1998 Supreme(Del) 81
High Court Of Delhi
BRINDA VAN AGRO INDUSTRIES LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
Civil 1564 of 1997
Decided On : 01/29/1998
A.K.VALI, Aditya Narain Singh, F.S.NARIMAN, RAKESH TIKKU, RAVINDER NARAYAN, SAJAN NARAIN
Headnote:
CONSTITUTIONAL LAW - MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 - SECTION 33(1) - AMENDMENT - VALIDITY - RESTRICTIVE TRADE PRACTICES - DEFINITION - REASONABLENESS - FUNDAMENTAL RIGHTS - ARTICLES 14 AND 19(1)(G) - INTERPRETATION.
Fact of the Case:
The petitioners, Coca-Cola Company and its Indian bottler, challenged the constitutional validity of Section 33(1) of the Monopolies and Restrictive Trade Practices Act, 1969 (the Act), as amended by Amendment Act 30 of 1984, arguing that it violated Articles 14 and 19(1)(g) of the Constitution. The petitioners contended that the amendment, which deemed certain categories of agreements to be restrictive trade practices, deprived them of the opportunity to show that their trade practices were not restrictive and, therefore, unreasonable.
Finding of the Court:
The Court upheld the constitutional validity of Section 33(1) of the Act, as amended. It held that the amendment did not impose unreasonable restrictions on the petitioners' fundamental rights under Articles 14 and 19(1)(g) of the Constitution. The Court reasoned that the amendment was within the competence of the Legislature in view of Articles 31C and 39(e) of the Constitution and that the restrictions imposed by the amendment were reasonable in the interest of public and were in furtherance of and to give effect to the Directive Principles.
Issues: 1. Whether Section 33(1) of the Monopolies and Restrictive Trade Practices Act, 1969, as amended by Amendment Act 30 of 1984, is violative of Articles 14 and 19(1)(g) of the Constitution? 2. Whether the amendment imposes unreasonable restrictions on the petitioners' fundamental rights?
Ratio Decidendi: 1. The amendment to Section 33(1) of the Act, which deems certain categories of agreements to be restrictive trade practices, is within the competence of the Legislature in view of Articles 31C and 39(e) of the Constitution. 2. The restrictions imposed by the amendment are reasonable in the interest of public and are in furtherance of and to give effect to the Directive Principles.
Final Decision: The Court dismissed the writ petition with costs, assessed at Rs. 5,000.00.
( 1 ) BY this writ petition under Article 226 of the Constitution of India the petitioners have challenged the constitutional validity of Section 33 (1 ) of the Monopolies and Restrictive Trade Practices Act, 1969 (for short the Act) as violative of Articles 14 and 19 (1 ) (g) of the Constitution; sought for quashing the order dated 21. 2. 1997 (Annexure E) of the Monopolies and Restrictive Trade Practices Commission (for short, the Commission) directing inquiry and the notice of inquiry (Annexure F) sent to the petitioners and also sought for quashing similar notices sent to other bottlers with whom petitioner No. 3 has entered into similar agreements, list of which has been given in Annexure G.
( 2 ) BRIEFLY the facts are that M/s. Coca Cola Company, (petitioner No. 3) is a Corporation, incorporated in the United States of America with principal office at City of Atlanta, State of Georgia, USA, and is engaged in the manufac- ture and sale of certain concentrates, beverage basis and syrups used in the preparation of certain non-alcoholic beverages such as Coca-cola, Fanta, Spirta, Gold Spot, Limca, Thums Up etc. which are offered for sale in bottles or other containers, under various Trade Marks for which it has the exclusive right to prepare, package and to manufacturer and sell the same in India.
( 3 ) PETITIONER No. 3 has entered into agreement dated 9. 8. 1993 (Annexure B) called Bottler s Agreement with petitioner No. 1, an Indian Company, called the Bottler granting licence to the latter authorising it to prepare and package the beverages in authorised containers and to distribute and sell the same under its trade marks only in the specified territory, i. e. in the Districts of Agra, Mathura and Aligarh in the State of U. P. on the various terms and conditions mentioned therein. The agreement inter alia contains the following terms and conditions to which objection before the Commission is that these are restrictive trade practices falling in Clauses (g), (a) and (e) of Sub-Section (1) of Section 33 of the Act:
(1) The Coca Cola Company hereby authorises the Bottler, and the Bottler undertakes, subject to the terms and conditions contained herein, to prepare and package the beverages in Authorised Containers, as defined, and to distribute and sell the same under the Trade Marks, in and throughout, but only in and throughout the territory which is defined and described in Appendix III (hereinafter referred to as the "territory" ). 6 (d) To sell and distribute the Beverages in Authorised Containers only to retail outlets or final consumers in the Territory, provided, however, that the Bottler shall be authorised to distribute and sell the Beverages in Authorised Containers to wholesale outlets in the Territory who sell only to retail outlets in the Territory. Any other methods of distribution shall be subject to the prior written approval of the Coca-Cola Company. 13 (a) The Bottler shall not, without the prior written consent of the Company, prepare, sell or distribute or cause the sale or distribution in any manner whatsoever of any of the Beverages outside the Territory. 13 (b) In the event of any of the Beverages prepared, packaged, distributed or sold by the Bottler are found in the Territory of another authorised bottler of the products of the Company (hereinafter referred to as the "injured Bottler") then in addition to all other remedies available to the Company. (1) The Company may, in its sole discretion cancel forthwith the authorisation for the Authorised Container (s) of the type which were found in the Injured Bottler s Territory; (2) The Company may charge the Bottler an amount of compensation for the Beverages found in the Injured Bottler s territory to include all lost profits, expenses, and other costs incurred by the Company and the Injured Bottler; and (3) The Company may purchase any of the Beverages prepared, packaged, distributed or sold by the Bottler which are found in the Injured