- (1.) This is an appeal under Section 55 of the Monopolies and Restrictive Trade Practices Act, 1969 (referred to hereinafter as 'the Act') against the order of the Commission in R.T.P. Enquiry No. 1616 of 1987. The Commission, having held that the appellant indulged in certain restrictive trade practices prejudicial to public interest, directed the appellant to desist from indulging in such practices in future and to amend the offending clause in the dealership agreement. The Commission further directed the appellant not to give effect to the termination of dealership of the complainant (2nd respondent herein) and to ensure the supply to Philips Products "at least to the extent of the supply made in the year 1985" subject to the placement of necessary orders by the complainant.
(2.) The factual background leading to the filing of the complaint is as follows : The appellant Company manufactures and sells certain audio products. It has a vast network of dealers - about 1800 throughout the country who are appointed on principal to principal basis. In Gwalior, the appellant had a dealer by name M/s. Evergreen operating since long for its shop at Sarafa Bazar. In the year 1985, the appellant appointed the 2nd respondent (hereinafter referred to as 'R-2' or 'complainant') having its place of business at Gwalior as another dealer. An agreement dated 15-11-1985 which, it is not in dispute, is in standard form was entered into. Clause 29 of the Agreement provided for termination of agreement by either party by giving to the other 30 days notice in writing. In terms of this clause, the appellant by its notice dated 23-9-1987 gave 30 days notice to R-2, terminated the dealership on expiry of the notice period. According to the appellant, such a step was taken as it was not satisfied with the performance of R-2. R-2 then filed a complaint before the Commission. The complainant alleged that the appellant felt aggrieved by some of the letters addressed by the complainant pointing out preferential treatment to the old dealer M/s. Evergreen to the detriment of R-2. Certain instances of restrictive trade practices were enumerated in the complaint. The complaint prayed for the issuance of cease and desist order' and a direction to restore the dealership and resume supplies of Philips products. The Commission decided to hold an enquiry. Accordingly, a notice of enquiry was sent to the appellant on 21-1-1988. In the said notice, as many as five restrictive trade practices alleged to have been committed by the appellant were set out. They are as follows : (i) The respondents prohibited the complainant from dealing in or selling the sama type of products of the competitors.The practice is restrictive trade practice within the meaning of Section 33(1)(c) of the MRTP Act; (ii) The respondents supplied to the complainant all types of goods irrespective of its order. For instance supply of 252 pcs of infra lamps was made to the complainant on 31st December, 1985 even though the complainant had not placed any order for them. Thus, the respondent in a trade practice of full line forcing/dumping unwanted goods and also delaying with holding the supply of wanted and ordered goods. It is a restrictive trade practice within the meaning of Section 2(o) and Section 33(1)(b) of the Act. The practice is a restrictive trade practice within the meaning of Section 33(1)(b) of the MRTP Act. (iii) The complainant was allocated a particular territory to which its dealership was confined. The practice of allocating a territory is a restrictive trade practice within the meaning of Section 33(1)(g) of the MRTP Act. (iv) The respondent fixed the prices at which their products were to be sold without giving liberty to the complainant to sell at prices lower to its customers. The practice is a restrictive trade practice within the meaning of Section 33(1)(f) of the MRTP Act. (v) The respondent discriminated against the complainant and gave a favoured treatment to their other dealer, viz. Evergreen, Sarafa Bazar, Gwalior in making supplies of Philip products. The practice is a restrictive trade practice within the meaning of Section 2(o)(ii) of the MRTP Act.
(3.) It appears that during the pendency of the inquiry, the Commission issued an order of ad interim injunction. However, it was stayed by the Bombay High Court on a writ petition filed by the appellant.;