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High Court Of Calcutta
AMIYA KUMAR MUKHERJI
I.T.C.LTD. - Appellant
Versus
M.R.T.P.COMMISSION - Respondent
C. R. 4256 (W) Of 1974
Decided On : 09/16/1975
MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 - SECTION 10(A)(IV) - PRELIMINARY INVESTIGATION - COMPLAINT - VERIFICATION - JURISDICTION - NATURAL JUSTICE - ENQUIRY - RESTRICTIVE TRADE PRACTICES - MONOPOLISTIC UNDERTAKING.
Fact of the Case:
The petitioner, a dominant undertaking under the Monopolies and Restrictive Trade Practices Act, 1969 (the Act), was issued a notice under Regulation 7 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, calling upon it to comply with the provisions of Regulations 14 and 16 of the said Regulations. The notice was issued after the Commission decided to institute an enquiry into restrictive trade practices in exercise of the powers conferred on it by Section 10(a)(iv) read with Section 37 of the Act. The petitioner challenged the notice on the grounds that the complaint received from twenty-seven consumers was not properly verified in accordance with Regulation 4 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, that the Commission had not acted in good faith, that there was a complete non-application of mind by the Commission, and that the Commission had misdirected itself regarding the perspective of the Act.
Finding of the Court:
The court held that the complaint was not a nullity and that the report of the Director of Investigation was not a nullity. The court also held that the Commission had jurisdiction to institute an enquiry under Section 10(a)(iv) of the Act upon its own knowledge or information, and that the Commission had not acted in bad faith or misdirected itself regarding the perspective of the Act. The court further held that the principles of natural justice had not been violated by the Director of Investigation.
Issues: 1. Whether the complaint received from twenty-seven consumers was properly verified in accordance with Regulation 4 of the Restrictive Trade Practices (Enquiry) Regulations, 1970? 2. Whether the Commission had acted in good faith? 3. Whether there was a complete non-application of mind by the Commission? 4. Whether the Commission had misdirected itself regarding the perspective of the Act? 5. Whether the principles of natural justice had been violated by the Director of Investigation?
Ratio Decidendi: 1. The court held that the complaint was not a nullity and that the report of the Director of Investigation was not a nullity because the complaint was not void ab initio and the infirmities in the complaint did not vitiate the report of the Director of Investigation. 2. The court held that the Commission had jurisdiction to institute an enquiry under Section 10(a)(iv) of the Act upon its own knowledge or information because the provisions of Section 10(a) are mutually exclusive but that does not mean that any information derived from any source or even from an invalid complaint cannot be used by the Commission as its own knowledge and information under Clause (iv). 3. The court held that the Commission had not acted in bad faith or misdirected itself regarding the perspective of the Act because there was no lack of bona fides on the part of the Commission and it acted within its powers and jurisdiction conferred upon it by the statute. 4. The court held that the principles of natural justice had not been violated by the Director of Investigation because the investigation which was conducted by the Director of Investigation was for the purpose of informing the mind of the Commission whether the Commission on the basis of those materials collected would decide to hold an enquiry against the petitioner under Section 37 of the Act.
Final Decision: The rule was discharged and there was no order as to costs.
( 1 ) THIS rule is directed against a notice dated 18th of May, 1974, under Regulation 7 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, issued by the Monopolies and Restrictive Trade Practices Commission, calling upon the petitioner and the respondent No. 5 to comply with the provisions of Regulations 14 and 16 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, as the Commission has decided to institute an enquiry into the restrictive trade practices in exercise of the powers conferred on it by Section 10 (a) (iv) read with Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969.
( 2 ) PETITIONER-COMPANY (ITC) was incorporated under the Indian Companies Act in the name of Imperial Tobacco Co. of India Ltd. on the 24th August, 1910. It carried on the business of manufacturing and selling cigarettes for domestic and export markets. Respondent No. 5, Vazir Sultan Tobacco Company Ltd. (hereinafter referred to as " VST ") was incorporated in 1930 in the Nizam's State of Hyderabad under the Hyderabad Companies Act, 1930. On 20th May, 1970, the Imperial Tobacco Co. 's name was changed into India Tobacco Co. Ltd. On 1st June, 1970, the Monopolies and Restrictive Trade Practices Act (hereinafter referred to as the said " Act") was brought into force. On and from 1st August, 1970, the Central Government established the Monopolies and Restrictive Trade Practices Commission (hereinafter referred to as "the Commission" ). The petitioner-company is an undertaking registered under Section 26 of the Act. It is a dominant undertaking within the meaning thereof having 47% of production, distribution and supply of the total goods produced, distributed and supplied in India. On or about December 9, 1971, the Commission received a complaint signed by twenty-seven consumers requesting for an enquiry and an investigation under Sections 10 and 11 of the Act. In the said complaint, allegations were made that the petitioner and the respondent No. 5 were indulging in several restrictive trade practices. The said complaint was considered by the Commission and it was decided in the month of March, 1972, that it should be referred to the Director of Investigation. Thereafter, the Director of Investigation started a preliminary investigation and issued a letter to the company. The company by its letter dated 3rd May, 1972, addressed to the Director of Investigation asked for a summary of the alleged complaint under Section 10 (a) (i) of the Act and by a subsequent letter dated 30th May, 1972, the petitioner made a request to the said Director that they might be given a personal hearing before the Commission. The Director of Investigation forwarded a gist and extracts of relevant portions of the complaint to the petitioner-company. On the 24th June, 1972, the Director wrote to the petitioner that if as a result of the preliminary investigation, the Commission was satisfied that the complaint against the petitioner required to be enquired into, the petitioner would be given full opportunity to meet the allegations which would be enquired into by the Commission. On the 29th September, 1973, the Director wrote to the petitioner that as a result of the preliminary investigation under Section 11 of the Act, a prima facie case regarding certain restrictive trade practices was found against the petitioner and the respondent No. 5. On 20th November, 1973, the petitioner wrote a letter to the Director complaining of violation of principles of natural justice and fair play for nondisclosure of the alleged complaint and order of the Commission directing preliminary investigation. It is also stated in the said letter that the alleged tentative findings could not be and, in fact, were based on the alleged complaint and the impugned trade practices did not and could not amount to restrictive trade practices within the meaning of Section 2 (o) of the Act. On the 14th December, 1973, the Director sent a
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