ORDER
Moksh Manajan, Member
1. M/s. Aegis Chemical Industries Limited is engaged in manufacture of fatty alcohol and other chemicals. It has been charged with adoption of and indulgence in restrictive trade practices within the meaning of Section 2(o) read with Section 33(i) of the Monopolies and Restrictive Trade Practices Act, 1969 (for short, the Act). This is in a complaint filed by the Director General (Investigation and Registration) under Section 10(a)(iii) and Section 37 of the Act. The specific allegations levelled are manipulation of prices, supply of goods on payment of higher price and charging differential rates from various parties. These in turn are taken up from the complaint of one M/s. Galaxy Organics (P) Ltd., A-8, Shaheen, 153-154, R.C. Marg, Chembur, Bombay – 400 074, purchaser of goods of M/s. Aegis Chemical Industries (P) Ltd.
2. For having suffered losses at the hands of the party on account of its following the practice of restrictive trade, the complainant also sought compensation of an amount of Rs. 1,36,080/- on account of difference in the price charged as against mentioned in the purchase order along with the compound interest @ 21% per annum on the aforesaid amount.
3. Since both the complaint application as well as the application filed under Section 12B of the Act relate to the same cause of action pertaining to the same subject matter, we find it convenient to dispose them of by a common order.
4. The DG in its complaint in RTPE No. 299/1998, after referring to the facts and figures collected from the respondent as a result of the probe letter issued supported the allegations with the documents like purchase orders, orders of confirmation, correspondence exchanged between the parties etc. etc. After analysing the information, as gathered from the informant/DG was of the view that the respondent which is the market leader of the product of Fatty Alcohol has manipulated the conditions of delivery of the product so as to impose unjustified cost resulting in loss and injury to the’ consumer. The trade practice is thus stated to be prejudicial to public interest.
5. Notice of Enquiry issued has been challenged on the ground of misplaced analysis based on insufficient material collected by the DG. A simple case of price hike on account of increase in cost of production has been construed to be a manipulation of price. A few cases of small difference in price charged from various purchasers on account of prompt payment and availability of credit facility have been generalized as a normal practice, contends the respondent. For want of availability of the product with the respondent, non-supply to Galaxy Group of Companies has been taken as a refusal to supply goods covered within the provisions of Section 33(1)(a) of the Act. The respondent has thus sought discharge of Notice of Enquiry on the strength of facts available on record.
After completion of the pleadings, the following issues were framed :
(1) Whether the enquiry is not maintainable for the reasons mentioned in the preliminary objections raised by the respondents in the reply to the notice ? (2) Whether the respondent is or has been indulging in RTFs as per the allegations made in the Notice of Enquiry ? (3) If answer to issue No. 1 is in affirmative, whether such practices are prejudicial to the public interest, interest of the consumer or consumers in general ? (4) Relief.
6. In this case, decision on the issues raised hinges mainly on the documents placed on record. The DG in its complaint has based his case solely on the allegations as levelled by the informant in its complaint. The main thrust of the DG’s arguments is that the respondent has exploited its pre-dominant position in the market by manipulating conditions of delivery and price in respect of sale of fatty alcohol as reflected in one of the sale orders for 10,200 kgs. Acilol 1214. We find that the purchase order for 10,200 kgs. of Acilol 1214 was placed on the respondent by the informant on 31.7.1987 vide Invoice No. 0918. The order was received by the respondent on 4.8.1987 and on 5.8.1987, the respondent confirmed the order subject to the revision of the price of the product at Rs. 49,000/MT against 43,000/MT as quoted in the purchase order. The increase was stated to be on account of increased cost of the raw materials. Clause (1) of terms and conditions of sale executed between the parties, namely, Aegis Chemicals Industries (P) Limited and M/s. Galaxy Organics (P) Limited, reads as under :
“All. orders are supposed to be accepted and booked only against confirmation by the Company, without engagement and subject to availability of stocks. Each lot of products despatched against an order shall be invoiced at the Company’s prices and terms ruling on the date of despatch, which when so invoiced shall be binding on the purchaser without any previous notice in that regard. The Company’s rights to increase the prices of products at any time upto the date of despatch and to invoice the purchaser for the products on the prices and terms ruling on the date of despatch shall not be affected by the Company having accepted at any time before the date of despatch any remittance in part or full towards the payment for the prices of the products at the rate other than the rate ruling on the date of despatch. Quantity and quality not confirmed by the Company shall be deemed to be treated as not accepted or as cancelled. The rate shall include packing charges when supplied in Company’s own packing other than road tankers or otherwise specified. No order which is not confirmed in a prescribed format and duly signed by an authorised officer of the Company shall be binding on the Company.”
7. Thus the order is made subject to confirmation of the seller and availability of the stock with it at the time of supply. Price chargeable is the one ruling on the date of despatch. There is no whisper of any commitment on the part of the respondent for supply of goods at the old rates in the letter dated 13th August, 1987 addressed by the informant to the respondent as relied upon by the DG. Rather the informant has itself accepted that the contract for supply of goods for six months in the year 1986 was duly carried out by the respondent. Pending the order for confirmation on the part of the informant, the same cannot be taken as refusal to supply the goods – the first charge levelled against the respondent.
8. As to the supply of Acilol 1214 made conditional on the increased price, we find that as per chart of average cost of production from 1st August, 1987 to 31st January, 1988, the cost of production of C12 Acilol has been worked out at Rs. 76,362/- and that of Acilol 12-14 at Rs. 73,423/-. This has not been challenged by the DG. The contention of the DG that the respondent had sufficient stock manufactured out of the Palm Karnel Oil received at concessional rates, is not supported by any direct evidence. It is based on an inference made on the ground that since on 1.8.1987, the entire raw material was consumed, there was sufficient stock of Acilol 12-14 to have been supplied at the old rates. As explained by the respondent, 5 MT Acilol was suplied at the old rates of Rs. 43/Kg. to the other Group of Companies of M/s. Galaxy Surfactant (P) Ltd. during that period. This has not been denied by the DG. Ordinarily the increase in the cost of raw material does lead to the increase in sale price of the product. From the information supplied by the respondent, we find that there has been reduction in the sale price of the products corresponding to the reduction in cost of raw material, when so warranted, as is evident from the following chart :
9. The DG has not been able to prove its case regarding manipulation of condition of delivery and price on the basis of material placed before us.
10. As to the allegations of differential rates charged from the other parties, we find that the explanation of the respondent is plausible. The policy of differential price to the customers has been linked with the credit terms, credit worthiness, of the partly, special qualities for different user industries and the mode of packing/ transportation dealing with the customers. This has not been linked to quantity take off. It in fact pertains to payment of consideration. This is also dependent on the supply of goods in drum packing or tankers’ load. It is not the case of the DG that this treatment is not available to all the customers across the board. Therefore, the allegations are bereft of any substance.
11. In view of the above, we are of the considered view that the case of restrictive trade practice having been not established against the respondent, the Notice of Enquiry deserves and is directed to be discharged.
12. As the charge of restrictive trade practices on the basis of which the compensation has been claimed by the applicant in C.A. No. 68/1994, has not been established, the application, having no merit, is also dismissed with no order as to the costs on the facts and in the circumstances of the case.