Skip to content


FoodgraIn and Kirana Merchants Vs. Delhi Kanodia Oil Mill and anr. - Court Judgment

LegalCrystal Citation
CourtMonopolies and Restrictive Trade Practices Commission MRTPC
Decided On
Judge
AppellantFoodgraIn and Kirana Merchants
RespondentDelhi Kanodia Oil Mill and anr.
Excerpt:
.....the field of competition affected nor the manner in which the competition is affected, that resale price maintenance would not be anti-competitive in all circumstances, that in cases of acute scarcity it might not be anticompetitive in effect, that at least the minimum price allegedly insisted upon by the respondent should be set out, that it was not at all clear whether refusal to sell 85 kg. drums was an independent restrictive trade practice or was ancillary to resale price maintenance, that it was also not pointed out whether any other trader in the locality was given more favourable terms, that the only prayer in the complaint was in respect of an inquiry under section 37, that paras. 21 to 23 were outside the pale of inquiry by the commission, that these paras, should at least be.....
Judgment:
1. Order on the application of the respondent dated the 5th December, 1977.

2. This is an application by the respondent making the following prayers : " (a) to reject the notice of enquiry dated December 21, 1976, and or complaint dated April 18, 1976, and to terminate the enquiry against the respondents; (b) in the alternative and without prejudice to the above, directions may be issued by this Hon'ble Commission to furnish all the relevant material and constituent facts setting out the cause of action and how and when it arose and to furnish further and better particulars as may be deemed proper in the facts and circumstances of the case ; (c) in the alternative and without prejudice to the aforesaid prayers to direct that a copy of the Director of Investigation's report under Section 11 of the Act be furnished to the respondents , (d) in the alternative and without prejudice to the aforesaid prayers to strike out paragraphs 21, 22 and 23 of the complaint under Regulation 71 of the M.R.T.P.C. Regulations, 1974 ; (e) in the alternative and without prejudice to the above prayers, suitable directions be given for filing the reply of the respondent only with regard to allegations of existence of restrictive trade practice and not as to the existence of circumstances contemplated under Section 38 of the Act; (f) to declare Regulation 67 of the M. R. T. P. C. Regulations, 1974, as ultra vires the Act and void, ineffective and unenforceable ; (g) in the alternative and without prejudice to the above prayers to give time to the respondents for one month for filing the reply subject to the directions as aforesaid ; (h) and to pass such other and further orders including the orders as to costs as may be deemed just and necessary in the circumstances of the case. " 3. In view of the decisions of the Commission in RRTA v. Atul Products Ltd. (RTPE No. 24-A of 1974) [1979] 49 Comp Cas 781 (MRTPC), RRTA v.Tata Engineering & Locomotive Co. Ltd. (RTPE. No. 5 of 1975) [1979] 49 Comp Cas 30 (MRTPC), RRTA v. Rallis India Ltd. (RTPE. No. 15 of 1974) [1979] 49 Comp Cas 580 (MRTPC) and RRTA v. Shriram Pistons & Rings Ltd. (RTPE No. 41 of 1976) [1979] 49 Comp Cas 126 (MRTPC), prayers (a), (e) and (f) do not survive. In view of the decision of the Commission in All India Motor Transport Congress v. Goodyear India Ltd. (RTPE No. 26 of 1974) dated the 10th February, 1975, [1976] 46 Comp Cas 315 (MRTPC), prayer (c) also does not survive.

4. At the outset the learned counsel for the respondent objected to the complainant being allowed to be represented in the proceedings before the Commission relating to the application of the respondent and he relied in this connection on the decisions of the Commission in Wimco (RTPE. No. 3 of 1973) [1979] 49 Comp Cas 836 (MRTPC) and Sarabhai (RTPE. No. 45 of 1975) [1979] 49 Comp Cas 887 (MRTPC). There is no merit in this objection of the learned counsel. The enquiry in the present case has been started on the complaint of the Foodgrain & Kirana Merchants Association (Regd.). They are complainants and not mere informants. Moreover, the present proceedings relate to an application by the respondent for further and better particulars, inter alia. These particulars can be given, if at all, by the complainant.

The notice of enquiry in the present case is based on the complaint. As a matter of fact, the complaint has been made an integral part of the notice. The deficiencies, if any, in the complaint can be made good only by the complainant. The locus standi of the complainant, therefore, in the present proceedings, arising out of the respondent's application, cannot reasonably be questioned. As a matter of fact, the first prayer itself is for rejection of the complaint dated the 18th April, 1976, and surely it cannot reasonably be suggested that the complainant would not be interested in the fate of its complaint. The objection raised by the learned counsel is, therefore, overruled.

5. With regard to the other prayers the learned counsel for the respondent contended that the restrictive trade practices alleged were not set out in the notice, that it is the notice which is the starting point of the inquiry and not the complaint, that the complaint did not set out either the field of competition affected nor the manner in which the competition is affected, that resale price maintenance would not be anti-competitive in all circumstances, that in cases of acute scarcity it might not be anticompetitive in effect, that at least the minimum price allegedly insisted upon by the respondent should be set out, that it was not at all clear whether refusal to sell 85 kg. drums was an independent restrictive trade practice or was ancillary to resale price maintenance, that it was also not pointed out whether any other trader in the locality was given more favourable terms, that the only prayer in the complaint was in respect of an inquiry under Section 37, that paras. 21 to 23 were outside the pale of inquiry by the Commission, that these paras, should at least be deleted from the scope of the inquiry, that even otherwise it is not shown how the practice affects competition, that as a matter of fact the allegations made by the complainant in para. 23 were contradictory, that either the respondent had refused to supply goods altogether or it had agreed to supply goods on less favourable terms and that it could not be guilty of both the practices at the same time.

6. The learned counsel for the complainant, on the other hand, complained that the application of the respondent was a jumble of prayers, that the complaint was advisedly confined to an inquiry under Section 37, that there was no contradiction between the complaint in paras. 23(a) and 23(b), that by reason of the practice adopted in para.

23(b) the respondent must be deemed to have followed the practice set out in para. 23(a), that as a matter of fact the complaint had given all possible facts and by reason of the practices followed by the respondent the competition between the complainant and other retailers in the same locality was clearly affected.

7. The learned Director of Investigation pointed out at the outset that the respondent had allowed nine months to pass on talks of settlement, that the prayer for further and better particulars at this stage was quite belated, that accordingly the application should be rejected, that at best the Commission should give clarification in regard to certain points raised, that as a matter of fact there were two charges against the respondent, that the first charge related to discrimination in the matter of commission and supply of 85 kg. drums between the complainant on the one hand and on the other the retailers in the locality, and the resale price maintenance, that both these practices were prima facie anti-competitive and did not require any further particulars, that Section 39 provided for an additional action contemplated against resale price maintenance, that in case of resale price maintenance the inquiry under Section 37 need not cover the question of prejudice to public interest, that the gateways under Section 38 would not be available to the respondent in case of resale price maintenance, that there was no need for a separate authority for enforcing the provisions relating to resale price maintenance and that the Commission's jurisdiction in relation thereto could not be ruled out.

8. The learned counsel for the respondent in his reply contended that the complainant and the Director of Investigation were not unanimous about the number of charges included in the complaint and that in such a situation further and better particulars were necessary to define exactly the charge the respondent had to meet.

9. I have considered the contentions of the parties with great care and I do not find any merit in the contentions put forward by the learned counsel for the respondent. In this case, the complaint is an integral part of the notice and, therefore, it cannot be suggested that the trade practices alleged have not been set out in the notice. The central charges in the complaint are about the resale price maintenance and discrimination against M/s. Garg & Co. in respect of supply of oil and particularly in the matter of packings of 85 kg. drums and in the matter of commission. The field of competition affected is the competition between the retailers in the market in which the members of the complainant-association are operating. As far as the resale price maintenance is concerned, at this stage, no further particulars are necessary. Same is the case with the charges of discrimination. If the discrimination is in support of resale price maintenance they will have to be considered together. In so far as they are independent of each other, they will have to be considered independently. But the field of competition affected is beyond doubt and so is the manner in which the competition is affected. Whether the allegations are borne out will depend on the evidence which the Director and the complainant are able to lead. On the other hand, whether the respondent was resorting to the trade practices and whether the trade practices had negligible effect on the field of competition and whether there was any other justification for the trade practices, if any, would depend also on the evidence led by the respondent. As far as the prima facie case was concerned, the same was adequately set out in the complaint annexed to the notice and the field of competition has been clarified at the time of the hearing of the application of the respondent. If, as it was suggested by the learned counsel for the respondent, the resale price maintenance had no effect on competition because of scarcity of the commodity concerned, this fact will have to be brought out at the time of final hearing. It is not correct on the part of the learned counsel to say that the allegation did not contain any reference to more favourable treatment to other competitors. The complaint clearly alleges that there was discrimination against M/s. Garg & Co. In respect of all the charges, therefore, the field of competition is set out and the manner in which such competition is affected needs no further elucidation.

10. In regard to the prayer (d), the learned counsel for the respondent relied on Regulation 71. In view of the decision of the Commission in the case of RRTA v. Bata India Ltd. (RTPE No. 3 of 1974) [1975] 45 Comp Cas 674 (MRTPC), the complaint under Section 10(a)(i) can be regarded as a pleading but I am unable to accept the contention put forward by the learned counsel for the respondent that paras. 21, 22 and 23 of the complaint were frivolous, oppressive or irrelevant. They were certainly not frivolous or oppressive because they contained charges which are substantial. They are not irrelevant because they specify the same charges, which are under inquiry under Section 37 of the Act. It is premature to decide the contention raised by the learned Director that in respect of the inquiry into resale price maintenance under Section 37, the question of public interest would not arise, since Section 39 would be decisive. That question will be decided, if raised, at the time of the final hearing of this inquiry under Section 37. The narrow question to be decided at this stage is whether paras. 21, 22 and 23 were so irrelevant as to jusify their being struck off under regln. 71, and as stated earlier, the paras, were certainly not irrelevant. They underline the charge of resale price maintenance and alleged sanction to support that practice. Some questions having a bearing on Sections 39 and 40 may have to be decided at the time of the final hearing, in the course of the inquiry under Section 37, e.g., the question whether inquiry into public interest is necessary or not and whether the circumstances under which resale price maintenance is deemed to have been resorted to, could be taken into account. It is not necessary to speculate as to what the correct answers to these questions are. It is enough to indicate that the paragraphs in question were not irrelevant to the inquiry and might have an important bearing on the outcome of the inquiry. Even if the statutory provisions referred to in the paragraphs were not invoked, the facts set out in those paragraphs would certainly have a bearing on the inquiry in question. I am, therefore, unable to accede to prayer (d) in the application.

11. In the result, the application is rejected and the respondent is directed to file the reply to the notice on or before the 13th February, 1978.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //