ORDER
A.N. Divecha, J. (Chairman)
1. Respondent No. 2 has made this application for review under Section 13(2) of the Monopolies and Restrictive Trade Practices Act, 1969 (“the MRTP Act” for brief), praying for recall and revocation of the order passed by this Commission on December 9, 1997, and for discharging the notice of enquiry (NOE) issued, inter alia, against respondent No. 2. The Director-General has filed his reply thereto and has resisted this application on various grounds. No reply has come to be filed by or on behalf of either respondent No. 1 or respondent No. 3 to the aforesaid application for review made by and on behalf of respondent No. 2.
2. A few facts need to be narrated in order to understand and to appreciate rival contentions urged before us with respect to the present application for review. One Shri Netaji Surinder Mohan Nayyar (“the complainant” for convenience) approached the Director-General with his complaint of July 25, 1997, inter alia, against respondents Nos. 2 and 3 herein. According to him, he wanted to purchase a Cielo car from respondent No. 3 with the financial assistance from respondent No. 2. He was given a loan in the sum of Rs. 4,38,000 and the necessary agreement in that regard was executed on January 25, 1996. A copy of the agreement is annexed with the application made by the Director-General under Section 10(a)(iii) of the Monopolies and Restrictive Trade Practices Act. It appears that respondent No. 2 disbursed the loan amount directly to respondent No. 3 herein as agreed between the parties. It was the case of the complainant before the Director-General and the case of the Director-General before this Commission in its aforesaid application that the complainant was delivered a second-hand car instead of a new car. It appears that the Director-General investigated into the matter by writing probe letters to the concerned parties. Thereafter, the Director-General moved the aforesaid application before this Commission under Section 10(a)(iii) of the MRTP Act. In the application besides respondents Nos. 2 and 3 mentioned in the complaint of the complainant, the manufacturer of the car is also made a party respondent as respondent No. 1. By its order passed on December 9, 1997, an NOE was ordered to be issued making it returnable on February 11, 1998. The respondents were directed to file their replies to the Director-General’s application within six weeks from its service under a copy to the Director-General. An application under Section 12A of the MRTP Act was also made. We are, however, not concerned with that application at present. An application for amendment was also made for correcting the title of respondent No. 1 in the cause title of the complaint and leave to amend was granted and the necessary amendment has been carried out. Another application for amendment has also been made under Regulation 65 of the Monopolies and Restrictive Trade Practices Commission Regulations, 1991 (“the Regulations” for brief), and it is pending hearing and disposal. The present respondent No. 2 has moved the present application on April 24, 1998, for review of the aforesaid order passed by this Commission on December 9, 1997, and for its discharge from the enquiry proceeding on the grounds mentioned in the application. As aforesaid, the Director-General has filed his reply thereto and has resisted it on several grounds.
3. Learned advocate, Shri Suri, for respondent No. 2 has submitted that respondent No. 2 is a banking company within the meaning of the Banking Regulation Act, 1949 (“the BR Act” for brief), and it will not be amenable to the jurisdiction of this Commission in view of the relevant provisions contained in Section 4(2) of the MRTP Act. He has further submitted that under Section 11(2) of the MRTP Act, the Director General is required to satisfy himself as to whether or not an application should be made by him to the Commission under Section 10 after making a preliminary investigation in such manner as he thinks fit on the basis of a complaint made to him or upon his own knowledge or information regarding any kind of restrictive trade practice carried on by any party or person. According to the learned advocate, Shri Suri for respondent No. 2, the preliminary investigation conducted by or on behalf of the Director-General was quite perfunctory in nature and the satisfaction reached by him for approaching this Commission with the application under Section 10 of the MRTP Act at least against respondent No. 2 can be said to have been vitiated on that account. As against this, the learned advocate, Shri Makhija, for the Director-General has submitted that Section 4(2) of the MRTP Act would not be applicable in the present case and this Commission is competent to enquire into the alleged restrictive trade practices adopted or indulged in, inter alia, by and on behalf of respondent No. 2. Learned advocate, Shri Makhija, for the Director-General has further submitted that the preliminary investigation conducted by the Director-General can be said to be suffering from no infirmity whatsoever and the satisfaction reached by the Director-General for the purpose of making an application under Section 10 of the MRTP Act cannot be said to have been vitiated on that account.
4. Section 4(2) of the MRTP Act excludes the applicability thereof, inter alia, to a banking company with respect to matters in respect of which specific provisions exist, inter alia, in the Banking Regulation Act. Section 6 of the Banking Regulation Act, 1949, enumerates forms of business in which banking companies may engage themselves. They include lending or financing of money either upon or without security. Provision for giving loan by way of purchase of a vehicle popularly known as auto finance against hypothecation of the vehicle in question would certainly be included in the forms of business enumerated in Section 6 of the Banking Regulation Act. Our attention has been invited by learned advocate, Shri Suri, for respondent No. 2 to Section 35A thereof providing for power of the Reserve Bank to give directions. Thereunder the Reserve Bank is empowered to issue directions to banking companies generally or to any banking company in particular from time to time if it is satisfied, inter alia, that in public interest or in the interest of banking policy it is necessary to do so. It has further been provided therein that the banking company to which such directions are issued shall be bound to comply with such directions. It thus becomes clear from the aforesaid provisions contained in the Banking Regulation Act that the Reserve Bank enjoys supervisory power over conducting affairs of banking business by any and every banking company. As aforesaid, it can issue directions if it is necessary to do so in public interest or in the interest of banking policy.
5. It is difficult to accept the submission urged before us by learned advocate, Shri Makhija, for the Director-General to the effect that the Reserve Bank will not be in a position to issue directions to any banking company to desist from adoption of and/or indulgence in any restrictive and/or unfair trade practice within the meaning of the relevant provisions contained in the MRTP Act.
6. As pointed out hereinabove, the Reserve Bank under the Banking Regulation Act is constituted as a custodian, inter alia, of public interest and conducting of banking affairs by the banking company qua any banking policy. This Commission can also pass a cease and desist order against any party found guilty, inter alia, of adoption of or indulgence in restrictive and/or unfair trade practices in public interest and not de hors thereto. In that view of the matter, it is difficult to conceive that the Reserve Bank will not issue directions in public interest if it finds, inter alia, adoption of or indulgence in any restrictive and/or unfair trade practice by any banking company.
7. In this view of the matter, we think that this Commission is precluded from exercising its jurisdiction over a banking company qua its banking business by virtue of Section 4(2) of the MRTP Act.
8. After reaching the aforesaid conclusion, it may not be necessary for us to dilate upon the alleged perfunctory nature of investigation conducted by and on behalf of the Director-General into the complaint made to him by the complainant. It may be pointed out that respondent No. 2 in its reply (at annexure 3 to the application) to the probe letter (at annexure 2 to the application) clearly pointed out that it is a banking company and it conducts its business affairs in accordance with the Banking Regulation Act and directions issued by the Reserve Bank. If that be so, it was necessary for the Director-General to have enquired with the Reserve Bank whether or not conducting of business by respondent No. 2 qua loan transactions for purchase of vehicles is in accordance with the Banking Regulation Act or directions issued by the Reserve Bank from time to time in general or in particular to respondent No. 2 or in public interest. Nothing of the sort appears to have been done by or on behalf of the Director-General on this point. Respondent No. 2 has also in its reply clearly indicated that the complainant had approached the Reserve Bank with respect to the transaction in question. It has, however, clarified that it has informed the Reserve Bank that the matter was subjudice. It is difficult to say at this stage whether or not the Reserve Bank could have given directions with respect to conducting of business affairs by respondent No. 2, qua its loan to purchasers of vehicles. The Director-General was, however, not precluded from ascertaining from the Reserve Bank whether it gave any directions to respondent No. 2 with respect to its aforesaid affairs or it kept quiet after receiving information from respondent No. 2 that the matter was sub judice. In its aforesaid reply respondent No. 2 has clearly pointed out to the Director-General that it has already approached the civil court for recovery of the outstanding amount with respect to the loan transaction in question from the complainant. It appears that the Director-General has not probed the matter further as to What kind of proceeding it was, what were the defences, if any, raised by the complainant in the suit proceeding and at what stage the matter stood. We are informed at the Bar that respondent No. 2 had already moved an application for an interim relief restraining the complainant before the Director-General not to disturb or to interfere with the custody of the vehicle hypothecated against the loan transaction, which vehicle respondent No. 2 has recovered from the complainant in terms of the agreement between the parties. The learned advocate, Shri Suri, for respondent No. 2 informs us that the civil court had granted the desired interim relief after satisfying itself with the prima facie case after resistance from the complainant as the defendant in that case. In the context of this fact situation, we think it would have been quite appropriate on the part of the Director-General to have made enquiries about the nature of the suit proceeding either with respondent No. 2 or with the complainant himself as also to the nature of defences, if any, raised on behalf of the complainant as the defendant in that case. It appears that the reply received from respondent No. 2 was sent to the complainant for his comments thereon. It appears that the complainant offered his comments by means of his reply of September 2, 1997. It is annexed to the application made by and on behalf of the Director-General at annexure 4. The complainant has in his aforesaid, communication of September 2, 1997, clearly stated that respondent No. 2 had obtained an order of injunction from the Additional District Judge in the suit proceeding. He has added that such injunction was obtained by respondent No. 2 by concealing certain material facts. In that view of the matter it was incumbent upon the Director-General to have ascertained from the complainant whether or not he had resisted the application for injunction made by and on behalf of respondent No. 2 and, if so, what defences he had taken in his reply to the injunction application. The Director-General could have further ascertained from the complainant whether or not any appeal against the order of injunction passed by the competent court was preferred before any higher forum. Nothing of the sort appears to have been done by or on behalf of the Director-General in this case.
9. Learned advocate, Shri Makhija, for the Director-General has submitted that” respondent No. 2 is guilty of adoption of unfair trade practices inasmuch as it has taken custody of the vehicle from the complainant without taking recourse to the due process of law. It has been urged in the application made by the Director-General under Section 10 of the Monopolies and Restrictive Trade Practices Act that respondent No. 2 could have resorted to the guarantor for the purpose of recovery of its dues from the complainant. It is unfortunate that the person conducting investigation on behalf of the Director-General has not applied his mind to the agreement in question or the fact situation obtaining from the loan transaction. There was no guarantor in the entire loan transaction. The question of turning to the guarantor for recovery of the loan amount would not, therefore, arise. Besides, under the agreement, respondent No. 2 is empowered to recover the custody of the vehicle in question in the case of default of payment of the instalments. In its ruling in the case Bharathi Knitting Company v. DHL Worldwide Express (Courier Division of Airfreight Ltd.) [1996] 87 Comp Cas 886 ; AIR 1996 SC 2508, the Supreme Court has held that the parties to an agreement are ordinarily bound by its terms and conditions. In that view of the matter, the Director-General should have realised that respondent No. 2 acted in accordance with the terms of the agreement and not de hors thereto. If the civil court had granted the desired interim relief after satisfying itself as to the prima facie case and consideration of the balance of convenience, the Director-General ought not to have made any application for interim relief under Section 12A of the MRTP Act at least qua respondent No. 2 herein. This Commission is certainly not empowered to sit in appeal over an appropriate order passed by a competent civil court in a suit proceeding in any manner.
10. It is true that the pendency of the suit proceeding in a competent civil court is no bar to exercise of jurisdiction by this Commission with respect to the matters covered by the MRTP Act in view of the binding ruling of the Supreme Court in Mrs. Viswalakshmi Sasidharan v. Branch Manager, Syndicate Bank [1997] 89 Comp Cas .128 ; [1997] 5 CTJ 185. It also, however, provides that the matter covered by the MRTP Act should not have been raised as a defence in the suit proceeding. If the Director-General had made enquiries either with the complainant or with respondent No. 2 what kind of defences the complainant as the defendant has raised in the suit proceeding even at the stage of contesting the interim relief application and if it was found that the defence also was based on adoption of and/or indulgence in, inter alia, restrictive trade practices by or on behalf of respondent No. 2 herein, the Director-General ought to have desisted from moving this Commission with this application at least against respondent No. 2. To that extent, we find considerable force in the submission urged before us by learned advocate, Shri. Suri, for respondent No. 2 to the effect that the investigation carried on or conducted by the Director-General with respect to the complaint of the complainant left much to be desired and it could be styled as cavalier, cursory and perfunctory.
11. With the review application has been annexed the order passed by the Additional District Judge at Delhi on February 26, 1998, in the injunction application proceeding in Civil Suit No. 510 of 1997, filed by respondent No. 2 against the complainant for recovery of the outstanding loan amount. The application for injunction was for restraining the complainant as the defendant therein from interfering with the custody of the vehicle in question. It transpires therefrom that the injunction application was contested by the complainant as the defendant therein and his defences were akin to the grievances voiced by him in his complaint to the Director-General qua respondent No. 2 herein. In that view of the matter, the aforesaid binding ruling of the Supreme Court will have to be distinguished on the ground that in the present case the issue regarding deficiency in the service on the part of respondent No. 2 herein was specifically raised in the suit proceeding at least qua the injunction application.
12. Relying on the ruling of the High Court of Calcutta in the case of ITC Limited v. MRTP Commission [1976] 46 Comp Cas 619, learned advocate, Shri Makhija for the Director-General has submitted that the Director-General has conducted the investigation according to law. It transpires from the aforesaid ruling of the High Court of Calcutta that the Director-General is not held to be a quasi-judicial or an administrative authority. It does not show how and in what manner the Director-General has to conduct his investigation. Respondent No. 2 has not made any grievance that no opportunity of hearing was given to it by or on behalf of the Director-General before moving the application under Section 10 of the MRTP Act on the basis of the complaint from the complainant and after investigation into it. The grievance voiced by and on behalf of respondent No. 2 before this Commission by means of the present application is that the application made by and on behalf of the Director-General under Section 10 of the MRTP Act suffers from the vice of non-application of mind as also it suffers from the infirmity of the perfunctory nature of investigation. In that view of the matter, we are of the opinion that the aforesaid ruling of the High Court of Calcutta has no application in the present case.
13. The learned advocate, Shri Makhija, for the Director-General has submitted that respondent No. 2 could have faced a trial and could have obtained the judgment in its favour on logical conclusion of the trial and this Commission need not review its order passed on December 9, 1997. In this connection a reference deserves to be made to the binding ruling of the Supreme Court in the case of Mahindra and Mahindra Ltd. v. Union of India [1979] 49 Comp Cas 419 ; AIR 1979 SC 798. It has been held therein that the powers of review under Section 13(2) of the MRTP Act are much wider in scope and content qua Section 114 read with Order XLVII, Rule 1 of the Code of Civil Procedure, 1908 (“the CPC”, for brief). As held by the Supreme Court in its aforesaid ruling in the case of Mahindra and Mahindra Ltd. v. Union of India [1979] 49 Comp Cas 419 ; AIR 1979 SC 798, the only limitation on the power of review is that no such review would be permissible on the same set of facts. In other words, no person can be permitted to play the same innings twice over. Respondent No. 2 had no opportunity to present its case when this Commission passed the order on December 9, 1997. Respondent No. 2, therefore, cannot be said to have played the same innings twice over. Besides, Order 1, Rule 10(2) of the CPC empowers the court at any stage of the proceeding to strike out, inter alia, any party improperly joined as the defendant. By virtue of Regulation 13(2) of the Monopolies and Restrictive Trade Practices Commission Regulations, 1991, the Civil Procedure Code is made applicable where no specific provision has been made therein. We are of the view that respondent No. 2 ought not to have been joined as a party respondent in the application made by and on behalf of the Director-General under Section 10 of the MRTP Act.
14. In view of our aforesaid discussion, we are of the opinion that we were in error in issuing the NOE at least against respondent No. 2 on the basis of the application made by and on behalf of the Director-General under Section 10(a)(iii) of the MRTP Act. The NOE against respondent No. 2, therefore, deserves to be discharged.
15. In the result, the application for review is accepted to the aforesaid extent. The NOE against respondent No. 2 is discharged, however, with no order as to costs on the facts and in the circumstances of the case.