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In Re: All India X-ray and - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
AppellantIn Re: All India X-ray and
Excerpt:
1. in this case the notice of enquiry, being restrictive trade practices enquiry no. 3 of 1975, was issued on the 28th january, 1975, suo motu by the commission to respondents nos. 1 to 15 under section 10(a)(iv) and section 37 of the monopolies & restrictive trade practices act, 1969, alleging that the respondent no. 1, namely, all india x-ray and electro-medical trades' association, bombay, is an association of firms/companies engaged in the trade as importers into india of x-ray and electro-medical equipments; that respondents nos. 2 to 15 are the member-firms/companies of the said association ; that one of the objects of the said association is to promote, safeguard and protect the interest of members engaged in the trade as importers into india of x-ray and electro-medical.....
Judgment:
1. In this case the notice of enquiry, being Restrictive Trade Practices Enquiry No. 3 of 1975, was issued on the 28th January, 1975, suo motu by the Commission to respondents Nos. 1 to 15 under Section 10(a)(iv) and Section 37 of the Monopolies & Restrictive Trade Practices Act, 1969, alleging that the respondent No. 1, namely, All India X-Ray and Electro-medical Trades' Association, Bombay, is an association of firms/companies engaged in the trade as importers into India of X-Ray and electro-medical equipments; that respondents Nos. 2 to 15 are the member-firms/companies of the said association ; that one of the objects of the said association is to promote, safeguard and protect the interest of members engaged in the trade as importers into India of X-Ray and electro-medical equipments ; and that the said association has by laying down/prescribing, and its member-firms/companies have by following and acting upon, the standardized minimum terms of payment for sale of X-Ray and electro-medical equipment and service charges, and the standardized minimum terms and conditions regarding guarantee and maintenance of X-Ray and electro-medical equipments been and are indulging in the following restrictive trade practices: (i) Agreeing to lay down and requiring compliance with the minimum terms of payment for sales of X-Ray and electro-medical equipment and service charges to D.G.S.& D., to Railways, States and Municipalities and to private hospitals, institutions and practitioners.

(ii) Requiring the purchaser of X-Ray and electro-medical equipment to get equipment installed by the supplier itself.

(iii) Agreeing to lay down and requiring compliance with the following minimum terms and conditions regarding guarantee and maintenance of X-Ray and electro-medical equipments : (a) giving guarantee for manufacturing defects only for 12 months from the date of delivery of the equipment and providing only one free routine service during the guarantee period, the service being confined to oiling, cleaning and check up for any adjustment but excluding attendance for repairs in the case of a break-down or normal wear and tear; (b) prescribing minimum charges for emergency service and for erection, removal and demonstration of apparatus/equipments.

It was further alleged in the said notice that these trade practices have or may have the effect of preventing, distorting or restricting competition amongst the said respondents Nos. 2 to 15 in the sale and supply of X-Ray and electro-medical equipments and in rendering the services in respect of the same, and tend to bring about conditions of delivery and affect flow of supplies in the market of the same in such manner as to impose on the consumers unjustified costs or restrictions.

2. The respondent No. 1, namely. All India X-Ray and Electro-medical Trades' Association filed its reply dated 6th May, 1975, and this reply was adopted by respondents Nos. 3 to 7, 9, 11, 13, 14 and 15.

Respondents Nos. 2 and 8 also filed their replies on 7th May, 1975, and 30th April, 1975, respectively. Respondents Nos. 10, 12 and 13 not having filed their replies the proceedings against them were ordered to be ex parte by order dated 9th May, 1975. Thereafter, respondent No. 13 filed its reply on 16th May, 1975, purported to be of 6th May, 1975, and without there being any application for condonation of delay and for setting aside the ex parte order passed against it.

3. In the reply filed by respondent No. 1 it has not been denied that it did not stipulate or prescribe the terms and conditions asset out in the said notice of enquiry. It has, however, been submitted that these terms and conditions do not amount to restrictive trade practices and that assuming that they are restrictive trade practices, such restrictive trade practices are not prejudicial to public interest.

This respondent has made submissions justifying the said terms and conditions and stated that they are not prejudicial to public interest within the provisions of Section 38(1)(a), (b) and (h) and that the said arrangements are not unreasonable having regard to the circumstances set out in the reply and any detriment to the public interest or to persons not parties to the arrangements. In paras. 3 and 5 of the reply it has been stated by respondent No. 1 that it has in fact suspended the agreements/arrangements complained of as soon as it received the notice of enquiry and that the same continued to be suspended and, therefore, there is no prevailing practice in respect of the same among the members of the association. In view of the submissions of respondent No. 1 that the said agreements/arrangements have been suspended and are not continued or no longer in force, the learned counsel for the respondent No. 1 and some others, Mr. Ravinder Narain, submitted on 9th May, 1975, that his clients propose to make application for submitting to the Commission's order under Section 37(1) in respect of the said restrictive trade practices complained of in the notice of enquiry without prejudice to the contentions in the reply. The Commission adjourned the proceedings to enable the said learned counsel to take instructions from his clients as to whether in view of what has been stated in para. 3 of the respondent No. 1's reply, the respondents will submit to an order under Section 37(1) of the Act. On 11th July, 1975, Mr. Ravinder Narain, the learned counsel for respondent No. 1 and others, submitted at the Bar that his clients would submit to the Commission's order under Section 37(1) in respect of the said restrictive trade practices.

4. The position taken by respondents Nos. 2 and 8, namely, M/s.

Agfa-Gevaert India Ltd. and M/s. Kodak Ltd. is, however, different. It is stated in their replies that although they are the members of the said respondent No. 1-association, the decision taken or adopted by the said association in these proceedings will not bind them. Both these respondents have submitted that they have been importing only such electro-medical equipments which do not require either installation or any service or repairs or maintenance and as such in their sale of electro-medical goods they never quoted as per the directive of the association to any customers in India and never attached printed conditions of the association in that regard. They, therefore, submitted that they have not been indulging in any way in any of the restrictive trade practices alleged in the notice and the enquiry against them may be ordered to be dropped or it may be decided that no action against them is called for under the provisions of the Monopolies and Restrictive Trade Practices Act. We are afraid no such relief can be granted to the respondents Nos. 2 and 8 as prayed for by them. It is admitted that respondents Nos. 2 and 8 are the members of the said respondent No. 1-association and in terms of Explanation II to Section 35 of the Monopolies and Restrictive Trade Practices Act they are deemed to be parties to the said agreements/arrangements arrived at by the said respondent No. 1-association which are the subject-matter of this enquiry. The Explanation II to Section 35 provides that where the agreement is made by a trade association, the agreement for the purposes of this section shall be deemed to be made by all persons who are members of the association or represented thereon as if each such person were a party to the agreement. In view of this it is for the respondents Nos. 2 and 8 to show that they have not been and are not indulging in the alleged restrictive trade practices, and so long as they are and continue to be the members of the said respondent No.1-association, any order that we make in respect of the said agreements/arrangements against respondent No. 1-association and other respondent-members thereof it shall be binding on these two respondents also. The respondents Nos. 2 and 8 are, therefore, deemed to be indulging in the restrictive trade practices alleged against them. They have neither ]ed any evidence to show that they are not giving effect to the agreement, nor to show that such practices are not prejudicial to public interest.

5. In view of the submission of Mr. Ravinder Narain, the learned counsel for respondent No. 1-association and other respondents (excepting respondents Nos. 2 and 8), that the respondents will submit to such orders under Section 37 of the Act as the Commission may pass on the assumption that the conditions for passing such orders existed but without prejudice to the contentions in the reply, and in view of what we have said above with regard to respondents Nos. 2 and 8 we are of the view that the standardized minimum terms of payment for sale of X-Ray and electro-medical equipments and service charges, and the standardized minimum terms and conditions regarding guarantee and maintenance of X-Ray and electro-medical equipments as specified in the circulars issued from time to time by the respondent No. 1-association to its member-firms/companies, respondents Nos. 2 to 15, and as set out above constitute restrictive trade practices which have or may have the effect of preventing, distorting or restricting competition amongst respondents Nos. 2 to 15 in the sale and supply of X-Ray and electro-medical equipments and in rendering the said services in respect of the same, and tend to bring about conditions of delivery and affect flow of supplies in the market of the same in such manner as to impose on the consumers unjustified costs or restrictions, and that it has not been shown that they are not prejudicial to public interest.

(1) We direct that respondent No. 1-association shall not lay down or prescribe in the circulars issued by it to its member-firms/companies or otherwise, and the respondents Nos. 1 and 3 to 7 and 9 to 15 shall not follow or act upon, the standardized minimum terms of payment for sale of X-Ray and electro-medical equipment and service charges, and the standardized minimum terms and conditions regarding guarantee and maintenance of X-Ray and electro-medical equipments as set out above, and that they shall not repeat the same.

(2) We further by this order restrain and prohibit the respondents Nos. 1 and 3 to 7 and 9 to 15 from repeating the restrictive trade practices set out above or trade practices similar thereto and the respondent No. 1-association from laying down or prescribing the terms and conditions as set out above or any terms and conditions similar thereto in the circulars issued by it to its member-firms/companies or in any other form or manner.

(3) The respondents Nos. 2 and 8 have stated in their reply and their counsel again states before us to-day that these respondents do not deal in X-Ray equipment except in certain parts which do not need any installation, service, repair or erection. They have also stated that they have not been indulging in any of the restrictive trade practices arising from the circulars issued by the respondent No. 1. They further state that they have after the commencement of the proceedings resigned the membership of the respondent No. 1. In view of these statements, we by this order restrain and prohibit respondents Nos. 2 and 8 from indulging in or resorting to the restrictive trade practices set out above or trade practices similar thereto.

(4) We direct that the respondent No. 1 do pay to the Director of Investigation costs of these proceedings fixed at Rs. 500.


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