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Registrar of Restrictive Trade Vs. Ex-cello India Ltd. and ors. - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
Reported in(1976)46CompCas605NULL
AppellantRegistrar of Restrictive Trade
RespondentEx-cello India Ltd. and ors.
Excerpt:
1. the registrar of restrictive trade agreements has filed the present application under sections 10(a)(iii) and 37 against 5 parties. of these, the respondent no. 1 is a manufacturer of certain parts of machinery and respondents nos. 2 to 5 are some of the distributors. the respondent no. 1 has entered into certain agreement with its distributors including the respondents nos. 2 to 5. the said agreement is annexed to the application. the registrar has set out in his application the clauses of the agreement which according to him relate to restrictive trade practices. he has prayed that the commission may hold an inquiry into these restrictive trade practices and pass such orders as it may deem fit and proper. the respondent no. 1 has filed a reply. it also appeared at one stage through.....
Judgment:
1. The Registrar of Restrictive Trade Agreements has filed the present application under Sections 10(a)(iii) and 37 against 5 parties. Of these, the respondent No. 1 is a manufacturer of certain parts of machinery and respondents Nos. 2 to 5 are some of the distributors. The respondent No. 1 has entered into certain agreement with its distributors including the respondents Nos. 2 to 5. The said agreement is annexed to the application. The Registrar has set out in his application the clauses of the agreement which according to him relate to restrictive trade practices. He has prayed that the Commission may hold an inquiry into these restrictive trade practices and pass such orders as it may deem fit and proper. The respondent No. 1 has filed a reply. It also appeared at one stage through an advocate who made a statement to the Commission that the respondent No. 1 did not desire to contest the application of the Registrar. Proceedings against the respondents Nos. 2 to 5 are ex parte.

3. On behalf of the Registrar an affidavit dated 2nd August, 1975, of Mr. P.C. Sen, Assistant Registrar, has been filed in ex parte proof. We have permitted the same to be filed under the provisions of Order XIX, Rule 1, Code of Civil Procedure.

4. We have carefully gone through the agreement and find that Clauses 2(a) and (b), 5, and 20(a) allocate an area to each distributor for the disposal of goods. These clauses fall under Section 33(1)(g) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter for the sake of brevity referred to as " the Act"). We also find that Clauses 6 and 25(a) and (b) restrict each dealer in the course of his trade from acquiring or otherwise dealing in any goods other than those of respondent No. I. These fall under Section 33(1 )(c) of the Act.

5. We also find that Clauses 17(a) to (h) of the agreement restrict or are likely to restrict persons or class of persons to whom goods may be sold. This practice falls under Section 33(l)(a) of the Act.

6. We have also examined the above practices from the view-point of the definition of restrictive trade practice in Section 2(o) of the Act and we are of the view that these practices may have the effect of preventing, distorting or restricting competition.

7. The Registrar has complained that Clause 12(a) of the agreement constitutes the restrictive trade practice of resale price maintenance within the meaning of Section 33(1)(f) of the Act. We, however, do not agree with him because Clause 3 9 of the agreement provides that the distributor shall be at liberty to sell the goods at prices below those in the price lists issued by the respondent No. 1. It, however, appears that the respondent No. 1 does not state in the price list that the distributors and dealers are at liberty to charge prices lower than those stated in the price list. We think a proper order ought to be made in that connection.

8. The Registrar also contended that Clause 22, Sub-Clauses (a) and (b), constitute the restrictive trade practice of full-line forcing.

But on a true construction of these sub-clauses we are not inclined to agree with him.

9. In the result we direct that the agreement which is the subject-matter of the Registrar's application shall be void in respect of restrictive trade practices embodied in Clauses 2(a) and (b), 5, 20(a), 6, 25(a) and (b) and 17(a) to (h). We further direct that the practices to which these clauses relate and practices similar thereto shall be discontinued and shall not be repeated.

10. We further direct that with effect from the date of this order the respondent No. 1 shall on the front page or the title page of each price list state clearly that prices lower than those mentioned in the list may be charged by the distributors and dealers.

11. The respondent No. 1 shall pay to the Registrar costs of the application fixed at Rs. 500.

12. We direct that a certified copy of this order be served on the respondents by registered post, acknowledgement due.


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