DIRECTOR GENERAL I AND R Vs. USHA INTERNATIONAL LTD

JUDGEMENT

(1.) This is an application filed by the Director General (Investigation and Registration) (DG) under Sec.36b (c) of the MRTP Act, 1969 indicating the respondents named above, M/s. Usha International Ltd. and M/s. Jay Engineering Works Ltd. of having indulged in certain unfair trade practices attracting Sections 36a (3) (a) and (b) of the Act. The following is a summary of the DG's application:

(2.) M/s. Usha International Ltd. (R-1) is engaged in the business of marketing Usha fans manufactured by M/s. Jay Engineering Works Ltd. (R-2 ). For the purpose of promoting the use or supply of Usha fans, R-l issued an advertisement in the 'indian Express' edition of date line 20th March, 1986 under the caption "better Fans, Better Gifts!" That said advertisement announced a scheme of prizes in the form of Maruti cars, Vijai super scooters. Tape-recorders etc. All that a prospective customer had to do was to purchase a Usha fan to become eligible for participation in the scheme. The advertisement announced that the dealer from whom the fan was purchased would give the purchaser a sealed envelope containing the name of the gift. The scheme commenced with effect from 11th February, 1986. The DG after inspecting the records of one of the outlets of R-l, noted that the prices of various categories of fans had been increased simultaneously from the date of the commencement of the advertised scheme. In particular, the DG noted that the cost of the prizes was fully or partly covered by the increase in the price of the fans. In view of the nexus between the price-rise and the prize scheme, he has brought about a charge that both the respondents are severally and jointly liable for the unfair trade practices indulged in by them, attracting the provisions of Sections 36a (3) (a) and (b) of the MRTP Act.

(3.) Based on the application of the DG, a Notice of Enquiry was issued by the Commission on 23rd June, 1986 summarizing the charge of unfair trade practices. In particular, the Notice of Enquiry (NOE) charges the respondents of having offered prizes free of charges whereas the cost of the prizes has been or was being received wholly or partly from the increased price of the fan, thus, creating an impression contrary to facts. Furthermore, the NOE charges the respondents of offering prizes or gifts depending upon chance. While specifying that these two limbs of the charge constitute unfair trade practices falling under Sec.36a (3) (a) and Sec.36a (3) (b) of the Act respectively, the NOE further charges that the aforesaid unfair trade practices are prejudicial to public interest. Essentially, the synchronizing of escalation in prices of the fans with the launching of the advertised scheme is central to the charge brought about by the DG, besides the fact that any contest or scheme of this nature based on chance is an unfair trade practice.