BLAZE ADVERTISING DELHI P LTD Vs. STATE
LAWS(NR)-1977-7-1
MONO POLIES AND RESTRICTIVE TRADE PRACTICES COMMISSION
Decided on July 22,1977

Appellant
VERSUS
Respondents

JUDGEMENT

H.M.Jhala, - (1.) ORDER on the application of the respondents dated 21st March, 1977.
(2.) This is an application by the respondents in the above noted enquiry claiming that the order of the Commission dated 30th September, 1976, on the application of the Director of Investigation dated August 23, 1976, is not in conformity with the law as declared by the Supreme Court by reference to Section 2(o) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as "the Act "), and the respondents, therefore, should not be required to comply with the said order. It is also submitted in the alternative that the order of the Commission dated 30th September, 1976, may be recalled. It is further submitted that the notice of inquiry dated 1st May, 1976, issued by the Commission was bad in law and deserved to be and ought to be revoked or cancelled or discharged and the proceedings in the enquiry be terminated or dropped. In order to appreciate the contentions raised in the application, it is necessary to have the background of the case. The respondents are private limited companies doing business in the exhibition of advertisement, film shorts and slides in Delhi, Bombay, Calcutta and Madras.
(3.) A notice of enquiry dated 1st May, 1976, was issued to the respondents in this case under Sections 10(a)(iv) and 37 of the Act and Regulation 58 of the Monopolies and Restrictive Trade Practices Commission Regulations, 1974 (hereinafter referred to as " the Regulations"). The relevant portions of the preamble and the substantive part of the notice read as under : " AND WHEREAS the respondents above mentioned have entered into agreements/arrangements for the exhibition of advertisement, film shorts and slides with the owners/lessees of various cinema houses in the country and that these agreements/arrangements, relate to the following trade practices : (i) Securing sole concession from the various cinema houses for exhibiting advertisement film shorts and slides at such cinema houses. (ii) Imposing restrictions on the cinema houses who have entered into such agreements/arrangements with the respondents not to enter into any other contract with any other party regarding such exhibition of advertisement, film shorts and slides. (iii) Making the cinema houses liable to refund, the amount of the entire instalment paid or payable by the respondents, besides other compensation, for the loss of revenue, if a breach of the condition mentioned at S. No. (ii) above is noticed. (iv) Making the cinema houses to forward all enquiries received by them from any party in respect of showing advertisement, film shorts and slides which are received by them during the currency of such arrangement/ agreement with the respondents. (v) The respondents' right to have the exclusive say in the matter of determination of the exhibition rates. (vi) Making it an imperative condition that in case of transfer of rights of the theatre/cinema houses with whom agreements/arrangements have been entered into to a third party by way of sale/gift or other alienation or on a theatre or cinema houses being given on lease or on hire for exhibition of feature films, the transferee/lessee or hirer shall be bound aud subject to the agreement/arrangement for exhibition of advertisement film shorts and slides entered into with the respondents. AND THAT the trade practices referred to above which are being indulged in by the abovementioned respondents by virtue of their agreements/arrangements with the owners/lessees of the various cinema houses are in the nature of restrictive trade practices and have the effect of preventing/distorting and restricting competition amongst proprietors/lessees of the concerned cinema houses/or those who are engaged in the business of screening advertisement, viz., exhibition of advertisement, film shorts and slides in the cinema houses and tend to affect the flow of supplies in the market relating to screen advertisement services in such manner as to impose on the consumers unjustified costs and restrictions. AND WHEREAS it appears to the Commission that an enquiry under Sections 10(a)(iv) and 37 of the Monopolies and Restrictive Trade Practices Act, 1969, should be made regarding such restrictive trade practices which appear to be indulged in by the above-mentioned respondents. THEREFORE, in exercise of the powers conferred upon it by Section 10(a)(iv) and Section 37 of the said Act, the Commission has decided to hold an enquiry at its office in New Delhi as to whether the said clauses of the agreements relate to, and the operation thereof constitute the alleged restrictive trade practices and whether such trade practices are not prejudicial to public interest.";


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