Restrictive trade practice demands proof of tie-up sales and material harm to competition before a cease-and-desist order.

A restrictive trade practice under the Monopolies and Restrictive Trade Practices Act, 1969 was not established where the evidence failed to prove compulsory tie-up sales of trousers with blazers, suits or safaris. The record showed supply against orders and availability, not insistence on bundled purchase, so the alleged compulsion was unsupported. A cease and desist order also required proof that the practice materially affected competition and was prejudicial to public interest; those elements were not shown because the dealer's market share was negligible and the alleged dealership termination was not made out as a real basis of public injury. The order was therefore unsustainable and the enquiry was discharged.

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Issues: (i) Whether the alleged tie-up of sales of trousers with other garments was established so as to amount to a restrictive trade practice under the Monopolies and Restrictive Trade Practices Act, 1969; (ii) Whether the impugned conduct affected competition to a material degree and was prejudicial to public interest so as to justify a cease and desist order.

Issue (i): Whether the alleged tie-up of sales of trousers with other garments was established so as to amount to a restrictive trade practice under the Monopolies and Restrictive Trade Practices Act, 1969.

Analysis: The evidence did not establish that trousers were insisted upon as a compulsory condition for supply of blazers, suits or safaris. The record showed that garments were supplied against orders and subject to availability, and the alleged compulsion was not proved with sufficient certainty. The Commission's conclusion on tie-up sales was therefore unsupported by the evidence.

Conclusion: The alleged tie-up sales were not proved and no restrictive trade practice was established on that basis.

Issue (ii): Whether the impugned conduct affected competition to a material degree and was prejudicial to public interest so as to justify a cease and desist order.

Analysis: A cease and desist order under the Act could be sustained only if the restrictive practice materially affected competition in the relevant trade and was prejudicial to public interest. The evidence showed that the appellant's market share was negligible and that readymade garments were in short supply generally. The supposed termination of dealership was also not borne out as a separate charge or as a real basis for public injury, and a single dealer's loss could not, on these facts, be treated as affecting competition to a material degree.

Conclusion: The requisite prejudice to public interest and material effect on competition were not proved.

Final Conclusion: The Commission's order could not be sustained in law, and the enquiry stood discharged.

Ratio Decidendi: A restrictive trade practice under the Act can justify a cease and desist order only when the alleged practice is proved on evidence and is shown to restrict competition to a material degree in the relevant trade so as to be prejudicial to public interest.

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