- (1.) THE Registrar of Restrictive Trade Agreements applied to the Commission under Section 10(a)(iii) read with Section 37 of the Monopolies & Restrictive Trade Practices Act, 1969 (hereinafter for the sake of brevity referred to as "the Act"), on June 29, 1974, praying that the Commission may inquire into the restrictive trade practices alleged to be indulged in by M/s. Centron Industrial Alliance Private Ltd. (hereinafter referred to as the respondent) having its office at Industrial Assurance Building, Churchgate, Bombay-20. THE respondent is doing business in the manufacture of blades and blade making machinery. According to the Registrar, the respondent had entered into three agreements, viz., one with M/s. Home Products Marketing Agency of Ballard Estate, Bombay, second with M/s. R. C. H. Barar & Co. of Abdul Rehman Street, Bombay, and the third with M/s. Union Carbide India Ltd., 1 Middleton Street, Calcutta-16. THEse agreements will, hereinafter, be referred to, for the sake of brevity, as " Home Products Agreement", " Barar Agreement " and "Union Carbide Agreement ", respectively. THE agreements were entered into on 29th November, 1969, 25th July, 1969, and 29th May, 1970, respectively.
(2.) In regard to the " Home Products Agreement", the Registrar objected to the following clauses : Clause 2 : "The company shall not sell the said products or any products relating to shaving field under the brand names of " Swish " and " Platinex" through any other distribution or selling agents in India except as otherwise stated in Clause 11 below." Clause 5: " The selling agents undertake to receive the said products from the company exclusively and will not deal with or sell such reputed products or spurious products of any kind from any other source. The selling agents undertake not to deal directly or indirectly in similar products of any other company. " Clause 7: "The selling agents will be responsible for advertising and promoting the said products of the company either directly themselves or through the advertising agents appointed by the company. For this purpose, the company will fix each year a promotion budget for each of the said products and it will be the responsibility of the selling agents to restrict the expenses to within the budget fixed and this budget may be revised upwards or downwards by mutual consent. The budget will cover expenses on press advertising, cinema slides and films, radio, point of purchase and display materials, field promotion programmes, special discount to main dealers over and above the normal main dealers' discount, sampling and expenses incurred on any other form of advertising and promotion and on shop audit and market research. The bills of the advertising agents for expenses on advertising and promotion authorised by the selling agents will be paid by the company directly to the advertising agents. The advertising and promotion expenses incurred by the selling agents themselves and not through the advertising agents, such as additional discounts to main dealers and expenses on field promotions will be deducted by the selling agents from the remittance to the company each month. However, upon termination of this agreement for any reason whatsoever, if the selling agents have committed themselves to incur advertising and promotional expenses, then the commitment of these expenses will be, as far as possible, cancelled by the selling agents, but those commitments for incurring the expenses which cannot be cancelled will be borne by the company." Clause 11: " In respect of sales of the said products of the Canteen Stores Department any tender issued by any Government, railway, municipality, port trusts or any other public body or where in the nature of things by reason of competition or otherwise, it is necessary to give the lowest rates for securing the business irfespective of whether the same is located in the said territory, the company shall be at liberty to fill in such tenders and/or secure and execute such business at its own cost and risk and will pay to the selling agents an overriding commission of 5% of the sales made under this clause. These sales will be notified to the selling agents by the company within ten days of the despatch of the goods. Sales for the purpose of this clause shall mean the value of sales of the said products at the rates quoted in the tender by the company excluding duties and taxes on such sales. No expenses incurred by the company for obtaining and executing such business shall be deductible from the rates. Payment of this overriding commission shall be made within ten days of the company receiving the actual payment from purchaser under this clause." In regard to " Barar Agreement", the Registrar objected to Clause 12 which read as under ; Clause 12 : " That the purchaser shall not purchase from any other party blades for sale in India." In regard to " Union Carbide Agreement", the Registrar objected to Clause 21 which read as under : Clause 21: " The company shall not directly or indirectly make investments or installation of manufacturing facilities for the manufacture of razor blades during the currency of this agreement without six months' notice in writing to the supplier." The Registrar alleged that the clauses impugned by him resulted in restrictive trade practices of the following nature attracting the provisions of Sections 33(1)(a), (c) and (g) of the Act : (i) restricting the persons to whom goods may be sold or from whom goods may be purchased ; (ii) restricting the agents from dealing in the products of the respondent's competitors; (iii) restricting the party concerned to make investments or instal manufacturing facilities for the manufacture of razor blades in the country. He also alleged that the restrictive trade practices indulged in by the respondent limited, restricted and distorted competition, imposed unjustified costs on the consumers and obstructed the flow of capital and resources into the stream of production and that the restrictive trade practices emanating from the aforesaid agreements were prejudicial to public interest.
(3.) NOTICE dated 6th July, 1974, was issued by the commission in exercise of the powers conferred on it under Section 37 of the Act informing the respondent that the commission proposed to hold an inquiry into the alleged restrictive trade practices complained of by the Registrar.;