DIRECTOR GENERAL I & R Vs. ALL INDIA ORGANISATION OF CHEMISTS AND DRUGGISTS
LAWS(NR)-1996-7-1
MONO POLIES AND RESTRICTIVE TRADE PRACTICES COMMISSION
Decided on July 01,1996

Appellant
VERSUS
Respondents

JUDGEMENT

S. Chakravarthy, Member - (1.) THIS enquiry needs to be disposed of in the light of the interpretation of law laid down by the Supreme Court in Voltas Ltd. v. Union of India [1995] 83 Comp Cas 228. Before we deal with the facts of this enquiry, it is desirable, in our considered view, to narrate the law laid down by the Supreme Court/in interpreting Section 33(1) of the Monopolies and Restrictive Trade Practices Act, 1969. We, therefore, proceed to do this exercise at the very threshold.
(2.) Prior to the amendment to Sub-section (1) of Section 33 of the Act, by Act No. 30 of 1984 with effect from August 1, 1984, an agreement -relating to a restrictive trade practice falling within one or more of the categories specified in the said sub-section was compulsorily required to be registered. After the amendment, with effect from August 1, 1984, which introduced a deeming clause, an agreement falling within one or more of the categories mentioned in the said Sub-section (1), "shall be deemed for the purposes of this Act, to be an agreement relating to restrictive trade practices and shall be subject to registration". Thus, while amending and substituting that part of Sub-section (1) of Section 33, Parliament determined, and specified that agreements falling within one or more of the categories mentioned in the said Sub-section (1) of Section 33, shall be deemed to be agreements relating to restrictive trade practices. By the deeming clause, there is now no requirement to treat any imaginary state of affairs as real but to treat the agreements specified and enumerated in Sub-section (1) of Section 33 of the Act as agreements relating to restrictive trade practices. The Supreme Court has observed in Voltes Limited's case [1995] 83 Comp Gas 228, 237 as follows : "It can be said that Parliament after having examined different trade practices, has identified such trade practices which have to be held as restrictive trade practices for the purposes of the Act. To keep such trade practices beyond controversy in any proceeding, a deeming clause has been introduced in Sub-section (1) of Section 33, saying that they shall be deemed to be restrictive trade practices. In this background, according to us, there is not much scope, for argument that although a particular agreement is covered by one or the other clause of Sub-section (1) of Section 33, still it shall not amount to an agreement containing conditions which can be held to be restrictive trade practices within the meaning of the Act." With the amendment to Sub-section (1) of Section 33 of the Act, a statutory fiction has been created. The framers of the Act have now in clear and unambiguous words said that an agreement which falls within the mischief of one or more of the categories specified in Clauses (a) to (1) of Sub-section (1) of Section 33 shall constitute a restrictive trade practice and be subject to registration. The Supreme Court has further observed as follows (at page 240) : "Now, it is no more open to the Commission or to this court to test and examine any of the trade practices mentioned in Clauses (a) to (1) of Sub-section (1) of Section 33 in the light of Section 2(o) of the Act, for the purpose of recording a finding as to whether those types of trade practices shall be restrictive trade practices within the meaning of Section 2(o) of the Act. This exercise has to be done only in respect of such trade practices which have not been enumerated in any of the clauses from (a) to (1). Only such trade practices have to be examined in the light of Section 2(o) of the Act, as to whether, they amounted to restrictive trade practices . . . But after the amendment of Sub-section (1) of Section 33, if an agreement falls within one of the clauses of the said sub-section, specifying a restrictive trade practice, then it is no more open to the Commission or to the court to say that it shall not amount to a restrictive trade practice. The trade practices enumerated in Clauses (a) to (1) of Sub-section (1) of Section 33, shall be deemed to have now been statutorily determined and specified as restrictive trade practices. Neither the Commission, nor the court can question the wisdom of Parliament in having statutorily determined certain trade practices as restrictive trade practices unless in this process, there is contravention of any of the provisions of the Constitution."
(3.) WHILE the legal fiction in Sub-section (1) of Section 33 of the Act has been clearly interpreted by the apex court as in the aforesaid paragraphs, a further question which came up for consideration before it, was the scope of enquiry by the Commission. Here again, the interpretation of the apex court is, with respect, very incisive. The court observed as follows (at page 241) : "As such persons who have got their agreements registered on their own in order to escape prosecution, although in such agreements, there may not be any clause relating to restrictive trade practices, cannot urge before the Commission, after having got the agreements registered, that they do not contain any clause relating to any restrictive trade practice. On the other hand, persons who for one reason or other have not got their agreements registered under Section 35, will be in an advantageous position in as much as in respect of their agreements, the Commission will have to examine both aspects (i) whether the agreement relates to any restrictive trade practice, (ii) even if it relates to restrictive trade practice, whether the said practice is prejudicial to the public interest. It is true that under Section 37, the Commission has been vested with the power to inquire in respect of agreements which have been registered under Section 35 as well as those which have not been registered. But the fact remains that once the Commission is satisfied that a particular agreement which has not been registered under Section 35, falls within any of the clauses from (a) to (1) of Sub-section (1) of Section 33, then no further inquiry is to be done, as to whether such agreement relates to restrictive trade practices or not.";


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