2012 (12) TMI 398 - SC - Indian Laws

Maintainability of compensation applications u/s 12B of MRTP Act - whether initiation of separate proceedings either u/s 10 or u/s 36B of MRTP Act alleging unfair trade practices by the respondents is mandatory for making a compensation application u/s 12B - Held that - 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. 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.

Summary

Issues Involved:
1. Maintainability of compensation applications under Section 12B of the MRTP Act without separate proceedings under Section 10 or Section 36B.
2. Interpretation of Sections 10, 12B, and 36B of the MRTP Act.
3. Jurisdiction of the MRTP Commission to award compensation.

Issue-wise Detailed Analysis:

1. Maintainability of Compensation Applications under Section 12B of the MRTP Act:
The appellants filed compensation applications under Section 12B of the MRTP Act before the MRTP Commission, which were transferred to the Competition Appellate Tribunal after the MRTP Act was repealed. The respondents contended that these applications were not maintainable without initiating separate proceedings under Section 10 or Section 36B of the MRTP Act. The Competition Appellate Tribunal dismissed the compensation applications based on this contention, relying on a previous judgment (Info Electronics System Ltd. v. Sutran Corporation) which held that an application for compensation under Section 12B is not maintainable without separate proceedings alleging unfair trade practices.

2. Interpretation of Sections 10, 12B, and 36B of the MRTP Act:
The appellants argued that Section 12B allows for independent proceedings for compensation without the need for separate proceedings under Section 10 or Section 36B. They cited the Delhi High Court's decisions in M/s Pennwalt (I) Ltd. and R.C. Sood And Co., which supported this interpretation. The respondents, however, maintained that an inquiry under Section 10 or Section 36B is necessary before a compensation claim under Section 12B can be entertained.

3. Jurisdiction of the MRTP Commission to Award Compensation:
The Supreme Court analyzed the relevant sections of the MRTP Act. Section 12B(1) allows for an application for compensation if loss or damage is caused by monopolistic, restrictive, or unfair trade practices. Section 12B(3) empowers the MRTP Commission to make an inquiry into such allegations and determine compensation. The Court noted that these powers are independent of the powers under Sections 10 and 36B. The Court emphasized that Section 12B was introduced as an independent remedy, and there is no indication in the language of the Act that it is dependent on proceedings under Sections 10 or 36B.

Conclusion:
The Supreme Court concluded that the Competition Appellate Tribunal erred in its interpretation that an application under Section 12B requires prior proceedings under Section 10 or Section 36B. The Court set aside the impugned orders of the Competition Appellate Tribunal. However, it left open the possibility for the respondents to argue that the appellants had not made out a case of monopolistic, restrictive, or unfair trade practices as required under Section 12B, which the Tribunal should decide on its merits. The appeals were allowed with no order as to costs.