9911796707
TMI Blog2008 (5) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant, the agreement between the appellant and the dealers contain certain clauses which are restrictive in nature, squarely falling under section 33 of the Act. These relate to restrictions of the territory in which the dealer is to operate, the tie-up agreement by fixing targets and maintaining the resale price. The appointment letter of the dealer dated 11-5-1994 indicates that it is restricted to "Rajkot" alone which is restriction of an area within the terms of section 33(1)(g) of the Act. Section 33(1)(g) is reproduced as under:- "Registrable agreements relating to restrictive trade practices.-(1) Every agreement falling within one or more of the following categories shall be deemed, for the purposes of this Act, to be an agreement relating to restrictive trade practices and shall be subject to registration in accordance with the provisions of this Chapter, namely:- ****** (g)any agreement to limit, restrict or withhold the output or supply of any goods or allocate any areas or market for the disposal of the goods;" 4. It is further alleged against the appellant that it fixed the sales targets in respect of various products and imposed a restriction on the dealer to pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly indicative of expectation on the part of the appellant. It neither compels nor obliges the dealer to buy one or the other Bajaj products. Non-achievement of targets in no way affects the dealership. As regards price fixation, clause DD of letter dated 7-9-1994 has to be read with clause Q of the dealership agreement. In the face of clear specification that the dealer is at liberty to sell the goods at lower than the recommended retail prices, question of invoking the provision of section 33(1)(f) does not arise. These clauses in no way distort or impair the competition. Therefore, the Notice of Enquiry needs to be discharged. 9. The Commission framed the following issues:- 1.Whether the Notice of Enquiry (NOE) is not maintainable for the preliminary objection taken by the appellant in its reply to the NOE? 2.Whether the appellant has indulged in or is indulging in the alleged restrictive trade practices? 3.Whether the alleged restrictive trade practices are not prejudicial to public interest? 4.Relief 10. Both the parties led documentary as well as oral evidence. The Commission did not find any merit in the preliminary objection taken by the appellant that section 2(o) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (f) of section 33(1) of the Act. 15. While disposing of the complaint, the Commission directed the appellant to give effect to this order within six weeks from the date of receipt of the order and file an affidavit of compliance within four weeks thereafter. 16. The appellant (who was the respondent before the Commission) filed a comprehensive reply. In the reply, it was mentioned that the MRTP Act is a result oriented Act. It is designed to be applied to practical situation, and, therefore, unless all the facts and circumstances including the facts constituting restrict trade practice within the meaning of section 33(1)(b), (f) and (g ) read with section 2(o) of the MRTP Act, particularly the fact as to how the competition is prevented, distorted or restricted and in particular which tends to, inter alia, bring about manipulation of prices or conditions of delivery or to affect the flow of supplies in the market relating to goods in question in such a manner as to impose on the consumers unjustified cost or restriction, are set out in the notice and the application, neither the notice nor the application meets the aforesaid requirement of law and in view thereof the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and, therefore, the jurisdictional facts for application of section 33(1)(b ) of the MRTP Act are lacking and both the notice and the application are not maintainable in this behalf. 20. The appellant submitted that the jurisdictional facts for applicability of section 33(1)(f) are lacking inasmuch as the letter dated 7-9-1994 cannot be read in isolation but has to be read with the appointment letter. The relevant portion of clause 'Q' of the Dealership Agreement reads as under: "You shall not sell our vehicles at higher than our recommended retail prices. You will, however, be free to sell at lower than the recommended retail prices. Taxes and Octroi whenever applicable, may be charged extra." 21. The appellant, Bajaj Auto Ltd. on its own initiative for a fair and wide geographical distribution of Bajaj products and availability of adequate after-sales-service appointed dealers for its products all over the country so as to ensure that Bajaj products and adequate after-sales-service are available throughout the country. It is submitted on behalf of the appellant that there is no territorial restriction or restraint on allocation of geographical area to the dealer. The appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... practice has or may have the effect of preventing, distorting or restricting competition. 26. Reliance has also been placed on the case of Paras Bros. [1974] 4 Comp. LJ. 395, wherein it was held that a restrictive trade practice must have the following elements: "(i)It should be a trade practice defined in section 2(o) of the Act. (ii)it should have an actual or probable effect of preventing, distorting or restricting competition in some manner. (iii)the competition necessarily envisages the same or a similar situation. (iv)there should be manipulation of prices. (v)there should be unjustified costs or restriction as a result of such manipulation." 27. Reliance has also been placed on the case of L. C. Malhotra v. Rahul Bajaj [1995] 1 Comp. LJ. 421 , in which it was held that even isolated acts should be viewed in the context of the practice of the respondent in relation to the question as to whether the respondent had manipulated the conditions of delivery. 28. In the instant case, neither the notice nor the application even allege that the appellant has ever indulged in or that the alleged trade practice has or may have the effect of preventing, distorting or restricting ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
