Supreme Court of India
DLF UNIVERSAL LTD. AND ANR.versusTHE DIRECTOR GENERAL (INVESTIGATION AND REGISTRATION) AND ANR.
- Citation
- 2008 INSC 715
- Decided
- 16 May 2008
- Disposal
- Dismissed
- Bench
- S B SINHA
Holding
An order of the MRTP Commission that has attained finality and is not perverse cannot be set aside; the Commission’s powers under Sections 13A and 138 are valid, and the appeal is dismissed.
Summary
DLF Universal Ltd. and its trust, the colonizers of a Gurgaon colony, were directed by the Monopolies and Restrictive Trade Practices (MRTP) Commission to execute a fresh lease deed with a complainant who alleged unfair and restrictive trade practices in the allotment of school sites. The appellants did not challenge the Commission's order dated 16 January 2004, which required the commercial terms of the original 1992 lease to remain unchanged. On appeal, the Supreme Court examined whether the Commission had jurisdiction under Sections 13A and 138 of the MRTP Act to direct the parties and whether the order, having attained finality, could be set aside. The Court held that the definition of restrictive trade practice is exhaustive, the Commission’s order was not perverse, and once an order attains finality it cannot be interfered with. Consequently, the appeal was dismissed.
Issues considered
- Whether the MRTP Commission has the authority under Sections 13A and 138 to direct the execution of a fresh lease deed and impose compliance requirements.
- Whether the alleged restrictive and unfair trade practices are prejudicial to public interest or consumers.
- Whether the order of the Commission dated 16 January 2004, which was not challenged, has attained finality and is therefore unreviewable under Section 55 of the MRTP Act.
- Whether the appellant can claim that the Commission’s direction violates contractual rights or exceeds its statutory jurisdiction.
Legislation cited
- Arbitration Act, 1940
- Constitution of Indias. Article 300A
- Haryana Development and Regulation of Urban Areas Act, 1975
- Monopolies and Restrictive Trade Practices Act, 1969s. 138, s. 13A, s. 2(o), s. 36A
- Transfer of Property Act
Subjects
MonopoliesRestrictive Trade PracticesUnfair Trade PracticesLease deedCommission orderFinalityMRTP ActDirector GeneralFourth party rightsPublic interest
Judgment
[2008] 9 S.C.R. 406
..
A DLF UNIVERSAL LTD. AND ANR.
V.
THE DIRECTOR GENERAL (INVESTIGATION AND
REGISTRATION) AND ANR.
(Civil Appeal No. 5680 of 2006)
B MAY 16, 2008
[S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.]
Monopolies and Restrictive Trade Practices Act, 1969 -
c s. 13A, 138 - Order of Commission - Not challenged by the
appellant - On appeal, held: Interference not called for as the
order of Commission attained finality
The appellant no.1 is a colonizer. The licences were
granted to it for the construction of a colony. In terms of
D licences granted, the appellant no.1 was required to con-
struct in the colony, schools, hospitals, community cen-
tres and other community buildings. Appellant alloted a
site measuring 0.20 acres to the complainant on consid-
eration of Rs.4 lakhs and also entered into a lease agree-
E ment dated 1.12.1992 for constructing and providing edu-
cational facilities by the lessee. Subsequently, an alter-
nate plot measuring .35 acres was offered to complain-
ant for an additional payment. This alternate plot was how-
ever not handed over to him on the plea that State Gov-
F ernment was not recognizing the fourth party rights.
The complainant-second respondent filed complaint
which was entertained by the Commission in purported
exercise of its jurisdiction under Section 2(o) (i) and Sec-
tion 36A of the MRTP Act. The said complaint was referred
G to the first respondent - DG for investigation and on re-
ceipt of the PIR submitted by the first respondent - DG, ..,
notice was issued to the appellants by the Commission
on 27.03.1998. Before the Commission, appellants stated
that they were willing to hand over the possession of the
H 406
DLF UNIVERSAL LTD. & ANR v. THE DIRECTOR GENERAL 407
(INVESTIGATION & REGISTRATION) &ANR
site/plot to complainant in terms of the agreement dated A
1.12.1992. On 16.01.2004, the appellants informed the
Commission that they would execute a fresh lease deed
in favour of the complainant-second respondent provided
the commercial terms as contained in the first lease deed
dated 1.12.1992 would not be ordered to be modified or B
altered or deviated and the appellants would indicate the
amount of lease rent which would be paid by the com-
plainant-second respondent within one week and there-
after the appellants shall sign the modified lease deed and
the possession of the site/plot would be handed over to c
the complainant-second respondent. Accordingly an or-
der dated 16.01.2004, was passed in terms of submission
of appellant. The order dated 16.01.2004 was not chal-
lenged by the appellant. The complainant-second respon-
dent filed miscellaneous application seeking incorpora-
0
_.. tion of some proposed clauses in the new lease deed.
The appellants submitted their comments to the proposed
amendments suggested in the draft lease deed to be ex-
ecuted by the parties. The Commission directed the ap--
pellants to modify the draft lease deed and furnish the
final lease deed to the complainant- second respondent E
within two weeks and hand over the possession of the
plot for the purpose it was leased out to him within two
weeks of the execution of the draft lease deed by the com-
plainant - second respondent. Hence the present appeal.
F
Dismissing the appeal, the Court
HELD: 1. The Statement of Objects and Reasons for
the enactments of MRTP Act is designated to ensure that
the operation of the economic system does not result in
the concentration of economic power to the common G
detriment and to prohibit such monopolistic and restric-
tive trade practices as are prejudicial to public interest.
The definition of s.2(o) clearly goes to show that it is ex-
haustive and not an inclusive one. The decision whether
trade practice is restrictive or not has to be arrived at by H
408 SUPREME COURT REPORTS [2008] 9 S.C.R.
A applying the rule of reason and not on the doctrine that
any restriction as to area or price will per se be a restric-
tive trade practice. [Paras 17, 18] [423-C,F,G]
2. It is the admitted case that the appellants have not
challenged the order of the Commission dated 16.01.2004
B by which the parties were directed that the commercial
terms as contained in the earlier lease deed dated
01.12.1992 shall not be modified and altered and shall re-
main the same in framing of the new lease deed which
shall be executed betwe~n the parties. [Para 25] [427 -F,G]
c
DLF Qutab Enclave Complex Educational Charitable
Trust v. State of Haryana and Ors. (2003) 5 SCC 622 - re-
ferred to.
3. S.13A empowers the Commission to cause inves-
D tigation to find out whether or not orders made by it un-
der this Act have been complied with or any obligation
imposed upon any person by or under any order made
by the Commission under this Act, authorizes the Direc-
tor General or any officer of the Commission to make in-
E vestigation into the matter and the Director General or the
officer so authorized, may, for the purpose of making such
investigation, exercise all or any of the powers conferred
on the Director General by s.11. In terms of sub-section
(2), the Director General , or, as the case may be, the of-
F ficer so authorized, shall submit to the Commission a re-
port of the investigation to enable the Commission to take
such action in the matter as it may think fit. The Commis-
sion under s.138 is also empowered to exercise the pow-
ers, jurisdiction and authority to punish the person in re-
spect of contempt of itself. In the backdrop of the facts of
G
the present case, once the appellants have accepted the
earlier order of the Commission dated 16.01.2004 which •
has attained finality, the appellants are left with no other
option but to execute a fresh lease deed with the com-
plainant - second respondent on modified terms sug-
H
....
J
{
DLF UNIVERSAL LTD. & ANR v. THE DIRECTOR GENERAL 409
(INVESTIGATION & REGISTRATION) &ANR [PANTA, J]
gested by him. The order of the Commission impugned A
in this appeal does not suffer from any manifest error or
perversity or invalidity. [Paras 26-28] [427-H, 428-A-E]
- CJVILAPPELLATE JURISDICTION: Civil Appeal No. 5680
of 2006
B
From the final Judgment and Order dated 3.7.2006 of the
4 Monopolies & Restractive Trade Practices Commission, New
Delhi in M.A. No. 14 of2004 (Review) in UTPE No. 350of1997
Ravindra Narain, Meghalee Barthakur Subrat Deb, Anil P.
Chhabra and Rajan Narain for the Appellants. c
A. Mariarputham, Aruna Mathur and B.K. Prasad (for P.
Parmeswaran) for the Respondents.
The Judgment of the Court was delivered by
D
4 LOKESHWAR SINGH PANTA, J. 1. Mis DLF Universal
Limited (first appellant herein) and DLF Qutab Enclave Com-
plex Educational Education Charitable Trust (second appellant
herein) have filed this appeal under Section 55 of the Monopo-
lies and Restrictive Trade Practices Act, 1969 [hereinafter re-
E
ferred to as 'the MRTP Act'] read with Order XX-A of the Su-
preme Court Rules, 1966 against the judgment and final order
dated 3rd July, 2006 recorded by the Monopolies and Restric-
tive Trade Practices Commission, New Delhi [for short 'the
• Commission'] in M.A. No. 14 of 2004 (Review) in UTPE No .
350 of 1997 whereby and whereunder the Commission has di- F
rected the appellants to execute fresh lease deed in favour of
Raj Kamal, complainant-second respondent herein with amend-
ments suggested by the complainant - second respondent and
to incorporate Clause 11(a) and (b) in the agreement to lease
dated 1.12.1992 instead of Clause 4 in the draft lease deed G
• which provided for the refund in the event of termination of the
lease deed.
2. Briefly stated the facts giving rise to the filing of the
present appeal are as follows:-
H
410 SUPREME COURT REPORTS [2008] 9 S.C.R.
A Mis DLF Universal Limited is a public limited company
registered and incorporated under the Indian Companies Act,
1956. It purchased free hold lands at Gurgaon in the State of
Haryana for setting up a colony known as 'DLF Qutab Enclave
Complex'. It applied for and was granted licence in terms of the
B provisions of the Haryana Development and Regulation of Ur-
ban Areas Act, 1975 [for short 'the State Act']. M/s DLF Univer-
sal Limited and other group of companies created DLF Qutab
Enclave Complex Educational Charitable Trust wherefor a large
number of sites were earmarked for construction of schools/
c community buildings in the complex. In response to the adver-
tisement issued by the appellants in November, 1991 Rr:ij Kamal,
complainant-second respondent applied for and was allotted
Nursery School site No. 3136 admeasuring 0.20 acre in DLF
Qutab Enclave, Gurgaon. Later on, this site was substituted by
D another site/plot no. 3101 admeasuring 0.35 acre after charg-
ing of extra amount for additional land allotted to him. The com-
plainant-second respondent filed a complaint on 20.6.1997
before the Commission which was referred to the Director Gen-
eral of Investigation and Registration [for short 'the DG'] -first
respondent herein. A Preliminary Investigation Report [PIR] was
E submitted by DG-first respondent on 271h March, 1998 in which
it was reported that the appellants have indulged in restrictive
and unfair trade practices within the meaning of Section 2(o)(i)
and Section 36A of the MRTP Act. Taking cognizance of the
PIR on 4.6.1998, the Commission issued notice of enquiry to
F the appellants. The allegations made in the complaint by the
Complainant - second respondent were that the appellants had
not handed over the possession of the alternate plot to him on
the plea that the Government of Haryana was not recognizing
the fourth party rights. During the preliminary investigation, it
G came to light that at the time of advertisement by the appellants
in November, 1991, the title of the sites including the site/plot
•
allotted to the complainant - second respondent was already
transferred by the first appellant to the second appellant on
27.11.1990. The first appellant was required to construct at its
H own cost or get constructed by any other institution or individual
DLF UNIVERSAL LTD. &ANR v. THE DIRECTOR GENERAL 411
(INVESTIGATION & REGISTRATION) & ANR [PANTA, J]
at its cost, schools/community buildings etc. on the land trans- A
ferred to them by the Government of Haryana under Section
3(a)(iv) of the State Act. 25 different sites having a total area of
29,358 acres were earmarked for the purposes of providing
educational facilities which were transferred to the second ap-
pellant trust for a sum of Rs. 1,05,000/- It was also provided that B
in case the appellants were unable to construct the said site
within the stipulated period, the same would automatically be
reverted to the State Government. In the PIR, the following un-
fair/restrictive trade practices on th'e part of the appellants have
been alleged in this transaction based on the investigation:- c
(i) The appellants (respondents before the Commission]
despite not having the title of the impugned sites
issued advertisement in November, 1991 inviting
applications for allotment which is a deceptive and
unfair trade practice within the meaning of Section D
36A of the MRTP Act.
(ii) The Trust i.e. appellant No. 2 had leased out the
sites to the fourth parties after 7.8.1991 as per
statement furnished during investigation by the
second appellant to the DG. It is also alleged that the E
second appellant was not allowed to create fourth
party right at the time of issuance of impugned
advertisement in November, 1991. This tantamounts
to unfair trade practices within the meaning of
Section 36A of the MRTP Act. F
(iii) Second Appellant created fourth party rights after
7.8.91 for a total consideration of over Rs. 1.85 crore
as against the nominal cost of Rs. 1,05,000/- paid
by them to the first appellant at the time of transfer. G
The allegation was that in terms of the guidelines
issued by the Director, Town and Country Planning,
Haryana, Gurgaon [for short 'the DTCP'] vide their
letter dated 25.10.1994 this difference of money was
to be utilised for the purpose of providing better
H
412 SUPREME COURT REPORTS [2008] 9 S.C.R
A amenities to the colony and for the benefit of residents
therein. It has been alleged in the PIR that the
appellants have, therefore, manipulated the prices
as well as conditions of delivery of the impugned
community sites for the purpose of benefiting the
B Trust wherein the Directors of the appellant
companies were interested. The creation of the fourth
party rights in the impugned sites contrary to the
guidelines issued by the DTCP is a restrictive trade
practice which imposed unjustified cost on the parties
c to whom fourth party rights has been created by the
Trust in connivance with the first appellant. Further,
since the Trust have created fourth party rights after
7.8.1991 the said trade practice constitutes
deceptive and unfair trade practices within the
meaning of Section 36A of the Act.
D
(iv) The transfer deed entered into by the first appellant
with the second appellant did not make obligatory
on the part of the second appellant to utilize the
amount collected as such for the purpose of providing
E better amenities to the residents of DLF Qutab
Enclave. Second Appellant was having a surplus of
Rs. 5,489,223.86p. and Rs. 5,729,723.49p.
respectively at the end of 31 51 March, 1996 and 31 51
March, 1997 respectively. It has, therefore, been
F alleged that the Trust has manipulated the prices
and conditions of delivery of impugned sites for its
personal gain which is a restrictive trade practice.
(v) Originally site No. 3136 measuring 0.20 acre was
allotted to the complainanUinformant on consideration
G of Rs. 4 lakhs and also a lease agreement dated
1.12.92 was entered into for constructing and
providing educational facilities by the lessee.
Subsequently, however, the appellants offered to the
complainanUinformant an alternate site measuring
H 0.35 acre after receiving an additional payment of
DLF UNIVERSAL LTD. &ANR. v. THE DIRECTOR GENERAL 413
... (INVESTIGATION & REGISTRATION) &ANR. [PANTA, J]
~
Rs. 2,96,204/- which tantamount to unfair trade A
practice since the complainant/informant was not
informed that the previous site No. 3136 was subject
to the revision of lay out plan.
(vi) The appellants raised maintenance bills for the
nursery school plot No. 3136 for the period from B
December, 92 to September, 93 though this plot was
omitted in the revised layout plan which is unfair trade
practice.
(vii) Similarly, appellant-Trust collected lease amount from c
the complainant/informant for the period from
December, 92 to March, 94 in advance without
handing over the plot in question to the lessee.
3. The appellants in their counter reply to the complaint of
the complainant - second respondent inter alia denied the al- D
legations stated in the complaint and maintained that the notice
of inquiry and the PIR do not set out the specific and precise
allegations of unfair/restrictive trade practices against them. It
was also submitted that the appellants had filed writ petition in
the High Court of Punjab and Haryana inter alia challenging the E
letter dated 9.2.1994 issued by the DTCP, whereby the appel-
lants have been restrained from creating and recognising any
fourth party rights and the said letter was given retrospective
effect from 7 .8.1991. The appellants then stated that they are
not in a position to handover the possession and the site/plot in F
the absence of the sanction of the building plans by the authori-
ties. It is also provided under the lease deed entered into be-
tween the second appellant - Trust and the allottees that the
possession of the site/plot can be given only upon sanction of
building plans by appropriate authorities i.e. DTCP. They also
G
stated that the agreement was entered into between the sec-
_,. ond appellant - Trust and the complainant - second respon-
dent and not by the first appellant. Therefore, there was no priv-
ity of contract between first appellant and the complainant-sec-
ond respondent. On these premises, the appellants submitted
H
414 SUPREME COURT REPORTS (2008) 9 S.C.R. ,.
A that they have not indulged in any sort of unfair trade practices
•
as alleged in the complaint.
4. On the controversial pleadings of the parties, the Com-
mission framed the following issues:-
8 (i) Whether the appellants (respondents before the
Commission) have been indulging in restrictive and
unfair trade practices as alleged in the Notice of
Enquiry?
(ii) Whether the alleged restrictive trade practices are
C not prejudicial to public interest?
(iii) Whether the alleged unfair trade practices are
prejudicial to the interest of consumer/ consumers
generally?
D 5. It appears from the order of the Commission that on
21.08.2001 the learned advocates appearing for both the par-
ties stated that the question which arose for consideration in
the complaint filed by complainant- second respondent has been
decided by the Division Bench of the High Court of Punjab and
E Haryana in CWP No. 7245/1997 on 07.03.2001 and against
the said judgment, special leave petition had been filed in this
Court. In this view of the matter, the Commission found that no
purpose would be served to continue with the present complaint
and, accordingly, the matter was disposed of.
F 6. Later on, an application was filed by the complainant -
second respondent seeking to review the order of the Com-
mission. On 04.07.2003, the complainant- second respondent
stated before the Commission that the possession of the site/
plot to which he was entitled to in terms of the agreement ex-
G ecuted between the parties has still not been handed over to
him. Learned counsel appearing on behalf of the appellants
before the Commission in response to the review application
stated that the appellants were willing to hand over the posses-
sion of the site/plot to the complainant - second respondent
H which was held up in view of the order passed by the High Court
DLF UNIVERSAL LTD. &ANR. v. THE DIRECTOR GENERAL 415
(INVESTIGATION & REGISTRATION) & ANR [PANTA, J)
of Punjab and Haryana and since the order of the High Court of A
Punjab and Haryana has been set aside by this Court in Civil
Appeal No. 4908/2002 along with Civil Appeal Nos. 4909-11/
2002 titled DLF Qutab Enclave Complex Educational Chari-
table Trust v. State of Haryana & Ors. reported in [(2003) 5
sec 622], therefore, now the appellants are ready and willing B
to hand over the possession of the site/plot to the complainant-
second respondent within six weeks in terms of the agreement
dated 01.12.1992. Again on 16.01.2004, the appellants in-
formed the Commission that they will execute a fresh lease deed
in favour of the complainant - second respondent provided the C
commercial terms as contained in the first lease deed dated
1.12.1992 shall not be ordered to be modified or altered or
deviated and the appellants will indicate the amount of lease
rent which shall be paid by the complainant-second respon-
dent within one week and thereafter the appellants shall sign
0
the modified lease deed and thereafter the possession of.the
site/plot shall be handed over to the complainant-second re-
spondent. On the basis of the pleadings of the parties, the ear-
lier order dated 21.08.2001 came to be modified accordingly
by the Commission. Again, the complainant-second respon-
dent filed miscellaneous application seeking incorporation of E
some proposed clauses in the new lease deed. The appellants
submitted their comments to the proposed amendments sug-
gested in the draft lease deed to be executed by the parties.
The parties did not choose to examine any witness but they
filed their written submissions. F
7. In the backdrop of the facts enumerated hereinabove,
limited qu'!!stion before the Commission was with regard to
handing over the site/plot of the land to the complainant - sec-
ond respondent on a fresh lease deed supplied to him in place G
of the earlier lease deed executed between the parties in De-
cember, 1992 and any deviation from the earlier lease deed
could be construed as unfair trade practices. The dispute was
with regard to certain provisions in the draft lease deed, which
read and are discussed by the Commission in its impugned
H
416 SUPREME COURT REPORTS {2008] 9 S.C.R.
A order as under:- •
(a) The complainant/informant has insisted on the
insertion of clause 1.3 in the draft lease deed with
regard to "No Objection Certificate" (NOC) particularly
that NOC is being issued in pursuance of the
B agreement to lease entered into with you by the Trust
on 1st day of December, 1992 and does not confer
on you any lien, right, title or ownership to the
aforesaid plot in question of the Trust till such time
you make full payment of the price of the plot along
c with other dues payable by you and the lease deed
is executed in your favour". It also seeks to provide
that "during the interim period i.e. till the lease deed
is executed in your favour, you shall not transfer, sub-
lease, mortgage or otherwise either encumber the
D aforesaid plot or part with it without the prior approval
in writing of the Trust". The respondents have stated
that the NOC in terms of the agreement dated
1.12 .1992 was issued to enable the proposed lessee
to submit building plans to the authorities as well as
E the lessor for approval. This was only required for
interim period till the lease is granted, so that there
was no delay in getting the plans approved. Since
NOC had already been given to the complainanU
informant, there were no requirements to give it again
F and no provision for this need be made in the new
lease deed. The purpose of NOC was clearly
indicated there whereas in the proposed amendment
new implications are being sought to be brought in
which were not contemplated in the agreement dated
1.12.92. It is, however, seen from the agreement dated
G
1.12.92 that the said NOC was issued for the
purpose of enabling the complainanUinformant for
getting the plans and specifications approved. It is
also on record that the NOC was issued in favour of
the complainanUinformant by the respondents and
H
DLF UNIVERSAL LTD. &ANR. v. THE DIRECTOR GENERAL 417
(INVESTIGATION & REGISTRATION) & ANR. [PANTA, J.]
since now the final deed is being proposed to be A
executed between the parties, there should not be
neither any need nor any Justification for incorporating
this in the draft lease deed in the manner indicated
by the complainant/informant. This "No Objection
Certificate" was issued on 1.12. 92 with regard to s
plot No. 3136 measuring 0.20 acres. It is, however,
seen from the record that this "No Objection
Certificate" issued on 1.12.92 by the respondents
was relating to plot No. 3136 measuring 0.20 acres.
The Commission noted that subsequently this plot c
was changed to plot No. 3101 measuring 0.35 acres
after charging extra amount from the complainant/
informant. Therefore, technically the NOC issued on
1.12.92 does not relate to the plot which is proposed
to be transferred to the complainant/ informant. In
0
view of this, we are unable to agree with the
respondents that there is no requirement to give "No
Objection Certificate" for the plot proposed to be
transferred to the complainant/informant now and
therefore, no provision is required in the draft lease
deed. The respondents are, therefore, directed that E
in order to enable the complainant/informant to get
the NOC for the new plot, the provisions of issue of
NOC as incorporated in clause 5(i) and 5(ii) oMhe
agreement dated 1.12.92 may be incorporated in
the lease agreement to be executed now. F
(b) The second issue is with regard to the amendment
in clause 2.3 of the draft agreement in which it has
been suggested by the complainant/informant that
the lessor shall pay to the lessee, the value of the G
said plot along with building and fixtures at the date
of determination of the lease, such value to be
determined by a sole arbitrator agreed upon by both
the parties or by two arbitrators one by each party.
The provision of Arbitration Act, 1940 amended from
H
418 SUPREME COURT REPORTS [2008] 9 S.C.R.
•
A time to time will oe ·referred to at such occasion, if
arises. The respondents have argued that Clause
17 of the agreement dated 1.12.92 provides that on
determination of the lease, the lessee shall hand over
the plot and the building constructed thereon to the
B lessor. The complainant/informant is seeking through
the amendment introduction of an arbitration clause
and handing over the plot along with the building and Jo
fixtures after payment of the value which was not
envisaged in the agreement dated 1.12.92. Since
c Clause 17 of the agreement dated 1.12.92 did not
envisage payment to be made to the lessee for the
constructed building on the plot, no question of
valuation arose. The dispute resolution has been
provided in clause 15 of the draft agreement and
therefore, there is no justification for an arbitration
D
clause in this behalf. We have gone through the
agreement dated 1.12.92 and we find that in clause
25 of that agreement, the dispute resolution is
provided arbitration mechanism and not in the manner
provided in clause 15 of the draft agreement but at
E the same time it is also clear that clause 17 of the
agreement dated 1.12.92 does not envisage any
payment for the constructed building on the plot on
resumption which is covered under clause 11 of the
agreement dated 1.12.92. Therefore, we hold that
F there is no justification in introducing the amendment
to clause 2.3 in the manner suggested by the
complainant/informant but at the same time, clause
15 of the draft agreement need to provide for the
Arbitration clause as existing in the agreement dated
G 1.12.92 and it is directed accordingly.
(c) The complainant has also suggested amendments
to clause 4 of the draft agreement in line with clause
11 (a)(b)(i) and (ii) as appearing in the lease deed
agreement dated 1.12.92 which relates to the period
H
DLF UNIVERSAL LTD. &ANR v. THE DIRECTOR GENERAL 419
(INVESTIGATION & REGISTRATION) & ANR [PANTA, J.]
for the completion of the construction of the building A
and in the event of its failure to construct the school
and other ancillary building, the lessor will have the
right to terminate the agreement to the lease. In the
written arguments, the respondents have stated that
in clause 11 of the agreement dated 1.12.92, the B
proposed lessee was required to complete the
construction within a stipulated period which has
already expired and no request has been made for
extension of time. The proposed lessee has not
i
submitted any building plans to the authority and no c
copy thereof has been sent to the lessor and as such
he is not entitled to any extension of time. The case
of the respondent, therefore, is that since the
agreement dated 1.12.92 has already become
terminable; no further rights can be given to the lessee
0
by including this as appearing in the earlier
agreement. It has also been stated that if the lessee
does not agree to the clauses suggested now in the
draft agreement i.e. clauses 4.1, 4.2 and 4.3, the
respondents would be at liberty to take action for
non-compliance. E
From the perusal of records before us is clear that
clause 4 of the agreement is not on the lines of the
agreement dated 1.12.92. The arguments of the
respondents that the period of 24 months is already F
over and no request was made for extension of time
thereby making the agreement dated 1.12.92 is
terminable is not convincing because the
respondents themselves have stated that they could
not hand over the possession of the land to the lessee G
due to the litigation in this matter. It has also come on
record that the appropriate authority of the Haryana
Government has not sanctioned building plan on the
ground of the respondents having created the third
party or fourth party rights, a matter which has now
H
420 SUPREME COURT REPORTS [2008] 9 S.C.R.
A been settled by the judgment of the Apex Court. There
is no reason therefore, in our opinion for respondents
for not agreeing to this amendment in clause 4, which
should be carried out in the draft lease deed and it
is ordered accordingly.
B (d) Another amendment which has been suggested to
the draft lease deed by the complainant/informant is
with regard to clause 5.1 of the draft lease deed by
which the lessee undertakes "it shall not use the
demised plot or building constructed thereon for any
c purpose other than the activities incidental or ancillary
to the said activities such as residence of teachers,
staff and other persons employed in connection with
the running of the school". The respondents have
opposed this amendment on the ground that the
D existing clause 5.1 of the draft lease deed is based
on the decision of the Hon'ble Supreme Court order
dated 17.2.2003 in terms of the law laid down. We
notice that under clause 5.1, the use of the land has
been specifically indicated and it has been provided
E that the lessee shall use that land strictly in
accordance with the terms and conditions of the
layout plan, building plans, sanctions, approvals etc.
granted by the concerned authorities including but
not limited to Director, Town and Country Planning,
F Haryana, Chandigarh". Keeping in view the ratio of
the judgment of the Hon'ble Supreme Court in which
it has been clearly laid down that the transferees will
also be bound by the terms and conditions of the
licence and the right of control of the State and other
regulatory measures will continue, we find no
G
justification in the amendment as suggested by the
complainant/informant in this clause and it is directed
accordingly."
8. The Commission finally directed the appellants to modify
H the draft lease deed as indicated in Para 7(a) to (d) above and
DLF UNIVERSAL LTD. & ANR. v. THE DIRECTOR GENERAL 421
(INVESTIGATION & REGISTRATION) & ANR. [PANTA, J.]
furnish the final lease deed to the complainant - second re- A
spondent within two weeks and hand over the possession of
the plot for the purpose it was leased out to him within two weeks
of the execution of the draft lease deed by the complainant -
second respondent. The appellants were also directed to file
the affidavit of compliance within eight weeks. B
9. Hence, the appellants by way of this statutory appeal
have challenged the correctness and validity of the impugned
order of the Commission.
10. We have heard the learned counsel for the parties and c
perused the entire material on record.
11. Mr. Ravindra Narain, learned counsel appearing on
behalf of the appellants, in support of the appeal inter alia con-
tended that the Commission has no jurisdiction to direct the
appellants to execute the fresh lease deed on terms and condi- D
tions in modification of the standard draft lease deed to be ex-
ecuted by all such intended lessees and deviation or modifica-
tion of the standard draft lease deed would amount to breach of
specific purpose of the contract or any other contractual matter
regarding implementation of agreement etc. He submitted that E
the allegations made in the complaint by the complainant - sec-
ond respondent on the basis of which directions were issued
by the Commission did not constitute unfair trade practice un-
der Section 36A of the MRTP Act nor do they constitute restric-
tive trade practices under Section 2(o) of the MRTP Act. Ac- F
cording to the learned counsel, the Commission failed to ap-
preciate that after the decision of this Court in DLF Qutab En-
clave Complex Educational Charitable Trust v. State of
Haryana and Others (2003) 5 SCC 622 whereby fourth party
rights are recognised, the appellants have prepared the stan- G
dard form of lease deed for sites/plots earmarked for construc-
tion of schools/community buildings in the complex and draft
lease deed was handed over to the complainant -second re-
spondent but he has raised objections for the purpose of chang-
ing the lease so as to confirm ownership rights upon him and to H
422 SUPREME COURT REPORTS [2008] 9 S.C.R.
A enable him use the plot for residential purpose in the garb of
putting up of school.
12. Mr. A. Mariarputham, learned counsel appearing on
behalf of the first respondent- DG, submitted that by order dated
03'd July, 2006, the Commission in substance directed due corn-
s pliance of its earlier order dated 16th January, 2004 and incor-
poration of certain terms in the fresh lease which are consistent
with the earlier agreement dated 1.12.1992 and also handing
over the possession of the site/plot to the complainant - sec-
ond respondent. It is submitted that as order dated 16th Janu-
C ary, 2004 has not been challenged by the appellants, therefore,
the said order has attain~d finality and, the order now impugned
in this appeal by the api:iellants on the plea raised cannot be
assailed and objected to.
13. Raj Kamal, the complainant - second respondent ap-
0
pearing in person has sought to support the order of the Com-
mission inter alia contending that this Court ordinarily would
not interfere in the well-reasoned and well-merited order of the
Commission which on the face of it cannot be held as perverse
E or illegal. In nutshell, he submits that after prolonged legal battle
with the mighty and strong appellants, he has succeeded in
getting relief; therefore, this Court shall not be obliged to exer-
cise its power under Section 55 of the MRTP Act to interfere
with the findings of fact.
F 14. We have given our thoughtful and anxious consider-
ation to the respective contentions of the learned counsel for
the parties. The submissions of Mr. Ravindra Narain, learned
counsel for the appellants at the first blush appears to be attrac-
tive, but in the facts and circumstances of the present case, we
G are afraid to accept them.
15. It is not in dispute that DLF is a colonizer. It is further
not in dispute that licences had been granted to if for the con-
struction of a colony. It also stands admitted that the schools,
hospitals, community centres and other community buildings
H were required to be constructed in the colony in terms of the
DLF UNIVERSAL LTD. &ANR. v. THE DIRECTOR GENERAL 423
(INVESTIGATION & REGISTRATION) & ANR. [PANTA, J.]
~
licences granted under the State Act. A
16. The complainant- second respondent filed complaint
which was entertained by the Commission in purported exer-
cise of its jurisdiction under Section 2(o) (i) and Section 36A of
the MRTP Act. The said complaint was referred to the first re-
spondent- DG for investigation and on receipt of the PIR sub- B
mitted by the first respondent - DG, notice was issued to the
~
appellants by the Commission on 27.03.1998. In response to
the notice, the appellants submitted their detailed reply.
17. The Statement of Objects and Reasons for the enact- c
ments of MRTP Act is designated to ensure that the operation
of the economic system does not result in the concentration of
economic power to the common detriment and to prohibit such
monopolistic and restrictive trade practices as are prejudicial
to public interest.
D
..... ~ 18. Section 2(o} defines 'Restrictive Trade Practice' to
mean 'a trade which has, or may have the effect of preventing,
distorting or restricting, competition in any manner and in par-
ticular, -
(i) xxx E
(ii) Which tends to bring about manipulation of prices,
or conditions of delivery or to affect the flow of
supplies in the market relating to goods or services
in such manner as to impose on the consumers F
unjustified costs or restrictions."
The definition of Section 2(o) clearly goes to show that it
is exhaustive and not an inclusive one. The decision whether
trade practice is restrictive or not has to be arrived at by apply-
ing the rule of reason and not on the doctrine that any restriction G
as to area or price will per se be a restrictive trade practice.
1
19. Part B of Chapter 5 of the MRTP Act deals with 'Unfair
Trade Practices'. Section 36A defines "unfair trade practice" to
mean "a trade practice w:-;ich, for the purpose of promoting the
H
424 SUPREME COURT REPORTS [2008] 9 S.C.R.
A sale, use or supply of any goods or for the provision of any ser-
vices, [adopts any unfair method or unfair or deceptive practice
including any of the following practices]" as enumerated therein.
20. It was the admitted case of the parties before the Com-
mission that agreement to lease of land bearing site/plot No.
B 3136 admeasuring 0.20 acres for starting a Nursery School for
a consideration of Rs. 4 lakhs was entered into between the
appellants and second respondent on 01.12.1992. The appel- »-
!ants later on issued a letter dated 19.5.1994 making allotment
of 0.35 acres of alternate land bearing site/plot no. 3103 in place
C of plot No. 3136 to the complainant-respondent on payment of
additional charges to the tune of Rs. 2,96,204 on account of
increase in area. The order of the Commission reveals that some
instructions were issued by the Government of Haryana on
25.10.1994 and 13.2.1996 regarding transferring of commu-
D nity sites to third and fourth parties under the following three
heads:- ~
(i) Where the community sites are still in the ownership
of the colonizer.
E (ii) Sites where colonizers have created third party rights
before 7 .8.1991.
(iii) Cases where the licences have created fourth pay
right on community sites.
F 21. An addendum appears to have been issued by the .-
State Government on 13.2.1996 to the instructions dated
25.10.1994 specifying that the time schedule of three years for
the construction of community buildings shall also apply to all
sites where third and fourth party rights have been created be-
G fore 7.8.1991 and the remaining conditions of the instructions
dated 25.10.1994 would continue to apply without any change
therein. The legality and validity of the directions/instructions '
contained in the two letters dated 25.10.1994 and 13.2.1996
was the subject matter of the Civil Writ Petition No. 7245 of
H 1997 filed by the second appellant in the High Court of Punjab
DLF UNIVERSAL LTD. &ANR v. THE DIRECTOR GENERAL 425
(INVESTIGATION & REGISTRATION) & ANR [PANTA, J]
and Haryana. As noticed hereinabove, the writ petition was fi- A
nally dismissed by the High Court on 7.3.2001 which order was
challenged by the aggrieved parties in Civil Appeal Nos. 4908/
2002 along with 4909-11/2002. This Court finally decided the
said appeals vide decision dated 171h February, 2003 titled DLF
Qutab Enclave Complex Educational Charitable Trust v. State B
of Haryana and Others (2003) 5 SCC 622. This Court while
dealing with and construing the various provisions of Haryana
Development and Regulation of Urban Areas Act, 1975 and
Haryana Development and Regulation of Urban Areas Rules,
1976, Transfer of Property Act and Article 300A of the Constitu- c
tion of India besides basic rules on construction of statutes,
held:- [see pp.634-635 paras 36, 37, 38 and 39]
"36. Right of transfer of land is indisputably incidental to
the right of ownership. Such a right can be curtailed or
taken away only by reason of a statute. An embargo upon D ·
the owner of the land to transfer the same in the opinion
of this Court should not be readily inferred. Section
3(3}(a)(iv) of the Act does not expressly impose any
restriction. The same is merely a part of an undertaking.
Assuming that a prohibition to transfer the land can be E
read therein by necessary implication, it is interesting to
note that the consequence of violation of such undertaking
has not been specified. In other words, if a transfer is
made in violation of the undertaking, the statute does not
provide that the same would be illegal or the transferee F
would not derive any title by reason thereof.
37. The right of a transferee, however, would be subject to
the building laws or regulatory statute relating to user of
the property. In terms of the said Act, in the event the
Government takes over the plots, it would be atliberty to G
transfer such land to any person or institution including a
local authority as it may deem fit. Purpose of such a clause,
therefore, is to ensure that schools, hospitals, community
centres and other community buildings are established at
the places reserved therefor in the sanction plan but there H
426 SUPREME COURT REPORTS [2008] 9 S.C.R.
A does not exist any embargo as regards the person or
persons who would run and manage the same.
38. A regulatory Act must be construed having regard to
the purpose it seeks to achieve. The State as a statutory
authority cannot ask for something which is not
B contemplated under the Act. A statute relating to regulation
of user of land must not be construed to be a limitation
prohibiting transfer of land which does not affect its user.
39. The plan provides that schools, hospitals etc. would
c be located at particular sites. When that purpose is
satisfied, the court in the name of interpretation would not
make a further attempt to find out who did so."
22. The Commission, in the light of the above-noted judg-
ment of this Court, disposed of the complaint of the second-
D respondent on 21.8.1991 without going into the merits of the
case. Later on, on a review application filed by the complainant
- second respondent, it was submitted before the Commission
on 4.7.2003 that the appellants were now willing to hand over
the possession of the site/plot to the complainant - second re-
E spondent subject to execution of the fresh lease deed without
modification and deviation of the standard lease deed to be
executed by all such lessors. The complainant - second respon-
dent suggested the above-stated modifications and their incor-
poration in the draft agreement in line with clause 11 (a)(b)(i) of
F the lease deed agreement dated 01.12 .1992. r
23. The Commission disposed of the review application
of the complainant - second respondent by order dated
16.01.2004, which reads as under:-
"The learned counsel for the respondent states that the
G
respondent is willing to execute a fresh lease deed in
favour of the informant. The commercial terms as contained
in the earlier lease deed dated 01.12.1992 shall not
modified and altered and shall remain the same in framing
of the new lease deed which shall be executed between
H
DLF UNIVERSAL LTD. &ANR v. THE DIRECTOR GENERAL 427
(INVESTIGATION & REGISTRATION) &ANR [PANTA, J.]
the parties. The respondent will indicate the amount of A
lease rent which is payable by the informant within one
week. The informant shall pay the said lease rent within
one week thereafter. The informant as well as the
respondent shall sign the modified lease deed and the
possession of the plot shall be handed over to the informant. B
The present review application is disposed of in these
terms and the order passed on 21st August, 2001 is
modified accordingly."
24. Thereafter, another order recorded by the Commis-
sion on 29.07.2005 reads as under:- c
"The learned counsel for the respondent states that they
have already furnished a standard lease draft to the applicant
which he acknowledges to have received. The learned advo-
cate is directed to file the same with the Commission. The ap-
D
plicant is directed to suggest the amendments, if any, he pro-
poses on the draft lease furnished by the informant to him within
four weeks with a copy to the Commission. The respondents
thereafter would prepare a secon.d draft after incorporating nee-
essary changes that they feel would be accommodated in the
agreement. A copy of the 2nct draft shall also be made available E
to the respondent and also to the Commission. Thereafter the
case could be taken for consideration. List on 18.10.2005."
25. The case of the complainant - second respondent
before the Commission was that he has furnished necessary, F
effective and valid suggestions which are to be incorporated in
the fresh lease because of delay in handing over the posses-
sion of the alternate site/plot to him. It is the admitted case that
the appellants have not challenged the order of the Commis-
sion dated 16.01.2004 by which the parties were directed that
G
the commercial terms as contained in the earlier lease deed
1 dated 01.12.1992 shall not be modified and altered and shall
remain the same in framing of the new lease deed which shall
be executed between the parties.
26. Section 13A empowers the Commission to cause in- H
428 SUPREME COURT REPORTS [2008] 9 S.C.R.
A vestigation to find out whether or not orders made by it under
this Act have been complied with or any obligation imposed
upon any person by or under any order made by the Commis-
sion under this Act, authorizes the Director General or any of-
ficer of the Commission to make investigation into the matter
B and the Director General or the officer so authorized, may, for
the purpose of making such investigation, exercise all or any of
the powers conferred on the Director General by Section 11. In
terms of sub-section (2), the Director General , or, as the case
may be, the officer so authorized, shall submit to the Commis-
C sion a report of the investigation to enable the Commission to
take such action in the matter as it may think fit.
27. The Commission under Section 138 is also empow-
ered to exercise the powers, jurisdiction and authority to punish
the person in respect of contempt of itself.
D
28. In the backdrop of the facts of the present case, once
the appellants have accepted the earlier order of the Commis-
sion dated 16.01.2004 which has attained finality, the appel-
lants are left with no other option but to execute a fresh lease
deed with the complainant - second respondent on modified
E terms suggested by him. The order of the Commission impugned
in this appeal does not suffer from any manifest error or perver-
sity or invalidity.
29. In the result, for the above stated reasons, we find no
F merit in this appeal and it is, accordingly, dismissed. In the facts
and circumstances of the case, we leave the parties to bear
their own costs.
30. Time granted by the MRTP Commission, however, shall
be extended by four weeks as prayed.
D.G. Appeal dismissed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Monopolies"Sign in to search