AMRIT MOTORS vs GENERAL MANAGER, VEHICLE FACTORY, ORDNANCE FACTORY BOARD

THE matter has been placed before us for deciding the preliminary issue regarding maintainability of this proceeding before this Commission.

IT is not necessary to set out in detail the facts giving rise to the present proceeding. IT may be sufficient to note that the applicant has filed the present compensation application under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act for brief) for claiming compensation in the sum of Rs. 30 crores for the loss of income and damages suffered by the applicant on account of illegal and improper breach of the dealership of the applicant for the sale and service of the vehicles in the Union Territory of Delhi including NOIDA manufactured by the respondent. The applicant claims to have suffered such loss/damage as a result of unfair/restrictive trade practices indulged in by the respondent. The respondent has filed its reply and has resisted the Compensation Application on the ground that this Commission has no jurisdiction to try such Compensation Application in view of Section 3 of the MRTP Act read with the Notification issued on 27th September, 1991 thereunder. It has, therefore, prayed for rejection of the Compensation Application. The respondent has however not filed any reply to the compensation application on merits reserving its rights to do so if it is decided that this Commission has jurisdiction to entertain and to decide the compensation application on merits.

It would be quite proper to look at Section 3 of the MRTP Act. It reads : "Act not to apply in certain cases-Unless the Central Government, by notification, otherwise directs, this Act shall not apply to- (a) any undertaking owned or controlled by a Government Company, (b) any undertaking owned or controlled by a Government, (c) any undertaking owned or controlled by a Corporation (not being a Company) established by or under any Central, Provincial or State Act, (d) any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees, (e) any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons in pursuance of any authorisation made by the Central Government under any law for the time being in force, (f) any undertaking owned by a Co operative Society formed and registered under any Central, Provincial or State Act relating to co-operative Societies, (g) any financial institution. Explanation-In determining, for the purpose of Clause (c), whether or not any undertaking is owned or controlled by a Corporation, the shares held by the financial institutions shall not be taken into account."

IN exercise of its powers under Section 3 of the MRTP Act, the Central Government has issued one Notification on 27th September, 1991. It reads : "IN exercise of the powers conferred by Section 3 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969), the Central Government hereby directs that the said Act shall apply to the undertakings specified in Clauses (a), (b), (c), (e) and (f) and financial institutions under Clause (g) thereof, except the undertakings owned or controlled by a Government Company, or the Government, as the case may be, engaged in the production of arms and ammunition and allied items of defence equipment, defence aircraft and warships, atomic energy, minerals specified in the Schedule to the Atomic Energy (Control of Production and Use) Order, 1953 and industrial units under the Currency and Coinage Division, Ministry of Finance, Department of Economic Affairs. "

It becomes clear from the aforesaid Notification that the undertaking owned or controlled by a Government Company or the Government, as the case may be, engaged in the production of arms, ammunition and allied items of defence equipment, defence aircraft and warships would be outside the purview of the MRTP Act. It is not in dispute that the factory of the respondent is engaged mainly in the manufacture of vehicles for the defence forces. It is true that it has also undertaken to manufacture vehicles for civilians. It appears that the activity of manufacture of vehicles for civilians at the factory of the defendant would be an ancillary activity presumably to utilise its spare capacity and not its main activity. It is, however, not disputed before us that the factory of the respondent has not given up its manufacturing activities of vehicles for defence forces. Besides, it is not in dispute that the factory of the respondent is a unit of the Ministry of Defence, Department of Defence Production and Supply, controlled by the Ordnance Factory Board of the Ministry of Defence, Government of India. It is again not in dispute that the factory of the respondent is directly managed and controlled by the Ministry of Defence through the Ordnance Factory Board at Calcutta. In that view of the matter, the factory of the respondent can be said to be an undertaking owned and controlled by the Central Government engaged in the production of allied items of defence equipment. It would, therefore, be covered by the aforesaid Notification of 27th September, 1991 issued under Section 3 of the MRTP Act. In that case, the present proceeding will fall outside the purview of the MRTP Act by virtue of Section 3 thereof read with the aforesaid Notification of 27th September, 1991 issued there under and that this Commission will not have any jurisdiction to entertain and to try the present proceeding.

IN view of our aforesaid discussion, we answer the preliminary issue in favour of the respondent and against the applicant and hold that the present proceeding would fall outside the purview of the MRTP Act and this Commission has therefore, no jurisdiction to entertain and to try the present Compensation Application. IN the result, the Compensation Application fails. It is hereby rejected, however, with no order as to costs on the facts and in the circumstances of the case. C.A. dismissed.