2004 (4) TMI 323 - SC - Companies Law

Supreme Court Overturns Order citing Lack of Clarity, Investigation Errors

Rajesh Patel Versus Monopolies and Restrictive Trade Practices Commission

Rajesh Patel Versus Monopolies and Restrictive Trade Practices Commission - [2005] 59 SCL 165 (SC) Issues:1. Violation of Monopolies and Restrictive Trade Practices Commission's order dated August 23, 1989.2. Interpretation of the order and its application to subsequent advertisements.3. Lack of independent finding by the Commission on unfair trade practices.4. Failure to conduct an enquiry before concluding violation of the order.5. Inclusion of real estate in the definition of services post the original order.6. Commission's failure to direct an investigation under section 13A.Analysis:1. The appeal concerned an order by the Monopolies and Restrictive Trade Practices Commission, accusing the appellant of breaching a previous order from August 23, 1989, and initiating prosecution under the Monopolies and Restrictive Trade Practices Act, 1969.2. The appellant, engaged in hire-purchase business, faced allegations of unfair trade practices based on advertisements. Despite denying offering gifts, the appellant's silence was deemed an admission of unfair practices, leading to the 1989 order restraining future similar advertisements.3. The Commission's 1989 order lacked a specific finding on the appellant's involvement in the impugned practice or its classification as an unfair trade practice under the Act.4. Subsequent to the 1989 order, the appellant issued an advertisement related to a housing scheme with a lottery, prompting a new complaint. The Commission found the appellant in violation of the previous order, leading to prosecution under the Act.5. The appellant challenged the Commission's decision, arguing that real estate was included in the Act's definition of services post the 1989 order, and no finding was made on the second advertisement constituting an unfair trade practice.6. The Supreme Court held that the Commission's order was unsustainable as it lacked clarity on the nature of the prohibited practice and failed to conduct an investigation under section 13A before concluding the violation. Moreover, the order's coverage of real estate was erroneous due to the subsequent amendment, leading to the appeal's allowance and the Commission's order being set aside.