Amiya Kumar Mookerji, J. - (1.) This rule is directed against a notice dated 18th of May, 1974, under Regulation 7 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, issued by the Monopolies and Restrictive Trade Practices Commission, calling upon the petitioner and the respondent No. 5 to comply with the provisions of Regulations 14 and 16 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, as the Commission has decided to institute an enquiry into the restrictive trade practices in exercise of the powers conferred on it by Section 10(a)(iv) read with Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969.
(2.) Petitioner-company (ITC) was incorporated under the Indian Companies Act in the name of Imperial Tobacco Co. of India Ltd. on the 24th August, 1910. It carried on the business of manufacturing and selling cigarettes for domestic and export markets. Respondent No. 5, Vazir Sultan Tobacco Company Ltd. (hereinafter referred to as " VST ") was incorporated in 1930 in the Nizam's State of Hyderabad under the Hyderabad Companies Act, 1930. On 20th May, 1970, the Imperial Tobacco Co.'s name was changed into India Tobacco Co. Ltd. On 1st June, 1970, the Monopolies and Restrictive Trade Practices Act (hereinafter referred to as the said " Act") was brought into force. On and from 1st August, 1970, the Central Government established the Monopolies and Restrictive Trade Practices Commission (hereinafter referred to as "the Commission"). The petitioner-company is an undertaking registered under Section 26 of the Act. It is a dominant undertaking within the meaning thereof having 47% of production, distribution and supply of the total goods produced, distributed and supplied in India. On or about December 9, 1971, the Commission received a complaint signed by twenty-seven consumers requesting for an enquiry and an investigation under Sections 10 and 11 of the Act. In the said complaint, allegations were made that the petitioner and the respondent No. 5 were indulging in several restrictive trade practices. The said complaint was considered by the Commission and it was decided in the month of March, 1972, that it should be referred to the Director of Investigation. Thereafter, the Director of Investigation started a preliminary investigation and issued a letter to the company. The company by its letter dated 3rd May, 1972, addressed to the Director of Investigation asked for a summary of the alleged complaint under Section 10(a)(i) of the Act and by a subsequent letter dated 30th May, 1972, the petitioner made a request to the said Director that they might be given a personal hearing before the Commission. The Director of Investigation forwarded a gist and extracts of relevant portions of the complaint to the petitioner-company. On the 24th June, 1972, the Director wrote to the petitioner that if as a result of the preliminary investigation, the Commission was satisfied that the complaint against the petitioner required to be enquired into, the petitioner would be given full opportunity to meet the allegations which would be enquired into by the Commission. On the 29th September, 1973, the Director wrote to the petitioner that as a result of the preliminary investigation under Section 11 of the Act, a prima facie case regarding certain restrictive trade practices was found against the petitioner and the respondent No. 5. On 20th November, 1973, the petitioner wrote a letter to the Director complaining of violation of principles of natural justice and fair play for nondisclosure of the alleged complaint and order of the Commission directing preliminary investigation. It is also stated in the said letter that the alleged tentative findings could not be and, in fact, were based on the alleged complaint and the impugned trade practices did not and could not amount to restrictive trade practices within the meaning of Section 2(o) of the Act. On the 14th December, 1973, the Director sent a gist of the matters in respect of which the Commission had directed to carry out the preliminary investigation. Again, on the 15th January, 1974, the petitioner by its letter reiterated that in the absence of a copy of the complaint and that of the specific order of the Commission directing preliminary investigation, there had been violation of natural justice and it maintained that the purported gist did not constitute a complaint within the meaning of Section 10(a)(i) of the Act. On the 19th January, 1974, the Director sent a letter enclosing extracts from paragraphs 13 to 15 of the complaint. On the 29th January, 1974, the petitioner again reiterated its request for complete copy of the complaint and the specific order of the Commission. It also indicated the infirmities in the complaint in the absence of verification as required under Regulation 4 of the Restrictive Trade Practices (Enquiry) Regulations, 1970. It was pointed out that although in the Director's letter of 19th April, 1972, it was stated that the complaint was made by twenty-five consumers, it was then written that the complaint was made by twenty-seven consumers. It was contended by the petitioner in the said letter that the preliminary investigation was being conducted outside the scope of complaint and attempt was being made to make out a new case de hors the alleged complaint. On the 31st January, 1974, M/s. J.B. Dadachanji & Company, advocate, wrote to the Director submitting a note on legal submissions on behalf of the petitioner raising substantial questions of law including interpretation of Section 2(o), Sections 10 and 11 and other provisions of the Act and the regulations as well. Arguments were advanced by a senior counsel on the 16th February, 1974, before the Director of Investigation in a personal hearing given to the petitioner. On the 18th March, 1974, the Director submitted his report to the Commission and in that report the Director prima facie found that the petitioner and the respondent No. 5 were indulging in several restrictive trade practices. On the 1st April, 1974, the India Tobacco Company's name was changed into ITC limited. On the 16th May, 1974, the Commission recorded an order to the effect that, as the complaint received from the twenty-seven consumers had not been properly verified in accordance with Regulation 4 of the RTP (Enquiry) Regulations, 1970, the Commission wrote to the complainants for such verification. Such verification has not been received. The Commission has, therefore, decided to enquire under Section 10(a)(i) of the MRTP Act. However, as the Director of Investigation has gone into the subject-matter of the complaint and made a preliminary investigation regarding the alleged trade practices indulged in by the abovementioned ITC and VST and notwithstanding the fact that the complainant has not verified as required by the Regulation, the Commission has derived knowledge and information from the preliminary investigation report and the Commission has reason to believe that certain practices were being followed by the ITC and VST. Therefore, in exercise of the powers conferred under Section 10(a)(iv) of the Act, the Commission has decided to institute an enquiry under Section 37 of the Act. On the 18th May, 1974, the impugned notice under Rule 7 of 1970 Regulation was served upon the petitioner and the respondent No. 5. The petitioner being aggrieved by the impugned notice, moved this court in an application under Article 226 of the Constitution and obtained the present rule on the 27th July, 1974.
(3.) Before I deal with the arguments of the parties, it is necessary to refer to certain provisions of the Act.;