Monopolies and Restrictive Trade Practices Commission
Director-General (Investigation And ... vs Rajashree Cement on 31 May, 1994
ORDER
Dr. S. Chakravarthy, Member
1. This is an application under Section 10(a)(iii) of the Monopolies and Restrictive Trade Practices Act, 1969, preferred by the Director-General (Investigation and Registration) alleging that the respondent, Rajshree Cement, a division of Indian Rayon and Industries Limited, Bombay, has been indulging in certain restrictive trade practices falling under Section 33(1)(e) and Section 33(1)(g) of the Monopolies and Restrictive Trade Practices Act,
2. The respondent is engaged in the business of manufacture and sale of ordinary Portland cement, Portland Pozzolana cement and special cement. For its marketing arrangement, the respondent besides selling its products to consumers directly has been appointing stockists charging them with the responsibility of purchasing, stocking and selling cement produced by the respondent. The respondent enters into a standardised agreement with the, stockists.
3. On a perusal of the standard agreement and a letter written by the respondent to the applicant bearing date December 31, 1987, the applicant moved this Commission citing two restrictions clamped by the respondent on its stockists as restrictive trade practices. The first of the two restrictions relates to the earmarking for each stockist of a territory, attracting Section 53(1)(g) of the Monopolies and Restrictive Trade Practices Act. The other restriction relates to the quantity discount allowed by the respondent to stockists attracting Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act.
3. Upon this, a notice of enquiry was issued by this Commission on April 4, 1988, calling upon the respondent to file its reply to the same. The application of the Director General was enclosed with the notice of enquiry to facilitate the respondent to reply to it.
4. The respondent gave a detailed reply to the notice of enquiry contending, inter alia, that :
(a) None, of the alleged trade practices constitutes a restrictive trade practice ;
(b) the allegations in the notice of enquiry are "vague and ambiguous" and do not contain necessary material particulars ;
(c) none of the alleged trade practices has or may have the effect of preventing or distorting or restricting competition in any manner or of bringing about manipulation of prices or conditions of delivery or of imposing on the consumers unjustified costs or restrictions or is prejudicial to public interest ;
(d) there are a number of manufacturers in the country of the same products as the respondent is manufacturing and therefore the trade practices adopted by the respondent are "to be introduced in order to meet its competitors in the market on an equal footing" ;
(e) in order to provide service to the customers, the respondent has appointed stockists in different areas ;
(f) the quantity discount offer is not a part of the standard agreement ;
(g) the quantity discount offer is not a restrictive trade practice as it does not restrict competition "but on the other hand is intended "to introduce and generate healthy competition" ;
(h) the quantity discount offer is a common practice in trade and commerce as it helps the consumers to secure cement at a reasonable price ;
(i) the quantity discount offer ensures lifting of large quantities of cement by the stockists and thus serves public interest and thus attracts the gateway in Section 38(1)(a) of the Monopolies and Restrictive Trade Practices Act;
(j) if the respondent is restrained from continuing the alleged practices, its stockists would cease to purchase cement which will be against the consumer interest ;
(k) the quantity discount offer is intended to compensate the large stockist for the extra expenditure for storage and handling large quantities of cement ;
(l) the quantity discount offer is not a "constant feature" but is available only during periods of "demand shrinkage" ;
(m) the alleged restrictions are necessary in terms of the gateway provided in Section 38(1)(c) of the Monopolies and Restrictive Trade Practices Act ;
(n) the stockist in terms of the agreement has to concentrate his sale efforts mainly in the area for which his appointment is made which implies that he is free to sell cement in other areas of his choice ;
(o) the identification of the address/locality of the stockist in the standard agreement does not amount to territorial restriction ;
(p) the alleged trade practices are not prejudicial to public interest in terms of Section 38(1)(b) and Section 38(1)(h) of the Monopolies and Restrictive Trade Practices Act and are also not unreasonable and do not cause any detriment to the public having regard to the balance between the circumstances and the alleged detriment.
5. Certain interrogatories and discovery of documents were applied for by the Director-General (Investigation and Registration) and allowed. Subsequently amended interrogatories were allowed to be filed by the Director-General for which the respondent filed its reply.
6. The applicant submitted a detailed rejoinder to the reply of the respondent relating to the notice of enquiry in which no new point, issue or argument has been advanced except citing three cases, namely, Director-General (Investigation and Registration) v. India Cements Ltd. [1987] 62 Comp Cas 382 (MRTPC) [SB]; Registrar of Restrictive Trade Agreements v. Kores India Ltd. (1988] 63 Comp Cas 102 (MRTPC) and Advent Oerlikon Ltd., In re (RTPE No. 35 of 1984).
7. The respondent while furnishing its reply to the interrogatories submitted discount schemes similar in nature to that offered by it, of other cement producing companies like the Associated Cement Company Limited and Coromondel Fertilizers Limited.
8. The following issues were framed after considering the pleadings:
1. Whether the notice of enquiry is liable to be quashed on the preliminary objection taken by the respondent in his reply to the notice of enquiry ?
2. Whether the respondent is or has been indulging in the restrictive trade practices as stated in the application of the Director-General and the notice of enquiry ?
3. If reply to issue No. 2 is in the affirmative whether the aforesaid restrictive trade practices are not prejudicial to public interest ?
4. Relief.
9. The Director-General tendered a copy of the letter dated December 31, 19.87, from the respondent addressed to the Deputy Director-General along with its enclosures as his evidence. It was admitted by learned counsel for the respondent and marked as exhibit A-1.
10. The respondent filed the affidavit of its Deputy Zonal Manager, Shri Rajendra Kumar Agarwal, who was cross-examined by Shri R. K. Arora, Joint Director-General, appearing for the applicant. The affidavit of Shri Agarwal was marked as exhibit RW-1/1.
11. Shri Rajindra, learned counsel for the Director-General and Dr. A. M. Singhvi, learned advocate for the respondent were given a hearing by us.
12. Learned counsel for the Director-General citing the letter dated December 31, 1987, addressed to the Deputy Director-General (exhibit) by the respondent argued that the said letter is an admission on the part of the respondent in so far as the two alleged trade practices are concerned. Amplifying he stated that the respondent in its explanation of the marketing arrangements has categorically stated that "stockists are earmarked for each major customer territory". This, in his view, attracts Section 33(1)(g) which provides any agreement that allocates any area or market for the disposal of goods as an agreement relating to a restrictive trade practice. In a similar vein, he drew our attention to the quantity discount features in the said letter exhibit A-1 and observed that the respondent has been allowing its stockists a quantity discount varying between 0.50 per bag to Rs. 2 per bag in case of "upliftment exceeding 500 bags". This, according to learned counsel for the Director-General clearly attracts Section 33(1)(e) which provides that agreements allowing discounts in connection with or by reason of, dealings, are agreements relating to restrictive trade practices. In this view of the matter, he argued that the preliminary objections of the respondent will have no validity. Responding to this argument, learned counsel for the respondent stated that the Director-General, who is the applicant, had not furnished the necessary material particulars which are a "must" in enquiries of this type under the Monopolies and Restrictive Trade Practices Act. He specifically brought it to our attention that the Director-General had adduced no evidence whatsoever in the form of invoices or other documents to prove that the alleged restriction of the quantity discount has restricted competition or has been prejudicial to public interest. Furthermore, the Director-General, has not, clothed his allegations with any substantive or relevant material to drive home his allegation that Section 33(1)(e) and Section 33(1)(g) have been hit by the trade practices followed by the respondent,
13. We have given careful consideration to the averments of both learned counsel and are of the view that on the first issue, there is no doubt that necessary material particulars had been furnished to the respondent and that the alleged restrictive trade practices relating to territory and quantity discount, can be and should be enquired into by this Commission. In fact, this Commission had issued a notice of enquiry only after satisfying itself that there is a prima facie case of restrictive trade practices. The preliminary objections of the respondent are, therefore, overruled and the first issue is decided against the respondent.
14. We now address ourselves to the second and third issues together.
They are closely connected in terms of the phraseology and construction of Sections 33, 37 and 38 of the Monopolies, and Restrictive Trade Practices Act.
15. Before we do so, we would like to deal with a forceful argument made by learned counsel for the respondent. Referring to the quantity discount, he observed that there is no mention of the same in the standard agreement between the respondent and the stockists. Section 33 of the Act clearly refers to agreements falling within one or more of the categories outlined in the section itself and deems such agreements to be agreements relating to restrictive trade practices. Dr. Singhvi, learned counsel for the respondent, contended that inasmuch as the quantity discount does not figure in the agreement, the question of examining the allegation in terms of Section 35 should not arise.
16. This argument could have had a lot of force but for the definition of the expression "agreement" in Section 2(a) of the Act. The said definition of "agreement" includes any arrangement or understanding whether or not, it is intended that such agreement shall be enforceable by legal proceedings. In other words, an understanding between two parties will be subsumed in the broad definition of an agreement. In the instant case, we have to see whether there is some understanding between the parties even if there is no mention of it in the formal standard agreement entered into by the respondent and the stockists. For this purpose, exhibit A-1 has the clue. Exhibit A-1, as mentioned earlier, is a letter of the respondent dated December 31, 1987, addressed to the Deputy Director-General. The respondent therein has clearly admitted that "We allow to our stockists quantity discount which varies from 50 paise per bag to Rs. 2 per bag in the case of upliftment exceeding 500 bags". Similarly the respondent has stated in the same letter that "the stockists are earmarked for each major customer territory". These clearly imply that, whether or not the standard agreement refers to the two trade practices relating to territorial jurisdiction and quantity discount, the respondent has been invoking the said two practices in dealing with their stockists. If this were not so, particularly in respect of the quantity discount, it is inconceivable that the stockists have been receiving discounts without any knowledge of this offer and practice. Nor is it conceivable that the respondent would have been invoking this practice of discount without communicating the features thereof to their own stockists. Implicit in the letter dated December 31, 1987, is the fact that both the respondent and the stockists are privy to the alleged practices. We, therefore, with respect to learned counsel for the respondent, disagree with his contentions in this regard.
17. On the territorial restriction, learned counsel for the Director-General observed that Clause 1 of the agreement categorically appoints a stockist for an area or territory and that clause 6 thereof does not save the respondent from Section 33(1)(g). In refutation, learned counsel for the respondent argued that Clause 1 of the agreement is not a territorial restriction but only a territorial marking. In Clause 1, he added, the address of the stockists is entered and nothing more should be read into it particularly any territorial restriction. According to him, the territorial restriction should have exclusivity and that in the impugned agreement, Clause 6 categorically destroys any presumption on exclusivity. He stressed that the expression "mainly" in Clause 6 will imply that the stockists can sell anywhere at his choice and that the agreement merely focuses on the sale area and nothing more. Inasmuch as other stockists can also sell in the same area, there is no exclusivity and thus the competition is not endangered.
18. A close reading of Clause 1 and Clause 6 of the agreement shows that there is an earmarking of the area by the respondent for each stockist. Clause 1 says "you will be the authorised stockist for the sale and distribution of our product "Rajashree Cement" at................ District ........ in the State of ... .".
19. Clause 6 says "you will concentrate your sales efforts mainly in the area for which your appointment is made. Such area shall only mean the territory in which you have been presently operating and shall only hot mean or deem to mean or be intended to mean that allocation of a definite or a particular area/s is made by the company to you exclusively." This obviously implies that the stockist will concentrate his sale efforts mainly in the area for which his appointment is made. This cannot be made to imply that the stockist is barred from effecting sales from other areas. The expression "mainly" in the said Clause 6 forges a presumption that the stockist can operate in other areas as well particularly outside the area for which his appointment has been made. While we do hold that there is an earmarking of the territory for the stockist, the respondent is saved from the mischief of Section 33(1)(g) because of Clause 6 of the agreement which in our view permits the stockist to sell outside the area of his appointment.
20. We are also taking note of the contention of the respondent in para 13 of its reply that "the stockists are free to sell cement in any area of their choice ... A stockist at one selling point is not precluded from competing with stockists at another point."
21. In view of the said categorical assertion of the respondent in its reply to the notice of enquiry and in view of the wording of Clause 6 of the impugned agreement, we are of the view that the alleged trade practice relating to territorial underpinning in terms of Section 33(1)(g) has not been established by the Director-General against the respondent.
22. The other allegation relates to quantity discount. We have already disposed of the contention of counsel for the respondent that inasmuch as the standard agreement does not contain any quantity discount, the respondent cannot be indicted in terms of Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act. To recapitulate, an understanding between the respondent and the stockists is implicit in the trade practice in terms of the definition of an "agreement" in Section 2(a) of the Monopolies and Restrictive Trade Practices Act, and it needs to be tested in terms of Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act.
23. Counsel for the Director-General referring to the reply dated February 6, 1989, of the respondent to the interrogatories observed that the respondent itself has admitted that the quantity discounts varying between 50 paise per bag and Rs. 2 per bag have been fixed by it "having regard to the rates of such discount generally allowed by the other manufacturers, taking into account the likely expenditure of storage and handling of the bags incurred by the stockists. The quantity discounts are generally in the. above range and are fixed for a period based on the quantity lifted. The periodical variations during the past five years were marginal."
24. He then proceeded to take us through para 6(b) of the respondent's reply dated July 24, 1989, to the amended interrogatories in which also the respondent had admitted varying quantity discounts based on upliftment of cement. In the said reply, the respondent had stated that the discounts "were fixed from time to time depending upon the market conditions, the prevailing market price, the stock position, progressive upliftment and the similar schemes of the other manufacturers". Learned counsel for the Director-General concluded that the clear admission of the respondent that it was giving discounts to the stockists attracts Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act which frowns on any discount granted or allowed in connection with or by reason of dealings and thus constitutes a restrictive trade practice. In support he cited a decision of this Commission in Maegaware Computers Ltd., In re [1994] 79 Comp Cas 84 (MRTPC), wherein a target-related rebate or incentive or commission was held to fall within the meaning of Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act. In that case, the Commission observed as follows (at page 89) :
"In terms of Section 33(1)(e), any agreement to grant or allow concessions or benefits, including allowances, discounts, rebates or credit in connection with, or by reason of dealings is a restrictive trade practice.
The various expressions used in this legal provision like 'allowances', 'discounts' 'rebates' or 'credit' etc. are illustrative in nature and not exhaustive. Clause (e) of Section 33(1) clearly brings within its scope all types of concessions or benefits allowed or granted by reason of dealings,"
25. He cited two more cases in support, both of this Commission. The first of these is the order of this Commission in Registrar of Restrictive Trade Agreements v. Kores India Limited [1988] 63 Comp Cas 102 (MRTPC), wherein the Commission had analysed discounts given for accredited dealers and various other, dealers and noted that allowing a discount was "nothing but allowing benefits in connection with or by reason of dealings" and that the "agreement or understanding in this respect relates as it does to a restrictive trade practice within the meaning of Section 33 of the Monopolies and Restrictive Trade Practices Act".
26. The other case cited by counsel for the Director-General is of this Commission in Advani Oerlikon Ltd., In re (RTPE No. 35 of 1984) (Company Law Digest, September, 86, page 59).
27. We have gone through the citations of counsel for the Director-General and with respect state that the application of the ratios therein has only a peripheral relevance to the instant case, as the fact and circumstances are not similar. For instance, in Registrar of Restrictive Trade Agreements v. Kores India Ltd. [1988] 63 Comp Cas 102 (MRTPC), there were two sets of dealers, accredited and others. In the instant case, all stockists belong to one genre except for the difference in their capacity to handle more than 500 bags. The other case, RTPE No. 35 of 1984, is not germane to the arguments advanced by learned counsel for the Director-General. The issue before us is whether the quantity discount offered by the respondent to the stockists constitutes a restrictive trade practice and whether such a practice can escape through any particular gateway of Section 38 of the Monopolies and Restrictive Trade Practices Act.
28. Learned counsel for the respondent interpreted the law to mean that if the discounts are uniform to everyone, Section 33(1)(e) will not be attracted as the discount will be available to everybody. He added further that the standard agreement is not bilateral but is unilateral from the side of the respondent. Another dimension, he mentioned was that there are no dealings to invite Section 33(1)(e) and that for each dealing, the discount could be availed of.
29. Citing a decision of this Commission in Registrar of Restrictive Trade Agreements v. Allied Distributors and Co. [1975] 45 Comp Cas 664 (MRTPC), counsel argued that the incentive discounts to increase the sale of any special item of production will not be hit by Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act, as the discount is connected with the quantum of sale and not with the fact of dealing itself and that each and every practice of giving allowances, discounts, rebates or credits in the course of trade or business will not be hit by Section 33(1)(e) except when those are allowed or granted in connection with or by reason of dealings. Echoing this line of thinking, the Commission had observed in the said case that "the words 'dealings' used in Clause (e) is used as a commercial term and in the anti-trust laws of various other countries, it has acquired a definite connotation. It would mean series of transactions of sale, purchase or distribution of goods or provision of services ... The concessions or benefits contemplated by Clause (e) must, therefore, be by reason of, or because of, or in consideration of dealings."
30. Dr. Singhvi, learned counsel for the respondent, argued that a similar stand was taken by the Commission in the case of Usha International Ltd., In re [1987] Tax LR 1792 (7) (MRTPC). The ruling therein was that the customer discount scheme/target achievement bonus scheme, does not constitute a restrictive trade practice under Section 33(1)(e) or Section 2(o) of the Monopolies and Restrictive Trade Practices Act. The next ruling placed before us by learned counsel of the respondent is an order of this Commission in Chemiequip, In re (RTPE No. 1248 of 1987), wherein an incentive commission allowed to an agent for paying the price of goods in time was held to be not violative of Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act. He also cited another case Director-General (Investigation and Registration) v. Combined Industrial Limited (RTPE No. 1354 of 1987), wherein it was held that a differential discount not related to off take or turnover is not hit by Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act.
31. We have gone through all the above rulings cited by Dr. Singhvi. Unfortunately, the said rulings are based on different sets of facts and circumstances which are not on all fours with the facts and circumstances of the instant case. By way of illustration, the target achievements bonus scheme of Usha International Ltd., In re [1987] Tax LR 1792 (7) (MRTPC) cannot be compared with the case in hand where the incentive discount is with reference to a specific minimum off take. No targets have been fixed by the respondent in the case in hand. Likewise in Chemiequip, In re (RTPE No. 1248 of 1987), the incentive is for payment of the price in time which is not the case with the respondent's agreement with its stockists.
32. We, however, note that in the rulings cited by learned counsel, there are some delineations of the law and the spirit behind the legislation.
33. In Allied Distributors and Co., the Commission had clearly postulated that each and every practice of discount will not come under the mischief of Section 33(1)(e) except when it is allowed or granted in connection with or by a reason of dealings. "Dealings" as an expression, according to the Commission, would mean a series of transactions of sale, purchase or distribution of goods or the provisions of services. The Commission has made an important observation in that case which is worthwhile to reproduce.
"For instance, there could be no objection to a purchaser of goods or user of services being given commission, allowance, or discounts based on the extent of sale of goods brought about by him or the services availed of by him. But, it is unusual to allow a concession or benefit to a distributor of goods or a user of services not by virtue of specific sales brought about or services availed of by him but by reason of or in consideration of or because of dealings, i.e., distribution of goods or availing of services, or the act of doing a business with a particular trader or businessman alone irrespective of the sales or the services rendered."
34. Learned counsel for the respondent leaning on the ruling argued that the quantity discount offer of the respondent relates to only dealing and not dealings and thus will fall outside the scope of Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act. A bare reading of exhibit A-1 which is the letter of the respondent dated December 31, 1987, to the Deputy Director-General shows that the quantity discount is allowed for upliftment exceeding 500 bags. This implies that a stockist who lifts more than 500 bags will be entitled to the discount. Even a single dealing exceeding 500 bags will entitle the stockist to the discount.
35. The legal delineation of Section 33(1)(e) was placed in a proper prospective in a landmark judgment of this Commission in Saraikella Glass Works (P.) Ltd., In re [1993] 3 Comp LJ 385 (MRTPC) (in RTPE No. 32 of 1985) which was delivered on May 10, 1993. An exhaustive analysis was made of different kinds of discount and also of the credit facility extended by manufacturers to their dealers and purchasers. The edifice of interpreting the law as built in that case taking the ratios of different cases commencing from Registrar of Restrictive Trade Agreements v. Carona Sahu Co. Ltd. [1976] 46 Comp Cas 431 (MRTPC) and proceeding through the cases of Registrar of Restrictive Trade Agreements v. Bata India Limited [1976] 46 Comp Cas 441 (MRTPC), Registrar of Restrictive Trade Agreements v. Stee( Age Industries Ltd. [1976] 46 Comp Cas 607 (MRTPC), Director-General (Investigation and Registration) v. Hindustan Gas and Industries. Ltd. (RTPE No. 114 of 1985-22-5-1987) and Registrar of Restrictive Trade Agreements v. Tata Oil Mills Co. Ltd. [1977] 47 Comp Cas 287 (MRTPC).
36. The Commission laid down the following postulates :
"First, differential or discriminatory incentive bonus or discount based on quantity is a restrictive trade practice within the meaning of Section 2(o) inasmuch as such discounts would reduce the opportunities of the smaller dealers in being able to compete with the bigger ones and this would have the effect of preventing, distorting or reducing competition between them.
Second, such a practice is a concession, benefit, allowance, discount or rebate in connection with or by reason of dealings within the meaning of Section 33(1)(e) of the Act.
Third, the manufacturers or producers may, however, be allowed to pass through the gateways under Section 38(1)(h) if they establish that the differential discount is negligible or so insignificant that it is not likely to affect the competition to any material degree."
37. We have, therefore, to examine if the quantity discount based on off take is a restrictive trade practice in the context of its impact on competition.
38. Applying the first postulate, it is clear that the discount based on quantity is a restrictive trade practice as such discounts reduce the opportunity for the small dealer to compete with the big dealer. In fact, this is likely to prevent, distort or reduce competition between them.
39. The second postulate enjoins every discount in connection with or by reason of dealings to fall within the mischief of Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act. Even though we had discussed earlier the question whether the respondent's quantity discount offer will relate to dealing or dealings, it may not be necessary to arbitrate on this question, in view of the gateways available to the respondent as discussed below. Even if the quantity discount offer is held to fall under Section 33(1)(e) of the Monopolies and Restrictive Trade Practices Act, the respondent has been held, in what follows, to be entitled to the gateways under Section 38 of the Monopolies and Restrictive Trade Practices Act.
40. This brings us to the third postulate whether the gateway under Section 38(1)(h) is available.
41. Counsel for the respondent sought to invoke Section 38(1)(h) and argued that the restriction does not directly or indirectly restrict or discourage competition to any material degree. He drew Support for this conclusion from the reply dated July 24, 1989, of the respondent to the amended interrogatories and brought it to our notice that the total discount given by the respondent is negligible in comparison with the average sales of the respondent amounting approximately to Rs. 50 crores. In particular he drew our attention to the following table which is a part of the said reply to the amended interrogatories :
42. Thus the percentage of discount to sales may be seen to be less than .001% every year between 1984-85 and 1987-88. These figures were not rebutted or countered by the Director-General in his evidence or arguments. We are, therefore, of the view that in the entire conspectus of facts and circumstances, the offering of quantity discount has been of such a marginal degree that it is unlikely to restrict or discourage competition.
43. De minimis non curat lex is a time-honoured maxim in the realm of law. Learned counsel for the respondent cited an order of this Commission in Director-General (Investigation and Registration) v. Hatsun Foods Pvt. Ltd. (RTPE No. 1299 of 1987 and I. A. No. 75 of 1987) in which it was ruled that having regard to the dimension of the business, a nominal discount may not affect competition to any material degree and will not be prejudicial to public interest.
44. Having regard to the table and figures extracted above from the reply to amended interrogatories, we are of the view that the quantity discount does not restrict or discourage competition to any material degree in trade and industry. Furthermore, we are satisfied that the restriction of the quantity discount is not unreasonable having regard to the balance between the circumstances of the case and any detriment to the public or others. The respondent is entitled to avail of the gateway under Section 38(1)(h) of the Act.
45. Furthermore, counsel for the respondent was able to successfully plead with us that there are other manufacturers of cement who have similar quantity discount schemes. Mention has been made earlier in this order of the respondent having brought to our notice the schemes of Associated Cement Company Limited and Coromandel Fertilizers Limited. This fortifies the argument of learned counsel for the respondent that in terms of Section 38(1)(c) of the Act, the quantity discount scheme is reasonably necessary to counteract measures taken by similar manufacturers with a view to, preventing or restricting competition. We agree with him and allow the respondent to pass through yet another gateway under Section 38(1)(c) of the Act.
46. In view of the above, we decide in the negative in favour of the respondent in so far as the issues Nos. 2 and 3 are concerned. In conclusion, we discharge the notice.