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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MRTP Act was repealed and the MRTP Commission was  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had  not  been  repealed.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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