TMI Blog2004 (4) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... rry on business in India through the respondent No. 2 and that the alleged unfair trade practice did not take place in India, the Commission will dismiss the respondent No. 1’s complaint without deciding the matter on merits. - CIVIL APPEAL NO. 7244 OF 1999 - - - Dated:- 19-4-2004 - MRS. RUMA PAL AND P. VENKATARAMA REDDI, JJ. Sunil Gupta, Ms. Mohna Lal, Rajiv Mehta for the Appellant. Arvind Minocha, Ravi Sharma, V.K. Rao, Satish Kumar, Ms. Madhu Sikri for the Respondent . JUDGMENT Ruma Pal, J. - The appellant has challenged the order of the Commission set up under the Monopolies and Restrictive Trade Practices Act, 1969 (referred to as the Act) by which the Commission held it had the jurisdic- tion to entertain the respondent s claim for compensation under section 12B of the Act against the appellant and the respondent No. 2. 2. The appellant carries on its business of manufacturing printing machines in Germany. It was incorporated under German Law and has its registered office at Offenbach, Main, Germany. The respondent No. 1 and the respondent No. 2 have their registered offices at Mumbai. 3. Pursuant to the agreement a printing machine was sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the Rules. The venue of such Arbitration shall be Paris (France) and the proceedings shall be conducted in English language." 8. Pursuant to this memorandum, a formal offer was sent by the appellant to respondent No. 1 on 24th January, 1994 to sell the printing machine. This was accepted by the respondent No. 1 s letter dated 2nd February, 1994 to the appellant. On the same date, the appellant acknowledged receipt of the order and the fact of sale of the machine subject to, inter alia , the following condition : "XVI. Jurisdiction and arbitration . (1) The place of jurisdiction for all disputes arising out of the contract - including actions on negotiable legal instruments and documents - shall be the place of the works supplying the goods concerned i.e. Augsburg or Offenbech MR may also bring an action at the place of the Purchaser s registered office. (2) In the event arbitration proceedings being agreed with a purchaser having his registered office outside the Federal Republic of Germany any disputes arising out of the contract or in respect of its validity or the validity of the arbitration agreement shall be finally settled to the exclusion of le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission is a Court as contended by the appellant. on the basis of Canara Bank v. Nuclear Power Corpn. of India Ltd. [1995] Supp. (3) SCC 81 1 and P. Sarathy v. State Bank of India 2000 (5) SCC 355. 11. The question then arises whether the Commission can at all exercise jurisdiction in respect of the complaint of unfair trade practice made by the respondent No. 1 before it ? An unfair trade practice has been defined in section 36A as meaning a trade practice which, for the purpose of promoting the sale, use or supply of any goods or the provision of any services, adopts any unfair method or unfair or deceptive practice including any of the practice specified in that section. The respondent has in its complaint relied on the following provisions in section 36B: "(1) the practice of making any statement, whether orally or in writing or by visible representation which, ( i )falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or mode; ( ii )falsely represents that the services are of a particular standard, quality or grade; ( iii )falsely represents any re-built, secondhand, renovated, re-conditioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ists on the payment of an additional sum of two lakhs as initial payment to the second respondent for carrying out repairs. ( e )And inspite of making the said payment not carrying out of any repairs. 14. The appellant s contention is that if the party alleged to have indulged in unfair trade practice does not reside in India the practices complained of must take place within India as the Act has no extra-territorial operation. As a proposition of law this is correct and follows from section 14 of the Act which deals with Orders where party concerned does not carry on business in India and says : "Where any practice substantially falls within monopolistic, restrictive or unfair, trade practice, relating to the production, storage, supply, distribution or control of goods of any description or the provision of any services and any party to such practice does not carry on business in India, an order may be made under this Act with respect to that part of the practices which is carried on in India." 15. The subject matter of complaint of an unfair trade practice must be such that relief under section 36D can be granted in respect of it. As the Commission can grant relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised as a preliminary issue. In such event, the issue would have to be adjudicated upon after giving the parties an opportunity to lead evidence. The Commission proceeded on the basis that both the objections raised by the appellant, were by way of demurrer. 19. The appellant s first objection to the Commission s jurisdiction based on the clause in the agreement was in fact in the nature of a demurrer and could be decided as such. But in our opinion the second objection to the jurisdiction of the Commission was not. It would have to be determined an evidence. 20. The Commission held that it had the jurisdiction to entertain the complaint because (1) the appellant carried on its trade practice of supply of the printing machinery to the respondent No. 1 in India through the respondent No. 2 who admittedly was its Indian Agent, (2) the contract between the appellant and the respondent No. 1 was required to be performed in India and (3) the supply of the printing machinery pursuant to the sale transaction was within the definition of trade practice in section 2( u ) of the Act and the effect of such trade practice would certainly be on the Indian soil as the printing mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddressed its mind to this aspect at all. It must do so. The appellant had also contended that the machine had been inspected in Germany prior to its sale by the respondent No. 1. This again pertains to the defense of the appellant on merits. The contract dated 21st December, 1993 envisaged not only the supply of the machine by the appellant to the respondent No. 1, but also provided for the appellant No. 1 helping in the erection and installation of the machine at the respondent No. 1 s site. According to the appellant, the contract was signed by it without any obligation . This would also have to be tried and determi- ned on evidence. The appellant has also claimed that the portion of the contract providing for installation of the machine had been subsequently deleted and a proportionate part of the price paid by the respondent No. 1 had been remitted to it. These are all matters to be adjudicated upon. 23. But the Commission erred in law when it held that it would have jurisdiction because the effect of the unfair trade practice would be in India. Haridas Export s case ( supra ) also dealt, inter alia , with the contention that even if the practice took place outside In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
