In the Matter of vs SINTER PLAST CONTAINERS

THIS shall dispose of the Notice of Enquiry (NOE) issued by this Commission under Section 36A, Section 36B(d) and Section 36D of the MRTP Act, 1969 charging the respondent M/s. Sinter Plast Containers of having indulged in the unfair trade practice of disparaging the product of its competitors attracting Section 36A(1)(x) of the Act. The NOE was based on a complaint received from M/s. Nuchem Limited in which it has alleged that the respondent has given an advertisement which is "technically incorrect and misleading".

MEDIUM Density Fiber Board (MDF) is manufactured in India by only two parties namely the complainant M/s. Nuchem Limited and M/s. Mangalam Timber Plantations Limited. According to the information furnished by the complainant, MDF originally was evolved in the United States of America in the early 60''s and the technology caught on because of its potential as an ideal replacement for natural timber. MDF has a smooth surface and more economical in terms of usage of paint in comparison with particle board, ply wood, black board etc. The complainant adds that MDF is the only panel material which can be "planned, routed, moulded without splitting, cracking, chipping". It has further pointed out that MDF is a "total substitute for natural timber and has been adopted globally for manufacture of door furniture''s and industrial components" besides being safe to consumers. The respondent inserted an advertisement which runs as follows: "Timber rots, plywood and particle board absorb water. MDF is the worst of the lot as it guzzles as much as 18% water in a short span of 24 hours even though it is made as per ISI: 12406 specifications. Hence it is very difficult to find the material that''s perfect. Like Sintex Plastic Sections. The Ultimate Alternative to Timber, Ply Board and MDF. Brought to you by the foremost innovator and leader in plastic products. Sintex Plastic Sections are ideal for your partitions, false ceilings, wall panelling, doors etc. As they are weather-proof, 100% water-proof, rot-proof, termite-proof, maintenance-fee and are available in various shades and combinations."

(Emphasis added)

The complainant citing the said advertisement in the Economic Times of 9th Jan., ''93 has alleged that this is a false and misleading statement and that it had been published "with a mischievous and mala fide intention to malign the MDF industry".

BASED on the said complaint, a NOE was issued by this Commission on 1st August, ''95, charging the respondent of having indulged in the trade practice of extolling and claiming superiority over alternative substitutes in the market falsely and of falsely disparaging the competing product attracting Section 36A(1)(x) of the MRTP Act, 1969. The NOE and the complaint of M/s. Nuchem Limited were communicated to the respondent for its appearance at the hearings of this Commission and for its defence against the charges. Even though the NOE was served on the respondent, the Commission, in the interest of justice, sent a fresh notice for service through the Registrar of Companies, Gujarat, Dadra and Nagar Haveli, Ahmedabad. The Registrar of Companies served the notice and sent the acknowledgement of service to this Commission. As the respondent failed to put in its appearance and also failed to file its reply, proceedings continued ex-parte against the respondent.

THE DG filed all documents in support of the charges in the NOE. We gave a hearing to Mr. V.P. Singhal, JD (L) for the DG. The crux of the issue is whether there has been any disparagement in the advertisement inserted by the respondent against the product of the complainant namely MDF. In particular, the passage in die advertisement, "MDF is worst of the lot as it guzzles as much as 18% water in a short span on 24 hours even though it is made as per ISI: 12406 specifications", is, according to the complainant, disparaging its product. Even though the proceedings have continued ex-parte against the respondent, we have, in the interest of justice, taken into consideration the reply given by the respondent addressed to the DG on the latter''s communication of a copy of the complaint to the former. In its reply dated 16th April, ''94 addressed to the DG, the respondent has heavily relied on an article that appeared in the Jan.-March, ''94 issue of "Wood News", entitled "Particle Boards and Fiber Boards as Substitutes to Wood and Plywood - An Appraisal". The article is authored by Dr. H.N. Jagadeesh, Scientist, Indian Plywood Industries Research and Training Institute, Bangalore. Leaning on the article, the respondent has contended that particle boards and MDF cannot be claimed as wood substitutes for all situations, that particle boards and MDF with higher performance level are required for their wider use in construction, that contrary to the claims by the manufacturers of MDF, it cannot be made water- proof, that in contact with water or moisture MDF absorbs very high level of water and that it is virtually impossible to make MDF termite-proof.

THE respondent has also added that its advertising campaign had been "concluded since long".

WE had a close look at the article of Dr. Jagadeesh and the respondent''s reply. What is at issue is the statement in the impugned advertisement that MDF absorbs as much as 18% water in a short span of 24 hours. WE see nothing in the article of Dr. Jagadeesh in support of the statement. The author of the article has stated as follows which brings the matter of water absorption into focus. "Ability of any material to preserve its dimensions, length, width and thickness under the influence of fluctuating humidity and temperature is an indicator of its usefulness for given applications. In joinery, door shutters, furniture and paneling dimensional stability is of utmost importance. Unlike wood which has tendency to shrink or swell in tangential direction, wood based panel materials change their dimensions depending upon fluctuations of humidity. If wood is properly seasoned shrinkage and swelling in tangential direction can be less than 0.5-1% depending upon the species of timber. Both eucalypt and rubber wood shrink and swell considerably more than teak wood but when seasoned shrinkage and expansion is greatly reduced. Plywood in this respect is stables among wood based materials, its dimensional changes with fluctuating humidity of 35% to 80% for practical purposes is negligible. Both particle board and MDF absorb considerable moisture and their behaviour hence under high humidity is characterized by thickness swelling and expansion length and widthwise. When such movements are restrained it may result in warping and other complications. It is for this reason, general specifications on these materials do indicate limits for thickness swelling and dimensional changes under standard conditions. In tropical humid weather conditions this can pose limitations and designers/consumers should be aware of the implications of dimensional changes. Proper measures have to be taken while devising joints especially in panelling, ceiling and furniture. In hardboard it is common experience that when restrained the board ripples due to dimensional changes. Board has to be properly conditioned before it can be used for panelling, partitions, etc. When particle board/MDF are used as panel inserts sufficient allowance should be made for thickness swelling and dimensional changes in planes. It is possible that excessive swelling and dimensional changes can be minimised by proper edge sealing and protection of surface with overlays".

Thus it would appear that MDF absorbs considerable moisture and its behavior under high humidity is characterized by thickness swelling and expansion length and widthwise. But this cannot lead to a conclusion that "MDF is the worst of the lot" or for that matter it "guzzles as much as 18% water in a short span of 24 hours". A manufacturer is entitled to make a claim that its product is superior to a rival''s so long as it does not defame or make light of the competitor''s product.

In our view, the article of Dr. Jagadeesh or any other material furnished by the respondent does not come in the conclusion that MDF is the worst of the materials (used in construction) as represented by the respondent. Section 36A(1)(x) specifically styles the practice of making any statement in writing which gives false or misleading facts disparaging the goods of another person as unfair trade practice. In this view of the matter, we have no hesitation to hold that the impugned advertisement of the respondent disparages the product of the complainant and similar manufacturers of that material. We are, therefore, of the view that the impugned trade practice attracts Section 36A(1)(x) of the MRTP Act, 1969. Furthermore, it is needless to add that the said unfair trade practice is prejudicial to public interest as it misleads the members of the public and consumers very pointedly. The respondent has stated that the impugned advertisement campaign has ''concluded since long''. In view of this, we direct the respondent not to repeat the said unfair trade practice in future. The respondent shall file an affidavit of compliance within six weeks from the date of this order.

WE also note that the respondent in its reply has made a number of observations to the effect that the complainant itself is giving advertisements of its product MDF with false and misleading statements. But this subject-matter is not covered in the NOE and we, therefore, cannot adjudicate on the same. However, it is for the DG to examine the advertisements of the complainant M/s. Nuchem Limited and move this Commission, if any unfair trade practice is prima facie attributable to the complainant. With this observation, the NOE stands disposed of. There shall be no order as to costs. Enquiry disposed of.