Decided on September 14,1977



- (1.) THIS is an application by the Director of Investigation seeking the following directions: " (a) That leave may kindly be granted to the applicant to deliver to the respondent interrogatories as set out in annexure ' A' hereto and time be fixed when the respondent shall answer those interrogatories. (b) That the respondent be ordered to make discovery on oath of the documents in its power or possession with particular reference to annexure II. Further the respondent be ordered to give inspection of those documents. (c) That the Hon'ble Commission may be pleased to issue such other direction or directions as may be considered proper and necessary in the matter.
(2.) The respondent is a limited company doing business in plywoods. On the basis of its own knowledge or information, the Commission issued to it a notice dated October 16, 1976, notifying its intention to enquire into the alleged restrictive trade practice of giving graduated bonus to its agents on the basis of annual turnover according to the following schedule: The respondent filed its memorandum of appearance and also filed its reply to the notice dated January 8, 1977. In this reply it was, inter alia, contended that the respondent in its price lists dated December 5, 1973, January 28, 1974, February 16, 1974, and March 5, 1974, was giving graduated bonus to its customers and not to its agents on the basis of the annual turnover for the year 1973 and 1974, and that the respondent has withdrawn the annual turnover bonus with effect from 1975 and that there was no warrant or justification for proceeding on the basis that the grant of bonus based on an annual turnover up to 1974 would have the effect of preventing, distorting or restricting competition in future. The Director of Investigation filed his rejoinder dated March 7, 1977, wherein he submitted, inter alia, as under : " Assuming without admitting that the restrictive trade practices set out in the notice of enquiry were discontinued in 1975, none the less a cease and desist order is liable to be issued to the respondent for prevention or repetition of the said practice or practices of a similar nature. The practice of giving graduated bonus on the basis of annual turnover to the customers is a restrictive trade practice within the meaning of Section 2(o) of the Act and the respondent is liable to be ordered to cease and desist from indulging in it. The averment of the respondent to the contrary is not admitted."
(3.) SUBSEQUENTLY the Director of Investigation filed an application dated March 11, 1977, to which the respondent has objected by its reply in which the following prayers were made : (i) no leave be granted to the petitioner to deliver to the respondent the interrogatories as set out in annex. I to the said application; (ii) no order be made for discovery or production of the documents mentioned in annex. II to the application filed by the petitioner under Regulation 74 and in any event only an order for discovery and inspection of documents should be made ; (iii) that the respondent may be granted time to file a detailed counter to the application filed by the petitioner under Regulation 74 if more particulars are required to be placed before this Hon'ble Commission; and (iv) pass such further or other order or orders as may be just and necessary under the circumstances of the case. " Both the parties were heard on the application by the Director of Investigation and the reply by the respondent. The learned counsel reiterated his stand that in view of the fact that the practice of granting turnover bonus was discontinued from 1974, the enquiry should be terminated and he relied on the decision of the Allahabad High Court in [1977] 47 Comp Cas 323 (J. K. Synthetics Ltd. v. R. D. Saxena, Director of Investigation). The Director of Investigation, on the other hand, contended that the Allahabad decision was not applicable to the facts of the present case, that the present case was not a case based on an agreement, that the enquiry in the present case was in respect of restrictive trade practice de hors any agreement and that the mere fact that the practice was discontinued for the time being did not justify the termination of the enquiry. In this connection he relied on the decision of the Commission in RTPE No. 17 of 1976 (Blaze Advertising) dated 30th September, 1976 [1977] TLR 1985.;

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