ORDER
H.C. Gupta, Member
1. This is a complaint filed by the complainant, Indo-Japan Photo Film Co., under Section 10(a) read with Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969. The complaint is filed against respondent No. 1 which is a society registered under the Societies Registration Act, 1860, having as its members most of the major newspapers and periodicals of the country. Respondent No. 2, as per the complaint, is a private limited company providing advertising service to its clients. It is stated that respondent No. 1 offered its services to the complainant sometime in April, 1988, for the production and manufacture of the editing, music composing, etc., and also acted as an advertising agent of the complainant. The complainant says that certain disputes about unsatisfactory performance by
respondent No. 2 arose between the complainant and respondent No. 2 as given in annexure “A”. The complainant further states that respondent No. 2 wrote to respondent No. 1, and in turn respondent No. 1 wrote a letter dated January 29, 1990, annexure “D” stating therein that the cheque of Rs. 8,93,000 issued by the complainant in favour of respondent No. 1 had bounced and respondent No. 1 has requested him to place an embargo on the advertisements of the complainants. The letter reads that the complainant is advised to clear the dues of the Indian Newspaper Society, respondent No. 1, within a week from the date of the letter that is January 29, 1990, but definitely by February 9, 1990, failing which respondent No. 1 shall have no option but to advise media members not to accept any advertisement of the complainant released directly or through any other source.
2. The contention of counsel for the complainant Shri Amit S. Chadha and Shri Atul Dua, is that the aforesaid letter dated January 29, 1990, if acted upon, would result in irreparable loss or injury to the complainant to a very considerable extent. The business of the complainant is publicity based.
3. The prayer of the complainant in his application under Section 12A of the Monopolies and Restrictive Trade Practices Act is :
(a) that operation of the Rule 56 of rules and regulations governing accredition of the advertising agencies issued by the Indian Newspaper Society be stayed pending enquiry ; and
(b) to restrain respondent No. 1, the Indian Newspaper Society, from proceeding with the embargo threatened by its letter dated January 29, 1990, immediately. Letter would be operated with effect from February 9, 1990.
4. I have gone through Rule 56 of the Rules framed by respondent No. 1, the Indian Newspaper Society, which reads as under :
Defaulting clients. — 56(a) Where an advertiser fails to pay and in consequence the agency is unable to pay publications, INS upon being authentically informed by the agency, and being so satisfied, will advise its member publications to suspend to the advertisements of the concerned advertiser, until payment is realised. This is without prejudice to the agency’s clear liability to pay its dues even if its client has not paid.
(b) On being so advised by the INS, the newspaper shall not refuse to publish the advertisements, scheduled by the concerned agency on behalf of its advertisers whose previous advertisements have been paid to. Further, a newspaper shall have the right to suspend the advertisements of an advertiser scheduled by an agency, if payment for the previous advertisements of the said advertiser has not been received by the publication within the credit period. This is without prejudice to the agency’s clear liability to pay the newspapers even if its client has not paid.
The protection under this clause will not be available to an advertising agency if it has bills pending payment with the publication for six months or over from the date of publication. The protection under this clause will, further, not be available to an advertising agency if the advertiser has paid his bills ;
(c) The advertiser shall pay dues to the advertising agency if the advertiser has not paid the advertising agency within the credit period, the member newspapers will be entitled to receive the amount of the bill from the advertiser within one week of receipt of notice to pay from the member newspapers. In all such cases of direct payment, the advertiser shall pay the gross amount to the newspaper and the member publication shall pay due commission to the concerned advertising agency. This is without prejudice to the agency’s clear liability to pay the newspapers even if its client has not paid.
5. This rule is prima facie violative of Section 33(1)(d) of the Monopolies and Restrictive Trade Practices Act and is prima facie a restrictive trade practice. If ex parte injunction is not issued immediately, it may result in irreparable loss to the complainant as his total advertisement and publicity would come to a standstill in case the aforesaid Rule 56 is put into action. I, therefore, issue ex parte temporary injunction against respondent No. 1 staying the operation of Rule 56 of the rules and regulations framed by the Indian Newspaper Society, respondent No. 1, and restrain respondent No. 1 the Indian Newspaper Society, from proceeding with the embargo threatened by its letter dated January 29, 1990, till further order. A copy of the injunction application and a copy of the complaint be sent to the respondents. Notice of the injunction application be issued returnable on March 5, 1990. Whatever has been stated in this order shall not, in any way, affect the final merit of the enquiry or injunction application which shall be finally settled and heard after hearing the other party.