9911796707
TMI Blog1975 (9) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... r-company (ITC) was incorporated under the Indian Companies Act in the name of Imperial Tobacco Co. of India Ltd. on the 24th August, 1910. It carried on the business of manufacturing and selling cigarettes for domestic and export markets. Respondent No. 5, Vazir Sultan Tobacco Company Ltd. (hereinafter referred to as "VST") was incorporated in 1930 in the Nizam's State of Hyderabad under the Hyderabad Companies Act, 1930. On 20th May, 1970, the Imperial Tobacco Co.'s name was changed into India Tobacco Co. Ltd. On 1st June, 1970, the Monopolies and Restrictive Trade Practices Act (hereinafter referred to as the said "Act") was brought into force. On and from 1st August, 1970, the Central Government established the Monopolies and Restrictive Trade Practices Commission (hereinafter referred to as "the Commission"). The petitioner-company is an undertaking registered under section 26 of the Act. It is a dominant undertaking within the meaning thereof having 47% of production, distribution and supply of the total goods produced, distributed and supplied in India. On or about December 9, 1971, the Commission received a complaint signed by twenty-seven consumers requesting for an enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission directing preliminary investigation, there had been violation of natural justice and it maintained that the purported gist did not constitute a complaint within the meaning of section 10( a )( i ) of the Act. On the 19th January, 1974, the Director sent a letter enclosing extracts from paragraphs 13 to 1 5 of the complaint. On the 29th January, 1974, the petitioner again reiterated its request for complete copy of the complaint and the specific order of the Commission. It also indicated the infirmities in the complaint in the absence of verification as required under regulation 4 of the Restrictive Trade Practices (Enquiry) Regulations, 1970. It was pointed out that although in the Director's letter of 19th April, 1972, it was stated that the complaint was made by twenty-five consumers, it was then written that the complaint was made by twenty-seven consumers. It was contended by the petitioner in the said letter that the preliminary investigation was being conducted outside the scope of complaint and attempt was being made to make out a new case de hors the alleged complaint. On the 31st January, 1974, M/s. J.B. Dada-chanji Company, advocate, wrote to the Director submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defines restrictive trade practices. Section 5 provides for establishment of the Commission consisting of a minimum 3 and a maximum 9 members including the Chairman who has been qualified to be a judge of the Supreme Court or the High Court. Section 10 deals with jurisdiction of the Commission to enquire into monopolistic or restrictive trade practices. Section 11 provides for a preliminary investigation by the Director of Investigation for satisfying the Commission that a complaint requires to be enquired into. Powers of the Commission have been enumerated in section 12. The Commission shall, for the purpose of any enquiry under the Act, have the same powers as are vested in a civil court under the Civil Procedure Code while trying a suit, in respect of certain matters. Section 37 deals with investigation into restrictive trade practices by the Commission and the practices prejudicial to public interest have been enumerated in section 38. Section 55 provides an appeal to the Supreme Court on points of law. Under section 66, the Commission have been given powers to make Regulations. It is contended by Mr. Deb, appearing on behalf of the petitioner that the Commission has not acte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to be made by the Director, in such manner as it may direct, for the purpose of satisfying itself that the complaint requires to be inquired into. The provision of section 11 is mandatory. It makes it obligatory upon the Commission on receipt of a complaint to cause a preliminary investigation by the Director of Investigation. Regulation 4 of the Restrictive Trade Practices (Enquiry) Regulations, 1970 (hereinafter referred to as "1970 Regulations"), lays down that every complaint shall be verified at the foot by the party or parties acquainted with the facts of the case. The person verifying shall specify what he authorised on his own knowledge and what he authorised upon information received and believed to be true. The verification shall be signed by the person or persons making it and shall state the date on which and the place at which it was signed. Regulation 47 provides that failure to comply with any requirement of these Regulations shall not invalidate any proceedings unless the Commission so directs and, subject to the provisions of the Act and these Regulations, the Commission shall have power to regulate its own procedure. So, even without a verification, the enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under clause ( a ) of section 190 if the first information report suffers from an infirmity of not containing sufficient factual allegations constituting a cognizable offence, yet there is no bar of taking cognizance of an offence if the information furnishes reasonable grounds to suspect commission of a cognizable offence. Mr. Deb points out that the provisions of section 190 of the Criminal Procedure Code are not similar to the provisions of section 10( a ) of the MRTP Act. Under clause ( c ) of section 190 of the Criminal Procedure Code, even on mere suspicion a Magistrate can take cognizance of an offence. Such a provision is absent in clause ( iv ) of section 10( a ) of the MRTP Act. Moreover, the object, purpose and scheme of the two Acts are different. In Ramnarain v. State of Uttar Pradesh AIR 1957 SC 18 , the Supreme Court made a note of caution against construing expressions used in one Act with reference to their use in another Act. The Supreme Court observed that it is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act. The meaning of words and expressions used in an Act must take their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 37, and it took cognizance under section 10( a )( iv ) of the Act. In my opinion, there was no lack of bona fides on the part of the Commission. It acted within its powers and jurisdiction conferred upon it by the statute. There was no conversion of a proceeding under section 10( a )( i ) into 10( a )( iv ) of the Act as urged by the petitioner. In Pooran Mal v. Director of Inspection (Investigation) Income-tax [1874] 93 ITR 505; AIR 1974 SC 348 , the Supreme Court held that information gathered from the documents even if seized illegally cannot be excluded from evidence. If it is admissible, the court is not concerned how it was obtained. In H. N. Rishbud v. State of Delhi AIR 1955 SC 196 the Supreme Court held that an illegality committed in the course of an investigation does not affect the competence or jurisdiction of the court for trial. The same propositions have been reiterated in Munnalal v. State of Uttar Pradesh AIR 1964 SC 28. Therefore, assuming that the complaint was defective, the infirmities in the complaint did not vitiate the report of the Director of Investigation. Obviously, there was no bar on the Commission to use such a report f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty to give notice or opportunity to be heard orally. The preliminary investigation conducted by the Director of Investigation under section 11 of the Act is in the nature of a fact-finding investigation. Materials collected by him are for the consideration and satisfaction of the Commission to come to a prima facie conclusion in determining whether or not an enquiry under section 37 should be instituted. The relevant materials gathered in the preliminary investigation would be examined by the Commission in open court during the course of enquiry under section 37 of the Act and at that time the petitioner shall have every opportunity to controvert each and every information, document or material that might be brought on record and which might be used by the Commission against the petitioner during the course of the enquiry for arriving at the conclusion as to whether or not the petitioner-company is indulging in any restrictive trade practices or whether such trade practices are prejudicial to the interest of the public. A mere provision for an enquiry at the preliminary stage before coming to a decision in such a context does not make the decision a quasi-judicial one. In R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y against the petitioner under section 37 of the Act. In that investigation, there was no lis between the petitioner and the Director of Investigation. The report of the Director of Investigation is neither a decision nor an administrative order which affects prejudicially the rights of the petitioner. It is urged that the report of the investigation would affect the reputation and goodwill of the petitioner-company. In my opinion, this argument is not well-founded. Unless and until there is a decision by the Commission under section 37 of the Act, the petitioner's goodwill and business reputation are not likely to be affected. Considering the nature of the powers exercised by the Director of Investigation under section 11 of the Act and the nature of the enquiry conducted by him, in my view, there is no implied obligation upon the Director to disclose the entire contents of the complaint or allow the petitioner opportunity to refute the allegations made in the complaint at that stage of preliminary investigation. The Director of Investigation is not required to act judicially but at the same time he must act with justice and fair play. Only complaint of the violation of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 10 deals with a preliminary enquiry. In the case of an enquiry under clause ( i ) the Commission shall first order for a preliminary enquiry and report by the Director of Investigation under section 11. In case under clauses ( ii ), ( iii ) and ( iv ), the Commission also may order such preliminary investigation by the Director under regulation 19(2) of the 1974 Regulations. Under regulation 23 of the 1974 Regulations, where the Commission after considering the report of the Director of Investigation is of opinion that an enquiry shall be held into restrictive trade practice, it shall so order such enquiry and the enquiry shall be held in accordance with the procedure prescribed in Chapter IX of the said Regulation. Chapter IX deals with proceedings under section 37 of the Act. Regulation 19(2)( c ) of the 1974 Regulations provides that even under sub-clause ( iv ) of section 10( a ) of the Act, the Commission may order a preliminary investigation by the Director of Investigation. In the instant case the preliminary investigation has been held by the Director upon a complaint under sub-clause ( i ) of section 10( a ) of the Act. The Commission after completion of the enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion and the grounds were altogether beyond the scope of the said Act. Those grounds have no bearing whatsoever on the question involved under section 10( a )( iv ) and section 37(1) of the Act. In the impugned notice the petitioner-company has been described as "monopolistic undertaking". Mr. Mukherjee, appearing on behalf of the respondents, frankly admitted that it was a wrong description and it should not have been there. A wrong description, in my view, does not invalidate the notice, if other things fulfilled the requirements of the statute. In M. A. Rasheed v. State of Kerala AIR 1974 SC 2249, the Supreme Court said that where powers are conferred on public authorities to exercise the same when "they are satisfied" or when "it appears to them", or when "in their opinion" a certain state of affairs exists; or when powers enable public authorities to take "such action as they think fit" in relation to a subject-matter, the courts will not readily defer to the conclusiveness of an executive authority's opinion as to the existence of a matter of law or fact upon which the validity of the exercise of the power is predicated. It has also been observed by the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son cannot be canvassed in proceeding under article 226 of the Constitution. So, I am unable to accept the contentions of Mr. Deb that the grounds as appearing from the impugned notice have no bearing on the question involved under section 10( a )( iv ) and section 37(1) of the Act. It could not be said that the formation of opinion was made on collateral and extraneous grounds or no reasonable person could form such an opinion on the basis of the materials placed before him. It is strenuously argued by Mr. Deb that the conclusion arrived at in the impugned notice that the petitioner-company is a monopolistic undertaking is without any basis and is against the evidence and information on records. No enquiry has been held so far into the question as to whether the petitioner-company is a monopolistic undertaking or not within the meaning of section 2( j ) of the Act. It is contended that the said question is irrelevant and immaterial for the purpose of the purported enquiry under section 10( a )( iv ) and section 37(1) of the Act. On 25th day of July, 1975, Triloki Nath Pandey, Secretary to the Monopolies and Restrictive Trade Practices Commission, affirmed an affidavit in pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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