BAJAJ AUTO LTD. versus DIRECTOR GENERAL (I & R) & ANR.

Citation: [2008] 8 S.C.R. 337 · Decided: 12-05-2008 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2008] 8 S.C.R. 337 
BAJAJ AUTO LTD. 
v. 
DIRECTOR GENERAL (I & R) & ANR. 
(Civil Appeal No.1709 Of 2001) 
MAY 12, 2008 
[TARUN CHATTERJEE AND DALVEER BHANDARI, 
JJ.] 
Monopolies and Restrictive Trade Practices Act, 1969 -
s.33(1)(g) - Notice of enquiry issued alleging involvement of 
appellant in restrictive trade practice within the meaning of s. 33 
- Commission held that alleged trade practice was covered 
under s.33(1)(g) of the Act and as such prejudicial to public 
interest and directed appellant to cease such practice - On 
appeal, Held: Neither notice nor application allege that the 
appellant ever indulged in or that alleged trade practice has 
or may have the effect of preventing, distorting or restricting 
competition in any manner - Therefore, neither notice nor the 
application maintainable - Frivolous notices breed long drawn 
avoidable litigation before various forums - Commission di-
reefed to be extremely careful before issuing notices to the 
parties because it has serious consequences on the reputa-
tion and credibility to the activities of those parties. 
A Notice of Enquiry was issued alleging the involve-
ment of appellant in certain restrictive trade practices 
within the meaning of s.33 of Monopolies and Restrictive 
Trade Practices Act, 1969. 
The Commission held that the alleged trade practice 
was covered under s.33(1 )(g) of the Act and as such preju-
dicial to public interest and directed appellant to cease 
such practice. 
In appeal to this Court, appellant contended that 
none of the trade practices alleged in the notice, consti-
337 
A 
B 
c 
D 
E 
F 
G 
H 
338 
SUPREME COURT REPORTS 
[2008] 8 S.C.R. 
A tuted restrictive trade practice and, therefore, the notice 
was misconceived and not maintainable in law. 
Allowing the appeal, the Court 
HELD: 1. Neither the notice nor the application al-
B lege that the appellant has ever indulged in or that the 
alleged trade practice has or may have the effect of pre-
venting, distorting or restricting competition in any man-
ner and in particular it tends to obstruct the flow of capital 
or resource into the stream of production or tends to bring 
c about manipulation of prices or conditions of delivery or 
to affect flow of supplies into the market in such a manner 
so as to impose unjustified costs and/or restrictions on the 
consumers of goods in question and therefore ex facie 
neither notice nor the application is maintainable. The im-
D pugned judgment passed by the MRTP Commission is set 
aside. [Para 28 and 30] [347-F-H; 348-C] 
2. The Commission must be extremely careful before 
issuing notices to the parties because it has serious conse-
quences on the reputation and credibility to the activities of 
E those parties. Frivolous notices breed long drawn avoidable 
litigation before various forums. [Para 29] [348-A-B] 
Mahindra and Mahindra Ltd. v. Union of India (1979) 2 
SCC 529; Paras Brothers (1994) 4 Comp. Law Journal 395 
and L. C Malhotra v. Rahul Bajaj (1995) 1 Comp. Law Jour-
~ 
F nal 421 - referred to. 
-. 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1709 
of 2001 
From the final Judgment and Order dated 27.10.2000 of 
G the Monopolies and Restrictive Trade Practices Commission 
New Delhi in RTP Enquiry No. 139 of 1996 
Joseph Vellapally, Shailendra Swarup, Neha Khatter and 
Debarshi Bhadra for the Appellant. 
H 
T.S. Doabia, Manpreet Singh Doabia and Shreekant N. 
t 
" 
BAJAJ AUTO LTD. V. DIRECTOR GENERAL 
339 
,;. 
(I & R) & ANR. [DALVEER BHANDARI, J.] 
Terdal for the Respondents. 
A 
The Judgment of the Court was delivered by 
DALVEER BHANDARI, J. 1. This appeal is directed 
against the judgment delivered by the Monopolies and Restric-
tive Trade Practices Commission (hereinafter referred to as the 
B 
'Commission') in Restrictive Trade Practices Enquiry No.159 
of 199') dated 271h October, 2000. 
2. Brief facts which are necessary to dispose of this ap-
peal are recapitulated as under:-
c 
The Director General (Investigation & Registration) under 
Section 10 (a)(iii) of the Monopolies & Restrictive Trade Prac-
tices Act, 1969 (hereinafter referred to as "the Act") sent an ap-
plication that an enquiry be instituted against Bajaj Auto Lim~ 
... 
ited (hereinafter referred to as the 'appellant') for indulging in ·u 
-
restrictive trade practice within the meaning of Section 33 of 
the Act. 
3. The Notice of Enquiry was issued on 18.11.1996 in pur-
suance of which the appellant filed its reply refutin

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