{"id":195731,"date":"2001-10-09T00:00:00","date_gmt":"2001-10-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/principal-apeejay-school-vs-the-m-r-t-p-commission-anr-on-9-october-2001"},"modified":"2018-09-30T19:04:35","modified_gmt":"2018-09-30T13:34:35","slug":"principal-apeejay-school-vs-the-m-r-t-p-commission-anr-on-9-october-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/principal-apeejay-school-vs-the-m-r-t-p-commission-anr-on-9-october-2001","title":{"rendered":"Principal, Apeejay School vs The M.R.T.P. Commission &amp; Anr on 9 October, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Principal, Apeejay School vs The M.R.T.P. Commission &amp; Anr on 9 October, 2001<\/div>\n<div class=\"doc_author\">Author: S Hegde<\/div>\n<div class=\"doc_bench\">Bench: N. Santosh Hegde, P. Venkatarama Reddi.<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 2842  of  1991\n\n\n\nPETITIONER:\nPRINCIPAL, APEEJAY SCHOOL\n\n\tVs.\n\nRESPONDENT:\nTHE M.R.T.P. COMMISSION &amp; ANR.\n\nDATE OF JUDGMENT:\t09\/10\/2001\n\nBENCH:\nN. Santosh Hegde &amp; P. Venkatarama Reddi.\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>SANTOSH HEGDE, J.\n<\/p>\n<p>\tThis is a statutory appeal under Section 55 of the<br \/>\nMonopolies &amp; Restrictive Trade Practices Act, 1969 (for short<br \/>\nthe Act) preferred against the order of cease and desist passed<br \/>\non 24.4.1991 under Section 37(1) of the Act by the Monopolies<br \/>\n&amp; Restrictive Trade Practices Commission (the Commission).\n<\/p>\n<p>\tThe Commission instituted a suo motu enquiry under<br \/>\nSection 10(a)(iv) of the Act vide order dated 11.12.1987 against<br \/>\nthe appellant alleging 3 specific violations of the Act. Since the<br \/>\nfirst two charges thus levelled against the appellant having been<br \/>\nfound not established, it is unnecessary for us to go into the<br \/>\nfacts of those charges. By the impugned order, the Commission<br \/>\nheld that the appellant has violated the provisions of Section<br \/>\n2(o)(ii) of the Act, hence, it had passed the order of cease and<br \/>\ndesist against the appellant under Section 37(1) of the Act, as<br \/>\nstated above, and has further directed the appellant to pay<br \/>\ninterest at the prevalent bank rate on all the securities collected<br \/>\nfrom the students of the appellant Institution as refundable<br \/>\nsecurity deposit.\n<\/p>\n<p>\t   The charge with which we are presently concerned in<br \/>\nthis appeal, reads thus :\n<\/p>\n<p>\t3. The School is reported to have<br \/>\naccepted refundable Security to the extent of<br \/>\nRs.500\/-. The Security does not carry interest<br \/>\nand to that extent an unjustified cost is<br \/>\nimposed on the parents of the students to<br \/>\nwhom education is being imparted. It also<br \/>\nattracts section 2(o) of the M.R.T.P. Act,<br \/>\n1969.\n<\/p>\n<p>\tPursuant to the issuance of the said charge, a notice of<br \/>\nenquiry was issued to the appellant by the Director General of<br \/>\nthe Commission enumerating the materials relied against the<br \/>\nappellant in support of the above charge. The appellant had<br \/>\nreplied to the said charge stating that it does not carry on any<br \/>\ntrade or render any service as contemplated under the Act. It<br \/>\nalso contended that it has not indulged in any restrictive trade<br \/>\npractice within the meaning of Section 2(o)(ii) or Section 2(r)<br \/>\nof the Act nor has it imposed any unjustified costs on the<br \/>\nparents of the students undergoing studies in the School. After<br \/>\nhearing the parties, the Commission held in regard to the third<br \/>\ncharge that the non-payment of interest on the refundable<br \/>\nsecurity is  prima facie objectionable and is a restrictive trade<br \/>\npractice within the meaning of Section 2(o)(ii) of the Act<br \/>\ninasmuch as it brings about manipulations of prices so as to<br \/>\nimpose on the consumers unjustified costs and not paying<br \/>\ninterest on the refundable security is prejudicial to public<br \/>\ninterest. Therefore, the Commission passed the impugned order.<br \/>\nIn this appeal, it is contended on behalf of the appellant that<br \/>\ncollection of refundable deposit without payment of interest is a<br \/>\ngeneral practice obtaining in all public Schools and the said<br \/>\npractice does not amount to restrictive trade practice.<br \/>\nElaborating this argument, it is contended that the restrictive<br \/>\ntrade practice is a trade practice which prevents, restricts or<br \/>\ndistorts competition in any manner as per Section 2(o) of the<br \/>\nAct. The practice of non-payment of interest on caution<br \/>\nmoney which is followed by almost all public Schools is an<br \/>\nextremely relevant factor which demonstrates that the said<br \/>\npractice does not prevent, distort or restrict competition in any<br \/>\nmanner and this relevant fact is not taken note of by the<br \/>\nCommission. Based on this, the appellant contends that so long<br \/>\nas this practice is prevalent in all Schools, the question of the<br \/>\nsaid practice being a restrictive trade practice within the<br \/>\nmeaning of Section 2(o) of the Act does not arise. Therefore,<br \/>\nthe Commission did not have the power to proceed against the<br \/>\nappellant under Section 37(1) of the Act. It is also alternatively<br \/>\ncontended by the appellant that the Commission did not have<br \/>\nthe power, authority or jurisdiction under the provision of<br \/>\nSection 37(1) of the Act to direct the appellant to pay interest<br \/>\non the prevailing bank rate on all refundable securities since<br \/>\nSection 37(1) of the Act does not empower issuance of such<br \/>\ndirection. It is also contended that  the Commission has no<br \/>\njurisdiction to pass an order of cease and desist under the said<br \/>\nSection particularly in view of the fact that the allegation in the<br \/>\nnotice of inquiry related only to imposition of unjust costs by<br \/>\ncollecting the security deposit without payment of interest<br \/>\nwhich, assuming it to be true, does not by any stretch of<br \/>\nimagination constitute restrictive trade practice within the<br \/>\nmeaning of Section 2(o)(ii) of the Act.\n<\/p>\n<p>\tThe appellant also strongly placed reliance on two<br \/>\njudgments of this Court in <a href=\"\/doc\/1000517\/\">Mahindra and Mahindra Ltd. v.<br \/>\nUnion of India &amp; Anr.<\/a> (1979 2 SCC 529) which was followed<br \/>\nby a subsequent judgment of this Court in <a href=\"\/doc\/1965103\/\">Rajasthan Housing<br \/>\nBoard v. Parvati Devi (Smt.)<\/a> (2000 6 SCC 104).<br \/>\nOn behalf of the respondents, it is contended that this<br \/>\nargument presently placed for our consideration in this appeal<br \/>\nwas not raised by the appellant before the Commission,<br \/>\ntherefore, the same should not be permitted for the first time in<br \/>\nthis appeal.\n<\/p>\n<p>We are not impressed with this argument addressed on<br \/>\nbehalf of the respondents. This being a statutory appeal and the<br \/>\nquestion raised before us being a question involving the<br \/>\njurisdiction of the Commission to pass the impugned order, we<br \/>\nreject this objection raised on behalf of the respondents and will<br \/>\nproceed to consider the case of the appellant on merits.<br \/>\nThis Court in the case of Mahindra &amp; Mahindra (supra)<br \/>\nhad held :\n<\/p>\n<p>Now, it is true, as laid down by this Court<br \/>\nin the Telco case, that an application by the<br \/>\nRegistrar under Section 10(a)(iii) must<br \/>\ncontain facts which, in the Registrars<br \/>\nopinion, constitute restrictive trade practice<br \/>\nand it is not sufficient to make mere<br \/>\nreferences to clauses of the agreement and<br \/>\nbald allegations that the clauses constitute<br \/>\nrestrictive trade practice. The application<br \/>\nmust set out facts or features to show\tor<br \/>\nestablish as to how the alleged clauses<br \/>\nconstitute restrictive trade practice in the<br \/>\ncontext of facts.\n<\/p>\n<p>\tBearing this principle of law in mind, if we consider the<br \/>\ncomplaint of the appellant, it can be seen that the charge alleged<br \/>\nagainst the appellant is not supported by the factual matrix so as<br \/>\nto make the allegation of restrictive trade practice as defined in<br \/>\nthe Act applicable to the appellants case. In the absence of any<br \/>\nmaterial to establish that the practice adopted by the appellant<br \/>\nhas in any manner the effect of preventing, distorting or<br \/>\nrestricting competition, the question of applying Section 2(o)<br \/>\nwill not arise. Based on the material available on record, it is<br \/>\nthe case of the appellant that this is a practice which is adopted<br \/>\nby almost all public Schools and by adopting this practice of<br \/>\ncollecting refundable security deposit without payment would<br \/>\nnot in any manner be a restrictive practice, hence,  the<br \/>\nCommission could not have come to a contrary conclusion so<br \/>\nas to attract the provision of Section 2(o)(ii) or Section 37(1) of<br \/>\nthe Act. We find considerable force in this argument. This<br \/>\nCourt in the case of Rajasthan Housing Board (supra) while<br \/>\nconsidering the applicability of Section 2(o)(ii) of the M.R.T.P.<br \/>\nAct, following the earlier decision of this Court in Mahindra &amp;<br \/>\nMahindra (supra)  held that in the absence of any evidence to<br \/>\nhold that the appellant (in that case) had indulged in restrictive<br \/>\ntrade practice, the direction given by the Commission that the<br \/>\nappellant shall discontinue the alleged restrictive trade practice<br \/>\nand not repeat the same in future, cannot be sustained. While<br \/>\ncoming to the said conclusion, this Court in Rajasthan Housing<br \/>\nBoard (supra) placed reliance on the following passage in the<br \/>\njudgment of this Court in Mahindra and Mahindra case (supra)<br \/>\nwherein it was held :\n<\/p>\n<p>14. It is now settled law as a result of the<br \/>\ndecision of this Court in the Telco case that<br \/>\nevery trade practice which is in restraint of<br \/>\ntrade is not necessarily a restrictive trade<br \/>\npractice. The definition of restrictive trade<br \/>\npractice given in Section 2(o) is a pragmatic<br \/>\nand result-oriented definition. It defines<br \/>\nrestrictive trade practice to mean a trade<br \/>\npractice which has or may have the effect of<br \/>\npreventing, distorting or restricting<br \/>\ncompetition in any manner and in clauses (i)<br \/>\nand (ii), particularises two specific instances<br \/>\nof trade practices which fall within the<br \/>\ncategory of restrictive trade practice. It is<br \/>\nclear from the definition that it is only where<br \/>\na trade practice has the effect, actual or<br \/>\nprobable, of restricting, lessening or<br \/>\ndestroying competition that it is liable to be<br \/>\nregarded as a restrictive trade practice. If a<br \/>\ntrade practice merely regulates and thereby<br \/>\npromotes competition, it would not fall<br \/>\nwithin the definition of restrictive trade<br \/>\npractice, even though it may be, to some<br \/>\nextent, in restraint of trade. Whenever,<br \/>\ntherefore, a question arises before the<br \/>\nCommission or the Court as to whether a<br \/>\ncertain trade practice is restrictive or not, it<br \/>\nhas to be decided not on any theoretical or a<br \/>\npriori reasoning, but by inquiring whether<br \/>\nthe trade practice has or may have the effect<br \/>\nof preventing, distorting or restricting<br \/>\ncompetition. This inquiry obviously cannot<br \/>\nbe in vacuo but it must depend on the<br \/>\nexisting constellation of economic facts and<br \/>\ncircumstances relating to the particular<br \/>\ntrade. The peculiar facts and features of the<br \/>\ntrade would be very much relevant in<br \/>\ndetermining whether a particular trade<br \/>\npractice has the actual or probable effect of<br \/>\ndiminishing or preventing competition and<br \/>\nin the absence of any material showing these<br \/>\nfacts or features, it is difficult to see how a<br \/>\ndecision can be reached by the Commission<br \/>\nthat the particular trade practice is a<br \/>\nrestrictive trade practice.\n<\/p>\n<p>\tIf the above principles laid down by this Court in the case<br \/>\nof Mahindra &amp; Mahindra (supra) and Rajasthan Housing Board<br \/>\n(supra) are to be applied to the facts of this case, then, we are<br \/>\nconvinced that the impugned order has to be set aside solely on<br \/>\nthe ground that there was no material before the Commission to<br \/>\ncome to the conclusion that the appellant by collecting<br \/>\nrefundable security deposit without interest has committed any<br \/>\nrestrictive trade practice within the meaning of Section 2(o)(ii)<br \/>\nof the Act. In the said view of the matter, this appeal succeeds<br \/>\nand the same is hereby allowed. The impugned order is set<br \/>\naside.\n<\/p>\n<p>\t\t\t\t\t\t..J.\n<\/p>\n<p>\t\t\t\t\t\t(N. Santosh Hegde)<\/p>\n<p>\t\t\t\t\t\t&#8230;&#8230;&#8230;..J.\n<\/p>\n<p>\t\t\t\t\t\t(P. Venkatarama Reddi)<\/p>\n<p>October 9, 2001.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Principal, Apeejay School vs The M.R.T.P. Commission &amp; Anr on 9 October, 2001 Author: S Hegde Bench: N. Santosh Hegde, P. Venkatarama Reddi. CASE NO.: Appeal (civil) 2842 of 1991 PETITIONER: PRINCIPAL, APEEJAY SCHOOL Vs. RESPONDENT: THE M.R.T.P. COMMISSION &amp; ANR. DATE OF JUDGMENT: 09\/10\/2001 BENCH: N. Santosh Hegde &amp; P. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-195731","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Principal, Apeejay School vs The M.R.T.P. 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