Holding

A finding of unfair trade practice under Section 36A(3)(a) is unsustainable without cogent material and an opportunity for the accused to prove that the alleged practice did not cause loss or injury to consumers.

Summary

Nirma Industries Ltd., a manufacturer of washing powders, launched a prize‑lottery scheme by placing coupons in its detergent packs. A consumer complaint alleged that Nirma had raised the price of its detergent shortly before the scheme to recover the value of the prizes, constituting an unfair trade practice under Section 36A(3)(a) of the Monopolies and Restrictive Trade Practices Act, 1969. The Director General filed an application under Section 36D and the Commission held the charge proved, issuing a cease‑and‑desist order. Nirma appealed, contending that the Commission relied solely on the complaint without giving it an opportunity to produce evidence that the price rise was due to raw‑material costs and not to fund the prizes. The Supreme Court held that a finding of unfair trade practice under Section 36A(3)(a) requires cogent material and an opportunity for the party to rebut the allegation; the Commission’s reliance on the complaint alone was unsustainable. Consequently, the Court quashed the Commission’s order and remitted the matter back for fresh consideration. The appeal was allowed and the parties were directed to bear their own costs.

Issues considered

The adequacy of material before the Commission to sustain a finding of unfair trade practice under Section 36A(3)(a).
Whether the price increase of detergent was intended to recover prize money, thereby constituting an unfair trade practice.
The burden of proof and the requirement of giving the accused an opportunity to justify its conduct under the Act.

Legislation cited

Monopolies and Restrictive Trade Practices Act, 1969s. 2U, s. 36-A(3)(a), s. 36-A(3)(b), s. 36-B, s. 36-C, s. 36-D

Subjects

unfair trade practiceprice increaseconsumer protectionprize lottery schemeburden of proofMonopolies ActSection 36Acease and desistcompetition

Judgment

NIRMA INDUSTRIES LTD. A
v.
DIRECTOR GENERAL OF INVESTIGATION
AND REGISTRATION

MAY 6, 1997 B
[J.S. VERMA, CJ. AND S.P. KURDUKAR, J.]

Monopolies and Restrictive Trade Practices Act, 1969 : Sections 36-
A(3)(a) and 36-D.
c
Unfair trade practice-Company floated a scheme of awarding and
distributing of prizes through a lottery as an incentive to the consumer for its
products-Complaint filed before Director General (Investigation & Registra-
tion) alleging that company had increased price of its products just prior to
launching of scheme with an intention to recover the value of the prizes fully D
or partly from the consumers-DG (I & R) immediately filed an application
before the Monopolies and Restrictive Trade Practices Commission for hold-
ing an inquiry and action under S.36-D-Commission on basis of pleadings ·
and on hearing advocates for the parties found the charge against the com-
pany under S. 36-A(3)(a) proved-Held: Finding of commission must be E
based on cogent material-Burden of proof, nature and adequacy of proof
will depend upon facts and circumstances of the case-Company had no
opportunity to justify increase in prices and there was no sufficient material
before the Commission to arrive at the conclusion that the company had
committed unfair trade practice under S.36-A(3)(a)-Hence, matter remitted
back to Commission for disposal afresh. F

The appellant, a public limited company was engaged in manufac-
ture and sale of washing powder, detergent cakes and bath soaps. The
appellant floated a scheme of awarding and distributing of prizes through
a lottery as an incentive to the consumers for its products. A complaint
was filed before the Director General (Investigation & Registration) alleg· G
ing that the appellant had increased the price of its products just prior to
the launching of the scheme with an intention to retover the value of the
prizes fully or partly from the consumers. The DG (I & R) immediately
filed an application before the Monopolies and Restrictive Trade Practices
Commission for holding an inquiry into the unfair trade practices under H
137
138 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A Section 36-D(l) of the Monopolies and Restrictive Trade Practices Act,
1969 and pass an order of 'cease and desist' against the company. The
Commission on the basis of the pleadings and on hearing the advocates
for the parties found that the charge against the appellant under Section
36-A(3)(a) of the Act was proved and accordingly directed the appellant
B not to repeat the same in future. Hence this appeal.

On behalf of the appellant it was contended that the Commission
had not taken into account the reply filed on behalf of the company that
the prices of the detergent powder were increased because of increase in
the prices of raw material and other cost, that if the Commis~ion were to
C call upon the company to justify the increase in the prices of the detergent
powder dehors the prize money, the company would have produced the
material to dislodge tbe assumption that this increase in the prices of the
detergent powder was not bonafide and in fact an exercise to cover fully or
partly the prize money; and that the audited balance-sheets and other
D evidence, which was in the possession of the appellant, would indicate that
the increase in the prices of the detergent powder was necessitated because
of the increase in the prices of raw materials and other factors connected
therewith.

E Disposing of the appeal, this Court

HELD : 1. Any unfair trade practice which causes loss or injury to
the copsumers of goods or service either by eliminating or restricting
competition or otherwise would attract the penal consequences. Each of
F the clauses employed in Section 36-A of the Monopolies and Restrictive
Trade Practices Act, 1969 is interwoven by use of the conjunction and
· would indicate that before determining a trade practice being unfair trade
practice, the Monopolies and Restrictive Trade Practices Commission has
to be satisfied as to whether the necessary ingredients contained therein
are satisfied or not. The words "or otherwise" in Section 36-A of the Act
G are of wider import and would signify not only actual loss but also would
include probable or likelihood of consumers suffering loss or injury in any
form. But for that purpose also, there has to be some cogent material
before the Commission to support a finding of unfair trade practice and
any inferential finding would be contrary to Section 36-A of the Act. It is
H necessary for the Commission to call upon the parties to substantiate the
NIRMA INDUSTRIES LTD. v. DIR GEN. OF INVESTIGATION &REGISfRATION 139

allegations. The bnrden of proof, the nature of proof and adequacy thereof A
would depend upon the facts and circumstances of each case. [147-D-F]

2. The Commission in its impugned order held that the gift/prize
scheme lloated by the company amounted to unfair trade practice under
Section 36-A(3)(a) of Act and to support this finding, the only material B
placed before the commission was the complaint filed by the Director

)
'
General (Investigation & Registration) containing an averment that the
company had raised the prices of its detergent a few days before impugned
scheme was lloated. The finding of the Commission in this behalf proceeds
on the footing that the prize money under the impugned scheme was either
fully or partly covered by the amount charged in the transaction as a whole. C
The averment in the complaint of the D.G. cannot be presumed to be per
, se valid being a proof of an unfair trade practice under Section 36-A(3)(a)
of the Act. For want of sufficient opportunity and under the misconception
of law, the company could not produce the evidence on record and,
therefore, prayed that the matter be remitted back to the Commission with D
liberty to the company to produce the relevant evidence on record to
substantiate its contentions. The inference of per se presumption against
the company under ~ection 36-A(3) (a) of the Act was unsustainable. Along
with this appeal, the company had produced on record certain documents
to justify the increase in the prices of the detergent powder and also sought E
to prove that the increase in the prices of the detergent powder has no
nexus with the prize money covered by the impugned scheme either fully
or partly. However, without expressing any opinion in this behalf and to
do justice between the parties, it must be held the company needs to be
given an opportunity to prove its case that they have not committed any F
unfair trade practice under Section 36-A(3)(a) of the Act. Such a finding
is necessary in order to determine whether such an unfair trade practice
has caused loss or injury to the consumers of such goods by eliminating
or restricting competition or otherwise. [147-G-H; 148-A-G]

3. The impugned order of the Commission passed under 36-D of the G
Act holding that the company had committed unfair trade practice under
Section 36-A(3)(a) of the Act is unsustainable and it is accordingly
quashed and set aside. The matter is remitted back to the Commission for
disposal afresh in accordance with law after giving an opportunity to both
the parties to lead such evidence as they deem fit. [149-B] H
140 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4498 of
1996.

From the Judgment and Order dated 4.1.96 of the Monopolies and
Restrictive Trade Practices Commission, New Delhi in Unfair Trade Prac-
tices Enquiry No. 119 of 1991.
B
· Dushyant A. Dave, Gaurav Benerjee, R.N. Karanjawala, Ruby Ahuja,
Manik Karanjawala and Kishore Gajria for the Appellant.

A.K. Ganguli, Dilip Tandon, N.K. Aggarwal, C.S. Bhardwaj and P.
Parmeswaran for the Respondent.
c
The Judgment of the Court was delivered by

S.P. KURDUKAR, J, This appeal under Section 55 of the Monopo-
lies and Restrictive Trade Practices Act, 1969 (for short 'the Act') is filed
by the appellant challenging the legality and correctness of the judgment
and order dated January 4, 1996 passed by the Monopolies and Restrictive
Trade Practices Commission, New Delhi (for short 'the Commission'). The
appellant has suffered an order of 'cease and desist' under Section 36-D
of the Act for having indulged in unfair trade practices under Section
36A(3)(a) of the Act.
E
2. Briefly stated the facts of the case are as under :

The appellant a public limited company (for short 'the company)
having its registered office at Ahmedabad, is engaged in manufacture and
sale of Nirma washing powder, Nirma detergent cakes and Nirma bath
F soaps. The company has. been manufacturing these products since early
seventies and its products are marketed and sold all over the country. It is
the claim of the appellant that having established a good market for sale
of its various products and having captured the confidence of the con-
sumers, thought of offering a scheme as an incentive to the consumers for
its products. The appellant, therefore, on April 25, 1991, floated a scheme
G of awarding and distributing of prizes through a lottery. According to the
scheme, the appellant placed a coupon bearing a number in each one kg.
pack of detergent/washing powder. The said scheme was valid till July 31,
1991 and the draw of lots was to be held on August 30, 1991. The coupon
kept in the one kg. bag of detergent mentioned that prizes worth Rs. 71
H lacs were to be distributed which included Contessa Car, Maruti 800 Car,
N!RMA !NDIJSI'RIES LID v. DIR. GEN. OF INVESTIGATION &REGISTRATION (S.P. KURDUKAR. J.j 141

BPL TV set, golden chain, Titan watch, Steel jug, Ladies purse, Steel bawl A
set and cash.

3. On July 24, 1991, a complaint was received by the D.G. (I & R)
from Azad Singh, New Delhi, alleging, inter alia, that the company while
floating a scheme in question did not inform the customer as to in which B
newspaper the result would be published; the company had increased the
price of the detergent along with prize scheme; the said scheme is harming
the interest of the other companies in this competition and the condition
of the coupon is so bad that while opening the bag, it would get torn and
the winner of the prize will have to face difficulty in getting the prize which
' ' would help the company in evading the responsibility to give the prize. C
Azad Singh, therefore, prayed that action be taken against the company
and "save the poor people being robbed." The D.G. very promptly
responded to the complamt of Azad Singh and filed an application on July
26; 1991 before the Commission for investigation and registration of the
complaint under Section 36B(c) of the Act. The D.G. requested the D
Commission hold an inquiry into the unfair trade practices under Section
360(1) of the Act and pass an order of cease and desist against the
company. It was alleged in the complaint that the scheme in question
floated by the Company was with a view to promote the sale of its
detergent powder; that it lured the customers to purchase more and more
Nirma detergent powder under the temptation of getting the prizes; that E
this trade practice of offering prizes would lead to excessive purchases and
consumption by the customers in the expectation of getting prizes; that
such avoidable and the excessive purchases were real loss to the consumers
and that it had deleterious impact on competition inasmuch as extraneous
consideration other than quality and the price of the product tend to F
determine the consumer preference; that there are several detergent
manufacturers in India; that the impugned scheme of the respondent
affected, djstorted and restricted competition among the various manufac-
turers of detergent powder and that the conduct of lottery or game of
chance for the purpose of promoting the sale, use or supply of detergent
powder by the appellant amounted to an unfair trade practice within the G
meaning of Section 36A(3)(a) and (b) of the Act. It was then alleged by
the D.G. in his complaint that company had increased the price of its
detergent powder just prior to the launching of the scheme with an inten-
tion to recover the value of the prizes fully or partly from the consumers
by raising the prices of its products. The company, therefore, had indulged H
142 SUPREME COURT REPORTS [1997) SUPP. lS.C.R.

A in unfair trade practice under Section 36A(3)(a) and (b) of the Act. The
D.G., therefore, recommended that the Commission would inquire into the
complaint and pass cease and desist order against the company.

4. The Commission on perusal of the application of the D.G. and
examining the documents annexed thereto issued notice of inquiry to the
B company.

5. On receipt of the said notice, the company filed its detailed reply
denying the allegations contained in the complaint. The Company, how-
ever, accepted that it had floated the scheme in question with a view to
C give prizes to the customers. The company denied that it had indulged in
any unfair trade practice for the purpose of promoting the sale or it had
caused loss and injury to the customers or eliminated or restricted com-
petition. That the scheme had come to an end on July 31, 1991, and
'-._

therefore, the complaint filed by the D.G. has becOilieinfructuous. That
D the draw was held and the prizes were declared and distributed according ,'
to the scheme. That there is no cogent and sufficient material to hold that
the scheme in question had infringed either the provisions of Section
36A(3)(a) or Section 36(3)(b) of the Act. That there is no averment in the
complaint which would prima facie show that company had indulged in
unfair trade practice being prejudicial to the public interest or the interest
E of any consumer or consumers generally. That the impugned prize scheme
was approved and authorised by the District Magistrate, Ahmedabad
und~r the Bombay Lotteries (Control and Tax) and Prize Competition
(Tax) Act, 1958 and the rules framed thereunder. That the increase in the
price of its product was not with an intention to cover the prize money
F either fully or partly. On the contrary, the prices were increased on July
26, 1990, November 19, 1990 and April 2, 1991 because of increase in the
prices of raw material and other costs. That the scheme floated did not
lure the customers to purchase more and more washing powder under the
temptation of getting prizes. That the demand and supply of such products
are governed by several factors in the market and the consumers were
G never influenced by mere introduction of the impugned scheme. That no
public interest had been prejudiced by the impugned scheme. The com-
pany, therefore, prayed that the complaint and the application being devoid
of any merit and the same be dismissed.

H 6. The Commission on the basis of the above pleadings formulated
NIRMA INDUSTRIES LTD. v. DIR. GEN. OF INVESTIGATION &REGISTR.ATION [S.P. KUR.DUKAR. J. J 143

four issues for its consideration and heard the Advocates for the parties. A
,; The Commission vide its impugned order found that the company has not
committed the breach of Section 36A(3)(b) of the Act and the charge in
that behalf is unsustainable. The Commission, however, found that the
~ charge against the company under Section 36A(3)(a) of the Act is proved
and accordingly directed the company not to repeat the same in future. It
B
is this order of the Commission dated January 4, 1996 which is subject
matter of challenge in this appeal.

7. In this appeal, we are called upon to decide as to whether the
company had indulged in any unfair trade practice as provided under
Section 36A of the Act as it stood between May 21, 1984 and September c
24, 1991. Section 2U defines trade practices as under :

"2U- Trade practice means any practice relating to carrying on of
any trade, and includes -

(i) anything done by any person which controls or affects the D
price charged by, or the method of trading of, any trader or
any class of trader,

(ii) a single or isolated action of any person in relation to any
... trade."
E
8. The Act came to be amended by Act No. 30 of 1984 called the
Monopolies and Restrictive Trade Practices (Amendment) Act, 1984. Sec-
ti on 36A was brought on Statute in Chapter V part B called "Unfair Trade
Practices." Section 36A defines Unfair Trade Practices and the relevant
provisions are as under : F

36A - Definition of Unfair Trade Practice :

"In this part, unless the context otherwise requires, "uafair trade
practice" means a trade practice which for the purpose of promo!-
ing the sale, use or supply of any goods or for the provision of any G
services, adopts one or more of the following practices and thereby
.' causes loss or adopts one or more of the following practices and
thereby causes loss or injury to the consumers of such goods or by
service, whether by eliminating or restricting competition or other-
wise, namely : H
144 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A 1. xxx: xxx: xxx

2. xxx xxx xxx

3. (a) Permits - the offering of gifts, prizes or other items with
the intention of not providing them as offered or creating the
B impression that something is being given or offered free of
charge when it is fully or partly covered by the amount
charged in the transaction as a whole,

(b) the conduct of any contest, lottery, game of chance or skil~
for the purpose of promoting, directly or indirectly, the sale,
c use or supply of any product or any business interest.

4. xxx xxx xxx
5. xxx xxx xxx

D Section 36C provides investigation by Director General before an
issue of process in certain cases. In the present case, the Director General
on receipt of the complaint on July 24, 1991 from one Shri Azad Singh,
perused the same and immediately on July 26, 1991 submitted his applica-
',
tion to the Commission for making inquiry and for suitable action under
·E Section 36D of the Act.

9. On perusal of the scheme of Section 36A to 36E, it is clear that
whenever a complaint is received by the D.G. alleging unfair trade practice
having been committed by the company, the D.G. under Section 36C is
obliged to make a preliminary investigation including issuance of notice to
F the complainant for the purpose of investigation and on being satisfied that
the complaint requires to be inquired into, submit his application to the
Commission for inquiry under Section 36D of the Act. In the present case,
it is common premise that the presence of Azad Singh could not be secured
and the only material before the D.G. at the time of making an application
G to the Commission was the complaint dated July 24, 1991. The company
on receipt of notice of inquiry from the Commission filed its detailed reply
along with the certificate granted by the District Magistrate; Ahmedabad
(Lottery) granting permission to the scheme.

10. As indicated earlier, the Commission recorded a finding that no
H charge under Section 36A(3)(b) of the Act was proved against the com-
NIRMA INDUSTRIES LTD. v. DIR. GEN. OF INVESTIGATION &REGISTRATION (S.P. KURDUKAR, J.] 145

pany. No appeal against that part of the order of the Commission was filed A
in this Court. The said finding and order thereof passed by the Commission
is final and is not the subject matter of challenge in this appeal. What
survives for reconsideration in this appeal is as to whether on the material
placed before the Commission, the order passed against the company
under Section 36A(3)(a) is sustainable. ·
B
11. Mr. Dushyant A. Dave, Learned Senior Advocate appearing in
support of this appeal urged that the order of the Commission holding that
the company had indulged in unfair trade practice under Section 36A(3)(a)
is unsustainable because there was no material except the complaint/ap-
plication of D.G. before the Commission to hold the charge proved. He C
urged that the Commission erroneously assumed that the offering of prizes
was with an intention not providing them as offered or creating the impres-
sion that something is being given or offered free of charge when it is fully
or partly covered by the amount charged in the transaction as a whole.
While elaborating this submission, he urged that the increase in the prices D
of detergent on April 2, 1991 was a bonafide exercise on the part of the
company and the same was not done with a view to wholly or partially cover
the amount of prizes to the consumers under the Scheme. The offering of
such prizes wa5 merely an incentive to the consumers for their "brand and
loyalty". Learned Counsel urged that in order to prove the charge under
Section 36A(3)(a) of the Act, there has to be a cogent evidence before the E
Commission to hold the said charge proved. In the present case, he urged
that except a complaint of Azad Singh received by the D.G. on July 24;
i991, there was no other material either before the D.G. or before the
Commission to substantiate the said charge. The preliminary inquiry that
was alleged to have been conducted by the D.G. was wholly perfunctory. F
The complaint filed by D.G. on July 26, 1991 was nothing but an ipse dixit
based on the complaint dated April 24, 1991 filed by Azad Singh whose
presence despite best efforts could not be secured either at the time of
preliminary inquiry or before the Commission. He then urged that Section
36A does not equate specified practices in sub Section (1) to sub Sections G
(5) as unfair trade practices but merely enumerates them as trade prac-
tices. It is only when such trade practices result in causing loss or injury to
consumers of such goods or services by eliminating or restricting competi-
tion or even otherwise when they become "unfair trade practices''. The
legislature did not characterise the specified trade practice as unfair trade
practices. Therefore, on a plain construction of Section 36A, it is necessary H
146 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.

A that every ingredient must be satisfied and particularly because of the use
of word and after the words "the following practices" as also the words
"thereby causes loss or injury" before the words "to the consumers of such
goods or services." To substantiate the above argument, counsel drew our
attention to the Sachar Committee report which recommended to specify
certain unfair trade practices and prohibit them altogether as indicated in
B
the Bill but, however, the legislature by amendment Act No. 30 of 1984
redefined Section 33 but did not choose to redefine Section 36A despite
the recommendation of the Sachar Committee. He, therefore, urged that
in the absence of Jlroof of trade practices resulting in causing loss or injury
to consumers of such gouds or services by eliminating or restricting com-
C petition or even otherwise, they would not become unfair trade practices.
The Commission erroneously assumed that there was per se unfair trade
practice in the scheme which view is unsustainable .

.- 12. Mr. Ganguly, Learned Senior Advocate appearing for the respon- -1
D dent/Commission seriously countenanced the aforesaid contention raised
on behalf of the appellant and urged that the plain reading of Section 36A
which defines the expression unfair trade practices to mean a trade prac-
tice which, for the purpose of promoting the sale, use or supply of any ·
goods, adopts (a) one or more of the practices enumerated therein; and
(b) thereby causes loss or injury to consumers of such goods by eliminating
E or restricting competition or otherwise. In order to constitute an unfair
trade practice under Section 36A, it is necessary to establish that the trade
practice concerned is one of several kinds of trade practices mentioned in
sub sections (1) to (5) thereof and once it is established that the trade
practice complained of falls in one or more of the trade practices men-
F tioned in sub sections (1) to (4) of Section 36A, it would then be only
question of inference to be drawn by the Commission as to whether such
trade practice causes loss or injury to the consumers of goods or services
either by eliminating or restricting competition or otherwise. The words "or
otherwise" are of wider import and they signify not only actual loss or injury
suffered by consumers but also probable or likelihood of the consumers
G suffering loss or injury in any form. The object of the amending Act 30 of
1984 is to extend an additional protection to the consumers from being
subjected to unfair trade practice and, therefore, it is not necessary to
prove auy loss or injury actually suffered by the consumers. Consistent with
this object, Section 36D empowers the Commission to issue a cea&e and
H desist order and can prevent execution of trade practice which may fall in
NIRMA INDUS!RlES LTD. v. DIR. GEN. OF INVESl1GATION &REGISTRATION [S.P. KURDUKAR. J.] 147

one or more of the practices mentioned in sub Sections (1) to (5) of Section A
36A.

13. On careful analysis of unfair trade practice defined in Section
36A, it is quite clear that the trade practice which is undertaken by the
company for the purpose of promoting the sale, use or supply of any goods B
or for the provision of any service/services adopts one or more following
practices and thereby causes loss or adopts one or more of the following
practices and thereby causes loss or injury to the consumers of such goods
or service whether by eliminating or restricting competition or otherwise
would amount to unfair trade practice. The above key words used in
Section 36A while defining the unfair trade practices have laid emphasis C
on "thereby causes loss or injury to the consumers of such goods or services
whether by eliminating or restricting competition or otherwise." It must,
therefore, follow that any such unfair trade practice which causes loss or
injury to the consumers of such goods or service either by eliminating or
restricting competition or otherwise would attract the penal consequences D.
as provided under this chapter. Each of the clauses employed in Section
36A is interwoven by use of the conjunction and would indicate that before
determining a trade practice being unfair trade practice, the Commission
has to be satisfied as to whether the necessary ingredients contained
therein are satisfied or not. The words "or otherwise" in Section 36A
assuming are of wider import and would signify not only actual loss or E
injury suffered by consumers but also would include probable or likelihood
of consumers suffering loss or injury in any form. But for that purpose also,
there has to be some cogent material before the Commission to support a
finding of unfair trade practice and any inferential finding would be con-
trary to Section 36A of the Act. It is necessary for the Commission to call F
upon the parties to substantiate the allegations. The burden of proof, the
nature of proof and adequacy thereof would1depend upon the facts and
circumstances of each case.

14. The Commission in its impugned order held that the gift/prize G
scheme floated by the company amounted to unfair trade practices under
Section 36A(3)(a) of the Act and to support this finding, the only material
placed before the Commission was the complaint filed by the D.G. con-
taining an averment that the company had raised the prices of its detergent
a few days before the impugned scheme was floated. The finding of the
Commission in this behalf proceeds on the footing that the prize money H
148 SUPREME COURT REPORTS (1997] SUPP. l S.C.R.

A under the impugned scheme was either fully or partly covered by the
amount charged in the transaction as a whole. Should this averment in the
complaint of the D.G. be presumed to be per se valid being a proof of an
unfair trade practice under Section 36A(3)(a) of the Act? The Commission
appears to- have been influenced by its own unreported decisions wherein
such a view was taken and followed. Mr. Dushyant, Learned Senior Advo-
B cate for the appellant urged that the Commission had not taken into
account the reply filed on behalf of the company that the prices of the
detergent powder were required to be raised because of rise in the prices
of the raw materials. If the Commission were to call upon the company to
justify the increase in the prices of the detergent powder dehors the prize
C money-the Company would have produced the material to dislodge the
assumption that this increase in the prices of the detergent powder was not
bonafide and in fact an exercise to cover fully or partly the prize money.
The learned counsel for the appellant stated before us that the audited
balance sheets and other evidence is in their procession which would
D indicate that the increase in the prices of the detergent powder was
necessitated because of increase in the prices of raw materials and other
connected factors therewith. For want of sufficient opportunity and under
the misconception of law, the company could not produce the evidence on
record and, therefore, prayed that the matter be remitted back to the
Commission with liberty to the company to pr~duce the relevant evidence
E on record to substantiate its contentions. Having regard to the facts and
circumstances of the case and having come to' the conclusion that the
inference of per se presumption against the company under Section
36A(3)(a) of the Act was unsustainable. Along with this appeal, the com-
pany had produced on record certain documents to justify the increase in
F the prices of the detergent powder and also sought to prove that the
increase in the prices of the detergent powder has no nexus with the prize
money covered by the impugned scheme either fuliy or partly. However,
without expressing any opinion in this behalf and to do the justice between
the parties, we are of the opinion that the company needs to be given an
opportunity to prove its case that they have not committed any unfair trade
G practice under Section 36A(3)(a) of the Act. Such a finding is necessary
in order to determine whether such an unfair trade practice had caused
loss or injury to the consumers of such goods by eliminating or restricting
competition or otherwise. As stated earlier, except the complaint of the
D.G., there was no other material before the Commission which would
H justify the finding in this behalf. Such an exercise is necessary since any
NIRMA !NDUSIRJES LID. v. DIR. GEN. OF INVESTIGATION &REGISIRATION [S.P. KURDUKAR. l.] 149

order passed under Section 360 attracts the penal consequences. A
f .

15. For the aforesaid conclusions, we are of the opinion that the
impugned order of the Commission passed under Section 360 of the Act
holding that the company had committed unfair trade practice under
Section 36A(3)(a) of the Act is unsustainable and it is accordingly quashed
and set aside. The matter is remitted back to the Commission for disposal B
afresh in accordance with law after giving an opportunity to both the
parties to lead such evidence as they deem fit. The appeal is accordingly
disposed of. In the circumstances of the present case, parties are directed
to bear their own costs.

V.S.S . Appeal disposed of. C

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