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In Re: Indian and Eastern - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
Reported in(1976)46CompCas165NULL
AppellantIn Re: Indian and Eastern
Excerpt:
.....commission ordered the director of research to carry out a study of restrictive and monopolistic trade practices in the business of advertising in newspapers and periodicals and on november 4, 1974, the commission directed him to carry out a study in respect of the trade practices relating to changes in the prices of newspapers. section 10(a)(iv) of the monopolies and restrictive trade practices act, 1969, empowers the commission suo motu to enquire into any restrictive trade practice and section 10(b) similarly empowers the commission to enquire suo motu into any monopolistic trade practice. the commission has in many cases thought it desirable to order a preliminary study before ordering a formal inquiry where necessary as such a course would save the concerned undertaking from.....
Judgment:
1. On September 23, 1974, the Commission ordered the Director of Research to carry out a study of restrictive and monopolistic trade practices in the business of advertising in newspapers and periodicals and on November 4, 1974, the Commission directed him to carry out a study in respect of the trade practices relating to changes in the prices of newspapers. Section 10(a)(iv) of the Monopolies and Restrictive Trade Practices Act, 1969, empowers the Commission suo motu to enquire into any restrictive trade practice and Section 10(b) similarly empowers the Commission to enquire suo motu into any monopolistic trade practice. The Commission has in many cases thought it desirable to order a preliminary study before ordering a formal inquiry where necessary as such a course would save the concerned undertaking from inconvenience of formal inquiries in respect of restrictive and monopolistic trade practices because it may be that as a result of such preliminary studies the formal inquiry may never be launched.

2. Pursuant to the order of the Commission certain information was sought from several parties including the Indian and Eastern Newspaper Society. In its letter dated the 7th January, 1975, the Society raised certain legal contentions with regard to the power of the Commission to seek such information and desired a hearing. Accordingly, the Society was heard on 21st January, 1975.

3. The first contention taken by Mr. J.M. Mukhi on behalf of the Society is that the Society has not been served with any formal order of the Commission authorising the Director of Research to ask for the information. It appears to us that a formal order becomes necessary only when law prescribes that the order should be formal or drawn up in a formal manner. Where law does not enjoin a formal order all that is necessary is that there should be an order of the Commission which may be on the files of the Commission. Such order could be communicated to the party such as the Society before us by the Secretary or other responsible officer of the Commission. In this case, such orders exist on the files of the Commission and are dated September 23, 1974, and November 4, 1974. The questionnaire prepared by the Director of Research has had the approval of the Commission. The Director of Research has communicated to the Society by his letters dated October 30, 1974, and November 25, 1974, that he was seeking the information under the directions of the Commission and pursuant to Section 12(3) of the Act, This fact was also communicated to the Society by the Secretary of the Commission in his letter dated December 23, 1974. It appears to us that it has been sufficiently communicated to the Society that the Director of Research was seeking information from it under the authority of the Commission. We find no substance in the contention that a formal drawn up order must be served on the Society.

4. The next contention taken by Mr. Mukhi is that, as there is no inquiry ordered under Section 10 and/or Section 37 of the M.R.T.P. Act, the Commission cannot lawfully require the Society to furnish documents or information in connection with an investigation. This contention does not appear to us to be correct because while Section 12(1)of the Act empowers the Commission to exercise certain powers for the purpose of an inquiry which may be any type of inquiry under the Act, Section 12(3) empowers the Commission even without the existence of an inquiry to require any person to furnish documents or information with regard to the trade practices, the examination of which may be required for the purposes of the M.R.T.P. Act, 1969. This point has already been determined by us by a judgment dated 5th March, 1974, in Inquiry No.20(3)-RTP/73 (In the matter of Agreement relating to Nylon Filament Yarn, [1975] 45 Comp Cas 646, 650 (MRTPC)). In that matter Mr. S.J.Sorabjee had raised the contention before us 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. In that judgment we have observed as under : "Mr. Sorabjee argued that the Commission could only harness into action the provisions of Section 12(3) for the purpose of an enquiry and not before an inquiry is ordered. He argued that the words 'for the purposes of an 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 used 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 Chapter 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. 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 enquiry 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." 5. We might further add that while Section 12(1) qualifies the powers of the Commission to be "for the purposes of an inquiry under this Act", Section 12(3) does not use the above qualifying words but only enjoins that the information or documents called for should be in connection with trade practices "the examination of which may be required for the purposes of the Act". Undoubtedly, a preliminary study or investigation prior to the exercise of powers under Sections 10(a)(iv) and 10(b) cannot be said not to be "relating to any trade practices the examination of which may be required for the purposes of the Act". As we have observed in the judgment referred to hereinabove a preliminary investigation would save citizens from inconvenience of formal inquiry in respect of restrictive and monopolistic trade practices and that the construction we have put on Section 12(3) is indeed most beneficent construction apart from being in our view the only correct construction.

6. We might further add that Regulation 35 made by the Commission in exercise of the powers conferred on it by Sections 18 and 66 of the M.R.T.P. Act empowers the Commission to direct any of its officers to study and investigate and report or furnish information on any trade practice as may constitute or contribute to monopolistic or restrictive trade practice existing in any trade or alleged to have been practised by any producer, distributor or dealer or a group of producers, distributors or dealers. The reports of or information furnished by such officer and other material or evidence gathered by him is treated as confidential and is not disclosed to any party except as provided in Section 60 of the Act or for the purposes of a regular inquiry which is also a purpose of the Act.

7. In view of the above we reject the second and last contention of Mr.

Mukhi.

8. After hearing Mr. Mukhi on the question of extension of time for filing replies to the Commission's questionnaire, we extend the time up to 31st March, 1975. The Society has agreed to furnish the information by that date.


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