1975 (9) TMI 93 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the complaint and preliminary investigation.
2. Jurisdiction and powers of the Monopolies and Restrictive Trade Practices Commission (MRTPC).
3. Compliance with principles of natural justice.
4. Validity of the notice issued under regulation 7 of the Restrictive Trade Practices (Enquiry) Regulations, 1970.
5. Interpretation of Section 10(a) of the Monopolies and Restrictive Trade Practices Act, 1969.
6. Whether the Commission's actions were bona fide and within jurisdiction.

Issue-wise Detailed Analysis:

1. Validity of the Complaint and Preliminary Investigation:
The petitioner argued that the complaint was invalid due to non-compliance with regulation 4 of the Restrictive Trade Practices (Enquiry) Regulations, 1970, as it was not properly verified. The court found that the complaint was signed by twenty-seven persons, although it initially mentioned twenty-five, which justified the discrepancy in the number of complainants. Regulation 47 states that non-compliance with procedural requirements does not invalidate proceedings unless directed by the Commission. Therefore, the complaint remained valid until the Commission decided not to proceed with it on May 16, 1974. Consequently, the preliminary investigation report based on the complaint was not invalid.

2. Jurisdiction and Powers of the MRTPC:
The petitioner contended that the MRTPC acted without jurisdiction by using information from an invalid complaint to initiate an enquiry. The court held that the Commission's jurisdiction under Section 10(a)(iv) is not restricted to information derived from a valid complaint. The Commission can use information from any source, including an invalid complaint, to initiate an enquiry under Section 37. The court cited the Delhi High Court's decision in Nirlon Synthetic Fibres & Chemicals Ltd. v. R. D. Saxena, which supported this view.

3. Compliance with Principles of Natural Justice:
The petitioner argued that the principles of natural justice were violated as they were not provided with a complete copy of the complaint and the Commission's order directing the preliminary investigation. The court noted that extracts and gists of the complaint were provided, and the petitioner was given an oral hearing during the preliminary investigation. The court held that the preliminary investigation was a fact-finding exercise to inform the Commission's decision on whether to hold an enquiry under Section 37. Therefore, there was no requirement for a full disclosure of the complaint at that stage, and the principles of natural justice were not violated.

4. Validity of the Notice Issued Under Regulation 7:
The petitioner challenged the validity of the notice issued under regulation 7, arguing that it was based on an invalid complaint and preliminary investigation. The court found that the Commission's decision to initiate an enquiry under Section 37 was based on information derived from the preliminary investigation report, which was valid. The court also noted that the Commission's jurisdiction under Section 10(a)(iv) allows it to act on its own knowledge or information, regardless of the source. Therefore, the notice issued under regulation 7 was valid.

5. Interpretation of Section 10(a) of the MRTP Act:
The petitioner argued that the four alternatives in Section 10(a) are mutually exclusive and cannot be superimposed on each other. The court disagreed, stating that while the alternatives are mutually exclusive, information derived from any source, including an invalid complaint, can be used by the Commission as its own knowledge or information under Section 10(a)(iv). The court emphasized that there could not be simultaneous enquiries based on different alternatives in Section 10(a), but the Commission's action in this case did not involve such simultaneous proceedings.

6. Bona Fides and Jurisdiction of the Commission:
The petitioner alleged that the Commission acted in bad faith and without proper jurisdiction. The court found no evidence of bad faith or lack of jurisdiction. The Commission's decision to initiate an enquiry under Section 37 was based on a valid preliminary investigation report and was within its statutory powers. The court also noted that the description of the petitioner as a "monopolistic undertaking" in the notice was incorrect but did not invalidate the notice. The court concluded that the Commission acted within its powers and jurisdiction, and there was no conversion of a proceeding under Section 10(a)(i) into one under Section 10(a)(iv).

Conclusion:
The court discharged the rule, finding that the Commission acted within its powers and jurisdiction, and there was no violation of natural justice. All interim orders were vacated, and there was no order as to costs.