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Wednesday, December 12, 2012

preliminary objections to the maintainability of the compensation applications filed by the appellants. They contended that the appellants had not initiated separate proceedings either under Section 10 or under Section 36B of the MRTP Act alleging unfair trade practices by the respondents and in the absence of any such separate proceedings initiated by the respondents before the MRTP Commission, the compensation applications of the appellants under Section 12B of the MRTP Act were not maintainable.- In fact, Section 12B was introduced in the MRTP Act by Act 30 of 1984 as an independent remedy for a claimant in addition to a suit that he may file to claim any loss or damage that he may suffer by reason of any monopolistic or restrictive or unfair trade practice as would be clear from sub-section (4) of Section 12B quoted above. -In the absence of any such indication of this intention of Parliament to make the provisions of Section 12B of the MRTP Act dependent on initiation of an inquiry or proceeding under Section 10 or Section 36B of the MRTP Act, the Competition Appellate Tribunal clearly erred in coming to the conclusion that interdependence of the provisions of Section 10 or Section 36B with Section 12B cannot be lost sight of and in the absence of a separate proceeding alleging unfair, monopolistic or restrictive trade practice, an application for compensation under Section 12B of the MRTP Act is not maintainable.We, therefore, set aside the impugned orders of the Competition Appellate Tribunal, but leave it open to the respondents to raise a plea before the Competition Appellate Tribunal that the appellants have not made out any case of monopolistic or restrictive trade practice or unfair trade practice in terms of Section 12B of the MRTP Act and if such plea is raised it will be decided by the Competition Appellate Tribunal on its own merits following the decision of this Court in Saurabh Prakash v. DLF Universal Ltd. (supra). The appeals are allowed. There shall be no order as to costs.


                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO._8920_ OF 2012
                (Arising out of S.L.P. (C) No. 28463 of 2011)


Girish Chandra Gupta                                  … Appellant

                                   Versus


M/s Uttar Pradesh Industrial
Development Corporation Ltd. & Ors.            … Respondents


                                    With

                       CIVIL APPEAL NO._8921_ OF 2012
                (Arising out of S.L.P. (C) No. 17380 of 2012)

James Kutty P.C. & Anr.                                    … Appellants

                                   Versus


M/s Tread Stone Ltd. & Ors.                          … Respondents



                               J U D G M E N T

A. K. PATNAIK, J.



      Leave granted.


   2. The facts very briefly in these two appeals are  that  the  appellants
      filed compensation applications C.A. No.110 of  1997 and  C.A.  No.126
      of 2008 under Section 12B of  the  Monopolies  and  Restrictive  Trade
      Practices Act, 1969 (for short ‘the MRTP Act’) before  the  Monopolies
      and Restrictive  Trade  Practices  Commission  (for  short  ‘the  MRTP
      Commission’) constituted under the MRTP Act.
By Section 66(1) of  the
      Competition Act,  2002,  the  MRTP  Act  was  repealed  and  the  MRTP
      Commission was dissolved.  Section 66(3) of the Competition Act,  2002
      provided that all cases pertaining to monopolistic trade practices  or
      restrictive trade practices pending before the MRTP Commission  shall,
      on the commencement of the Competition  (Amendment)  Ordinance,  2009,
      stand transferred to the Competition  Appellate  Tribunal  constituted
      under the Competition Act,  2002  and  shall  be  adjudicated  by  the
      Appellate Tribunal in accordance with the provisions of the  MRTP  Act
      as if the MRTP Act had  not  been  repealed.  
Consequently,  the  two
      compensation applications filed by the appellants stood transferred to
      the Competition Appellate Tribunal.
Before the Competition  Appellate
      Tribunal, the  respondents  in  the  two  appeals  raised
 preliminary
      objections to the maintainability  of  the  compensation  applications
      filed by the appellants.
They contended that
  the appellants  had  not
      initiated separate  proceedings  either  under  Section  10  or  under
      Section 36B of the MRTP Act alleging unfair  trade  practices  by  the
      respondents and in  the  absence  of  any  such  separate  proceedings
      initiated  by  the  respondents  before  the  MRTP   Commission,   the
      compensation applications of the appellants under Section 12B  of  the
      MRTP Act were not maintainable.

   3. This preliminary question raised by the respondents was also raised in
      C.A. No.108 of 2005 filed by  Info  Electronics  System  Ltd.  against
      Sutran Corporation and
the Competition Appellate Tribunal by its order
      dated 29.03.2011 passed in  C.A.  No.108  of  2005  (Info  Electronics
      System Ltd. v. Sutran Corporation) held, 
relying on a judgment of this
      Court in Saurabh Prakash v. DLF Universal Ltd.  [(2007)  1  SCC  228],
      that  in  the  absence  of  separate  proceedings   alleging   unfair,
      monopolistic  or  restrictive  trade  practice,  an  application   for
      compensation under section 12B of the MRTP Act is not maintainable and
      accordingly dismissed C.A. No.108 of 2005.  
Following  the  aforesaid
      order dated  29.03.2011  in  C.A.  No.108  of  2005,  the  Competition
      Appellate Tribunal also dismissed C.A. No.126 of  2008  on  26.04.2012
      and C.A. No.110 of 1997 on 20.05.2011 filed by the appellants  in  the
      Civil Appeals before us.
Aggrieved, the appellants have  filed  these
      appeals.

   4. Mr. Siddharth Bhatnagar, learned counsel  for  the  appellant  in  the
      Civil Appeal arising out of S.L.P. (C)  No.28463  of  2011,
submitted
      that this Court has not held in Saurabh Prakash v. DLF Universal  Ltd.
      (supra), on  which  the  Competition  Appellate  Tribunal  has  placed
      reliance, that in the absence of any separate proceedings either under
      Section 10 or  Section  36B  of  the  MRTP  Act,  an  application  for
      compensation under Section 12B of the MRTP Act  is  not  maintainable.
      He submitted that
a reading of Section 12B  of  the  MRTP  Act  rather
      shows that an independent proceeding under Section 12B of the MRTP Act
      for compensation can be initiated by an applicant.
He relied  on  the
      decision in M/s Pennwalt (I) Ltd. & Anr. v. Monopolies and Restrictive
      Trade Practices Commission & Ors. [AIR 1999 DELHI 23] in which,  after
      examining the provisions of Sections 10, 36B and other  provisions  of
      the MRTP Act,
  the Delhi High Court has held that the proceedings under
      Section 12B of the MRTP Act are not  dependent  on  proceedings  under
      Section 10 or 36B of the MRTP Act and that a  preliminary  inquiry  as
      envisaged in Section 11 or Section 36C is not a condition precedent to
      the maintainability of the claim under Section 12B of the MRTP Act.

   5. Mr. Rakesh Uttamchandra Upadhyay, learned counsel for the  respondents
      in the Civil Appeal arising out of SLP(C) No.28463  of  2011,  on  the
      other hand, submitted that a claim for compensation under Section  12B
      of the MRTP Act cannot be decided  without  an  inquiry  either  under
      Section 10 or under Section 36B of the MRTP Act.   He  submitted  that
      the view taken by the Competition Appellate Tribunal  that  without  a
      proceeding either under Section 10 or Section 36B of the  MRTP  Act  a
      claim for compensation under Section 12B  of  the  MRTP  Act  was  not
      maintainable is, therefore, correct.  He further  submitted  that  the
      case of the respondent U.P. Industrial Development Corporation Limited
      in C.A. No.110 of 1997 was that the grievance of the appellant did not
      relate to any unfair  trade  practice  but  relates  to  a  breach  of
      contract and such a claim for compensation cannot be entertained under
      Section 12B of the MRTP Act.

   6. Mr. Alex Joseph, learned counsel  for  the  appellants  in  the  Civil
      Appeal arising out of S.L.P. (C) No.17380 of 2012, submitted that  the
      Delhi High Court in yet another decision in R.C.  Sood  And  Co.  (P.)
      Ltd. & Ors. v. Monopolies and Restrictive Trade Practices Commission &
      Anr. [1996 Vol.86 Company cases 626 Delhi] has
 held  that  it  is  not
      necessary that the MRTP Commission should first inquire or investigate
      into the allegations of monopolistic,  restrictive  and  unfair  trade
      practices carried on by any person or undertaking  under  Section  10,
      Section 36B or Section 37(1) of the MRTP Act before issuing notice  in
      the application filed under Section 12B  of  the  MRTP  Act  and  sub-
      section (3) of Section 12B of the MRTP Act clearly shows that the MRTP
      Commission is required to make an inquiry into the allegations set out
      in the application filed under sub-section (1) of Section 12B and only
      after making such an inquiry pass an order directing the owner of  the
      undertaking  or  the  person  who  has   indulged   in   monopolistic,
      restrictive  and  unfair  trade  practice,  to  make  payment  to  the
      applicant of the amount determined by the MRTP Commission.

   7. Mrs. Kiran Suri, learned counsel  for  the  respondent  in  the  Civil
      Appeal arising out of S.L.P. (C) No.17380 of 2012, submitted that  the
      jurisdiction of the MRTP Commission is based on a  finding  of  unfair
      trade practice and such finding can only be recorded under Section 36B
      of the MRTP Act.  She submitted  that  Section  11  of  the  MRTP  Act
      empowers the Director General to make  an  inquiry  and  there  is  no
      mechanism of inquiry in Section 12B of the MRTP Act.   She  vehemently
      argued that Section 12B of the MRTP Act, therefore, cannot be read  as
      an independent Code.

   8. We have considered the submissions of  the  learned  counsel  for  the
      parties and we find that in Saurabh  Prakash  v.  DLF  Universal  Ltd.
      (supra) this  Court  was  called  upon  to  decide  whether  the  MRTP
      Commission had jurisdiction to entertain an application under  Section
      12B of the MRTP Act  when  no  case  of  indulgence  in  unfair  trade
      practice or restrictive trade practice was made  out  and  this  Court
      held that the power of the MRTP Commission to  award  compensation  is
      restricted to a case where loss or damage had been caused as a  result
      of monopolistic or restrictive or unfair trade practice but it had  no
      jurisdiction where damage is claimed for mere breach of contract.   In
      the aforesaid decision  in  Saurabh  Prakash  v.  DLF  Universal  Ltd.
      (supra) on which reliance has been placed by the Competition Appellate
      Tribunal in the impugned orders, this Court did not  at  all  consider
      the question whether an application under Section 12B of the MRTP  Act
      was maintainable without initiation  of  separate  proceedings  either
      under Section 10 or under Section 36B of the MRTP Act.

   9. The decision of the Division Bench of the  Delhi  High  Court  in  M/s
      Pennwalt (I) Ltd. & Anr. v. Monopolies and Restrictive Trade Practices
      Commission & Ors. (supra) and the decision of the learned Single Judge
      of the Delhi High Court in R.C. Sood And  Co.  (P.)  Ltd.  &  Ors.  v.
      Monopolies and Restrictive Trade Practices Commission & Anr.  (supra),
      cited before us by the learned counsel for  the  appellants,  however,
      hold that an application for compensation under  Section  12B  of  the
      MRTP Act was maintainable without any proceeding being initiated under
      Section 10 or Section 36B of  the  MRTP  Act.   We  have  perused  the
      aforesaid two decisions of the Division Bench and the  learned  Single
      Judge of the Delhi High  Court  and  in  our  considered  opinion  the
      Division Bench as well as the learned Single Judge of the  Delhi  High
      Court have correctly interpreted the provisions of  Sections  10,  12B
      and 36B of the MRTP Act.

  10.  Sections 10, 12B and 36B of the MRTP Act are extracted hereinbelow:

       “10. Inquiry into monopolistic or  restrictive  trade  practices  by
       Commission - The Commission may inquiry into -
       
       (a) any restrictive trade practice -
       
       (i) upon receiving  a  complaint  of  facts  which  constitute  such
       practice from any trade  association  or  from  any  consumer  or  a
       registered consumers' association, whether such consumer is a member
       of that consumers' association or not, or
       
       (ii) upon a reference made to it by  the  Central  Government  or  a
       State Government, or
       
       (iii) upon an application made to it by the Director General, or
       
       (iv) upon its own knowledge or information;
       
       (b) any monopolistic trade practice, upon a reference made to it  by
       the Central Government or upon an application  made  to  it  by  the
       Director General or upon its own knowledge or information.




       12B. Power of the Commission to award compensation. – (1) Where,  as
       a result  of  the  monopolistic  or  restrictive,  or  unfair  trade
       practice, carried on by any undertaking or any person, any  loss  or
       damage is caused to the Central Government, or any State  Government
       or any trader or class or traders or any consumer,  such  government
       or, as the case may be, trader or class of traders or consumer  may,
       without prejudice to the right of such government, trader  or  class
       of traders or consumer to institute a suit for the recovery  of  any
       compensation for the loss or damage so caused, make  an  application
       to  the  Commission  for  an  order  for  the  recovery  from   that
       undertaking or owner thereof or, as  the  case  may  be,  from  such
       person,  of  such  amount  as  the  Commission  may  determine,   as
       compensation for the loss or damage so caused.


       (2) Where any loss or damage  referred  to  in  sub-section  (l)  is
       caused to numerous persons having the same interest, one or more  of
       such persons may, with the permission of  the  Commission,  make  an
       application, under that sub-section, for and on behalf  of,  or  for
       the benefit  of,  the  persons  so  interested,  and  thereupon  the
       provisions of rule 8 of Order I of the First Schedule to the Code of
       Civil Procedure, 1908 (5  of  1908),  shall  apply  subject  to  the
       modification that every reference therein to a suit or decree  shall
       be construed as a reference to the application before the Commission
       and the order of the Commission thereon.


       (3) The Commission may, after an inquiry made into  the  allegations
       made in the application filed under sub-section (1), make  an  order
       directing the owner of the  undertaking  or  other  person  to  make
       payment, to the  applicant,  of  the  amount  determined  by  it  as
       realisable from the undertaking or the owner  thereof,  or,  as  the
       case may be, from the other person, as compensation for the loss  or
       damage caused to the applicant by  reason  of  any  monopolistic  or
       restrictive, or unfair trade practice carried on by such undertaking
       or other person.


       (4) Where a decree for the recovery of any  amount  as  compensation
       for any loss or damage referred  to  in  sub-section  (l)  has  been
       passed by any court in favour of any person or persons  referred  to
       in sub-section (1), or, as the case may  be,  sub-section  (2),  the
       amount, if any, paid or recovered in pursuance of the order made  by
       the Commission under sub-section(3) shall be  set  off  against  the
       amount  payable  under   such   decree   and   the   decree   shall,
       notwithstanding anything contained in the Code of  Civil  Procedure,
       1908 (5 of 1908), or any other law for the time being in  force,  be
       executable for the balance, if any, left after such set off.


       36B. Inquiry  into  unfair  trade  practices  by  Commission  -  The
       Commission may inquire into any unfair trade practice, -
       
       (a) upon receiving a  complaint  of  facts  which  constitutes  such
       practice from any trade  association  or  from  any  consumer  or  a
       registered consumers' association, whether such consumer is a member
       of that consumers' association or not; or
       
       (b) upon a reference made to it by the Central Government or a State
       Government; or
       
       (c) upon an application made to it by the Director General; or
       
       (d) upon its own knowledge or information.”




11.     On a reading of sub-section (1) of Section 12B of the MRTP  Act,  it
will be clear that where, as a result of the  monopolistic  or  restrictive,
or unfair trade practice, carried on by any undertaking or any  person,  any
loss or damage is caused to the Central Government, or any State  Government
or any trader or class or traders or any consumer, such  government  or,  as
the case may be, trader  or  class  of  traders  or  consumer  may  make  an
application to the MRTP Commission for an order for the recovery  from  that
undertaking or owner thereof or, as the case may be, from  such  person,  of
such amount as the MRTP Commission may determine, as  compensation  for  the
loss or damage so caused.  Sub-section (3) of Section 12B of  the  MRTP  Act
further provides that the MRTP Commission may, after an  inquiry  made  into
the allegations made in the application filed under  sub-section  (1),  make
an order directing the owner of the undertaking  or  other  person  to  make
payment, to the applicant, of the amount  determined  by  it  as  realisable
from the undertaking or the owner thereof, or, as  case  may  be,  from  the
other person,  as  compensation  for  the  loss  or  damage  caused  to  the
applicant by reason of any monopolistic  or  restrictive,  or  unfair  trade
practice carried on by such undertaking or other  person.   Thus,  the  MRTP
Commission has been vested with the powers under sub-section (3) of  Section
12B of the MRTP Act to make an inquiry to the  allegations  of  monopolistic
or restrictive or unfair trade practice made in the application filed  under
sub-section (1) of Section 12B of the MRTP Act and to determine  the  amount
of compensation realizable from the undertaking or the  owner  thereof,  or,
as case may be, from the other person, towards loss or damage caused to  the
applicant by reason of any monopolistic  or  restrictive,  or  unfair  trade
practice carried on by such  undertaking  or  other  person.   These  powers
vested in the MRTP Commission under sub-section (3) of Section  12B  of  the
MRTP Act are independent of its powers under Section 10 and Section  36B  of
the MRTP Act.

12.      In fact, Section 12B was introduced in the MRTP Act by  Act  30  of
1984 as an independent remedy for a claimant in addition to a suit  that  he
may file to claim any loss or damage that he may suffer  by  reason  of  any
monopolistic or restrictive or unfair trade practice as would be clear  from
sub-section (4) of Section 12B quoted above.  
There is no reference  at  all
in Section 12B of the MRTP Act to the provisions of  either  Section  10  or
Section 36B of the MRTP Act and if Parliament intended  that  the  power  of
the MRTP Commission to award compensation under Section 12B of the MRTP  Act
was to be dependent on the exercise  of  power  of  MRTP  Commission  either
under Section 10 or under Section 36B of  the  MRTP  Act,  Parliament  would
have made this intention clear in the language of some provision in  Section
12B of the MRTP Act.
There is also no reference in either Section 10 or  in
Section 36B of the MRTP Act to any of the provisions of Section 12B  of  the
MRTP Act and if the Parliament intended to make Sections 10, 12B and 36B  of
the MRTP Act interdependent, there would have been some indication  of  this
intention of Parliament in Section 10 or in Section 36B  of  the  MRTP  Act.
In the absence of any such indication of this  intention  of  Parliament  to
make the provisions of Section 12B of the MRTP Act dependent  on  initiation
of an inquiry or proceeding under Section 10 or  Section  36B  of  the  MRTP
Act, the Competition Appellate Tribunal  clearly  erred  in  coming  to  the
conclusion that interdependence of the provisions of Section 10  or  Section
36B with Section 12B cannot be lost  sight  of  and  in  the  absence  of  a
separate proceeding  alleging  unfair,  monopolistic  or  restrictive  trade
practice, an application for compensation under Section 12B of the MRTP  Act
is not maintainable.

13. We,  therefore,  set  aside  the  impugned  orders  of  the  Competition
    Appellate Tribunal, but leave it open to the respondents to raise a plea
    before the Competition Appellate Tribunal that the appellants  have  not
    made out any case of  monopolistic  or  restrictive  trade  practice  or
    unfair trade practice in terms of Section 12B of the  MRTP  Act  and  if
    such plea is raised it will be  decided  by  the  Competition  Appellate
    Tribunal on its own merits following  the  decision  of  this  Court  in
    Saurabh Prakash v. DLF Universal Ltd. (supra).  The appeals are allowed.
     There shall be no order as to costs.

                                                               .……………………….J.
                                                               (A. K.
Patnaik)



                                                               ………………………..J.
                                                               (Swatanter
Kumar)

New Delhi,
December 11, 2012.
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