AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2003 (4) TMI 432
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.... for its employees at Bombay and for the purpose issued a tender notice in Times of India dated 4-5-1991 in response whereof the respondent Lokhandwala Construction Industries Ltd. made an offer for sale of 40 flats at Kandiwali, Bombay. The respondent, it is said, had also offered to sell some more flats in Green Meadows. Negotiations, in regard to the above flats, started between the parties. Offers and revised offers were exchanged between them. Apart from other conditions it is said to be agreed that price of the flat would be at the rate of 780 per sq. ft. of the saleable area. It is also said to have been given out that the respondent would be able to complete the construction within 12 months of receiving the letter of intent along with the first instalment. As against the advance payments which were to be made by the complainant, the respondent is said to have agreed to furnish bank guarantee on release of the amount by the complainant. The offer was valid up to 31-8-1991. 3. Further correspondence, however, ensued raising the question regarding costs as quoted which also said to have included the cost of bank guarantee. The validity of the offer was extended up to 31-12-1....
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....on 12(A) of the Act. The case of the respondent is that there was no agreement whatsoever between the parties for the bank guarantee for the flats in the building 'Reviera'. The complainant had itself corrected the draft of Memorandum of Understanding and made the counter-suggestions which never attained the stage of agreement between the parties. There has throughout been only negotiations, offers and counter offers. It was also indicated that the complainant could not be allowed to plead mistake by oversight as a ground of enforcing term of unconditional bank guarantee which was never agreed to between the parties. Some other pleas also seem to have been raised but suffice it to mention that one of them being that the complainant if at all could file a civil suit for specific performance of the agreement etc. but no case of restrictive trade practice is made out merely on the allegation of refusal by the respondent to enter into an agreement with a term of unconditional bank guarantee. It was also pleaded that the case does not fall within the purview of section 2(o) or section 33 of the Act. 5. One of the Members of the Commission, namely Shri N.C. Gupta, after detailed discus....
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.... The respondent had also given out that the applicant could send its confirmation within seven days and that the work which had already commenced would be completed and they would be able to hand over the possession by May 15, 1993. No letter of confirmation was received. Hence the respondent wrote another letter on June 1, 1992 in reference to earlier letter dated May 18, 1992 saying that since the period of two weeks had already elapsed and no confirmation of modification in the condition relating to bank guarantee was received, it would be presumed that modification was not accepted, in the circumstances it was not possible to execute the Memorandum of Understanding. Thereafter the respondent started selling the flats on June 8, 1992 at the rate of Rs. 650 per sq. fit. The learned Member then observed that the above conduct of the respondent was suspicious as there could be no occasion to start selling the flats from June 8, 1992 without waiting for any reply form the applicant and that too at lesser price whereas agreed price to sell to the applicant was at the rate of Rs. 800 or Rs. 780 per sq. ft. In the opinion of the learned Member, the respondent had manipulated the condit....
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....respondent declining to furnish unconditional bank guarantee in view of their previous experience with the applicant in regard to the flats in Green Meadows. He found that there was no question of manipulation on the part of the respondent in refusing to furnish the unconditional bank guarantee. 8. We feel it would be appropriate to peruse the definition of the words 'restrictive trade practice' as defined under the Act. It reads as follows :- "Section 2(o) 'restrictive trade practice' means a trade practice which has, or may have the effect of preventing, distorting or restricting competition in any manner and in particular,- (i )which tends to obstruct the flow of capital or resources into the stream of production, or (ii)which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions;" From the definition quoted above it is evident that the conduct of party complained against should be such which may have the effect of preventing, distorting or restricting, competition in any manner which may tend to obstru....
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....tage and to the disadvantage of the other. It has been observed by the Commission that the respondent had the unpleasant experience of furnishing unconditional bank guarantee, in relation to the sale of flats in "Green Meadows". Instead of unconditional bank guarantee, they only wanted it to be based on progressive payment and performance guarantee. We may refer to a decision Haridas Exports v. All India Float Glass Mfgrs. Association [2002] 6 SCC 600, more particularly to observation made in paragraph 42 of the Judgment, which reads as follows :- "Section 2(u) does state that 'trade practice' means any practice relating to the carrying on of any trade then it adds that such a trade practice would include anything done by any person which controls or affects the price charged by, or the method of trading of, any trader or any class of traders. The Act and the aforesaid section, in particular, is, therefore, concerned specifically with the incidence of the restrictive trade practice within India which in section 2(o)( i) refers to the obstruction to the flow of capital or resources into the stream of production, while section 2(o)( ii) talks of manipulation of prices or conditions ....