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preliminary objections to the maintainability of the compensation applications filed by the appellants. They contended that the appellants had not initiated separate proceedings either under Section 10 or under Section 36B of the MRTP Act alleging unfair trade practices by the respondents and in the absence of any such separate proceedings initiated by the respondents before the MRTP Commission, the compensation applications of the appellants under Section 12B of the MRTP Act were not maintainable.- In fact, Section 12B was introduced in the MRTP Act by Act 30 of 1984 as an independent remedy for a claimant in addition to a suit that he may file to claim any loss or damage that he may suffer by reason of any monopolistic or restrictive or unfair trade practice as would be clear from sub-section (4) of Section 12B quoted above. -In the absence of any such indication of this intention of Parliament to make the provisions of Section 12B of the MRTP Act dependent on initiation of an inquiry or proceeding under Section 10 or Section 36B of the MRTP Act, the Competition Appellate Tribunal clearly erred in coming to the conclusion that interdependence of the provisions of Section 10 or Section 36B with Section 12B cannot be lost sight of and in the absence of a separate proceeding alleging unfair, monopolistic or restrictive trade practice, an application for compensation under Section 12B of the MRTP Act is not maintainable.We, therefore, set aside the impugned orders of the Competition Appellate Tribunal, but leave it open to the respondents to raise a plea before the Competition Appellate Tribunal that the appellants have not made out any case of monopolistic or restrictive trade practice or unfair trade practice in terms of Section 12B of the MRTP Act and if such plea is raised it will be decided by the Competition Appellate Tribunal on its own merits following the decision of this Court in Saurabh Prakash v. DLF Universal Ltd. (supra). The appeals are allowed. There shall be no order as to costs.

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English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO._8920_ OF 2012
(Arising out of S.L.P. (C) No. 28463 of 2011)
Girish Chandra Gupta … Appellant

Versus
M/s Uttar Pradesh Industrial
Development Corporation Ltd. & Ors. … Respondents
With

CIVIL APPEAL NO._8921_ OF 2012
(Arising out of S.L.P. (C) No. 17380 of 2012)

James Kutty P.C. & Anr. … Appellants

Versus
M/s Tread Stone Ltd. & Ors. … Respondents

 

J U D G M E N T

A. K. PATNAIK, J.

 

Leave granted.
2. The facts very briefly in these two appeals are that the appellants
filed compensation applications C.A. No.110 of 1997 and C.A. No.126
of 2008 under Section 12B of the Monopolies and Restrictive Trade
Practices Act, 1969 (for short ‘the MRTP Act’) before the Monopolies
and Restrictive Trade Practices Commission (for short ‘the MRTP
Commission’) constituted under the MRTP Act. By Section 66(1) of the
Competition Act, 2002, the MRTP Act was repealed and the MRTP
Commission was dissolved. Section 66(3) of the Competition Act, 2002
provided that all cases pertaining to monopolistic trade practices or
restrictive trade practices pending before the MRTP Commission shall,
on the commencement of the Competition (Amendment) Ordinance, 2009,
stand transferred to the Competition Appellate Tribunal constituted
under the Competition Act, 2002 and shall be adjudicated by the
Appellate Tribunal in accordance with the provisions of the MRTP Act
as if the MRTP Act had not been repealed. Consequently, the two
compensation applications filed by the appellants stood transferred to
the Competition Appellate Tribunal. Before the Competition Appellate
Tribunal, the respondents in the two appeals raised preliminary
objections to the maintainability of the compensation applications
filed by the appellants. They contended that the appellants had not
initiated separate proceedings either under Section 10 or under
Section 36B of the MRTP Act alleging unfair trade practices by the
respondents and in the absence of any such separate proceedings
initiated by the respondents before the MRTP Commission, the
compensation applications of the appellants under Section 12B of the
MRTP Act were not maintainable.

3. This preliminary question raised by the respondents was also raised in
C.A. No.108 of 2005 filed by Info Electronics System Ltd. against
Sutran Corporation and the Competition Appellate Tribunal by its order
dated 29.03.2011 passed in C.A. No.108 of 2005 (Info Electronics
System Ltd. v. Sutran Corporation) held, relying on a judgment of this
Court in Saurabh Prakash v. DLF Universal Ltd. [(2007) 1 SCC 228],
that in the absence of separate proceedings alleging unfair,
monopolistic or restrictive trade practice, an application for
compensation under section 12B of the MRTP Act is not maintainable and
accordingly dismissed C.A. No.108 of 2005. Following the aforesaid
order dated 29.03.2011 in C.A. No.108 of 2005, the Competition
Appellate Tribunal also dismissed C.A. No.126 of 2008 on 26.04.2012
and C.A. No.110 of 1997 on 20.05.2011 filed by the appellants in the
Civil Appeals before us. Aggrieved, the appellants have filed these
appeals.

4. Mr. Siddharth Bhatnagar, learned counsel for the appellant in the
Civil Appeal arising out of S.L.P. (C) No.28463 of 2011, submitted
that this Court has not held in Saurabh Prakash v. DLF Universal Ltd.
(supra), on which the Competition Appellate Tribunal has placed
reliance, that in the absence of any separate proceedings either under
Section 10 or Section 36B of the MRTP Act, an application for
compensation under Section 12B of the MRTP Act is not maintainable.
He submitted that a reading of Section 12B of the MRTP Act rather
shows that an independent proceeding under Section 12B of the MRTP Act
for compensation can be initiated by an applicant. He relied on the
decision in M/s Pennwalt (I) Ltd. & Anr. v. Monopolies and Restrictive
Trade Practices Commission & Ors. [AIR 1999 DELHI 23] in which, after
examining the provisions of Sections 10, 36B and other provisions of
the MRTP Act, the Delhi High Court has held that the proceedings under
Section 12B of the MRTP Act are not dependent on proceedings under
Section 10 or 36B of the MRTP Act and that a preliminary inquiry as
envisaged in Section 11 or Section 36C is not a condition precedent to
the maintainability of the claim under Section 12B of the MRTP Act.

5. Mr. Rakesh Uttamchandra Upadhyay, learned counsel for the respondents
in the Civil Appeal arising out of SLP(C) No.28463 of 2011, on the
other hand, submitted that a claim for compensation under Section 12B
of the MRTP Act cannot be decided without an inquiry either under
Section 10 or under Section 36B of the MRTP Act. He submitted that
the view taken by the Competition Appellate Tribunal that without a
proceeding either under Section 10 or Section 36B of the MRTP Act a
claim for compensation under Section 12B of the MRTP Act was not
maintainable is, therefore, correct. He further submitted that the
case of the respondent U.P. Industrial Development Corporation Limited
in C.A. No.110 of 1997 was that the grievance of the appellant did not
relate to any unfair trade practice but relates to a breach of
contract and such a claim for compensation cannot be entertained under
Section 12B of the MRTP Act.

6. Mr. Alex Joseph, learned counsel for the appellants in the Civil
Appeal arising out of S.L.P. (C) No.17380 of 2012, submitted that the
Delhi High Court in yet another decision in R.C. Sood And Co. (P.)
Ltd. & Ors. v. Monopolies and Restrictive Trade Practices Commission &
Anr. [1996 Vol.86 Company cases 626 Delhi] has held that it is not
necessary that the MRTP Commission should first inquire or investigate
into the allegations of monopolistic, restrictive and unfair trade
practices carried on by any person or undertaking under Section 10,
Section 36B or Section 37(1) of the MRTP Act before issuing notice in
the application filed under Section 12B of the MRTP Act and sub-
section (3) of Section 12B of the MRTP Act clearly shows that the MRTP
Commission is required to make an inquiry into the allegations set out
in the application filed under sub-section (1) of Section 12B and only
after making such an inquiry pass an order directing the owner of the
undertaking or the person who has indulged in monopolistic,
restrictive and unfair trade practice, to make payment to the
applicant of the amount determined by the MRTP Commission.

7. Mrs. Kiran Suri, learned counsel for the respondent in the Civil
Appeal arising out of S.L.P. (C) No.17380 of 2012, submitted that the
jurisdiction of the MRTP Commission is based on a finding of unfair
trade practice and such finding can only be recorded under Section 36B
of the MRTP Act. She submitted that Section 11 of the MRTP Act
empowers the Director General to make an inquiry and there is no
mechanism of inquiry in Section 12B of the MRTP Act. She vehemently
argued that Section 12B of the MRTP Act, therefore, cannot be read as
an independent Code.

8. We have considered the submissions of the learned counsel for the
parties and we find that in Saurabh Prakash v. DLF Universal Ltd.
(supra) this Court was called upon to decide whether the MRTP
Commission had jurisdiction to entertain an application under Section
12B of the MRTP Act when no case of indulgence in unfair trade
practice or restrictive trade practice was made out and this Court
held that the power of the MRTP Commission to award compensation is
restricted to a case where loss or damage had been caused as a result
of monopolistic or restrictive or unfair trade practice but it had no
jurisdiction where damage is claimed for mere breach of contract. In
the aforesaid decision in Saurabh Prakash v. DLF Universal Ltd.
(supra) on which reliance has been placed by the Competition Appellate
Tribunal in the impugned orders, this Court did not at all consider
the question whether an application under Section 12B of the MRTP Act
was maintainable without initiation of separate proceedings either
under Section 10 or under Section 36B of the MRTP Act.

9. The decision of the Division Bench of the Delhi High Court in M/s
Pennwalt (I) Ltd. & Anr. v. Monopolies and Restrictive Trade Practices
Commission & Ors. (supra) and the decision of the learned Single Judge
of the Delhi High Court in R.C. Sood And Co. (P.) Ltd. & Ors. v.
Monopolies and Restrictive Trade Practices Commission & Anr. (supra),
cited before us by the learned counsel for the appellants, however,
hold that an application for compensation under Section 12B of the
MRTP Act was maintainable without any proceeding being initiated under
Section 10 or Section 36B of the MRTP Act. We have perused the
aforesaid two decisions of the Division Bench and the learned Single
Judge of the Delhi High Court and in our considered opinion the
Division Bench as well as the learned Single Judge of the Delhi High
Court have correctly interpreted the provisions of Sections 10, 12B
and 36B of the MRTP Act.

10. Sections 10, 12B and 36B of the MRTP Act are extracted hereinbelow:

“10. Inquiry into monopolistic or restrictive trade practices by
Commission – The Commission may inquiry into –

(a) any restrictive trade practice –

(i) upon receiving a complaint of facts which constitute such
practice from any trade association or from any consumer or a
registered consumers’ association, whether such consumer is a member
of that consumers’ association or not, or

(ii) upon a reference made to it by the Central Government or a
State Government, or

(iii) upon an application made to it by the Director General, or

(iv) upon its own knowledge or information;

(b) any monopolistic trade practice, upon a reference made to it by
the Central Government or upon an application made to it by the
Director General or upon its own knowledge or information.

 
12B. Power of the Commission to award compensation. – (1) Where, as
a result of the monopolistic or restrictive, or unfair trade
practice, carried on by any undertaking or any person, any loss or
damage is caused to the Central Government, or any State Government
or any trader or class or traders or any consumer, such government
or, as the case may be, trader or class of traders or consumer may,
without prejudice to the right of such government, trader or class
of traders or consumer to institute a suit for the recovery of any
compensation for the loss or damage so caused, make an application
to the Commission for an order for the recovery from that
undertaking or owner thereof or, as the case may be, from such
person, of such amount as the Commission may determine, as
compensation for the loss or damage so caused.
(2) Where any loss or damage referred to in sub-section (l) is
caused to numerous persons having the same interest, one or more of
such persons may, with the permission of the Commission, make an
application, under that sub-section, for and on behalf of, or for
the benefit of, the persons so interested, and thereupon the
provisions of rule 8 of Order I of the First Schedule to the Code of
Civil Procedure, 1908 (5 of 1908), shall apply subject to the
modification that every reference therein to a suit or decree shall
be construed as a reference to the application before the Commission
and the order of the Commission thereon.
(3) The Commission may, after an inquiry made into the allegations
made in the application filed under sub-section (1), make an order
directing the owner of the undertaking or other person to make
payment, to the applicant, of the amount determined by it as
realisable from the undertaking or the owner thereof, or, as the
case may be, from the other person, as compensation for the loss or
damage caused to the applicant by reason of any monopolistic or
restrictive, or unfair trade practice carried on by such undertaking
or other person.
(4) Where a decree for the recovery of any amount as compensation
for any loss or damage referred to in sub-section (l) has been
passed by any court in favour of any person or persons referred to
in sub-section (1), or, as the case may be, sub-section (2), the
amount, if any, paid or recovered in pursuance of the order made by
the Commission under sub-section(3) shall be set off against the
amount payable under such decree and the decree shall,
notwithstanding anything contained in the Code of Civil Procedure,
1908 (5 of 1908), or any other law for the time being in force, be
executable for the balance, if any, left after such set off.
36B. Inquiry into unfair trade practices by Commission – The
Commission may inquire into any unfair trade practice, –

(a) upon receiving a complaint of facts which constitutes such
practice from any trade association or from any consumer or a
registered consumers’ association, whether such consumer is a member
of that consumers’ association or not; or

(b) upon a reference made to it by the Central Government or a State
Government; or

(c) upon an application made to it by the Director General; or

(d) upon its own knowledge or information.”

 
11. On a reading of sub-section (1) of Section 12B of the MRTP Act, it
will be clear that where, as a result of the monopolistic or restrictive,
or unfair trade practice, carried on by any undertaking or any person, any
loss or damage is caused to the Central Government, or any State Government
or any trader or class or traders or any consumer, such government or, as
the case may be, trader or class of traders or consumer may make an
application to the MRTP Commission for an order for the recovery from that
undertaking or owner thereof or, as the case may be, from such person, of
such amount as the MRTP Commission may determine, as compensation for the
loss or damage so caused. Sub-section (3) of Section 12B of the MRTP Act
further provides that the MRTP Commission may, after an inquiry made into
the allegations made in the application filed under sub-section (1), make
an order directing the owner of the undertaking or other person to make
payment, to the applicant, of the amount determined by it as realisable
from the undertaking or the owner thereof, or, as case may be, from the
other person, as compensation for the loss or damage caused to the
applicant by reason of any monopolistic or restrictive, or unfair trade
practice carried on by such undertaking or other person. Thus, the MRTP
Commission has been vested with the powers under sub-section (3) of Section
12B of the MRTP Act to make an inquiry to the allegations of monopolistic
or restrictive or unfair trade practice made in the application filed under
sub-section (1) of Section 12B of the MRTP Act and to determine the amount
of compensation realizable from the undertaking or the owner thereof, or,
as case may be, from the other person, towards loss or damage caused to the
applicant by reason of any monopolistic or restrictive, or unfair trade
practice carried on by such undertaking or other person. These powers
vested in the MRTP Commission under sub-section (3) of Section 12B of the
MRTP Act are independent of its powers under Section 10 and Section 36B of
the MRTP Act.

12. In fact, Section 12B was introduced in the MRTP Act by Act 30 of
1984 as an independent remedy for a claimant in addition to a suit that he
may file to claim any loss or damage that he may suffer by reason of any
monopolistic or restrictive or unfair trade practice as would be clear from
sub-section (4) of Section 12B quoted above. There is no reference at all
in Section 12B of the MRTP Act to the provisions of either Section 10 or
Section 36B of the MRTP Act and if Parliament intended that the power of
the MRTP Commission to award compensation under Section 12B of the MRTP Act
was to be dependent on the exercise of power of MRTP Commission either
under Section 10 or under Section 36B of the MRTP Act, Parliament would
have made this intention clear in the language of some provision in Section
12B of the MRTP Act. There is also no reference in either Section 10 or in
Section 36B of the MRTP Act to any of the provisions of Section 12B of the
MRTP Act and if the Parliament intended to make Sections 10, 12B and 36B of
the MRTP Act interdependent, there would have been some indication of this
intention of Parliament in Section 10 or in Section 36B of the MRTP Act.
In the absence of any such indication of this intention of Parliament to
make the provisions of Section 12B of the MRTP Act dependent on initiation
of an inquiry or proceeding under Section 10 or Section 36B of the MRTP
Act, the Competition Appellate Tribunal clearly erred in coming to the
conclusion that interdependence of the provisions of Section 10 or Section
36B with Section 12B cannot be lost sight of and in the absence of a
separate proceeding alleging unfair, monopolistic or restrictive trade
practice, an application for compensation under Section 12B of the MRTP Act
is not maintainable.

13. We, therefore, set aside the impugned orders of the Competition
Appellate Tribunal, but leave it open to the respondents to raise a plea
before the Competition Appellate Tribunal that the appellants have not
made out any case of monopolistic or restrictive trade practice or
unfair trade practice in terms of Section 12B of the MRTP Act and if
such plea is raised it will be decided by the Competition Appellate
Tribunal on its own merits following the decision of this Court in
Saurabh Prakash v. DLF Universal Ltd. (supra). The appeals are allowed.
There shall be no order as to costs.

.……………………….J.
(A. K.
Patnaik)

 

………………………..J.
(Swatanter
Kumar)

New Delhi,
December 11, 2012.
———————–
15

 

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