ANIL HARDBOARDS LTD Vs. STATE
LAWS(NR)-1977-11-2
MONO POLIES AND RESTRICTIVE TRADE PRACTICES COMMISSION
Decided on November 16,1977

Appellant
VERSUS
Respondents

JUDGEMENT

H.M.Jhala, - (1.) THESE are applications by respondents Nos. 1 and 2 seeking amendments to the Commission's order dated the 18th March., 1977, which was passed by the Commission on the 'footing that all the three respondents were willing to submit to an order by the Commission without prejudice to their contentions that the respondents were not resorting to any restrictive trade practices but on the assumption that conditions for passing an order under s. 37(1) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as " the Act "), existed.
(2.) This was an inquiry started suo motu by the Commission under Sections 10(a){iv) and 37 of the Act. The first respondent is a limited company doing business, inter alia, in hardboards, respondent No. 2 is doing business in hardboards in New Delhi and respondent No. 3 is a private limited company having its head office in Bombay and doing hardboard business at Madras. As far as the subject-matter of the present order is concerned, respondent No. 3 is not in the picture at all. On the basis of its own knowledge and information the Commission had issued a notice dated October 16, 1976, to the three respondents making the following allegations : " (a) Area restriction Respondent No. 1 has assigned specific areas for the distributors/stockists for the sale of their products. (b) Resale price maintenance (i) The agreement dated 13-4-72, with its validity as extended, between respondents Nos. 1 and 2 provides at para. 6 as under : ' The chief stockists will be supplied with the materials as per the price list in force and the chief stockists agree to sell the same at the prices .applicable to the consumers mentioned in the company's price list to the best of their ability.' (ii) The agreement dated 21-10-74 between respondents Nos. 1 and 3 at para. 6 provides as under : ' The prices of the hardboard will be on par with those of Western India Plywood effective from time to time and for the time being it has been agreed as under : Hardboards large size 4' x 4' and above 60 paise f.o.r. destination. . Hardboards smaller size 4' x 4', 58 paise f.o.r. destination. At present as indicated by you and verified by us, the price of Western India Plywood is 0'62 paise sq. ft. for standard size.' (c) (i) Respondent No. 1 giving a trade discount of 5% on orders of value of Rs. 5,000 or more for supply at a time. (ii) Respondent No. 1 giving graduated bonus to authorised stockists/ dealers on the basis of annual turnover, i.e.,
(3.) THERE was no reply from respondents Nos. 1 and 2 to the notice although respondent No. 3 filed its reply dated February 21, 1977. At the hearing on March 15, 1977, however, the learned counsel for all the three respondents stated that without prejudice to their contentions that the respondents were not resorting to any restrictive trade practices but on the assumption that conditions for passing order under Section 37 existed, the respondents were willing to submit to an order by the Commission. The Director of Investigation, while reiterating his stand that the respondents were indulging in restrictive trade practices referred to in the notice by the Commission, had no objection to an order being passed on that basis. Accordingly, an order was passed on 18th March, 1977, incorporating the following terms : " (i) Respondent No. 1 is restrained and prohibited' from allocating any area or market for the disposal of its goods. (ii) Respondents Nos. 1 and 2 are restrained and prohibited from selling goods on condition that price to be charged on resale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that the prices stipulated were the maximum prices and the dealer or the purchaser was free to resell them at prictes below the maximum prices. (iii) Respondent No. 1 is restrained and prohibited from fixing the prices of hardboard at which it will sell them to respondent No. 3 in a manner different from that determined by free forces of the market. (iv) Respondent No. 1 is restrained and prohibited from granting or allowing concessions or benefits including bonus, trade discounts, rebates, etc., in connection with or by reason of dealings. (v) The provisions in the agreement or arrangements between respondent No. 1 on the one hand and respondents Nos. 2 and 3 on the other hand shall, in so far as they relate to restrictive trade practices indicated in the notice, be void. (vi) The restrictive trade practices referred to in the notice to which the provisions in the agreement/arrangements between respondent No. 1 on the one hand and respondents Nos. 2 and 3 on the other relate shall be discontinued and shall not be repeated. (vii) In the price list which the respondents may issue hereafter it shall be made clear either on the front page or on the first page that the prices set out were the maximum prices and prices lower than the maximum prices could be charged by the dealer or distributors. (viii) Respondent No. 1 will send a copy of the price list, if any, issued after the date of this order and also the list of its distributors to the Director of Investigation. (ix) The respondents will file affidavits of compliance with the terms of this order on or before 1-5-77. Copies of the affidavits shall also simultaneously be sent to the Director of Investigation, (x) THERE will be no order as to costs.";


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