2002 Supreme(SC) 706

2002(5) Supreme 74
Supreme Court of India
(From M.R.T.P., Commission, New Delhi)
B.N. Kirpal, CJI., Y.K. Sabharwal and K.G. Balakrishnan, JJ.
M/s. Haridas Exports —Appellants
versus
All India Float Glass Mfrs. Association & Ors. —Respondents
Civil Appeal No. 2330 of 2000
With
Civil Appeal Nos. 3572/2000, 76/2002, 4238/2002 @ SLP (C) Nos. 22549 of 2001 and Civil Appeal No. 3562 of 2000
Decided on 22-7-2002
Counsel for the Parties :
For the Appearing Parties : P. Chidambaram, R.F. Nariman, Joseph Vellapally, Dipankar, P. Gupta, Anil B. Divan, Gopal Subramanium, Sr. Advocates, Vikas Mehta, Ms. Indu Malhotra, Diljeet Titus, Ms. Kiran Bhardwaj, Satya Mitra, Ms. Priya Hegde, Sohil Dutt, R. Hegde, Ramesh Singh, R.N. Karanjawala, Gourab Banerjee, Ms. Ruby Singh Ahuja, Ms. Pooja Gautam, Ms. Meghna Srivastava, Ms. Manik Karanjawala, Ms. P.S. Shroff, Sunil Dogra, T. Srinivas Murthy, Jayant Mehta, Krishnan Venug­opal, Ms. P.S. Shroff, Advocates.

Very important point
No case has been made out by the respondents for grant of injunction against appellants either under Sections 12A, 14 or 33 of the MRTP Act, 1969.

Headnote:(i) Monopolies and Restrictive Trade Practices Act, 1969—Sections 33(1)(i)(ja) and 36A r/w 2(o)—Complaint about restrictive and unfair trade practice against three Indonesian Companies manufacturing float glass and selling in India at predatory prices thus indulging in heavy under invoicing—Application under Section 12A for ad ­interim injunction against said Indonesian Companies—Conflict of opinion—Appeal against to Supreme Court—Limits of interim order under Section 12A—Whether MRTP Commission has power and jurisdiction relating to allegedly predatory prices—Whether MRTP Act has extra terri­torial application? (No)—Whether principle of “effect doctrine” has any application in India?—Whether anti dumping provisions will oust the jurisdiction of MRTP Commission?

       Held : Reading Sections 1(2), 2(e) and 14 together can leave no manner of doubt that the Act has no extra territorial operation. Section 1(2) specifically provides that the Act extends to the whole of India except the State of Jammu and Kashmir, thereby defining the geographical boundary of the operation of the Act. Section 2(e)(iii) defines goods as including those goods which are supplied, distributed or controlled in India or the goods imported into India. The emphasis is on the words "in India" or "into India". Paraphrasing the said sub-section "goods" would mean "those goods supplied in India or goods distributed in India or goods controlled in India or goods imported into India". In the present case, we are concerned with float glass which was sought to be imported into India. For the purpose of the Act, it is only the goods imported into India which will fall within the definition of the word "goods" in Section 2(e). As such for the Commission to exercise any jurisdiction goods must be those which are imported into India. As long as the import has not taken place and the goods are merely intended for export to India the same will not fall within the definition of the word "goods" in Section 2(e). (Para 33)

       Even if an agreement is executed outside India or the parties to the agreement are not in India and agreement may not be registerable under Section 33, being an outside India agreement, nevertheless, if any, restrictive trade practice, as a consequence of any such an outside agreement, is carried out in India then the Commission shall have jurisdiction under Section 37(1) in respect of that restrictive trade practice if it comes to the conclusion that the same is prejudicial to the public interest. (Para 46)

       The jurisdiction of the MRTP Commission, in our opinion, is not ousted by the Anti-dumping provisions in the Customs Act. The two Acts operate in different fields and have different purposes. The Import Control Act and the Customs Tariff Act are concerned with import of goods into India and the duty which could be imposed on the imported items. Import may be allowed on the basis of an import license or, depending upon the policy, import may be allowed under OGL - Open General License - where no specific license for import is required. Whether to allow import or not and the terms on which an item may be imported is a matter of policy and regulated by law. (Para 49)

       It is thus seen that the provisions relating to anti-dumping contained in the Customs Tariff Act do not in any way affect the power or jurisdiction of the MRTP Commission. The Import Control Act and the Customs Tariff Act on the one hand and the MRTP Act on the other operate in different independent fields and the authority under one has no jurisdiction over the other. In other words, their paths do not cross each other. While the provisions of Anti-dumping Act are concerned with the levy of anti-dumping duty, the MRTP Act in the present case would be concerned with the agreements between the parties which relate to the restrictive trade practices. Therefore, it would be incorrect to say that the incorporation of the anti-dumping provisions ousts the jurisdiction of the MRTP Commission to inquire and pass orders, inter alia, with regard restrictive trade practice in India.­ (Para 54)

       In our opinion, the MRTP Commission has no extra territorial jurisdiction. The action of an exporter to India when performed outside India would not be amenable to jurisdiction of the MRTP Commission. The MRTP Commission cannot pass an order determining the export price of an exporter to India or prohibiting him to export to India at a low or predatory price. (Para 58)

       (ii) Monopolies and Restrictive Trade Practices Act, 1969—Section 33(1)(i)—Registration of agreement of import—Indian party importing from Indonesia at predatory prices—Whether such a case is made out in the facts of this case? (No) (see Para 55)—Summary of conclusions.

       Held : From the aforesaid discussion and reasons, we arrive at the following conclusions:-

        1. Anti-dumping provisions do not per se oust the jurisdiction of the MRTP Commission.

        2. The MRTP Commission can, inter alia, take action whenever a Restrictive Trade Practice is carried out in India in respect of imported goods or otherwise.

        3. It is only in respect of the Indian leg of the restrictive trade practice, can an order under Section 12A and/or Section 37 be passed.

        4. Under Section 33 of the Act what can be registered is only an agreement in regard to which any party to an agreement carries on business in India [Section 35 Explanation I]. But this does not mean that if an agreement is entered into outside India and which results in a Restrictive Trade Practice in India, the MRTP Commission has no jurisdiction. The "effects doctrine" will apply and Section 2(o) read with Section 2(u) and Section 37 gives jurisdiction to the MRTP Commission to pass appropriate orders qua the Restrictive Trade Practice in India. The MRTP Commission, in such a case, may not be able to stop import but there can be order imposing post import restrictions such as, for example, not to sell imported goods in India in such a manner which will be regarded as a restrictive trade practice under Section 37.

        5. In Explanation I to Section 35 the use of the words shall be deemed to be an agreement within the meaning of this section...." and the time-frame for registration clearly indicates that Section 33 and Section 35 apply only to Indian agreements or agreements in India and, therefore, it became necessary to incorporate Explanation I so as to enlarge the ambit and give extra territorial jurisdiction in relation to those agreements which relate to performance of services in India and any party to that agreement carries on business in India.

        6. On the facts of this case, the impugned order passed by the MRTP Commission against the Indonesian exporters cannot be sustained and is set aside

       Appeals are disposed of in the aforesaid terms. Parties to bear their own costs. (Para 62 and 63)

       (iii) Monopolies and Restrictive Trade Practices Act, 1969—Sections 12A and 14—Grant of interim in­junction—Cartel formed in America—Indian importer purchasing goods at lower price—Whether calls for any injunction? (No)—Injunction granted vacated—Appeal allowed.

       Held : The competition law in the form of MRTP as it stands today does not contain any provision, which can give it jurisdiction to interfere merely with cartel formation. Formation of cartel which takes place outside India is outside the territorial jurisdiction of the MRTP. The Indian importer obtaining goods at a low price does not contravene any law. He has obtained a good bargain. We need not go into the question whether anti-dumping provisions in the Customs Act can be an effective remedy against such cartelisation. But if the cartel carries out Restrictive Trade Practice in India or it s actions have the effect of a Restrictive Trade Practice being carried out in India, then the MRTP Commission will get jurisdiction to act under Section 37(1) of the MRTP Act. We make it clear that we are expressing no opinion as to whether the appellant is a cartel or on the question of predatory prices for the reason that we are satisfied that here no case had been made out by the respondents for the grant of injunction against the appellant. The injunction issued against the appellant was not only against the provisions of Section 14 of the Act but even on facts as ­alleged no case had really been made out for any order under Section 12-A or Section 37 of the Act more so when no import of soda ash into India from the appellant had, in fact, taken place. On the other hand, prima facie the allegation of the appellant that it is the respondents which have formed a cartel and do not welcome any competition does merit consideration, perhaps in another case. For the aforesaid reasons, this appeal is allowed with costs. (Paras 78, 79, 80 and 81)