Restrictive trade practice analysis on territorial restraints, discriminatory supply, and limits on reviving terminated dealerships.

A restriction enforced in actual dealings, even if not expressly written into the dealership agreement, may amount to a restrictive trade practice, and a territorial bar on sales can qualify as an area or market restriction. Unequal treatment, however, is not enough unless the statutory effect on competition and consumer impact is shown. A contractual term allowing withholding or refusal of supply may itself be restrictive and can be directed to be amended in a standard form agreement. By contrast, a competition authority cannot revive a terminated dealership or compel renewed supplies unless the termination is specifically found to be a statutory device to perpetuate the prohibited practice; compensation remains the proper remedial route.

---

---

Issues: (i) whether the restriction preventing the dealer from selling from its Sarafa Bazar premises and the differential treatment vis-a -vis the other dealer constituted a restrictive trade practice; (ii) whether clause 7 of the dealership agreement was itself a restrictive trade practice and could be directed to be amended; (iii) whether the Commission could direct that the termination of dealership be ignored and supplies be restored; (iv) whether the cease and desist order could survive in the circumstances.

Issue (i): whether the restriction preventing the dealer from selling from its Sarafa Bazar premises and the differential treatment vis-a -vis the other dealer constituted a restrictive trade practice.

Analysis: A restriction imposed in actual dealings, even if not expressly written into the agreement, can fall within the statutory concept of restrictive trade practice. The prohibition on sales from a particular premises amounted to an area or market restriction. However, discrimination under the relevant definition required more than unequal treatment; it had to be shown that the practice affected competition in the manner contemplated by the statute, including the statutory consequence of unjustified costs or restrictions on consumers. On the record, the finding on differential supply was unsupported by any substantive finding on that essential ingredient.

Conclusion: The finding on territorial restriction was upheld, but the finding of restrictive trade practice on the allegation of discriminatory supply was set aside.

Issue (ii): whether clause 7 of the dealership agreement was itself a restrictive trade practice and could be directed to be amended.

Analysis: A clause conferring an unrestricted right to withhold, delay, or refuse supply was inherently capable of restricting supply and distorting competition. Once a trade practice falls within the statutory illustrations of restrictive trade practice, no further inquiry into the general definition is required. The Commission was also competent to examine the clause even though the agreement had been terminated, because the clause formed part of a standard form agreement and the issue had been effectively placed before the parties with opportunity to meet it.

Conclusion: Clause 7 was rightly treated as a restrictive trade practice, and the direction to amend such a clause in the standard form agreements was sustained.

Issue (iii): whether the Commission could direct that the termination of dealership be ignored and supplies be restored.

Analysis: The Commission could not assume the role of a civil court to revive a terminated contract unless it recorded a clear finding that the termination itself was a device to perpetuate the prohibited trade practice or was otherwise contrary to the statute. No such finding was made. Relief for loss, if any, lay in the statutory compensation remedy rather than in revival of the dealership relationship.

Conclusion: The direction setting aside the termination and requiring restoration of supplies was invalid and was set aside.

Issue (iv): whether the cease and desist order could survive in the circumstances.

Analysis: In view of the setting aside of the direction reviving the dealership and the fact that the dispute had moved into the compensation domain, further consideration of the cease and desist order did not materially affect the operative result.

Conclusion: The cease and desist direction did not survive as an operative relief in the final disposition.

Final Conclusion: The appeal succeeded only in part: the finding on territorial restriction was sustained, the finding on discriminatory supply was not, the objectionable supply clause had to be amended, and the directions reviving the terminated dealership and compelling supplies were set aside, leaving compensation remedies open.

Ratio Decidendi: A trade practice falling within the statutory illustrations of restrictive trade practice is treated as such without further resort to the general definition, but a terminated commercial arrangement cannot be revived by the Commission unless the termination itself is specifically found to be a statutory device to perpetuate the unlawful practice.

---