Are Signboards Advertisements? Delhi High Court Says If They Convey Nature Of Business Via Name, They Could Fall Under Section 143 DMC Act

The Delhi High Court has ruled that signboards which convey the nature of the business via names or nomenclature could fall within the provisions of Section 143 of the Delhi Municipal Corporation Act.

As per the provision, no advertisement can be "erected, exhibited, fixed or retained" at any public place in Delhi without the written permission of the Commissioner. 

The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju explained that advertisement is nothing but a mode of communication directed towards the public to convey the kind of business the advertiser is involved in and to promote its business and commercial interest.

"In certain cases, the nomenclature or a name under which the business is conducted acts as an advertisement, whereas in other cases where the business is conducted under a random name which has nothing to do with the kind of business being operated by the advertiser, the advertiser may have to use different mediums to promote its business interests, which could include billboards, hoardings, electronic media, social media platforms or print media to reach its target customers/consumers," said the court.

Citing the example of airlines like Singapore Airlines, British Airways, American Airlines, Malaysian Airlines and Japan Airlines, the court said their names convey to their target customers or consumers the kind of business they are in. It added that only distinguishing feature is perhaps the country with which they are aligned.

Observing that signboards of such entities would convey to the public the nature of their business, the court said the mere fact that the signboard bears the name of the entity without extolling its strengths would not in every case take it out of the purview of Section 143 of the DMC Act.

"Much would depend on the facts and circumstances that subsist in each case. Say for instance, if an entity has signboards installed bearing only its name in multiple locations of a city, one could argue that such a signboard is an advertisement as it increases visibility and enhances the recall factor. Add to it another dimension; each signboard carries the address of its branches. Such a "Signboard" could convey a lot to the customers [both existing and prospective] of such an entity," it added.

Citing the examples to airlines like Indigo, Virgin Atlantic and Emirates, the court said their names do not convey the nature of their business.

However, it said that when it comes to banking business, more often than not the name itself conveys the nature of the entity's business. "Examples which come to mind are the State Bank of India, United Commercial Bank, HDFC Bank, ICICI Bank, Bank of America, Barclays Bank, etcetera. These entities may not necessarily require a more overt form of communication with their customers," said the court.

The court ruled that every signboard cannot be said to be excluded from the purview of Section 143 of the DMC Act.

"... entities which convey the nature of their business via their names or nomenclature could fall, in our opinion, within the provisions of Section 143 of the DMC Act, if facts and circumstances obtain in a case which suggests that there is an intent to draw potential customers and/or consumers to the place of business and/or to consume or receive services offered by the advertiser," the division bench said.

Thus, the court said if signboards bear the name of the entity which is descriptive of the entity's business and they are put up in various parts of th city, they could, in a given case, be treated as an advertisement.

"Likewise, the size of the signboard and what is stated therein, apart from the name of the entity, could also in certain circumstances lead to the conclusion that the entity is seeking to promote its business interests. Say, for instance, a bank's signboard carries its name along with the acronym "ATM" and such signboards are put up in different locations, could it then be said that they are simpliciter signboards and not advertisements?"

The court made the observations in its decision on a petition related to the death of a man, who was injured in 2011 after Bank of Baroda's signboard fell on his head. The bank's argument was there was no obligation cast on it to seek prior permission from the Commissioner for putting up the signboard as it does not advertise the business being carried out by it.

It was also contended that advertising is a form of marketing communication which employs an openly sponsored, non-personal message to promote or sell a product, service or idea but a signboard, which is relatively smaller in size and displays the name or logo of a business or product, is ordinarily fixed on the facade of the building in which the place of business is located.

"The Bank's argument, in our opinion, qua this aspect is too broad, that is, anything which is a signboard cannot fall in the category of an advertisement within the meaning of Section 143 of the DMC Act," said the court.

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Title: M/S BANK OF BARODA & ANR vs MAHESH GUPTA & ORS.

Click Here To Read/Download Judgement