COMPETITION APPELLATE TRIBUNAL

Civil Appeal

52 of 2007

SWASTIC PIPES - Complainant(s)

Versus

H C L INFORSYSTEMS LTD AND ANR - Opp.Party(s)

BEFORE: Arijit Pasayat, Pravin Tripathi

29 Mar 2011

ORDER

Arijit Pasayat, J.

[1] This matter along with other connected matters was heard on the question of maintainability of the Compensation Application filed under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (In short the Act). In each of these cases, the Compensation Application was filed claiming compensation on the alleged ground that the Applicant suffered loss or damage as a result of monopolistic or restrictive or unfair trade practice carried on by the respective Respondent. The Respondent in each case raised preliminary objection to the maintainability of the Compensation Application in the absence of separate proceedings to prove alleged monopolistic or restrictive or unfair trade practices. Section 12B is the pivotal provision which reads as follows: 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 of 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 (1) is caused to numerous persons having the same interest, one or more or 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 1 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 realizable 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 (1) 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.

[2] It has been brought to our notice by Mr. Makheeja who was appointed as Amicus-Curie that the erstwhile Monopolies and the Restrictive Trade Practices Commission (hereinafter referred to as Commission) had taken a view that application for compensation in terms of Section 12B of the Act is maintainable notwithstanding the fact that separate proceedings for alleged unfair, restrictive or monopolistic trade practice has not been filed. He referred to Section 12B(3) of the Act to contend that there is no necessity for filing a separate application.

[3] Learned Counsel appearing for the Applicant in each of the cases suppoted the stand of Mr. Makheeja. In response, learned Counsel for the Respondent in each case submitted that the issue is no longer res Integra in view of what has been stated by Hon ble Supreme Court in Saurabh Prakash v. DLF Universal Ltd., 2007 1 SCC 228. By way of reply to the stand of the Respondents, Mr. Makheeja brought to our notice a decision of the Hon ble Supreme Court in Manjul Srivastava v. Govt. of UP and Ors., 2008 8 SCC 652 more particularly, the observations that in paragraph 51 of Saurabh Prakash s case that the decision was not be treated as a precedent.

[4] In Saurabh Prakash s case supra, the Hon ble Supreme Court observed as follows:

33. The power of the Commission is enumerated under Section 12 of the Act. Section 12A provides for the power of the Commission to grant temporary injection. Power to award compensation by the Commission is contained in Section 12B of the Act, Sub-section (1) whereof reads as under:

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 of 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.

34. The power of the Commission to award compensation, therefore, is restricted to a case where loss or damage had been caused as a result of monopolistic or restrictive or unfair trade practice. It has no jurisdiction where damage is claimed for mere breach of contract.

35. It was not a case where a notice of enquiry had been directed. If there had been no inquiry, the Petitioner has to file a suit wherein the relevant particulars are required to be stated as to how loss or damage occurred owing to one or the other trade practices referred to therein. The power of the Commission is not in addition to the power of the civil court. An application under Section 12B of the Act would not lie where a complaint is confined to a breach of contract. Purchases on the part of the Respondent must necessarily relate to one or the other trade practices contemplated under Sub-section (1) of Section 12B of the Act.

[5] We notice on a reading of the Judgment of Hon ble Supreme Court that the observation in Saurabh Prakash s case that the order was not to be treated as a precedent was relatable not of the points of the law decided, but to the peculiar fact situation of that case. This is evident from paragraph 50 of the judgement. The points of law decided by the Hon ble Supreme Court, so far as the point of law is concerned, are contained in paragraph 33 to 35 of the Judgment quoted above.

[6] We may also notice here that in a compensation application under Section 12B, Notice of Enquiry is not issued. The said provision has to be read with Sections 10, 37, 36B, and 36D of the Act which read as follows:

10. Inquiry into monopolistic or restrictive trade practices by Commission. The Commission may inquire 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.

37. Investigation into restrictive trade practice by Commission-

(1) The Commission may inquire into any restrictive trade practice, whether the agreement, if any, relating thereto has been registered under Section 35 or not, which may come before it for inquiry and, if, after such inquiry it is of opinion that the practice is prejudicial to the public interest, the Commission may, by order, direct that-

(a) the practice shall be discontinued or shall not be repeated;

(b) the agreement relating thereto shall be void in respect of such restrictive trade practice or shall stand modified in respect thereof in such manner as may be specified in the order.

(2) The Commission may, instead of making any order under this section, permit the party to any restrictive trade practice, if he so applies to take such steps within the time specified in this behalf by the Commission as may be necessary to ensure that the trade practice is no longer prejudicial to the public interest, and, in any such case, if the Commission is satisfied that the necessary steps have been taken within the time specified, it may decide not to make any order under this section in respect of that trade practice.

(3) No order shall be made under Sub-section (1) in respect of-

(a) any agreement between buyers relating to goods which are bought by the buyers for consumption and not for ultimate resale whether in the same or different form, type, or specie or as constituent of some other goods;

(b) a trade practice which is expressly authorized by any law for the time being in force.

(4) Notwithstanding anything contained in this Act if the Commission, during the course of an inquiry under Sub-section (1), finds that the owner of any undertaking is indulging in monopolistic trade practices, it may, after passing such orders under Sub-section (1) or Sub-section (2) with respect to the restrictive trade practices as it may consider necessary, submit the case along with its findings thereon to the Central Government for such action as that Government ay take under Section 3

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;

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

(d) upon its own knowledge or information.

36D. Power which may be exercised by the Commission inquiring into an unfair trade practice-

(1) The Commission may inquire into any unfair trade practice which may come before it for inquiry and, if, after such inquiry, it is of opinion that the practice is prejudicial to the public interest, or to the interest of any consumer of consumers generally, it may, by order direct that-

(a) the practice shall be discontinued or shall not be repeated

(b) any agreement relating to such unfair trade practice shall be void or shall stand modified in respect thereof in such manner as may be specified in the order;

(c) any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published, as the case may be, in such manner as may be specified in the order

(2) The Commission may, instead of making any order under this section, permit any party to carry on any trade practice, if it so applies and takes such steps within the time specified by the Commission as may be necessary to ensure that the trade practice is no longer prejudicial to the public interest or to the interest of any consumer or consumers generally, and in any such case, if the Commission is satisfied that necessary steps have been taken within the time so specified, it may decide not to make any order under this section in respect of that trade practice.

(3) No order shall be made under Sub-section (1) in respect of any trade practice which is expressly authorized by any law for the time being in force.

[7] Interdependence of these provisions with Section 12B cannot be lost sight of. That being so, we are of the considered view that in the absence of the separate proceedings alleging unfair, monopolistic or restrictive trade practice, an application for compensation under Section 12B of the Act is not maintainable. The Compensation Application in each case therefore is not maintainable. Each application is disposed of accordingly.

[8] Needless to say that if the parties have any remedy available under any provision of any other statute, they are free to avail the same. Mr. Makheeja submitted that there should be some observation regarding condonation of delay. This position has been taken care of under Section 14 of the Limitation Act 1963 (In short the Limitation Act).

[9] We record our appreciation for the fair assistance rendered by Mr. Makheeja as Amicus-Curie in true spirit of an Amicus-Curie.

Latest Judgments

We’re always searching for amazing people to join our team.

5.0 (615)

Bhanu Pratap

Featured Recomended
Highly recommended!

Experties

Consumer Court | Cheque Bounce | Civil Cases | Criminal Cases | Matrimonial Disputes

Phone Number

7982270319

Dedicated team of best lawyers for all your legal queries. Our lawyers can help you for you Consumer Court related cases at very affordable fee.