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2008(3) Supreme 712
SUPREME COURT OF INDIA
Dalveer Bhandari and Tarun Chatterjee JJ.
Raymond Woollen Mills Ltd. —Appellants
Versus
Director General (Investigation &
Registration) & Another —Respondents
Civil Appeal No. 1120 of 2001
Decided on 15.05.08
(ii) Monopolies and Restrictive Trade Practices Act, 1969- Sections 10 (a)(iv),37,2(o)(ii), 33(1)(b) - Restrictive trade practice- The court would be justified in passing the order on alleged restrictive trade practice only when it is “prejudicial to public interest” under clause (h) of section 38(1) of the MRTP Act-The pre-condition for passing such an order is that the restriction as imposed directly or indirectly when restricts or discourages competition to any “material degree” in any trade or industry, then only it would be considered as “prejudicial to public interest”- The court should not pass an order of “cease and desist” where the alleged restrictive trade practice does not have the impact on restricting competition to any material degree. (Para 44)
(iii) Monopolies and Restrictive Trade Practices Act, 1969- Section 38(1)(h)- Restrictive trade practice-Instantly complainant/informant had requested for refund of the security amount and, therefore, it was refunded- It was really not a case of “termination of dealership”-There was no charge or allegation of termination of dealership in the notice of enquiry, therefore, the Commission was not justified in passing the order based on “termination of dealership”- Even otherwise also, the termination of single dealership cannot affect competition to any “material degree” in the relevant trade or industry within the meaning of clause (h) of section 38(1) of the MRTP Act. (Para 46)
Facts of the Case:
1. Complaint was filed by complainant/informant M/s Roop Milan here in in the instant case alleging that it was appointed as a retail dealer on 19.4.1982 and that it was getting regular supplies of blazers, suits, safaris and trousers till December 1986 when the appellants stipulated that blazers, suits and safaris would be supplied only if substantial orders were placed for readymade trousers. Complainant alleged that his dealings with appellants came to an end in July 1987 when appellant no. 2 compelled him to place an order for trousers along with order for blazers, safaris and suits. Commission held that appellants had indulged in restrictive trade practice.
2. Present appeal has been filed against said order of MRTP Commission.
Findings of the Court:
On proper analysis of entire evidence on record, held that no “tie-up” of sales of trousers as a condition had been established. Therefore, Commission’s passing any consequential order on basis of tie-up was wholly untenable and unsustainable in law. Since the evidence on behalf of appellants clearly showed that there were several manufacturers including small scale manufactures, the little share of the complainant/informant did not affect competition in relevant trade or industry. Hence in these circumstances, to pass any order under section 38(1)(h) held unjustified. On consideration of totality of facts and circumstances, impugned order passed by Commission was set aside.
Result: Appeal allowed.
JUDGMENT
Dalveer Bhandari, J.—
1. This appeal is directed against the judgment/order dated 12.10.2000 passed by the Monopolies and Restrictive Trade Practices Commission (hereinafter referred to as “the Commission”) in R.T.P. Enquiry No. 204 of 1988.
2. Brief facts which are necessary to dispose of this appeal are as under:
A Notice of Enquiry under section 10 (a)(iv) and Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as the ‘MRTP Act’) was issued to the appellants wherein it was alleged that the appellants had indulged in restrictive trade practice within the meaning of Section 2(o)(ii) and section 33(1)(b) and of the MRTP Act.
3. In order to comprehend the controversy involved in this case properly, sections 2(o)(ii) and 33 (1)(b) of the MRTP Act are reproduced as under:
“2. In this Act, unless the context otherwise requires -
xxx xxx xxx
xxx xxx xxx
(o) “restrictive trade practice” means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular,-
(i) .................
(ii) which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified cost or restrictions.”
33. Registrable agreements relating to restrictive trade practices.- (1) Every agreement falling within one or more of the following categories shall be deemed, for the purposes of this Act, to be an agreement relating to restrictive trade practices and shall be subject to registration in accordance with the provisions of this Chapter, namely:-
(a) .............
(b) any agreement requiring a purchaser of goods, as a condition of such purchase to purchase some other goods;
xxx xxx xxx”
4. The appellants herein denied the allegations made in the Notice of Enquiry and it was categorically stated that it neither manufactured nor sold any garments and such allegations of restrictive trade practice made against it was without any foundation.
5. The Commission directed respondent no. 1 [Director General (I&R)] to furnish a copy of the Preliminary Investigation Report on the basis of which the Notice of Enquiry was issued to the appellants.
6. Respondent no. 1 in evidence produced one Viren Shah, partner of M/s Roop Milan, Bombay and his examination-in-chief and the cross-examination was recorded. In his evidence, he referred the following documents:
i) Letter dated 23.7.87
ii) Letter dated 15.1.88
iii) Letter dated 12.9.87
iv) Refund Memo dated 28.9.87.
7. The appellants filed the affidavit of evidence of Pradeep H. Paranandan, Sales Manager of appellant no. 2. The said witness was also cross-examined on behalf of the Director General (I&R).
8. The complainant/informant M/s Roop Milan complained that it was appointed as a retail dealer on 19.4.1982 and that it was getting regular supplies of blazers, suits, safaris and trousers till December 1986 when the appellants stipulated that blazers, suits and safaris would be supplied only if substantial orders were placed for readymade trousers. From the information furnished by the complainant/informant, it transpired that out of 139 items supplied by the appellants, 119 were trousers and the balance 20 were blazers and suits.
9. The complainant in his statement further stated that his dealings with the appellants came to an end in July 1987 when appellant no. 2 compelled him to place an order for trousers along with order for blazers, safaris and suits.
10. Pradeep H. Hiranandani appeared as a witness on behalf of appellant no. 2 herein. He stated that the readymade garments including trousers manufactured and marketed by appellant no. 2 enjoyed good demand in the market and the supply of garments was made to the dealers on the basis of order placed by them and subject to availability of stock. It was also stated by him that the manufacture of readym
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