Monopolies and Restrictive Trade Practices Commission
Standing Committee (S&C) Association ... vs Karmobiles Limited And Anr. on 1 May, 2002
ORDER
Moksh Mahajan, Member
1. The complainant is an Association of State Road Transport Undertaking (ASRTU) which is an apex body stated to be representing the interest of 67 State Road Transport Undertakings. It has its registered office at New Delhi and functions through various Standing Committees, which in turn are constituted by the General Body. The respondent No. 1 is one of the manufacturers of valves for internal combustion engine and not valve guide. The latter items are traded in by it. Respondent No. 2, on the other hand is a leading manufacturer of valves for I.C. engine in the country.
2. On 17.1.1995 both the parties submitted their tenders on the stated prevailing published prices. The tenders of both the parties were considered at 175th meeting of S.C. (S&C) held in Guwahati in the month of April, 1995. Decision to accept the contract of both the respondents was communicated to the parties vide letter dated 9th November, 1995. Offer was also sent to both the firms. However, the offer was not found to be acceptable to them due to increase in the cost of raw materials and other inputs. The revised price offer of the respondents was considered by the Association and was rejected. The decision was also communicated to both the respondents vide letter dated SC (S&C) PRSC 109/8891 and letter No. SC(S&C) PRSC 109/8892 dated 18th January, 1996. The complainant discovered that the prices quoted by both the firms were identical which suggested formation of a cartel. On the aforesaid facts, the complainant has filed a complaint before the Commission alleging that because of the cartelisation, it suffered a loss of Rs. 3,25,150/- in respect of R-l and Rs. 1,89,469/- in respect of R-2 on account of Secretarial Administrative Rebate to be paid by the respondent at 2% on purchases made by the STUs. The complainant, therefore, sought enquiry against the respondents.
3. On the aforesaid facts, a Notice of Enquiry under Sections 36A, 36B(a) and 36D of the Monopolies and Restrictive Trade Practices Act, 1969 read with Section 51 of the M.R.T.P.C. Regulations, 1991 was issued. No reply has been filed on behalf of the respondents. The submissions made in their correspondence with the Secretary/Director General (Investigation and Registration), however, reveal that as per the contention of R-l the tenders were submitted at listed prices less 25% discount. It is just a chance that the prices so quoted came to be identical with the ones quoted by R-2. The increase in the cost of the raw material and other inputs let to the revision of prices and rejection of offer. The defence of the respondent No. 2 on the other hand is that due to steep increase in the input's prices, the published prices were revised in November, 1995 and the decision was communicated to the complainant explaining the reasons for non-acceptance of the offer made to it. The common contention of the respondents being that in absence of any cartelisation, the enquiry needs to be dropped.
4. As none appeared on behalf of the respondents right from the beginning of the issuance of the Notice of Enquiry, they were set ex parte. The submissions made on behalf of the respondents before the Director General (Investigation and Registration) are, however, taken, into consideration while dealing with the issues raised in the complaint.
5. The allegations levelled in the complaint as well the charges framed in the Notice of Enquiry are in regard to the trade practice of cartelisation between the respondent No. 1 and respondent No. 2. Pertinent to mention at the outset is that the Notice of Enquiry has been issued under Sections 36A, 36B pertaining to unfair trade practice and not the restrictive trade practice as envisaged in Section 2(o) as well Section 33 of the Monopolies and Restrictive Trade Practices Act, 1969. The charge of cartelisation is basically based on the identity of the prices of the parties while the respondents have explained the basis for quoting the prices in the tenders, there is no material brought on record to show that there was collusiveness on the part of the respondents or meeting of minds with the concerted action to act against the complainant. Both the respondents are manufacturers of the products having no connection with each other. While the R-l has explained the basis for quoting the prices, respondent No. 2 has also given the reasons for fixing the prices at a particular level. They are independent parties and free to quote the prices, which are considered to be reasonable in the interest of business. The identity of prices by itself does not lead to the establishment of cartelisation as alleged against the respondents. As the complainant is at liberty to accept or decline the offer made in the tenders, Respondents are also free to quote prices considered to be best in their business interest so far as they are not unfair to the consumers or public at large. In this context, we find that R-2 has furnished the basis of cost of products to justify the increase in the prices as revised and as per the meeting of the Association the respondents are permitted to increase the prices in case the cost the inputs warrant so. The figures given have not been challenged by the complainant. As the deal has not been fructified, we fail to understand the basis for the claim for imaginary loss claimed by the complainant. Before us, no material has been placed to show that the decision taken by the Association is mandatory and binding on the respondent. Incidentally, it may also be mentioned that the Associa tion is not a consumer in terms of Section 2(n)of the Act.
6. On the facts and circumstances of the case, we are of the considered view that no case has been made out for cartelisation or manipulation of prices or delivery of goods on the part of the respondents and as such the complaint deserves and is directed to be dismissed. The Notice of Enquiry is accordingly discharged.