2008 (5) TMI 422 - SC - Companies Law

Supreme Court upholds MRTP Commission's order on restrictive trade practices, directs execution of modified lease deed

The Supreme Court upheld the MRTP Commission's order, dismissing the appellants' appeal. The Court affirmed the Commission's jurisdiction to address ... Whether the appellants have been indulging in restrictive and unfair trade practices as alleged in the Notice of Enquiry? Whether the alleged restrictive trade practices are not prejudicial to public interest? Whether the alleged unfair trade practices are prejudicial to the interest of consumer/consumers generally? Held that:- Appeal dismissed. Once the appellants have accepted the earlier order of the Commission dated 16-1-2004 which has attained finality, the appellants are left with no other option but to execute a fresh lease deed with the complainant-second respondent on modified terms suggested by him. The order of the Commission impugned in this appeal does not suffer from any manifest error or perversity or invalidity. Issues Involved:1. Restrictive and unfair trade practices.2. Jurisdiction of the Commission.3. Execution of fresh lease deed.4. Compliance with earlier orders.5. Validity of amendments in the draft lease deed.Issue-wise Detailed Analysis:1. Restrictive and Unfair Trade Practices:The Commission identified several restrictive and unfair trade practices by the appellants under sections 2(o)(i) and 36A of the MRTP Act. These included issuing advertisements for allotment without title to the sites, creating fourth-party rights contrary to guidelines, manipulating prices and conditions of delivery, and collecting lease amounts without handing over possession. The Commission concluded that these practices imposed unjustified costs on consumers and were prejudicial to public interest.2. Jurisdiction of the Commission:The appellants contended that the Commission lacked jurisdiction to direct the execution of a fresh lease deed with modifications. However, the Commission's jurisdiction under the MRTP Act was upheld, emphasizing that the Act aims to prevent monopolistic and restrictive trade practices detrimental to public interest. The Commission's authority to investigate and ensure compliance with its orders was also affirmed.3. Execution of Fresh Lease Deed:The dispute centered around the execution of a fresh lease deed incorporating specific amendments suggested by the complainant. The Commission directed the appellants to execute a new lease deed with modifications, ensuring it aligned with the original lease agreement dated 1-12-1992. The Commission found that deviations from the original terms would constitute unfair trade practices.4. Compliance with Earlier Orders:The Commission's earlier orders dated 16-1-2004 and 29-7-2005, which directed the execution of a fresh lease deed on the same commercial terms as the original agreement, were not challenged by the appellants. These orders attained finality, and the Commission emphasized the need for compliance. The appellants were directed to incorporate the necessary amendments suggested by the complainant in the new lease deed.5. Validity of Amendments in the Draft Lease Deed:The Commission reviewed the proposed amendments to the draft lease deed, including the issuance of a 'No Objection Certificate,' arbitration clauses, and the period for completion of construction. It directed the incorporation of certain amendments while rejecting others. The Commission ensured that the new lease deed reflected the original agreement's terms and addressed the complainant's concerns.Conclusion:The Supreme Court upheld the Commission's order, finding no merit in the appellants' appeal. The Court emphasized the appellants' obligation to execute a fresh lease deed with the complainant on modified terms as directed by the Commission. The appeal was dismissed, and the time granted by the MRTP Commission was extended by four weeks.