2008 Supreme(SC) 1446

2008(7) Supreme 310
SUPREME COURT OF INDIA
(From MRTP Commission)
Markandey Katju and Altamas Kabir, JJ.
M/s. Philips Medical Systems (Cleveland) Inc. — Appellant
versus
M/s. Indian MRI Diagnostic & Research Ltd & Anr. — Respondents
Civil Appeal No. 2461 of 2006
[with C.A. 5889 /2008 @ SLP(Civil) No. 6325 of 2006]
Decided on : 29-09-2008

IMPORTANT POINT
Section 36A, MRTP Act, 1969 does not apply in a situation where goods are not sold at all.

Headnote:(a) Monopolies and Restrictive Trade Practices Act, 1969 – Section 36A – Principles of ejusdem generis and noscitur a sociis will apply to the interpretation of Section 36A as amended in 1991 – Thus, Section 36A does not apply in a situation where goods are not sold at all – It only applies where goods in fact are sold. (Para 25)

        (1988) 1 All ER 72 (HL); AIR 1977 SC 90; AIR 1981 SC 1649 – Relied upon.

       Facts of the case :

        1. The appellant is a company incorporated in accordance with the laws of the State of New York, USA which is engaged in the business of manufacturing and selling of various medical diagnostic equipment, including whole body CT Scanner.

        2. Respondent No. 1 wanted to purchase a whole body Whole Body CT Scanner and held negotiations for the same with the appellant and respondent No. 3, M/s. UB Picker Ltd. It is alleged that on 10.4.1989, the appellant sent its proforma invoice No. PMS/S/CT/001/89 (hereinafter referred to as the ‘First Offer’) for the supply of a new CT Scanner (Picker Synerview 1200 SX Whole Body Computer Tomography Scanner, 4th Generation Stationary Detector Technology system) including spares and accessories at a price of US $ 1,282,500.00. This First Offer was a comprehensive and composite offer and could not be split and /or partly accepted.

        3. It is alleged that respondent No. 1 neither communicated any acceptance of the First Offer nor opened an L/C within the aforesaid validity period of 90 days.

        4. The appellant was required under the applicable US laws to obtain an export licence from the US Authorities for exporting the equipment to India. In order to apply for the necessary export licence, the appellant was required to attach a copy of an import licence from the Indian Government which was to be procured by respondent No. 1 and which was not done. As a result, the First Offer dated 10.4.1989 lapsed without being accepted on the expiry of 90 days from 10.4.1989.

        5. Towards the end of 1989, respondent Nos. 1 and 2 began fresh discussions with the appellant for purchase of a refurbished CT Scanner. Appellant’s second quotation for US $ 595,000.00 vide its quotation No. QR/4896/90 dated 03.1.1990 was duly accepted by respondent No. 1 with the condition that the total system price would be US $ 570,000.00. The respondent no.1 accordingly opened a L/C.

        6. It is alleged that the appellant was surprised to find that the L/C had been opened for a sum of US$ 700,000.00 instead of the agreed price of US $ 570,000.00 and also that respondent No. 1 had referred to the old proforma invoice No. PMS/B/CT/001/89 dated April 10, 1989 instead of the duly accepted Second Quotation.

        7. It is alleged that Respondent No. 2 refused to amend the L/C in conformity to the second quotation and wanted the appellant to falsify the shipping documents and show that a new CT Scanner was being supplied instead of a refurbished system. Respondent No. 2 wanted the appellant to draw down the entire amount of US $700,000.00 and to repay the excess amount of US $ 130,000.00 to him in Malaysia. The appellant did not agree to any of the proposals of respondent No. 2.

        8. The L/C was never encashed by the appellant and was returned to respondent No. 1. Respondent No. 1 was in breach of its obligations that were to be performed by it before the appellant could perform or could be called upon to perform its obligations. Consequently, the occasion for supply of the CT Scanner by the appellant to respondent No. 1 never arose.

        9. The respondent Nos. 1 & 2 filed a complaint before the MRTP Commission against the appellant and respondent Nos. 3 to 5, being RTP Enquiry No. 172 of 1995 alleging that they were left with no option but to procure the CT Scanner from Hitachi, Japan whereby they suffered a huge loss of Rs. 32,31,885/-, which should be paid to them as damages.

        10. By the impugned judgment dated 29.11.2005, the MRTP Commission allowed the complaint and has held the appellant guilty of unfair trade practice. The Commission has passed an order restraining the appellant in indulging in the aforesaid alleged restrictive trade practice and directing it to pay compensation of Rs.5,71,439/- with interest @ 9% per annum to the respondent.

       Finding of the Court :

        Since the appellant did not sell the CT Scanner at all to the respondent, Section 36A could not be attracted at all.

       Result : Appeal allowed.