SC quashes MRTPC order against Raymond

The Supreme Court today quashed the Monopolies & Restrictive Trade Practices Commission order that held Raymond Woolen Mills responsible for indulging in restrictive trade practices.
A bench comprising Justices Tarun Chatterjee and Dalveer Bhandari while allowing the company’s plea said, “We reach to an irresistible conclusion that no “tie-up” of sales of trousers as a condition has been established. Therefore, the Commission’s passing any consequential order on the basis of tie-up is wholly untenable and unsustainable in law”. Raymond had moved the apex court against the Commission’s judgement dated October 12, 2000 that directed it to cease indulging in such practices and furnish an undertaking that it would not repeat similar trade practices in future.
MRTPC had given the judgement on a complaint filed by a Raymond dealer whose dealership was terminated by the company.
According to the bench, the pre-condition for passing such an order was that “the restriction as imposed directly or indirectly when restricts or di sc ourages competition to any “material degree” in any trade or industry, then only it would be considered as “prejudicial to public interest”.
The court should not pass an order of “cease and desist” where the alleged restrictive trade practice does not have the impact on restricting competition to any material degree, it said. “When the evidence on behalf of the appellants clearly shows that there are several manufacturers including small sc ale manufactures, the little share of the complainant/informant does not affect the competition in the relevant trade or industry and, accordingly, in these circumstances, to pass any order under section 38(1)(h) cannot be justified,” the judgement stated.
While di sc harging the Notice of Enquiry, the court held that it was really not a case of “termination of dealership”.
Press Trust of India / new Delhi May 16, 2008, 11:28 IST
http://www.business-standard.com

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