2008 (10) TMI 353 - SC - Companies Law

Whether any such deficiency in service could be said to amount an unfair trade practice as envisaged under the provisions of the aforesaid MRTP Act? Held that - Appeal allowed. Element of unfair trade practice definitely stands at a higher and onerous platform than the deficient service. For making out a case of unfair trade practice an element is involved to the extent of making false and misleading statement and representation and in order to make a case of unfair trade practice such ingredients, which are part and parcel of the concept of unfair trade practice has to be alleged and must be proved and established. In the present case there is neither such allegation of any such false and misleading representation nor is there any proof provided by way of evidence, which also we have perused. Therefore there could be no finding by the MRTP Commission that the appellant is guilty of unfair trade practice. That being so, the order of the Commission cannot be upheld and the same is set aside.

Summary

Issues Involved:
1. Jurisdiction and applicability of the MRTP Act.
2. Allegations of unfair trade practices.
3. Deficiency in service.
4. Legal interpretation of "unfair trade practice."
5. Examination of evidence and findings by the MRTP Commission.

Issue-wise Detailed Analysis:

1. Jurisdiction and Applicability of the MRTP Act:
The appeals were made under Section 55 of the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act), challenging the final judgment and orders passed by the MRTP Commission. The appellant argued that the MRTP Commission's order was illegal and without jurisdiction, as there was no allegation of fraudulent representation by the appellant.

2. Allegations of Unfair Trade Practices:
The complaint was filed by M/s. Maharajah & Co., alleging that the appellant airlines failed to deliver a consignment of three parcels on time, resulting in loss of goodwill and a claim of Rs. 6 lakh for negligence and deficiency in service. The MRTP Commission found the appellant guilty of unfair trade practices under clauses (ii), (iv), and (vi) of Section 36A(1) of the MRTP Act and directed the appellant to cease such practices.

3. Deficiency in Service:
The MRTP Commission concluded that the appellant's failure to deliver the parcels on time constituted a deficiency in service. The appellant argued that the delay did not amount to an unfair trade practice as defined under the MRTP Act. The Commission's order was based on the premise that the appellant's services were not of the expected standard and quality.

4. Legal Interpretation of "Unfair Trade Practice":
The Supreme Court examined the definition of "unfair trade practice" under Section 36A of the MRTP Act, which includes false or misleading representations regarding the standard, quality, or benefits of services. The Court noted that there was no allegation of false or misleading representation by the appellant in the complaint filed by M/s. Maharajah & Co. or the Director General before the MRTP Commission. The Court emphasized that to constitute an unfair trade practice, there must be a false or misleading statement, which was not present in this case.

5. Examination of Evidence and Findings by the MRTP Commission:
The Supreme Court reviewed the evidence and findings of the MRTP Commission and found no allegations or proof of false or misleading representation by the appellant. The Court held that the MRTP Commission's order was not supported by any findings of false representation or misstatement by the appellant regarding their services. The Court also highlighted that the stringent penalties under Section 48C of the MRTP Act necessitate careful examination of allegations and essential ingredients of unfair trade practices.

Conclusion:
The Supreme Court concluded that the MRTP Commission's order could not be upheld as there was no evidence of unfair trade practices by the appellant. The appeals were allowed, and the order of the MRTP Commission was set aside. The Court emphasized that while there may have been a deficiency in service, it did not amount to an unfair trade practice under the MRTP Act.