Monopolies and Restrictive Trade Practices Commission
Indian Newspaper Society vs Indo-Japan Photo Films Co. Ltd. And Anr. on 11 April, 1991
ORDER
H.C. Gupta, Member
1. This order shall dispose of an application under Section 13 (2) of the Monopolies and Restrictive Trade Practices Act, 1969, read with regulation 85 of the Monopolies and Restrictive Trade Practices Commission Regulations, 1974, praying for amendment/modification of the order dated March 15, 1990 Indo-Japan Photo Films Co. Ltd. v. Indian Newspaper Society [1990] 68 Comp Cas 134 (MRTPC).
2. Brief facts leading to the present application are that a complaint under Section 10 (a) read with Section 37 of the Monopolies and Restrictive Trade Practices Act was filed by M/s. Indo-Japan Photo Films Co. Ltd. against the present applicant, i.e., Indian Newspaper Society, and respondent No. 2 on the allegatiaons that the present applicant, by letter dated January 29, 1990, advised respondent No. 1 to clear the dues of respondent No. 2 within a week, failing which this applicant shall have no option but to advise its media members not to accept any advertisement of respondent No. 1 released directly or through any other source. The aforesaid letter was issued by the present applicant in terms of Rule 56 of the Rules and Regulations governing Accreditation of Advertising Agencies which was framed by this applicant. On the application of respondent No. 1 under Section 12A of the Act, an ex parte temporary injunction was issued against the present applicant restraining the operation of Rule 56 of the aforesaid Rules framed by the applicant and also restraining the applicant from proceeding with the embargo threatened by its letter dated January 29, 1990, till further orders.
3. The aforesaid ex parte injunction order was confirmed by the order of the Commission dated March 15, 1990 Indo-Japan Photo Films Co. Ltd. v. Indian Newspaper Society [1990] 68 Comp Cas 134 (MRTPC). The present application to amend/revoke the aforesaid order has been moved on the following grounds, namely :
(a) The Commission did not keep in mind the following principles which act as condition precedent and sine qua non, namely :--
(i) prima facie case ;
(ii) balance of convenience ;
(iii) irreparable loss or injury ;
(iv) wider public interest.
(b) The Commission did not state as to how Rule 56 of the Accreditation Rules in any manner attracted the provisions of Section 33(1)(d) of the Act.
(c) The Commission erroneously proceeded on the assumption that Rule 56 amounts to an agreement without specifying as to how Rule 56 could be regarded as an agreement within the meaning of Section 2(a) of the Act.
(d) It has not been specified by the Commission as to how Rule 56 can be regarded as being prejudicial to public interest or to the consumer interest or even to the interest of any trader.
(e) It is stated that Rule 56 is merely recommendatory in nature and not mandatory.
(f) The petitioner does not render any services ; assuming it does so, such services being rendered by the applicant are excluded from the definition of the services as they are being rendered by the applicant free of charge.
(g) Injunction order dated March 15, 1990, has had wide spread ramifications all over the industry since all defaulting advertisers are merrily seeking to advertise through other agencies without making any payment whatsoever to the earlier agencies which is clearly contrary to public interest and the consumer interest.
(h) In a previous enquiry being RTP Enquiry No. 78 of 1975, the Commission, vide order dated December 20, 1978, upheld the validity of the Rules governing Accreditation of Advertising Agencies.
(i) Respondent No. 1 cannot be regarded as a consumer and as such no enquiry ought to have been instituted under the provisions of Section 10(a)(i).
(j) The Commission has committed a fundamental error in its approach in not even considering the gate-ways as set out in Section 38 of the Act prior to the grant of an injunction under the provisions of Section 12A of the Act.
(k) The commission wrongly proceeded on the basis that the ruling of the Delhi High Court dated February 6, 1989, would not apply to the present case, inter alia, on the ground that Rule 56 was not challenged before the Hon'ble High Court and that there was no admitted liability on behalf of respondent No. 1.
4. Notice of this review application was sent to respondent No. 1 and enough opportunity was given to file reply. No reply was filed by respondent No. 1 and the case was fixed for arguments and the arguments were addressed by learned counsel for the petitioner on a number of days and ultimately, it was concluded on March 27, 1991.
5. I heard learned counsel for the petitioner at some length. Learned counsel has invited my attention to the ruling of the Supreme Court in Mahindra and Mahindra v. Union of India [1979] 49 Comp Cas 419 to say that the power conferred under Section 13(2) is a corrective or rectificatory power and it is conferred in terms of the widest amplitude. There are no fetters placed by the Legislature to inhibit the width and amplitude of the power. Learned counsel has also invited my attention to an earlier order of the Commission in RTPE No. 78 of 1975, dated December 10, 1978, to say that Rule 19 was part and parcel of the accreditation system which was the subject-matter before this Commission in the aforesaid enquiry and was held up being in public interest and consumer interest and Rule 56 is a normal and logical form of Rule 19 of the form of standard contract between Advertising Agencies and the Member Publications. Learned counsel argued that Rule 56 is an extension of Rule 19 of the form of standard contract and as such is in pari materia to aforesaid Rule 19.
6. Learned counsel, Shri Anil Diwan, also argued that the impugned order can be bifurcated in two parts, namely :--
(a) staying the operation of Rule 56 of the Rules in general ; and
(b) staying its operation against the complainant vis-a-vis the letter dated January 29, 1990.
7. He has prayed that the first part of the impugned order may be vacated and the second part may be allowed to stay vis-a-vis the complainant.
8. As against this, learned counsel for the complainant has argued that, in the first instance, the scope of the review power is restricted by regulation 85 of the Monopolies and Restrictive Trade Practices Commission Regulations, 1974, and also by order 41, Rule 1 of the Civil Procedure Code. He has also argued that the impugned Rule 56 is not in pari materia to Rule 19 as Rule 19 is a Clause in the form of a standard contract and operates between one member and the Advertising Agency whereas Rule 56 is a general Rule and not a reincarnate of Clause 19 as both co-exist and Rule 56 came into being only in 1983 and could not have been considered in RTPE No. 78 of 1975.
9. I have heard learned counsel for both the parties at some length; I have perused the review application ; I have also perused the order of the Commission in RTPE No. 78 of 1975 ; I have gone through the rulings of the Supreme Court in Mahindra and Mahindra v. Union of India [1979] 49 Comp Cas 419. While laying down that wide and unfettered power is conferred on the Commission to amend or revoke an order in a proper case, the Supreme Court hastened to add that this power cannot be construed to be so wide as to promote rehearing on the same matters without anything more with a view to showing that the order is wrong on facts. Nothing has been brought before me to convince that the order of the Commission is either wrong on facts or on law. The earlier order of the Commission in RTPE No. 78 of 1975 is not at all relevant for the purpose of this review application. The aforesaid order was passed in December, 1978, whereas the impugned Rule 56 came into being only in 1983 and could not have been considered in the aforesaid restrictive trade practices enquiry. Nothing new has been brought before me to convince that the impugned order passed by the Commission merits any modification or alteration in any way. The review application is without any merit and is hereby dismissed.
Pronounced.