M/S PHILIPS MEDICAL SYSTEMS (CLEVELAND) INC. versus M/S INDIAN MRI DIAGNOSTIC & RESEARCH LTD. & ANR.

Citation: [2008] 13 S.C.R. 1140 · Decided: 29-09-2008 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2008] 13 S.C.R. 1140 
A 
M/S PHILIPS MEDICAL SYSTEMS (C~EVELAND) INC. 
v. 
MIS INDIAN MRI DIAGNOSTIC & RESEARCH LTD. & 
ANR. 
(Civil Appeal No. 2461 of 2006) 
B 
SEPTEMBER 29, 2008 
[ALTAMAS KABIR AND MARKANDEY KATJU, JJ.) 
Monopolies and Restrictive Trade Practices Act, 1969 -
c s. 36 A (as amended in 1991) - Definition of unfair trade prac-
fices - Interpretation of - Situation where seller not selling 
good at all to purchaser - Application of s. 36A - Held: Per 
Kalju J: s. 36A does not apply in a situation where goods are 
not sold at all - It only applies where goods in fact are sold -
D By 1991 amendment, definition of unfair trade practice was 
made inclusive and not exhaustive - However, while interpret-
~ 
ing amended s. 36A, the object of s. 36A should not be disre-
garded - Per Kabir J: s. 36A cannot in absolute terms be said 
not to apply to a situation where goods may not have been 
E sold at all - Where supplier knows that he is not in a position 
to supply a particular good but he promises to supply the.same 
with a motive of promoting of some other model, then even 
without actua/esa/e of goods, such act of supplier could a/so 
amount to 'unfair trade practice' - However, in the instant case, 
since the manufacturer/seller did not sell CT Scanner at all to 
F the purchaser, s. 36A not attracted. 
" 
Appellant company is engaged in the business of 
manufacturing and selling of various medical diagnostic 
equipment, including whole body CT Scanner. Respon-
G dent No. 1 negotiated with the appellcint and respondent 
No. 3 for purchase of Whole Body CT Scanner. It is al-
leged that the appellant and respondent Nos. 3 to 5 falsely 
represented to respondent No. 1 about the production 
' 
and quality of CT Scanner and induced respondent Nos. 
H 
1140 
MIS PHILIPS MEDICAL SYS, (CLEV.) INC. v. MIS 
1141 
IND. MRI DIAG. & RESEARCH LTD. & ANR. 
1 and 2 to enter into an agreement with them, though they A 
had knowledge that the CT Scanner ordered by respon-
· dent No. 1 was not in production. Respondent Nos. 1 and 
2 filed a complaint before the MRTP Commission against 
the appellant and respondent Ncrs.3 to 5. It is alleged that 
.... 
the respondent Nos. 1 and 2 had to procure CT Scanner B 
from Japan, i:tnd as such suffered a loss of Rs. 32,31,885/ 
~J 
. -. MRiP Commission held the appellant guilty of unfair 
trade practic9. It res~rained the appellant in indulging in 
·the said restrictive trade practice and directed the appel-
- lant to pay compensation of Rs.5,71,439/- with interest@ c 
. 9% p.a. to the respondent. Hence the prese_nt appeals.· 
The question which arose for consideration in these 
. appeals was whether a party can be held guilty of unfair 
trade practice as referred to in section 36A of the Mon.opo-
..... 
lies and Restrictive Trade Practices Act, 1969 although D 
· 'he did not sell any goods at all. 
Allowing the appeals, the Court 
· HELD: Per Markandey Kalju, J.: 
1.1 In the original Act 'Monopolies and Restrictive E 
Trade Practices Act, 1969' there was no specjfic provi$ion 
for regulating unfair trade practices like misleading ad-
vertiseinents, bargain selling, etc. It was realized that the 
consumer needs to be protected not only from the effects 
~ 
of restrictive trade practices, but also from practices 
F -
which are resorted to by certain unscrupulous business-
men who mislead or dupe the consumers. Hence, the 
MRTP Act was amended in 1984 and the Statement of Ob-
jects and Reasons of the amendment has given the rea-
sons as to why this amendment was nece$sary. [Para 21] G 
[1154,B-D] 
' 
1.2 The 1984 amendment was in pursuance of the 
recommendations of the Sachar Committee. The object 
of the amendment was broadly to prevent false or mis-
H 
1142 
SUPREME COUf3J REPO~TS 
[2008] 13 S.C.R. 
A leading adv~rtis.ements, or false r-epresentations claim-
ing that the goods sold are of a certain standard or have 
certain qualities,which, in fact, they do not po~sess. Thus, 
the very. object of the 1984 amendment was to ensure that 
the persons buying certain goods were not duped or mis-
B led by a representation or advertisement whic.h stated that 
these goods have certain features or qualities which, in 
fact, they do not possess. Thus, the amendment had noth-
ing to do with a situation where goods ·are not sold at an: 
[Paras 22 and 23] !1154,D; 1154,G-H; 11?5,A] 
, . 
. 
. 
C 
1.3 In the original Section 36A which was f ntroduced 
·by 1984 amendment, it was 11ecessary. to attrac

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