JUDGMENT
H.C. Gupta, (Member)
1. This order shall finally dispose of an application under Section 12A of the Monopolies and Restrictive Trade Practices Act, 1969, filed by Indo-Japan Photo Films Co. Ltd., 40, Community Centre, Naraina, New Delhi (hereinafter referred to as “the complainant”), on the basis of which the Commission had passed an ex parte ad interim injunction order on February 9, 1990, restraining respondent No. 1 and staying the operation of Rule 56 of the rules and regulations framed by the Indian Newspaper Society and restraining respondent No. 1 from proceeding with the embargo threatened by its letter dated January 29, 1990, till further orders. The Commission had directed the respondent to show cause as to why the interim injunction be not made absolute till the disposal of the main enquiry.
2. Respondent No. 1 filed an application for vacation of the order of interim injunction passed on the basis of the application of the complainant under Section 12A of the Monopolies and Restrictive Trade Practices Act. Shri J.M. Mukhi, learned counsel for respondent No. 1, has raised two basic legal issues having a bearing on the jurisdiction of the Commission to grant an ad interim injunction on the application of the complainant under Section 12A of the Act. Firstly, learned counsel has pleaded that ex parte order dated February 9, 1990, is based upon concealment and a false statement on the part of the applicant and is vitiated on that account and is also per incuriam. Respondent No. 1 says in his reply that it was concealed from the Commission that the Commission itself had made a long order after long hearing in which lengthy evidence was adduced, wherein it has upheld the totality of the rules and regulations of the Indian Newspaper Society, then the Indian and Eastern Newspaper Society as being eminently in the public interest by its judgment dated December 20, 1978, Restrictive Trade Practices Enquiry No. 78 of 1975, in Indian and Eastern Newspaper Society, In re. Secondly, respondent No. 1 also alleged that the complainant has concealed the material facts from the Commission that it was in arrears of Rs. 8,93,000 and that it had, in discharge of the said application, issued a cheque for Rs. 8,93,000 and deposited the same in the bank account of respondent No. 2. ^The applicant has concealed the fact that the said cheque was dishonoured. The reply further reads that the applicant has concealed the fact that the criminal complaint was filed by respondent No. 2 against the applicant in the Court of Judicial Magistrate, 1st class, New Delhi. The applicant has falsely stated that it had filed a suit in the Delhi High Court in relation to the said Rs. 8,93,000 and this was an obvious effort to mislead the Hon’ble Commission and to commit a fraud upon it and to induce it to grant an ex parte injunction.
3. The arguments on the injunction application were heard on March 8, 1990, and were concluded. Learned counsel for respondent No. 1 has invited the attention of this Commission to the earlier order of the Commission dated December 20, 1978, and has placed a copy of that order on the file of the Commission. In addition to this he also argued that, for grant of a temporary injunction, the complainant must be able to prove that not only he has a prima facie case and that the balance of convenience lies in his favour, but also that irreparable injury would be caused to him if it is not granted. Learned counsel has also argued that the complainant is pursuing the alternative remedy in the High Court of Delhi and their whole approach in approaching the Commission is to abuse the process of the court. Learned counsel has also argued that the liability has been admitted by the complainant in the instant case ; cheque was paid and the same has bounced and there are various disputes between the parties. I would discuss all these points taken by learned counsel one by one.
4. So far as the order of the Commission dated December 20, 1978, goes, learned counsel has quoted many paragaphs of the order in his reply. Learned counsel has read from page 29 of the above-mentioned order which reads as under :
“The main question, the vality of the IENS Plan in its entirety arises for decision in Restrictive Trade Practices Enquiry No. 78 rather than in 79. Whatever this may be, as a matter of form, no objection of any valid kind can be taken, in substance, to any of the clauses of the IENS Regulations, Code of ethics, etc. (what we call the IENS Plan) which are clearly meant to serve the objectives explained above having both economic and social basis.”
5. Learned counsel has also quoted in the other para from the earlier ruling of the Commission which reads as under : —
“All these facts are once again recalled only for the purposes of underscoring the truth so forcibly brought out during the trial that there are so many advantages flowing all round to all concerned parties from the package of regulations, conceived to promote the well being of all those noticed above, and confer benefits on them. Such advantages arising both individually to each of the parties concerned as well as totally to all concerned cannot, it seems, properly be objected to by looking at any regulation piecemeal or in isolation disregarding the total context and the purposes they are meant to achieve, as explained above. The parties involved with the package of regulations, from a holistic view-point, seem to be …”
6. Learned counsel for the complainant in his reply has argued that the allegation levelled by the learned counsel for the respondent in reply that there is concealment of facts and the concealment of earlier order of the Commission and the High Court is totally wrong and is denied. My attention has been drawn by learned counsel for the complainant to the notice of enquiry which contains the charges made against the respondent in Enquiry No. 78 of 1975, and also the issues therein. It has been argued that Rule 56 of the Rules governing accreditation of advertising agencies was not the subject-matter of the enquiry before the Commission and no finding was given upon the validity or otherwise of Rule 56 vis-a-vis Section 33 of the Monopolies and Restrictive Trade Practices Act, 1969.
7. I have gone through the earlier order of the Commission dated December 20, 1978, in Restrictive Trade Practices Enquiry No. 78 of 1975. This is the order upon which learned counsel for the respondent is heavily relying upon. I have reproduced above the relevant part of this order on which learned counsel for the respondent is, inter alia, relying upon. I have given my best consideration to the facts before the Commission in Enquiry No. 78 of 1975. The charges against the respondents in the aforesaid enquiry were as follows :
“(i) Prohibiting the grant of better facilities such as lower rates, longer credit periods, preferential positions, discounts or rebates, commission, etc., to any direct advertiser ; and discriminating against direct advertisers vis-a-vis advertising agencies which have been, under the regulations prescribed by respondent No. 1, allowed certain percentage of commission, and between accredited advertising agencies and non-accredited advertising agencies (The relevant clauses of the documents are at annexure ‘A’).
(ii) Prescribing the minimum charges to be levied by the advertising agencies on the advertisers (The relevant clauses of the documents are at annexure ‘B’).,
(iii) Prohibiting the grant of cash discounts (The relevant clause of the documents are at annexure ‘C’).
(iv) Restricting or limiting the persons or classes of persons to whom the services of publishing advertisements in the newspapers are to be rendered (The relevant clauses of the documents are at annexure ‘D’).
(v) Granting or allowing concessions or benefits, including allowances, discounts, rebates or credits in connection with, or by reason of, dealings, i.e., rendering the services of, publishing advertisements to the advertising agents and/or advertisements (The relevant clauses of the documents are at annexure ‘E’).
(vi) Issuing directives to the member newspapers to levy surcharges at specified rates on the normal advertising rates at different times :
(vii) Discriminating between certain classes of advertisers in allowing rebate by issuing directives to the member newspapers to allow 15% rebate on the normal rate to the Director of Advertising and Visual Publicity, Government of India, and not to allow the same rebate to other classes of advertisers such as Railways, State Governments, public sector commercial undertakings, etc. ; and…”
8. The issues which were framed by the Commission in the aforesaid Enquiry No. 78 of 1975 were as follows :
“1. Whether the inquiry is maintainable or it is liable to be terminated in limine in view of the grounds given by respondent No. 1 in paragraphs 4 and 5 of its reply, dated 4th March, 1976, to the notice of enquiry issued by the Commission ?
2. Whether the notice of enquiry is not maintainable in view of the objections raised by respondents Nos. 4 and 5 in paragraphs 1, 3, 4, 5, 6 and 8 of their reply ?
3. Whether respondents Nos. 4 and 5 can be impleaded in the proceedings along with other respondents ?
4. Whether the allegations made in the notice of enquiry dated 25th October, 1975, or any of them constitute restrictive trade practices within the meaning of Section 2(o) of the Act ?
5. If the answer to question No. 1 is in the affirmative, whether any or all the respondents are indulging in any or all of these practices ?
6. If answers tp issues Nos. 4 and 5 are in the affirmative, whether any or all the respondents are entitled to the benefit of Section 38(1)(a), (b), (c), (d), (g) or (h) read with the balancing clause ?
7. General, including reliefs and costs.”
9. It is seen from the notice of enquiry as reproduced above and also the issues as framed, that neither Rule 56 of the rules governing accreditation of advertising agencies, nor the restrictive trade practices as enshrined in Section 33 of the Monopolies and Restrictive Trade Practices Act, were before the Commission at that time. As is seen from issue No. 4, the Commission was seized of the allegations made in the notice of enquiry dated October 25, 1975, or any of them constitute restrictive trade practice within the meaning of Section 2(o) of the Monopolies and Restrictive Trade Practices Act As is seen from the notice of enquiry, the dispute before the Commission was about discrimination between certain classes of advertisers in allowing rebate by issuing directives to the member newspapers to allow 15% rebate on the normal rate to the Director of Advertising and Visual Publicity, Government of India, and not to allow the same rebate to other classes of advertisers such as Railways, State Governments, public sector commercial undertakings, etc., and the discrimination in respect of commission inter se between accredited advertising agencies and non-accredited advertising agencies. There is absolutely no mention of Rule 56 in the earlier order of the Commission nor was before the Commission any enquiry in respect of Section 33 of the Monopolies and Restrictive Trade Practices Act. The observations made by the Commission at pages 23 and 29 of the Order, as reproduced above, were not at all essential to the decision of that enquiry and are without binding authority ; these observations were in the nature of “obiter” and just by the way and incidental. The validity or vires of Rule 56 vis-a-vis Section 33 of the Monopolies and Restrictive Trade Practices Act was neither the subject-matter of the enquiry, nor was any finding given by the Commission. It has been held by the Supreme Court in the case of Lakhanpal National Ltd. v. MRTPC [1989] 66 Comp Cas 519 (SC), that the scope of the enquiry under the Monopolies and Restrictive Trade Practices Act is only limited to the charges as mentioned in the show-cause notice as stated above. The show-cause notice did not mention any charge touching upon Rule 56 of the rules governing the accreditation of the advertising agencies.
10. Learned counsel for the respondent has also invited my attention to a ruling of the Delhi High Court dated February 6, 1989, in F. A. O. No. 119 of 1988 (R.K.B. Herbals P. Ltd. v. Enterprises Advertising P. Ltd., AIR 1989 Delhi 25), The facts leading to the appeal before his Lordship of the Delhi High Court are that the plaintiff filed a suit against the respondent for the grant of a permanent injunction. It was alleged that respondent No. 1, who is an advertising agency, had entered into an agreement with the plaintiff for handling the advertisements of the plaintiff’s products. Respondent No. 2 was the Indian Newspaper Society. It was alleged in the plaint that due to poor quality and delayed advertisement released by respondent No. 1, the appellant suffered loss and damage and the advertising agreement was terminated and an amount of Rs. 15,81,819 was not paid for reasons like poor reproduction of advertisements, improper art work, etc. On April 4, 1988, the appellant received a letter circulated by the respondents requesting the advertising agencies not to release advertisements to the plaintiff till the settlement of the dispute between the parties. According to the appellant, the circulation of such letters operated as a virtual ban on the appellant’s advertisement and is not warranted by law. The trial court declined to grant ad interim ex parte injunction and, thereafter, the matter was taken’to the High Court. The learned single judge of the High Court dismissed the appeal, inter alia, on the grounds, namely, (i) There was no challenge to Rule 56 of the impugned rules in the suit filed in a civil court; (2) An admitted amount of Rs. 11,69,831 had not been paid. Respondent No. 3 had a dispute committee which investigated the claims and took into consideration the case of the appellant therein. A detailed report was submitted, according to which respondent No. 1 was held liable to give credit of Rs. 44,694 and it was held that the balance amount of Rs. 15,40,855 was payable. It was after this letter that the impugned letters were issued by the associations.
11. So far as the dispute before me goes, Rule 56 of the impugned rules has been directly challenged as violative of Section 33 of the Monopolies and Restrictive Trade Practices Act, 1969 ; there is no admitted liability on behalf of the complainant. It is seen from page 37 of the complaint that the cheque for Rs. 8,93,000 was given by the complainant to respondent No. 2 subject to the condition that respondent No. 2 would return the total property of the complainant by that evening, that is, March, 17, 1989, and this position was again reiterated in the letter dated March 18, 1989. As respondent No. 2 did not return the property to the complainant, the complainant directed his bankers to stop payment of the said cheque, which was allegedly paid as advance for adjustment against future orders and not by acceptance of any liability. So, there is no admitted liability in the dispute before me as it was the case in the matter before his Lordship of the Delhi High Court. No dispute committee investigated his claim and made any report as it was done in the case before his Lordship of the Delhi High Court In the absence of all the three salient features being not present ir. the present enquiry before me, the judgment of the Delhi High Court is not attracted.
12. Having discussed the aforesaid two orders/judgments as put forth for my consideration by learned counsel for the respondent, I reiterate that Rule 56 of the impugned rules is prima facie violative of Section 33 of the Monopolies and Restrictive Trade Practices Act and is prima facie a restrictive trade practice. I also feel that, if the injunction is not made absolute, it would result in irreparable loss to the complainant as his total advertisements and publicity would come to a standstill in case the aforesaid Rule 56 is put into action. I see no merit in the contention raised by learned counsel for the respondent that there is no prima facie case and the balance of convenience is not in favour of the complainant. I am of the considered view that there is nothing wrong with the issuance and continuation of the temporary injunction under Section 12A of the Monopolies and Restrictive Trade Practices Act, 1969. I order accordingly, and make the order dated February 9, 1990, absolute for the duration of the enquiry.