Holding

The MRTP Commission retains jurisdiction over restrictive trade practices that have an effect in India, the anti‑dumping provisions do not oust its power, but it cannot prohibit imports or issue injunctions absent proof of a restrictive practice within India.

Summary

The All India Float Glass Manufacturers Association complained that Indonesian exporters were selling float glass in India at predatory prices, alleging a restrictive trade practice under the Monopolies and Restrictive Trade Practices (MRTP) Act. The MRTP Commission issued an interim injunction restraining the exporters, which was later confirmed. The appellants challenged the Commission's jurisdiction, arguing that anti‑dumping provisions of the Customs Tariff Act ousted the MRTP Commission’s power and that the Act had no extra‑territorial reach. The Supreme Court held that the anti‑dumping regime does not per se oust MRTP jurisdiction and that the MRTP Act applies to any restrictive trade practice that has an effect in India, even if the agreement is made abroad (the "effect doctrine"). However, the Commission cannot stop imports or decide the validity of import policy, and an injunction could be granted only if a restrictive practice in India is proved. Finding no sufficient proof of a restrictive practice and noting that the foreign exporters do not carry on business in India, the Court set aside the Commission’s order. The appeal was allowed and the MRTP Commission’s injunction was vacated.

Issues considered

The MRTP Act's territorial jurisdiction and whether it has extra‑territorial application.
Whether the "effect doctrine" applies to agreements made outside India but having adverse effects in India.
Whether anti‑dumping provisions of the Customs Tariff Act, 1975, impliedly repeal or oust the MRTP Commission's jurisdiction under Sections 33 and 36‑A.
Whether an agreement for import at predatory prices must be registered under Section 33(1)(j) of the MRTP Act.
Whether the MRTP Commission can grant a temporary injunction under Section 12‑A without concrete proof of a restrictive trade practice.

Legislation cited

Code of Civil Procedure, 1908s. Order XXXIX Rule 211
Customs Tariff Act, 1975s. 11, s. 9A, s. 9B, s. 9C
Monopolies and Restrictive Trade Practices Act, 1969s. 12-A, s. 14, s. 2(e), s. 2(o), s. 2(u), s. 33(1)(g), s. 33(1)(j), s. 35, s. 36, s. 37, s. 38

Subjects

Monopolies and Restrictive Trade Practices Actjurisdictionextra‑territorialeffect doctrineanti‑dumpingtemporary injunctionrestrictive trade practicecartelcustoms tariffpredatory pricing

Judgment

M/S. HARIDAS EXPORTS A
v.
ALL INDIA FLOAT GLASS MFRS. ASSOCIATION AND ORS.

JULY 22, 2002
,,
" ' '

[B.N. KIRPAL, CJ. Y.K:·SABHARWAL'AND 't ' ' , B
,.,. . ; .,. · K.G. BALAKRISHNAN, JJ.] ... · 1 "I ,; ,, ·'"'''''
I' l11 ..
' " " ," I• 11 ', , 1' : I• l.
j ., iK· L, }I

Monopolies and Restrictive Trade Practices.Act, 1969-Sections fl2),, r
2(c), 2(o), 2(u), 33(1)(1) and (ja), 36-A and. 37-Foreign Manufactwers ''C
exporting goods into India and selling at predatory pric~omplaint. under.,;
the Act .restrictive trade practice-Jurisdiction of MRTP. Commission--Plea ,
that Commission has no jurisdiction since sections 33(J)(j)and (fa) impliedly_,
repealed by anti-dumping provisions-Held, anti-dumping provisions do not,
per se oust the jurisdiction of Commission--/! can take action in respect of ,
imported goods or otherwise-However it cannot stop import and cannot D
decide validity of the action of Government in permitting import of goods at
predatory price---Customs Tariff Act, 1975-Sections 9-A. to 9-C- Customs
Tariff (Identification, Assessment and Collection of Anti-dumping Duty on '
Dumped Articles and/or Determination of Injury) Rules, 1995. · · .. ,, ·
Ju 1 • I• rl ,I I; I -r I •. •1 ,. I

Sec::on 12-A(l)-Temporary injunction--Grant of-Jurisdiction of., E .
Commission-Held, could be granted on the basis of proof that restrictive
trade practices likely to affect prejudicially the public interest, or interest of
any trader, class of traders or traders generally or bf customers, and i:ot on :
me;e allegation--Merely because an industry will find itself unable to compeie
with imports from outside India can be no ground for exercising jurisdiction F
under the Section. · ,. - ' •
'. ' ... '~ II.

Section 12-A Explanation II-Temporary Injunction-Grant a/-
Procedure for-Commission should normally give notice and hear the
respondents before passing an order ofinjunction---Code o/Civil.Procedure,1 ·
1908-0rder XXXIX Rule 211. • '' ,, , •G
.,. a
" ·11.

Section 37.,-Cartel formation outside India-Export by the cartel _into
India-Jurisdiction of MRTP Commission to interfere. wjt~ .cartel formatio~
Held, is outside the territorial jurisdiction of Commission--But if the cartel
carries out restrictive trade practice in -India then Commission will get
jurisdiction. ' ' 229 ,,. , .• H
230 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A · Docthne- "Effect Doctrine "-Applicability of
Words and Phrases- "goods "-Meaning of in the context of Section
2(e) of Monopolies and Restrictive Trade Practices Act, 1969.

The facts in Civil Appeal Nos. 2330 and 3572 of 2000; 76 of 2002
B and SLP (c) No. 22549 of 2001 are that Respondent No.I, an association
of domestic float glass manufacturers filed a complaint under Section
33(1)(j), Ga) and Section 36-A read with Section 2(o) of Monopolies and
Restrictive Trade Practices Act, 1969 before of Monopolies and Restrictive
Trade· Practices Commission (MRTP Commission) against Indonesian
C companies alleging that they were selling float glass at prices much lower
than their cost of production and thereby were indulging in selling at
predatory prices with an intent to eliminate competition and causing
material injury to the interest of domestic float glass industry; and that
the MRTP Commission passed injunction against the Indonesian
companies restraining them from exporting float glass to India at allegedly
D predatory prices.

C.A. No., 3562 of 2000 is against th'e MRTP Commission's interim
injunction which was subsequently confirmed, directing the appellant, an
export cartel which used to produce natu~al soda and export it in India,
not to indulge in the practice of cartelization by exporting soda ash to India
E in the form of cartel directly or indirectly.

The questions for considerations before this Court were whether
MRTP Act has extra territorial jurisdictions; whether the principle of
"effect doctrine" has any application in India i.e. where action takes place
and agreements are entered into outside India but the resultant adverse
F effect is experienced in India then can the MRTP Commission have any
jurisdiction; whether anti-dumping provisions as provided in Customs
Tariff Act, 1975 and Customs Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995 would oust the jurisdiction of MRTP
G Commission; and whether import by Indian party from foreign country
at predatory prices required the agreement for import to be registered as
per Section 33(1)(.j) of the MRTP Act; and whether under the facts and
circumstances of the case passing of injunction order was called for.

In Civil Appeal No. 3562 of 2000, additional question for
H consideration was whether the Commission had jurisdiction to interfere
HARIDAS EXPORTS 1'. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION 231

with cartel formation; and whether the Commissi.on had jurisdiction to A
grant injunction.

Disposing of the appeals, the Court

HELD: I.I. On the facts of the instant case, impugned order passed
by the MRTP Commission against the Indonesian exporters cannot be B
sustained and is set aside. Anti-dumping provisions do not per se oust the
jurisdiction of the MRTP Commission. MRTP Commission can, inter a/ia
take action· whenever a restrictive trade practice is carried out in India
in respect of imported goods or otherwise. It is only in respect of the Indian
leg of the restrictive trade practice, can an order under Section 12A and/
or Section 37 be passed. Under Section 33 of the Act what can be registered C
is only an agreement in regard to which any party to an agreement carries
on business in India [Section 35 Explanation l J. But this does not mean
that if an agreement is entered into outside India and which results in a
Restrictive Trade Practice in India, the MRTP Commission has no
jurisdiction. The "effect doctrine" apply and Section 2(u) and Section 37 D
gives jurisdiction to the MRTP Commission to pass appropriate orders
qua the Restrictive Trade Practice in India. The MRTP Commission, in
such a case, may not be able to stop import but there can be order
imposing post import restrictions such as, for example, not to sell imported
goods in India in such a manner which will be regarded as a restrictive
trade pracrice under Section 37. [261-F, G, H; 262-A, BJ E
1.2. In Explanation I to Section 35 the use of the words "shall be
deemed to be an agreement within the meaning of this section ........... "and
the time-frame for registration clearly indicates that Section 33 and Section
35 apply only to the Indian agreements or agreements in India and,
therefore, it became necessary to imcorporate Explanation I so as to F
enlarge the ambit and give extra territorial jurisdiction in relation to those
agreements which relate to performance of services in India and any party
to that agreement carries on business in India. [262-C, DJ

1.3. Reading Sections 1(2), 2(c), 14 and Explanation I to Section 35 G
of Monopolies and Restrictive Trade Practices Act, 1969 together can leave
no manner of doubt that the Act has no extra territorial operation. The
present case is concerned with float glass, which was sought to be imported
into India. For the purpose of the Act, it is only the goods imported into
India which will fall within the definition of the word "goods" in Section
2(e). As such for the Commission to exercise any jurisdiction goods must H
,,.,, 11 • 1 " 1, 1 • ~UP.RE~.E. COURT, REPORTS. {2002] SUPP. I S.C.R.

A'\ bM~R~.':·~.IJl~hi~i:~J.'!'P.Pr,t~.~.}~tq ~n~!~··.~~ .l~~g as. the import has not_ taken,
place and the goods are merely intended for export to Indi_a the same .will
not fall within the definition of the word "goods" in Section 2(e).
•, · ":1,,. ;)•···: ·(249-H; 250-B, CJ

. h'Jtttf4/Jfhe lrestficti~e~tfade 'practi~e 1 'may -<u"rtiay not be directly
Ba connectttd"with 'of1>e'.'tlie ies·u1t of any ·agreement between the parties in'·
India!'A'.fiy·act wiiicli falls 1Uffder the 'Category ot restrictive trade practice
1

can'· be irivestigatea into 'and'orders passed under Section 27(1). Sections'.
2(o}'and i(u)'ao riot speCificiillfiridicate thatttie·practice should be carried
in
on•o'nly1bya1pefscirf (){'person's India. if the ttade practice is such that
C'J itbe~o~~~-~r~~~~!~ted t~~~e.:~~a,ct!c,e ~n In~~a.a_s c~n~~mplated by Section '
2(o);' then-i acbon·<:an be talien under Section 37(1)'m respect of such a
trade"practice?l253-'A, ·n1 1 J1 !J:''l 1 " ; "~: ;. r ' 1 J " I • ' '

OB'Jm lu!t ~·Job 1idt Jul!.: I no-.:: .1~,· 1 -:f ,., J.

G ni1~s:1Under Sedion :33(·1)(j) 1of the Aet;·any'agreemenf to sell goods' 1
atisuch ·prices its would iliave'-the 'effect of eliminating competition or a•·
DJ coml)etitor is'-regardedas·an'a'greement relating to ·an·agreement relating·
to•restrictive·.trade,practice and shall be subject to registration. The Act -
nowhere states 1't-hatithis agreement should be' only iri India or between
Indfan'·parties.·11n effect;·this Section recognize's 'effeet doctrine', nameiy;- •
where·.an·agreement r-Csults 'in sale of goods at ·such prices which would
E _havelthe ·effect of. eliminating !Competition or a competifor. In the very
·l nature of things, die -safo l()f, goods keeping ·in mind the definition of the·
word "goods" in Section 2(e) must be of goods imported into lndia,.in the
'lcf 1_,1•.rft~'"' 1.h"ll~/I ~Hf~ h) ~~., ~111 ~~. 1~(1 J•~,, 1.J., ._,,i.~',1 ;• , • ;
case hke the' present. Thus, the agreement requmng registration must be
in°fespecn>f·g86ai~it~/. thei~ 1 illl'po·rfint<nridia:'(253-G, u; 254-A, 8] ,!,
noib'.lfl bns c..1. nniJJ'Jt'. h:rl1 ~·ii.r: ,. , , 1 1.:. ·., · - _. -, 1 · ' " - , ·. I'

F 1 ~~ :~_.6~~~h(''.~!rf~f.:~oft~!?.~'.'.,,wo?1~,~~"ap~licabie o?ly in 'reiation to ;
0

those gooils 'Yhicli are ~ithin 'the territory of India before its sale referred
~..,,... .. 11 ., ,~• nn~· ~1.·- ,., ,~ •• q.l~ 1 ~"4'•':ilJ~
r ll -r ' •• 1 1 • ~
tom Section 33(1)(j) oftlkAct. An agreement, which results in' sale outside
India a'ntfih~'expb';i'~rthe.gol)iJ's to Intlia, e~en iftha t sale is at predatory
1

prices, would not ,..fall}~thi n the' ambit ofSection 33(1j(j) of the Act. It is
1

a subsequent agreement of sale of the imported goods, if it has the effect
Guor'"eli~in~tln~ 1
'c~. ~p~titi"o~.·~~
5-'f'A~l llb-J 1-- .J'l_.U~ "'-\i'
~ 'co~p~tltor, which would .be .registrable
,,..1)n t_.l:J · -
.& .1 • •

uq,~H ~.~SH~rr,~~,q~9).,~f1 t~~ 1-f~: ~ve.n)f1 :ii;i_agre.ement is exe~ute~ outside
India or the parties
U:.J..1'lutluu .._,,~.T i11~uO.-:
\.'f
to the agreement
~1 ·•a1•
r....i+1·.
are not in India and agreement may
."< ·.,. ' - 1 • -

no~ 1 ~ptff.~'~;~~!}N~>t~Jl~d~f. 1 S~SMo!1 ~3.,_ peing an outside India agreement
nevertheless,
UiJU)~t:...Hl
,if any, restrictive trade practice, as a consequence of any such
euu . . . . .:4 US\JTf'iiHIUl"f Jl .. l l . ,.,

an outside agreement, is carried out in India then the Commission shall
H j { Jt:i.ttn u\HJ ''U'·~ tL"~ -i~n. a
1"';1J\Jti"'4 · •. ,, · : ,
HARIDAS EXPORTS 1•. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION 233

have jurisdiction under Section 37(1) in respect of that restrictive trade A
practice if it comes to the conclusion that the same is prejudicial to the
public interest. (254-C, D, E, F]

I. 7. ,It is possible that persons outside India indulge in such trade
practices, not necessarily restricted to the effectuation of prices within
India, which have the effect of preventing distorting or restricting B
competition in India or gives rise to a restrictive trade practice within India
then in respect of that restrictive trade practice, MRTP Commission will ·
have jurisdiction. If the effect of restrictive trade practices came to be felt
in India because of a part of the trade practice being implemented here
the MRTP Commission would have jurisdiction. This "effects doctrine" C
will clothe the MRTP Commission with jurisdiction to pass an appropriate
order even though a transaction, for example, which results in exporting
goods to India at predatory price, which was in effect a restrictive trade
practice, had been carried out outside the territory of India if the effect
of that had resulted in a restrictive trade practice in India. If power is
not given to the MRTP Commission to have jurisdiction with regard to D
that part of trade practice in India which is restri~tive in nature then it
will mean that persons outside India can continu~ to indulge in such
practices whose adverse effect is felt in India with impugnity. A
competition law like the MRTP Act is a mechanism to counter cross border
economic terrorism. Therefore, even though such an a~reement may enter . E,
into outside the territorial jurisdiction of the Commission but if it results
in a restrictive trade practice in India then the Commission will have
jurisdiction under Section 37 to pass appropriate orders in respect of such
restrictive trade practice. (254-G, H; 255-A-C] ·

1.8. In the instant case no challenge to the import policy allowing F
import of float glass and even if such a challenge was to be there it would
hardly succeed. The grievance of the respondents is that import is being
made at predatory prices. The challenge is to the actual import. But
allowing such a challenge will amount 'fo giving the MRTP Commission
jurisdiction to adjudicate upon the legal validity of the provisions relating G
to import, which jurisdiction the Co'!lmission does not have. It is not a
court with power of judicial review over legislative action. Therefore, it
would have no jurisdiction to decide whether the action of the G?vern~ent
in permitting import of float glass even at predatory prices is valid or not.
The Commission cannotI prohibit import, its jurisdiction
.
commences afterI
,.
import is completed and any restrictive trade practice takes place. The H
234 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R.

A rate of import duty which is imposed is a legislative act and is thus not
amenable to the jurisdiction of the MRTP Commission. (255-F, G, H; 256-BJ

2.1. The jurisdiction of the MRTP Commission, is not outsted by the
Anti-dumping provisions in the Customs Act. The two operate in different
fields and have different purpose. (255-D) ·
B
2.2. The levy or non-levy of anti-dumping or other duty being a
legislative act pursuant to the exercise of powers under the Customs Tariff
• can also not be a subject-matter of judicial review by the MRTP
Act
<Eommission. The two statutes and regimes op·erate in different and distinct
C spheres and there is no conflict between the two regimes/statutes. Hence
t.Jie question of implied repeal of the provisions of Section 33(1)(j) of the
iftRTP Act, 1969 on account of the provisions of Section 9A of the Customs
Tariff Act, 1975 does not arise. (256-E; 258-B)

2.3. On the facts of this case, it cannot be said that import by the
D Indian party from Indonesia at predatory prices required the agreement
for import to be registered as per Section 33(1)(j) of the Act. Under this
provision, there must be an agreement between the foreign seller and the
Indian importer to sell goods at such prices as would have the effect of
eliminating competition of a competitor, i.e., here the Indian industry. It
is only if there is an agreement between the Indian importer and the
E foreign seller which has such an effect that the production in India of float
glass by efficient Indian industry would have to stop and such stoppage is
considered prejudicial to the public interest, can an order under.Section
12-A or Section 37 be passed. [258-F, G, H; 259-A)

2.4. Import of material at prices lower than prevailing in India
F cannot per se be regarded as being prejudicial to the public interest. The
availability of goods outside India at prices lower than those which are
indigenously produced would encourage competition amongst the Indian
industry and would not per se result in eliminating the competitor.
[259-C, DJ
G 3.1. It is while dealing with a complaint relating to restrictive trade
practice that the MRTP Commission has the jurisdiction to grant
temporary injunction under Section 12-A(I). It is only on the basis of
proof; and not mere allegation, and on the basis of an inquiry before the
Commission that any trader or class of traders is carrying on a restrictive
H trade practice which is likely to affect prejudicially the public interest or
HARIDAS EXPORTS 1•. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION 235
the interest of any trader, class of traders or traders generally or of A
consumers that the Commission would have jurisdiction to grant a
temporary injunction restraining any undertaking a person from carrying
on any restrictive trade practice. While the Commission has power to grant
ex-parte temporary injunction, but in view of Explanation II to Section
12-A, whereby the provisions of Rule 2-A of Order XXXIX CPC made B
applicable, for grant of temporary injunction the Commission normally
ought to give notice and hear the respondents before passing an order of
injunction. Merely. because an industry will find itself unable to be able
to complete with imports from outside can be of no ground for exercising
jurisdiction under Section 12-A. It is only if the trade practice which is
being impugned is such that would fall within the four corners of Section C
2(o), which defines restrictive trade practice, can the Commission grant
an injunction. [259-D, E, F, G]

3.2. The facts on record do not indicate any justification for any
interim order being passed in the present case. Furthermore, the order
passed against the foreign manufacturers of float glass, who do not carry D
on business in India is clearly contrary to the provisions of Section 14 of
the Act and, as such, cannot be sustained. [260-A, BJ

4.1. The competition law in the form of MRTP as it stands today
does not contain any provision, which can give it jurisdiction to interfere
merely with cartel formation. Formation of cartel which takes place E
outside India is outside the territorial jurisdiction of the MRTP. The Indian
importer obtaining goods at a low price does not contravene any law. He
has obtained a good bargain. [267-E]

4.2. If the cartel carries out restrictive trade practice in India or it's F
actions have the effect of a restrictive trade practice being carried out in
India, then the MRTP Commission will get jurisdiction to act under
Section 37(1) of the MRTP Act. [267-FJ

5. In the instant case, no case had been made out by the respondents
for the grant of injunction against the appellant. The injunction issued G
against the appellant was not only against the provisions of Section 14 of
the Act but even on facts as alleged no case had really been made out for
any order under Section 12-A or Section 37 of the Act. [267-H; 268-A]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2330 of
2002. H
236'.:. . ,.,. •!·''' SBPREME COUR'f REPORTS·[2002}'SUPP. l S.C.R.

Al\ • 0 "\from1·thedudginent ·and OrMr ldatedi'2 n2!2000• of the' 'M'.RFf.P) I
Commission, New1Delhi ·in R.T.P.E: No.•'212Hof"l998!1t lt..1!1 n ;mu""'J'J
Hnl '>"\u·; m1nl ''"'1'Jq H ~·1i1!U «.. :mu '"'' ,!.luim.;il"'J1 nulJ'lnu[m nL-,1>CJi-"1l
luing 11J n. roq tlifl n• '""' ·r 11111 ) ·;W,ITrH. ;.f . ni 1- ~nq ·,!Hnt 'Hihhtl'-•;1 tr~ no
rwif'.l'I~ t1l II r10h11rrn.h•1 l 'i11 ".,• 1 ni lud .noihnuini n1noc1m ..! '!T''t>n· •. '.I
'Jtsr~·~:!lj 0J-: ,3 3~21~.~l91q'; ~P,, }.2:.3 ~(t9.0?.,aRR,1~?.~f,l1°.f,J,09R:.~ ,,J ;: J~-r. t
BJ' . .
{llll i>. chiHah1~a¥arti~1:ii'..NaH~an',1 ibs~1Pii. VeiiabJiiy;'bip~~k1r:~: a~~!~:;
1 1
·,
Aili1 ·13_tbivah, iGol:iafslioram ani~ili: Vfkas rvi:'bhta; :r\.td~l~cih M~1hoti-a, oiije~t1~
1 1 1 1 1

"'n" ·.\ · .. 1r1 ..... 1i..,1.,1·"il n, ..... ,1.>-1··v ~-11 '.f"•':"rrl •!··~....., .J'.•·<l"}·.'Jl'll
Titus,' Ms. K1ran Bh~rdWaJ, Satya Mitra, Ms. Pnya Degde, Soh1l Dutt, SanJay
.,. "·"' .. • -_,,-, h · ·-·:;o lll ',. ·r! ~'.t' .. :1j,l1 ·1 fi""·~I, • '''"'Jnl 1'.JIU "l~i<t"l' 'I ul
R: Hegde, Ramesh Smgli, R.N. KaranJawala, Gourab Banerjee, Ms. Ruoy .
Singh 11Aiiula!'Ms~ i>HoJa ·dJJiaih;·'M~. 1M~iliAar v~~t1xit' 1 M's~: ·M:~~'ik' t
1
·s'if
C) Kai-aliJ~~ia, ·~s~ ~s:1s!lio'fr, stiMinJ~rk, 't~ siirii~1is ·M:aft6y?1a'Y~rit'Melit~:'.d
1 1 1

Klishnan"Veilugopa1:and Ni5: P.'s: s1lrofi toV ih~ 1 iP'Pe~iirig'p~?Heg~·" ·~ ·: "i!:
! .) ,'i .~ .t.-l·<::-..1 .• ulJ'.)OUllll nu
Th~ Judgment of the Court was deliven;d by . .. . _ ~
#I· 1i!J11t Jo!l n!J lno·.;~n .1n tJ:JGl -Jd l .-.l
[illl iol r::oil1n1l1L'.b• ·1.0.

-.:ifrKIRPAL; C.J:;'Civil Appeal· Nos!'~2330·or:iooo;13572"6r 2000, 76:0( 11
D:12002 and•S.l.J.·P/(C) No; 22549•of200l:»lrn .. m ngi·~1nl ;ii! ''l'i11!i" :n·"~l1
'•o ,.1 uoth?l lo 1,ior•i ·, " ' 'Hfl .•! 111ntuu'l :·\i;'J!'.: d 1>1bnl ni n·Jfll•Uti 11•1
Leave granted. I(; . / -•M' 1
.lt .. ni .t•,,·1~ "<1 11rn riwi ,1bt.1 t!i .briu l"JJ.. #1t

( 8 uTh~se"appeals are; :against ,orders1 passed by. itherMonopolies :.and

Re.strictive .Trade Practices Commission·(hereinafter referred.to as the ;'MRTPJb
E ·J Corpmjssjon'.'.) whereby 1 Indones·i~nrmanufacturers. of1 fl~at1glass; had been r.,
re~tr:;;ii_ned)from 1 exporting 1 the, same.to J~ndia,at allegedly1predatory .prices.- 1uo
'.IH .'tllli (ti~ ~wt 14"\l!H"I Jor, 1uli ·r•iiq rrn! h 1& ~boo~ :-niniiiJrlo ~'J1,oqmt
Respondent No. l is an associa~iC?n- 19[1 ~.9f~bg}.~~s.>lill~n!!f~~Wr_~~~)n.,11
India. During March-April, 1998, complaints were made by the said respondent
F . to ,the -.Customs ,Departmenti) alleging that-the tlndonesiammanufactufors of
1 flo_a~ .gl(ls_s.,,jn ass!:>ciation;with· ~ndian 1importers .were .allegedly.lindulging• in·, :i
1
hel!YYi:l!nder:-invoicing. 0 lhe 1respondentsJ were, rhowever~l inforified1 by, then l
Customs Department in Calcutta that: iftheY. had·.ahy genuine grievance;1the1?
same could be made before the Designated Authority, Ministry of Commerce
dealingi with -anti!dun'iping Jcomplainis: On J26th I May;' "1998/llie' resp'on~ent
G i _No~ l presenteg'a 'complaint before.the Designated Authority~ This coriipl~fof 111
appears toihave' been fiied before 'the...,Ariti~D-tiriipirig AutlioritY aiid tli~ safi:ie~i"
was possibly{noe.pursuea by the complainant: j • i ' " • ''llll n 11 ;n ri • ud f'I/.. " : 1
j.\-:~.)!: :H--,;:.[ .1·1-' .1011. "f. 11;.i;,·,~1" f.r;,· 110in,~ ,.,b:at 1-JL~" zn1;
On l 0th September, 1998, the respondent No. l filed a complaint before
the MRTP Commission under Section 33(l)G), ·Qa) and .Seetion 36A' read
H ~with Section 2(o) of the Monopolies and Restrictive Trade Practices Ac{ri'.:
HARIPAS EXPORTS '" ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL CJ.] 23 7

1969 (hereinafter referred to as the. 'MRTP Act') against three Indonesian, A
companies alleging that they were manufacturing float glass and were. selling
the same at predatory prices in.· India, and were hence resorting·to restrictive
and unfair trade practices. In the complaint, it was stated that the float glass
of Indonesian origin was being exported into India at the CIF price of US$
155. to 180 PMT. At this price, some float glass had be~n .shipped into India !B
during the penod December, 1997, to June, 1998. It was alleged that these
sale prices were predatory prices as they were ·1ess than not only the· cost of
production for the product in Indonesia but also the variable cost of production
of the product. The complainant gave figure indicating the estimated cost of
float glass internationally as well as the cost of production· of float glass in
India with a view to demonstrate that the Indian manufacturers of float glass C
would not be able to compete with the price at which the' Indonesian
manufacturers were presently selling or intending to seil to Indian consumers.
On this basis, it was contended that the sale of float glass by the Indonesian
manufacturers at the said price of US$ ·l 55 to I 80 PMT will restrict, distort
and prevent competition by pricing out Indian producers from the market.
· This would result in lowering the production of the Indian industry and the · D
consequent idle capacity and losses would force the industry to become sick
which would lead to its closure whkh would have a direct impact on ihe
employment in the industry. ·

" In response to the notice issued to the Indonesian companies, Mis. P.T. E
Mulia Industries (respondent No. 2 in this appeal) wrote a letter to the MRTP
Commission stating that it had never in the past exported float glass to India.
The other two respondents did not send any reply to the Commission. The
appellant, however, which is the Indian importer of the float glass from
Indonesia had filed a caveat before the Commission. It also filed a reply
refuting the allegations of the respondent and it was the contention of the F
appellant that respondent No. I was a cartel of Indian manufacturers of float 0

glass which was, in fact, exporting out of India at prices ·far lower than the ir
own cost of production in India. It was also contended by the appellant
herein that the cost of production of float glass was lower in Indonesia than
in India and float glass was not being exported to India at predatory prices. G
The application under Section 12-A for interim injunction was heard by
the Chairman of the Commission and a second Member. There was a difference
of opinion amongst them. While the Chairman vide order dated 18th January,
1999, allowed the application and restrained the Indonesian companies from
exporting to India their float glass production at 'predatory prices, Dr. S. H
23.8 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

'A. Chakravarthy, the second Member dismissed the application, inter alia, holding
that there was no evidence to substantiate the plea of predatory pricing at this
stage. By order dated 9th February, 2000, the third Member who heard the
case concurred with the view taken by the Chairman and passed an order of
injunction against the Indonesian companies.

B While Civil Appeal No. 2330 of 2000 is filed by the Indian importer
who was the caveator before the Commission, Civil Appeal No. 3572 of
2000 has been filed by P.T. Muliaglass which is the subsidiary of P.T. Mulia ·
Industrindo. It is the case of P.T. Muliaglass that the holding company does
not carry out any manufacturing operations and that is why it had informed
C the MRTP Commission that it was not engaged in the export of float glass
to India and, therefore, it did not appear before the MRTP Commission. P.T.
Mulia Glass which, in fact, manufacturers the float glass being aggrieved by
the order of the MRTP Commission has filed the appeal, inter alia, contending
that it is not exporting float glass to India at predatory prices.

D On behalf of the appellant, it was submitted that the MRTP Commission
had no jurisdiction to entertain and adjudicate upon the complaint which was
made by the respondents. It was submitted that the essence of the complaint
of the respondents before the MRTP Commission was of injury to the domestic
industry on account of low prices by the Indonesian manufacturers which is
a dispute under Anti-Dumping law and does not fall within the jurisdiction
E of MRTP Commission. It was submitted that the complaint which was made
against the Indonesian exporters was one essentially of dumping as it had
been contended that the Indonesian exporters were exporting float glass at
very low prices which were predatory in nature and the intention was to
cause injury to the domestic industry.
F
It was submitted that Article 18.1 of the WTO Agreement on
Implementation of Article VI of GA TT, 1994, provides that "no specific
action against dumping of exports from another Member can be taken except
in accordance with the provisions of GATT, 1994 as interpreted by this
Agreement". The remedy against the practice of"dumping"/export of goods
G at "predatory prices" has been expressly agreed upon internationally under
the General Agreement on Tariffs and Trade (Gatt) to which India is a
signatory. The Agreement deals with anti-dumping duties and provides
mechanism to implement it.

In pursuance of the GA TT, 1994, the Parliament for the first time
H inserted provisions 9A to 9C in the Customs Tariff Act vide the Customs
HARIDAS EXPORTS i•. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION {B.N. KIRPALCJ.J 239

Tariff (Amendment) Act, 1995, No. 6 of 1995 which replaced the provisions A
of sections 9, 9A and 9B earlier inserted in the Customs Tariff Act under Act
No. 52 of 1982. The Statement of Objects and Reasons to the Bill clearly
states that the Bill seeks to amend the Custom Tariff Act to bring the provisions
of the Custom Tariff Act in conformity with the provisions of Article VI of
the Gatt 1994, and the agreements on subsidies and countervailing measures. B
Even the preamble of the Customs Tariff (Amendment) Act, 1995, No. 6 of
1995 also provides that the provisions of sections 9, 9A and 9B of the
Customs Tariff Act, I 975, have been replaced by the new sections 9, 9A and
9B to reflect the changes in the domestic law, consequent upon coming into
effect the Agreement on Anti-dumping (i.e. an Agreement on implementation
of Article VI of the GATT 1994)..... under the Uruguay Round on 1st January, C
1995.

Se::ti:n 9A, inter alia, provides that where any article is exported from
any country or territory to India at less that its normal value, then, upon the
importation of such article into India, the Central Government may, by
notification in the Official Gazette, impose an anti-dumping duty not exceeding D
the margin of dumping in relation to such article. The said section indicates
how the normal value and the margin of dumping is to be ascertained. Section
9B contains provisions which provide for exemption from levy under Section
9 or Section 9A in certain cases while Section 9C gives the right of appeal
against the order of determination or review thereof regarding the existence, E
degree and effect of any subsidy or dumping in relation to import of any
article. The Act contemplates the Designated Authority, which is appointed
under it's provisions, to conduct a detailed investigation into the allegation
of dumping of articles before it determines the normal value, export price and
the margin of dumping. It is important to note that in undertaking this exercise,
the Government or the foreign country exporting the article is required to be F
informed. By notification dated lst January, 1995, Anti-Dumping Duty Rules
were framed. Rule 14 sets out circumstances under which the designated
authority may terminate an investigation. In Rule 14(d), there is a de-minimus
requirement that is to say the volume of the dumped imports, actual or
potential, should account for not less than 3% of the imports of the like G
product. If the imports are below this level, the authority shall terminate the
investigation immediately. It is the case of the appellant that the float glass
which was imported from Indonesia was much less than 3%.

The learned counsel for the appellants contended that the respondents
have in the complaint filed by them with the MRTP Commission under the H
l'240 ::·"' . I 'l· SUPREME'COURT'REPORTS [2002] SUPP. rs:c.R.
'A ... MRTP'Act'soughnedressal·oftheir alleged grievance tliat'cerfain Indonesian
I companies a~e selling· float glass at-~prices ".ffiuch lower tnan'',theif• cost' of
. productio'n and are thereby allegedly' indulging in predator/p'ricing with/an
, alleged ·intent to ·eliminate competition· arid causinglmaterial· iitjufy to' the
I ·interest.of domestic float·glass industrY. For redressaf of the 'alleged grievance

;B J.of the respondents; a specific remedy has'been providecl'linder seetioris 9A
to ·9erof the Customs :fariff Act 'and the'1Anti-duinping 'Ducy- Rules·.· The
.provisions ofsectioris 9Ato 9C introduced•undei"the'Customs TariffA~t'artd
I. the Anti-dumping Duty Rules provide for a complete anCl exhaustive niadiiiiety
•. to 1prevcnt dumping .of goods into Iridia'including export:of 1into India goods
'at 'predatory' price: causing "injury'.' to domestic industry' 'caU'sing ~threat; of T

· C injuryAo domestic industry by-waylofjimpositiori 'of anti-dumping duty 'on
import of such goods. The expression "injury" has been defined under Article
3 of the Agreement on Anti-Dumping as under: _
11.o·n 1 ~...,nnr; ' . . - ·. .d,,. ·. N J• .'! <.·... lr1 /fJ1fl ·. ~ ' 1 1 -l .·\· - "ll. ~. ,;
,1L i". 1.i"Injury shall ,unless otherwise .specified, •be taken to •mean ·material
rl ' ,jnjury to.a.domestic industry; threat of material injury to·a 'domestic
(D ::r·' _,; industryfor material retardati~n of1.the 1establishment of such'•an
·, ., · L -,.industry,:and shall be interpreted•in accordance With the provisions'bf
this Article.';... , , . • '':J i1J:._, ~(I fl·~'J ~. ·.,,~ j' f · •_, L ' I 'r· ·, J' ,rjt N ..

11 i; :/_,/ ·r·.~L••J.I 1 , _.1 ,..,T,1 ·t •.. ~!~; ,r.~ ~L' 1v1r. (tJ, 1 ' ' ""· h, L11r· ( · 1.r~.'iJ HP
Ir;,.",. T~u?, i~ :w,~~' su,bmitted, t~e ~e!ll~dy, for.~l'l!P.o.sition _ofm.1ti-4umping duty
h,~~. ,~e.~It ~~~viq7~ ..~9 ,~s.,t~ pr~v~nt ,qi,st,9.J1iC!!1;,,,impaiin.i:ept ~pd restrictiOI1:.,0f
E competition
I 'T _
, · , Jr l'
in Udomestic industry. IA• specific.
1 ~ r r • '
authority, i.e.,
I Ir · • •
the .Designated
• · .,
1 • -I ' 1J l.• • . ~~ ~ ~

l~p!~9ri,ty ~!}. :.~nti-?u!1.1P.l~g h_~s 1 8e_i;p. .~?~S~!tP!~4. un9~r th.t; ,AJ]thdumping
Duty Rules
~.•~11. I . .;{·
framed1l'•,.11.1
under.....the Customs Tariff Act which has .the powers to
i· . J, ·"'-'ll·>J.ILJ •. -'·~~I"'" •• , . • - .. . . - -

~?.?~~cUnvestigat!op ,ul?~n,.~e.ceipt, of a cqp]pl~int from ~he d<?mest_ic ~ndustry
~~ suo f!10f~ ~el~ting1~p,,d,u_mP,~ng ~f g??'1~,p~ a foreig~ cpmpany ,to identify
p !h~,rxis~enc;~, ~egr:~ ,anc:f 1 e£.f~ct 0~31~y all~g~d.dumping.il). rela~ionto _import
p~ ~.1.1~ .a.i:t~cle ~H4 1inj.~ry to 40m~~~s, 1 ind,i,i~try:,~hr~a~·<?f: !njµry ,to d9mestic
i~qu~try~,~~rnri~~. r~!ar~I,~ti~n t9,~~~~Rqs9~e~!(of d_om~sti~ i!J..d1:1.st_ry,.etc .. a.nd
toi.,J recommend
I I l'
• h .(I
to the1 Central
0
.J ' •
Government the
~ 1 ... .. '
amount of anti- dumping duty
'j ' I I l l l\J•.1 ... ...t~ "'Ii.. . • , ,. . .

to
'(
remove
I- .t.I
the
' i if i
injury to the domestic industry,
~A '
based on which the Central
I ' I .~ I ' t • j .I 4 'J ' ,, , - . • " . I. • . . .

~9;ve,r;n!11,e?t. ~mp9.~es _p~ovisional ?.!. :?~<!l .~ti 7 d~rnP,ii:tg .41!ty .up,on importa~_io~
G ?f,th~ c~n.~e~~~ go~ds into I~dia as Hre~pl,t .o,f,whi~h the 1c9st ,for:the Jn_diat?-
i~~ort.e,r .fo~.~~7. i~P9f1f?,goods ~nd the. aff\cl~s becowe_s the sa!'tle .a.s that.of
fair value of such go~ds .~i;td articles in th~ 1 d'!rne~_~ic m~r~e.t. The obje<;:~ of
the provisions of the Customs Tariff Act and the Anti- dumping Duty rules
~s th~s to p~event distortion; impairment and restriction·of competition caused
H byexport of goods to India at dumped/predatory price. In view of the aforesaid;
HARIDAS EXPORTS i'. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL C J.J 241

the finding of the MRTP Commission that as the provisions of the Customs A
Tariff Act only provide for imposition of custom duties, they have had no
relevance for overriding the provisions of the MRTP Act, is erroneous, was
the submission. It is also submitted that the object of the MRTP Act on the
other hand generally is to check concentration of economic power to the
common detriment, to control monopolies and to prohibit monopolistic and B
restrictive trade practices and for matters connected therewith or incidental
thereto. In view of the MRTP Act and the provisions of the Customs Tariff
Act cover the.same subject- matter as the scope and object of both the Acts
is same although the MRTP Act is a general Act and the Customs Tariff Act
is a special Act for the redressal of grievance of the respondents.

It was urged that where a particular subject has received special treatment
c
under specific provisions/statute, it will exclude the applicability of the general
provision (s) which might otherwise cover the said topic. Therefore, applying
this well-settled law, the general provisions of the MRTP Act will be excluded
in relation to any grievance and complaint pertaining to dumping/exporting
of goods at predatory price from foreign country in to India, with an intent D
to cause injury to the domestic industry which is specifically covered under
the provisions of Sections 9A, 9 B and 9C of the Customs Tariff Act and the
Anti-dumping Duty Rules framed thereunder. Therefore, Sections 9 A to 9C
of the Customs Tariff Act exclude the jurisdiction of the MRTP Commission
in such matters. The appellants rely on the following decisions of the Hon'ble E
Supreme Court which unequivocally lays down and reiterates the above
mentioned principle:

(i) Belsund Sugar Co. Ltd. v. State of Bihar and Ors., [1999] 9 SCC
620, at 639, 641, 648, 649 and 650.
(ii) Jogendra Lal Saha v. State of Bihar and Ors., (1991] Supp. 2 F
sec 624, at 657.
(iii) life Insurance Corporation of India v. D.J Bahadur and Ors.,
(1981] 1 sec 315, at 349, 350-354
(iv) Damji Valji Shah and Anr. v. Life Insurance Corporation of
India and Ors., (1965] 3 SCR 665, at 673. G
(v) Gobind Sugar Mills ltd. v. State of Bihar and Ors., [1999] 7
sec 76, at 80-82.
(vi) Shriram Mandir Sansthan v. Vatsa/abai and Ors., (1999] l SCC
657, at 661 and 662. H
242 SUPREME COURT REPORTS [2002) SUPP. l S.C.R.

A On behalf of the respondents, it was submitted that the provisions of
the Customs Tariff Act, 1975 relation to imposition of anti-dumping duties
do not in any way oust the jurisdiction of the MRTP Commission over the
restrictive trade practice of predatory pricing.· 1t was contended that the two
statutes occupied different fields and were distinct in their scope and
applicability. There was no overlap or conflict between the statutes and hence
B the question of repeal, whether implied or express, did not arise. The Customs
Tariff Act is concerned with the imposition of duties of custom. 'Imposition
of customs duty is the policy decision of the Government in the realm of
taxation. Section 9A read with the Rules provide for the determination of
certain objective criteria on the basis of which the decision of the Central
C Government to levy anti damping duty can be based. The Customs Tariff Act
does not confer any right .on any individual or Association and does not
provide for any remedy to them. Only the domestic industry can approach
the Designated Authority.

It was .further contended that whereas predatory pricing enquiries are
D concerned with sales below the cost of production of the predator with the
intention to eliminate competition, anti- dumping investigations are triggered
when an exporter sells his products in the export market at a price below that
of the price at which he sells his product in the country of origin. In anti-
dumping investigations, therefore the focus is on sale price in the country of
E origin as opposed to. the cost of production.

According to the respondents, the MRTP Act provides for a judicial
remedy for specified practices done individuanylor collectively. An individual
consumer or a trade association or a competitor can approach the MRTP
Commission. There is a right of appeal to the Supreme Court against the
F orders passed by the ·MRTP Commission. Only domestic industry has the
right to initiate antidumping proceeding. Thus the scope and operation of the
Acts mentioned above was different. In particular, the ingredients of
transactions which attract operation of the MRTP Act and the Customs Tariff
Act are different and the question of the superseding the other as a special
G law does not arise. They operate in different fields and are subject to different
considerations. Hence, in the absence of any conflict or overlap between the
two statutes, the question of the Customs Tariff Act provisions impliedly
repealing the provisions of Section 33 (l)G) of the MRTP Act do not arise,
was the submission.

H While adopting the arguments of the other counsel, Shri Anil B. Divan,
HARIDAS EXPORTS i·. ALL INDIA FLOAT GLASS MFRS.ASSOCIATION(B.N. KIRPALCJ.] 243

Senior Advocate on behalf of the respondent No. I referred to Sections 2(e ), A
2(u), 13 and 14 of the Act. He submitted that Section 2(u)(i) which defines"
trade practice" covers a chain of events/series of transactions that affect the
price charged or methods of trading. Thus a part of "trade practice" may be
outside India but the affectation of prices may have effect in India. Thus, he
submitted, the import of goods and the sale in India which is the last link of B
the trade practice of predatory pricing read with Section 14 clearly gives
jurisdiction in an appropriate case to the MRTP Commission. He contended
that like the EEC as well as the USA, the Law in India was the same, namely,
that ifthe effect ofa restrictive trade practice came to be felt in India because
of a part of the trade practice being implemented in India, the MRTP
Commission would have jurisdiction. This "effects doctrine" was, therefore, C
sought to be invoked with a view to clothe the MRTP with jurisdiction to
pass orders even though a transaction which resulted in exporting goods to
India at predatory price, which was in effect a restrictive trade practice, had
been carried outside the territory of India. He submitted that where the effect
of restrictive trade practice carried out outside the territory of EEC or USA
is felt within the EEC or USA, the authorities enforcing competition law in .D
the EEC or the USA exercise jurisdiction in regard to such conduct. He relied
upon the decision of the European Court of Justice in the wood Pulp case
rendered on 27th September 1988. There, while interpreting Article 85 of the
EEC Treaty which prohibited any agreement, decision and concerted practice·
which have the effect of prevention, restriction or distortion of competition E
within the common market, it was held that where producers established
outside the EEC implement a pricing agreement within the common market
the community's jurisdiction to apply its competition rules to such conduct
is covered by the territoriality principle and is not in breach of the principle
of international comity.
F
It was submitted by Mr. Divan that even while a regime for imposition
of anti- dumping duties has been present in the EEC right from 1968, it was
never suggested before the European Commission or the European Court of
Justice that its jurisdiction stood ousted or that the provisions of Article 85
stood impliedly repealed by the anti-dumping code in respect of imports. Mr. G
Divan also submitted that in the USA, the Antitrust Enforcement Guidelines
for International Operations issued by the U.S. Department of Justice
enunciated that the State Department will exercise Jurisdiction under the
Sherman Act over foreign conduct which had direct, substantial and reasonably
foreseeable effects on U.S. domestic or import commerce.
H
244 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A While adopting the arguments of the other counsel, Shri Anil Divan on
behalf of the respondents, drew the Court's attention to Section 4 of the
MRTP Act which reads as follows:

''Application of other laws not barred- ( 1) Save as otherwise Provided
in sub-section (2) or elsewhere in this Act, the provisions of this Act,
B shall be in addition to, and not in derogation of, any other law for ..the
time being in force. ··.;,,

(2) Notwithstanding anything contained in Section 3 or elsewhere in
this Act, so much of the provisions of this Act, as relate to matters
in respect of which specific provisions exist in the-
c
(i) Reserve Bank of India Act, 1934 (2 of 1934), or the Banking
Regulation Act, 1949 (10 of 1949 ), or

(ii) State Bank of India Act, 1955 (23 of 1955), or the State Bank
of India (Subsidiary Banks) Act, 1959 (38 of 1959), or
D
(iii) Insurance Act, 1938 (4 of 1938),

shall not apply to a banking company, the State Bank of India or a
subsidiary bank, as defined in the State Bank of India (Subsidiary
Banks) Act, 1959 (38 of 1959), or an insurer, as the case may be."
E He submitted that the provisions of the MRTP Act clearly postulated
the continued applicability of other laws. There was no specific provision in
the MRTP Act which made any other law inapplicable and there was no
reason why by a process of interpretation the Indian MRTP Act should be
emasculated and a beneficent anti-monopoly jurisdiction exercised world-
F wide should be denied to the Indian MRTP Commission.

What is the scheme of the Act, In so far as it is relevant to the present
case, relating to allegation of restrictive trade practice and the jurisdiction
and power of the Commission in regard thereto.

G As the preamble indicates the MRTP Act, inter alia, prohibits restrictive
trade practices. Section 2 (o) defines restrictive trade practice while Section
2 (u) defines trade practice.

Section 10 gives the jurisdiction to the Commission to inquire into any
restrictive trade practice. This jurisdiction can be exercised either upon
H receiving of a complaint or upon reference made by the Government or upon
HARIDAS EXPORTS r. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL CJ.] 245

an application by the Director General or upon its own knowledge or A
information. Before a process is issued requiring the attendancl! upon any
person the Commission may require, under Section I I, the Director General
to make an investigation and to submit a report. Section 12-A contains the
power of the Commission to grant temporary injunctions and the same reads
as follows:-
B
"12-A. Power of the Commission to grant temporary injunctions.
(l) Where, during an inquiry before the Commission, it is proved,

- whether by the complainant, Director General, any trader or class of
traders or any other person, by affidavit or otherwise, that any
undertaking or any person is carrying on, or is about to carry on, any C
monopolistic or any restrictive or unfair trade practice and such
monopol_istic or restrictive, or unfair trade practice is likely to affect
prejudicially the public interest or the interest of any trader, class of
traders or traders generally or of any consumer or consumers generally,
the Commission may, for the purposes of staying or preventing the
undertaking or, as the case may be, such person from causing such D
prejudicial effect, by order, grant a temporary injunction restraining
such undertaking or person from carrying on any monopolistic or
restrictive, or unfair trade practice.until the conclusion of such inquiry
or until further orders.

;:) The provisions of Rules 2-A to 5 (both inclusive) Order XXXIX E
of the First Schedule to the Code of Civil Procedure, 1908 (5 of
1908), shall, as far as may be, apply to a temporary injunction issued
by the Commission under this section, as they apply to a temporary
injunction issued by a civil court, and any reference in any such rule
to a suit shall be construed as a reference to any inquiry before the
Commission."
F

Section 14 relates to order where a party concerned does not carry on
business in India. Section I 5 contains the restriction of application of orders
in certain cases and reads as follows:-

"Restriction of application of orders in certain cases.-No order G
made under this Act with respect to any monopolistic or restrictive

- trade practice shall operate so as to restrict-

(a) the right of any person to restrain any infringement of a patent
granted in India, or
H
246 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A (b) any person as to the condition which he attaches to a licence to
do anything, the doing of which but for the licence would be an
infringement of a patent granted in lridia, or
(c) the right of any person to export goods from India, to the extent
to which the monopolistic or restrictive trade practice relates
exclusively to the production, supply, distribution, or control of
~-···· goods for such export."

Chapter V contains provisions relating to restrictive trade practices and
unfair trade practices. In the present case, it was the contention of the
. respondents that there were agreements between the Inpian importers and the
C foreign parties which were registerable under Sectioq 33 of the Act. So far
as the import of float glass in concerned, it was contended that the provisions
of Section 33 (I) 0) were attracted. The relevant portions of Section 33 are
as follows:

"Registerable agreements relating to restrictive trade practices.
D
(1) Every agreement falling within one or more of the following
categories shall be deemed, for the purposes of this Act, to be an
agreement relating to restrictive trade practices and shall be subject
to registration .in accordance with the provisions of this Chapter
namely-
E
(a) xxx xxxx
(b) xxx xxxx
(c) xxx xxxx

(d) any agreement to purchase or sell goods or to tender for the sale
F
or purchase of goods only at prices or on terms or conditions agreed
upon between the sellers or purchasers;

(e) xxx xxxx
(f) xxx xxxx
G (g) xxx xxxx
(h) xxx xxxx
(i) xxx xxxx
...
G) any agreement to sell goods at such prices as would have the
H
HARIDAS EXPORTS v. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPALC J.J 247

effect of eliminating competition or a competitor; A
Ga) any agreement restricting in any manner, the class or number of
wholesalers, producers or suppliers from whom any goods may
be bought;

Gb) any agreement as to the bids which any of the parties thereto B
may offer at an auction for the sale of goods or any agreement
whereby any party thereto agrees to abstain from bidding at any
auction for the sale of goods

(k) xxx xxxx

(I) xxx xxxx c
(2) The provisions of this section shall apply, so far as may be, in
relation to agreements making provision for services as they apply in
relation to agreements connected with the production, storage, supply,
distribution or control of goods.
D
(3) No agreement falling within this section shall be subject to
registration in accordance with the provisions of this Chapter if it is
expressly authorised by or under any law for the time being in force
or has the approval of the Central Government or if the Government
is party to such agreement''.
E
The registration of agreement is provided for by Section 35. The relevant
provisions of which are as follows:-

"Registration of agreement.- (1) The Central Government shall, by
notification in the Official Gazette, specify a day (hereinafter referred
to as the appointed day) on and from which every agreement falling F
within Section 33 shall become registrable under this Act:

Provided that different days may be appointed for different categories
of agreements.

(2) Within sixty days from the appointed day, in the case of an G
agreement existing on that day, and in the case of an agreement made
after the appointed day within sixty days from the making thereof,
there shall be furnished to the Director General in respect of every
agreement falling within Section 33, the following particulars, namely-

( a) the names of the persons who are parties to the agreement; and H
248 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A (b) the whole of the terms of the agreement.
(3) If at any time after the agreement has been registered under this
section, the agreement is varied (whether in respect of the parties or
in respect of the terms thereof) or determined otherwise than by
afflux of time, particulars of the variation or determination shall be
B furnished to the Director General within one month after the date of
the variation or determination.

(4) The particulars to be furnished under this section in respect of an
agreement shall be furnished-

(a) in so far as the agreement or any variation or determination of
c the agreement is made by an instrument in writing, by the
production of the original or a true copy of that agreement; and
(b) in so far as the agreement or any variation of determination of
the agreement is not so made, by the production of a memorandum
in writing signed by the person by whom the particulars are
D furnished.
(5) the particulars to be furnished under this section shall be furnished
by or on behalf of any person who is a party to the agreement or, as
the case may be, was a party thereto immediately before its
determination, and where the particulars are duly furnished by or on
E behalf of any such person, the provisions of this section shall be
deemed to be complied with on the part of all such persons.

Explanation /.-Where any agreement subject to registration under
this section relates to the production, storage, supply, distribution or
control of goods or the performance of any services in India and any
F party to the agreement carries on business in India, the agreement
shall be deemed to be an agreement within the meaning of this section,
notwithstanding that any other party to the agreement does not carry .
on business in India.

Xxx xxx"
G
The investigation by the Commission and the orders which may be
passed by it relating to restrictive trade practices is dealt with by Section 37.

We will first consider whether the MRTP Act has extra territorial
application. In other words, can the MRTP Commission pass order against
H parties who are not in India and who do not carry on business here and where
HARIDAS EXPORTS 1'. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION (B.N. KIRPAL CJ.] 249

agreements are entered into outside India with no Indian being a party to it. A
The preamble of the MRTP Act reads as follows:

"An Act to provide that the operation of the econon1ic systen1 does
not result in the concentration of econon1ic power to the con1n1on
determent, for the control of monopolies, for the prohibition of B
n1onopolistic and restrictive trade practices and for n1atters connected
therewith or incidents thereto."

Presumably the economic system to which reference has been made in the
preamble of the Act can only be with regard to the Indian economic system
and not any other system in the world. The object of the Act was that there C
should be no exploitation of the people of India, as a result of concentration
of economic power or by reason of monopolistic and restrictive trade practices
being carried out in India.

Section 1(2) states that the Act "extends to the whole of India except
the State of Jammu and Kashmir". Section 2(a) defines "agreement" while D
Section 2(e) defines "goods" which reads as follows:-

"goods" means goods as defined in the Sale of Goods Act, 1930 (3
of 1930), and includes,-

(i) products manufactured, processed or mined in India; E
(ii) shares and stocks including issue of shares before allotment;
(iii) in relation to goods supplied, distributed or controlled in India,
goods imported into India,".

Section 14 which has relevance on the point in issue reads as follows: F
"Orders where party concerned does not carry on business in
lndia.-Where any practice substantially falls within monopolistic,
restrictive, or unfair, trade practice, relating to the production, storage,
supply, distribution or control of goods of any description or the
provision of any services and any party to such practice does not G
carry on business in India, an order may be made under this Act with
respect to that part of the practice which is carried on in India."

Reading Sections I (2), 2(e) and 14 together can leave no manner of
doubt that the Act has no extra territorial operation. Section I (2) specifically
provides that the Act extends to the whole of India except the State of Jammu H
250 SUPREME COURT REPORTS (2002] SUPP. I S.C.R.

A and Kashmir, thereby defining the geographical boundary of the operation of
the Act. Section 2(e)(iii) defines goods as including those goods which are
supplied, distributed or controlled in India or the goods imported into India.
The emphasis is on the words "in India" or "into India." Paraphrasing the
said sub-section "goods" would mean "those goods supplied in India or goods
distributed in India or goods controlled in India or goods imported into
B India". In the present case, we are concerned with float glass which was
sought to be imported into India. For the purpose of the Act, it is only the
goods imported into India which will fall within the definition of the word
"goods" in Section 2(e). As such for the Commission to exercise any
jurisdiction goods must be those which are imported into India. As long as
C the import has not taken place and the goods are merely intended for export
to India the same will not fall within the definition of the word "goods" in
Section 2(e ).

Even ifthere was any manner of doubt the same would stand dispelled
by the plain reading of Section 14. The said Section visualizes where, inter
D alia, restrictive or unfair trade practice is carried on and any party to such
practice does not carry on business in India then an order can be passed
under the Act only with respect to that part of the practice which is carried
on in India. To put it differently, it is only that part of monopolistic, restrictive,
or unfair, trade practice, relating to pr6duction, supply etc. of goods in India
E in respect of which orders can be passed. To put matters beyond any doubt
Explanation 1 to Section 35, which refers to agreements which are subject to
registration under the said section, provides that when any party to the
agreement for the production, supply, distribution etc. of goods or performance
of any services in India carries on business in India then that agreement shall
be deemed to be an agreement within the meaning of the section,
F notwithstanding that any other party to the agreement does not carry on
business in India. The meaning of this clearly is that it is only that agreement
which would require registration in India if at least one party to the agreement
carries on business in India. It may happen that there may be two or more
parties which enter into an agreement outside India, relating to supply or
G distribution of goods to India, the formation of such an agreement would not
ipso facto require any registration even if it relates to restrictive trade practice
but if one of the parties to an agreeme:lt carries on business in India then that
agreement shall be deemed to be an agreement within the meaning of the
Section which would require registration.

H The next qu~stion which would arise for consideration is whether the
HARIDAS EXPORTS 1•. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION[B.N. KIRPALC J.J 251

principle of "effect doctrine" has any application in India. Where, in other A
words, actions take place and agreements are entered into outside India but
the resultant adverse effect is experienced in India then can the MRTP
Commission have any jurisdiction.

The preamble of the Act indicates that the MRTP Act was enacted,
inter a/ia, prohibiting any restrictive trade practice. Restrictive trade practice B
has been defined in Section 2(o) which reads as follows:

" 'restrictive trade practice' means a trade practice which has, or may
have, the effect of preventing, distorting or restricting competition in
any manner and in particular,-
c
(i) which tends to obstruct the flow of capital or resources into the
stream of production, or
(ii) which tends to bring about manipulation of prices, or conditions
of delivery or to effect the flow of supplies in the market relating
to goods or services in such manner as to impose on tQe consumers D
unjustified costs or restrictions;"

The expression "trade practice" has been defined under Section 2(u)
which reads as under :

" 'trade practice' means any practice relating to the carrying on of E
any trade, and includes-

(i) anything done by any person which controls or affects the price
charged by, or the method of trading of, any trader or any class
of traders,
(ii) a single.or isolated action of any person in relation to any trade;" F
Section 33 of the Act deals with certain types of agreements stipulated
therein to be an agreement relating to restrictive trade practice and such
agreement requires to be registered. Section 37(1) gives the Commission
power to inquire whether an agreement is governed by Section 33 and has
been registered under Section 35 or not G
Section 3 7 reads as under :

"37. Investigation into restrictive trade practices by Commission.-
(!) The Commission may inquire into any restrictive trade practice,
whether the agreement, if any, relating thereto has been registered H
252 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A under Section 35 or not, which may come before it for inquiry and,
if after such inquiry it is of opinion that the practice is prejudicial to
the public interest, the Commission may, by order, direct that-

(a) the practice shall be discontinued or shall not be repeated;
(b) the agreement relating thereto shall be void in respect of such
B restrictive trade practice or shall stand modified in respect thereof
in such manner as may be specified in the order.

(2) The Commission may, instead of making any order under this
section, permit the party to any restrictive trade practice, if he so
applies to take such steps within the time specified in this behalf by
c Cq.tnmission as may be necessary to ensure that the trade practice is
no longer prejudicial to the public interest, and in any such case, if
the Commission is satisfied that the necessary steps have been taken
within the time specified, it may decide not to make any order under
this section in respect of that trade practice.
D (3)'No order shall be made under sub-section (1) in respect of-

(a) any agreement between buyers relating to goods which are bought
by the buyers for consumption and not for ultimate resale whether
in the same or different form, type or specie or as constituent of
some other goods;
E
(b) a trade practice which is expressly authorise<;! by any law for the
time being in force;

(4) Notwithstanding anything contained in this Act, ifthe Commission
during the course of an inquiry under sub-section (I), finds that the
F owner of any undertaking is indulging in monopolistic trade practices,
it may, after passing such orders under sub-section (I) or sub-section
(2) with respect to the restrictive trade practices as it may consider
necessary, submit the case along with its findings thereon to the
Central Government for such action as that Government may take
under Section 31."
G
Section 37 thus gives power to the Commission to inquire into any
restrictive trade practice and if it is of the opinion that the practice is prejudicial
to the public interest, the Commission may, by order, direct that the practice
shall be discontinued or shall not be repeated. It appears to us that what is,
H iner alia, P[Ohibited by the Act will be carrying or restrietive trade practice
HARIDAS EXPORTS r. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPALCJ.] 253

as defined in Sections 2 (o) and 2(u) of the Act. The restrictive trade practice A
may or may not be directly connected with or be the result of any agreement
between the parties in India. Any act which falls under the category of
restrictive trade practice can be investigated into and orders passed under
Section 37(1). Sections 2(o) and 2(u) do not specifically indicate that the
practice should be carried on only by a person or persons in India . If the B
trade practice is such that it becomes a restricted trade practice in India as
contemplated by Section 2(o), then action can be taken under Section 37(!)
in respect of such a trade practice.

Section 38 provides that every restrictive trade practice shall be deemed
to be prejudicial to the public interest unless the Commission is satisfied of C
any one or more of the circumstances mentioned in Clauses (a) to (k) of
Section 38 exists and it is further satisfied that the restriction is not
unreasonable having regard to the balance between those circumstances and
any detriment to the public or to persons not parties to the agreement.

Section 2(u) does state that 'trade practice' means any practice relating D
to the carrying on of any trade but then it adds that such a trade practice
would include anything done by any person which controls or affects the
price charged by, or the method of trading of, any trader or any class of
traders. The Act and the aforesaid section, in particular, is, therefore, concerned
specifically with the incidence of the restrictive trade practice within India E
which in Section 2(o)(i) refers to the obsiruction to the flow of capital or
resources into the stream of production, while Section 2(o)(ii) talks of
manipulation of prices or conditions of delivery or to effect the flow of
supplies in the ,market but which must be such as to impose on the consumers
unjustified costs or restrictions. To put it different, mere manipulation of
prices or conditions of delivery would not be a restrictive trade practice F
under Section 2( o)(ii) unless it is done in such a manner so as to impose on
the consumers unjustified costs or restrictions. Lowering of prices cannot be
regarded as imposing on the consumers unjustified costs or restrictions.

Under Section 33(1)0) of the Act, any agreement to sell goods at such
prices as would have the effect of eliminating competition or a competitor is G
regarded as an agreement relating to restrictive trade practice and shall be
subject to registration. The Act nowhere states that this agreement should be
only in India or between Indian parties. In effect, this Section recognizes the
'effects doctrine', namely, where an agreement results in sale of goods at
such prices which would have the effect of eliminating competition or a H
254 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A competitor. In the very nature of things, the sale of goods keeping in mind
the definition of the word "goods" in Section 2(e) must be of goods imported
into India, in the case like the present. But if we replace the word "goods"
in Section 33(1)G) with the definition of"goods" in Section 2(e)(iii), then the
Section 33(1)G) would read as follows:

B "Any agreement to sell goods imported into India at such prices as'.
would have the effect of eliminating competition or a competitor."

Thus, the agreement requiring registration must be in respect of goods
after their import into India.

C In other words, where the goods are already in India, then any agreement
which has the effect of eliminating competition or a competitor of the sale
of those goods existing in India would be a restrictive trade practice and it
would be immaterial as to where the agreement takes place in relation to the
sale of those goods. The "effects doctrine" would be applicable only in
D relation to those goods which are within the territory of India before its sale
referred to in Section 33(1)G) of the Act. An agreement, which results in sale
outside India and the export of the goods to India, even if that sale is at
predatory prices, would not fall within the ambit of Section 33(1)G) of the
Act. It is a subsequent agreement of sale of the imported goods, if it has the
effect of eliminating competition or a competitor, which would be registerable
E under Section 33(l)G) of the Act.

Even if an agreement is executed outside India or the parties to the
agreement are not in India and agreement may not be registerable under
Section 33, being an outside India agreement, nevertheless, if any, restrictive
trade practice, as a consequence of any such an outside agreement, is carried
F out in India then the Commission shall have jurisdiction under Section 37(1)
in respect of that restrictive trade practice if it comes to the conclusion that
the same is prejudicial to the public interest.

It is possible that persons outside India indulge in such trade practices,
not necessarily restricted to the effectuation of prices within India, which
G have the effect of preventing, distorting or restricting competition in India or
gives rise to a restrictive trade practice within India then in respect of that
restrictive trade practice, MRTP Commission will have jurisdiction. The
counsel for the respondents is right in submitting that if the effect ofrestrictive
trade practices came to be felt in India because of a part of the trade practice
H being implemented here the MRTP Commission would have jurisdiction.
_HARIDAS EXPORTS 1·. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL Cl] 255
This "effects doctrine" will clothe the MRTP Commission with jurisdiction A
to pass an appropriate order even though a transaction, for example, which
results in exporting goods to India at predatory price, which was in effect a
restrictive trade practice, had been carried out outside the territory of India
if the effect of that had resulted in a restrictive trade practice in India. If
power is not given to the MRTP Commission to have jurisdiction with regard B
to that part of trade practice in India which is restrictive in nature then it will
mean that persons outside India can continue to indulge in such practices
whose adverse effect is felt in India with impugnity. A competition law like
the MRTP Act is a mechanism to counter cross border econon1ic terroris1n.
Therefore, even though such an agreement may enter into outside the territorial
jurisdiction of the Con1mission but if it results in a restrictive trade practice C
in India then the Commission will have jurisdiction under Section 37 to pass
appropriate orders in respect of such restrictive trade practice.

We will now consider whether the Anti-dumping provisions will oust
the jurisdiction of the MR TP Commission, as has been contended by the
appellants. D

The jurisdiction of the MRTP Commission, in our opinion, is not ousted
by the Anti-dumping provisions in the Customs Act. The two Acts operate
in different fields and have different purposes. The Import Control Act and
the Customs Tariff Act are concerned with import of goods into India and the
duty which could be imposed on the imported items. Import may be allowed
E
on the basis of an import license or, depending upon the policy, import may
be allowed under OGL-Open General License-where no specific license fot
import is required. Whether to allow import or not and the terms on which
an item may be imported is a matter of policy and regulated by law.
F
There is in this case no challenge to the import policy allowing import
of float glass and even if such a challenge was to be there it would hardly
succeed. The grievance of the respondents is that import is being made at
predatory prices. The challenge is to the actual import. But allowing such a
challenge will amount to giving the MRTP Commission jurisdiction to
adjudicate upon the legal validity of the provisions relating to import, which G
jurisdiction the Commission does not have. It is not a court with power of
judicial review over legislative action. Therefore, it would have no jurisdiction
to decide whether the action of the Government in permitting import of float
glass even at predatory prices is valid or not. The Commission cannot prohibit
import, it's jurisdiction commences after import it completed and any restrictive H
256 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R.

A trade practice takes place.
Customs duty on import of any goods is levied under the provisions of
the Customs Tariff Act. The rate at which the import duty is to be levied is
a matter of policy. The rate of duty is determined by the schedule to the
Customs Tariff Act and is subject to such exemption as may be granted under
B that Act. Thus the rate of import duty which is imposed is a legislative act
and is thus not amenable to the jurisdiction of the MRTP Commission. A
party cannot contend before the MRTP Commission that the rate of duty is
too high or too low. In fact, such a challenge is hardly likely to succeed in
a Court of law and the question of the MRTP Commission having such a
C jurisdiction does not arise.

Apart from the rate of duty the value of the goods imported has to be
determined for the purpose of levy of duty. The customs authorities are
required to determine whether the value of the goods imported has been
correctly declared. In case of wrong valuation, the customs authorities can
D determine the correct value and levy duty thereon. Normally the goods are
valued at the price at which they are actually purchased. Then that will be the
value at which the duty will be imposed. It is not the case of the respondents
that the appellants are guilty of under-valuing the goods imported. It is the
low price which has been charged by the Indonesian exporter which is really
the object of attack.
E
The levy or non-levy of anti-dumping or other duty being a legislative
act pursuant to the exercise of powers under the Customs Tariff Act can also
not be a subject-matter of judicial review by the MRTP Commission. The
two Acts substantially operate in different fields and the following table
brings out some of the distinctions between the MRTP Act and the Anti-
F
dumping provisions:

COMPETITION LAW ACTIONS ANTI-DUMPING ACTIONS

I. Competition law is concerned An anti-dumping law is
with the regulation of competition concerned with addressing just
G in a particular market within the one type of unfair, international
territory of a country. Thus it trade practice that causes injury
would take within its sweep a to domestic industry, i.e.,
whole host of anti-competitive "dumping" of goods by an
practices including (i) exporting country.
H monopolistic trade practices, as
HARIDAS EXPORTS 1·. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPALC J.) 257

defined in Section 2(i) of the A
MR TP Act, (ii) restrictive trade
practices, as defined in Section
2(o). and (iii) unfair trade
practices as defined in Section
36A.
B
2. A Complaint under the MRTP An Anti Dumping Petition can
Act can be filed by a Trade be filed by the Domestic
Association or any Consumer or Industry as defined under the
a Registered Consumers Anti Dumping Rules or suo
Association, or a reference can motu by the Designated
be made by the Central Authority. [See Rules 2(b), and C
Government or the State 5(4) of the Anti Dumping
Government or even by the Rules.]
Director General upon its own
knowledge or information.
[Section lO(l)(A) of the MRTP D
Act.]

3. Competition law procedures No interest group other than
allow and require consideration domestic industry has full legal
of interest groups such as standing in anti-dumping cases. E
manufacturers, importers, The predominant interest group
exporters, consumers and the is of domestic producers.
general public. Commercial Industrial users and consumers
actors can have their interests do not have legal standing to
assessed through the maintain a complaint.
determination of the market,
F
causation or injury. Interests of
consumers are taken into account
when assessing the impact of a
business practice on competition.

4. In predatory pricing enquiries, the In anti-dumping complaints, G
complainant has to establish that intent is irrelevant but actual
the predator acted with intent to injury has to be shown. Further,
eliminate competition and a causal link has to be
competitors. Actual injury is not established between the
required. dumping and the injury suffered.
H
258 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A 5. In most countries, competition Anti-dumping enquires are
cases are dealt with by a court always conducted by
of law, where parties are entitled government agencies through
to full discovery rights and due administrative procedures and
process. law.

B A perusal of the above chart indicates that the two statutes and regimes
operate in different and distinct spheres and there is no conflict between the
two regimes/statutes. Hence, the question of implied repeal of the provisions
of Section 33(1)(j) of the MRTP Act, 1969 on account of the provisions of
Section 9A of the Customs Tariff Act, 1975 does not arise.
c It is thus seen that the provisions relating to anti-dumping contained in
the Customs Tariff Act do not in any way affect the power or jurisdiction of
the MRTP Commission. The Import Control Act and the Customs Tariff Act
on the one hand and the MRTP Act on the other operate in different
independent fields and the authority under one has no jurisdiction over the
D other. In other words, their paths do not cross each other. While the provisions
of Anti-dumping Act are concerned with the levy of anti-dumping duty, the
MRTP Act in the present case would be concerned with the agreements
between the parties which relate to the restrictive trade practices. Therefore,
it would be incorrect to say that the incorporation of the anti-dumping
provisions ousts the jurisdiction of the MRTP Commission to inquire and
E pass orders, inter alia, with regard restrictive trade practice in India.

It was submitted that import by the Indian party from Indonesia at
predatory prices required the agreement for import to be registered as per
Section 33(l)(j) of the Act. On the facts of this case, we are not inclined to
F agree that such a case is made out. As far as Section 33(1)(j) is concerned,
there must be an agreement between the foreign seller and the Indian importer
to sell goods at such prices as would have the effect of eliminating competition
of a competitor, i.e., here the Indian industry. What seems to have happened
here is that the monopolistic Indian undertakings are now having to face
competition. The quantum of import in the present case is a small fraction of
G the total float glass which is manufactured and sold in India. The reduction ''>
in prices of the Indian importer is to the benefit of the Indian customer. It is
only if there is an agreement between the Indian importer and the foreign
seller which has such an effect that the production in Ii:idia of float glass by
efficient Indian industry would have to stop and such stoppage is considered
H prejudicial to the public interest, can an order under Section 12-A or Section
HARIDAS EXPORTS 1·. ALL !NOIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL CJ.] 259
3 7 be passed. It is the case of the petitioners that the Indian manufacturers A
have formed a cartel of their own and are charging high prices because of
lack of competition. It is alleged that the Indian manufacturers are making
much profits and despite import of float glass having taken place for the last
5-10 years the Indian industry has not suffered. On the other hand, the volume
of sales has increased and the profit of the Indian producers not decreased.
Under these circumstances, it was contended, the passing of the injunction B
was wholly uncalled for.

Import of material at prices lower than prevailing in India cannot per
se be regarded as being prejudicial to the public interest. If the normal or
export price of any goods outside India is lower than the selling price of an C
indigenously produced item to say that the import is prejudicial to the public
interest would not be correct. The availability of goods outside India at prices
lower than those which are indigenously produced would encourage
competition amongst the Indian industry •nd would not per se in result in
eliminating the competitor, as was sought to be submitted by the respondents.
D
It is while dealing with a complaint relating to restrictive trade practice
that the MRTP Commission has the jurisdiction to grant temporary injunction
under Section 12-A(l). It is only on the basis of proof, and not mere allegation,
and on the basis of an inquiry before the Commission that any trader or class
of traders is carrying on a restrictive trade practice which is likely to affect
prejudicially the public interest or the interest of any trader, class of traders E
or traders generally or of consumers that the Co1nmission would have
jurisdiction to grant temporary injunction restraining any undertaking or person
from carrying on any restrictive trade practice. While the Commission has
power to grant ex-parte temporary injunction, but in view of Explanation II
to Section 12-A, whereby the provisions of Rule 2-A of Order XXXIX of the F
Code of Civil Procedure, 1908 are made applicable, for the grant of temporary
injunction the Commission normally ought to give notice and hear the
respondents before passing an order of injunction. What is, however, important
is that the condition stipulated in Section 12-A(I) have to be satisfied before
an order for injunction can be passed. In other words, it has to be proved that
the respondents before the Commission is carrying on or about to carry on G
a restrictive trade practice which will be prejudicial to ihe public interest or
to the interest of traders etc. before an order for injunction can be C;sued.
Merely because an industry will find itself unable to be able to compete with
imports from outside can be of no ground for exercising jurisdiction under
Section 12-A(I). It is only if the trade practice which is being impugned is H
260 SUPREME COURT REPORTS (2002] SUPP. I S.C.R.

A such that would fall within the four comers of Section 2(o), which define
restrictive trade practice, can the Commission grant an injunction. The facts
on record do not indicate any justification for any interim order being passed
in the present case. Furthermore, the impugned order passed against the
foreign manufacturers of float glass, who do not carry on business in India
B is clearly contrary to the provisions of Section 14 of the Act and, as such,
cannot be sustained.

In our opinion, the MRTP Commission has no extra territorial
jurisdiction. The action of an exporter to India when perfonned outside India
would not be amenable to jurisdiction of the MRTP Commission. The MRTP
C Commission cannot pass an order detennining the export price of an exporter
to India or prohibiting him to export to India at a low or predatory price.

The matter may be examined from another angle. In this case, there i's
a sale of float glass by the exporter in Indonesia. If the float glass was ready
and available, then being ascertained goods the sale would be regarded as
D having taken place where the goods existed at the time of sale, i.e., in
Indonesia. If the glass had to be manufactured and not readily identifiable,
then the sale would take place outside India when the goods are appropriated
to the contract by the foreign exporter. Here the appropriation would take
place in Indonesia when the glass is eannarked and exported to India. In
either case the MRTP Commission would have no jurisdiction to stop that
E sale. If the said sale cannot be stopped and the import policy pennits the
Indian importer to import on payment of duty then we fail to see what
jurisdiction the MRTP Commission can possibly have till a restrictive trade
practice takes place after float glass is imported into India.

F It is not as if the Indian industry has no remedy against goods being
exported to India predatory prices. It is because of the need for such a
provision that the Customs Act was amended and anti-dumping provisions
were incorporated. Recourse to this was taken by the respondents but then
that remedy was not pursued. At this stage, it is relevant to refer to the
provisions of Section 11 of the Customs Act. The said Section gives the
G Central Government a power to prohibit importation or exportation of goods,
if it is satisfied that it is necessary to do so for any of the purposes specified
in sub-section (2). Under sub-section (2), such prohibition can be for the
purpose of establishment of any industry (sub-clause (i); preventing serious
injury to domestic production of goods of any description (sub-clause G); the
H compliance of imported goods with any laws which are applicable to similar
HARIDAS EXPORTS 1•. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KlRPALC J.J 261
goods produced or manufactured in India (sub-clause (s); the prevention of A
the contravention of any law for the time being in force (sub-clause (u)) and
any other purpose conducive to the interest of general public (sub-clause (v)).
In as much as, the import into the country is, inter alia, governed by the
Customs Act and the power to prohibit or not to prohibit the importation of
any goods is with the Government, then unless and until, a law prohibiting B
import is infringed, it is difficult to perceive as to how the MRTP Commission
can prevent the importation of the goods. In this connection, it is also useful
to refer to Section 33(3)of the Act which reads as under :

"No agreement falling within this section shall be subject to registration
in accordance with the provisions of this Chapter if it is expressly C
authorized by or under any law for the time being in force or has the
approval of the Central Government or if the Government is a party
to such agreement."

Inasmuch as the importation of float gla.s is permitted by law, under
the provisions of the Customs Act' and the Import Control Act, then an D
agreement in relation to such an import may not be liable to be registered
under the provisions of the Act. It is only in respect of float glass, which is
imported and thereafter if in respect to that a restrictive trade practice is
indulged can the MRTP Commission have jurisdiction qua post import Indian
end of tlic transaction.
E
Conclusions

From the aforesaid discussion and reasons, we arrive at the following
conclusions:

I. Anti-dumping provisions do not per se oust the jurisdiction of F
the MRTP Commission.

2. The MRTP Commission can, inter alia, take action whenever a
Restrictive Trade Practice is carried out in India in respect of
imported goods or otherwise. G

3. It is only in respect of the Indian leg of the restrictive trade practice,
can an order under Section 12 A and/or Section 37 be passed.

4. Under Section 33 of the Act what can be registered is only an
agreement in regard to which any party to an agreement carries H
262 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A on business in India [Section 35 Explanation I]. But this does not
mean that if an agreement is entered into outside India and which
results in a Restrictive Trade Practice in India, the MRTP
Commission has no jurisdiction. The "effects doctrine" will apply
and Section 2(o) read with Section 2(u) and Section 37 gives
jurisdiction to the MRTP Commission to pass appropriate orders
B qua the Restrictive Trade Practice in India. The MRTP
Commission, in such a case, may not be able to stop import but •
there can be order imposing post import restrictions such as, for
example, not to sell imported goods in India in such a manner
which will be regarded as a restrictive trade practice under Section
c 37.

5. In Explanation I to Section 35 the use of the words "shall be
deemed to be an agreement within the meaning of this
section ......... " and the time-frame for registration clearly indicates
that Section 33 and Section 35 apply only to Indian agreements
D or agreements in India and, therefore, it became necessary to
incorporate Explanation I so as to enlarge the ambit and give
extra territorial jurisdiction in relation to those agreements which
relate to performance of services in India and any party to that
agreement carries on business in India.
E 6. On the facts of this case, the impugned order passed by the
MRTP Commission against the Indonesian exporters cannot be
sustained and is set aside.

Appeals are disposed of in the aforesaid terms. Parties to bear their own
costs.
F
Civil Appeal No. 3562 of 2000 :

Interim order of the MRTP Commission restraining the appellant from
dispatching, directly or indirectly, soda ash to India is the subject matter of
challenge in this appeal.
G
The complainant-Mis Alkali Manufacturers Association of India
(AMAI for chart) had filed a complaint before the MRTP Commission under
Section 33(I)(d), Section 36-A and Section 40 read with Section 2(i) & (o)
of the MRTP Act. The Complainant Association had 34 members carrying on
H the business of Soda Ash in India. In the complaint, it was stated that the
HARIDAS EXPORTS 1·. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPALCJ.J 263

Soda Ash was being manufactured by six companies in India and was being A
sold to the Indian consumers at a net price of Rs 8190 to Rs 8320 PMT net
of excise. It was alleged that the appellant Mis American Natural Soda Ash
Corporation (hereinafter referred to as ANSAC) consisted of six producers of
natural Soda Ash who have joined together to form an Export Cartel by
virtue of a Membership Agreement amongst them entered into in America on B
8th December, 1983. By this agreement, the six produces had agreed that all
export sales by them or by any of their subsidiaries will be made through
ANSAC which was set up as Corporation in accordance with the provisions
of the United States Export Trade Act, 1918. It was further alleged in the
complaint that ANSAC in an attempt to invade the Indian market and undercut
the Indian producers, it sold American Soda Ash to Indian consumers at an C
unrealistically low price of US$ 132 PMT-CIF. With a view to circumvent
the prohibition in Indian law against monopolistic, restrictive and unfair trade
practices, a strategy had been adopted by ANSAC by selling American Soda
Ash to Indian consumers through the front ofone Mis G. Premjee of Singapore
in whose favour the Indian producers had opened letters of credit. According D
to this complaint, there was a bulk sale of soda ash by ANSAC to the Indian
Consumers through the conduit of Mis. G. Premjee of Singapore. On the
basis of these averments, namely, that ANSAC was a Cartel of American
Soda Ash Producers and was likely to affect maintenance of prices at
reasonable and realistic levels in India and with a view to adversely affect the
local production and availability of Soda Ash, the MRTP Commission should E
enquire against this restrictive and unfair trade practice and grant an ex-parte
injunction restraining ANSAC from despatching the goods. On the basis of
these allegations, the MRTP Commission on 9th September, 1996 passed an
ad-interim injunction, which was subsequently confirmed by it, directing
ANSAC not to indulge in the practice of cartelisation by exporting soda ash F
to India in the form of cartel directly or indirectly. The order further stated
that it was without prejudice to the final outcome of the said enquiry as well
as to the rights of the importers or exporters in the individual capacity to
export soda ash to India. This order has been affirmed by the Commission
by it's order of 9th March, 2000.
G
While denying that ANSAC was a cartel or that export of Soda Ash to
India was violative of any of the provisions of the MRTP Act, ANSAC has
submitted in this appeal that the MR TP had no extra territorial jurisdiction
and furthermore in view of the provisions of the anti-dumping law, the MRTP
Commission had no jurisdiction to decide the case.
H
264 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A This appeal was heard along with Civil Appeal No. 2330 of 2000
Mis Haridas Exports v. All India Float Glass Manufacturers Association . In
Haridas Exports case common contentions raised in this appeal regarding
jurisdiction of the MRTP Commission and the scope and ambit of the MRTP
Act vis- a-vis Anti dumping Duty have been· dealt with. We now propose to
B deal with the allegation of export by the appellant, which is alleged to be a
cartel, and whether there was justification for granting the injunction.

Some more undisputed facts, which are relevant may first be mentioned. ,.
'
ANSAC was set up under the Webb Powerence Act of U.S.A. as an export
agency, the six producers of soda ash in U.S.A. being its members. Like a
C canalising agency exports of natural soda ash by these producers cannot be
made by the members individually, Exports of soda ash from U.S.A. are
made by the canalising agency, namely, the appellant.

~ile the India companies manufacture synthetic soda ash, the American
companies export natural soda ash which is cheaper to produce than the India
D and soda ash. Since its inception in 1983, the appellant had sold for export
to India only one consignment equal to 1.44 per cent of the annual production
of India, and it is in respect of this consignment that the MRTP Commission
issued injunction restraining its import. Till today, therefore, no soda ash has
been exported by the appellant to India.
E
It was submitted by the respondent that the agreement of 1983 formed
a cartel and was registrable under Section 33 (l)(d) of the MRTP Act.

In so far as Section 33 {l){d) is concerned scheme appears to be that
every agreement falling under Section 33 (I) (a) to (I) is presumed to be one
F relation to restrictive trade practice and is subject to registration. An agreement
falling under Section 33 need not necessarily be one in writing inasmuch as
Section 2 (a) defines an agreement as including any arrangement or
understanding as well. Therefore, if apart from written agreement there is an
arrangement or understanding amongst the sellers or the purchasers with
G regard to the purchase or sale of goods to be only at the prices or on terms
or conditions agreed upon amongst them then such an agreement would
require registration. Section 33 (l)(d) regards an agreement to be one relating
to restrictive trade practice if such agreement relates to purchase or sale of
goods or to tender for sale or purchase of goods only at prices or on terms
or conditions agreed upon amongst the sellers or amongst the purchasers.
H Such an agreement amongst the sellers or amongst the purchasers relating to
HARIDAS EXPORTS 1·. ALL !NOIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL CJ.] 265

purchase or sale or to the prices in respect thereof may be regarded as the A
formation of a cartel.

Section 35 specifies the period within which every agreement falling
under Section 33 become registrable. As we have already noticed, Explanation
I would make such an agreement registrable only when at least one party to
the agreement carries on business in India. On an agreement being filed B
under Section 35 particulars are furnished to the Director General who is
required to maintain a register under Section 36. Section 37 then gives the
jurisdiction to the Commission to make an inquiry, whether an agreement is
registered or not, in order to find out if a restrictive trade practice is prejudicial
to the public interest. The effect of this is that by not registering an agreement C
failing under Section 33 and 35 the Commission is not divested of its
jurisdiction of exercising its powers under Section 37. The opening words of
Section 37 make it quite clear that an inquiry into any restrictive trade practice
can be made by the Commission even in relation to an agreement which is
not registered. Therefore, once an agreement comes to the notice of the
Commission which is to be regarded as containing a restrictive trade practice D
then the Commission is under an obligation to find out and determine whether
in its opinion the practice is prejudicial to the public interest. It is only if the
Commission is satisfied that there is prejudice to the public interest then the
Commission has the jurisdiction to direct either that the practice shall be
discontinued or shall not be repeated or to hold that any such agreement E
which is prejudicial to the public interest shall be void in respect of such
restrictive trade practice or that the said agreement shall be modified in such
a manner as may be specified. If remedial steps have been taken then, as
contemplated by Section 37 (2), no order need be passed by the Commission.
One further restriction on the power of the Commission to pass order is also
contained in Section 37 (3)(b) which provides that if a trade practice is F
expressly authorised to be carried on by any law for the time being in force
then no order shall be passed under Section 37. This Explanation is in addition
to the provision of Section 38 which deals with cases relating to presumption
as to the agreement of the types mentioned therein being in the public interest.

The impact of reading of the provisions together is that what is sought G
to be targeted in relation to restrictive trade practice is not the nature or the
factum· ofJhe restriction but such restriction should not be prejudicial to the
public interest. For example, an agreement may be entered into amongst the
purchasers in order to ensure constant supply of goods at a reasonable rate.
Such an agreement even though it may fall under Section 33 (1) (d) would H
266 SUPREME COURT REPORTS (2002] SUPP. I S.C.R.

A not be regarded as being prejudicial to the public interest.
It is in this context that when we examine the provisions of Section 12-A
we find that the power of the Commission to grant temporary injunction
arises only after it is satisfied that a restrictive trade practice or unfair trade
practice is being carried on which is likely to affect prejudicially the public
B interest or the interest of trader or class of traders etc. It is only with a view
to prevent the causing of a prejudicial effect that an interim order can be
passed by the Commission under Section 12-A.

As we have already seen the Act does not have any extra territorial
operation. An agreement which is referred to under Section 33 (I) (d) must,
C therefore, be of a kind in which a person in India is a party. This is clear from
the bare reading of Explanation I to Section 35. This means that for an
agreement to fall within the ambit of Section 33(1) (d) and in respect of
which the Commission can exercise its powers under Section 37 a person in
India must be regarded as one of the sellers who is a person to such an
b agreement. This is clear from the use of the words" any party to the agreement
carries on business in India" occurring in Explanation I to Section 35. A
Careful reading of Section 33 (l)(d) indicates that it refers to two classes of
agreements. One class is an agreement to purchase goods or to tender for the
purchase of goods. only at prices or on terms or conditions agreed upon
between the purchasers. The other class is an agreement to sell goods or to
E tender for the sale of goods only at prices or on terms or conditions agreed
upon between the sellers. In other words, Section 33 (I) (d) refers to the
agreements which have the effect of forming either a buyers cartel or a
sellers cartel. This sub-section does not refer to or deal with agreements of
sale and purchase between sellers and purchasers.
F
Jn the case of import of soda ash, the contention is that the appellant
is a cartel in America which was proposing to sell soda ash to India at very
low prices with a view to eliminate competition and to adversely affect the
Indian industry. Any agreement of sale by the appellant to an Indian purchaser
would not attract the provisions of Section 33 (l)(d), which refers only to
G cartelising agreements and not to agreements of sale and purchase. But th~
MRTP Commission will have jurisdiction under Section 37 to pass orders if
such a sale was to amount to being a restrictive trade practice. For the
Commission to have jurisdiction to pass such an order, whether interim or
final, it must come to the conclusion that it is in public interest to do so. It
H is to be borne in mind that public interest does not necessarily mean interest
HARIDAS EXPORTS 1·. ALL INDIA FLOAT GLASS MFRS. ASSOCIATION [B.N. KIRPAL CJ.] 267

only of the industry. Unless and until it can be demonstrated that an efficient A
Indian industry would be forced to shut down or suffer serious loss resulting
in closure or une1nployment, the Com1nission ought not to pass an injunction
restraining an Indian party from importing goods from a cartel at predatory
prices. Importing goods at a price lower than what is available in India is not
per se illegal. We have provisions under the Customs Act which enables the
Government to impose anti dumping duties with a view to protect the Indian B
industry. Nevertheless, the era of protectionism is now coming to an end. The
Indian industry has to gear up so as to meet the challenges from abroad. If
the cartel is selling goods to India and still making profit then it will not be
in the interest of the general body of the consumers in Jndia to prevent the
import of such goods. The remedy of the Indian industry, in such an event, C
is to take recourse to the provisions under the Customs Act in relation to the
levy of anti-dumping duties.

A cartel is formed, inter alia, with a view that members of the cartel
do not wage a price war and they sell at an agreed or uniform price. There
may perhaps also be a cartel where members divide the territories to which D
each of them can export. There is little doubt that the object of an export
cartel is to capture a market even if at first, it may result in a loss to the
exporter.

The competition law in the form of MRTP as it stands today does not
contain any provision, which can give it jurisdiction to interfere merely with E
cartel formation. Formation of cartel which takes place outside India is outside
the territorial jurisdiction of the MRTP. The Indian importer obtaining goods
at a low price does not contravene any law. He has obtained a good bargairj.

We need not go into the question whether anti-dumping provisions in
the Customs Act can be an effective remedy against such cartelisation. But F
if the cartel carries out Restrictive Trade Practice in India or it's actions have
the effect of a Restrictive Trade Practice being carried out in India, then the
MRTP Commission will get jurisdiction to act under Section 37 (1) of the
MRTP Act.

We make it clear that we are expressing no opinion as to whether the
G
appellant is a cartel or on the question of predatory prices for the reason that
we are satisfied that here no case had been made out by the respondents for
the grant of injunction against the appellant. The injunction issued against the
appellant was not only against the provisions of Section 14 of the Act but
even on facts as alleged no case had really been made out for any order under H
268 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R.

A Section 12-A or Section 37 of the Act more so when no import of soda ash
into India from the appellant had, in fact, taken place. On the other hand,
prima facie the allegation of the appellant that it is the respondents which
have formed a cartel and do not welcome any competition does merit
consideration, perhaps in another case.

B For the aforesaid reasons, this appeal is allowed with costs.

K.K.T. Appeals disposed of.