ORDER
Moksh Mahajan, Member
1. The Director General of Investigation and Registration (for short the DG) was directed to conduct an inquiry into the allegations levelled against the respondent M/s. Geoffrey Manners & Co. Ltd. As per the Preliminary Investigation Report (PIR) the information gathered revealed that the respondent has despatched goods to the party without any orders resulting in uncleared stocks at the end of the distributor and have also adopted discriminatory policy in allowing rebates to different groups of the purchasers. Not only the goods are replaced after a period of eight months or so even the claims are not settled within reasonable time. As per the the DG, by manipulating conditions of delivery the respondent has indulged in restrictive trade practices within the meaning of Section 2(o)(ii) of the Act. Accordingly, the issuance of Notice of Enquiry has been recommended.
2. On the basis of the facts stated in the PIR, the Notice of Enquiry was issued to the respondent under Sections 10(a)(iv), 36A, 36B(d) read with Sections 37 and 36D of the Monopolies and Restrictive Trade Practices Act, 1969 (for brief the Act). The provisions of Section 2(o)(ii) of the Act were also invoked in the said notice.
3. Pursuant to the Notice of Enquiry issued, the respondent stated that as the
informant had voluntarily taken the delivery of the various goods, it was required to pay the amount within the stipulated period. Its unwillingness to discharge the liability has led to the filing of the complaint. The respondent company never forced its dealers to take any stipulated quantity of its products and there was no condition for off-take of any of its products. The fact that the informant still continues to be a dealer of the respondent company shows that the complaint filed is without any basis. As per the practice, the informant is required to pay the amount on receipt of the goods through the transporter selected by the respondent. This is to facilitate the recovery of the amount in respect of the goods received by the dealer/distributor and is within its right to return the goods in case they were not ordered by it. On the other hand the informant has always taken the delivery of the goods raising no objections at the time of the delivery. As per practice the respondent also honoured the orders placed on telephone by the parties. The complaint needs to be dismissed on the ground of outstanding amount of Rs. 2,78,671/- from the informant, contended the respondent.
4. After the pleadings were complete, the following issues were framed :
(1) Whether the respondent has been or is indulging in the restrictive and unfair trade practices as alleged in the NOE?
(2). If so (a) Whether such restrictive trade practices are not prejudicial to public interest ? (b) Whether such unfair trade practices are prejudicial to public interest or affecting the interest of consumers generally ? 5. In addition to the documents filed along with the affidavits on both sides, the witnesses were also cross-examined by both the parties. 6. We have given careful consideration to the contentions made on both sides. Perusal of
the evidence brought on record shows that as per letter dated 1st September, 1997 the informant registered its protest with the respondent for having despatched 9 consignments amounting to Rs. 5,04,053.44 without orders. In reply thereto the-respondent attributed the aforesaid consignments to the oral orders without specifically denying the charge. There are other such like instances as reflected in letters dated 18.6.1997 and 20.12.1997. The Resolution of the stockists of the respondent for Allahabad area further shows that such like practices have been adopted in respect of the other dealers too. However, it is also a fact that the informant has paid the amounts of such consignments though allegedly at the insistence of the respondent. What is to be noted in this context is that the respondent in its letter has undertaken to instruct Kanpur Depot not to despatch the goods without written orders. If there were such like transactions after the year 1997, there is no such evidence placed on record. Rather the informant has been making payments in respect of unordered consignments. Statement of the respondent in the affidavit of Anil Kumar Mohindru, Assistant Manager, Distribution-North that replacement of goods is made between 17 and 58 days stands unrebutted by the informant. It has also not beer, denied that in FMGC/Pharma Industry 60 days’ period is generally observed for settlement of claims. The respondent has in fact claimed that there is an outstanding of Rs. 2,78,671.23 at the end of the informant. The seriousness of the allegations can be gauged from the fact that the Wholesale Dealership Agreement entered into way back 1982 has still been kept alive by both sides. This apart, it has been shown on behalf of the DG that the practices as adopted by the respondent have led to restriction, distortion and prevention of competition in the market which is the essential ingredient to be satisfied before a finding is reached that the respondent has indulged in restrictive trade practices within the meaning of Section 2(o)(ii) of the Act. This is as held by Their Lordships of Hon’ble Supreme Court in the case of Rajasthan
Housing Board v. Smt. Parvati Devi, etc. To quote relevant observations :
“In our view, the Commission ought to have read the said part along with the main ingredient which requires that a trade practice which has or may have the effect of preventing, distorting or restricting competition in any manner would be restrictive trade practice and in particular which inter alia, tends to bring about manipulation of ‘services in such manner as to impose on the consumers unjustified costs.”
In absence of any evidence led to show that the aforesaid practices indulged in by the respondent led to restriction, distortion or prevention of competition in the market, we are of the considered opinion that the charge of restrictive trade practices having not been established, the Notice of Enquiry deserves and is accordingly discharged. No order as to the cost on the fact and in the circumstances of the cases.