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2024 SCC OnLine Blog OpEd 95
Addressing the Issue: ASCI's Role and the Limits of its Authority
ADDRESSING THE ISSUE: ASCI'S ROLE AND THE LIMITS OF ITS
AUTHORITY
by
Abhinav Bhalla1
In the absence of a comprehensive advertising law in India, the
Advertising Standards Council of India (ASCI) has emerged as a key
player in regulating the advertising landscape. However, while ASCI's
role in maintaining ethical standards is significant, it is crucial to
understand the limitations of its jurisdiction, especially regarding the
binding nature of its recommendations and its authority over non-
members.
ASCI's role and the need for self-regulation
The ASCI is a private, non-statutory body, formed with the purpose
of self-regulating advertising content to protect consumers from
2
misleading or unethical advertisements. It operates through a code of
self-regulation that outlines rules and guidelines for advertisers to
follow.3 ASCI handles complaints from consumers and competitors,
adjudicating on whether an advertisement violates its code.
Given that India lacks a formal advertising law, ASCI's code serves
as the de facto standard for advertising practices. This role is critical, as
companies often use advertisements to compare their products with
those of competitors, sometimes leading to misleading claims. ASCI's
process provides a much-needed platform for resolving disputes
without the necessity of protracted litigation, thus reducing the burden
on courts of law. The ASCI's Fast Track Complaint Process (FTCP) and
Consumer Complaints Council (CCC) offer relatively quick resolutions,
providing a cost-effective and time-saving alternative to legal
proceedings.
The non-binding nature of ASCI's orders
Despite ASCI's important role in self-regulation, it is essential to
note that its recommendations are not legally binding. Several cases
have highlighted this limitation, reinforcing that ASCI lacks the
statutory power to enforce its decisions. This is particularly important in
cases where companies are not members of ASCI.
In Teleshop Teleshopping v. Advertising Standards Council of India4,
the Bombay High Court ruled that ASCI's orders could not be binding
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on non-members. The Court emphasised that, while ASCI can issue
recommendations, these do not have the force of law unless the party
submits to them. Similarly, in Century Plyboards (India) Ltd. v.
5
Advertising Standards Council of India , the Court noted that ASCI
could not assume powers that are judicial in nature and that its orders
do not have any statutory backing.
The Reckitt Benckiser (India) (P) Ltd. v. Advertising Standards
6
Council of India case reiterated this position. The Court ruled that
ASCI's directions were not enforceable and that Reckitt, as a company,
was not bound to follow the Council's recommendations. ASCI's role in
such disputes remains advisory, allowing advertisers the freedom to
seek judicial redress if they feel aggrieved by the Council's actions.
Freedom of speech and ASCI's limits
A fundamental issue that arises in ASCI's jurisdiction is the
intersection with commercial freedom of speech. Under Article 19(1)(a)
7
of the Indian Constitution , freedom of speech includes commercial
speech, as affirmed by the Supreme Court in Tata Press Ltd. v. MTNL8.
Advertisements are a form of expression and enjoy protection under
this constitutional provision. ASCI, being a private regulatory body,
cannot adjudicate on constitutional matters or restrict this right in a
binding manner.
While ASCI can recommend modifications or withdrawal of
advertisements that it deems misleading, it cannot act as a substitute
for courts of law. The principles of natural justice, such as the right to a
fair hearing, must be upheld in all quasi-judicial proceedings. In Reckitt
Benckiser case 9, the Court emphasised that ASCI must adhere to due
process, including giving parties a fair chance to present evidence and
defend their claims.
10
The Delhi High Court in Sameer Jain v. Union of India further
reaffirmed ASCI's role as a recommendatory body without binding
authority. In this case, the petitioners challenged the delegation of
regulatory powers to ASCI, arguing that its actions amounted to
impermissible delegation of governmental powers. The petitioners
contended that ASCI, being a private body, could not lawfully
adjudicate on misleading advertisements, a role that rightfully belongs
to the Government.
The Court dismissed the petition, clarifying that ASCI does not
perform a judicial function. Additionally, the Court stated that ASCI's
role is limited to making recommendations, and its decisions are non-
binding. It emphasised that ASCI cannot replace the Central
Government in adjudicating matters related to advertising regulations.
Moreover, while ASCI can examine complaints and issue
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recommendations, the final decision-making authority rests with the
appropriate Ministry of the Government. This case reinforces ASCI's
function as a self-regulatory organisation with no enforceable powers.
ASCI's impact on dispute resolution
Despite these limitations, ASCI plays an invaluable role in reducing
the burden on courts. By providing a platform for speedy disposal of
complaints, ASCI helps resolve disputes that might otherwise escalate
into lengthy litigation. The cost of pursuing a legal case, especially in
matters of advertising, can be prohibitively high, making ASCI an
attractive alternative for companies seeking resolution in a less
adversarial setting.
For example, the Reckitt Benckiser and Godrej Consumer Products
11
Ltd. dispute over mosquito repellents could have led to costly
litigation. Instead, ASCI provided a forum for the parties to present
their claims and rebuttals. Even though the Court eventually ruled that
ASCI's recommendations were non-binding, the process provided both
parties with a structured platform to resolve their issues without
immediately resorting to the courts.
ASCI's importance also lies in creating a uniform set of guidelines
that all advertisers are encouraged to follow. This helps prevent
misleading or denigrating advertisements, especially in cases of
comparative advertising, where brands often make claims of superiority
over competitors. ASCI's guidelines serve as a deterrent against false
claims and provide a reference point for advertisers to ensure
compliance with ethical standards.
ASCI's code: Filling a regulatory void
In India, where there is no comprehensive advertising law, the ASCI
code acts as a vital tool for regulating the content of advertisements.
The code outlines what constitutes misleading, harmful, or denigrating
content, and helps maintain a level of trust between consumers and
brands. Furthermore, ASCI has admitted to its regulatory role in
dealing with complaints in Muthoot Finance Ltd. v. Advertising
Standards Council of India12, wherein ASCI submitted that “the
aforesaid decision is only in the nature of a recommendation and is not
binding on the plaintiff Company”. The ASCI, therefore, ensures that
companies are held accountable for their advertising claims in a
structured manner without interfering in a judicial capacity. As noted in
13
Muthoot Finance case , the ASCI communicates its
decisions/recommendations to the Ministry of Information and
Broadcasting and the Department of Consumer Affairs to take
appropriate action on the complaint.
However, ASCI's role remains advisory and non-binding. Companies
are free to challenge its decisions, as seen in the abovementioned
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precedents, and courts have consistently upheld the principle that ASCI
cannot act as a judicial authority.
Conclusion: A delicate balance
While ASCI is not a statutory body and its orders are not legally
binding, it holds a crucial position in India's regulatory framework for
advertising. By offering a fast, cost-effective mechanism for resolving
disputes, ASCI significantly reduces the load on courts, saving time and
resources for both the judiciary and the parties involved. However, it is
essential to recognise the limits of ASCI's jurisdiction, particularly its
non-binding nature, and its inability to impinge on commercial freedom
of speech.
Ultimately, ASCI serves as a mediator rather than an enforcer,
pushing parties toward settlements and helping maintain ethical
advertising standards in India. Its role, while not judicial, remains
indispensable in a country where formal advertising regulation is still
lacking. The balance between ASCI's regulatory function and the
protection of free speech ensures that advertisers operate within a
framework that is both fair and conducive to market competition.
———
1
Intellectual Property Advocate and Attorney at Law. Practising at the High Court of Delhi
and Supreme Court of India. Author can be reached at: [email protected].
2
The Advertising Standards Council of India Code <https://www.ascionline.in/the-asci-
code/>.
3
The Advertising Standards Council of India Code <https://www.ascionline.in/the-asci-
code/>.
4
2015 SCC OnLine Bom 8777.
5
1999 SCC OnLine Bom 444.
6
2024 SCC OnLine Mad 2133.
7
Constitution of India, Art. 19(1)(a).
8
(1995) 5 SCC 139.
9
2024 SCC OnLine Mad 2133.
10
WP (C) No. 9823 of 2017, decision dated 7-2-2020 (Del).
11
2024 SCC OnLine Mad 2133.
12
CS (OS) 483/2022, order dated 22-8-2022 (Del).
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13
CS (OS) 483/2022, order dated 22-8-2022 (Del).
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