DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) vs BHARAT ELECTRONICS LIMITED

THE order passed in this case shall govern the disposal of Case Nos. RTPE 101/1998, RTPE 102/1998 and RTPE 103/1998,

ON behalf of respondent No. 1 an application under Order VII, Rule 11(d) of the Code of Civil Procedure, 1908 read with Regulation 65 of the Monopolies and Restrictive Trade Practices Commission Regulations, 1991 has been filed for discharging the Notice of Enquiry issued by this Commission. It is submitted on behalf of the respondent that the case as set up by the petitioner does not fall within the jurisdiction of this Commission. To substantiate argument, reference of Notification issued under Section 3 of the Monopolies and Restrictive Trade Practices Act, 1969 is referred and it is submitted that the Undertaking 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 equipments, defence air-crafts, 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 do not come within the jurisdiction of the MRTP Act, 1969. It is, therefore, submitted that the said Notification issued under Section 3 of the MRTP Act, 1969 clarifies this position.

However, on behalf of the petitioner it is argued that Energy Saver for Air Conditioners Refrigerating System, Water Coolers, Heaters, HVAC System, Heat Pumps etc. are being manufactured by the respondent but these items are not being used as defence equipments attracting the aforesaid Notification. As such, the present case falls for enquiry within the jurisdiction of this Commission.

AFTER hearing rival contentions and considering the Notification, referred to above, we have to examine as to whether the Government Company/Companies engaged in the production of arms and ammunition and allied items of defence equipments are only excluded or Undertakings owned and controlled by Government Companies engaged in the production of arms and ammunition and allied items of defence equipments being their main activity and in spare time, as an ancillary activity, engaged in production of non-defence articles, would also falls for the purpose of enquiry under the provisions of MRTP Act, 1969. We have already examined that the main function or the activity of the respondent is to manufacture the defence equipments and it is a Unit of the Ministry of Defence, Department of Defence (Production and Supply) and as such is being controlled by the Govt of India and, therefore, it is covered under the Notification dated 27th September, 1991, referred to above, issued under Section 3 of the MRTP Act, 1969 and for such industrial organization enquiry part is outside the jurisdiction of the MRTP Act and thus no Notice of Enquiry can be issued.

IN this regard, we may also consider the true import of Order VII, Rule 11(d) of Code of Civil Procedure, 1908. It postulates that from the statements made on the application/petition/ plaint, prima facie appears to be barred by any law, the said application/petition/plaint deserves to be rejected out-right without entering into and resolving any issue. We have already observed that respondent herein is primarily engaged in manufacturing defence equipments but to utilise its spare capacity, it is also manufacturing Energy Saver for Air Conditioners Refrigerating System, Water Coolers, Heaters, HVAC System, Heat Pumps etc. Therefore, if spare capacity is utilized for manufacturing non-defence equipments, the original identity i.e., manufacturing of arms and ammunition cannot be lost as it is the primary activity of the industrial organization, is to be taken into consideration. The primary activity of the present respondent is to manufacture of arms and ammunition and allied items for defence equipments. This being so, in our considered opinion, merely if the respondent manufactures non- defence equipments in spare time alongwith arms and ammunition, the said activity of the respondent cannot be said to be outside the purview of the Notification, referred to above, and indeed no enquiry can be initiated under the provisions of the MRTP Act, 1969 and the application as framed and filed is barred by Section 3 of the MRTP Act and also by Notification, referred to above. This being so, the application is allowed and NOE is discharged. NOE discharged.