9911796707
TMI Blog1997 (5) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... istered office at Ahmedabad, is engaged in manufacture and sale of Nirma washing powder, Nirma detergent cakes and Nirma bath soaps. The company has been manufacturing these products since early seventies and its products are marketed and sold all over the country. It is the claim of the appellant that having established a good market for sale of its various products and having captured the confidence of the consumers, thought of offering a scheme as an incentive to the consumers for its products. The appellant, therefore, on April 25, 1991, floated a scheme of awarding and distributing of prizes through a lottery. According to the scheme, the appellant placed a coupon bearing a number in each one kg. pack of detergent/washing powder. The said scheme was valid till July 31, 1991 and the draw of lots was to be held on August 30, 1991. The coupon kept in the one kg. bag of detergent mentioned that prizes worth ₹ 71 lacs were to be distributed which included Contessa Car, Maruti 800 Car, BPL TV set, golden chain, Titan watch, Steel jug, Ladies purse, Steel bawl set and cash. 3. On July 24, 1991, a complaint was received by the D.G. (I R) from Azad Singh, New Delhi, alleging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by raising the prices of its products. The company, therefore, had indulged in unfair trade practice under Section 36A(3)(a) and (b) of the Act. The D.G., therefore, recommended that the Commission would inquire into the complaint and pass cease and desist order against the company. 4. The Commission on perusal of the application of the D.G. and examining the documents annexed thereto issued notice of inquiry to the company. 5. On receipt of the said notice, the company filed its detailed reply denying the allegations contained in the complaint. The Company, however, accepted that it had floated the scheme in question with a view to give prizes to the customers. The company denied that it had indulged in any unfair trade practice for the purpose of promoting the sale or it had caused loss and injury to the customers or eliminated or restricted competition. That the scheme had come to an end on July 31, 1991, and therefore, the complaint filed by the D.G. has become infructuous. That the draw Was held and the prizes were declared and distributed according to the scheme. That there is no cogent and sufficient material to hold that the scheme in question had infringed either t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a single or isolated action of any person in relation to any trade. 8. The Act came to be amended by Act No. 30 of 1984 called the Monopolies and Restrictive Trade Practices (Amendment) Act, 1984. Section 36A was brought on Statute in Chapter V part B called Unfair Trade Practices. Section 36A defines Unfair Trade Practices and the relevant provisions are as under: 36A - Definition of Unfair Trade Practice : In this part, unless the context otherwise requires, unfair trade practice means a trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any services, adopts one or more of the following practices and thereby causes loss or adopts one or more of the following practices and thereby causes loss or injury to the consumers of such goods or by service, whether by eliminating or restricting competition or otherwise, namely : 1.X X X 2.x x x 3. (a) Permits - the offering of gifts, prizes or other items with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission to hold the charge proved. He urged that the Commission erroneously assumed that the offering of prizes was with an intention not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole. While elaborating this submission, he urged that the increase in the prices of detergent on April 2, 1991 was a bonafide exercise on the part of the company and the same was not done with a view to wholly or partially cover the amount of prizes to the consumers under the Scheme. The offering of such prizes was merely an incentive to the consumers for their brand and loyalty . Learned Counsel urged that in order to prove the charge under Section 36A(3)(a) of the Act, there has to be a cogent evidence before the Commission to hold the said charge proved. In the present case, he urged that except a complaint of Azad Singh received by the D.G. on July 24,' 1991, there was no other material either before the D.G. or before the Commission to substantiate the said charge. The preliminary inquiry that was alleged to have been conducted by the D.G. was who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te an unfair trade practice under Section 36A, it is necessary to establish that the trade practice concerned is one of several kinds of trade practices mentioned in sub sections (1) to (5) thereof and once it is established that the trade practice complained of falls in one or more of the trade practices mentioned in sub sections (1) to (4) of Section 36A, it would then be only question of inference to be drawn by the Commission as to whether such trade practice causes loss or injury to the consumers of goods or services either by eliminating or restricting competition or otherwise. The words or otherwise are of wider import and they signify not only actual loss or injury suffered by consumers but also probable or likelihood of the consumers suffering loss or injury in any form. The object of the amending Act 30 of 1984 is to extend an additional protection to the consumers from being subjected to unfair trade practice and, therefore, it is not necessary to prove any loss or injury actually suffered by the consumers. Consistent with this object, Section 36D empowers the Commission to issue a cease and desist order and can prevent execution of trade practice which may fall in one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany had raised the prices of its detergent a few days before the impugned scheme was floated. The finding of the Commission in this behalf proceeds on the footing that the prize money under the impugned scheme was either fully or partly covered by the amount charged in the transaction as a whole. Should this averment in the complaint of the D.G. be presumed to be per se valid being a proof of an unfair trade practice under Section 36A(3)(a) of the Act? The Commission appears t have been influenced by its own unreported decisions wherein such a view was taken and followed. Mr. Dushyant, Learned Senior Advocate for the appellant urged that the Commission had not taken into account the reply filed on behalf of the company that the prices of the detergent powder were required to be raised because of rise in the prices of the raw materials. If the Commission were to call upon the company to justify the increase in the prices of the detergent powder dehors the prize money-the Company would have produced the material to dislodge the assumption that this increase in the prices of the detergent powder was not bonafide and in fact an exercise to cover fully or partly the prize money. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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