TMI Blog2008 (9) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. 2. These appeals have been filed against the judgment and final order dated 29-11-2005 passed by the Monopolies and Restrictive Trade Practices Commission, New Delhi in Restrictive Trade Practices Enquiry No. 172 of 1995 and Compensation Application No. 258 of 1994. 3. Heard learned counsel for the parties and perused the record. 4. The appellant is a company incorporated in accordance with the laws of the State of New York, USA which is engaged in the business, inter alia, of manufacturing and selling of various medical diagnostic equipment, including whole body CT Scanner. Respondent No. 1 wanted to purchase a whole Body CT Scanner and held negotiations for the same with the appellant and respondent No. 3, M/s. UB Picker Ltd. It is alleged that on 10-4-1989, the appellant sent its proforma invoice No. PMS/S/CT/001/89 (hereinafter referred to as the First Offer ) for the supply of a new CT Scanner (Picker Synerview 1200 SX Whole Body Computer Tomography Scanner, 4th Generation Stationary Detector Technology system) including spares and accessories at a price of US$ 1,282,500 (US Dollar one million two hundred eighty two thousand five hundred only). This First O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or/Viewing Console; ( b )The lead time for supply of the system was to be 90 days after receipt of L/C. The lead time was also dependant upon the timely receipt of Indian Import Certificate and US Export licence and was likely to be extended if documentation of the Government of India or USA was not available within the time period. ( c )The system was to be sent from USA to India by Ocean Freight " 7. After negotiations, the Second Quotation was duly accepted by respondent No. 1 with the condition that the total system price would be US$ 570,000 (US Dollar five hundred seventy thousand only) and this would include shipment of the system by Air instead of by ocean freight , which was one of the terms of the Second Quotation. The break-up of the total system price was US$ 560,000 (US Dollar five hundred sixty thousand only) for the system and US$ 10,000 (US Dollar ten thousand only) towards the cost of the shipment by Air . This was duly endorsed by respondent No. 2, on 16/23-1-1990. At the relevant time, respondent No. 2 was the Chairman of the Board of Directors of respondent No. 1. Respondent No. 1 opened an L/C dated 24-2-1990 in the amount of US$ 700,000 (US Dollar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during cross-examination. The L/C was never encashed by the appellant and was returned to respondent No. 1. Respondent No. 1 was in breach of its obligations that were to be performed by respondent No. 1 before the appellant could perform or could be called upon to perform its obligations. Consequently, the occasion for supply of the CT Scanner by the appellant to respondent No. 1 never arose. 13. The respondent Nos. 1 2 filed a complaint before the MRTP Commission against the appellant and respondent Nos. 3 to 5, being RTP Enquiry No. 172 of 1995 making therein various allegations including the allegation that appellant and respondent Nos. 3 to 5 had falsely represented to respondent No. 1 about the production and quality of the goods and services and it induced respondent Nos. 1 2 into entering into an agreement with them, although they had knowledge that the CT Scanner ordered by respondent No. 1 was not in production. 14. It is alleged that in these circumstances, respondent Nos. 1 2 was left with no option but to procure the CT Scanner from Hitachi, Japan. It is also alleged that respondent Nos. 1 2 thereby suffered a huge loss of Rs. 32,31,885, which should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which such seller or supplier does not have; ( vi )makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services; ( vii )gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof: Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence; ( viii )makes to the public a representation in a form that purports to be ( i )a warranty or guarantee of a product or of any goods or services; or ( ii )a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out; ( ix )materially misleading the public concerning the price at which a product or like products or goods or services, have been, or are, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest; (4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods; (5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale, or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services." 20. In this connection it may be mentioned that as originally enacted the MRTP Act, 1969 was made with the object of ensuring that the operation of the economic system does not result in a concentration of economic power to the common detriment, for the control of monopolies, and for the prohibition of monopolistic and restrictive trade practices. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer has been deleted. Also, another change brought out by the 1991 amendment was that while the original section 36A had adopted an exhaustive definition of unfair trade practice, the 1991 amendment has given an inclusive and not an exhaustive definition of unfair trade practice. 25. However, we are of the opinion that principles of ejusdem generis and noscitur a sociis will apply to the interpretation of section 36A as amended in 1991. Applying these well-known principles of interpretation we are of the opinion that section 36A does not apply in a situation where goods are not sold at all. It only applies where goods in fact are sold. 26. It is a settled principle of interpretation that when an amendment is made to an Act, or when a new enactment is made, Heydon s mischief rule is often utilized in interpreting the same. Applying this principle we are of the opinion that section 36A was inserted in the MRTP Act because there was no provision therein for protection of consumers against false or misleading advertisement or other similar unfair trade practices. It is well-known that in a trade suppliers often have a dominant bargaining position, and the bargaining power in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the inclusive definition the meaning of the expression unfair trade practice goes beyond the specific clauses mentioned in section 36A, but that does not mean that the meaning will go beyond the very object of section 36A. 30. In view of the above discussion, we are of the opinion that the impugned judgment and order dated 29-11-2005 passed by the MRTP Commission cannot be sustained and it is hereby set aside. The appeals are allowed. There shall be no order as to costs. JUDGMENT Altamas Kabir, J. - Having had an opportunity of going through the draft judgment prepared by my learned brother, while I generally agree with the same, I would like to add a few words of my own with regard to the interpretation of section 36A of the Monopolies and Restrictive Trade Practices Act, 1969, (hereinafter referred to as the 1969 Act ) which has been introduced in the Act by way of amendment in 1984 and further amendment in 1991. 2. As was submitted by Mr. A.N. Haksar, learned Senior Advocate for the appellant, the 1969 Act, as originally enacted, lacked definition of the term unfair trade practice . While trade practice was defined in section 2( u ) of the original e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, or false representations, claiming that the goods sold are of a certain standard or have certain qualities, which, in fact, they do not possess. My learned brother, therefore, was of the view that the Amendment had nothing to do in a situation where goods were not sold at all. While also observing that by the 1991 amendment section 36A was given an inclusive and not an exhaustive definition of unfair trade practice, my learned brother was also of the opinion that the principles of ejusdem generis and noscitur a sociis will apply to section 36A as amended in 1991 and applying the said principles the High Court was of the opinion that section 36A would not apply in a situation where goods are not sold at all. 5. The said view has been reiterated throughout the latter part of my learned brother s judgment, but I am of the view that such an interpretation is too rigid and situations may arise, which though falling under the wider concept of unfair trade practice, may not strictly be covered by section 36A of the 1969 Act. In my view, there may be situations where a promise to supply a particular good, which the supplier knew that he was in no position to supply, with a motive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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