TMI Blog2008 (5) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... mers of goods in question and therefore ex facie neither notice nor the application are maintainable. Thus the Commission must be extremely careful before issuing notices to the parties because it has serious consequences on the reputation and credibility to the activities of those parties. Frivolous notices breed long-drawn avoidable litigation before various forums. - CIVIL APPEAL NO. 1709 OF 2001 - - - Dated:- 12-5-2008 - TARUN CHATTERJEE AND DALVEER BHANDARI, JJ. JUDGMENT Dalveer Bhandari, J. - This appeal is directed against the judgment delivered by the Monopolies and Restrictive Trade Practices Commission (hereinafter referred to as the Commission ) in Restrictive Trade Practices Enquiry No. 159 of 1996, dated 27-10-2000. 2. Brief facts which are necessary to dispose of this appeal are recapitulated as under: The Director General (Investigation Registration) under section 10( a )( iii ) of the Monopolies Restrictive Trade Practices Act, 1969 (hereinafter referred to as "the Act") sent an application that an enquiry be instituted against Bajaj Auto Limited (hereinafter referred to as the appellant ) for indulging in restrictive trade practice wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uisite condition before the action can be taken against the appellant. Section 2( o ) of the Act reads as under: "2( o ) restrictive trade practice means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular, ( i )which tends to obstruct the flow of capital or resources into the stream of production, or ( ii )which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions;" 7. In reply, it was also contended that the dealers appointment at Rajkot neither prescribes any territorial limit nor does it restrain it to sell goods outside Rajkot. In absence of any such restraint, the statement in the Preamble and the Appointment Letter cannot be construed to mean an agreement allocating area or market for disposal of goods in question. The identification of a place is for the purpose of establishing necessary facilities, infrastructure for after sales and maintenance of services. The relevant portion of the letter which has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s impair the competition in the market as it limits the choice of the consumer to a particular dealer who may not indulge in unfair dealings. This is certainly not in public interest. 12. According to the Commission, the alleged restrictive trade practice is covered under section 33(1)( g ) of the Act and as such being prejudicial to public interest. The Commission directed appellant No. 1 to cease the aforesaid practice if continued at present and desist from repeating the same in future. 13. Regarding fixation of sales target, the Commission observed that the quantity of product to be purchased not by reason of market demand but on account of target fixed by the appellant would certainly amount to tie-up of one product with another attracting clause ( b ) of section 33(1) of the Act. 14. Regarding dealership agreement, the Commission observed that it fairly laid down that the dealer is free to sell at a lower price than the recommended retail price. Clause DD, on the other hand, refers to the revised prices which have been made effective from 1-10-1994. As per this clause, the vehicles already in stock as on 1-10-1994 are to be sold at the old prices. This is clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appointment letter only states that the appointment is a Dealer at Rajkot. It neither prescribes any territory nor does it restrict in any way the dealer to any territory or area for disposal of goods in question and, therefore, in the absence of any such restraint, the statement in the preamble in the appointment letter cannot be construed or interpreted as an agreement allocating area or market for disposal of the goods in question. It was further submitted on behalf of the appellant that it is pre-requisite for and an essential ingredient of the restrictive trade practice referred in section 33(1)( g ) of the Act, the jurisdictional facts for applicability are not present and, therefore, section 33(1)( g ) of the MRTP Act has no application. The purpose of indicating "at Rajkot" only means the identification of place which is necessary as the dealer has to establish at Rajkot necessary facilities and infrastructure for after-sales maintenance and service including warranty services of the scooters and other vehicles. In the reply, it was further submitted that the jurisdictional facts for application of section 33(1)( b ) are lacking inasmuch as the said letter dated 11-5- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after-sales-services to the customers of the vehicle sold by it and to keep them running and in good condition. 23. The appellant also submitted before the Commission that to motivate the dealers for increasing sales, the appellant fixes sales target for the year. Fixing of sales targets do not and cannot mean that the dealer is required or compelled to buy one or the other Bajaj products. The appellant submitted that the setting of target as outlined in the said letter dated 11-5-1994 is not a process of performance appraisal, but is a condition imposed in the agreement, the gateway laid down in clause ( h ) of section 38(1) of the MRTP Act is squarely applicable as the condition does not directly or indirectly restrict or discourage competition in the two and three wheeler market to any extent at all. 24. It is submitted that, by no stretch of imagination, the appellant has indulged in restrictive trade practice and the provisions of clauses ( b ), ( f ) and ( g ) of section 33(1) of the MRTP Act are not attracted. 25. The appellant company placed reliance on the case of Mahindra Mahindra Ltd. v. Union of India [1979] 2 SCC 529, wherein it was held that it is on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
