DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) vs DON BOSCO HIGH SCHOOL

A Notice of Enquiry (NOE) was issued on 22.12.1997 to the respondents as listed above under Section 10(a)(iv) of the Monopolies and Restrictive Trade Practices Act, 1969 (for brief the Act) based on two separate Preliminary Investigation Reports (PIR) submitted by the Director General (Investigation and Registration) (the DG).

IN the PIR dated 29.10.1997, the DG had stated that respondent No. 1 - Don Bosco High School, Bombay, lets out to the public its playground for holding function/programmes and charge a sum of Rs. 25,000/- per occasion. The respondent No. 2 is generally engaged for decoration by the customers on these occasions. It transpires that the customers who take the playground on rent have to engage respondent No. 2 for the purpose of decoration. This practice according to the DG amounts to restrictive trade practice under Sections 33(1)(a) and 33(1)(b) read with Section 2(o) of the Act. In a separate PIR dated 29th October, 1997, the DG has stated that respondent No. 3 - Maharashtra Labour Welfare Board, Bombay lets out open air stage and ground for sports, cultural programmes, social gatherings, etc. It has entered into an agreement with respondent No. 4 - Ramesh Decorators, Bombay, who has been given the exclusive rights for decoration and catering for functions organized in the premises of respondent No. 3. The contract provides that parties booking the premises of respondent No. 3 have to get their catering and decoration done only by respondent No. 4. This, according to DG, attracts Clause (b) of Section 33(1) of the Act as well as Section 2(o) of the Act.

Since the respondents had not appeared despite repeated opportunities given to them after due service, the proceedings against them were set ex parte by the Commission on 25.5.1998. We, however, find that the respondent No. 3 had sent a reply dated 20.5.1998 to the Commission which was not taken on record.

THE DG filed an affidavit of evidence reiterating the facts contained in the two PIRs submitted earlier. We gave a hearing to Mr. V.K. Mehta, Advocate for the DG and Mr. Ajit S. Bhasme, Advocate for the respondents. The Advocate for the respondents pointed out that in a case involving Islam Gymkhana Club and KH Karmali and Company, the Commission in its order dated 27.10.1998 held that there was no prima facie case of restrictive trade practice and closed the case. In that matter also the DG has filed a PIR involving similar cause of action where the concerned parties had approved only one decorator. The Advocate for the respondent prayed that in the light of the order of the Commission, the NOE issued to the respondents may be discharged.

WE have carefully examined the records of the case of both Don Bosco High School, Bombay and Maharashtra Labour WElfare Board, Bombay. The premises are being let out not as part of their main business but as an incidental function with the objective of serving public cause as well as supplementing their income. In the case of Don Bosco High School, the PIR states that the premises were let out only twenty times in two calendar years which works out to less than once a month. In the case of respondent No. 2 the number of such occasions average around 70 per year. In the matter of Islam Gymkhana Club referred to by the Advocate for the respondent, the Commission noted that it was necessary that only a decorator who had the necessary wherewithal, manpower and resources to take up decoration should be engaged. Such an agency should be familiar with the layout of the building and the arrangements for taking electric connections for illumination, etc. for decoration of the premises. The users of the premises might not be in a position to select a decorator who is well equipped to do the work. The Commission came to the conclusion prima facie that there was no restrictive trade practice involved in that complaint. From the reply of respondent No. 3, even though it was not taken on record, it was revealed that where customers were given the choice to engage their own caterers and decorators, the premises were not maintained properly and the respondents had to incur expenses for cleanliness and maintenance later. As already pointed out, respondent Nos. 1 and 3 only spare the facilities available with them for use by others and they are willing to extend this facility only on the condition that for the purpose of decoration the customers have to use the services of an approved person. Even if the practice is considered restrictive trade practice in a technical sense, the respondents can justify the practice with reference to the provisions of Sections 38(a) and 38(b) of the Act. In the premises, having regard to the nature of allegations made against respondents and in the light of the order of the Commission dated 27.10.1998 referred to above, we direct that NOE issued against the respondents be discharged. There is no order as to costs. Enquiry discharged.