DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) vs Tata Engineering and Locomotive Co. Ltd.

IN a complaint filed, the Director General of INvestigation and Registration (for short the DG) has charged the respondents -Tata Engineering and Locomotive Company Limited (hereinafter referred to as R-1) and Cargo Motors Limited (hereinafter referred to as R-2) for having adopted and indulged in unfair trade practices in terms of Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as the Act for short) insofar as they have been selling incomplete chassis of the diesel vehicles

FIRST, the facts in brief, R-1 is a public limited company engaged in the manufacture and sale of diesel commercial vehicles. It has appointed various authorised dealers through whom the sales are made. R-2 i.e. Cargo Motors Limited is an authorised dealer of R-l for Tata diesel vehicle. R-2 has its sales offices at Chandigarh and Jalandhar. After obtaining a proforma invoice /quotation from R-2 for one Tata diesel chassis model No. LPO/1210/55 with six tyres and seven wheel rims, the informant M/s. Radha Soami Satsang Beas, placed an order for its supply. An amount of Rs. 3,34,130.62 was also paid which was inclusive of all taxes, transportation charges excluding local octroi duty and tools. The order was placed on 24th December, 1990. The informant was asked to take delivery of the aforesaid chassis at Chandigarh. On 2nd January, 1991, the delivery of chassis was taken with only four wheel rims as against seven wheel rims and four tyres against six tyres. It was informed that the missing wheel rims, wiper motor assembly and tools would be given by R-2 at Jalandhar office alongwith the replacement of defective tyre wheel which had a cut when supplied. When approached, the office at Jalandhar informed that as chassis was supplied to it with four wheel rims and four tyres, the same could only be supplied to it, however, remaining tyres would be supplied within a fortnight''s time. The informant was accordingly billed for a sum of Rs. 3,17,915.96 and refund of Rs 16,214.66 was allowed for short supply of items. The spare parts were not given within the time-frame as promised. Despite several reminders, delay occurred in making good the short supply. In view of the incomplete supply of parts, the informant could not run the vehicle for the purposes for which it was purchased. Thus for supply of incomplete chassis without standard and essential fittings, both the respondents are stated to have indulged in unfair trade practices as covered in Clauses (i) and (iv) of Section 36A(1) of the Act. On receipt of the complaint, Notice of Enquiry under Sections 36A, 36B(c) and 36D of the Act was issued to both the respondents in its reply, R-1 took an objection regarding jurisdiction of the Commission in the matter. It was stated that due to circumstances beyond its control on account of acute shortage of supply of wheel rims, which were purchased from ancillary unit, the chassis supplied to the authorised dealers were with only four wheel rims and four tyres. The customers accordingly charged for the chassis with only four wheel rims and four tyres and in case of the excess price realised, the proportionate amount relating to wheel rims and tyres was refunded back. The informant was supplied with four wheel rims to meet its minimum requirement for original equipment. The remaining wheel rims could not be supplied due to strike on account of the prolonged labour unrest and lay-off in Sankey Wheels, Durgapur. Without prejudice to the aforesaid contention, it was however stated that in any case it would have taken six weeks to build the body on the chassis by which time extra wheel rims would have been made available in the market. In the circumstances, no charge of unfair trade practices could be levelled against respondent No. 1.

Respondent No. 2 in its reply also resisted the application on the ground that it only supplied those wheel rims and tyres to the informant as were received from R-1. It denied having given any undertaking or promise to the informant that the short supply, if any, would be made good within a particular time-frame. In fact payment of refund of Rs. 16,214.66 by cheque dated 17th January, 1991 showed the bona fide of the respondent and as soon as it received the necessary accessories, the informant was approached for collection of the same against the payment of Rs. 13,389.54. Even interest at Rs. 4,456.08 on the amount retained by R-2 was paid on 12th August, 1991. Due to short supply of accessories as explained on behalf of R-1, it was beyond it to supply wheel rims and six tyres and as such it is not fair to charge it with trade practices as alleged.

A rejoinder to the reply filed by and on behalf of R-1 and R-2 was submitted by the DG. Thereafter, on an application moved under Regulation 65 of the MRTPC Regulations, 1991, R-l furnished its reply to the interrogatories sought by and on behalf of the DG. After the pleadings were complete, the following issues were framed : 1. Whether the enquiry is not maintainable for the reasons set out as preliminary objections in the replies of the two respondents ? 2. Whether the respondents have been indulged in unfair trade practices as set out in the Notice of Enquiry ? 3. If the answer to the foregoing issue is in the affirmative whether the said unfair trade practice is prejudicial to public interest or the interest of the consumer or consumers generally ? 4. Relief.

BOTH the parties relied on oral as well as documentary evidence. Witness Col. B.N. Sethi appearing on behalf of the DG was cross-examined by the learned Advocates appearing for respondents. The Advocates appearing on behalf of the respondents mainly reiterated their stand as taken in their respective replies. Mr. S.S. Kumar, Advocate for R-2 also relied on the decision in the matter of Director General (I & R) v. British Physical Laboratories (India) Ltd., reported in 1998 CTJ 23 (MRTPC), dated 16th September, 1997 for the proposition that where the deficiency of the items is due to circumstances beyond control of the party, no charge of unfair trade practices could be levelled against it. We have carefully considered the submissions made on behalf of both the parties and consulted the material brought on record as well gone through the evidence led on both sides. At the outset, we may state that the legality and the validity of Notice of Enquiry issued has been challenged in the preliminary objection raised on behalf of both the respondents. We find that the Notice of Enquiry has been legally issued on the basis of facts as brought out in the complaint as well as the investigation carried out by the DG. The merits of the case could only be examined on the basis of the evidence as led during the course of trial. Accordingly there being no force in the preliminary objection as raised the same is rejected. Coming to the merits of the case, we find that as per undertaking contained in quotation/proforma invoice (Annexure II) the informant was to be supplied with diesel chassis with seven wheel rims and six tyres. The amount received from the informant was at Rs. 3,34,130.62 which covered the equipment specifications given in the aforesaid quotation/proforma invoice dated 20.12.1990. Undisputedly R-2 was only supplied with four wheels rims and four tyres with chassis by R-l as per its own statement in its reply to the Notice of Enquiry. It was well aware of the fact that due to short supply, he could not supply the requisite accessories as are indicated in the proforma invoice. It should have been so indicated in its proforma invoice. Thus knowingly, false representation in regard to supply of wheel rims and tyres was made through proforma invoice and the informant was misled in placing the order for the requisite chassis. The complainant also paid the entire price oil the basis of undertaking as given in the proforma in voice. As per the reply of R-1, the customer was to be charged for four wheels and four tyres (para 7 of the reply) which was not so. Initially the demand should have been for the lesser amount. Even one tyre had 3/4" cut at the time of delivery. This was only set right on 3rd January, 1991 when the invoice was issued for Rs. 3,17,915.96 covering price for four wheel rims and four tyres and the refund for Rs. 16,214.66 was issued to the informant. The letters addressed to R-l and R-2 clearly show that the Informant was misled into the purchase of chassis on the false representation made on behalf of R-2, Normally one expects fair deal in the transaction with the dealer of reputed manufacturer like Tata Engineering and Locomotive Company Ltd. As stated by the informant, it is the right of the customer to get the accessories as mentioned in the proforma/invoice at the time of delivery of chassis. It is not for the customer to purchase the short supply items from the open market at a higher market rate. The delay caused in delivery of the short supply items certainly caused loss to the customer who could not ply the vehicle for the purpose it was purchased. This practice is certainly prejudicial to the consumer in particular as is in the present case and consumers in general as well to public. Thus on the facts as stated, the charge of unfair trade practice stands established against the respondent No. 2. It is directed to cease the alleged unfair trade practice, if continued at present and also desist from doing the same in future. As regards respondent No. 1 the circumstances under which chassis with four tyres and four wheel rims were supplied to the dealer were duly explained in its reply. The averment that due to strike in the factory, the requisite number of wheel rims could not be supplied was not controverted at any stage by and on behalf of the complainant. The statement that the dealers were supplied with four tyres and four-wheel rims was also not denied either by R-2 or by the complainant. In the circumstances, it could not be established that respondent No. 1 indulged in unfair trade practices as charged by the complainant. Therefore, the charge of unfair trade practice having been not established, Notice of Enquiry against R-1 stands discharged. There is no order as to costs on the facts and in the circumstances of the case. Respondent No. 2 shall give effect to this order within six weeks from date of the receipt of the order and file an affidavit of compliance within four weeks thereafter. Complaint dismissed.