1995 (2) TMI 436 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of agreements under the Monopolies and Restrictive Trade Practices Act, 1969.
2. Whether the agreements contained restrictive trade practices u/s 33(1)(a) and (c) of the Act.
3. Scope of inquiry by the Commission under Section 37 of the Act.
4. Application of statutory fiction in Section 33(1) post-amendment.

Summary:
1. Validity of Agreements:
The appeals were filed u/s 55 of the Monopolies and Restrictive Trade Practices Act, 1969, against the judgment of the Monopolies and Restrictive Trade Practices Commission. The appellant had agreements with various companies for the distribution of machinery and equipment in India, which were alleged to contain restrictive trade practices.

2. Restrictive Trade Practices:
On 26.11.1986, notices were issued u/s 10(a)(iii) read with Section 37, alleging that the agreements contained conditions amounting to restrictive trade practices under Section 33(1)(a) and (c). The Commission directed the appellant to discontinue these practices and delete objectionable clauses within eight weeks.

3. Scope of Inquiry by the Commission:
The Commission must inquire whether the agreement relates to restrictive trade practices and if such practices are prejudicial to public interest. The Commission can direct discontinuation or modification of such agreements u/s 37 if found prejudicial.

4. Statutory Fiction in Section 33(1):
The amendment to Section 33(1) introduced a statutory fiction, deeming agreements falling within specified categories as restrictive trade practices. The court emphasized that this statutory fiction must be fully applied, and agreements falling within these categories must be treated as restrictive trade practices without further inquiry into their nature.

Conclusion:
The Supreme Court set aside the Commission's order and directed it to re-examine the matters afresh, considering whether the objectionable clauses were prejudicial to public interest. The Commission must provide detailed findings before issuing any 'cease and desist' orders. The appeals were allowed, and no costs were ordered.