TRIAD TRADING SERVICES LIMITED Vs. STATE OF TAMILNADU

JUDGEMENT

(1.) IN all these cases, the issue involved is one and the same. The petitioners are dealers in various consumer goods, groceries and dairy products. They have been purchasing butter/ghee flavoured milk and other products of the respondent No. 3 sold under the brand name "Aavin" from the respondent No. 5 who was the distributor for the concerned area. The petitioners have sold the said products giving discount to the public. On the basis that the petitioners were selling the products to the consumers at prices lower than the maximum retail prices fixed for the products, the respondent No. 5 refused to sell the dairy products of the respondent No. 3 to the petitioners. So the petitioners have filed the above writ petitions, seeking to issue a writ of mandamus, directing the respondent Nos. 1 to 4, their officers and agents to take action to ensure compliance with the law by their distributors and wholesalers including the respondent No. 5.

(2.) ACCORDING to the petitioners, though the maximum retail price of a 500 gms. butter pack is Rs. 55, they are selling it for Rs. 51.95 per 500 grams. By that, according to them, they are getting profit of six paise. The price of the same to the wholesale dealer is Rs. 49.89. They are allowed to get a margin of Rs. 2. So, the retailers price for the said product would be Rs. 51.89. The maximum retail price is fixed at Rs. 55 after allowing retailer price margin of Rs. 3.11. The fact is not under dispute.

(3.) 'Loss-leader', as explained in the Concise Oxford Dictionary, 8th edn., refers to an item sold at a loss to attract customers. So, to bring the petitioners' case within the abovesaid provision of section 40(2), the respondents should establish that the petitioners are selling the said products and are incurring loss. But, unfortunately, even according to the respondents, the petitioners are selling the butter at the rate of Rs. 51.95 per 500 grams which is over and above the purchase price of the petitioners, i.e., Rs. 51.89 per 500 grams. By that, the petitioners are making six paise profit. So, it cannot be said that the petitioners are incurring loss, and so the said products are being used as loss-leaders. After all, the petitioners are getting profit of six paise. This cannot be said as a loss. As stated already, the respondents cannot insist the petitioners to sell the said products only at the rate fixed as maximum retail price. From the above, it is very clear that the refusal to supply the said products to the petitioners by the respondents is not in accordance with law and so the attitude of the respondents to refuse to supply the said products to the petitioners cannot be sustained in law.