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Registrar of Restrictive Trade Vs. Escorts Ltd. - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
Reported in(1979)49CompCas243NULL
AppellantRegistrar of Restrictive Trade
RespondentEscorts Ltd.
Excerpt:
.....or lack of after-sales service outside the territories of the dealers and sub-dealers.7. the learned counsel for the registrar referred to order 11, rule 12, order 11, rule 14 and order 11, rule 18(2) and contended that the respondent was bound to disclose the documents set out in the application of the registrar. he also referred to a.i.r. commentaries on the code of civil procedure, page 2504, and contended that the affidavit of documents could be controverted where, from the affidavit itself, or from the documents referred to therein, or from admissions made either in pleadings or otherwise, it appeared that the party making discovery had or has had other relevant documents in his possession or power ; or where the basis on which the first or original affidavit had been made.....
Judgment:
1. This is an application filed by the Registrar of Restrictive Trade Agreements (hereinafter referred to as " the Registrar") praying that the respondent may be directed to make full discovery of and to produce all the relevant material documents, particularly the documents mentioned in para. 4 of the application which according to the Registrar are in the possession or power of the respondent.

2. An enquiry under Sections 10(a)(iii) and 37 of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as " the Act ") was started against the respondent on the basis of an application by the Registrar dated November 29, 1975. The respondent is a limited company engaged in manufacturing and/or marketing, inter alia, Ford tractors, Escort tractors, road rollers, trailers, motor cycles, scooters and implements, accessories and parts thereof. The Registrar referred to the agreements entered into by the respondent with several parties for the sale and distribution of its products.

These agreements were (i) dealer's sales agreement for the sale and distribution of Ford tractors, trailers, implements, accessories, spare parts and Kamani road rollers, (ii) dealer's sales agreement for the sale and distribution of Escorts tractors, trailers, implements, accessories, spare parts and Kamani road rollers, (iii) dealer's sales agreement for the sale and distribution of Rajdoot motor cycles, scooters and spare parts and accessories thereof, (iv) general sales and service dealer's agreement for the sale and distribution of tractors, trailers, implements, motor cycles and their spare parts and accessories, and (v) sub-dealer's sales agreement for the sale and distribution of Rajdoot motor cycles, scooters and their spare parts and accessories.

3. The Registrar alleged that the terms and conditions of these agreements related to certain restrictive trade practices, that these trade practices had and may have the effect of preventing, distorting and restricting com-petition and that they were prejudicial to public interest.

4. The respondent after filing its memorandum of appearance and after unsuccessfully requesting the Commission to institute separate enquiries in respect of different agreements, filed its reply dated May 5, 1976. The Registrar filed his rejoinder dated June 17, 1976.

Thereafter, the Registrar applied for directions to the respondent for furnishing better and further particulars, for permission to deliver interrogatories to the respondent and for order to the respondent to make discovery of documents under Order 11, rule 13 of the Civil Procedure Code. The Commission by its order dated July 30, 1976, issued the directions prayed for. The respondent by an affidavit of its principal officer dated September 20, 1976, dealt with the interrogatories delivered to it by the applicant. An application by the Registrar for further directions relating to interrogatories was disposed of by the Commission by its order dated November 9, 1976 and the Commission directed the respondent to answer questions Nos. 3, 7 and 12 in more detail.

5. By another affidavit dated October 4, 1976, the principal officer of the respondent made a discovery of 54 documents set out in the schedule to the affidavit. It was also stated in the affidavit that according to the best of his knowledge, information and belief, he had not and never had in his possession, custody or power or in the possession, custody or power of his pleader or agent, or in the possession, custody or power of any other person on his behalf any account, books of account, voucher, receipt, letter or any copy or extract from any such document or any other documents whatsoever which he thought relevant to the matters in question in this enquiry or wherein any entry had been made other than and except the documents set forth in the schedule.

6. The Registrar by his application dated November 11, 1976, submitted that the affidavit of the respondent's principal officer did not disclose all the relevant and important documents, material for the present inquiry proceedings, that the respondent had failed to disclose the agreements and correspondence with sub-dealers, that the affidavit itself stated that the documents disclosed therein were not complete but merely illustrative, that the respondent had not adhered to the form prescribed in the First Schedule to the "Civil Procedure Code and had used the expression " which I think relevant" in para. 3 of the affidavit, and that the pleadings showed that many documents not disclosed by the respondent must be or must have been in the possession or power of the respondent. The Registrar accordingly sought directions from the Commission requiring the respondent to disclose the following documents : "(1) Sales agreements between dealers and sub-dealers appointed by the respondents' dealers.

(2) Agreements and correspondence with the sub-dealers appointed by the respondent.

(3) Correspondence with Govt. authorities in regard to alleged operations of Tractors (Distribution and Sale) Control Order, 1971 and Scooters (Distribution and Sale) Control Order, 1971.

(4) Instructions issued by the respondent to its dealers for performance and administration of the warranty in respect of each company products.

(5) Report of inspection of the dealers' premises by the respondents' representatives.

(6) Correspondence and other documents relating to the working of the impugned clauses with particular reference to the following : (i) Consent or refusal to consent to the appointment of sub-dealers by the respondents' dealers.

(ii) Determination of minimum stock to be maintained by the dealers and sub-dealers.

(iii) After-sales service or lack of after-sales service outside the territories of the dealers and sub-dealers.

7. The learned counsel for the Registrar referred to Order 11, Rule 12, Order 11, Rule 14 and Order 11, Rule 18(2) and contended that the respondent was bound to disclose the documents set out in the application of the Registrar. He also referred to A.I.R. Commentaries on the Code of Civil Procedure, page 2504, and contended that the affidavit of documents could be controverted where, from the affidavit itself, or from the documents referred to therein, or from admissions made either in pleadings or otherwise, it appeared that the party making discovery had or has had other relevant documents in his possession or power ; or where the basis on which the first or original affidavit had been made turns out to have been, wrong, i.e., where the party making the affidavit had misconceived his case so that the court is practically certain that if he had conceived properly and acted on a, correct view of the law he would have disclosed further documents.

According to him, if there was a reasonable suspicion that a document was with the respondent, the court could order it to make a further affidavit. He also referred to the decision of the Supreme Court in the case of M.L. Sethi v. R.P. Kapur, AIR 1972 SC 2379, and pointed out that it was sufficient if the documents would be relevant for the purpose of throwing light on the matter in controversy for the obligation on the respondent to make discovery of documents to arise.

Every document which will throw any light on the case is a document relating to a matter in dispute in the proceedings, though it might not be admissible in evidence. A document might be inadmissible in evidence yet it may contain information which may either directly or indirectly enable the party seeking discovery either to advance his case or damage the adversary's 'case or which may lead to a trail of enquiry which may have either of these consequences. He submitted that not only can a party demand the other party to make a general discovery of documents, but it can also demand that the other party may make discovery of certain specified documents. He then contended that the court as a matter of fact had a right to order the production of documents even though they may not have been disclosed in the affidavit of documents.

He then referred to the decision of the Calcutta High Court in India Foils Ltd. v. 5th Industrial Tribunal, AIR 1972 Cal 308 ; 41 FJR 481, and contended that the court has got ample powers to make an order for production of a document at any time during the pendency of the suit, although he very fairly added that before such an order could be made, according to the Calcutta decision, the court must satisfy itself that the documents were in the possession or power of the party against whom the order was sought and they related to the matter in question before the court. He then went through the application of the Registrar and contended that all the documents requested for discovery would in all reasonable probability be with the respondent. He pointed out that in its further reply to the interrogatory 7, the respondent had admitted that in some cases goods were supplied to sub-dealers by the respondent at the request of the dealers. He also referred to para. 37 of the respondent's reply which according to him showed that the Government of India had issued a surveillance order.

8. The learned counsel for the respondent relied on the decision of the Commission dated April 2, 1976, in the case of Atul Products in R.T.P.E. No. 24A of 1974 ([1978] 48 Comp Cas 766), and contended that as far as the discovery and production of documents were concerned, the Commission's powers were circumscribed by Section 12(1). According to that section the Commission had powers of a Civil Court in regard to these matters, and that necessarily implied the application of the provisions of the Civil Procedure Code. According to him the principles according to which any party can be called upon to make a further affidavit of documents at the request of the other party to the dispute were well settled and they were set out in the decision of the Commission in the case of Atul Products [1978] 48 Comp Cas 766. Unless the party alleging could establish that there were documents in existence and in the power and possession of the other side, the other party could not be called upon to make a further affidavit of documents. The allegation could be sustained only if there was any indication in the affidavit of documents already made or the enclosures to those documents or in the documents disclosed or in the. pleadings.

A mere allegation by one party would not justify an order by the court on the other party to make a further affidavit of documents. He also contended that reference to Order 11, Rule 14 and Order 11, Rule 18(2), were not at all relevant and that in any case, according to the decision of the Calcutta High Court in India Foils Ltd. v. 5th Industrial Tribunal, AIR 1972 Cal 308 ; 41 FJR 481, quoted by the learned counsel for the Registrar, the conditions precedent for the court ordering production of documents were basically the same which have been laid down by the courts in the case where the original affidavit of documents by a party was found to be deficient. He pointed out that the decision of the Supreme Court in M.L. Sethi v. R.P. Kapur, AIR 1972 SC 2379, was confined to an altogether different issue, viz., whether particular documents related to the matter in question.

According to him, in the present case there was no controversy about the fact that if the documents related to the matter in question, they had to be discovered. The question in the present case was whether the Registrar has been able to indicate that there was any omission on the part of the respondent to disclose any documents relating to the matter in question.

9. The learned counsel for the respondent then took me through the application filed by the Registrar. He contended that there was no question of the respondent failing to disclose the agreements and correspondence with sub-dealers because even though the respondent did deal with some sub-dealers directly it was only at the request of the dealers. He also pointed out that in some cases the documents disclosed were said to be illustrative because it would have been impracticable to give details of all the circulars and encumbering the reply. The fact of the circulars being in existence was disclosed and if the Registrar wanted any particular circular, that could certainly be produced. He also contended that the narration " which I think relevant" in paragraph 3 of the affidavit dated October 4, 1976, did not in any manner derogate from the accuracy or ! efficacy of the affidavit. His main contention was that the Registrar had failed to prove that any of the documents which he wanted to be disclosed were in the possession and power of the respondent.

10. Regarding item (1) in para. 4 of the Registrar's application, the learned counsel for the respondent pointed out that the respondent could not be expected to disclose copies of agreements between its dealers and sub-dealers. In regard to item No. (2) he pointed out that sub-dealers were in fact appointed by dealers and that in any case a copy of the pro forma agreement between the dealers and the sub-dealers was filed along with the original reply. In regard to item (3), the learned counsel referred to item 52 disclosed in the original affidavit and pointed out that apart from that there was no other document which the respondent could disclose. In regard to item (4), the learned counsel pointed out that the respondent had already disclosed in the original affidavit item 6 " Manual on Service Management" issued by the respondent to its dealers. Similarly, for item (5) the learned counsel pointed out that in item 7 of the schedule to the original affidavit the respondent had already disclosed " Dealer Service Upgrading Visit Report" and it was also clarified that this pro form a was referred to by way of illustration. In regard to item 6(i), the learned counsel contended that there was nothing to show that the respondent had in its possession any document referring to consent or refusal to consent to the appointment of sub-dealers by the respondent's dealers. In regard to item 6{ii), he pointed out that the minimum stock to be held by the dealer was set out as original condition of the agreement and there was no question of any subsequent document being executed in that connection later. In regard to item 6(iii), he contended that there was no evidence to show that there was any correspondence and that in any case the respondent had nothing to add to its reply to the interrogatory in this regard. In regard to items 6(iv) and 6(v), the learned counsel contended that these documents were not strictly relevant to the charges contained in the notice of enquiry. But he very fairly added that documents relating to these items were with the respondent.

11. There is no scope for any controversy about the circumstances in which or the considerations on which a party could be ordered to file a further affidavit of documents. The principles laid down by the Commission in its decision dated 2nd April, 1976, in the case of RRTA v. Atul Products Ltd. (R.T.P.E. No. 24A of 1974) [1978] 48 Comp Cas 766 are crystal clear. They are based on well-settled principles evolved by reference to Order 11, Rule 12. Reference to Order 11, Rule 14 is not very apposite in the present circumstances of the case. It may be that in certain circumstances the court can order production of certain documents independently of and without reference to any application for further affidavit of documents. But as rightly pointed out by the learned counsel for the respondent that that situation has not arisen here, and even otherwise the conditions to be satisfied before the court could pass such an order were more or less identical with the conditions necessary before a further affidavit of documents could be insisted upon. There is considerable merit in the contention of the learned counsel for the respondent that in this matter of discovery and production of documents the powers of the Commission are not larger than that of the civil court in view of the provisions of Section 12(1) and any suggestion that any part of the regulations gave any wider power to the Commission in this regard has to be discountenanced. It is true that the decision of the Supreme Court in M.L. Sethi v. R.P.Kapur, AIR 1972 SC 2379, defines the ambit of the words "relates to the matter in question ". But once again the controversy in the present case is not about the relevance of the documents but about their existence or availability.

12. Coming to the documents proper, the respondent is directed to disclose all the documents relating to termination of dealerships and the warranty claims. They are clearly relevant to the enquiry and relate to the matter in question. The documents relating to termination would throw light on the enforcement machinery relating to the clauses of the agreement including the impugned clauses and it is quite on cards that they might lead to the trial of enquiry which might support the applicant's claim or undermine the respondent's defence. The learned counsel for the respondent contended that the implementation of the agreements was not denied by the respondent but perusal of the documents relating to termination might help to emphasise some of the anti-social aspects of the impugned clauses apart from underlining their restrictive nature. In regard to warranty claims also the relevance cannot be questioned. Warranty also is an instrument in the hands of the respondent for making the dealer carry out its behests and the extent and the manner in which the warranty is honoured was bound to throw considerable light on the exact nature and content of the impugned clauses and their impact on public interest.

13. In respect of items 1, 2, 7, 16 and 24 of the Schedule to respondent's affidavit of documents dated October 4, 1976, the respondent is directed to disclose all the documents answering the description given against these items in the Schedule to the original affidavit. The documents can be confined to the period fr.om April 1, 1975, to March 31, 1976. The respondent is also directed to remove the defects in the original affidavit so as to bring it in conformity with the form set out in Form No. 5, Appendix " C " to the First Schedule to the Code of Civil Procedure. In regard to other documents referred to in the Registrar's application, I see no warrant for directing the respondent for making any further affidavit.


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