1. In this case the notice of enquiry was issued to the respondents by the Commission on the 14th January, 1975, under Sections 10(a)(iv) and 37 of the Monopolies & Restrictive Trade Practices Act, 1969, alleging that the respondents are the authorised dealers of M/s. Hindustan Motors Ltd. for the sale of Ambassador cars, etc., manufactured by it, and that they have entered into an agreement/arrangement/understanding between themselves by virtue and in pursuance whereof they are indulging in the restrictive trade practices of the following nature : (i) selling Ambassador car at the agreed price of Rs. 32,572 ex-show room Delhi (inclusive of sales tax) and thereby maintaining resale price ; and (ii) selling Ambassador cars to those who wish to purchase on instalment basis, on the terms and conditions agreed upon between themselves (dealers), namely, Rs. 20,000, cash down and the balance in 12 equal instalments of Rs. 1,200 each.
2. The respondents entered appearance and filed their replies to the said notice of enquiry on 29th March, 1975. The Director of Investigation filed his rejoinders to the said replies of the respondents on 13th May, 1975. Thereafter, the Director submitted his application for directions and the Commission by its order dated 20th June, 1975, gave necessary directions. The respondents have filed their respective affidavits in compliance with the said directions.
3. The respondents have in their replies admitted that they did put a joint advertisement in the Hindustan Times, New Delhi, offering Ambassador cars at Rs. 32,572 (inclusive of sales tax) ex-show room, Delhi, with Rs. 20,000 cash down and the balance in 12 monthly instalments of Rs. 1,200 each. The offer was open up to 31st January, 1975. The respondents, however, contend that there is neither any agreement between them nor any other arrangement nor understanding and that it was only an advertisement at the initiative of the Regional Manager of M/s. Hindus-tan Motors Ltd. at Delhi, who suggested that in order to save the advertisement expenses of the dealers who are at present running in losses and in order to educate the motoring public in Delhi who can buy car on instalment basis, a joint incentive by different dealers should be offered through the newspaper on behalf of the respondents so that they are not put to unnecessary advertisement expenses and the loss which the business is bearing is not further burdened with the advertisement expenses of the individual dealers. It is further stated in the replies that this incentive was just on an experimental basis for a period from 22nd December, 1974, to 31st January, 1975, and that in spite of this incentive the position of the sale of cars did not improve.
4. The respondents have now filed an application on 18th August, 1975, through their counsel, Mr. Uberoi, stating that, as there were no buyers of the cars, an incentive of instalment was given to the buyers and the joint advertisement was inserted for the intending buyers of Ambassador cars in Delhi giving the names and addresses of the dealers in Delhi and that the purpose of such advertisement was to impress upon the consumers that the cars were available on instalments also. The respondents have, however, stated that, if the Commission takes the view that the joint advertisement given by them is in violation of the provisions of the Monopolies and Restrictive Trade Practices Act, they would assure and undertake that they will not repeat such an act in the future and that in view of this undertaking of the respondent an appropriate order may be passed by the Commission against them.
5. From the replies given by the respondents it is clear that they joined together at the instance or suggestion of the Regional Manager of the Hindustan Motors Ltd., the manufacturer of Ambassador cars, or otherwise, and put a joint advertisement in the Hindustan Times dated 22nd and 26th December, 1974, offering Ambassador cars at the price of Rs. 32,572 each (inclusive of sales tax) ex-show room, Delhi, on the uniform terms of Rs. 20,000 cash down and the balance in 12 monthly instalments of Rs. 1,200 each. This act of the respondents amounts to an agreement or arrangement between the respondents, and on the face of the advertisement it is quite evident that the respondents agreed to practise resale price maintenance and to sell Ambassador cars on the terms and conditions agreed upon between themselves. This agreement has the effect of preventing competition. This is a restrictive trade practice within the meaning of Section 2(o) of the Monopolies and Restrictive Trade Practices Act. The respondents have not shown how these restrictive trade practices could be said to be not prejudicial to public interest. Therefore, in our view, an order should be made against the respondents directing them to discontinue to act under the said agreement/arrangement and not to repeat the same or similar restrictive trade practices in any form either by agreement amongst themselves or between any one or more of them and any other dealers of the Hindustan Motors Ltd. (i) We direct that the respondents shall forthwith discontinue to act under the agreement/arrangement by which they had agreed amongst themselves to maintain the resale price in the sale of Ambassador cars and to offer for sale the same on the agreed terms and conditions.
(ii) We further by this order restrain and prohibit the respondents and each of them from entering into any agreement or arrangement or understanding amongst themselves or between any one or more of them and any other dealers of Ambassador cars with regard to resale price maintenance and the terms and conditions on which the said cars are to be sold, or from resorting to any other trade practice similar thereto.
(iii) We direct that the respondents do pay to the Director of Investigation costs of these proceedings fixed at Rs. 400.