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All India Motor Transport Vs. Goodyear India Ltd. and ors. - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
Reported in(1976)46CompCas315NULL
AppellantAll India Motor Transport
RespondentGoodyear India Ltd. and ors.
Excerpt:
order on the application dated 7th january, 1975, of respondents nos. 1 to 4 and 7 and 8 1. this is an application by the respondents nos. 1 to 4 and 7 and 8, praying, (a) that the commission should discharge the notice of inquiry dated the 23rd november, 1974, issued to all the respondents, (b) that the commission should furnish to the applying respondents a copy of the report of the director of investigation, (c) that the commission should furnish particulars prayed for in the application, and (d) that the commission should extend the time for filing the respondents' reply to the complaint by four weeks from the date particulars are furnished.2. the facts leading to the present application may be briefly stated.the complainant claims to be a trade or consumers' asssociation having a.....
Judgment:
Order on the application dated 7th January, 1975, of Respondents Nos. 1 to 4 and 7 and 8 1. This is an application by the respondents Nos. 1 to 4 and 7 and 8, praying, (a) that the Commission should discharge the notice of inquiry dated the 23rd November, 1974, issued to all the respondents, (b) that the Commission should furnish to the applying respondents a copy of the report of the Director of Investigation, (c) that the Commission should furnish particulars prayed for in the application, and (d) that the Commission should extend the time for filing the respondents' reply to the complaint by four weeks from the date particulars are furnished.

2. The facts leading to the present application may be briefly stated.

The complainant claims to be a trade or consumers' asssociation having a membership of not less than 25 persons. It was formerly known as All India Motor Union Congress and has since changed its name to All India Motor Transport Congress (hereinafter for the sake of brevity referred to as "the complainant"). The eight respondents are tyre manufacturers in India. The complainant made a complaint dated 18th December, 1971, to the Commission alleging that the respondents are indulging in certain restrictive trade practices. As this complaint was not verified in accordance with the regulations of the Commission, the complainant sent a verified complaint dated 14th November, 1972, The complainant also sent a supplementary complaint dated 17th August, 1973, to the Commission. Copies of these two complaints have been furnished to the respondents. These complaints were made under the provisions of Section 10(a)(i) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter for the sake of brevity referred to as "the Act" ).

Section 11 of the Act requires that in respect of any restrictive trade practice of which a complaint is made under Section 10(a)(i) the Commission shall, before issuing any process requiring the attendance of the person complained against, cause a preliminary investigation to be made by the Director of Investigation (hereinafter for the sake of brevity referred to as "the Director" ) in such manner as the Commission may direct for the purpose of satisfying itself that the complaint required to be inquired into. We might mention that the Director is an officer appointed by the Central Government in consultation with the Commission under the provisions of Section 8 of the Act. Accordingly, the complaints received from the complainant were referred to the Director. On September 21, 1974, the Director submitted to the Commission his report of the preliminary investigation dated 16th September, 1974. On perusing the same the Commission was satisfied that the complaints of the complainant required to be inquired into.

Accordingly, on 23rd November, 1974, the Commission issued to the respondents a notice of inquiry. The notice sets out the facts of complaint having been received from the complainant, its reference to the Director under Section 11 of the Act and the fact that a report had been received and that the Commission was satisfied that the complaint required to be inquired into in respect of certain trade practices set out in the notice. After the service of the notice and entering appearance the respondents have filed the present application.

3. The respondents have not pressed their prayer for discharge of the notice of inquiry dated the 23rd November, 1974, but have argued with considerable vehemence their prayer for furnishing a copy of the report of the Director on several grounds.

4. The first ground on which the respondents have insisted on a copy of the report of the Director is that in respect of complaints under Section 10(a)(i), Section 11 of the Act makes a reference of the complaint to the Director for a preliminary investigation mandatory and, therefore, the report of the Director is the foundation of the jurisdiction of the Commission and, therefore, a copy of the report must be furnished to the persons complained against. It is true that Section 11 makes it compulsory that a complaint received by the Commission under Section 10(a)(i) should be referred to the Director for preliminary investigation. It, therefore, follows that if the Commission had not referred the complaint to the Director for preliminary investigation but had ordered an inquiry straightaway the jurisdiction of the Commission may have been affected. But there is no grievance on the ground that the complaint was not so referred or that the report of the Director was not obtained. But furnishing a copy of the report to the persons complained against would depend upon the law of the land including the Regulations made by the Commission and it cannot be said that not furnishing a copy of the report of the Director to the person complained against whether rightly or wrongly would affect the jurisdiction of the Commission to hold an inquiry.

5. If the Commission refuses to furnish a copy of the report to the person complained against and in an appeal under Section 55 of the Act the Supreme Court comes to the conclusion that the copy was wrongly refused it may set aside the final order of the Commission, or pass some other appropriate order as it deems fit. But it cannot be said that the refusal to furnish a copy affects the jurisdiction of the Commission to hold an inquiry. It may at worst be a wrong decision on a point of law. But every wrong decision on a point of law does not affect the jurisdiction of the deciding Tribunal. Section 11 of the Act does not require that a copy of the report of the Director shall be furnished to the persons complained against. We shall consider later whether the Regulations made under the Act or any other law so require.

6. The second ground on which a copy of the report of the Director is claimed is that these proceedings are governed by the Restrictive Trade Practices (Enquiry) Regulations, 1970, and not by the Monopolies & Restrictive Trade Practices Commission Regulations, 1974, and, therefore, the respondents are entitled to the copy. We are afraid there are 3 flaws in this argument. The first flaw is that, although the first complaint in these proceedings duly verified was received on 14th November, 1972, no judicial inquiry was ordered on the complaint.

As required by Section 11 the complaint was referred to for preliminary investigation to the Director. The judicial inquiry under Section 10(a)(i)/37 of the Act was commenced on 23rd November, 1974. The 1974 Regulations came into force on 13th July, 1974. In our opinion, therefore, the procedure applicable on 23rd November, 1974, will be applicable to the proceedings and not the earlier procedure. The second flaw is that the argument postulates that the 1970 Regulations gave the respondents a vested right to get a copy of the report of the Director.

This is not so. The 1970 Regulations were silent on the question as to whether the respondents are or are not entitled to a copy of the report of the Director. Silence does not create a vested right. As against that, Section 18 of the Act provides that subject to the provisions of the Act the Commission shall have power to regulate the procedure and conduct of its business so that on matters on which the Regulations were silent the Commission could have regulated its procedure and conduct of its business. This did not create a vested right in the respondents. Regulation 21 of the 1974 Regulations provides that the reports of the Director and any other material or evidence collected by him shall be treated as confidential and shall not be disclosed to any party except as otherwise provided in the Regulations. The report of the Director and any evidence or other material collected by the Director or any part of such report, evidence or material may at the discretion of the Commission at any stage of an inquiry be brought on record for the purpose of the inquiry and the Commission shall communicate the report, evidence or material so brought on record to the parties concerned and give them an opportunity to rebut the material so brought on record. In our opinion, under the 1974 Regulations which are applicable to the present inquiry the respondents would not be entitled to a copy of the report unless the report or parts of it were introduced into evidence later in which case the respondents will be entitled to the report or its part as the case may be. The third flaw in the argument of the respondents is in the interpretation sought to be placed by the respondents on Regulation 86 of the 1974 Regulations, This regulation provides that the repeal of 1970 Regulations shall not affect the previous operation of the Regulations so repealed or anything duly done or suffered thereunder, or affect any right, privilege, obligation or liability acquired, accrued or incurred under the said Regulations, or affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation or liability and all investigations and legal proceedings shall be continued or enforced "as if the present Regulations had not been made".

7. Mr. Desai, on behalf of the respondents, argued that the expression "as if the present regulations had not been made" means that the old procedure would apply. In our opinion, all that the expression means is that the proceedings would survive "as if the present Regulations had not been made" although the proceedings would be governed by the new procedure. No one has any vested right in any procedural rule and, therefore, any change in the procedural law has a restrospective effect in the sense of being applicable even to judicial proceedings initiated before the change provided this can be done without affecting any substantive rights acquired by any of the parties to the proceedings before the change: Ram Singh v. Crown, AIR 1950 East Punjab 25, 32 [FB] . As we have observed hereinabove the old Regulations did not confer on the respondents a right to get a copy of the report of the director.

Therefore, there is no question of the new procedure affecting any substantive or vested rights acquired by the respondents to the proceedings before the change. Subject to that the respondents would not have any vested right in the old procedure and any change in the procedural law has a retrospective effect in the sense of being applicable even to judicial proceedings initiated before the change. In this case, however, as we have observed hereinabove the judicial proceedings themselves were commenced after the 1974 Regulations came into force and the question of applicability of the 1970 Regulations does not arise. A Division Bench of the Bombay High Court has held also in Hope Mills Ltd. v. Vithaldas Pranjivandas, [1910] 12 Bom LR 730, 736 that when an enactment deals with the procedure only unless the contrary is expressed the enactment applies to all actions whether commenced before or after the passing of the Act. In our opinion the ground of applicability of old Regulations does not help the respondents. Further, in our opinion the 1970 Regulations do not apply and even if they apply they do not confer any right on the respondents to get a copy of the report. One can go even further and say that whereas the old Regulations were silent on the question of furnishing a copy of the director's report to the respondent and so the respondents could not have obtained a copy of the report at all, the 1974 Regulations are more beneficial to the parties inasmuch as they become entitled to a copy of the report if the Commission brings the same on record. Of course it goes without saying that if the report or any part of the same is introduced in evidence the parties would be entitled to get a copy of the report even under the rules of natural justice. In the present case, the copy of the director's report has neither been brought on record nor introduced in evidence. The only use to which the report has been put is the one contemplated by Section 11 of the Act.

The Commission has used it "for the purpose of satisfying itself that the complaint requires to be inquired into". The purpose of the report has exhausted itself for the time being. If at a subsequent stage it is brought on record or used in evidence both parties will undoubtedly be entitled to a copy of the report or part of the same which may be either brought on record or introduced in evidence.

8. Mr. Desai relied upon two cases both in respect of sales tax. These are cases reported in Abdul Aziz Ansari v. State of Bombay, [1958] 9 STC 135 ; AIR 1958 Bom 279 and Commissioner of Sales Tax v. Amarnath Ajitkumar of Bhind, [1971] 28 STC 702 ; AIR 1972 SC 38 . These are in respect of proceedings already commenced under the repealed Acts. It was held that the period of limitation for commencing the proceedings prescribed by the repealed Acts would apply. These are undoubtedly cases of vested right in the period of limitation and have no application to the facts of the present case. On the other hand, Mrs.

Pappu on behalf of the director has invited our attention to the case of Lalji Raja & Sons v. Firm Hansraj Nathuram, AIR 1971 SC 974 wherein it has been held that the non-executability of a decree within a particular territory, namely, Madhya Bharat, was neither a privilege nor a vested right within the meaning of Section 20(1)(b) of the Civil Procedure Code amending Act. There are observations in the judgment to indicate that there is no vested right in procedure.

9. The third ground on which a copy of the report of the director is claimed is that under Section 11 of the Act, the Commission has used the report for satisfying itself that the complaint requires to be inquired into and, therefore, rules of natural justice require that a copy of the report be furnished to the respondents. Mr. Desai further argued that rules of natural justice must be read into the statute. We have no doubt and in fact a catena of judgments of the Supreme Court has decided that where civil rights of parties are affected rules of natural justice must be read into a statute whether they are expressly provided for or not. But they apply only when the statute or the Rules and Regulations framed thereunder do not expressly or by necessary implication exclude them. We must now find out what the rules of natural justice are and whether they require that a copy of the report used by the Commission for the purpose of satisfying itself that the complaint requires to be inquired into should be furnished to the person against whom the inquiry is ordered. This also depends upon the express provisions of the statute and Regulations made under it.

10. Section 11 of the Act does not provide that a copy of the report of the director should be furnished to the person complained against. We have noticed above that Regulation 21 of the 1974 Regulations provides that the report shall be confidential and shall not be disclosed to any party except when the same or parts of it are used in the inquiry against the respondents in which case the report or the parts used must necessarily be furnished to the parties. It is, therefore, clear that the Regulations not only do not provide for furnishing a copy of the report to the parties at this stage but expressly prohibits such course. These Regulations are statutory provisions. In case of conflict between rules of natural justice and statutory provisions the latter must prevail. This was held by the Supreme Court in the case of Union of India v. J.N. Sinha, AIR 11. But assuming that there was no conflict between rules of natural justice and statutory provisions and the rules of natural justice applied in this case, let us find out what the rules of natural justice require. Here again, there is a catena of decisions of the Supreme Court on the point. We need only refer to the case of Union of India v.T.R. Varma, AIR 1957 SC 882 wherein it is observed that the law requires that Tribunals which are judicial in character should observe rules of natural justice in the conduct of the inquiry and if they do so their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that which obtains in a court of law. The Supreme Court further observed that stating it broadly and without intending to be exhaustive it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence and that he should be given the opportunity of cross-examining the witnesses examined by that party and that no materials should be relied on against him without his being given an opportunity of explaining them.

If these rules are satisfied, the inquiry is not open to attack. The above judgment lays down that no materials should be relied on against a party without his being given an opportunity of explaining them.

Regulation 21 is fully in conformity with this opinion of the Supreme Court. No part of the report will be used in the inquiry against the respondents without furnishing to the respondents the materials used against it. The Supreme Court does not lay down that if any material is used for coming to the conclusion that an inquiry is necessary, it should be furnished to the respondent. In fact a contrary position was laid down by the Supreme Court in the case of Suresh Koshy George v.University of Kerala, AIR 1969 SC 198 where in the judgment of Shelat J. it is observed at page 204 as follows: "There seems to be an erroneous impression in certain quarters evidently influenced by the provisions in Article 311 of the Constitution particularly as they stood before the amendment of that article that every disciplinary proceeding must consist of two inquiries, one before issuing the show cause notice to be followed by another inquiry thereafter. Such is not the requirement of the principles of natural justice. Law may or may not prescribe such a course. Even if a show cause notice is provided by law, from that it does not follow that a copy of the report on the basis of which the show cause notice is issued should be made available to the person proceeded against or that another inquiry should be held thereafter." 12. In our opinion an inquiry under Section 37 of the Act is almost on the same footing. It is a disciplinary proceeding against a business undertaking alleged to be indulging in anti-social practices and the consequence of the inquiry is an injunction restraining the continuation of the anti-social act. Section 11 of the Act does not contemplate two inquiries--one before and the other after the issuing of a notice of inquiry. If that were so, the respondents would further insist that they should be heard before the Commission is satisfied that the matter requires to be inquired into. Neither the law prescribes such a course nor the rules of natural justice so require.

13. Mr. Desai on behalf of the respondents did suggest that once the Commission had read the director's report even for the purpose of satisfying itself that an inquiry was necessary it will leave some impressions or traces of influence on the minds of the Commission which may affect the inquiry proper. We are afraid this argument is without substance. The argument forgets that Section 5 of the Act requires that the Chairman of the Commission has to be a person who is or has been a judge of the Supreme Court or of a High Court and the members thereof have to be persons of ability, integrity and standing who have adequate knowledge or experience of or have shown capacity in dealing with problems relating to law, commerce, accountancy, industry, public affairs or administration. It is implied that the Chairman and the members are trained to look at things objectively and to come to conclusions in the inquiry only on the material produced in the inquiry and not anterior to it.

14. Mr. Desai also invited our attention to the case of Surendra Singh Kanda v. Govt. of the Federation of Malaya, [1962] AC 322 (PC) decided by the Privy Council in an appeal from Malaya, where the question was about the dismissal of a public servant. There had been police disciplinary proceedings and findings of the board of inquiry were furnished to the adjudicating officer but not to the accused police officer and it was decided that there was failure of rules of natural justice. We are afraid this case has no application, because a copy was furnished to the adjudicating officer in the adjudication proceedings.

In the case in hand if the report is used in the adjudication proceedings a copy will undoubtedly be furnished to the parties.

15. Mr. Desai also referred to the case of Wiseman v. Borneman, [1967] 3 All ER 1045 ; 71 ITR 651 (CA) decided by the Court of Appeal in England wherein it was observed that there is no difference in principle so far as observance of rules of natural justice was concerned between decisions which were final and those which were not final. But, as against this, the House of Lords decided in the case of Pearlberg v. Varty, [1972] 2 All ER 6 (HL) that the question of determination of prima facie case was an administrative decision and there was no requirement that for determining whether there was a prima facie case or not the Tribunal must hear both the parties. The only duty of the Tribunal is to act fairly. We are, therefore, of the opinion that if there is no requirement that before determining whether there was a prima facie case or not the parties should be heard, there is neither purpose nor requirement for furnishing a copy of the report to the parties.

16. Mr. Desai also referred to the fact that in criminal cases a copy of the police report and other documents are furnished to the accused.

We, however, find that this is so because of the statutory requirements of Sections 207 and 208 of the Code of Criminal Procedure and not because of any rule of natural justice. If there had been any such requirement in the Act or the Regulations framed under it, the respondents would have been entitled to a copy of the report.

17. In the light of the above discussion we are of the view that the respondents are not entitled to a copy of the report of the director at this stage.

18. The parties also referred to several other cases in this connection which we think are unnecessary to discuss. These are : Barium Chemicals Ltd. v. Company Law Board,(SC) Ram Kristo Mandal v. Dhankisto Mandal, AIRState Bank of India v.Rajendra Kumar Singh, AIRRohtas Industries Ltd. v. S.D.Agarwal,(SC) A.K. Kraipak v. Union of India, AIR 1970 SC 150 M.K.S. Seyed Mohamed Shareef v. Commissioner for Registration of Indian and Pakistani Residents, [1966] AC 47 (PC) Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax [1954] 26 ITR 775 (SC) and Lawrence D'Souza v. State of Bombay, AIR 19. Mr. Desai argued that assuming that the 1974 Regulations apply to this case, Regulation 21 should be read down and its applicability confined only to the reports of the director under Regulation 19(2). In our opinion, there is no difference between the report of the director under Regulation 19(1) and Regulation 19(2), for in both cases the preliminary investigation is caused to be made by the Commission for the purpose of satisfying itself whether the inquiry should be instituted or not. Nextly, it is contended by Mr. Desai that Regulation 21 is ultra vires the regulation-making power of the Commission under Section 66. Section 66 confers power on the Commission to make regulations for the efficient performance of its functions under the Act and particularly, inter alia, the general procedure and conduct of the business of the Commission. We do not see any reason how the provisions of Regulation 21 cannot be said to be for the efficient performance of the Commission's functions under the Act and related to procedure and conduct of the business of the Commission.

20. Another prayer in the application of the respondents is for particulars of the allegations in the notice. The particulars demanded are set out in paras. 12 to 18 of the application.

21. The first objection taken to this part of the application is that this is not the proper stage to demand particulars. Section 12(1) of the Act makes certain parts of the Code of Civil Procedure applicable to the inquiry under the Act. Order VI, Civil Procedure Code, pertaining to particulars is not one of the provisions made applicable.

Regulation 77 also makes certain provisions of the Civil Procedure Code applicable to the inquiry. But Order VI is not one of them. Regulation 74 of the 1974 Regulations framed under the Act provides for delivery of further and better particulars when parties apply for directions after the pleadings are closed. In this case the respondents have not even filed their replies. The stage under Regulation 74 for particulars has not arrived. Mr. Desai invited our attention to Regulation 15 which provides that in respect of any matter for which no provision has been made in the Regulations the provisions of the Civil Procedure Code shall apply mutatis mutandis to the proceedings before the Commission.

We are afraid this regulation is not applicable because Regulation 74 makes an express provision for particulars. We are, therefore, of the view that the application for particulars should be rejected at this stage as it is premature.

22. The next point argued by Mr. Desai on behalf of the respondents is that under Section 10(a)(i) the Commission may inquire into a restrictive trade practice upon receiving a complaint of facts which constitute such practices. He also pointed out that Regulation 53 also provides that a complaint under Section 10(a)(i) of the Act shall contain the facts complained of which constitute a restrictive trade practice. According to him the complaints of the complainant do not contain facts. This raises a question as to what are the facts which constitute a restrictive trade practice. The provisions of the Act and the Regulations suggest that there should be a set of facts in the complaint and they should indicate a restrictive trade practice. There was considerable debate on the connotation of the word "fact". In our view in the context in which the word is used it is used in contra-distinction to the word "inference". The complaint should, therefore, set out the basic facts on which the allegation is founded.

The fact would connote something which according to the complainant has already happened or is happening. It would exclude all imagination or something which has not happened or is not happening. Fact is not merely a state of mind or a perception as was suggested by Mrs. Pappu.

Facts are something which are objective and which can be ascertained or established without the assistance of the person alleging or refuting the facts. Facts have to be distinguished from inferences that can be drawn from the facts or from the evidence which supports the facts or proves the facts. It is from this point of view that the complaint has to be examined. Notice of inquiry merely paraphrases the restrictive trade practices complained of in the complaint. It is the complaint which is to be inquired into. In inquiries under Section 10(a)(i) of the Act the notice is not a pleading but merely an intimation of inquiry. It is a process of the Commission like a writ of summons issued by the court and no particulars of it can be asked. The complaint is the pleading and contains what is to be inquired into.

Examining paras. 12 to 18 of the application we find that what the applicants want are the instances of restrictive trade practices alleged against the respondents and the evidence of such instances. We are afraid the respondents are not entitled either to the instances or to the evidence of those instances. The instances themselves will be the evidence of the restrictive trade practices alleged against the respondents. In fact the purpose of asking for a copy of the report of the director is also to get hold of the instances and the evidence of the alleged restrictive trade practices. In asking for particulars of instances and evidence the respondents are asking for a copy of the report by the back door to which they are not entitled; We have carefully examined the allegations in the complaints and we find that the facts and ingredients of the alleged restrictive trade practices are sufficiently set out therein. There is no vagueness which would disable the respondents from replying to the complaints. The complainants have no powers of investigation. They cannot be expected to gather many instances of the respondents indulging in restrictive trade practices. Their position is quite different from that of a plaintiff in a suit and we cannot import wholesale the notions of Order VI, Civil Procedure Code, in the matter--more particularly when those provisions have not been made applicable either by the Act or by the Regulations framed under it. The prayer for particulars at this stage must, therefore, be rejected.

23. In the result we dismiss the application of the respondents with costs. The matter has been heard for a good part of two days. We quantify the costs at Rs. 1,000. The costs shall be paid to the director who has appeared by counsel.

24. The respondents were served with a notice of inquiry in the first week of December, 1974. Under Regulation 67 the reply had to be filed by the respondents within 4 weeks of their entering appearance. The reply was due in the first week of January, 1975. The present application was filed on 7th January, 1975, after waiting for the full period of four weeks given for filing a reply to the notice. This shows unjustified delay on the part of the respondents. The respondents have applied for extension of time for filing of reply by four weeks from the date the particulars are furnished. We have, however, rejected the application for particulars and other reliefs. We extend the time for filing the replies by three weeks from today.


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