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In Re: an Agreement Relating to - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
Reported in(1975)45CompCas646NULL
AppellantIn Re: an Agreement Relating to
Excerpt:
.....applications.4. at the outset mr. sorabjee on behalf of respondents nos. 2 and 3 applied that the notice of inquiry be discharged on the ground that the commission had no jurisdiction to issue the notice under section 10(a)(iv) of act. the remaining of these respondents joined in this contention. although the applications of these respondents do not contain a prayer for discharge of the notice, paragraph 3 of the application sets out the facts on which these respondents rely and states that the complaint is defective and liable to be dismissed. the registrar of restrictive trade agreements did not object to the contention being taken at this stage and we thought that instead of leaving the contention to a subsequent stage of the proceedings we might as well dispose of it since it has.....
Judgment:
1. These are 6 applications filed by the respondents Nos. 1 to 13 (hereinafter referred to as " these respondents ") for an order that the facts on the basis of which notice of inquiry under Section 37 of the Monopolies and Restrictive Trade Practices Act was issued to these respondents be disclosed to them and copies of the requisite documents and records and/ or inspection be given to them, and for an order extending time for filing these respondents' statements of case.

2. The facts leading to these applications may be briefly stated. On 21st November, 1973, the Commission received a memorandum from the All India Crimpers Association, Bombay (consisting of 23 members), drawing the attention of the Commission to an agreement dated the 9th September, 1973, made by and between the respondents. The Crimpers Association alleged that the operation of the agreement resulted in a number of restrictive trade practices. They requested that the Commission should institute an inquiry in the matter. On a perusal of the agreement dated the 9th September, 1973, the Commission was satisfied that the matter required to be inquired into and pursuant to Section 10(a)(iv) of the Monopolies and Restrictive Trade Practices Act, ordered an inquiry into the said restrictive trade practices under Section 37 of the Act. The respondents were accordingly served with a notice under Regulation 7 of the Restrictive Trade Practices (Enquiry) Regulations 1970 (hereinafter referred to as " the regulations"), calling upon them to comply with Regulations 14 and 16. The notice states that the Commission had reason to believe that the respondents had entered into agreement dated the 9th September, 1973, and were indulging in restrictive trade practices of the nature specified in the notice.

3. Under the regulations the respondents were required to file their statements of the case on or before 25th January, 1974. They, however, did not file the statements of the case but these respondents applied for extension of time for filing statements of the case. The Commission extended the time for filing the statements of case up to 15th February, 1974. On 14th February, 1974, instead of filing the statements of the case, these respondents have filed the present applications.

4. At the outset Mr. Sorabjee on behalf of respondents Nos. 2 and 3 applied that the notice of inquiry be discharged on the ground that the Commission had no jurisdiction to issue the notice under Section 10(a)(iv) of Act. The remaining of these respondents joined in this contention. Although the applications of these respondents do not contain a prayer for discharge of the notice, paragraph 3 of the application sets out the facts on which these respondents rely and states that the complaint is defective and liable to be dismissed. The Registrar of Restrictive Trade Agreements did not object to the contention being taken at this stage and we thought that instead of leaving the contention to a subsequent stage of the proceedings we might as well dispose of it since it has been raised.

5. The proposition as stated by Mr. Sorabjee is that each of the provisions of Section 10(a) is a separate and distinct source of jurisdiction of the Commission and any one of them cannot be super-imposed on another. If a complaint of facts has been filed by a consumers' association having at least 25 members or by 25 or more individual consumers then the matter must proceed under Section 10(a)(i) and must satisfy its conditions and requirements. A defective complaint which is liable to be dismissed under Section 10(a)(i) cannot be turned into the knowledge or information of the Commission and cannot be made to do service in place of the Commission's " own knowledge or information". Such knowledge or information cannot be derived from a defective complaint falling under Section 10(a)(i). If a complaint is defective it is liable to be dismissed. If it properly falls under Section 10(a)(i), a preliminary investigation has to be made by the Director of Investigation under Section 11. If the Commission proposes to institute an inquiry upon its own knowledge or information, such knowledge or information cannot be derived from a defective complaint made under Section 10(a)(i); and, further, in order to give jurisdiction to the Commission to proceed under Section 10(a)(iv) its " own knowledge or information" must be derived from another independent inquiry under the Act which is before the Commission.

6. There appears to us to be nothing in Section 10 to limit the sources from which the information of the Commission may be derived. There is also nothing to indicate that it may not be derived from a complaint made by a single consumer. Such information must, however, be satisfactory and reliable. The Commission may check the veracity of the information. There is also obviously nothing in Section 10 to impose a limitation on the jurisdiction of the Commission under Section 10(a)(iv) to the effect that the knowledge or information of the Commission must be derived in the course of another independent inquiry. We are tempted to quote the words of Lord Evershed M.R., quoted by Maxwell in The Interpretation of Statutes, that " the length and detail of modern legislation has undoubtedly reinforced the claim of literal construction as the only safe rule ". If there is nothing to modify, alter, or qualify the language which the statute contains it must be construed in the ordinary and natural meaning of the words or sentences. In our opinion, the words of Section 10 do not justify either of the limitations proposed by Mr. Sorabjee. The words of the statute do not suggest or warrant a restricted construction.

7. Where, however, the language of a statute in its ordinary meaning and grammatical construction leads to manifest contradiction of the apparent purpose of the enactment or to some inconvenience or absurdity which can hardly be intended, a construction may be put upon it which modifies or restricts the meaning of words and even the structure of the sentences. Such cases must indeed be exceptional. Mr. Sorabjee argued that in case of complaint falling under Section 10(a)(i) the provisions of Section 11 makes an investigation by the Director of Investigation compulsory. By treating a complaint by a few consumers as the Commission's information, a defective complaint would be treated on a higher footing and notice of inquiry issued on the basis of such complaint would be defective. This argument, however, loses sight of the fact that where a reference has been received by the Commission from the Central Government or a State Government under Section 10(a)(ii), or an application is received from the Registrar under Section 10(a)(iii), no such preliminary investigation by the Director of Investigation is enjoined. The reason obviously is that, before making a reference or application, a governmental authority is satisfied that the matter requires to be inquired into. This reason is equally applicable to an inquiry ordered by the Commission upon information received by it. The Commission will not order an inquiry unless it has satisfied itself that the matter requires to be inquired into. The satisfaction of the Commission before ordering an inquiry on information received under Section 10(a)(iv) cannot be of lesser value than the satisfaction of the Central or State Government or the Registrar under the provisions of Section 10(a)(ii) or 10(a)(iii). We must, therefore, reject the argument of Mr. Sorabji to the effect that acting on information derived from a complaint of less than 25 consumers or an association of such consumers would be given a higher status than a complaint that falls under Section 10(a)(i). This argument forgets that no inquiry is ordered until there is a preliminary satisfaction of the Commission itself that the matter requires to be inquired into. Before ordering an inquiry under Section 10(a)(iv) on a complaint which does not satisfy the provisions of Section 10(a)(i) the Commission may in fit cases have an investigation made or use the provisions of Section 12(3) for the purposes of collecting information about existing trade practices. It is only when, as a result of such investigation if any ordered by the Commission, it is satisfied that the matter requires to be inquired into that an inquiry is ordered under Section 37.

8. Mr. Sorabji argued that the Commission could only harness into action the provisions of Section 12(3) for the purpose of an inquiry and not before an inquiry is ordered. He argued that the words " for the purposes of any inquiry under this Act " appearing in Section 12(1) also govern the provisions of Section 12(3). We are afraid we cannot accept this contention. The provisions of Section 12(1) expressly use the words " for the purposes of any inquiry under this Act". These words have been omitted from the provisions of Section 12(3) presumably intentionally. On a plain reading, Section 12(1) covers all kinds of inquiries under the Act including inquiries under Chapters III, IV and VI. The provisions of Section 12(3) are, however, applicable only to inquiries under Chapters IV and VI pertaining to monopolistic and restrictive trade practices. A plain reading of the section also shows that the provisions of Sub-sections (1), (2) and (4) of Section 12 are applicable to all proceedings under the Act whereas the provisions of Sub-section (3) are applicable only to trade practices and are not qualified by the words " for the purposes of any inquiry under this Act ". It is obvious that the provisions of Sub-section (3) are intended to be used also for investigations before a formal inquiry is ordered and we so hold.9. Section 8 provides for appointment of Director of Investigation for making investigations for the purposes of the Act. Such purposes would include preliminary investigations before an inquiry is ordered. In fact such a preliminary investigation may be desirable before ordering a formal inquiry where necessary even in cases falling under Section 10(a)(ii) and (iii). It would save people from harassment of formal inquiries in respect of restrictive trade practices. The construction we are putting on Section 12(3) is indeed the most beneficent construction apart from being in our view the only correct construction.

10. Coming to the prayers in the application we find that the Crimpers Association merely furnished information with regard to the making of the agreement dated the 9th September, 1973. The fact of making this agreement is not denied by the respondents. It is the operation, working and giving effect to the provisions of this agreement alone which leads to the restrictive trade practices set out in the notice issued under Regulation 7.

11. In view of the fact that it is not denied that such agreement has been entered into and is in operation, there is no question of disclosure of any facts to these respondents.

12. With regard to the prayer for extension of time, we are of the view that in fact no sufficient grounds have been made for such extension.

Notice under Regulation 7 was issued on 30th November, 1973. No respondent has complained that it was served on him late. The statements of the case had to be filed by 25th January, 1974. This gave ample time to the respondents to file the statements of the case. In spite of this, the respondents applied for extension of time expressly for the purpose of "filing statements of the case ". Time was extended up to 15th February, 1974. No statement of the case has been filed within the extended time. Instead one day before the expiry of the extended time, and more than two months after the service of the notice under Regulation 7, the present applications have been filed. The intention is obviously to gain time. If the allegation of restrictive trade practices against the respondents is correct, such restrictive trade practices can only be for monetary gain at the cost of the community or a section of the society. In such cases time should not be extended.

13. If we reject the application for extension of time, it would result in the respondents being deprived of the right of defence. In our opinion they would deserve this, in view of the fact that they have thrown away the ample time given to them. Notwithstanding the view we have taken, it is argued that the refusal of extension would be a harsh order. We have, therefore, decided to extend the time on the condition that the time so gained by the respondents is with their consent saved in the subsequent proceedings.

14. Accordingly, we reject the contention of the respondents for dismissing or discharging the notice under Regulation 7. We also reject the application for disclosure or inspection of any documents or records. We, however, extend the time for filing the statements of the case by these respondents up to and inclusive of 11th March, 1974, on the condition that these respondents will furnish complete information required by Regulation 16 on or before 15th March, 1974, along with copies of all documents required by Regulation 16(b). If the compliance with Regulation 16 is not complete, the statements of the case will be liable to be struck out.

15. By the consent of parties, the time limited for delivering replies, if any, under Regulation 19 by these respondents to the Registrar is reduced to 7 days from the date of receipt by these respondents of the answers, if any, filed by the Registrar. The time mentioned in Regulations 25 and 26 is also with the consent of the parties reduced to 7 days each.

16. The learned counsel for the respondents stated that their consent to the reduction in time under the regulations will not be understood to prejudice their rights or remedies, if any, in respect of the order passed and the public notice.

17. The four respondents, namely, (1) M/s. J.K. Synthetics Ltd., Kanpur, (2) M/s. Garware Nylons Ltd., Bombay, (3) M/s. Nirlon Synthetic Fibre & Chemicals Ltd., Bombay, and (4) M/s. Modipon Ltd., Modinagar, U.P., will pay to the Registrar costs quantified at Rs. 250 each.

18. After the judgment was pronounced Mr. S.D. Parekh on behalf of respondent No. 22 orally applied that in view of the above order time be given to his clients also to file a statement of the case up to 11th March, 1974, on the same terms except as to costs. Order accordingly.


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