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TMI Blog2010 (3) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... oda, claims that such an application is not maintainable in view of the earlier legal proceedings instituted by the petitioner. 3. The facts of the case are that the petitioner-Company was incorporated and registered as a private limited company under the Companies Act, 1956 in the year 1975 and is a recognized export house dealing with export of carpets, durries and other allied products. The petitioner rooted its transaction in trade through Bank of Baroda since its very inception. The petitioner claims to have authorized one Mr. Girwar Singh, Manager and Mr. Sharad Shah, Accountant to jointly operate its accounts with R-2/Bank in pursuance to resolutions passed on 1-6-1987 and 12-5-1989. These two persons were divested of the power to operate the account by resolution dated 31-5-1990 and 24-2-1993 respectively. 4. It is the claim of the petitioner that in view of its adherence to the financial discipline of R-2/Bank, the facilities advanced by R-2/Bank were enhanced including grant of packing credit facilities to the extent of Rs. 75 lakhs and foreign bill purchase of the export consignment up to the extent of Rs. 95 lakhs. 5. In February, 1996 when Mr. Sharad Shah went on le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the monopolistic or restrictive, or unfair, trade practice, carried on by any undertaking or any person, any loss or damage is caused to the Central Government, or any State Government or any trader or class of traders or any consumer, such Government or, as the case may be, trader or class of traders or consumer may, without prejudice to the right of such Government, trader or class of traders or consumer to institute a suit for the recovery of any compensation for the loss or damage so caused, make an application to the Commission for an order for the recovery from that undertaking or owner thereof or, as the case may be, from such person, of such amount as the Commission may determine as compensation for the loss or damage so caused. (2) Where any loss or damage referred to in sub-section (1) is caused to numerous persons having the same interest, one or more of such persons may, with the permission of the Commission, make an application, under that sub-section, for and on behalf of, or for the benefit of, the persons so interested, and thereupon the provisions of rule 8 of Order I of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall apply subject to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in turn inter alia provides as under: "(5) I undertake that if I receive any amount from any source in connection with or relating to the aforesaid compensation, I will intimate the same to the MRTP Commission." 13. It was thus the submission of learned counsel for the petitioner that reading of section 12B(4) and Regulation 77 along with format of the affidavit left no manner of doubt that two or more parallel proceedings were envisaged, but there would be no duplication in respect of the payment of damages. Thus, instead of debarment of parallel proceedings section 12-B it is stated to recognize such parallel proceedings being maintained simultaneously, section 12B being a substantive provision, the rights so acquired were submitted to be one without prejudice to right of an applicant to institute inter alia suit for recovery of compensation for loss/damages and the only exception to the same is that there should not be another proceedings filed on the same cause of action before the Commission or before any authority under the Consumer Protection Act, 1986 as set out in Regulation 77, which reads as under : "77. Application for compensation.-(1) Every application made under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle does not apply to proceedings under the Act which provide for statutory remedies in respect of statutorily defined offences. The remedies available under the Act are additional to the usual remedies available under the Contract Act to the parties. This is clear inter alia from sections 4(1) and 12B(1) of the Act, both of which indicate that the proceedings under the Act are additional to, and therefore, distinct from, proceedings before a civil court. The powers invoked by the complainant under the Act are not exercisable otherwise than under the Act and they are certainly not exercisable by courts in Germany. The jurisdictional clause in the contract would, therefore, not apply to proceedings before the Commission. This is so even assuming that the Commission is a "court" as contended by the appellant on the basis of Canara Bank v. Nuclear Power Corpn. of India Ltd. and P. Sarathy v. State Bank of India." In order to appreciate the aforesaid observations, we consider it appropriate to reproduce section 4(1) of the said Act as under : "4. Application of Other Laws not Barred.-(1) Save as otherwise provided in sub-section (2) or elsewhere in this Act, the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or inquire into an unfair trade practice from the stand- point of competitor which is purely a private interest, therefore, the scope of an inquiry into an unfair trade practice before the MRTP Commission is entirely different from the scope of consideration of an unfair trade practice in a civil court in a suit instituted by a competitor against another competitor with regard to disparaging advertisement. I do not see how the directions which may be passed under section 36D of the MRTP Act can be regarded as an equally efficacious relief." (Emphasis supplied) 17. Learned counsel for the petitioner pleaded that the rationale of the impugned order is the doctrine of election of remedies i.e., the petitioner/claimant must choose between or elect one of the two or more conflicting remedies available. The said doctrine was pleaded to have no application as it applies to the adoption of an unequivocal act of one or two or more inconsistent remedial rights which has the effect of precluding a resort to the others. The remedy under section 12B of the said Act being independent of any other remedy, there could not be any conflict or repugnance between the remedies. 18. To explain the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t grounds of action arising from the same transaction and which may be concurrently or consecutively pursued to satisfaction are not subject to the doctrine of election of remedies. Accordingly, an action on a contract induced by fraud is not inconsistent with an action for damage for the fraud. Nor is an action against an insurer for failure to pay under an insurance policy for damages to an automobile inconsistent with an action for conversation against the insurer for taking possession of the automobile without authorization." (Emphasis supplied) 19. The aforesaid doctrine has also been elucidated in the case of Transcore v. Union of India [2008] 1 SCC 125 in the context of banks or financial institutions which have elected to seek a remedy in terms of Recovery of Debts due to Banks and Financial Institutions Act, 1993 invoking also the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for realizing the secured assets without withdrawing or abandoning the original application filed under the DRT Act. It was observed in para 64 as under : "64. In the light of the above discussion, we now examine the doctrine o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation of Statutes, Twelfth Edition page 40). It has been observed on page 45 of that book: 'If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result.' It is well-settled that in construing the provisions of a statute courts should be slow to adopt a construction which tends to make any part of the status meaningless or ineffective; an attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the status (See in this connection Siraj-ul-Haq v. S.C. Board of Waqf, U. P. AIR 1959 SC 198. In the cause of Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale [1960] 1 SCR 890/AIR 1960 SC 137, the Supreme Court while dealing with, legislation conferring further protection on the tenants, observed: 'In interpreting provisions of such beneficial legislation the Courts always lean in favour of that interpretation which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de on the compensation and damages aspect if the respondent entity was found to be indulging in monopolistic, restrictive or unfair trade practices. 26. Learned counsel rightly could not dispute the reading of the plain language of section 12B of the said Act but contended that what was envisaged was a proceeding under section 12B of the said Act and thereafter a suit to be filed. The said section did not envisage a similar leave being available to the aggrieved party to file an application under section 12B of the said Act if he had already filed a civil suit in a court of competent jurisdiction. The rationale for the same was that a civil court covers a wider area as under section 9 of the Code of Civil Procedure, 1908, the civil court has jurisdiction to try all suits of civil nature except the suits of which cognizance is either expressly or impliedly barred. In case of an illegal or prohibited practice or a monopolistic, restrictive or unfair trade practice, a civil suit could be filed to recover damages which might have been caused because of such practice but the jurisdiction under section 12B of the said Act was restrictive and such a practice was a pre-requisite to any cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 30. The said observations were sought to be utilized by learned counsel for the respondents to plead that filing of proceedings under section 12B of the said Act preserved the right to file a civil suit but not vice versa. 31. Learned counsel further pointed out that even in Man Roland Druckimachinen's case (supra) the Supreme Court had held the proceedings under section 12-B of the said Act to be in the nature of additional proceedings and not derogatory to the civil proceedings, but the judgment did not deal with a situation where a suit had already been initiated and during the pendency of the civil court proceedings, an application was sought to be filed under section 12-B of the said Act. 32. The substratum of case of the respondent rests on the general principle that neither law nor jurisprudence encourages parallel proceedings for the same relief unless it is specifically so provided and referred to the consistent view taken by the Commission in this behalf. Learned counsel referred to the judgment of the Division Bench in M.S. Shoes East Ltd. v. MRTP [2004] 52 SCL 628 (Delhi) but in our considered view the judgment would really have no application because it dealt with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under section 12B of the said Act. The respondents had filed a suit for recovery against the petitioner before the DRT which was pending. Thus the petitioner had taken recourse to civil remedy and could not be permitted to maintain parallel proceedings before the said Commission. 38. We have examined the aforesaid submission in the context of the limited controversy as to whether parallel proceedings under section 12B of the said Act can be maintained. There is no doubt about the general principle of law that parallel proceedings on the same course of action should be discouraged. Rationale for the same is based on the concept of election of remedies. What are the essential ingredients while determining this principle of election of remedies has been elucidated in American jurisprudence which has been extracted aforesaid. The essential conditions are : (i)The existence of two or more remedies. (ii)The inconsistencies between such remedies. (iii)A choice of one of them. 39. It has been clearly explained that absence of even one of those elements would imply that the doctrine will not preclude any remedy. It has no application where remedies are concurrent or cumula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequently the application is filed under section 12B of the said Act. (iii)Proceedings are pending under section 12B of the said Act and during such pendency a civil suit is filed. 42. The respondents sought to deny the maintainability of proceedings under section 12B of the said Act in the first two eventualities. We find no such limitation on a plain reading of the Act. 43. We fail to appreciate how if during the pendency of an application under section 12B of the said Act a suit can be filed (which position is not disputed by learned counsel for the respondents) the vice versa is not permissible. The plea that the jurisdiction of a civil court being wider and thus only a subsequent civil suit is maintainable is spacious. The affidavit to be filed under Regulation 77 itself envisages the possibility of a civil court decree and the damages therefrom to be intimated to the Commission determining the application under section 12B(4) of the said Act. 44. Thus as to whether a suit is filed first or an application under section 12B of the said Act first is immaterial to determine whether parallel proceedings can be maintained. Either such parallel proceedings are maintainable or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 12B is restrictive in nature, if it is so, it is only within those parameters that the remedy of damages would be available on the claimant establishing a monopolistic, restrictive or unfair trade practice. There is no disadvantage to the respondents inasmuch as the petitioner cannot recover the amount twice over. No doubt the respondents would have to defend legal proceedings in more than one forum, but then that is what has been specifically permitted by section 12B of the said Act and the principle of election of remedies cannot be imported to deny parallel proceedings it such parallel proceedings have been specifically permitted even if in the past the Commission has taken a view to the contrary. 50. We are thus of the considered view that as per the clear mandate of section 12B(4) of the said Act, an application for compensation is maintainable even if a civil suit is pending and the application must proceed in accordance with law. 51. We thus set aside the impugned order dated 13-11-2000 and direct the Commission (now the succeeding authority being Competition Commission of India under the Competition Act, 2002) to proceed in accordance with law. 52. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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