LexM/S. PAWAN HANS LTD. versus UNION OF INDIA AND ANR.
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\ MIS. PAWAN HANS LTD. A V. UNION OF INDIA AND ANR. APRIL 8, 2003 [BRIJESH KUMAR AND B. N. SRIKRISHNA, JJ. ] B Monopolies and Restrictive Trade Practices Act, 1969: Ss. 2(o) and JO(a)(i)- 'Restrictive trade practices '-Deal for sale/ purchase of flats between complainant and construction-company could not C be finalised-Complainant filing application before Monopolies and Restrictive Trade Practices Commission for initiating inquiry proceedings against the construction company-Held, in order to fall within the term 'restrictive trade practices' the conduct of party complained against should be such which may have the effect of preventing, distorting or restricting competition in any manner D which may tend to obstruct flow of capital into the stream of production or may bring about manipulation of prices or conditions of delivery resulting in imposition on consumers unjustified costs or restrictions-Instant case would not fall within the ambit of s. 2(o)(i) or (ii). The appellant-company required certain number of flats for its E employees and for that purpose invited tenders. The respondent- . construction company offered to sell the required number of flats to the appellant-company at a specified price. Some difference of opinion occurred between the parties regarding the manner in which the bank guarantee was to be furnished and ultimately the Memorandum of F Understanding could not be signed. Consequently, neither any advance payment was released by the appellant-company nor any bank guarantee was furnished by the respondent; and the deal fell through. The appellant filed a complaint against the respondent before the Monopolies and Restrictive Trade Practices Commission, alleging that G though the respondent had agreed to furnish unconditional bank guarantee regarding the advance release of amount but later wanted waiver of that condition; that the respondent in order to cause wrongful gain to itself and wrongful loss to the complainant backed out and did not sign the Memorandum of Understanding; and that the respondent wanted to take 443 H 444 SUPREME COURT REPORTS [2003) 3 S.C.R. A benefit of the enhanced price of the flats. The case of the respondent was that there was no agreement between the parties with regard to bank guarantees since the respondent never agreed to furnish unconditional bank guarantee; that the complainant had itself corrected the draft of Memorandum of Understanding which never attained the stage of B agreement; and that the complainant, if at all, could file a civil suit for specific performance of agreement, but no case of restrictive trade practices was made out. The Commission by a majority opinion dismissed the complaint holding that it was only a case of breach of condition of contract, if at all, and would not fall within the ambit of s. 2(o)(ii) of the Monopolies and Restrictive Trade Practices Act,1969. Aggrieved, the C complainant filed the present appeal. Dismissing the appeal, the Court HELD: I.I. Jn order to fall within the term "restrictive trade practice" as defined in s. 2(o) of the Monopolies and Restrictive Trade D Practices Act,1969 the conduct of party complained against should be such which may have the effect of preventing, distorting or restricting, competition in any manner which may tend to obstruct flow of capital into the stream of production or may bring about manipulation of prices or conditions of delivery resulting in imposition on the consumers unjustified costs or restrictions. Any conduct or violation of a condition of a contract E between two parties not resulting in such consequences cannot amount to restrictive trade practice. In the instant case, no such facts have been averred which may be said to have constituted restrictive trade practice on the parts of the respondent. 1450-F, G; 452-GI F 1.2. The complainant wanted unconditional bank guarantee whereas the respondent was not agreeable for the same and could validly suggest modification of that condition in the Memorandum of Understanding for providing bank guarantee on progressive payment and performance basis; and if on that point the negotiations broke and the transaction fell through, the case would not fall within the ambit ofs. 2(o)(i) or (ii) of the Act. Even G if it is assumed that the contract had been completed without signing of Memorandum of Understanding or any agreement, then too, it would be nothing more than a
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