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2010 Supreme(Mad) 1720
High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE R. BANUMATHI & THE HONOURABLE MR. JUSTICE M. VENUGOPAL
Tamil Nadu Co-operative Milk Producers' Federation Ltd., rep. By its Managing Director
Versus
Triad Trading Services Ltd, Chitra Towers, rep. By its Director & Others
W.A. Nos.204 to 206 of 2000 & C.M.P.Nos.1823 to 1827 of 2000
Decided on : 13-04-2010
For the Appellant :M. Kempraj For S. Subbiah, Advocates. For the Respondents:R1 - Prakash Goklaney, R2 to R4 - A. Arumugham Special Government Pleader, R5-P.B. Krishnamoorthy, Advocates.
The main legal point established in the judgment is the lack of deep and pervasive state control over the Cooperative Society, the absence of privity of contract between the parties, and the availability of alternative remedies under the Monopolies and Restrictive Trade Practices Act or the Competition Act 2002.
Headnote:
Monopolies And Restrictive Trade Practices Act - Cooperative Society - Section 3, Section 10, Section 11, Section 37, Section 40(2) - The court discussed the applicability of the Monopolies And Restrictive Trade Practices Act, 1969 to the Cooperative Society and the legal provisions related to the regulation of trade practices, including the power of the Commission to investigate restrictive trade practices and the entitlement to withhold supplies based on loss leaders.
Fact of the Case:
The case involved a dispute between the First Respondents/Petitioners, who were dealers of dairy products, and the Appellant/Third Respondent, a Cooperative Society, regarding the refusal of the Fifth Respondent/Distributor to sell products to the First Respondents/Petitioners at prices lower than the maximum retail price fixed by the Appellant/Third Respondent.
Finding of the Court:
The court found that the writ petitions filed by the First Respondents/Petitioners were not maintainable as there was no deep and pervasive state control over the affairs of the Appellant/Third Respondent, and the privity of contract existed only between the Appellant/Third Respondent and its wholesale Dealers/Franchisees. The court also held that the dispute between the parties rested on a contractual obligation, and the First Respondents/Petitioners had alternative remedies under the Monopolies and Restrictive Trade Practices Act or the Competition Act 2002.
Issues: The main issues involved in the case were the maintainability of the writ petitions against the Cooperative Society, the applicability of the Monopolies And Restrictive Trade Practices Act to the Cooperative Society, and the existence of privity of contract between the parties.
Ratio Decidendi: The court's decision was based on the lack of deep and pervasive state control over the Cooperative Society, the absence of privity of contract between the parties, and the availability of alternative remedies under the Monopolies and Restrictive Trade Practices Act or the Competition Act 2002.
Final Decision: The court set aside the order allowing the writ petitions and allowed the writ appeals, stating that there shall be no order as to costs.
M.VENUGOPAL, J
1. The Appellant/Third Respondent has preferred these Writ Appeals as against the common order dated 30.08.1999 passed by the learned Single Judge in W.P.Nos.4652 to 4654 of 1999.
2. The learned single Judge while passing common order on 30.08.1999 in the above writ petitions has among other things observed that ...............Even in these cases, the petitioners are being regulated under the provisions of Monopolies And Restrictive Trade Practices Act, 1969. So, in the event of non-supply of the said products, it is the duty of the Court to enforce the same. Moreover, the third respondent is under the all pervasive control of the State Government. In view of the above, the submission of the learned counsel for the third respondent that these writ petitions are not maintainable against the third respondent cannot be sustained in law and accordingly allowed the writ petitions with costs of Rs.2,000/- to be paid by the fifth respondent.
3. According to the learned counsel for the Appellant/Third Respondent, the learned single Judge has committed an error in issuing the writ petitions against the Appellant, a Cooperative Society registered under the Tamil Nadu Cooperative Societies Act 1961 and in fact, as per the Full Bench decisions of this Court in 1992 1 MLJ 154 and 1994 1 MLJ 398, no writ will lie against a Cooperative Society. But this aspect of the matter has not been properly appreciated by the learned single Judge in a real perspective.
4. Proceeding further, the learned counsel for the Appellant/Third Respondent submits that the learned Single Judge has misdirected himself in coming to the conclusion that the Appellant/Third Respondent, a Cooperative Society registered under the Tamil Nadu Cooperative Societies Act is amenable to the writ jurisdiction of this Court since it is under all pervasive control of the Tamil Nadu Government.
5. It is the contention of the learned counsel for the Appellant/Third Respondent that as per Section 3 of the Monopolies And Restrictive Trade Practices Act, 1969 unless the Central Government by notification in the official gazette otherwise direct the said Act, shall not apply to any undertaking owned or controlled by a Corporation (not being a company) established by or under any Central provincial or State Act (vide Section 3(b) and (c) of the Act) and such being the clear cut legal position, the learned single Judge ought not to have allowed the writ petitions.
6. As a matter of fact, the learned single Judge should have directed the First Respondents/Petitioners to approach Monopolies and Restrictive Trade Practices Commission as per Section 10 of the MRTP Act so as to enable the Commission to exercise its power under Section 11 for an investigation by the Director before issuance of process in certain cases and in case of its satisfaction of the existence of prima facie case of any restrictive trade practice as per Section 2(o) of the MRTP Act, 1969 to initiate a full-fledged enquiry as per Section 37 of the Act.
7. That apart, the Learned counsel for the Appellant/Third Respondent takes a plea that the Fifth Respondent/Dealer of the Appellant/Society will be well within its rights to withhold supplies of Butter from any wholesaler or retailer or to cause or procure another supplier to do so if it has a reasonable cause to believe that the wholesaler or the retailer has been using as loss leaders any goods of the same or a similar description whether obtained from the supplier or not and the same shall not be rendered as an unlawful one by virtue of Section 40(2) of the MRTP Act.
8. Advancing his arguments, the learned counsel for the Appellant/Third Respondent contends that the learned single Judge has gone wrong in rendering a finding that the First Respondents/Petitioners are getting profit of 6 paise and this cannot be termed as a loss and that the respondents cannot insist the First Respondents/Petitioners to sell the said products only at the
