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In Re: Ramgopal Maheswari and Sons - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
AppellantIn Re: Ramgopal Maheswari and Sons
Excerpt:
.....the advocate on 2nd july, 1976, and/or 9th july, 1976, that neither the respondents in nagpur nor shri gupta of the respondents' new delhi branch office received any intimation from the said advocate either that the hearing had been fixed for directions upon the filing of the respondents' reply or of the application of the director of investigation for striking off the defence of the respondents. it was also pointed out that it was only from the news item in ' hitvada ', an english daily published from bhopal on 16th july, 1976, that the respondent came to know about the order passed by the commission and that, on enquiry, the advocate informed mr. gupta that though he had received both the notices he was unable to contact the respondents because he was out of station on the receipt of.....
Judgment:
1. This is an application by M/s. Ramgopal Maheswari & Soils, respondents in Restrictive Trade Practices Enquiry No. 73 of 1975, in the matter of M/s. Ramgopal Maheswari & Sons, Nagpur, under Section 13(2) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as " the Act") and regulations 77 and 85 of the Monopolies and Restrictive Trade Practices Commission Regulations, 1974 (hereinafter referred to as "the Regulations") for the revocation of the order of the Commission dated 9th July, 1976, in Restrictive Trade Practices Enquiry No. 73 of 1975. The respondents are a firm printing, publishing and selling a news- paper called "Nav Bharat" from five places, namely, Nagpur, Jabalpur, Bhopal, Raipur and Indore.

2. An enquiry under Sections 10(a)(iv) and 37 of the Act was initiated against the respondents as the Commission had information that in publishing advertisements in the newspaper "Nav Bharat" the respondents were indulging in the following trade practice : " Prescribing and charging the joint/combined advertisement rates for publication of advertisements in the Nagpur, Jabalpur, Bhopal, Raipur and Indore editions of the paper, even when the advertiser wants the advertisement to be published only in any one or more, as the case may be, of the editions of the said newspaper and not in the other editions thereof." 3. Accordingly, a notice dated 29th September, 1975, was issued to the respondents and in reply to that notice the respondents filed a letter dated 6th October, 1975. When the attention of the respondents was drawn to the requirements of the Regulations, respondents filed on February 2, 1976, a memorandum of appearance and authorised Shri Pawan Choudhary, advocate of 80A, Kamla Nagar, Delhi-7, to accept the service of the processes on behalf of the respondents. On the same day, a reply was filed on behalf of the respondents. An application was also filed for condoning the delay in the filing of the memorandum of appearance.

The delay in the filing of memorandum of appearance was condoned by the Commission and the respondents were informed accordingly by a letter dated February 6, 1976. The Director of Investigation filed on March 15, 1976, rejoinder to the reply by the respondents. On March 22, 1976, the Director of Investigation applied for directions, for delivery of interrogatories to the respondents and for the discovery of documents by the respondents. This application was fixed for hearing on 30th April, 1976. Nobody was present on behalf of the respondents at the hearing before the Commission on April 30, 1976. By its order dated 30th April, 1976, the Commission passed the usual order granting leave to the Director to deliver to the respondents interrogatories in terms of annexure I to the application and directing the respondents to make and file an affidavit of documents in Form No. 5, appendix ' C ' to the First Schedule, of the Code of Civil Procedure. The affidavit was to be filed within four weeks from the date of the order and the case was adjourned to 4th June, 1976, for further directions. On 4th June, 1976, nobody was present on behalf of the respondents and the Additional Director of Investigation, therefore, prayed that the defence of the respondents be struck off in the circumstances. He followed up this by application dated 7th June, 1976. It was pointed out in that application that the respondent had failed to comply with the order of the Commission dated 30th April, 1976, and that accordingly the respondents' defence should be struck off and proceedings be declared to be ex parte. On this application, the Commission passed an order on 2nd July, 1976, and the defence of the respondents was ordered to be struck off and the case was ordered to be placed for ex parte hearing on 9th July, 1976. It was pointed out in this order that the notice of the application of the Director of Investigation had been served by registered post A/D on the advocate of the respondents and yet neither the respondents nor their advocate was present.

4. On 9th July, 1976, the Commission passed an ex parte order because neither the respondents nor their advocate was present either on 2nd July, 1976, or on 9th July, 1976. The operative part of the order read as follows; ' "1, The respondents are restrained and prohibited from prescribing joint or combined advertisement rates for Bhopal, Indore, Nagpur, Jabalpur and Raipur editions of Nav Bharat except as hereinafter provided.

2. The respondents are directed to prescribe separate advertisement charges for each of the above five editions of Nav Bharat.

3. The combined advertisement rates for any two, three and four editions of Nav Bharat shall not be less than 90% of the aggregate of the separate rates for those places. The combined rates for all the five editions shall not be less than 85% of the aggregate of the separate rates for all the aforesaid editions.

4. The respondents shall be at liberty to round off the actual advertisement charges to nearest half rupee.

5. This order shall come into force with effect from 1st August, 1976.

6. The respondents shall on or before 31st December, 1976, make and file an affidavit before the Commission and simultaneously furnish a copy of the same to the Director of Investigation setting out the manner in which this order has been carried out.

7. The respondents shall pay to the Director of Investigation costs of these proceedings fixed at Rs. 300." 5. By a letter dated 26th July, 1976, the respondents appointed M/s.

Khaitan and Partners, to act and appear on their behalf before the Commission and filed an application dated 27th July, 1976, under Section 13{2) of the Act which is the subject-matter of this order. In this application, it was stated that the respondents had authorised Sri Pawan Choudhary, advocate, to appear and act on their behalf in all proceedings relating to this enquiry, that the advocate was informed that he could take all further instructions either from Shri M.M.Gupta, the head of the respondents' New Delhi branch or from the respondents themselves in Nagpur, that no appearance was entered by the advocate on 2nd July, 1976, and/or 9th July, 1976, that neither the respondents in Nagpur nor Shri Gupta of the respondents' New Delhi branch office received any intimation from the said advocate either that the hearing had been fixed for directions upon the filing of the respondents' reply or of the application of the Director of Investigation for striking off the defence of the respondents. It was also pointed out that it was only from the news item in ' Hitvada ', an English daily published from Bhopal on 16th July, 1976, that the respondent came to know about the order passed by the Commission and that, on enquiry, the advocate informed Mr. Gupta that though he had received both the notices he was unable to contact the respondents because he was out of station on the receipt of the first notice and that on the receipt of the second notice be had tried to contact Mr.

Gupta over the telephone at his home and left the message with the said Gupta's wife. It was also pointed out that Mr. Gupta's home telephone had been disconnected from 8th March, 1976, till 23rd July, 1976, that the advocate had not returned the file relating to the case even till the date of the filing of the application under Section 13(2), that no telephone calls or letters were ever received by the respondent either at their branch office in New Delhi or at the residence of Shri Gupta or at Nagpur, that had their advocate not acted negligently and if the respondents had received intimation from the advocate of the relevant hearings in the matter, the respondents would have taken an opportunity to make these submissions to the Commission. It was also contended in the application that the scope of the order was wider than the charge covered by the enquiry because the plea in the notice was confined to the practice of offering combined edition rates and did not call for an enquiry into the rate structure. This application was supported by an affidavit from Shri Prakash Maheshwari, a partner in the firm of M/s.

Ram Gopal Maheswari and Sons, and the affidavit of Shri M.M. Gupta, Branch Manager of " Nav Bharat " Press and Ram Gopal Maheswari & Sons at Delhi.

6. At the time of hearing of this application in the first instance the learned counsel for the respondents wanted to examine Shri Pawan Choudhary as a witness. Shri Pawan Choudhary was examined by Shri G.L.

Sanghi on August 31, 1976, and by his junior, Shri Rikhye, on September 6, 1976. He was cross-examined by the learned Director of Investigation himself. Thereafter, the learned Director of Investigation wanted to examine Shri M. M. Gupta as a witness and he was allowed to examine him. The Director of Investigation examined Shri M.M. Gupta on September 29, 1976. There was a brief cross-examination of Shri Gupta by Shri Sanghi. Thereafter, the learned counsel for the respondents and the learned Director of Investigation were heard on the application.

7. The learned counsel for the respondents contended that the ambit of Section 13(2) was quite wide, that it had to be interpreted very liberally, that in the interests of justice the order should be revoked, that in the present case the respondents had no real opportunity to submit its case and that that justified the reopening of the case. He pointed out that Shri Choudhary was grossly negligent of his duty as an advocate in the present case, that he had appeared only once before the Commission in the present case and that thereafter he had not done anything to represent the respondents before the Commission. He also contended that the respondents had done all that could reasonably be done in the matter, that it had entrusted the case to a qualified advocate, and that it was the advocate's duty to inform his clients about the date of hearing. He pointed out that Shri Choudhary had failed to get in touch with the client, that his claim that he had written a letter to the client in April, 1976, has not been established, that his claim that he had put a telephone call to Shri Gupta's residence has been proved to be a lie and that he himself admitted that he wanted to send a telegram from Bombay to the Commission and also inform his client accordingly. He also contended that the charge specified in the notice was a limited charge about combined rates of advertisement whereas the operative part of the Commission's order dealt with the rate structure as a whole and in respect of the rate structure the respondents had no notice at all. He referred to the decisions in AIR 1936 Nag 85 (Pandu v. Hira), AIR 1967 Orissa 14 (Parikshit Sai v. Indra Bhoi), AIR 1938 Bom 199 (P. D.Shamdasani v. Central Bank of India Ltd.), AIR 1966 Cal 307 (Manibala Dassi v. Tamizuddin Saha) and AIR 1968 Bom 57 (Miss Devi Ramchand Waswani v. S.V. Bastikar). According to him, if a party does all he is required to do under the law to retain a pleader, and he is failed or betrayed by the pleader, it was manifestly unjust to visit the party with penalty. The fact that the party has engaged a pleader is itself a sufficient cause for his non-appearance unless it is proved that he was in default in the matter of ensuring the performance of duty by the pleader. A party who engages a competent lawyer cannot thereafter be held to be in default for the laches or negligence of that lawyer.

8. The learned Director of Investigation, on the other hand, contended that the ex parte proceedings under several laws were meant to ensure public compliance with the laws of the land, that ex parte order should not be revoked except when sufficient cause is shown for non-compliance with the statutory requirements and that Section 13(2) carries with it built in restrictions and by reason of those restrictions the order can be revoked only in circumstances mentioned in reglns. 85 and 86 or by parity of reasoning when conditions referred to in Order 9, r, 13 exist. He contended that in the present case not only the advocate was negligent but the Delhi representative of the respondents was more negligent. According to him, the evidence given by Shri Pawan-Choudhary, although halting at certain places and vague at other places, was given without any preparation and, therefore, approximated to truth. On the other hand, according to him, Shri Gupta's evidence was deliberate and evasive. He pointed out that there was clear negligence on the part of the respondents when they did nothing between 2nd July, 1976, and 9th July, 1976, and that it had not revoked the power of authority in favour of Shri Choudhary throughout the proceedings. He emphasised that Shri Gupta did not make any attempt to contact Shri Choudhary any time during the critical period and it was certainly his duty to keep an eye on the proceedings pending before the Commission. He referred to the decisions quoted in AIR Manual, Volume 13, 3rd Edn., at page 424, with reference to the term " sufficient cause " in Section 5 of the Limitation Act of 1963 and contended that a cause arising from the negligence of the party cannot be said to be beyond the control of the party and cannot be sufficient cause and that the negligence of a party's agent is, in law, the negligence of the party himself and will not furnish a sufficient cause. He pointed out that the respondents were late even in filing the memorandum of appearance, it had not cared even to give a copy of the original reply to Shri Choudhary and that Shri Gupta had not informed Shri Choudhary of the disconnection of his telephone at his residence. He contended that the procedure before the Commission was time bound and it was necessary to ensure that parties before the Commission adhere to the time schedule. According to him, there was no case for revoking the order.

9. After considering the application made by the respondents and the submissions made by the learned counsel for the respondents and the learned Director of Investigation, I am inclined to allow the application and revoke the order of the Commission dated July 9, 1976.

It is not necessary in my view to decide the larger issue whether the ambit of Section 13(2) is so wide as to enable the Commission to revoke or amend this order in the larger interests of justice; or to be more precise whether it was possible to read the provisions of Section 151 of the Code of Civil Procedure in that section. It is enough for the purpose of the present case to hold that the order passed by the Commission can be revoked in circumstances set out in Order 9, Rule 13 of the Code of Civil Procedure. Regulations 85 and 86 seek to read into Section 13(2) provisions of Sections 114, 152 and 153 and Order 47 of the Code of Civil Procedure. Regulation. 85, in addition, refers to the material change in the relevant circumstances or any other fact or circumstances on which the applicant for amendment relies. These two regulations do not refer to the situation contemplated by Order 9, Rule 13. But the situation contemplated by that rule is such that it must be impliedly taken to be included in the situations covered by Section 13(2). On the failure of a party to attend the hearing an ex parte order has to be passed. But if the party is able to show that he was prevented by sufficient cause from being present at the hearing the ex parte order has to be revoked and an opportunity given to the party to present its case. In view of Regulation 15 the relevant provisions of the Code of Civil Procedure providing for these contingencies have necessarily to be applied and there is nothing in the wording of Section 13(2) to preclude such an application. In fact, the learned Director of Investigation very fairly stated that Order 9, Rule 13 had to be applied to the situation prevailing in the present case.

10. The controversy, however, arose in regard to the extent of the application of Order 9, Rule 13, viz., whether on the facts and circumstances of the case, the respondents were prevented by sufficient cause from complying with the notice of the Commission. From this point of view one fact is very clear and that is that the respondents had no notice of the hearings before the Commission. There was complete absence of communication between the respondents and their counsel during the period from February 22, 1976, to July 9, 1976. The question is whether the respondents were negligent in any manner during this critical period in regard to their obligations flowing from their being respondents to the enquiry. They filed a memorandum of appearance authorising Shri Choudhary to represent them in the case. Having done so it seems to me that they had done all that was reasonably expected from them to do in regard to their obligations flowing from the notice.

They are quite justified in expecting that their lawyer will inform them about the developments in the case, about the hearings fixed from time to time in the case and about the strategy to be followed in the case. They cannot be accused of negligence just because apart from appointing a lawyer to represent them they failed to enquire from the lawyer from time to time as to the stage at which the proceedings stood. The fact that they filed a memorandum of appearance some months after it was due and the fact that neither the respondents nor their representatives at Delhi contacted Shri Choudhary to find out at what stage the proceedings stood did not in any manner suggest that there was any negligence on their article. They could reasonably expect that they would be informed by their advocate about the hearings in the case and especially about the crucial hearings on the 2nd and 9th July, 1976.

11. There is also no doubt that there was no communication between Shri Choudhary and the respondents during the crucial period. There is no evidence about the letter dated April 8, 1976, which Shri Choudhary is alleged to have sent to Shri Gupta, the Delhi representative of the respondents. The paper purporting to be a copy of that letter curiously refers to 20th April, 1976, as the date of hearing when as a matter of fact the date of hearing was 30th April, 1976. In the absence of any evidence about the posting of that letter I am unable to accept the plea of the learned Director of Investigation that the letter was in fact sent by Shri Choudhary.

12. In regard to the appointments on 2nd and 9th of July, 1976, especially on the 2nd July, there can be no dispute that there was no communication from Shri Choudhary to the respondents. The following extracts from his evidence on August 1, 1976, and September 6, 1976, are relevant in this connection: " When I received notice from the Commission in June, I was not certain about my visit to Bombay because I was preoccupied with professional work. Till 18th June, I did not know that I would be leaving for Bombay on the 19th by Frontier. I did not inform the party before leaving for Bombay that I would not be available on the 28th of June because my idea was to send a telegram to the Commission about my inability to attend and also to inform Mr. Gupta about my difficulty. There was also uncertainty about my going to Bombay." " I accepted the two notices because as per the letter of authority I was authorised to receive the notices. My duty as an advocate was to communicate the notices to the client and ask him to come and discuss with me the next steps to be taken. I cannot say distinctly whether I communicated to the client that I received the notices referred to earlier. Although the client did not contact me and I could not contact the client, I did not return the notices to the Commission because I was under the impression and I am still under the impression that the notices are not to be returned. Ordinarily, I should have appeared before the Commission and withdrawn from the case, although I am not aware of the exact steps to be taken in such a situation." 13. It is clear from these extracts' that Shri Chaudhary did not communicate to the respondents about the hearing on 2nd July, 1976, nor did he attend the hearing before the Commission. Whatever might have been his pious intentions before leaving for Bombay none of these intentions were given effect to. There is also no basis or evidence in support of Shri Choudhary's plea that he tried to contact Shri Gupta at his residence on telephone in the last week of June, 1976. In point of fact the residential telephone of Shri Gupta was disconnected during that period and when this fact was brought to the notice of Shri Choudhary he very readily admitted that he might have confused and that he might have telephoned at his (Gupta's) office. This claim also is incongruous with the statement made by Shri Choudhary in the course of the examination that actually he was not sure whether he would be able to return to Delhi before 2nd and that in any case he wanted to write to the Commission about his difficulties if he could not attend and inform the respondents accordingly. There was clearly failure on the part of Shri Choudhary to communicate to the respondents the crucial dates of hearing, particularly the hearing on July 2, 1976, which resulted in an ex parte decision against the respondents. The respondents cannot be held responsible for this failure even on the grounds of contributory negligence. This would, therefore, be a valid ground or sufficient cause for the respondents' failure to comply with the notices of hearing from the Commission. As the Supreme Court has pointed out in Union of India v. Ramcharan, AIR 1964 ; SC 215, the court should not be overstrict in expecting such proof of the suggested cause as it would accept in holding certain facts established. Applying this principle, the Bombay High Court held in AIR 1968 Bom 57 (Miss Devi Ramchand Waswani v. S.V. Bastikar) that if a party was unaware of the date of hearing and the unawareness was not due to any fault of his and he had taken all the precautions necessary in this case of being made aware of the date, then being unaware would be sufficient cause which would prevent a party from appearing in a court. It was also held in Ramsetty Mallidh v. Mitta Laxminarasiah [1967] 2 An WR 250; [1967] 2 ALT 341 (AP) that failure of the counsel to inform the date of hearing to the party constituted sufficient cause for purposes of Order 9, Rule 13. The learned Director of Investigation has referred to certain cases -relating to Section 5 of the Limitation Act, 1963. But in that catena of cases itself, reproduced at pages 424 and 425 of the AIR Manual (vol. 13), there is authority for the proposition that if the party was diligent, though the agent was negligent, it cannot be said that the party was negligent. Relying on these authorities I am inclined to the view that in the circumstances of the present case the respondents were prevented by sufficient cause from complying with the notice of hearing by the Commission and that accordingly the ex parte order dated July 9, 1976, passed by the Commission has necessarily to be revoked.

Accordingly, the order is revoked and the proceedings are restored to the stage at which the respondents were to comply with the directions of the Commission contained in the order dated April 30, 1976. They will now comply with the directions on or before November 19, 1976. The respondents will pay the costs to the director determined at Rs. 200.


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