LexNIRMA INDUSTRIES LTD. versus DIRECTOR GENERAL OF INVESTIGATION AND REGISTRATION
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NIRMA INDUSTRIES LTD. v. DIRECTOR GENERAL OF INVESTIGATION AND REGISTRATION MAY 6, 1997 [J.S. VERMA, CJ. AND S.P. KURDUKAR, J.] Monopolies and Restrictive Trade Practices Act, 1969 : Sections 36- A(3 )(a) and 36-D. A B c Unfair trade practice-Company floated a scheme of awarding and distributing of prizes through a lottery as an incentive to the consumer for its products-Complaint filed before Director General (Investigation & Registra- tion) alleging that company had increased price of its products just prior to launching of scheme with an intention to recover the value of the prizes fully D or partly from the consumers-DG (I & R) immediately filed an application before the Monopolies and Restrictive Trade Practices Commission for hold- ing an inquiry and action under S.36-D-Commission on basis of pleadings · and on hearing advocates for the parties found the charge against the com- pany under S. 36-A(3)(a) proved-Held: Finding of commission must be E based on cogent material-Burden of proof, nature and adequacy of proof will depend upon facts and circumstances of the case-Company had no opportunity to justify increase in prices and there was no sufficient material before the Commission to arrive at the conclusion that the company had committed unfair trade practice under S.36-A(3)(a)-Hence, matter remitted back to Commission for disposal afresh. F The appellant, a public limited company was engaged in manufac- ture and sale of washing powder, detergent cakes and bath soaps. The appellant floated a scheme of awarding and distributing of prizes through a lottery as an incentive to the consumers for its products. A complaint was filed before the Director General (Investigation & Registration) alleg· G ing that the appellant had increased the price of its products just prior to the launching of the scheme with an intention to retover the value of the prizes fully or partly from the consumers. The DG (I & R) immediately filed an application before the Monopolies and Restrictive Trade Practices Commission for holding an inquiry into the unfair trade practices under H 137 138 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R. A Section 36-D(l) of the Monopolies and Restrictive Trade Practices Act, 1969 and pass an order of 'cease and desist' against the company. The Commission on the basis of the pleadings and on hearing the advocates for the parties found that the charge against the appellant under Section 36-A(3)(a) of the Act was proved and accordingly directed the appellant B not to repeat the same in future. Hence this appeal. On behalf of the appellant it was contended that the Commission had not taken into account the reply filed on behalf of the company that the prices of the detergent powder were increased because of increase in the prices of raw material and other cost, that if the Commis~ion were to C call upon the company to justify the increase in the prices of the detergent powder dehors the prize money, the company would have produced the material to dislodge tbe assumption that this increase in the prices of the detergent powder was not bonafide and in fact an exercise to cover fully or partly the prize money; and that the audited balance-sheets and other D evidence, which was in the possession of the appellant, would indicate that the increase in the prices of the detergent powder was necessitated because of the increase in the prices of raw materials and other factors connected therewith. E Disposing of the appeal, this Court HELD : 1. Any unfair trade practice which causes loss or injury to the copsumers of goods or service either by eliminating or restricting competition or otherwise would attract the penal consequences. Each of F the clauses employed in Section 36-A of the Monopolies and Restrictive Trade Practices Act, 1969 is interwoven by use of the conjunction and · would indicate that before determining a trade practice being unfair trade practice, the Monopolies and Restrictive Trade Practices Commission has to be satisfied as to whether the necessary ingredients contained therein are satisfied or not. The words "or otherwise" in Section 36-A of the Act G are of wider import and would signify not only actual loss but also would include probable or likelihood of consumers suffering loss or injury in any form. But for that purpose also, there has to be some cogent material before the Commission to support a finding of unfair trade pract
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