Order on the application of respondent No. 1 dated the 8th January, 1975, and of respondent No. 2 dated the 20th January, 1975.
1. On 8th January, 1975, the respondent No. 1 wrote a letter to the Secretary to the Commission stating that "in order to enable us to submit our reply to the above notice within time we would request you to furnish us at an early date with the information or materials in the possession of the Commission on which the Commission has issued the notice and instituted the proceedings at an early date." On 20th January, 1975, the respondent No. 2 made an application praying : (a) that the notice of enquiry dated 19th December, 1974, be discharged and, in the alternative, (b) the Commission may furnish to the respondents particulars set out in paras. 6 to 9 of the application, and (c) to furnish information sought in para. 12 of the application, and (d) the time for filing the reply be extended by a period of at least four weeks from the date on which the particulars and/ or the information are furnished.
2. On 19th December, 1974, the Commission issued to the respondents a notice of suo motu inquiry under Section 10(a)(iv) and Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter for the sake of brevity referred to as the Act), stating that the Commission had information that the respondent No. 1 manufactured sewing needles and respondent No. 2 distributed and sold the said sewing machine needles manufactured by the respondent No. 1, that the respondent No. 1 was a monopolistic undertaking in respect of sewing machine needles and that the two respondents were indulging respectively in restrictive trade practices of the following nature : (i) M/s. Singer-TVS Ltd. has in practice made M/s. Singer Sewing machine Company an exclusive dealer for the sale and supply of sewing machine needles manufactured by M/s. Singer-TVS Limited, (ii) M/s. Singer Sewing Machine Company is granting discounts and other benefits on the basis of turnover including minimum turnover ; (iii) M/s. Singer Sewing Machine Company is indulging in a large scale arbitrary termination of dealership for sale of sewing machine needles supplied by it which may have the effect of preventing or restricting competition and/or affecting the flow of supplies in the market in such manner as to impose on the consumers unjustified costs or restrictions ; (iv) M/s. Singer TVS Ltd. and M/s. Singer Sewing Machine Company have adopted the practice of distribution and supply of sewing machine needles which is bringing about manipulation of prices or conditions of delivery in such manner as to impose on the consumers unjustified costs or restrictions.
3. The respondent No. 2 has not pressed its prayer for the discharge of the notice of enquiry dated the 19th December, 1974. Both the respondents have, however, pressed their prayers for furnishing particulars and information.
4. 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 or deemed to be closed. In this case the respondents have not even filed their replies and the stage under Regulation 74 for particulars has not arrived. Mr. Desai for respondent No. 2 invited our attention to Regulation 15 which provides that in respect of any matter in 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.
5. Examining the application of the respondent No. 2 for particulars we find that the said respondent asked for "all the information that the Commission has in possession in relation to the restrictive trade practices alleged against the said respondent". In para. 3 of the application the said respondent states that an allegation of restrictive trade practice is per se an allegation of misconduct in law and it is absolutely necessary and in accordance with fair play and principles of natural justice that the allegation should include the exact nature of the alleged misconduct and the specific instances of it. The respondent No. 2 has also stated in the application that without such particulars being furnished the Commission would not have the jurisdiction to inquire into the matter and it is a condition precedent for an inquiry under Section 10(a)(iv) of the Act that a notice consisting of all material particulars should be furnished to the respondents. We find no such provision in Section 10(a)(iv). The Regulations provide in respect of inquiries under Section 10(a)(i), (ii) and (iii) that facts constituting the restrictive trade practices should be stated. We would extend this by analogy to a notice under Section 10(a)(iv) and hold that the respondents would be entitled to the facts constituting the restrictive trade practices but not to instances and the evidence of the alleged restrictive trade practices.
Section 10(a)(i) itself and Regulations 53, 54 and 55 in respect of complaints, references and applications talk of facts constituting restrictive trade practices.
6. In our opinion, on the analogy of these provisions the respondents would at best be entitled to know the facts constituting the restrictive trade practices.
7. In our view in the context in which the word "fact" is used, it is used in contra-distinction to the word "inference". The notice should, therefore, set out the basic facts on which the allegation is founded.
The fact connotes something which has already happened or is happening.
It would exclude all imaginary or something which has not happened, or is not happening. 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 notice has to be examined.
8. We are afraid the respondents are not entitled cither to the instances or to the evidence of those instances of restrictive trade practices. The instances themselves will be the evidence of the restrictive trade practices alleged against the respondent.
9. We have carefully examined the notice of enquiry and we find that the facts which are the ingredients of the alleged restrictive trade practices are sufficiently set out therein. They are specific, clear and intelligible and can bring home to the respondents what is being alleged against them and, in our opinion, should, with no difficulty, enable them to reply. There appears to be a slight vagueness in the alleged restrictive trade practices Nos. (iii) and (iv). In order to remove this vagueness we order that the said paras, be substituted by the following : (iii) M/s. Singer Sewing Machine Company is indulging in a large scale arbitrary termination of dealerships for which it has been unable to state any satisfactory ground for sale of sewing machine needles supplied by it which may have the effect of preventing or restricting competition and/or affecting the flow of supplies in the market in such manner as to impose on the consumers unjustified costs or restrictions ; (iv) M/s. Singer TVS Ltd.--which is a monopolistic undertaking--is indulging in restrictive trade practices enumerated under item No. (i) above and M/s. Singer Sewing Machine Company is indulging in restrictive trade practices enumerated in items Nos. (i), (ii) and (iii) above. The said practices relate to distribution and supply of sewing machine needles and tend to bring about manipulation of prices or conditions of delivery in such manner as to impose on the consumers unjustified costs or restrictions ; and the notice of enquiry be amended accordingly. There will be no vagueness in the notice of enquiry so amended which would disable the respondents from filing their replies to the notice.
10. The prayer for particulars and information at this stage must be rejected, and we order accordingly.
11. The respondents have applied for extension of time for filing of reply by four weeks from the date the particulars and information are furnished. As we have rejected the application for particulars and information and the respondents are aware of the amendments in the notice of inquiry, we extend the time for filing the replies by four weeks from today.
12. In the circumstances of the case, there will be no order as to costs.