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Supreme Court of India
B.N. Kirpal, CJI, Y.K. Sabharwal & K.G. Balakrishnan, JJ.
HARIDAS EXPORTS—Appellant
versus
ALL INDIA FLOAT GLASS MFRS. ASSOCIATION & ORS.—Respondents
Civil Appeal No. 2330 of 2002 with C.A. Nos. 3572/2000, 76/2002, 4238/2002, 4238/2002 and 3562/2000 from Judgment and Order dated 21.2.2000 of M.R.T.P. Commission, New Delhi in R.T.P.E. No. 212 of 1998—Decided on 22.7.2002
The competition law in the form of MRTP as it stands today does not contain any provision, which can give it jurisdiction to interfere merely with cartel formation. Formation of cartel which takes place outside India is outside the territorial jurisdiction of the MRTP. The Indian importer obtaining goods at a low price does not contravene any law. He has obtained a good bargain. We need not go into the question whether anti-dumping provisions in the Customs Act can be an effective remedy against such canterlisation. But if the cartel carries out Restrictive Trade Practice in India or its actions have the effect of a Restrictive Trade Practice being carried out in India, then the MRTP Commission will get jurisdiction to act under Section 37(1) of the MRTP Act. We make it clear that we are expressing no opinion as to whether the appellant is a cartel or on the question of predatory prices for the reason that we are satisfied that here no case had been made out by the respondents for the grant of injunction against the appellant. The injunction issued against the appellant was not only against the provisions of Section 14 of the Act but even on facts as alleged no case had really been made out for any order under Section 12-A or Section 37 of the Act more so when no import of soda ash into India from the appellant had, in fact, taken place, On the other hand, prima facie the allegation of the appellant that it is the respondents which have formed a cartel and do not welcome any competition does merit consideration, perhaps in another case. For the aforesaid reasons, this appeal is allowed with costs.
Monopolies and Restrictive Trade Practice Act, 1969-Sections 33(1)(i) (ia) and 36A r/w 2(o)-Complaint about restrictive and unfair trade practice against three Indonesian Companies manufacturing float glass and selling in India at predatory prices thus indulging in heavy under invoicing-Application under Section 12A for ad interim injunction against said Indonesian Companies-Conflict of opinion-Appeal against to Supreme Court-Limits of interim order under Section 12A-Whether MRTP Commission has power and jurisdiction relating to allegedly predatory prices-Whether MRTP Act has extra territorial application? (No)-Whether principle of "effect doctrine" has any application in India?-Whether anti dumping provisions will oust the jurisdiction of MRTP Commission?
Reading Sections 1(2), 2(e) and 14 together can leave no manner of doubt that the Act has no extra territorial operation. Section 1(2) specifically provides that the Act extends to the whole of India except the State of Jammu and Kashmir, thereby defining the geographical boundary of the operation of the Act. Section 2(e)(iii) defines goods as including those goods which are supplied, distributed or controlled in India or the goods imported into India. The emphasis is on the words "in India" or "into India". Paraphrasing the said sub-section "goods" would mean "those goods supplied in India or goods distributed in India or goods controlled in India or goods imported into India". In the present case, we are concerned with float glass which was sought to be imported into India. For the purpose of the Act, it is only the goods imported into India which will fall within the definition of the word "goods" in Section 2(e). As such for the Commission to exercise any jurisdiction goods must be those which are imported into India. As long as the import has not taken place and the goods are merely intended for export to India the same will not fall within the definition of the word "goods" in Section 2(e).
The jurisdiction of the MRTP Commission, is not ousted by the Anti-dumping provisions in the Customs Act. The two Acts operate in different fields and have different purposes. The Import Control Act and the Customs Tariff Act are concerned with import of goods into India and the duty which could be imposed on the imported items. Import may be allowed on the basis of an import licence or, depending upon the policy, import may be allowed under OGL-Open General Licence-where no specific licence for import is required. Whether to allow import or not and the terms on which an item may be imported is a matter of policy and regulated by law.
It is thus seen that the provisions relating to anti-dumping contained in the Customs Tariff Act do not in any way affect the power or jurisdiction of the MRTP Commission. The Import Control Act and the Customs Tariff Act on the one hand and the MRTP Act on the other operate in different independent fields and the authority under one has no jurisdiction over the other. In other words, their paths do not cross each other. While the provisions of Anti-dumping Act are concerned with the levy of anti-dumping duty, the MRTP Act in the present case would be concerned with the agreements between the parties which relate to the restrictive trade practices. Therefore, it would be incorrect to say that the incorporation of the anti-dumping provisions ousts the jurisdiction of the MRTP Commission to inquire and pass orders, inter alia, with regard restrictive trade practice in India.
The MRTP Commission has no extra territorial jurisdiction. The action of an exporter to India when performed outside India would not be amenable to jurisdiction of the MRTP Commission. The MRTP Commission cannot pass an order determining the export price of an exporter to India or prohibiting him to export to India at a low or predatory price.
Civil Appeal Nos. 2330 of 2000, 3572 of 2000, 76 of 2002 and S.L.P. (C) No. 22549 of 2001:
B.N. Kirpal, CJI.—Leave granted.
1. These appeals are against orders passed by the Monopolies and Restrictive Trade Practices Commission (hereinafter referred to as the “MRTP Commission”) whereby Indonesian manufacturers of float glass had been restrained from exporting the same to India at allegedly predatory prices.
2. Respondent No. 1 is an association of float glass manufacturers in India. During March-April, 1998, complaints were made by the said respondent to the Customs Department, alleging that the Indonesian manufacturers of float glass, in association with Indian importers were allegedly indulging in heavy under-invoicing. The respondents were, however, informed by the Customs Department in Calcutta that if they had any genuine grievance, the same could be made before the Designated Authority, Ministry of Commerce dealing with anti-dumping complaints. On 26th May, 1998, the respondent No. 1 presented a complaint before the Designated Authority. This complaint appears to have been filed before the Anti-Dumping Authority and the same was possibly not pursued by the complainant.
3. On 10th September,1998, the respondent No. 1 filed a complaint before the MRTP Commission under Section 33(1)(j), (ja) and Section 36A read with Section 2(o) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as the ‘MRTP Act’) against three Indonesian companies alleging that they were manufacturing float glass and were selling the same at predatory prices in India, and were hence resorting to restrictive and unfair trade practices. In the complaint, it was stated that the float glass of Indonesian origin was being exported into India at the CIF price of US $ 155 to 180 PMT. At this price, some float glass had been shipped into India during the period December, 1997, to June, 1998. It was alleged that these sale prices were predatory prices as they were less than not only the cost of production for the product in Indonesia but also the variable cost of production of the product. The complainant gave figures indicating the estimated cost of float glass internationally as well as the cost of production of float glass in India with a view to demonstrate that the Indian manufacturers of float glass would not be able to compete with the price at which the Indonesian manufacturers were presently selling or intending to sell to Indian consumers. On this basis, it was contended that the sale of float glass by the Indonesian manufacturers at the said price of US $ 155 to 180 PMT will restrict, distort and prevent competition by pricing out Indian producers from the market. This would result in lowering the production of the Indian industry and the consequent idle capacity and losses would force the industry to become sick which would lead to its closure which would have a direct impact on the employment in the industry.
4. In response to the notice issued to the Indonesian companies, M/s. P.T. Mulia Industries (respondent No. 2 in this appeal) wrote a letter to the MRTP Commission stating that it had never in the past exported float glass to India. The other two respondents did not send any reply to the Commission. The appellant, however, which is the Indian importer of the float glass from Indonesia had filed a caveat before the Commission. It also filed a reply refuting the allegations of the respondent and it was the contention of the appellant that respondent No. 1 was a cartel of Indian manufacturers of float glass which was, in fact, exporting out of India at prices far lower than their own cost of production in India. It was also contended by the appellant herein that the cost of production of float glass was lower in Indonesia than in India and float glass was not being exported to India at predatory prices.
5. The application under Section 12-A for interim injunction was heard by the Chairman of the Commission and a s
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