Topic: Tata Press Ltd v/s Mahanagar Telephone Nigam Ltd - government could regulate advertisements, which are deceptive, unfair, misleading

Tata Press Ltd v/s Mahanagar Telephone Nigam Ltd
Equivalent citations: 1995 AIR 2438, 1995 SCC (5) 139 - Bench: Kuldip Singh (J), Hansaria B.L. (J), Majmudar S.B. (J) - Citation: 1995 AIR 2438 1995 SCC (5) 139, JT 1995 (5) 647 1995 SCALE (4)595 - Date of Judgment: 03/08/1995


Kuldip Singh,J.

This appeal has arisen from a civil suit instituted before the Bombay by the Mahanagar Telephone Nigam Limited (the Nigam) and the Union of    India for a declaration that they alone have the right to    print/publish the list of telephone subscribers and that the same cannot be printed or published by any other person without express permission of the Nigam/Union     of India. A further declaration was sought that the Tata Press Limited (Tatas) have no right whatsoever to print, publish and circulate the compilation called "Tata Press Yellow Pages" (Tata- pages). A    permanent injunction restraining the Tatas, their     agents     and servants    from printing and/or     publishing and/or circulating the "Tata - Pages" being violative of the Indian    Telegraph Act,    1885 (the Act) and the Indian Telegraph Rules, 1951 (the rules) - was also sought from the Court. The City Civil Court, Bombay by its    judgment dated    August 7, 1993 dismissed the suit. First appeal filed by    the Nigam and the Union of India was heard by a learned single judge of the Bombay High Court and the learned judge by the judgment dated April 27,    1994 allowed the appeal, set aside the judgment of the trial court and decreed the    suit. Letters Patent Appeal filed by the Tatas was dismissed by a    Division Bench of the Bombay High Court by the impugned judgment dated September 8, 1994. This appeal, by way of special leave, is    against     the judgment of the Division Bench of the High Court upholding the learned single judge.

The Nigam     is a     Government company substantially controlled by the Government of India. The Government holds 80% of    the total shares of the company. The Nigam is a licensee under the Act and as such is required to establish, maintain and control the telecommunication services within the territorial jurisdiction of the Union Territory of Delhi and the     areas covered    by the     Municipal Corporations of Bombay, New Bombay and the Thane. Till 1987 the Nigam/Union of India used to publish and    distribute, on    its own, the telephone directory consisting of white pages only. However, of late, the Nigam started entrusting the publication of its telephone-directory to     outside contractors.     From    1987 onwards, the Nigam has     permitted such contractors to raise revenue for themselves. by procuring     advertisements     and publishing the    same as "Yellow Pages" appended to the telephone directory. In other words, the telephone directory published and distributed by the Nigam consists of the white pages which contain    alphabetical list of telephone subscribers and also "Yellow Pages" consisting     of advertisements    procured by the contractor to meet     the expenses incurred by the contractor in printing, publishing and distributing the directory.

The Tatas    are engaged in the publication of the Tata - pages which is a buyers-guide comprising of a compilation of advertisements     given     by businessmen, traders     and professionals duly classified according to their trade, business or profession. It is not disputed that the said compilation includes unpaid advertisements in which     the category/type of business, trade or     profession of     the advertiser is listed. It is stated by the appellant that the advertisements are published in the Tata - pages on the application of    the party concerned. The only criterion for inclusion of advertisements in the said compilation is that the advertiser    must be     engaged in a trade, profession or business. Three     editions of Tata - Pages have already been published in Bombay in 1992, 1993 and 1994. According to the appellant such     Yellow Pages/buyers     guides     have    been published in    India since 1984 and follow generic international pattern which was introduced in the USA as far back as 1880. Since 1984 a large number of parties - details have been placed on the record - are engaged in     the publication of Yellow     Pages/     trade    directories/ buyers guides in India.

Rules 452,     453, 457, 458 & 459 of the Rules which are relevant, are reproduced hereunder:-

"452. Supply of telephone directories. A copy of the telephonedirectory shall be supplied free of charge for     each telephone,     extension or     party    line, rented by     the subscriber from an exchange system    or private branch exchange or a private branch exchange or a private exchange. A copy shall also be supplied free of charge for     each extension (including extension) from an extension working    from a     public     call office. Additional copies supplied shall be charged     for at     such rate as may be fixed by the Telegraph Authority     from time to time.

453. Entries in telephone directories. - For each direct telephone     line rented (i.e. for     main connections, direct extensions     and PBX junction lines) ordinarily only one entry not exceeding one line will be allowed free of charge in     the telephone     directory to    every subscriber. Such entry shall contain the telephone    number,     the initials, the surname and the address of     the subscriber or user. No word which can intelligibly be abbreviated shall be allowed to be     printed in    full. Additional lines may be allowed by the Telegraph Authority at its discretion.

457. General. - Any telephone directory provided by the Department shall remain its exclusive property and shall be delivered     to it on    demand.     The department reserves the right to amend or delete    any entries in the telephone directory at any time and undertakes no responsibility for     any omission; and it shall not     entertain any claim or compensation on account of any entry in or omission from the telephone directory or of any error therein.

458. Publishing of telephone directory. Except with the     permission of the Telegraph    Authority no person    shall publish any list of telephone subscribers.

459. Advertisements. The Telegraph Authority    may publish or allow the publication of advertisements in the body of the telephone directory."

As stated    above, the learned trial judge dismissed the suit filed by the Nigam and the Union of India. The learned judge compared    the advertisements published in the Tata- Pages with the Telephone directory and found as a fact that the `Tata-Pages' was a     compilation of advertisements given by the    businessmen, traders and professionals     and as such did not     constitute a    list of telephone subscribers as contemplated in     Rule 458 of the Rules. The learned judge based his conclusions on the reasoning that the source for the advertisements published in the Tata-Pages was different from the telephone directory,    some advertisements in     the Tata-Pages did not list telephone numbers, the criterion for listing in the telephone directory and for publication in the Tata-Pages    was different for telephone directory     the person/party must be a telephone subscriber whereas for the Tata-Pages the    advertiser must be a trader, professional or businessmen - and the telephone directory was restricted to the area of service by the Nigam wheras the advertisements in the    Tata-Pages relate to    parties     outside the local area/Bombay.

Appeal against the Trial Court judgment was heard by a learned Single    Judge of the High Court. The Learned Judge agreed with the Trial    Court that the white pages of     the Telephone Directory constituted the    `List of Telephone Subscribers' whereas the yellow pages consisted of     the advertisements    given    by the     telephone subscribers     and others. He further accepted that the criterion for listing of entries in    the white pages was    different from     the criterion for inclusion of advertisements in     the yellow pages. The learned judge, however, held that Rule     458 covered all parts of the telephone directory including the yellow pages. According to the learned judge the publication of advertisements in the form of yellow pages, appended to the white pages, was within the bar contained in Rule 458 of the Rules. The learned judge accordingly allowed the appeal and restrained the appellant from publishing the Tata-Pages. The Letters Patent Bench    of the     Bombay High Court hearing the appeal filed by the TATAs against the judgment of the    learned     single     judge posed the question to be considered by the Bench in the following words:- "There should be no doubt that a publication in order to    amount    to a contravention of the Rules, as quoted above, must in substance    be a "list of telephone subscribers", for it is the substance    that must count and     must outweigh and take precedence over mere appearance. Before restraining     the defendant     Tata     Press Ltd.     from

publishing or circulating or in any way dealing with the     "TATA    Press Yellow Pages", we     have to be satisfied that in substance and in effect the same     is a "list of telephone subscribers"    or a "telephone directory". The case at hand involves questions, not so much of law but rather of semantics and common sense."

The Bench while dealing with the question observed as under:-

"a list of telephone     subscribers"

would obviously mean a list of persons to whom telephone     services have     been provided by means     of an     installation under the    Telegraph Rules     or under an agreement.     Suppose we, in this     High Court, print or publish a     Book containing a list     of our judges and officers    containing their names. designations, departments they     are attached to, their office     as well as residential addresses and also their telephone numbers    in the office as well as in their residence. Or, suppose, a Bar Association or a Medical Association prints or    publishes a Book containing the names     of their members,    their specialisation, addresses of    their offices, chambers    and residences    along with their respective telephone numbers, we are inclined to think that such Books as aforesaid may not amount to "a list of subscribers" if the dominant purpose for such publication is not to notify the telephone numbers only, but mainly to notify    who these persons are    along with their designations and/or qualifications or     specialisation; and addresses    at which they would be available during as well as after office hours and the     telephone numbers published in such Books would be there only to provide    a full     or an more complete picture.    The High Court or the Bar Association     or the Medical Association in such cases     may not be proceeded against    for violation of Rule 458 of the Indian     Telegraph Rules, for publishing such books, if     the primary object thereof is not to     provide the telephone    numbers     also along     with various other relevant matters. If in such books     as aforesaid,    the names of such officers or members,     who are not subscribers of telephones, are     also published, the same would further go to show that    such books would be not be a list of subscribers."

The Bench finally upheld the judgment of the learned Single Judge on the following reasoning:-

"We have given our best and very serious considerations to the arguments advanced by     Mr. Nariman.     We have already indicated, we will have to scrutinise and examine the publication Tata Press Yellow Pages and would have to come to our conclusion as to whether the same is a Telephone Directory or a List of Telephone Subscribers from the point of view of the main object and the dominant purpose of     the publication. The     fact that has weighed with us most is that even though there are some features which may    distinguish the     "TATA    Press Yellow Pages" from a mere Telephone Directory or a more List of Telephone Subscribers, the     publication    would nevertheless be of little     or no use if the telephone numbers printed therein are omitted or deleted. It may be that the "TATA Press Yellow Pages" may not be a    Telephone Directory or a List of Telephone Subscribers only, but we are nevertheless of the clear view that the same is a Telephone Directory or a List of     Telephone Subscribers also....... reading the provisions of Rules 452, 458 & 459 together, we will have to     hold that even    if a telephone directory or List of Telephone     Subscribers contain advertisements, may be in large numbers, publication thereof would     nevertheless come within the prohibition of Rule 458 as in such a case the publication, even though not     merely a Telephone Directory or a List of Telephone Subscribers, is also nevertheless     such    a telephone directory     or List of Telephone Subscribers."

Learned counsel    for the appellant has drawn     our pointed-attention to the above     quoted observations of the Division Bench     of the High     Court    and has vehemently contended that    the examination     of Tata-pages,     even in the light of the Test laid-down by the High Court, would show that the said compilation is not a Telephone Directory. A Bar Association     or a Medical Association can publish a List of their respective members. Similarly, according to     the learned counsel, the Associations of professionals, traders or businessmen     can publish    Lists of their respective members. The    Tata-pages, he     contended, which is a compilation of advertisements, given by businessmen, traders and professionals, cannot be     equated with    a "list of Telephone Subscribers."     It is contended that the Tata-Pages was a     Buyer's guide/Trade Directory and its content, character and function are different    from the Telephone Directory. The    primary purpose     of reference to a Telephone Directory is    to find out the telephone number of a particular telephone-subscriber     whereas the primary purpose of a Buyer's guide such as the Tata - Pages is to enable a consumer/buyer    to find out    the parties engaged in a particular business or trade for providing a particular service. There    is plausibility     in the     contention of     the learned counsel     but cannot, by itself, tilt the balance in favour of the appellant.

We are of the view that    the answer to the question whether the Tata - Pages is a Telephone Directory within the meaning of Rule 458 or is a Buyers Guide/Trade Directory outside the scope of the said Rule, depends upon     the determination of the     larger     issue     whether a simple "commercial advertisement" comes within the     concept of "freedom of speech and expression" guaranteed under Article 19(1)(a) of the Constitution     of India. We, therefore, proceed to deal with the constitutional question. Dr. Abhishek Singhvi, learned counsel supporting     the case of     the appellant,     has contended that the "commercial speech"     is protected    under Article    19(1)(a) read    with Article 19(2) of the Constitution. Mr. Venugopal and     Mr. Arun Jaitley, learned counsel appearing for the respondents have, however,     contended that a     purely     commercial advertisement is meant for furtherance of trade or commerce and as    such is outside the concept of freedom of speech and expression. Reliance was placed by the learned counsel on the judgment of this Court in Hamdard Dawakhana (WAKF) Lal Kuan, Delhi and Another v Union of India and others [SCR 1960 (2) 671]. A Constitution Bench of this Court speaking through Kapur, J. held as under:

"     An advertisement is no doubt a form of speech    but its true    character is reflected    by the object for the promotion of which it is employed. It assumes the attributes and elements of the activity under Art. 19(1) which it seeks to aid by    bringing it to the notice of    the public. When it takes the form of a commercial advertisement which has an element of     trade or commerce it no longer    falls within the concept of freedom of     speech for the object is not propagation of ideas social, political or economic or furtherance of literature or human thought; but as in the present case the commendation of    the efficacy, value and    importance in    treatment of particular diseases by certain drugs and medicines. In such a case, advertisement is a part of business even though as described by Mr.    Munshi    its creative part, and    it was    being used for the purpose of     furthering the     business of the petitioners and had no relationship with what    may be    called the essential concept of     the freedom of speech. It cannot be said that the right to publish and distribute commercial advertisements advertising an individual's personal business is a part of freedom of speech guaranteed by the Constitution. In Lewis J. Valentine v. F.J. Chrestensen it was held that    the constitutional right of free speech is     not infringed by prohibiting the distribution in     city streets of handbills bearing on one side a protest against action taken by public officials and on the other advertising matter. The object of affixing of the protest to     the advertising circular was the evasion of the prohibition of a city ordinance forbidding the distribution in the city     streets of commercial and business advertising matter. Mr. Justice Roberts, delivering the opinion of the court said:

"This court has unequivocally held that the streets are proper places for the exercise of the freedom of communicating information and disseminating opinion and that,     though the     states     and municipalities    may    appropriately

regulate the privilege in the public interest, they may not unduly burden or prescribe its employment in these public thoroughfares. We are equally clear that the Constitution     imposes no such restraint    on government     as respects purely commercial advertising ....... If the respondent was attempting to use the streets of New York by     distributing commercial advertising, the prohibition of     the Code provisions    was lawfully invoked against such conduct."

It cannot    be said     therefore that every advertisement is a matter     dealing with freedom of     speech nor can it be     said that it is an expression of ideas. In every case     one has to see what is the nature of the advertisement and     what activity falling under Art. 19(1) it seeks to further. The advertisements in the instant case relate to commerce or trade and    not to    propagating of ideas; and advertising of prohibited drugs or commodities of which the sale is not in the interest of     the general public cannot be    speech within the meaning of freedom of     speech and would not     fall within Art. 19(1)    (a). The main purpose and true intent and aim, object and scope of the Act    is to prevent    self- medication     or self-treatment and for that purpose advertisements commending certain drugs and medicines have     been prohibited. Can it be said that this is an abridgement of the petitioners' right of free speech. In our opinion it is not. Just    as in Chamarbaughwala's case 1957 SCR 930 it was said that activities undertaken and carried on with a view to earning profits e.g. the     business of betting and gambling will not be protected     as falling     within     the guaranteed right of carrying on business or trade so it cannot be     said that an advertisement commending     drugs     and substances     as appropriate cure     for certain diseases is an exercise of the right of freedom of speech. Freedom of speech goes to the heart of the natural right of    an organised freedom-loving society to "impart and acquire information about that common interest". If     any limitation is    placed    which results in the society being deprived of such right     then no doubt it would fall within the guaranteed freedom under Art. 19(1) (a). But if all it does is that it deprives a     trader from commending his wares it would not fall within     that term. In John W.    Rast v.     Van Deman & Lewis Company, Mr. Justice Mckenna, dealing with advertisements said:-

"Advertising is merely identification and description, apprising of quality and place.     It has     no other object than to draw attention to the article to be sold and the acquisition of the article to     be sold constitutes the     only inducement to its purchase."

As     we have said     above    advertisement takes the    same attributes as the object it seeks to promote or bring to the notice of    the public to be used by it. Examples can be multiplied which would show that advertisement    dealing     with trade and business has relation with the item "business or trade"    and not     with "freedom of speech". Thus advertisements sought to    be banned do not fall under Art. 19(1) (a).

This Court in Hamdard Dawakhana's case primarily relied on the    judgment of the United States Supreme Court in Valentine v Chrestensen for the proposition that "purely commercial advertising" is not     protected by Article 19(1) (a) of    the Constitution. Dr. Singhvi has placed reliance on series of judgments of the United States Supreme Court since 1942 when Chrestensen's case was decided to show that the Courts in United States have step-by-step moved away from the Rule in Chrestensen's case, and as on today "purely commercial advertising" is entitled     to full "First Amendment'/ protection.     We may     refer to some of the cases. In 1964     United States Supreme Court ruled in New York Times v Sullivan 376 U.S. 254 that editorial advertising, that is, advertising to promote an idea such as "Save Whale", "Stop War" or     "Ban Pesticides" rather than    a product like used cars or     spaghetti is protected by the First Amendment. In the year 1975 in Bigelow v Virginia 421 U.S. 804 the United States Supreme    Court reversed    the conviction of a Virginia newspaper editor who had been found guilty of publishing an advertisement which offered assistance to women seeking abortion. Abortion was illegal in Virginia in 1971 when the advertisement was published. The women Pavilion, a New York group, urged women who     wanted an abortion to     come to New York. Blackmun,     J. analysing earlier judgments of the Court observed that speech does not lose the protection of the First Amendment     merely because     it appears in the form of a commercial advertisement.

Finally, in 1976 the United States Supreme Court has provided a clearer answer in Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc. 425 US

748. The appealees in    the said case attacked, as violative of the    First Amendment, that part of     the statute which provided that a pharmacist licensed in Virginia was guilty of unprofessional conduct if he "publishes, advertises or promotes, directly or indirectly, in any manner whatsoever, any amount, price, fee, premium, discount, rebate or credit terms..... for    any drugs which may be dispensed only by prescription."    The District    Court declared     the quoted portion     of the statute "void and of no effect".     The appellants before the    Supreme     Court    contended that     the advertisement of prescription drug price was    outside     the protection of the First Amendment because it was "commercial speech". Rejecting the argument the Court speaking through Blackmun, J. held as under:-

"There can     be no    question that in past decisions    the Court has given     some indication     that commercial speech is unprotected. In Valentine v Chrestensen, supra, the Court     upheld     a New     York statute that prohibited the distribution of any "handbill, circular .... or other advertising matter whatsoever in or upon any street." The Court concluded that, although the First Amendment    would forbid the     banning of all communication by handbill in the public thoroughfares, it     imposed "no    such restraint on government as respects purely commercial advertising". 316    US, at    54, 86    L ED 1262, 62 S Ct 920. Further support for a "commercial speech" exception to the First Amendment may perhaps be found in Breard v Alexandria, 341 US 622, 95 L Ed 1233, 71 S Ct 920, 46 Ohio Ops 74, 62 Ohio L Abs 210, 35 ALR 2d 335 (1951), where the    Court upheld a conviction for violation of an ordinance prohibiting door-to-door solicitation     of magazine subscriptions. The Court reasoned: "The selling...brings into the transaction a commercial feature", and it distingushed Martin v Struthers, supra, where it had reversed a     conviction for     door-to-door distribution of leaf-lets publicizing a religious meeting,     as a case involving "no element of the commercial." 341 US, at 642-643, 95 L    Ed 1233, 71 S Ct 920, 46 Ohio Ops 74, 62 Ohio    L Abs 210, 35 ALR2d 335................. Since the decision in Breard, however, the Court has never     denied protection on the ground that the speech in issue was "commercial speech". That simplistic approach, which by then had come under criticism or was regarded as of doubtful validity by Members of the Court.

Last Term, in Bigelow v Virginia,

421 US 809, 44 L Ed 2d 600, 95 S Ct 2222 (1975), the notion of     unprotected "commercial speech" all but passed from the scene.     We reversed a conviction for violation of a Virginia    statute     that made the circulation of any publication to encourage or promote the processing of     an    abortion in     Virginia a

misdemeanor. The defendant had published in his newspaper    the availability of abortions in New York. The advertisement in question, in addition    to announcing that abortions were legal     in New York, offered the services of a referral agency in    that State. We rejected the contention     that    the publication was unprotected because it was commercial. Chrestensen's continued    validity was questioned, and     its    holding     was described as "distinctly a limited one" that merely upheld "a reasonable regulation     of the manner in    which commercial     advertising     could     be distributed."

Here,     in contrast,    the question

whether there is a First Amendment exception    for "commercial speech" is squarely before us. Our pharmacist does not wish to editorialize on any subject, cultural, philosophical, or political. He     does not wish to     report     any particularly newsworthy fact, or to make generalized observations     even about commercial matters. The "idea" he wishes to communicate is simply    this: "I will sell you the X prescription drug at the Y price". Our question, then, is whether this communication is wholly outside the protection of the First Amendment.

Our question     is whether speech

which does "no more than propose a commercial     transaction."     Pittsburgh Press Co.    v Human Relations comm'n, 413 US, at 385, 37 L Ed 2d 669, 93 S Ct 2553, is so removed from any "exposition of ideas",     Chaplinsky v New Hampshire, 315 US 568, 572,    86 L Ed 1031, 62 S Ct 766 (1942), and from "truth, science, morality, and arts in general, in its diffusion of liberal sentiments on the administration of    Government." Roth v United States, 354 US 476, 484, 1 L Ed 2d 1498, 77 S Ct 1304, 14 Ohio Ops 2d 331 (1957), that it     lacks     all protection. Our answer is     that it is not.

Generalizing, society also may have

a strong interest in the free flow of commercial     information.     Even     an individual     advertisement, though entirely "commercial," may be of general public interest. The facts of decided cases     furnish illustrations:

advertisements stating that referral services    for legal abortions     are available, Bigelow     v Virginia, supra; that a manufacturer of artificial furs promotes his product as an alternative to the extinction by his competitors of fur-bearing mammals, see Fur Information & Fashion    Council, Inc. v. E.F. Timme & Son, 364 F supp 16 (SDNY 1973); and that a    domestic producer advertises     his product as an alternative to imports that tend    to deprive American residents of their jobs.

Moreover, there    is another

consideration that suggests that no line between publicly     "interesting" or "important" commercial advertising and the opposite kind could ever be drawn. Advertising, however tasteless     and excessive    it sometimes may seem, is nonetheless dissemination of information as to who is producing and selling what product, for what reason,     and at     what price. So     long    as we     preserve a predominantly free     enterprise economy, the allocation of our resources in large measure will be made through numerous private economic    decisions. It    is a matter of    public    interest that    those decisions,     in    the aggregate, be intelligent and well informed. To this end, the     free flow of commercial information is indispensable........ And if it is indispensable to the proper allocation     of resources     in a free enterprise     system, it     is     also indispensable to     the formation of intelligent opinions as    to how     that system ought to be regulated or altered. Therefore, even if the First Amendment were thought to be primarily an instrument to enlighten public decision making in    a democracy, we could not say that the free flow of information does not serve that goal."

It is, thus, obvious that the United States Supreme Court in Virginia Board case has    virtually overruled Valentine's case decided in 1942. The     Court has ruled in clear terms that the Virginia statute which had the effect of prohibiting    pharmacies from     advertising the price of prescription drugs violated the First Amendment protection. In John R. Bates    and Van     o'Steen vs. State Bar of Arizona 53 L.    Ed. 2nd 810,    two attorneys    licensed to practice law in Arizona placed an advertisement in a phoenix newspaper, stating that they were offering "legal services at very reasonable fees" and listing their fees for various matters. The advertisement was in violation of disciplinary rules of the Supreme Court of Arizona which prohibited Arizona lawyers     from publicizing themselves, their partners or their associates by     "commercial" means. On a complaint filed by the President     of the     State    Bar, the Board of Governors recommended     a one     week suspension for    each attorney. The two lawyers then sought review in the Supreme Court of Arizona which     rejected their     contention that the disciplinary rules infringed their First Amendment rights. On an appeal, the United States Supreme Court reversed the judgment of the Supreme Court of Arizona on the question of First Amendment     rights. Speaking for the court Blackmun, J. held that the blanket suppression     of advertising by attorneys violated a free speech clause of First Amendment. The Court rejected arguments that such advertising would have an adverse effect on professionalism, would be inherently misleading,    would have an adverse effect on the administration    of justice, would produce     undesirable economic effects, and would have an adverse effect on the quality of legal services. The Court, however, further held that such advertising, if false, deceptive or misleading could continue    to be restrained, and    that, as with other varieties of speech, such advertising could be made subject to reasonable restrictions on the time, place and manner of such advertising.

After the decision in Virginia Board case, it is almost settled law in the United States that "commercial speech" is entitled to the First    Amendment protection.    The Supreme Court has, however, made it    clear that Government     was completely free     to recall "commercial speech" which is false, misleading, unfair, deceptive    and which proposes illegal transactions. A political or social speech and other public- affairs     - oriented discussions are entitled to full First Amendment protection whereas a "commercial speech" may be restricted more easily whenever the government can show substantial justification for doing so. More recent judgments of    the Supreme Court of Unites States in Central Hudson Gas & Electric Corp. v. Public Service Commission 447     US 557, Posadas de    Puerto    Rico Associates v. Tourism Company    of Puerto Rico 92 L Ed. 2nd 266 and Board of Trustees of    the State University of New York vs. Todd Fox 106 L Ed. 388 clearly indicate that in "commercial speech" cases a     four-part analysis     has developed. At the outset, it must be determined whather the advertising is     protected by     the First Amendment.     For commercial speech to come within that     provision it    must concern lawful    activity and not be misleading. Next it is seen whether    the asserted    governmental interest     is substantial. If     both inquiries     yield positive answers then it must be determined whether the    regulation directly advances the governmental interest asserted and whether it is more extensive than is necessary to serve that interest. Unlike the     First Amendment under     the United States Constitution, our Constitution itself    lays down in Article 19(2) the restrictions which can    be imposed on     the fundamental right guaranteed under Article 19(1) (a) of the Constitution. The "Commercial speech"    which is deceptive, unfair, misleading and untruthful would be hit by Article 19(2) of the Constitution and can be regulated/prohibited by the State.

The Court    in Hamdard Dawakhana's case was dealing with advertising of    prohibited drugs and commodities. The Court came to the conclusion that the sale of prohibited drugs was not in the interest of the general public and as such "could not be a speech" within the meaning of freedom of speech and expression under Article 19(1) (a) of the Constitution. The Court further held in the said case that an advertisement is no doubt a form of speech but its     true character is reflected by the object for the promotion of     which it is employed. Hamdard Dawakhana's case was considered by this Court in Indian Express Newspapers (Bombay) Private Ltd. & Ors. etc. etc. vs. Union of India & Ors. etc.etc. 1985(2) SCR 287. The observations in Hamdard Dawakhana's case to the effect that advertising by itself would not    come within Article 19(1) (a) of the Constitution, were explained by this Court in    Indian    Express     Newspapers's case in     the following words:

"We have     carefully considered     the decision in Hamdard Dawakhana's     case (supra). The main plank of that decision was that the type of advertisement dealt with there     did not carry with it the protection     of Article 19(1) (a). On examining     the     history of     the

legislation,    the     surrounding

circumstances and    the scheme of the Act which had    been challenged     there namely the Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 (21 of 1954) the    Court held that the object of that Act was the prevention of self-medication and self-treatment by prohibiting instruments which may be used to advocate     the same or    which tended to    spread the evil.... In the above said case the     Court     was principally dealing with the right to advertise prohibited drugs, to prevent self-medication and self-treatment. That was the main issue in the case. It is no doubt true that some of the observations referred to above go beyond the needs of the case and tend to affect the right to publish all commercial advertisements. Such broad     observations appear to have been made    in the    light of the decision of     the American     Court    in LEWIS J. Valentine vs. F.J. Chrestensen (supra). But it is worthy of notice that the view expressed in this American case has not been fully approved by    the American Supreme Court itself in its subsequent decisions. We shall refer only to two of them. In    his concurring     judgment in William B. Cammarano v. United States of America Justice Douglas said "Valentine vs. Chrestensen..... held that business of advertisements and commercial matters did not enjoy the protection of the First Amendment, made applicable to the States by the Fourteenth. The ruling was casual, almost off hand. And it has not survived reflection". In    Jeffrey     Gole Bigelow v.     Commonwealth of Virginia the American Supreme Court held that the holding in     Lewis J. Valentine v.     F.J. Chrestensen (supra) was    distinctly a limited one. In view of the foregoing, we feel that the    observations made in the Hamdard Dawakhana's case (supra) too broadly stated and the Government cannot draw much support from it. We are of the view that    all commercial advertisements cannot be     denied the protection of Article 19(1) (a) of the Constitution merely because they are issued by businessmen."

The combined reading of Hamdard Dawakhana's case and the Indian Express Newspapers's case leads     us to     the conclusion that     "commercial speech" cannot be     denied     the protection of Article 19(1) (a) of the Constitution merely because the same are issued by businessmen. Advertising is considered to be the cornerstone of our economic system. Low prices for consumers are dependent upon mass production, mass production is dependent     upon volume sales, and volume sales are dependent upon    advertising. Apart from the lifeline of the free economy in a democratic country, advertising can be viewed as the life blood of free media, paying most of    the costs and thus making the media widely available. The newspaper industry obtains 60/80% of its revenue from advertising.     Advertising pays a large portion of the costs of supplying the public with newspaper. For a democratic press the advertising "subsidy" is crucial. Without advertising, the resources available for expenditure on the "news" would decline, which may lead to an erosion of quality and quantity. The cost of the "news" to the public would increase, thereby restricting     its    "democratic" availability.

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

Advertising as a "commercial speech" has     two facets. Advertising which is no more than a commercial transaction, is nonetheless    dissemination of information regarding     the product-advertised. Public at large is benefitted by     the information made available through the advertisement. In a democratic economy free flow of commercial information is indispensable. There    cannot    be honest and economical marketing by the public at large without being educated by the information     disseminated through    advertisements.     The economic system     in a democracy would be handicapped without there being freedom of     "commercial speech". In relation to the publication and circulation of newspapers, this Court in Indian Express    newspaper's case, Sakal paper's case and Bennett Coleman's case has authoritatively held that     any restraint or curtailment of advertisements would affect the fundamental right under Article 19(1) (a) on the aspects of propagation, publication and circulation. Examined    from another angle,    the public at large has a right to receive the "Commercial     speech". Article (19)     (1) (a) not    only guarantees freedom of speech and expression, it    also protects the rights of     an individual    to listen, read and receive the said speech. So far as the economic needs of a citizen are concerned, their fulfilment has to be guided by the information disseminated through the advertisements. The protection of Article 19(1)(a)     is available to the speaker as well     as to the recipient of the speech. The recipient of "commercial speech" may be having much deeper interest in the advertisement than the businessman who is behind     the publication. An advertisement giving information regarding a life saving drug may be of much more importance to general public than to the advertiser who may be having purely a trade consideration.

We, therefore, hold that "commercial speech" is a part of the    freedom of speech and    expression guaranteed under Article 19(1) (a) of the constitution. Adverting to the question whether Tata's compilation is a telephone directory as envisaged under the Rules, we may examine the scheme of the Rules. Rule 452 provides that a copy of     the telephone    directory shall     be supplied free of charge for each telephone, extension or party line, rented by the     subscriber. Although     the expression "Telephone Directory" has    not been defined under     the Rules, but Rule 453 clearly provides     that an entry in the Telephone Directory shall     contain the telephone number, the initials, the sir-name and the address of the subscriber or user. Rule 457 makes a telephone    directory to be the property of the department. It    provides that the telephone directory shall remain the exclusive property of the department and shall be delivered to it on demand. The department reserves the right to amend or delete any entry in the telephone directory at any time and undertakes no responsibility for any omission. It shall not entertain any claim or compensation on account of any    entry in or omission from the telephone directory or of an error therein. Then come the two crucial rules. Rule 458 under the heading    "Publishing of    Telephone Directory" provides that except with the permission of the telegraph authority, no person shall publish any list of telephone subscribers. Rule 459 deals with "advertisements" and lays down that the telegraph authority may publish or allow the publication of    advertisements in the body of the telephone directory. It is no doubt correct that a telephone directory is an essential instrumentality in connection with     the peculiar service which the Union of India offers for the public benefit    and convenience. It is as much so as is the telephone receiver itself, it    would be practically useless for the     receipt and transmission of messages without the accompaniment of such directories. The telephone service being a     public utility service, the telephone authority has rightly been given powers under the Act and    the Rules to regulate the form and    contents of the telephone directory. In the    development of    this form of public utility service, the telegraph     authority has     found    it practicable     and profitable to diminish the cost and increase the profits of operation by making use of its directories as a means and form of     advertising available    to its    subscribers. In     the typical     classified telephone    directory, or    the "yellow pages" section    of the directory published by     the Nigam, there are alphabetical light-faced type listing (for which there is usually no charge), alphabetical bold faced type listings, alphbetical in-column business card listings and display     advertising.    "Yellow     pages"     of the telephone directory are wholly paid advertising. It cannot be disputed that the paid advertising,apart from the light-faced free listing, is not in the nature     of a service rendered by a utility. The "Yellow    Pages"    attached to the telephone directory issued by the Nigam cannot    be a part of     the Nigam's public telephone service.

Rules 458    and 459     of the Rules have to be interpreted in the    light of our findings    that "commercial speech" by itself is a fundamental right under Article 19(1) (a) of the Constitution and the paid advertisements comprising "Yellow Pages" attached     to the     telephone directory is not a public utility service.

Right to freedom of speech and expression guaranteed under Article 19(1)(a) of the     Constitution can only be restricted under Article 19(2). The said right can not be denied by creating a monopoly in favour of the government or any other authority. "Publication of advertisements" which is a "commercial speech" and protected under Article 19(1)(a) of the Constitution     cannot     be denied to the appellants on the interpretation of rule 458 and 459 of the Rules. The plain language of the Rules indicate that the prohibition under rule 458 of the Rules is only in respect of publishing "any list of telephone    subscribers". By no stretch of imagination "publication of advertisements" can be equated with a "list of telephone subscribers A "list" is a number of names having something in common written out systematically one beneath the     other. "List of telephone subscriber" in    terms of Rule 458 of the Rules would have to be compiled only on the criterion of the persons listed being telephone subscribers.     No person who is not a telephone subscriber could be    eligible for inclusion. The said list would necessarily be restricted to the    area serviced by the Nigam. On the other hand "Tata Press yellow pages" is a Buyer's Guide comprising of advertisements given by traders, businessmen and professionals and the    only basis/criterion     applied for    acceptance/ publication of advertisements is that an advertiser should be a trader, businessman or professional.

The scheme of the Rules make it    clear    that advertisements are treated differently under the Rules from "list of telephone subscribers". Rule     458 of the Rules intends     to protect the exclusive    property rights of Nigam/Union of    India created under Rule 457 in respect of the telephone directory prepared in terms of Rule    453. "Publication of     advertisements" being a non-utility service cannot come within the     prohibition imposed by Rule 458 of the Rules.

We, therefore, hold that     the Nigam/union of India cannot restrain     the appellant    from publishing "Tata Press yellow     pages"     comprising    paid advertisements    from businessmen, traders and professionals. We are, however, of the view that the appellants cannot publish any "list of telephone subscribers"     without the     permission of     the telegraph authority. Rule 458 of the Rules is mandatory and has to be complied with. The appellant shall not publish in the "Tata Press yellow     pages" any entries similar to those which are printed in the 'white Pages' of the "telephone directory" published by the Nigam under the Rules. We make it clear that the appellant cannot print/publish an entry containing only     the telephone    number,     the initials,     the surname and the address of the businessmen, trader or professional concerned.

We allow the appeal in the above terms and set aside the judgments of the learned Single Judge and the Division Bench of the High Court. While holding that Rule 458 of the Rules is mandatory, we dismiss the    suit filed by     the respondents. We leave the parties to bear their own costs.