GIRISH CHANDRA GUPTA Vs U.P INDL.DEV.CORPN.LTD
Bench: A.K. PATNAIK,SWATANTER KUMAR
Case number: C.A. No.-008920-008920 / 2012
Diary number: 28057 / 2011
Advocates: T. MAHIPAL Vs
RAKESH UTTAMCHANDRA UPADHYAY
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Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO._8920_ OF 2012 (Arising out of S.L.P. (C) No. 28463 of 2011)
Girish Chandra Gupta … Appellant
Versus
M/s Uttar Pradesh Industrial Development Corporation Ltd. & Ors. … Respondents
With
CIVIL APPEAL NO._8921_ OF 2012 (Arising out of S.L.P. (C) No. 17380 of 2012)
James Kutty P.C. & Anr. … Appellants Versus
M/s Tread Stone Ltd. & Ors. … Respondents
J U D G M E N T
A. K. PATNAIK, J.
Leave granted.
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2. The facts very briefly in these two appeals are that the
appellants filed compensation applications C.A. No.110
of 1997 and C.A. No.126 of 2008 under Section 12B of
the Monopolies and Restrictive Trade Practices Act,
1969 (for short ‘the MRTP Act’) before the Monopolies
and Restrictive Trade Practices Commission (for short
‘the MRTP Commission’) constituted under the MRTP
Act. By Section 66(1) of the Competition Act, 2002, the
MRTP Act was repealed and the MRTP Commission was
dissolved. Section 66(3) of the Competition Act, 2002
provided that all cases pertaining to monopolistic trade
practices or restrictive trade practices pending before
the MRTP Commission shall, on the commencement of
the Competition (Amendment) Ordinance, 2009, stand
transferred to the Competition Appellate Tribunal
constituted under the Competition Act, 2002 and shall
be adjudicated by the Appellate Tribunal in accordance
with the provisions of the MRTP Act as if the MRTP Act
had not been repealed. Consequently, the two
compensation applications filed by the appellants stood
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transferred to the Competition Appellate Tribunal.
Before the Competition Appellate Tribunal, the
respondents in the two appeals raised preliminary
objections to the maintainability of the compensation
applications filed by the appellants. They contended
that the appellants had not initiated separate
proceedings either under Section 10 or under Section
36B of the MRTP Act alleging unfair trade practices by
the respondents and in the absence of any such
separate proceedings initiated by the respondents
before the MRTP Commission, the compensation
applications of the appellants under Section 12B of the
MRTP Act were not maintainable.
3. This preliminary question raised by the respondents
was also raised in C.A. No.108 of 2005 filed by Info
Electronics System Ltd. against Sutran Corporation and
the Competition Appellate Tribunal by its order dated
29.03.2011 passed in C.A. No.108 of 2005 (Info
Electronics System Ltd. v. Sutran Corporation) held,
relying on a judgment of this Court in Saurabh Prakash
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v. DLF Universal Ltd. [(2007) 1 SCC 228], that in the
absence of separate proceedings alleging unfair,
monopolistic or restrictive trade practice, an application
for compensation under section 12B of the MRTP Act is
not maintainable and accordingly dismissed C.A.
No.108 of 2005. Following the aforesaid order dated
29.03.2011 in C.A. No.108 of 2005, the Competition
Appellate Tribunal also dismissed C.A. No.126 of 2008
on 26.04.2012 and C.A. No.110 of 1997 on 20.05.2011
filed by the appellants in the Civil Appeals before us.
Aggrieved, the appellants have filed these appeals.
4. Mr. Siddharth Bhatnagar, learned counsel for the
appellant in the Civil Appeal arising out of S.L.P. (C)
No.28463 of 2011, submitted that this Court has not
held in Saurabh Prakash v. DLF Universal Ltd. (supra),
on which the Competition Appellate Tribunal has placed
reliance, that in the absence of any separate
proceedings either under Section 10 or Section 36B of
the MRTP Act, an application for compensation under
Section 12B of the MRTP Act is not maintainable. He
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submitted that a reading of Section 12B of the MRTP
Act rather shows that an independent proceeding under
Section 12B of the MRTP Act for compensation can be
initiated by an applicant. He relied on the decision in
M/s Pennwalt (I) Ltd. & Anr. v. Monopolies and
Restrictive Trade Practices Commission & Ors. [AIR
1999 DELHI 23] in which, after examining the provisions
of Sections 10, 36B and other provisions of the MRTP
Act, the Delhi High Court has held that the proceedings
under Section 12B of the MRTP Act are not dependent
on proceedings under Section 10 or 36B of the MRTP
Act and that a preliminary inquiry as envisaged in
Section 11 or Section 36C is not a condition precedent
to the maintainability of the claim under Section 12B of
the MRTP Act.
5. Mr. Rakesh Uttamchandra Upadhyay, learned counsel
for the respondents in the Civil Appeal arising out of
SLP(C) No.28463 of 2011, on the other hand, submitted
that a claim for compensation under Section 12B of the
MRTP Act cannot be decided without an inquiry either
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under Section 10 or under Section 36B of the MRTP Act.
He submitted that the view taken by the Competition
Appellate Tribunal that without a proceeding either
under Section 10 or Section 36B of the MRTP Act a
claim for compensation under Section 12B of the MRTP
Act was not maintainable is, therefore, correct. He
further submitted that the case of the respondent U.P.
Industrial Development Corporation Limited in C.A.
No.110 of 1997 was that the grievance of the appellant
did not relate to any unfair trade practice but relates to
a breach of contract and such a claim for compensation
cannot be entertained under Section 12B of the MRTP
Act.
6. Mr. Alex Joseph, learned counsel for the appellants in
the Civil Appeal arising out of S.L.P. (C) No.17380 of
2012, submitted that the Delhi High Court in yet
another decision in R.C. Sood And Co. (P.) Ltd. & Ors. v.
Monopolies and Restrictive Trade Practices Commission
& Anr. [1996 Vol.86 Company cases 626 Delhi] has held
that it is not necessary that the MRTP Commission
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should first inquire or investigate into the allegations of
monopolistic, restrictive and unfair trade practices
carried on by any person or undertaking under Section
10, Section 36B or Section 37(1) of the MRTP Act before
issuing notice in the application filed under Section 12B
of the MRTP Act and sub-section (3) of Section 12B of
the MRTP Act clearly shows that the MRTP Commission
is required to make an inquiry into the allegations set
out in the application filed under sub-section (1) of
Section 12B and only after making such an inquiry pass
an order directing the owner of the undertaking or the
person who has indulged in monopolistic, restrictive
and unfair trade practice, to make payment to the
applicant of the amount determined by the MRTP
Commission.
7. Mrs. Kiran Suri, learned counsel for the respondent in
the Civil Appeal arising out of S.L.P. (C) No.17380 of
2012, submitted that the jurisdiction of the MRTP
Commission is based on a finding of unfair trade
practice and such finding can only be recorded under
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Section 36B of the MRTP Act. She submitted that
Section 11 of the MRTP Act empowers the Director
General to make an inquiry and there is no mechanism
of inquiry in Section 12B of the MRTP Act. She
vehemently argued that Section 12B of the MRTP Act,
therefore, cannot be read as an independent Code.
8. We have considered the submissions of the learned
counsel for the parties and we find that in Saurabh
Prakash v. DLF Universal Ltd. (supra) this Court was
called upon to decide whether the MRTP Commission
had jurisdiction to entertain an application under
Section 12B of the MRTP Act when no case of
indulgence in unfair trade practice or restrictive trade
practice was made out and this Court held that the
power of the MRTP Commission to award compensation
is restricted to a case where loss or damage had been
caused as a result of monopolistic or restrictive or
unfair trade practice but it had no jurisdiction where
damage is claimed for mere breach of contract. In the
aforesaid decision in Saurabh Prakash v. DLF Universal
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Ltd. (supra) on which reliance has been placed by the
Competition Appellate Tribunal in the impugned orders,
this Court did not at all consider the question whether
an application under Section 12B of the MRTP Act was
maintainable without initiation of separate proceedings
either under Section 10 or under Section 36B of the
MRTP Act.
9. The decision of the Division Bench of the Delhi High
Court in M/s Pennwalt (I) Ltd. & Anr. v. Monopolies and
Restrictive Trade Practices Commission & Ors. (supra)
and the decision of the learned Single Judge of the
Delhi High Court in R.C. Sood And Co. (P.) Ltd. & Ors. v.
Monopolies and Restrictive Trade Practices Commission
& Anr. (supra), cited before us by the learned counsel
for the appellants, however, hold that an application for
compensation under Section 12B of the MRTP Act was
maintainable without any proceeding being initiated
under Section 10 or Section 36B of the MRTP Act. We
have perused the aforesaid two decisions of the
Division Bench and the learned Single Judge of the
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Delhi High Court and in our considered opinion the
Division Bench as well as the learned Single Judge of
the Delhi High Court have correctly interpreted the
provisions of Sections 10, 12B and 36B of the MRTP Act.
10. Sections 10, 12B and 36B of the MRTP Act are
extracted hereinbelow:
“10. Inquiry into monopolistic or restrictive trade practices by Commission - The Commission may inquiry into - (a) any restrictive trade practice - (i) upon receiving a complaint of facts which constitute such practice from any trade association or from any consumer or a registered consumers' association, whether such consumer is a member of that consumers' association or not, or (ii) upon a reference made to it by the Central Government or a State Government, or (iii) upon an application made to it by the Director General, or (iv) upon its own knowledge or information; (b) any monopolistic trade practice, upon a reference made to it by the Central Government or upon an application made to it by the Director General or upon its own knowledge or information.
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12B. Power of the Commission to award compensation. – (1) Where, as a result of the monopolistic or restrictive, or unfair trade practice, carried on by any undertaking or any person, any loss or damage is caused to the Central Government, or any State Government or any trader or class or traders or any consumer, such government or, as the case may be, trader or class of traders or consumer may, without prejudice to the right of such government, trader or class of traders or consumer to institute a suit for the recovery of any compensation for the loss or damage so caused, make an application to the Commission for an order for the recovery from that undertaking or owner thereof or, as the case may be, from such person, of such amount as the Commission may determine, as compensation for the loss or damage so caused.
(2) Where any loss or damage referred to in sub-section (l) is caused to numerous persons having the same interest, one or more of such persons may, with the permission of the Commission, make an application, under that sub-section, for and on behalf of, or for the benefit of, the persons so interested, and thereupon the provisions of rule 8 of Order I of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to the application before the Commission and the order of the Commission thereon.
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(3) The Commission may, after an inquiry made into the allegations made in the application filed under sub-section (1), make an order directing the owner of the undertaking or other person to make payment, to the applicant, of the amount determined by it as realisable from the undertaking or the owner thereof, or, as the case may be, from the other person, as compensation for the loss or damage caused to the applicant by reason of any monopolistic or restrictive, or unfair trade practice carried on by such undertaking or other person.
(4) Where a decree for the recovery of any amount as compensation for any loss or damage referred to in sub-section (l) has been passed by any court in favour of any person or persons referred to in sub-section (1), or, as the case may be, sub-section (2), the amount, if any, paid or recovered in pursuance of the order made by the Commission under sub-section(3) shall be set off against the amount payable under such decree and the decree shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, be executable for the balance, if any, left after such set off.
36B. Inquiry into unfair trade practices by Commission - The Commission may inquire into any unfair trade practice, - (a) upon receiving a complaint of facts which constitutes such practice from any trade association or from any consumer or a registered consumers' association, whether such consumer is a member of that consumers' association or not; or
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(b) upon a reference made to it by the Central Government or a State Government; or (c) upon an application made to it by the Director General; or (d) upon its own knowledge or information.”
11. On a reading of sub-section (1) of Section 12B of the
MRTP Act, it will be clear that where, as a result of the
monopolistic or restrictive, or unfair trade practice, carried
on by any undertaking or any person, any loss or damage is
caused to the Central Government, or any State Government
or any trader or class or traders or any consumer, such
government or, as the case may be, trader or class of
traders or consumer may make an application to the MRTP
Commission for an order for the recovery from that
undertaking or owner thereof or, as the case may be, from
such person, of such amount as the MRTP Commission may
determine, as compensation for the loss or damage so
caused. Sub-section (3) of Section 12B of the MRTP Act
further provides that the MRTP Commission may, after an
inquiry made into the allegations made in the application
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filed under sub-section (1), make an order directing the
owner of the undertaking or other person to make payment,
to the applicant, of the amount determined by it as
realisable from the undertaking or the owner thereof, or, as
case may be, from the other person, as compensation for the
loss or damage caused to the applicant by reason of any
monopolistic or restrictive, or unfair trade practice carried on
by such undertaking or other person. Thus, the MRTP
Commission has been vested with the powers under sub-
section (3) of Section 12B of the MRTP Act to make an
inquiry to the allegations of monopolistic or restrictive or
unfair trade practice made in the application filed under sub-
section (1) of Section 12B of the MRTP Act and to determine
the amount of compensation realizable from the undertaking
or the owner thereof, or, as case may be, from the other
person, towards loss or damage caused to the applicant by
reason of any monopolistic or restrictive, or unfair trade
practice carried on by such undertaking or other person.
These powers vested in the MRTP Commission under sub-
section (3) of Section 12B of the MRTP Act are independent
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of its powers under Section 10 and Section 36B of the MRTP
Act.
12. In fact, Section 12B was introduced in the MRTP Act
by Act 30 of 1984 as an independent remedy for a claimant
in addition to a suit that he may file to claim any loss or
damage that he may suffer by reason of any monopolistic or
restrictive or unfair trade practice as would be clear from
sub-section (4) of Section 12B quoted above. There is no
reference at all in Section 12B of the MRTP Act to the
provisions of either Section 10 or Section 36B of the MRTP
Act and if Parliament intended that the power of the MRTP
Commission to award compensation under Section 12B of
the MRTP Act was to be dependent on the exercise of power
of MRTP Commission either under Section 10 or under
Section 36B of the MRTP Act, Parliament would have made
this intention clear in the language of some provision in
Section 12B of the MRTP Act. There is also no reference in
either Section 10 or in Section 36B of the MRTP Act to any of
the provisions of Section 12B of the MRTP Act and if the
Parliament intended to make Sections 10, 12B and 36B of
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the MRTP Act interdependent, there would have been some
indication of this intention of Parliament in Section 10 or in
Section 36B of the MRTP Act. In the absence of any such
indication of this intention of Parliament to make the
provisions of Section 12B of the MRTP Act dependent on
initiation of an inquiry or proceeding under Section 10 or
Section 36B of the MRTP Act, the Competition Appellate
Tribunal clearly erred in coming to the conclusion that
interdependence of the provisions of Section 10 or Section
36B with Section 12B cannot be lost sight of and in the
absence of a separate proceeding alleging unfair,
monopolistic or restrictive trade practice, an application for
compensation under Section 12B of the MRTP Act is not
maintainable.
13.We, therefore, set aside the impugned orders of the
Competition Appellate Tribunal, but leave it open to the
respondents to raise a plea before the Competition
Appellate Tribunal that the appellants have not made out
any case of monopolistic or restrictive trade practice or
unfair trade practice in terms of Section 12B of the MRTP
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Act and if such plea is raised it will be decided by the
Competition Appellate Tribunal on its own merits
following the decision of this Court in Saurabh Prakash v.
DLF Universal Ltd. (supra). The appeals are allowed.
There shall be no order as to costs.
.……………………….J. (A. K. Patnaik)
………………………..J. (Swatanter Kumar)
New Delhi, December 11, 2012.
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