RAYMOND WOOLLEN MILLS LTD. (NOW KNOWN AS M/S RAYMOND LTD.) AND ANR. versus DIRECTOR GENERAL (INVESTIGATION & REGISTRATION) AND ANR.

Citation: [2008] 8 S.C.R. 1002 · Decided: 15-05-2008 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Appeal(s) allowed

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Judgment (excerpt)

,.
[2008] 8 S.C.R. 1002 
A 
RAYMOND WOOLLEN MILLS LTD. (NOW KNOWN 
! 
,I 
'" 
AS M/S RAYMOND LTD.) AND ANR. 
II. 
DIRECTOR GENERAL (INVESTIGATION & 
REGISTRATION), AND ANR. 
(Civil Appeal No.1120 Of 2001) 
"'
B 
l 
MAY 15, 2008 
• 
[TARUN CHATTERJEE AND DALVEER BHANDARI, 
JJ.] 
c 
Monopolies and Restrictive Trade Practices Act, 1969: 
ss.10(a)(iv), 33,37 and 38- Tie up sales -Allegation of 
tie up of sales of trousers with other garments - Held: Since 
,,,.,, 
~M
all garments including trousers are in short supply and have 
..
D great demand hence allegation that supply of trousers had 
~ 
been tied up with any other garment is without basis. 
s.38(i)(h) -Restriction of competition to material degree 
- A/legation of - Held: Negligible market share of appellants 
E in relevant trade - Hence it cannot be alleged that competi-
tion was affected to material degree - .There was no charge or 
a/legation of termination of dealership in the notice of enquiry, 
therefore, the Commission was not justified in passing the or-
der based on "termination of dealership" - Even otherwise also, 
the termination of single dealership cannot affect competition 
J 
F to any "material degree" in the relevant trade or industry within 
the meaning of clause (h) of s.38(1) of the Act. 
A Notice of Enquiry under s.1 O(a)(iv) and s.37 of the 
Monopolies and Restrictive Trade PracticesAct, 1969 was 
G issued to the appellants wherein it was alleged that the 
appellants had indulged in restrictive trade practice within 
the meaning of s.2(o)(ii) and s.33(1)(b) of the Act. 
The complainant/informant complained that it was ap-
pointed as a retail dealer on 19.4.1982 and that it was get-
H 
1002 
RAYMOND WOOLLEN MILLS LTD. (NOW KNOWN AS M/S 1003 
RAYMOND LTD.) v. DIR. GEN. (INVES. & REG.) [BHANDARI, J.] 
ting regular supplies of blazers, suits, safaris and trou-
A 
sers till December 1986 when the appellants stipulated 
that blazers, suits and safaris would be supplied only if 
substantial orders were placed for readymade trousers. 
The Commission, after evaluating the evidence, ob-
served that there was pressure on the dealers to accept 8 
higher quantity of trousers than required and when he 
showed his unwillingness to accept the large quantity of 
trousers, his dealership was terminated and the security 
deposit was refunded to him, thus the allegation of tie-up 
of sales of trousers with other garments supplied by ap-
C 
pellant no. 2 appeared to have been fully established; that 
the termination of the dealership or appellants' refusal to 
deal with a well established retailer was bound to have 
an adverse effect and impact on competition in so far as 
it would reduce the number of retail dealers in the local D 
market and thus would have the effect of restricting and 
lessening of the competition in the sale and supply of 
readymade garments and, therefore, would also be preju-
dicial to public interest; and that by restricting and reduc-
ing the supply of ready to wear garments would also at-
E 
tract the provisions of s.2(o)(ii) of the Act. The Commis-
sion directed the appellants to cease the aforementioned 
restrictive trade practice forthwith and furnish an under-
taking that they shall not repeat or indulge in same or simi-
lar trade practices in future. Hence the present appeal. 
F 
Allowing the appeal, the Court 
HELD: 1.1. The evidence of the sole witness pro-
duced by the respondent, the complainant retail dealer, 
would show that the allegation of 'tie up" of sales of "trou-
G 
sers" as a condition for sale of "other garments" like blaz-
ers, coats, safaris, suits has not been established. On 
the contrary, the evidence of the said witness establishes 
that there was no "tie up", as alleg·ed. In fact, the evidence 
shows that all readymade garments manufactured by H 
1004 
SUPREME COURT REPORTS 
[2008] 8 S.C.R. 
A appellant no. 2 were in short supply since it could not 
t .... 
; 
expand its manufacturing capacity due to licensing con-
trols. When all items are in demand and are in short sup-
ply, there cannot be any question of "tie up" of sales, 
which is resorted to for the purpose of selling an un-
B wanted item along with an item having high demand. 
[Para 20] [1011-C,D,E] 
• 
1.2. The evidence of witness on behalf of appellant 
)' 
no.2 reveals that all garments including trousers were in 
short supply and had great demand. Therefore, the alle-
c gation that the supply of trousers had been tied up with 
any other garment for

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