JUDGMENT
S. Chakravarthy, Member
1. We are called on to adjudicate on the maintainability of this enquiry besides the application of the five interveners filed in this Commission. Before the issues in question for adjudication are listed, it is desirable to narrate briefly the facts of the main enquiry.
2. Shri Gir Prasad has moved this Commission with a complaint petition under Section 10(a)(i) of the Monopolies and Restrictive Trade Practices Act, 1969, alleging that the respondents, namely, the Government of Uttar Pradesh (Secretary, Irrigation Department), the Executive Engineer, Matt Branch Division, Ganga Canal and the Deputy Revenue Officer-I, Matt Branch Division, Ganga Canal, have indulged in certain restrictive trade practices within the meaning of Section 2(o)(ii) of the Act. The complainant owns certain lands in Dayanatpur village, Bulandshahr District, covered by irrigation through Matt Branch Division, Ganga Canal of the Jewar reservoir. He owns 1.640 hectares. Out of his holding, land measuring 0.615 hectares (7 bighas approximately) falling under chak No. 410 has been getting irrigation supply from channel No. 61 of Jewar reservoir for which the complainant has been paying consideration fixed by the respondents from time to time. Similarly, other owners of agricultural land falling in different chak numbers measuring about 405 bighas of land were also getting irrigation supply from the same channel No. 61.
3. On account of shortage of irrigation water, the respondents formed, an additional channel No. 61B in addition to the existing channel No. 61. After the additional channel was formed, land measuring about 117 bighas falling under chak Nos. 438 and 439 were attached to it. The remaining land, namely, 405 bighas minus 117 bighas 285 bighas, continued to be served by channel No. 61.
4. Another set of lands measuring about 225 bighas of land was being served from a new channel 61A since about 15 years ago. To summarise the above details, the following table may be read :
5. The three channels mentioned in the table above, are drawing irrigation water from Jewar reservoir with the help of 4′ diameter pipes. According to the complainant, channel No. 61 is heavily loaded in comparison with the other two channels Nos. 61A and 61B. The result has been that some of the land owners served by channel No. 61 have been adversely affected in rearing their crops.
6. Recently, the second and the third respondents in their warbandi order dated August 19, 1995, added further burden to channel No. 61 by adding 90 bighas of land to it, withdrawing 90 bighas from channel No. 61A. The new scenario, according to the complainant, is reflected in the following table :
7. The complainant has alleged that after the warbandi order dated August 19, 1995, the land owners served by channel No. 61 would further suffer in terms of affectation of their agricultural crops. Charging the respondents with having manipulated the conditions of delivery of service of supplying irrigation water, the complainant has alleged that the trade practice indulged in by the respondents has imposed unjustified restriction and cost on him within the meaning of Section 2(o)(ii) of the Act. He has prayed that a notice of enquiry may issue against the respondents and a cease and desist order may be passed against them.
8. The complainant has also moved an injunction application under Section 12A of the Act, seeking a restraint on the respondents from implementing the warbandi order dated August 19, 1995.
9. The Commission after hearing Dr. V.K. Aggarwal, counsel/for the complainant, directed the issue of a notice to the respondents on the main complaint petition and further directed that the operation of the warbandi order dated August 19, 1995, in respect of channel No. 61 be restrained till further orders.
10. The injunction order was on September 27, 1995.
11. As things stood, thus, an application has been moved in this Commission by five intervenes, namely, Shri Kichu Singh, Shari Narottam Singh, Shri Amar Singh, Shari Lakshman Singh and Smt. Sukhbir Devi, under Section 13(2) of the Act read with regulation 64(2) of the Monopolies and Restrictive Trade Practices Regulations, 1991, read with Order 1, rule 10(2) of the Code of Civil Procedure, 1908.
12. Their main prayer is to vacate the ex parte injunction order dated September 27, 1995, of the Commission. In support of their prayer, the interveners have stated as follows :
1. The interveners are poor agriculturists availing of irrigation facility from channel No. 61.
2. Because of the injunction order, they have been deprived of the irrigation facility.
3. The interveners have not been made a party to the proceedings by the complainant.
4. The interveners hold 95 bighas of land which were served by channel No. 61 before the injunction.
5. The impugned warbandi order is based on the capacity of the channel to carry water and the level of the lands covered by the channel. It is for this reason that the land of the interveners which was getting irrigation supply from channel No. 61A was attached to channel No. 61 through the impugned warbandi’ order. This will not affect the complainant or any other agriculturist similarly placed.
6. After taking into consideration all relevant technical factors, the sanctioned load for channel No. 61 has been fixed as 620 bighas whereas the present load, after the warbandi order is only 395 bighas, 7. After the warbandi order, the complainant gets water for 3 hours 17 minutes as against 3 hours 9 minutes prior to the said order.
8. Irrigation facility is provided by the Irrigation Department in pursuance of the Directive Principles of the Constitution and is without any consideration and it is the duty of the department to extend the facility to all agriculturists.
9. The Commission has no jurisdiction to entertain the complaint and adjudicate on the same as the provision of irrigation facility by the Government of Uttar Pradesh is not in the nature of a trade and as it is without “any consideration”. The Government collects tax on irrigation facility which is not a price for the services rendered by the Department.
13. The interveners have submitted a number of documents in support of their applications.
14. The three respondents filed their reply to the main complaint petition of Shri Gir Prasad. Their averments are summarised herein below :
A. The Commission has no jurisdiction to entertain the complaint, as it is materially misrepresented.
B. No consideration is charged by the Irrigation Department for water supply as it is a part of the welfare measures of the Government. What is charged, is in the nature of irrigation tax which is recovered as land revenue. Tax is not consideration.
C. Irrigation activity does not fall under the definition of “trade” in Section 2(s) of the Act.
D. The complainant is not a consumer and has no locus standi under Section 10(a)(i) of the Act. If the complainant has any grievance, he should apply to the Irrigation Department for a larger spout for more water. Provision of irrigation facility is not “service” defined in Section 2(r) of the Act. Furthermore, the warbandi order is not issued in the name of the complainant.
F. Lands covered by an irrigation channel are at different heights and, therefore, the rule of mathematical equality will not apply in irrigation.
G. The present load on channel No. 61 is 395 bighas whereas it can safely take a load of 620 bighas as per the technical report.
H. A brother and other family members of the complainant have filed a suit in the Court of the Civil Judge, Bulandshahr, seeking an injunction. A miscellaneous appeal with regard to the injunction order is pending in the Court of the Special Judge, Bulandshahr. Therefore, the present complaint is barred by Section 10 of the Code of Civil Procedure, 1908, and is not maintainable.
I. The complainant has failed to join other persons whose fields are irrigated from the same spout. Without impleading them, no order can be passed in favour of the complainant.
J. Warbandi is fixed by the respondents in accordance with the Northern India Canal and Drainage Act, 1873.
K. The spout carrying water from channel No. 61 is 4′ diameter in size and should be able to command; an area 124 acres or 620 bighas. As the actual area covered was only 79 acres (395 bighas), some more lands were added to the same channel. The complainant is not entitled to interfere with the administration of the Irrigation Department.
L. The executive power of the Irrigation Department cannot be challenged under the Monopolies and Restrictive Trade Practices Act.
M. Warbandi is designed to provide equitable rights of irrigation.
N. The lands of the interveners of about 19 acres (95 bighas) have been attached to channel No. 61 from channel No. 61A as the said lands could not be irrigated from channel No. 61A.
O. The complainant prior to the impugned warbandi order was getting irrigation for 3 hours and 9 minutes but after the warbandi order, he gets irrigation for 3 hours and 17 minutes.
P. The respondents are not indulging in any restrictive trade practice.
Q. The action of the Government in providing water supply does not count in the Monopolies and Restrictive Trade Practices Act, as alleged.
15. A separate application has been filed by the respondents seeking vacation of the injunction granted by the Commission on September 27, 1995.
16. A rejoinder has been filed by the complainant to the reply of the respondents.
17. At the outset, on the basis of the pleadings and on the basis of averments, we allow the application of the five intervenes, namely, Shri Kichu Singh, Shri Narottam Singh, Shri Amar Singh, Shri Lakshman Singh and Smt. Sukhbir Devi, to be impleaded as respondents in the main complaint as they are necessary parties, as we feel that the said persons should be joined as parties to enable us to effectively and completely adjudicate upon the case and settle the questions involved in the proceedings. In exercise of the power conferred on us under regulation 64(2) of the Monopolies and Restrictive Trade Practices Regulations, 1991, we direct that the said five persons be added as necessary parties. They shall be regarded as the fourth, fifth, sixth, seventh and eighth respondents in the array of the parties henceforth.
18. During the proceedings in the Commission, it was agreed to by all the parties concerned, that the question of maintainability of the complaint should be decided in the light of the objections raised by the respondents including the interveners, as to the jurisdiction of the Commission. We gave a hearing to Dr. V.K. Aggarwal, counsel for the complainant, and Shri Jeevan Prakash, counsel for the first three respondents and also counsel for the five interveners, on the maintainability of the complaint.
19. While we will deal with the specific objections raised by the respondents on the maintainability of the complaint, we will deal with, at the outset certain “specific issues raised at the time of arguments which are :
(a) Whether a Government department or the Government can be charged and prosecuted in the Commission ?
(b) Whether a Government department or Government is included within the ambit and jurisdiction of the Monopolies and Restrictive Trade Practices Act ?
20. The two issues (a) and (b) listed above can be dealt with together. Repeatedly, the issue whether a Government department can be indicted under the Monopolies and Restrictive Trade Practices Act has been raised in some cases in this Commission but this has not come up for adjudication squarely in any case for one reason or the other. We will, therefore, address ourselves to this issue in this case so that the interpretation of law, as perceived by us, can be posited, not only for this case but for future cases as well.
21. Shri Jeevan Prakash, counsel for the respondents including the interveners, commenced his arguments with the observation that the non-mention of Government in Section 3 of the Monopolies and Restrictive Trade Practices Act lends itself to the conclusion that the Monopolies and Restrictive Trade Practices Act has no jurisdiction over the Government. He quoted the legal maxim de, non apparentibus, et non existentibus, eadem est ratio which means that things not apparent and not existing cannot be presumed to exist. He referred to another maxim roy n’est lie per ascun statute, si il ne soit expressment nosme which means that the king is not bound by any statute unless expressly named.
22. Shri Jeevan Prakash further argued that Section 3 of the Monopolies and Restrictive Trade Practices Act merely permits the Central Government to notify that the Act shall apply to undertakings owned or controlled by the Government, owned and controlled by a Government company, owned and controlled by a Corporation (established by or under any Central, Provincial or State Act), any trade union or association of workmen or employees, undertakings the management of which has been taken over in pursuance of an authorisation of the Central Government, undertakings owned by co-operatives and financial institutions, The said Section 3 of the Act, according to Shri Jeevan Prakash does not, therefore, permit the Central Government to notify any Government department or the Government itself to be brought under the ambit of the Act.
23. A notification was indeed issued by the Government (Ministry of Law, Justice and Company Affairs), Department of Company Affairs, Notification No. G.S.R. 605(E), dated September 27, 1991, published in the Gazette of India, Extraordinary, Part II, dated September 27, 1991, P.2 (F. No. 7/26/86-CL.V) bringing undertakings owned and controlled by the Government, Government companies, etc., within the purview of the Monopolies and Restrictive Trade Practices Act. The notification merely excluded those undertakings owned or controlled by Government companies engaged in the production of arms and ammunition and allied items of defence equipment, defence aircrafts and warships, atomic energy, etc. The notification, therefore, implies that now there is no distinction in treatment between public sector undertakings and private sector companies and that the former will be subject to the same discipline, as the private sector companies, in the matter of monopolistic, restrictive and unfair trade practices.
24. This, therefore, raises the main issue as to whether “any undertaking owned or controlled by a Government” or “an undertaking owned or controlled by a Government company” will subsume a Government department which renders a service or is engaged in the production, storage, supply, distribution, acquisition or control of articles or goods. For this purpose, we have to examine the definition of “undertaking” in Section 2(v) of the Monopolies and Restrictive Trade Practices Act.
25. Section 2(v) defines an undertaking as :
“An enterprise which is, or has been, or is proposed to be engaged in the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind either directly or through one or more of its units or divisions, whether such unit or division is located at the same place where the undertaking is located or at a different place or at different places”, (emphasis added).
26. In Explanation Kb) to the definition, a unit or division in relation to an undertaking includes any branch or office established for the provision of any service.
27. Following a perusal of the above definition, it needs to be examined whether a Government department like the Irrigation Department of Uttar Pradesh in this case is an enterprise and if providing irrigation facilities’ is provision of a service in terms of the definition of “service” in Section 2(r) of the Act.
28. The two maxims referred to by Shri Jeevan Prakash, counsel for the respondents, though important, do not directly apply to the instant case. The first maxim that a thing which does not exist, cannot be presumed to exist, will apply only if it is clear that the thing does not exist in the first instance. To put it bluntly, if it is very categorical in the statute that the Government departments are excluded from its provisions, then it cannot be presumed that Government departments are included within the mischief of the Act. What Shri Jeevan Prakash emphasised was that the non-mention of the Government department in the exclusionary section, namely, Section 3 of the Act, itself will bring the maxim to apply. But with respect, we disagree with Shri Jeevan Prakash as Section 3 of the Act excludes, inter alia, undertakings owned or controlled by a Government or a Government company unless notified by the Government. In other words, broadly, Government undertakings stood excluded from the mischief of the Monopolies and Restrictive Trade Practices Act till they were notified under Section 3 of the Act on September 27, 1991, to which we have made a reference earlier. But then, when we are on the exercise of determining whether the definition of “undertaking” in Section 2(v) of the Act includes a Government department, there cannot be the countenance of the application of the maxim narrated by Shri Jeevan Prakash, as we will see later in this order.
29. Similarly, the second maxim cannot also be applied for the same reason, as we will be examining in a short while, whether a Government department can fall under the definition of “undertaking” in Section 2(v) of the Act and if so, subject to what conditions.
30. To adjudicate on the issue posed above, we need to address ourselves to three key questions as to what is service, whether providing irrigation facilities is service in the circumstances of the case and whether the Department of Irrigation of the Government of Uttar Pradesh is an enterprise and thus an “undertaking” in terms of Section 2(v) of the Act read with Explanation 1(b) to the said section.
31. Section 2(r) of the Act provides an inclusive definition of “service”. It means-
“Service which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, chit fund, real estate, transport, processing, supply of electrical or other energy, board or lodging or both, entertainment, amusement or the purveying of news or other information but does not include the rendering of any service free of charge or under a contract of personal service.” (emphasis added).
32. The above inclusive definition of “service” is very wide as it inheres all service made available to potential users. This, in our considered view, would and should include provision of irrigation facilities. The only catch is that such a service should not be “free of charge”.
33. Shri Jeevan Prakash, counsel for the respondents, forcefully argued that the Irrigation Department of the Government of Uttar Pradesh is not levying any consideration but has been levying a tax on irrigation which goes into the Consolidated Revenue Fund of the Government. He added that the first three respondents received no monies out of the tax levied by the Government and that, therefore, provision of irrigation facilities by the Department of Irrigation should be construed as free of charge, ke cited Sections 45, 46, 47 and 60 of the Northern India Canal and Drainage Act, 1873, and argued that these sections provide for the collection of lawfully due sums from the persons liable to pay, as if they are arrears of land revenue and that, therefore, what is charged is tax.
34. We have gone through the said sections cited by Shri Jeevan Prakash and also Sections 36, 37, 38 of the said Act and the allied sections which provide for the rates to be charged for canal water supplied for purposes of irrigation. Section 36 provides power to the State Government to determine the rates to be charged and other incidental charges on occupiers’ of land for canal water supplied for purposes of irrigation. Similarly, Section 37 provides power to the State Government to impose what is called the “owner’s rate” on the owners of canal irrigated land in respect of “the benefit which they derive from such irrigation.” No doubt, the occupier’s rate in Section 36 and the owner’s rate in Section 37, if due from the occupiers and owners, would be recoverable as arrears of land revenue in terms of Sections 45, 46 and 47 of the said Act. But nowhere, do we get any indication from the wording of the Act that the rates so levied are not fee or consideration but are tax as Shri Jeevan Prakash would make us believe. On the other hand, Section 36 clearly indicates that the rates to be charged are for the canal water supplied for purposes of irrigation and Section 37 states that the owner’s rate is in respect of the benefit which the owners derive from irrigation. It would, therefore, in our view, appear that the rates so charged under the said provisions of the Northern India Canal and Drainage Act, 1873, are specifically for the service of providing irrigation facilities to the lands benefited by the canal. .
35. Dr. V.K. Aggarwal, counsel for the complainant, cited the observation of the Supreme Court in Lucknow Development Authority v. N.K. Gupta [1994] 80 Comp Cas 714 to the effect that where a Government authority undertakes to construct a building or allot houses or sites to the citizens of the State, either as an amenity or as a benefit, it amounts to rendering of service to the potential users. He added that providing irrigation facility to the farmers for a consideration is “service” under the definition of Section 2(r) of the Monopolies and Restrictive Trade Practices Act. He made a pointed reference to the receipts issued by the Department of Irrigation in proof of the fact that it was charging a fee or consideration for providing irrigation facilities. The charges, according to him vary with the quantum of water released for the beneficiaries and have a direct bearing on the facilities provided.
36. Before dealing with some of the case laws cited by Shri Jeevan Prakash, we would like to advert to the meaning given to the expression “service” in Black’s Law Dictionary (Best Publishing Company, 1990). The furnishing of water, heat, light and power, etc., are considered to be “service” in terms of a general classification. Provision of irrigation facility, therefore, in our view, is “service” not only in terms of Black’s Law Dictionary but also in terms of Section 2(r) of the Monopolies and Restrictive Trade Practices Act. We, further hold the view that the water rate charged is not tax. Merely because the water rate dues are regarded as arrears of land revenue, will not detract from the merit of the conclusion that the said rate is a charge, fee or consideration for the service of providing irrigation by the department. The treatment of the dues as arrears of land revenue is only for the purpose of laying down a scheme for collection, as there exists a scheme (coercive process) for collection of land revenue and its arrears.
37. Shri Jeevan Prakash, cited an order of the National Consumer Disputes Redressal Commission, New Delhi, in Consumer Unity and Trust Society v. State of Rajasthan [1992] 1 CPJ 259 (NC) to the effect that the payment of direct or indirect taxes does not constitute consideration paid for hiring the service rendered in the Government hospitals. He added that the ratio will apply to the instant case. With respect, we disagree with Shri Jeevan Prakash that the said ruling of the National Consumer Disputes Redressal Commission can be applied to the instant case, as the water rate is not a tax at all.
38. The alternative argument formulated by Shri Jeevan Prakash is that the element of quid pro quo is not a sine qua non for levying fee and that, the charges for water is a kind of a tax. We have already seen that there is an element of quid pro quo, when we read Sections 36 and 37 of the Northern India Canal and Drainage Act, 1873. The water rate is essentially a consideration in lieu of the service of providing of irrigation facility. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege. The Supreme Court in Sreenivasa General Traders v. State of Andhra Pradesh [1983] 3 SCR 843 ; AIR 1983 SC 1246 observed that in order to establish the quid pro quo concept, it is not necessary to establish exactly that the amount collected is spent on the services rendered. The authority collecting the fee must show that it is rendering a service in lieu of the fee and that it is giving some special benefit to the payer of the fee. The relationship between the levy and service rendered is one of general character, not of mathematical exactitude,
39. Shri, Jeevan Prakash’s argument that the Department of Irrigation does not get any amount out of the water rate collected from the farmers, is not correct as the State Government through its budgetary subventions makes available to the Department of Irrigation, such monies as are required towards pay and allowances of the staff, maintenance of the canals and other allied expenses. Leaning on the aforesaid Supreme Court’s decision in Sreenivasa General Trader’s case [1983] 3 SCR 843 ; AIR 1983 SC 1246, there is no need for mathematical exactitude of relating the fee collected and the service rendered.
40. Shri Jeevan Prakash cited the decision of the State Consumer Disputes Redressal Commission, Punjab, in Laxm Narain Goel v. Punjab Water Supply and Sewerage Board [1993] 3 CPR 1 to the effect that payment of tax to the Government cannot be construed as consideration for the services rendered by it. Another case, he cited, was that of National Consumer Disputes Redressal Commission in A. Srinivas Murthy v. Bangalore Development Authority [1991] 1 CPR 529 in which it was ruled that payment of tax which goes to the general revenues of the State or local authority does not constitute consideration for hiring of service.
41. The above two decisions do not help the case of the respondents as we have observed earlier that the water rate levied by the Department of Irrigation is not a tax but a consideration in lieu of service rendered, namely, providing irrigation.
42. The next case cited by Shri Jeevan Prakash is a Supreme Court decision in Southern Pharmaceuticals and Chemicals v. State of Kerala [1982] 1 SCR 519 to the effect that the fees should be distinguished from taxes and that fees are nothing but payment for some special privilege granted or service rendered. According to Shri Jeevan Prakash, providing irrigation is not service. He added that “privilege” according to Black’s Law Dictionary is a particular and peculiar benefit enjoyed by a person, company or class beyond the common advantages of other citizens. In the instant case, no farmer can claim, according to him, as a matter of right, irrigation of his field from a particular channel.
43. We have gone through the decision of the Supreme Court cited and also the definition of “privilege” in Black’s Law Dictionary. We reproduce the relevant portion from the said Supreme Court Judgment ;
“Fees are distinguished from taxes in that the chief purpose of the tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith. Thus, fees are nothing but payment for some special privilege granted or service rendered: Taxes and taxation are, therefore, distinguishable from various other contributions, charges or burdens paid or imposed for particular purposes and under particular powers or functions of the Government. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence, are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure for rendering the service is not by itself decisive.”
44. Here again, we have already held that the water rate is levied by the Department of Irrigation for the service of provision of irrigation facility. In fact, the Supreme Court decision cited by Shri Jeevan Prakash and the particular passage from the decision extracted above by us, lend support to our conclusion that the water rate is a charge for the service rendered by the Department of Irrigation.
45. Shri Jeevan Prakash cited three more decisions, namely, S. P. Goel v. Collector of Stamps [19951 3 CPR 684, M.S. Rao v. Commissioner of City Municipality, Bellary [1996] 4 CTJ 156 (SCDRC) and Government of Tamil Nadu v. Shri Thiagaraja Finance Limited [1996] 4 CTJ 13 (NCDRC), all of which relate to the distinction between tax and fee, which we have already dealt with.
46. One further important case cited by him, is a decision of the Supreme Court in Indian Medical Association v. V.P. Shantha [1995] 3 CTJ 969 ; [1996]. 86 Comp Cas 806. We have gone through the said judgment in which their Lordships Shri Justice Kuldip Singh, Shri Justice S.C. Agrawal and Shri Justice B.L. Hansaria, while holding that medical practitioners cannot be excluded from the purview of the Consumer Protection Act, 1986, postulated what constitutes “service”. Shri Jeevan Prakash specifically referred to paras 55, 56 and 47 of the Supreme Court’s decision and argued that according to the ruling of the apex court, in a Government hospital where services are rendered free of charge, and where the expenses of running the hospital are met from the consolidated fund, which is raised from taxes, the Consumer Protection Act will not apply. He sought to argue that the water rate is a tax which goes to the consolidated fund and that, therefore, provision of irrigation facility will not be “service” under the Monopolies and Restrictive Trade Practices Act.
47. Once again, with respect, we point out, that we are repeatedly maintaining after perusal of the Northern India Canal and Drainage Act, 1873, that water rate is levied by the Irrigation Department in lieu of the service of providing irrigation facility and is, therefore, not a tax. The ruling of the Supreme Court in Indian Medical Association’s case [1996] 86 Comp Cas 806 does not apply in the instant case.
48. Thus, out of the three key questions addressed, namely, what is service, whether providing irrigation facilities is service and whether the Department of Irrigation is an enterprise and thus, an “undertaking” in terms of Section 2(v) of the Act, we have dealt with the first two and hold that providing irrigation facilities is service as the said service is not free of charge but is visited with the levy of water rate under the Northern India Canal and Drainage Act, 1873, This leaves for adjudication the third key question as to whether the Department of Irrigation is an enterprise and thus an undertaking. We have already noted the definition of an “undertaking” in terms of Section 2(v) of the Monopolies and Restrictive Trade Practices Act. An enterprise is defined in Black’s Law Dictionary as “a business venture or undertaking”. A citation is given in the said dictionary in support, namely, William Buchanan Foundation v. Shepperd, Tex. (Civ. App., 283 S.W. 2d 325, 333). According to the definition in the said dictionary, an enterprise includes any individual, partnership, corporation, association, or other legal entity and any union or group of individuals associated in fact although not a legal entity. Thus, an enterprise could include a very wide spectrum of entities engaged in an activity including service.
49. In a landmark judgment, the Supreme Court in Carew and Co, Ltd. v. Union of India, AIR 1975 SC 2260 ; [1976] 46 Comp Cas 121 laid down the ambit and scope of the expression “undertaking” in Section 2(v) of the Monopolies and Restrictive Trade Practices Act. It is worthwhile reproducing the relevant passages from the said judgment.
50. Shri Justice K. K. Mathew observed as follows :
“The word ‘undertaking’ is a coat of many colours, as it has been used in different sections of the Act to convey different ideas. In some of the sections, the word has been used to denote the enterprise itself while in many other sections, it has been used to denote the person who owns it. The definition of the word ‘undertaking’ in Section 2(v) of the Act would indicate that ‘undertaking’ means an enterprise which is engaged in production, sale or control of goods, etc.
An enterprise can be characterised as an undertaking within the definition of the term only when it is engaged in the production, supply, distribution or control of foods of any description or the provision of service of any kind.”
51. Shri Justice V.R. Krishna Iyer in the same judgment, while concurring with Shri Justice K. K. Mathew, observed as follows (at page 135 of 46 Comp Cas) :
“If the language used in a statute can be construed widely so as to salvage the remedial intendment, the court must adopt it. Of course, if the language of the statute does not admit of the construction sought, wishful thinking is no substitute and then, not the court but the Legislature is to blame for enacting a damp squib statute. In my view, minor definitional disability, divorced from the realities of industrial economics, if stressed as the sole touchstone, is sure to prove disastrous when we handle special types of legislation like the one in this case.” (emphasis added)
“when two interpretations are feasible, that which advances the remedy and suppresses the evil, as the Legislature envisioned must find favour with the court,” (emphasis added).
52. At page 133 of 46 Comp Cas :
“The law is not ‘a brooding omnipotence in the sky’ but a pragmatic instrument of social order. It is an operational art controlling economic life, and interpretative effort must be imbued with the statutory purpose.”
” ‘Undertaking’ is an egression of flexible semantics and variable connotation, used in this very statute in different senses and defined in legal dictionaries widely enough.” (emphasis added).
53. From the above extracts, it is manifest that the expression “undertaking” and “enterprise” should be widely construed so as to inhere the spirit and the objectives of the Act.
54. The Indian Constitution in its essay in building up a just society, interdicting concentration of economic power to the detriment of the community has mandated the State to direct its policy towards securing that end. Monopolistic hold on the nation’s economy takes many forms. Pursuant to this policy and to checkmate anti-social moves of undertakings which may result in restrictive, unfair or monopolistic trade practices, Parliament enacted the Monopolies and Restrictive Trade Practices Act, 1969. The Act is an important social legislation which is designed, inter alia, to protect public interest and consumer interest.
55. In this context, when a service is rendered by a private sector undertaking, it is subject to surveillance under the Monopolies and Restrictive Trade Practices Act. Likewise, consequent on the Government notification dated September 21,1991, Government undertakings, Government corporations, co-operatives, financial institutions, etc., have also been made subject to such surveillance. The question, therefore, arises as to when a service is rendered by a Government department as distinguished from Government undertakings, does the surveillance obtain ? In other words, assumingall the trappings of service, in terms of its definition in Section 2(r) of the Act, if it is rendered by a Government department, would the said department get unlocked from the fetters of the Monopolies and Restrictive Trade Practices Act, merely because of its separate status of not being a Government company or a Government corporation ?
56. Shri Jeevan Prakash very forcefully argued that undertakings like the Delhi Development Authority, the Mahanagar Telephone Nigam Limited or the Delhi Electricity Supply Undertaking have to be differentiated from the Government departments.
57. Dr. V.K. Aggarwal, counsel for the complainant, cited a decision of this Commission in Surya Scooters Private Limited v. Greaves Cotton and Company Limited [1993] 1 CTJ 381 (MRTPC) and argued that the definition of “undertaking” is only for the purpose of Chapter III of the Act and is not applicable to enquiries relating to restrictive or unfair trade practices.
58. We have gone through the decision of the Commission but with respect, we disagree with the counsel for the complainant. The Commission, in that case has made some observations about the definition of “undertaking” in the context of a situation where the production of goods had not yet commenced. A further context was the severance of interconnection between undertakings. The said observations of the Commission have no direct relevance for the question we have posed namely, whether Government Departments would fall under the definition of “undertaking” in Section 2(v) of the Act.
59. We may take up an illustration to adjudicate on this issue. In the territory of Delhi, Mahanagar Telephone Nigam Limited, a Government company is rendering the service of providing telephone facilities to citizens within. The Department of Telecommunications renders similar service for the citizens outside Delhi territory. Both the Mahanagar Telephone Nigam Limited and the Department of Telecommunications render the same service. Mahanagar Telephone Nigam Limited is indictable for deficiencies of service or for any negligence in carrying out its responsibilities, but the Department of Telecommunications is not indictable. This is the invidious discrimination that Dr. Aggarwal, counsel for the complainant, emphasised and argued that there is no justification in keeping one entity within the ambit of the Act and excluding another, when both are rendering the same service.
60. We are inclined to agree with Dr. Aggarwal.
61. One is aware, that during the last few decades, there has been an enormous change regarding the conception of the function of the Government. Formerly, the main functions of the State were to maintain law and order and, to protect the State from external aggression. Its sphere of activities, as a sort of night-watchman was confined to defence, public order, tax collection and administration of justice. But in modern times, the State is a service State or a welfare State and has become an active instrument of the economic and social policy. In a model welfare State like India, the State performs several social services including industrial and commercial activities and service. Naturally, the vast increase in the sphere of activities of the Government has resulted in corresponding increase in the functions and the powers of the Government. Parliament is, therefore, vigilant in providing legal control of the organs of the Government and their powers and in providing remedies to those affected by administration.
62. The Monopolies and Restrictive Trade Practices Act as a social legislation provides for remedies and compensation to those who suffer loss or damage consequent on restrictive, unfair and monopolistic trade practices indulged in by person, persons, undertakings, entities, etc. In this context, it does not appear to us apposite that two different kinds of entities rendering the same service should be treated differently by the same social legislation, in this case, the Monopolies and Restrictive Trade Practices Act. We hasten to add, however, that we are alive to the distinction between sovereign functions and non-sovereign functions of the Government. In so far as sovereign functions are concerned, we do feel, with a strong sense of conviction, that they should be outside the pale of the Monopolies and Restrictive Trade Practices Act but in so far as non-sovereign functions are concerned, there cannot be one law for one set of bodies and another for another set of bodies. Thus, in our considered view, Government departments rendering a service in terms of the definition of “service” in Section 2(r) of the Act, will be governed by the provisions of the Act particularly those relating to restrictive, unfair and monopolistic trade practices. To emphasise, the only qualification, we would like to attach to our conclusion is that the Government department concerned should be rendering “service” in terms of Section 2(r) of the Act.
63. Another dimension of this matter can be seen from a reading of Section 2(s) and Section 2(u) of the Act. Section 2(s) defines “trade” which includes the “provision of any services”. Section 2(u) defines a “trade practice” as any practice relating to the carrying on of any trade and includes “anything done by any person” which controls or affects “the method of trading”. Dr. Aggarwal advanced the argument that the expression “any person” in Section 2(u) read with Section 2(s) of the Act will cover all Government departments.
64. Shri Jeevan Prakash, counsel for the respondents, rebutted this argument contending that irrigation is not a “trade” as defined in Section 2(s) of the Act, as there is no buying/selling for money. In support, he cited a decision of the Commission in Abhishek Sharma v. Central Board of Secondary Education [1995] 3 CTJ 42 and argued that in the said case, it had been ruled that education is not a trade. Yet another citation referred to by Shri Jeevan Prakash is the decision of the Madras High Court in Registrar, University of Madras v. Union of India [1995] 3 CTJ 100. He argued that the expressions “consumer” and “service” defined in the Consumer Protection Act, 1986, according to the said decision of the Madras High Court, should be construed to comprehend consumer of services of commercial and trade-oriented nature only and not otherwise.
65. We have gone through the order of the Commission and the judgment of the Madras High court. We have already seen how the definitions of “trade”, “trade practice” and “service” will include the service of providing irrigation facilities. We have also held that a Government department would fall within the ambit of the Monopolies and Restrictive Trade Practices Act, provided it renders a service as defined in the Act. The decisions cited by counsel for the respondents relate to education and are not relevant for the issue on hand in this case. We are unable to agree with the argument advanced by Shri Jeevan Prakash in this regard.
66. One further argument advanced by Shri Jeevan Prakash, counsel for the respondents, is that fixation of warbandi is a judicial proceeding. He drew our attention to Sections 68 and 69 of the Northern India Canal and Drainage Act, 1873, and observed that whenever a difference arises between two or more persons in regard to their rights in respect of the use of a water course, the Divisional Canal Officer will proceed to enquire into the matter and adjudicate. Every such enquiry is a judicial proceeding under Section 69 of the Act. Similarly, in terms of Section 67 of the Act, all claims against the State Government in respect of anything done under the Act . will have to be tried by the civil courts. Shri Jeevan Prakash’s main argument is that the honesty and integrity of a judicial authority in respect of a decision taken under the Northern India Canal and Drainage Act, 1873, cannot be questioned under the Monopolies and Restrictive Trade Practices Act. As the complainant accuses the first three respondents of having manipulated the conditions of delivery of service, they being judicial authorities, the complaint cannot be entertained under the Monopolies and Restrictive Trade Practices Act.
67. This argument has no force as Section 4 of the Monopolies and Restrictive Trade Practices Act declares that the provisions of the Monopolies and Restrictive Trade Practices Act “shall be in addition to and not in derogation of, any other law for the time being in force”. If the complainant has chosen to move the Monopolies and Restrictive Trade Practices Commission, he is well within his rights to do so, though, he may have a remedy in the Northern India Canal and Drainage Act, 1873. For the reasons advanced by the respondents, the complainant cannot be shut out under the Monopolies and Restrictive Trade Practices Act.
68. However, whether there has been any manipulation of conditions of delivery by the respondents in the fixation of warbandi, whether the said warbandi order is in the nature of judicial proceedings and thus, cannot be challenged except in a civil court as contended by Shri Jeevan Prakash, counsel for the respondents, and whether the impugned warbandi order itself constitutes a restrictive trade practice within the meaning of Section 2(o)(ii) of the Monopolies and Restrictive Trade Practices Act are all questions which will have to be addressed, at the time, we hear arguments on the question of issuance of notice of enquiry. We will also have to give a hearing to both the parties on the prayer of the respondents including the interveners for vacating the injunction order of this Commission dated September 27, 1995. For the present, in this order, we hold that the complaint is maintainable in this Commission. We further reiterate and hold the view that Government departments rendering a “service” in terms of Section 2(r) of the Monopolies and Restrictive Trade Practices Act will be covered by the provisions of the Act.
69. The case shall be listed for further hearing on September 16, 1996, for arguments on the question of issuance of notice of enquiry and also on the prayer of the respondents for vacating the injunction order of this Commission dated September 27, 1995.