SUPREME COURT OF INDIA
M.B. Shah and R.P. Sethi, JJ.
RAJASTHAN HOUSING BOARD & ANR.—Appellants
versus
PARVATI DEVI (SMT.) & ANR.—Respondents
Civil Appeal Nos. 14994 & 15096 of 1996—Decided on 3.5.2000

Headnote:(i) Monopolies and Restrictive Trade Practices Act, 1969 - Section 2(o)(ii) - Restrictive trade practice - Complaint that State Housing Board though allotted house in 1988 till 1993 did not gave possession which amounted to unfair trade practice - Commission s order that Housing Board indulged in restrictive trade practice - Commission directing Housing Board to file affidavit that it would not repeat same - Order unsustainable -Section 2(o) not applicable in case where a trade practice has no effect, actual or probable of preventing, distorting or restricting competition in any manner:

       Held: It appears that Commission has considered that the acts of the Board would be covered by clause (ii) particularly last portion of the said clause namely, "services in such manner as to impose on the consumers unjustified cost". In our view, the Commission ought to have read the said part along with the main ingredient which requires that a trade practice which has or may have the effect of preventing, distorting or restricting competition in any manner would be restrictive trade practice and in particular which inter alia, tends to bring about manipulation of services in such manner as to impose on the consumers unjustified costs. For this purpose no case is made out by the respondents that the Board has prevented or restricted competition in any manner which effects the services in such a manner as to impose on consumers unjustified costs or restrictions. Section 2(o) will not be applicable in case where a trade practice has no effect, actual or probable of preventing, distorting or restricting competition in any manner. (Para 9)

       In the present case, there is no allegation or evidence to hold that the appellant has indulged in restrictive trade practice. In this view of the matter learned counsel for the respondents were not in a position to support the said finding. Hence, the direction given by the Commission that the appellant shall discontinue alleged restrictive trade practices and not repeat the same in future and shall file an affidavit in compliance within six week from the date of the order passed both the matters requires to be set aside. (Para 11)

       (ii) Monopolies and Restrictive Trade Practices Act, 1969 - Section 36A(1)(ii) and (ix) -Unfair trade practice - Complaint against State Housing Board alleging delay in constructing building or handing over its possession/increase in cost-Commission not considered necessary evidence-Accepted plea of complainant in arriving at conclusion that Housing Board indulged in unfair trade practice under Section 36-A(1)(i) and (vi)-Held, there being no proper finding based on necessary evidence impugned order set aside.

       Held : Considering the provisions of Section 36A(1)(ii) and (ix) and allegations made against the Board, it, appears that Commission was justified in proceeding with the matter. However, with regard to the claim made by the respondent in each case, the matter is still not decided by the Commission by considering the relevant documents. At the time of deciding the said matters, the Commission is required to go into the terms and conditions agreed between the parties and to find out whether the appellant has indulged in unfair trade practices so as to take any further action against the Board on the basis of the applications filed by the respondents in each case. (Para 14)

       For deciding such question, the Commission has to find out whether a particular act can be condemned as an unfair trade practice whether representation contained a false statement arid was misleading and what was the effect of such a representation made to the common man. The issue cannot be resolved by merely holding that representation was made to hand over the possession within stipulated period and the same is not complied with or some lesser constructed area is given after the construction of the building. The Commission has to find out whether the representation, complained of, contains the element of misleading the buyer and whether buyers are mislead or they are informed in advance that there is likelihood of delay in delivering the possession of constructed building and also increase in the cost. For this purpose, terms and conditions of the agreement are required to be examined by the Commission. Not only this, the Commission is required to consider whether the Board has adopted unfair method or deceptive practice for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services. Unless there is finding on this issue, appellant Board cannot be penalized for unfair trade practice. (Para 15)

       In the present case, the Commission has not considered the necessary evidence and has accepted the plea of the respondent in arriving at the conclusion that the appellant Board has indulged in unfair trade practice. We would again note that the Commission was not very clear about the application of the provisions of Section 2(o)(ii) of the MRTP Act and it proceeded on the basis that the said Section is also applicable. Further, as there is no proper finding of fact based on necessary evidence, we are of the opinion that the impugned order dated 30th May, 1996 passed by the Commission in UTPE/RTPE No. 15 of 1994 holding that the appellant Board has indulged in unfair trade practices under Section 36-A(1)(i) and (vi) of the MRTP Act is unsustainable. (Para 17)

       Result: order accordingly.

       IMPORTANT POINT

       Section 2(o) of the MRTP Act will not be applicable in case where a trade practice has no effect, actual or probable of presenting, distorting or restricting competition in any manner.