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On 10th September, 1998, the respondent No.1 filed a complaint before the MRTP Commission under Section 33(1)(j), (ja) and Section 36A read with Section 2(o) of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as the 'MRTP Act') against three Indonesian companies alleging that they were manufacturing float glass and were selling the same at predatory prices in India, and were hence resorting to restrictive and unfair trade practices. In the complaint, it was stated that the float glass of Indonesian origin was being exported into India at the CIF price of US$ 155 to 180 PMT. At this price, some float glass had been shipped into India during the period December, 1997, to June, 1998. It was alleged that these sale prices were predatory prices as they were less than not only the cost of production for the product in Indonesia but also the variable cost of production of the product. The complainant gave figures indicating the estimated cost of float glass internationally as well as the cost of production of float glass in India with a view to demonstrate that the Indian manufacturers of float glass would not be able to compete with the price at which the Indonesian manufacturers were presently selling or intending to sell to Indian consumers. On this basis, it was contended that the sale of float glass by the Indonesian manufacturers at the said price of US$ 155 to 180 PMT will restrict, distort and prevent competition by pricing out Indian producers from the market. This would result in lowering the production of the Indian industry and the consequent idle capacity and losses would force the industry to become sick which would lead to its closure which would have a direct impact on the employment in the industry.
The application under Section 12-A for interim injunction was heard by the Chairman of the Commission and a second Member. There was a difference of opinion amongst them. While the Chairman vide order dated 18th January, 1999, allowed the application and restrained the Indonesian companies from exporting to India their float glass production at predatory prices, Dr. S. Chakravarthy, the second Member dismissed the application, inter alia, holding that there was no evidence to substantiate the plea of predatory pricing at this stage. By order dated 9th February, 2000, the third Member who heard the case concurred with the view taken by the Chairman and passed an order of injunction against the Indonesian companies.
The learned counsel for the appellants contended that the respondents have in the complaint filed by them with the MRTP Commission under the MRTP Act sought redressal of their alleged grievance that certain Indonesian companies are selling float glass at prices much lower than their cost of production and are thereby allegedly indulging in predatory pricing with an alleged intent to eliminate competition and causing material injury to the interest of domestic float glass industry. For redressal of the alleged grievance of the respondents, a specific remedy has been provided under sections 9A to 9C of the Customs Tariff Act and the Anti-dumping Duty Rules. The provisions of sections 9A to 9C introduced under the Customs Tariff Act and the Anti-dumping Duty Rules provide for a complete and exhaustive machinery to prevent dumping of goods into India including export of goods into India at predatory price causing "injury" to domestic industry, causing threat of injury to domestic industry and material retardation to establishment of domestic industry by way of imposition of anti-dumping duty on import of such goods. The expression "injury" has been defined under Article 3 of the Agreement on Anti-Dumping as under:

While adopting the arguments of the other counsel, Shri Anil B. Divan, Senior Advocate on behalf of the respondent No. 1 referred to Sections 2(e), 2(u), 13 and 14 of the Act. He submitted that Section 2(u)(i) which defines "trade practice" covers a chain of events/series of transactions that affect the price charged or methods of trading. Thus a part of "trade practice" may be outside India but the affectation of prices may have effect in India. Thus, he submitted, the import of goods and the sale in India which is the last link of the trade practice of predatory pricing read with Section 14 clearly gives jurisdiction in an appropriate case to the MRTP Commission. He contended that like the EEC as well as the USA, the law in India was the same, namely, that if the effect of a restrictive trade practice came to be felt in India because of a part of the trade practice being implemented in India, the MRTP Commission would have jurisdiction. This "effects doctrine" was, therefore, sought to be invoked with a view to clothe the MRTP with jurisdiction to pass orders even though a transaction which resulted in exporting goods to India at predatory price, which was in effect a restrictive trade practice, had been carried outside the territory of India. He submitted that where the effect of restrictive trade practice carried out outside the territory of EEC or USA is felt within the EEC or USA, the authorities enforcing competition law in the EEC or the USA exercise jurisdiction in regard to such conduct. He relied upon the decision of the European Court of Justice in the Wood Pulp case rendered on 27th September, 1988. There, while interpreting Article 85 of the EEC Treaty which prohibited any agreement, decision and concerted practice which have the effect of prevention, restriction or distortion of competition within the common market, it was held that where producers established outside the EEC implement a pricing agreement within the common market the community's jurisdiction to apply its competition rules to such conduct is covered by the territoriality principle and is not in breach of the principle of international comity.