agencies, and
media in the betterment of the nation.”112
These are only a few and not the entire list of functions performed by AAAI.

5.3.10 Food Safety and Standard Authority of India (FSSAI)

The Food Safety and Standards Authority of India (FSSAI) was

established under the Food Safety and Standards Act, 2006, which is a
consolidating statute related to food safety and regulation in India and the
regulatory structure of the

111
See, “The Advertising Association of India” available at:
http://www.indianmirror.com/indian-industries/associations/advertising-association.html
(Visited on January 22, 2019).
112
Dr. Swati Sinha and Dr. Pradip Kumar Das, “False and Misleading Advertisements and
protection of the consumers: Indian scenario” available at: http://ijlljs.in/wp-

55
content/uploads/2014/10/false_Advt.pdf (Visited on January 22, 2019).

56
Ministry of Health and Family Welfare. It is responsible for handling the food
related issues and maintaining the safety and quality of food items for the benefit
of consumers.113 FSSAI was created for formulating scientific standards for
articles of food and regulating their manufacture, storage, distribution, sale, and
import to ensure the availability of safe and wholesome food for human
consumption. The aim of FSSAI is to ‘Build a New India, a Healthy and Happy
India’.114 It is established to transform the food safety and nutritional landscape in
India. The FSSA act 2006 vide section 24115 prohibited the advertisements and
unfair trade practices and also provided punishment for misleading advertisements
(already discussed in Chapter- 4). Section 92116 of the act empowers the FSSAI to
make rules and regulations for preventing false and misleading advertisements and
promote food safety and health-related activities. By virtue of this power FSSAI
has issued various regulations like Food Safety and Standards (Packaging and
Labelling) Regulation, 2011; Food Safety and Standards (Organic Food)
Regulation, 2017; etc. In November 2017, FSSAI has issued a draft of the Food
Safety and Standards (Advertisements and Claims) Regulations, 2017. The
regulations have given a wider meaning to ‘advertisements’ and ‘claims’ and
contain general principles in

113
R. C. Tripathi, Food Safety and Standards Act, 2006 5 (Ekta Law Agency, 1stedn., 2019).
114
See, “FSSAI role in food quality and consumer safety is Essential” available at:
https://www.fssaifoodlicense.com/consumers-food-safety-fssai/ (Visited on January 22,
2019).
115
The Food Safety and Standards Act, 2006, s.24
Restrictions of advertisement and prohibition as to unfair trade practices.- (1) No
advertisement shall be made of any food which is misleading or deceiving or contravenes
the provisions of this Act, the rules and regulations made thereunder.
(2) No person shall engage himself in any unfair trade practice for purpose of promoting
the sale, supply, use and consumption of articles of food or adopt any unfair or deceptive
practice including the practice of making any statement, whether orally or in writing or by
visible representation which-
(a) falsely represents that the foods are of a particular standard, quality, quantity or grade-
composition;
(b) makes a false or misleading representation concerning the need for, or the usefulness;
(c) gives to the public any guarantee of the efficacy that is not based on an adequate or
scientific justification thereof: Provided that where a defence is raised to the effect that
such guarantee is based on adequate or scientific justification, the burden of proof of such
defence shall lie on the person raising such defence.
116
The Food Safety and Standards Act, 2006, s.92
Power of Food Authority to make regulations- (1) The Food Authority may, with the
previous approval of the Central Government and after previous publication, by
notification, make regulations consistent with this Act and the rules made thereunder to
carry out the provisions of this Act.

57
relation to such advertisements and claims which must be followed by the
advertisers. A redressal mechanism is also provided in the regulations for
receiving the objections from the consumers.

FSSAI, on November 19, 2018, has issued new regulations on food

advertisements which provide elaborated conditions on how the food firms should
advertise their products and how to evade misleading claims, without declining the
significance of a healthy lifestyle and a balanced diet. The rules are effective from
July 1, 2019. The new regulations are an effort in the right direction as they
authorize state government officials to take suo-moto action against culpable food
companies. As per the new regulations, claims made in the advertisements must be
consistent with the information provided on the label. The labels must not contain
words implying the food is suggested, prescribed, or approved by any medical
practitioner or approved for some medical purposes. The regulations prohibit the
companies from using deceiving words/phrases like "natural", "fresh", "original",
"traditional", "premium", "finest", "best", "authentic", "genuine" and "real".
However, companies may be permitted to use such words only under some
specific conditions as provided in the regulations.117 The regulations put much
responsibility on celebrities who subscribe to food products and endeavour to
ensure fairness in claims made by companies engaged in the packaged food
business. Also, the contents of an ad need to be compatible with what is
mentioned in the labels.

As per section 3 of the regulations, “every food business operator and

marketer who is advertising shall comply with the regulation.” 118 Some general
principles have been formulated regarding the content of the advertisements which
include:

 “Claims must be truthful, unambiguous, meaningful, not misleading, and

must help consumers to comprehend the information provided.

117
Kalyan Ray, “FSSAI brings out new regulations on food advertisement” Posted on
December 1, 2018 available at: https://www.deccanherald.com/national/fssai-brings-out-
new-705241.html (Visited on January 22, 2019).
118
Food Safety and Standards (Advertising And Claims) Regulations, 2018, s.3.

58
 Claims shall not encourage or condone excess consumption of a particular
food.

 Claims shall not state, suggest, or imply that a balanced and varied diet
cannot provide appropriate quantities of nutrients as required by the body.

 Where the claim benefit is related to or dependent on the method of

preparation of the food, the same shall be provided on the label.

 Claims shall specify the number of servings of the food per day for the
claimed benefit.

 The claim that a food has certain nutritional or health attributes shall be
scientifically substantiated by validated methods of characterizing or
quantifying the ingredient or substance that is the basis for the claim.

 Where the meaning of a trade mark, brand name or fancy name containing
adjectives such as "natural", "fresh", "pure", "original", "traditional",
"authentic", "genuine", "real", etc., appearing in the labelling, presentation
or advertising of food is such that it is likely to mislead the consumers as
to the nature of the food, in such cases, a disclaimer in not less than 3mm
size shall be given at appropriate place on the label stating that – "*This is
only a brand name or trade mark and does not represent its true nature".

 All disclaimers relating to a claim shall be conspicuous and legible.

 Notwithstanding the mandatory declaration of the Food Safety and

Standards Authority of India logo and license number as per Food Safety
and Standards (Packaging and Labelling) Regulations, 2011, no claim or
promotion of sale, supply, use, and consumption of articles of foods shall
be made using Food Safety and Standards Authority of India logo and
license number.

 Advertisements shall also not undermine the importance of healthy

lifestyles.

 Advertisements for food or beverages shall not be promoted or portrayed

as a meal replacement unless otherwise specifically permitted as a meal

59
 replacement under any other Regulations made under the Food Safety and
Standards Act, 2006.

 Claims in advertisements shall be consistent with the information on the

label of the food or beverage.

 No advertisement shall be made for food products which are deceptive to

the consumers.

 Every declaration which is required to be made on advertisements under

these regulations shall be conspicuous and legible.”119

The regulations also provide that “when a nutrient comparative claim is made
in an ad, the food should be having at least 25% higher energy value or
nutrient content as against the same food without the nutrient. For claims on
micro- nutrients, the food should be having at least 10% of the recommended
dietary allowances for such micro-nutrients.”120 The regulations contain a
provision relating to Prohibited claims which say that:

 “No product can make a claim regarding sustainability unless permitted

under any other regulations made under the Food Safety and Standards
Act, 2006 (34 of 2006).

 Phrases such as "recommended by the medical or nutrition or health

professionals" are not permitted.

 Terms like "added nutrients" are not to be used in cases where they are
added merely to compensate for lost nutrients during the process.

 Food for special dietary uses shall not be included unless permitted under
any other regulations made under the Food Safety and Standards Act, 2006
(34 of 2006).

 No claims can be made that give rise to suspicion about the safety of
similar foods.

119
Food Safety and Standards (Advertising and Claims) Regulations, 2018, s.4.
120
Supra note 879.

60
  No health claims can be made for foods that increase the risk of disease.

 No claims or advertisement can be made that undermine other

manufacturer's products.”121

FSSAI stresses on the companies that if their advertisement if found to be

defective and misleading, they need to correct it and issue a new one as
directed.122

Consumers can connect to FSSAI through various channels or call Toll free
Number provided by FSSAI. Recently an online platform called ‘Food Safety
Voice’ has been launched which helps consumers to register their complaints and
feedbacks about food safety issues related to adulterated food, unsafe food,
substandard food, labelling defects in food, and misleading claims &
advertisements related to various food products. A GAMA portal for concerns
regarding misleading claims and advertisements too is operated.123

5.3.11 Real Estate Services and the Real Estate Regulatory Authority of
India (RERA)

The Real Estate Regulation is not a new concept in India. Prior to the
RERA Act, the laws governing the property was included in the Indian Contract
act, 1872, The Transfer of Property Act, 1882, laws relating to Municipalities and
Municipal Corporations, various state-specific Land Laws, etc.. Growing
urbanization and increased demand of the housing as a result of the growing
population necessitated the need of specific legislation to regulate the real estate
and housing services provided by the real estators. The RERA act was passed in
the year 2016 to regulate transactions relating to the sale of plot, apartment, or
building in relation to real estate projects.124 It is to be noted here that the act does
not regulate the construction

121
Food Safety And Standards (Advertising And Claims) Regulations, 2018, s. 10.
122
Food Safety And Standards (Advertising And Claims) Regulations, 2018, s. 15.
Corrective advertisement. If an advertisement is found to be in violation of the provisions
of these regulations, the Food Authority may, by order, require the concerned food
business
operator or advertiser to stop it immediately and to issue corrective advertisement within
thirty days through the same medium for neutralising the effect of such advertisement.
123
See, “The Food Safety and Standards Authority of India” available at:
https://en.wikipedia.org/wiki/Food_Safety_and_Standards_Authority_of_India (Visited
on January 22, 2019).

61
124
M. V. Durga Prasad, Law Relating to Real Estate Regulation in India along with Model
Building Bye-Laws 9 (Asia Law House, Hyderabad, 2017).

62
of the building or the use of the land.125 Nor it has any impact on the laws
pertaining to the title or interest in the land. The RERA has come as a relief to the
buyer who’s most crucial difficult was regarding misleading advertisements by the
builders and big construction houses. But after RERA, it’s a history. Now after the
law, the developers cannot endorse their fancy or luxurious projects which are not
real and remain a distant dream for the innocent buyers. If any developer promises
to deliver something, it must be done in order to escape the penalties under the
RERA.

The RERA was established to achieve the following Objects126:

i. To regulate the planned development of the real estate sector;

ii. To ensure the sale of immovable properties in an efficient and
transparent manner;
iii. To protect the interest of consumers in the real estate sector
iv. The matters connected therewith and incidental thereto.
v. It makes mandatory for all builders to register their project with RERA
here the land exceeds 500squaremetres before launching or advertising
their project.
vi. Not doing so attracts imprisonment for any term upto 3 years or a fine
upto 10% of the total project cost.

Section 2(b) of the RERA Act states that an "advertisement means any
document described or issued as advertisement through any medium and includes
any notice, circular or other documents or publicity in any form, informing
persons about a real estate project, or offering for sale of a plot, building or
apartment or inviting persons to purchase in any manner such plot, building or
apartment or to make advances or deposits for such purposes”. The RERA has the
power to register

125
Id., at 18.

63
126
See, Preamble of the Act, see also the object and reasons.

64
real estate projects,127128 to extend, and revoke the registration so granted. Further,
the promoter is liable to compensate the purchaser in case of any deficiency or
damage sustained by him as a result of any false statement made by the
promoter.129

127
RERA act, 2016, s. 3
Prior registration of real estate project with Real Estate Regulatory Authority- (1) No
promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase
in any manner any plot, apartment or building, as the case may be, in any real estate
project or part of it, in any planning area, without registering the real estate project with
the Real Estate Regulatory Authority established under this Act: Provided that projects
that are ongoing on the date of commencement of this Act and for which the completion
certificate has not been issued, the promoter shall make an application to the Authority for
registration of the said project within a period of three months from the date of
commencement of this Act: Provided further that if the Authority thinks necessary, in the
interest of allottees, for projects which are developed beyond the planning area but with
the requisite permission of the local authority, it may, by order, direct the promoter of
such project to register with the Authority, and the provisions of this Act or the rules and
regulations made there under, shall apply to such projects from that stage of registration.
(2) Notwithstanding anything contained in sub-section (1), no registration of the real
estate project shall be required— (a) where the area of land proposed to be developed
does not exceed five hundred square meters or the number of apartments proposed to be
developed does not exceed eight inclusive of all phases: Provided that, if the appropriate
Government considers it necessary, it may, reduce the threshold below five hundred
square meters or eight apartments, as the case may be, inclusive of all phases, for
exemption from registration under this Act; (b) where the promoter has received
completion certificate for a real estate project prior to commencement of this Act; (c) for
the purpose of renovation or repair or re-development which does not involve marketing,
advertising selling or new allotment of any apartment, plot or building, as the case may
be, under the real estate project. Explanation.—For the purpose of this section, where the
real estate project is to be developed in phases, every such phase shall be considered a
stand-alone real estate project, and the promoter shall obtain registration under this Act
for each phase separately.
128
RERA Act, 2016, s. 5
Grant of Registration- (1) On receipt of the application under sub-section (1) of section 4,
the Authority shall within a period of thirty days. (a) grant registration subject to the
provisions of this Act and the rules and regulations made thereunder, and provide a
registration number, including a Login Id and password to the applicant for accessing the
website of the Authority and to create his web page and to fill therein the details of the
proposed project; or (b) reject the application for reasons to be recorded in writing, if such
application does not conform to the provisions of this Act or the rules or regulations made
thereunder: Provided that no application shall be rejected unless the applicant has been
given an opportunity of being heard in the matter. (2) If the Authority fails to grant the
registration or reject the application, as the case may be, as provided under sub-section
(1), the project shall be deemed to have been registered, and the Authority shall within a
period of seven days of the expiry of the said period of thirty days specified under sub-
section (1), provide a registration number and a Login Id and password to the promoter
for accessing the website of the Authority and to create his web page and to fill therein
the details of the proposed project. (3) The registration granted under this section shall be
valid for a period declared by the promoter under sub-clause (C) of clause (1) of sub-
section (2) of section 4 for completion of the project or phase thereof, as the case may be.
129
Section 12.
65
Further RERA ensures that ever advertisement, brochure, or information material
bears the registration number of the promoter.130

Thus, RERA will effectively protect the buyers from unrealistic and
misleading advertisements as well as fraudulent builders, agents, and brokers.
Buyers will be delivered what is promised to them by way of an advertisement by
the promoter as RERA has imposed a new advertising policy on the projects
which must be implemented in letter and spirit to fulfill the objectives as
enshrined in the act. Even the developers have become extra cautious about their
marketing policies. Most of them have employed special teams to ensure the
compliance of the RERA.

5.3.12 Architects and the Council of Architects (COA)

An architect is essentially a person or a group of persons who plan, design,

review, and supervise the construction of buildings. To practice
architecture implies providing services in connection with the design of the inner
buildings and also the space within the site but surrounding the buildings, where
the principal purpose is either human occupancy or use. Professionally, an
architect's decisions concern public safety vis-à-vis the safety of the owner of the
building. Thus, an architect must undertake specialized training consisting of
advanced educational course in architecture and an internship for some practical
experience to become a licenced architect. The services rendered by architects,
like other professional services, have also been covered by the relevant laws of
the country,
i.e. the Architects Act, 1972, Rules - 1973, Regulations - 1982, COA (Minimum
Standards of Architectural Education) Regulations, 1983, and the Architects
(Professional Conduct) Regulations, 1989.131

The Council of Architecture (COA) has been constituted by the

Government of India under the provisions of the Architects Act, 1972. The Act
provides for registration of Architects, standards of education, recognized
qualifications and standards of practice to be complied with by the practicing
architects. The Council of Architecture is charged with the responsibility to
regulate the education and

130
Section 11.

66
131
See, “Architects Professional Guidelines” available at :
https://www.coa.gov.in/index1.php?lang=1&level=1&sublinkid=271&lid=250 (Visited
on January 22, 2019).

67
practice of the profession throughout India besides maintaining the register of
architects. For this purpose, the Government of India has framed Rules, and the
Council of Architecture has framed Regulations as provided for in the Architects
Act, with the approval of the Government of India.132 If an architect is found guilty
of professional misconduct, he is liable for disciplinary action by the Council of
Architecture.133 An architect is liable for the negligent act which he committed in
the performance of his duties. Regulation 2(1)(XXV)134 of the Architects
(Professional Conduct) Regulations, 1989 provides restrictions on advertising by
the advertisers. The same provision also prescribes the advertising mode permitted
thereunder. It further provides that violation of the conditions so stipulated shall
constitute professional misconduct by the architect.

Thus, the COA has provided the guidelines which make it clear that when
architects can be held responsible to the owners/occupiers of the building for their
false and misleading advertisements and also for concealment of essential
information.

132
See, “Acts, Rules & Regulations” available at :
https://www.coa.gov.in/index1.php?lang=1&level=0&lid=10&linkid=6 (Visited on
January 22, 2019).
133
The Architects Act, 1972, s.30.
134
The Architects (Professional Conduct) Regulations, 1989, regulation 2(1)
Every architect, either in practice or employment, subject to the provisions of the Central
Civil Services (Conduct) Rules, 1964 or any other similar rules applicable to an Architect,
he shall :-
xxv. shall not advertise his professional services nor shall he allow his name to be
included in advertisement or to be used for publicity purposes save the following
exceptions :- (a) a notice of change of address may be published on three occasions and
correspondents may be informed by post, (b) an Architect may exhibit his name outside
his office and on a building, either under construction or completed, for which he is or
was an Architect, provided the lettering does not exceed 10 cm. in height, (c)
advertisements including the name and address of an Architect may be published in
connection with calling of tenders, staff requirements and similar matters, (d) may allow
his name to be associated with illustrations and descriptions of his work in the press or
other public media but he shall not give or accept any consideration for such appearances,
(e) may allow his name to appear in advertisements inserted in the press by suppliers or
manufacturers of materials used in a building he has designed, provided his name is
included in an unostentatious manner and he does not accept any consideration for its use,
(f) may allow his name to appear in brochure prepared by Clients for the purpose of
advertising or promoting projects for which he has been commissioned, (g) may produce
or publish brochures, pamphlets describing his experience and capabilities for distribution
to those potential Clients whom he can identify by name and position, (h) may allow his
name to appear in the classified columns of the trade / professional directory and/or
telephone directory/ website.

68
5.3.13 The Company Secretaries and the Institute of Company Secretaries of
India (ICSI)

The Institute of Company Secretaries of India (ICSI) is a statutory body that

finds its existence in an Act of Parliament i.e. the Company Secretaries Act,
1980.135 It is the only professional body recognized in the entire nation to develop,
grow, and regulate the profession of company secretaries in India. The Institute
awards the certificate of “Company Secretary (CS)” to a candidate who qualifies
for the membership of the institute after going through the required examinations
and formal trainings. The Company Secretary Act clearly provides that any person
who is a member of ICSI is a company secretary. 136 This body functions under the
authority and control of the Ministry of Corporate Affairs (MCA), Government of
India. At present, there are more than 60,000 company secretaries in India. ICSI
has its headquarters at Lodhi Road, New Delhi, four regional offices at New
Delhi, Chennai, Kolkata, Mumbai, and 70 chapter offices across the districts in
several states of India.137

The company secretaries are governed by the provisions of the Company

Secretaries Act, the rules and regulations framed by ICSI for their conduct as well
as various directives issued by MCA from time to time. The CS professionals are
not entitled to practice, whether in India or elsewhere unless they have obtained
from the institute a certificate of practice (CoP). “The company secretary is
responsible for the well-organized and professional administration of a company,
predominantly with regard to ensuring compliance with statutory and regulatory
requirements and for ensuring that decisions of the board of directors are
implemented.”138 The members of the institute are required to abide by the
advertising guidelines139 issued by the institute in 2007 which became operative
from January 1, 2008. These guidelines are available at the ICSI portal free of
cost.

135
Act No. 56 of 1980.
136
The Company Secretary Act, 1980, s 2(c).
“Company Secretary” means a person who is a member of the Institute.
137
See, https://www.icsi.edu/about-icsi/ (Visited on January 22, 2019).
138
See, “Company Secretary” available at: https://en.wikipedia.org/wiki/Company_secretary
(Visited on January 23, 2019).
139
Guidelines for Advertisement by Company Secretary in Practice, ICSI Guideline No. 4 of
December, 2007.

69
The Institute has further issued new guidelines140 on January 9, 2020, which will
be effective from April 1, 2020. These guidelines contain detailed information
about advertising by company secretaries in practice.141 Clause 1.4(2)142 of the
guidelines prohibits any sort of advertising except a write-up 143 by a company
secretary in practice which is not in conformity with such guidelines. Clause 4
provides for the definitions of the terms used in the guidelines which include the
definition of the term advertisement.144 The guidelines elaborate precisely
permitted means of

140
ICSI (Guidelines for Advertisement by Company Secretaries), 2020 as approved by the
council on January 9, 2020.
141
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause 4.4
“Company Secretary in Practice” means a member of the Institute who holds a valid
Certificate of Practice issued to him by the Council of the Institute.
142
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause 1.4(2).
Prohibition to Advertise- No Company Secretary or a firm of Company Secretaries is
permitted to advertise the services as specified in the Act, rules, regulations framed
hereunder except through a write-up as defined in Clause 2.6.
143
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause
1 Introduction
Part I of the First Schedule of the Company Secretaries Act, 1980, enumerates
professional misconduct in relation to a member in practice and inter-alia includes if such
a member:
(1) Solicits clients or professional work, either directly or indirectly, by circular,
advertisement, personal communication or interview or by any other means:
Provided that nothing herein contained shall be construed as preventing or prohibiting –
(i) Any Company Secretary from applying or requesting for or inviting or securing
professional work from another Company Secretary in Practice; or (ii)A member from
responding to tenders or enquiries issued by various users of professional services or
organisations from time to time and securing professional work as a consequence;
(2)Advertises his/her professional attainments or services, or uses any designation or
expressions other than Company Secretary on professional documents, visiting cards,
letterheads or sign boards, unless it is a degree of a University established by law in India
or recognised by the Central Government / State Government or a title indicating
membership of the Institute of Company Secretaries of India or of any other institution
that has been recognised by the Central Government / State Government or recognised by
the Council:
Provided that a member in practice of the profession of company secretaries or otherwise
may advertise through a write up setting out:
a. the services provided by him/her or his/her firm or LLP andb. particulars of his/her firm
/ LLP subject to such guidelines as may be issued by the Council.
The write-up should not be used for solicitation of clients, portrayal of supremacy or tall
claims to undermine other members.
144
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause 4
Definitions
For the purposes of these Guidelines,
4.3 “Advertisement or advertising” means advertisement or advertising in any mode
including written, recorded, displayed communication through print or electronic mode or
otherwise including in newspapers, journals, internet, online, websites, banners, letters,
circulars issued, circulated or published in accordance with these guidelines.
70
advertisements by the company secretaries in practice.145 Clause 6146 further
mentions the restrictions which, if violated, will make an advertisement false and
misleading. The guidelines provide restrictions for advertising through placement
websites as well.147 There is also included a disclaimer clause that absolves the

145
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause
5 Permitted means of advertising
The following activities are permitted for a Company Secretary in Practice as means to
advertise:
i.) Display the scope of work on his/her own website. ii.) Creating a visual identity in
compliance with the Guidelines for use of Individual Logo issued by the Council of ICSI.
iii.) Display of Location and décor of the workplace, meeting rooms, etc. iv.) Display of
Firm name, Logo or any other identity on Uniform, Office/s, office stationary&
equipments/material and providing Training to Staff. v.) Professional Updates and Write
ups in any mode. vi.) Appearing on local radio or television. vii.) Giving
speeches/lectures at any platform including Seminars, Conferences, training programmes,
Workshops, Conventions, etc. so organised by any forum. viii.) Holding professional
seminars, conferences and workshops. ix.) Sponsoring any event (cultural, professional or
otherwise) or helping with community programmes or doing voluntary work as a
professional for charitable organizations. x.) Use of social media like Facebook,
Instagram, Linkedin, Twitter, Youtube, WeChat, Telegram and Whatsapp or and other
media of similar nature.
146
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause
6 Restrictions-
The Advertisement shall:
(i) not be in violation of provisions of Company Secretaries Act, 1980;
(ii) not be false or misleading;
(iii) not claim superiority over any or all other Company Secretaries;
(iv) not be indecent, sensational or otherwise of such nature which may bring disrepute to
the profession or the Institute (ICSI);
(v) not contain fabricated or false testimonials or endorsements concerning the Company
Secretary;
(vi) not refer the Company Secretaries in the terms such as “specialists” or “experts”;
Explanation: The advertisements shall not be self-laudatory and not include the words
such as “best,” “better” or “cheapest.”
(vii) not represent that the quality of the professional services to be performed is greater
than the quality of professional services performed by other professionals.Statements
comparing one professional’s services to that of another are not allowed;
(xi) not constitute a guarantee, warranty, or prediction regarding the outcome of any
professional assignment;
(xii) in no way indicate that the charging of a fee is contingent on outcome, or that no fee
will be charged in the absence of the desired outcome;
(xiii) not contain any reference to past successes or results which indicates a guarantee,
warranty or prediction of result of future professional assignments. eg. We made M/s.
Xxx win the case, Meet the masters;
(xiv) not be designed for “pleasing customers,” which might mislead or eventually harm
customers or third parties; (xv) not contain any humorous slogans. E.g. Save Rs. Xxxx
Come to us, we will tell you how
147
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause 7

71
liability of the advertiser.148 The observance of these guidelines lies with the
“member(s) who commission, create, place or publish any advertisement or assist
in the creation or publishing of any advertisement covered under these
guidelines”.149 “This is a self-imposed discipline required to be observed by all
those involved in the commissioning, creation, placement, or publishing of
advertisements”.150 Any member if violates these guidelines is subjected to
disciplinary proceedings as if he has committed professional misconduct.151

Thus, a company secretary cannot circulate, communicate, publish, or cause

to be published, issue, or allowed to be issued abroad any advertisement or
solicitation which violates the ICSI guidelines.

5.3.14 The Chartered Accountants and the Institute of Chartered

Accountants of India (ICAI)

The Institute of Chartered Accountants of India (ICAI) is the national body

for professional accounting in India. It is a statutory body established in 1949
under the Chartered Accountants Act, 1949 enacted by the Parliament to regulate
the profession of Chartered Accountants in India. ICAI is the second largest
professional Accounting & Finance body in the world. It is the only licensing and
regulating body in India dealing with the financial
audit and accountancy profession at length. The institute has recommended
the accounting standards to be followed by companies in India as well as by other
types of organisations. It is exclusively in charge of setting the Standards on
Auditing (SAs) to be followed in the audit of financial statements in India. It also

The Company Secretary or a firm of Company Secretaries shall not list his/her service(s)
on any aggregator website such as Sulekha, Olx, Urbanclap, JustDial, Quikr or any other
aggregator of similar category.
148
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause
9 Website Disclaimer
The Advertiser shall also include the following Statement of Responsibility and
Disclaimer on the Website:
“Disclaimer: The contents or claims in the website issued by the advertiser are the sole
and exclusive responsibility of the Advertiser. The Institute of Company Secretaries of
India does not own any responsibility whatsoever for such contents or claims by the
Advertiser”.
149
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause 10.
150
Ibid.
151
ICSI (Guidelines for Advertisement by Company Secretaries), 2020, clause 12.

72
issues other technical standards like Standards on Internal Audit (SIA), Corporate
Affairs Standards (CAS), etc. to be followed by practicing Chartered
Accountants.152 It works in coordination with the Government of India, Reserve
Bank of India, and the Securities and Exchange Board of India in formulating and
enforcing such standards.153

Members of the Institute are known as ‘Chartered Accountants’ who are

also considered to be the key managerial personnel under the Companies Act.
While the word chartered does not refer to or flow from any Royal Charter, still,
there are special laws enacted by the institute to regulate the working of chartered
accountants in India. They are subject to a Code of Ethics and professional
standards, violation of which is meted out by a disciplinary action by the institute.
They enjoy a statutory monopoly in the audit of financial statements under the
Companies Act, 2013, Income Tax Act, 1961, and various other statutes in India.
Financial statements audited by a chartered accountant are presumed to have been
prepared according to the generally accepted accounting principles in India. But,
all Chartered Accountants do not essentially work in an audit. Firms of
accountants provide speckled business services, and many of them are employed
in commerce and industry at financial and general positions as CEOs and CFOs
and render expert services like Tax Compliance, Financial Reporting, Auditing
and Assurance, Corporate Finance, Investment Banking, Management
Accounting, Information Systems Audit, Corporate Law, Direct Tax, Indirect Tax,
GST, etc.

Dealing with the most delicate segment of the society, ICAI has set a code
of ethics154 and advertising guidelines for the Chartered Accountants under Part I
of

152
See, “Institute of Chartered Accountants of India” Available at :
https://en.wikipedia.org/wiki/Institute_of_Chartered_Accountants_of_India (Visited on
January 23, 2019).
153
Ibid.
154
CODE OF ETHICS — Salient provisions
A Chartered Accountant in practice is PROHIBITED:
to pay commission/brokerage or share of profits of his professional business to/with any
person other than a member of the Institute. from soliciting clients or professional work
by circular, advertisement etc. except for advertisement as per the guidelines dt.14th May,
2008 issued by the Council from being Director of a Holding Company in whose
subsidiary he is the auditor. from responding to advertisements inviting application for
appointment of auditors, tenders or circulars or enquiry (made to more than one member)
73
inviting quotation restricted to CA. However members can respond to tenders in the
areas where

74
First Schedule to the Chartered Accountants Act to regulate advertising
undertaken by them across different means. The Members are permitted to
advertise through a write up setting out their particulars or of their firms and
services provided by them subject to certain guidelines155 and must be
presented in such a manner as to

they compete with non CAs. They can also respond to tenders in the audit field outside
the country provided the fees are received in foreign currency. The members are
permitted to pay a reasonable amount as price for tender/bid document. In general no
earnest money/security deposit is permissible in areas which are exclusive to Chartered
Accountants as per Law. However, in non-exclusive area the members are permitted to
pay earnest money/security deposit. If only Chartered Accountants are invited in non-
exclusive area, the members are permitted to pay reasonable amount towards earnest
money/security deposit. from expressing his opinion on financial statements of any
business or enterprise in which one or more persons who are his ‘relatives’ within the
meaning of Section 6 of the Companies Act, 1956 have, either by themselves or in
conjunction with such member, a substantial interest in the said business or enterprise.
A Chartered Accountant in practice CANNOT: Use any designation other than Chartered
Accountant on professional documents, visiting cards, letterheads or signboard. The
Council has decided that a member of the institute shall not be permitted to use initials
"CPA" (standing for Certified Public Accountant) on his visiting card.
155
Guidelines for Write up include:
1 The Member(s)/Firm( s) should ensure that the contents of the Write up are true to the
best of their knowledge and belief and are in conformity with these Guidelines and be aware
that the Institute of Chartered Accountants of India does not own any responsibility
whatsoever for such contents or claims by the Writer Member(s) / Firm(s).
2 Definitions
For the purpose of these Guidelines:
(i) The “Act” means The Chartered Accountants Act, 1949.
(ii) “Institute” means the Institute of Chartered Accountants of India.
(iii) “write up” means the writing of particulars according to the information given in the
Guidelines setting out services rendered by the Members or firms and any writing or
display of the particulars of the Member(s) in Practice or of firm(s) issued, circulated or
published by way of print or electronic mode or otherwise including in newspapers,
journals, magazines and websites ( in Push as well in Pull mode) in accordance with the
Guidelines.
(The terms not defined herein have the same meaning as assigned to them in the
Chartered Accountants Act, 1949 and the Rules, Regulations and Guidelines made there
under.)
3. The write-up may include only the following information:
(A) For Members
(i) Name.........................Chartered Accountant
(ii) Membership No. with Institute
(iii) Age
(iv) Date of becoming ACA
(v) Date of becoming FCA
(vi) Date from which COP held
(vii) Recognized qualifications
(viii) Languages known
(ix) Telephone/Mobile/ Fax No.
(x) Professional Address
75
(xi) Web

76
(xii) E-mail
(xiii) C A Logo
(xiv) Passport size photograph
(xv) Details of Employees (Nos. -)
(a) Chartered Accountants
(b) Other Professionals –
(c) Articles/Audit Assistants
(d) Other Employees
(xvi) Names of the employees and their particulars on the lines allowed for a member as
stated above.
(xvii) Services provided
(a) ………………………………; (b).................................................;
(c) ………………………………
(B) For Firms
(i) Name of the Firm.................................Chartered Accountants
(ii) Firm Registration No. with Institute
(iii) Year of establishment.
(iv) Professional Address(s)
(v) Working Hours
(vi) Tel. No(s)/ Mobile No./Fax No(s)
(vii) Web address
(viii) E-mail
(ix) No. of partners
(x) Name of the proprietor/partners and their particulars on the lines allowed for a
member as stated above including passport size photograph.
(xi) C A Logo
(xii) Details of Employees (Nos. -)
(a) Chartered Accountants
(b) Other professionals –
(c) Articles/Audit Assistants
(d) Other employees
(xiii) Names of the employees of the firm and their particulars on the lines allowed for a
member as stated above.
(xiv) Services provided:
(a) ……………………………….; (b).................................................;
(c) ………………………………
The write-up may have the Signature, Name of the Member/ Name of the Partner signing
on behalf of the firm, Place and Date.
4. Other Conditions
(i) The write-up should not be false or misleading and bring the profession into disrepute.
(ii) The write-up should not claim superiority over any other Member(s)/Firm( s).
(iii) The write-up should not be indecent, sensational or otherwise of such nature which
may likely to bring the profession into disrepute.
(iv) The write-up should not contain testimonials or endorsements concerning Member(s).
(v) The write-up should not contain any other representation( s) that may like to cause a
person to misunderstand and/or to be deceived.
(vi) The write-up should not violate the provisions of the ‘Act’, Rules made there under
and ‘The Chartered Accountants Regulations, 1988’.
(vii) The write-up should not include the names of the clients (both past and present)

77
maintain the profession’s good reputation, dignity, and its ability to serve the
public interest.156 Regulation 190A of the Chartered Accountants Regulations,
1988 provides that a chartered accountant in practice shall not engage in any
business or occupation other than the profession of accountancy, except with the
permission granted in accordance with a resolution of the Council. The ICAI in
January 2001, approved the detailed guidelines for posting the particulars on the
website157 by Chartered Accountant(s) in practice and firm(s) of Chartered
Accountants in practice. These guidelines have been amended from time to time.

(viii) The write-up should not be of font size exceeding 14.

(ix) The write-up should not contain any information other than stated in Para 3 herein
above.
(x) The write-up should not contain any information about achievements / award or any
other position held.
(xi) The particulars of information required at para (ii) of 3(A) and para (ii) of 3(B) above
is mandatory.
156
ICAI Guidelines No.1-CA(7)/ Council Guidelines/01/ 2008, Dated 14th May,2008
(Issued Pursuant to Clause (7) of Part I of the First Schedule to the Chartered Accountants
Act, 1949.)
157
The amended guidelines issued by the Council are as under:
(1)The Chartered Accountants and/or Chartered Accountants’ Firms would be free to
create their own Website subject to the overall guidelines laid down by the Council
hereunder. The actual format of the Website is not being prescribed nor any standard
format of the website is being given to provide independence to the Members. There is no
restriction on the colours which may be used in the Website. (2)Individual Members
would also be permitted to have their Webpage in their trade name or individual name.
(3) The Chartered Accountants and/or Chartered Accountants’ Firms would ensure that
their Websites are run on a “pull” model and not a “push” model of the technology to
ensure that any person who wishes to locate the Chartered Accountants or Chartered
Accountants’ firms would only have access to the information and the information should
be provided only on the basis of specific “pull” request. (4) The Chartered Accountants
and/or Chartered Accountants’ Firms should ensure that none of the information
contained in the Website be circulated on their own or through E-mail or by any other
mode or technique except on a specific “pull” request. (5)The Chartered Accountants
would also not issue any circular or any other advertisement or any other material of any
kind whatsoever by virtue of which they solicit people to visit their Website. The
Chartered Accountants would, however, be permitted to mention their Website address on
their professional stationery. (6)The following information may be allowed to be
displayed on the Firms/Members’ Websites: (i) Member/Trade/Firm name, (ii) Year of
establishment, (iii) Member/Firm’s Address (both Head Office and Branches) Tel. No(s)
Fax No(s) E-mail ID(s) (iv) Nature of services rendered(iv) Partners year of other Tel….
Area of Experience Mobile E-mail address (vi) Details of Employees – Professional
Others Name Designation Area of experience (to be displayable only on specific “pull”
request) (vii) Job vacancies for the Chartered Accountant/firm of Chartered Accountants
(including articleship). (viii) No. of articled clerks. (ix) Nature of assignments handled
and Names of clients and fee charged cannot be given.

78
 The chartered accountants are contributing a lot to the national economy
but in a supporting role. The lead role is being played by entrepreneurs,
businessmen, and the government. Yet, their regulation by the ICAI is imperative
to sustain transparency and objectiveness in their working. The chartered
accountants, like other professionals are not free to advertise in any manner they
like, but enjoy a limited scope in advertising what they do.

5.4 CONCLUSION

It is extremely important to protect the immature and innocent consumers

against all the misleading advertisements and fraudulent claims. The existing self-
regulatory body, i.e. ASCI, and other regulators in the advertising industry should
function like professional organizations. The rules and regulations framed by them
as well as the self-regulation code must not simply remain on the books and every
effort should be made to implement them strictly. There should be greater
transparency in the working of these bodies. The regulations must be amended
from time to time to meet the changes in the socio-economic situations of the
market and also the needs of the consumers. The consumers must be educated and
made aware of the existence of the laws, rules, regulations etc. and the media must
also play a positive role while adhering to the restrictions placed on them.

As witnessed, we have several legal provisions and we have more than

sufficient regulatory bodies to ensure compliance with the strict quality standards.
However, until and unless they are implemented strictly, they will not be able t
serve the purpose. Advertising is a slippery road and it is ultimately the job of the
regulatory bodies to provide the consumers with a safe and protected atmosphere
to exercise their freedom to choose a quality product.

79