DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) vs CITY-MAN CLOTHING (INDIA) LTD.

IN a complaint filed by one Shri K. Rama Rao, Plot No. 25, Anand Apartments, Lalithanagar, Hyderabad, the Director General (INvestigation and Registration) was asked to investigate into the matter and submit a preliminary investigation report thereafter. As per preliminary investigation report, the respondent M/s. City-Man Clothing (INdia) Ltd. launched a scheme announcing issue of tickets/coupons on every purchase of City-Man products of Rs. 250/-. The contestants were required to fill up forms/coupons with some slogans to participate in the contest to be eligible for winning the prizes as listed in the advertisement. There were 9 DCM Cielo, Maruti 800, Bajaj Chetak Scooters as monthly prizes and over 1000 Titan Watches as quarterly prizes to be given to the winner through a draw of lots. The scheme was to last for 13 months starting from 1.6.1995 and ending on 30.6.1996. The total expenditure was incurred at Rs. 48.95 lakhs. The scheme was said to have been launched to promote the sales of the Company. As per DG it also resulted in an increase in the sales. Accordingly a conclusion was reached that the aforesaid practice adopted by the respondent is directly hit by the provisions of Section 36A(3)(b) of the Monopolies and Restrictive Trade Practices Act, 1969 (for short the Act). Accordingly, the issuance of NOE was recommended.

PURSUANT to the Notice of Enquiry issued, the respondent contended that the scheme launched announced an open contest giving an equal opportunity to all the participants. The prizes as earmarked were duly given to all the successful contestants. There was no increase in the price of the product prior or subsequent to the contest. The new ranges of products introduced were in December, 1996 and not during the currency of the scheme. The alleged increase in sales was contended to be on account of various reasons not specifically attributable to the advertisement in question. No extra price was also charged for the entry in the contest. The charge of unfair trade practice, therefore, having been not established by the DG, the notice, contended the respondent, needs to be discharged. After the pleadings were complete, the following issues were framed : (1) Whether the respondent has been indulging in unfair trade practices as alleged in the Notice of Enquiry ? (2) Whether the alleged unfair trade practices are prejudicial to the interest of the consumer/consumers generally ? Neither the proceedings were attended to nor any reply has been filed on behalf of the respondent. D.G. on the other hand relied upon the information as collected during the course of enquiry. This included copy of advertisement, price list, monthly details of sales and a copy of the accounts for the year 1996-97. The respondent''s case is argued to be covered under the specific provisions of Section 36A(3)(b) of the Act. The provisions of the aforesaid section read as under :

"36A. In this part unless the contest otherwise requires, ''unfair trade practice'' means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, [adopts any unfair method or unfair or deceptive practice including any of the following practices], namely : (3) permits- (a) xxx xxx xxx (b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;"

We find that the scheme in question was open to all who wanted to participate in the contest and no extra price was charged for participation in the contest. There is no material to hold that the prizes as announced have not been given to the successful customers as contended. There is no supporting evidence to come to the conclusion that the cost of gifts was recovered from the customers through prices charged for the products offered for sale. On the other hand the argument that there has been no increase in the price of the product stands uncontroverted on behalf of the DG. The perusal of monthly sales made during the period reveals that while sales have registered an increase in certain months they have declined in other months during the period of the scheme. Thus no case of false representation in general under Sections 36A and 36A(3)(b) of the Act in particular has been made out against the respondent. In view of the decision of the Hon''ble Supreme Court in the case of HMM, which squarely covers the present case, the charge of adoption of unfair trade practice on the part of the respondent has not been established and as such NOE deserves and is directed to be dismissed with no order as to the costs on the facts and in the circumstances of the case. N.O.E. discharged.