DIRECTOR GENERAL INVESTIGATION, REGISTRATION Vs. MOTHER DAIRY

JUDGEMENT

(1.) A complaint was received from certain consumers regarding sudden increase in the per litre prices of milk supplied by the Mother Dairy in Delhi in poly packs as well as through vending booths. It was complained therein that the price of milk in poly packs had been increased tors.12/-per litre and of toned milk to Rs.11 /-per litre with effect from 8.5.1996. The complaint was sent to the Director General (Investigation and Registration) (the DG) for investigation. After investigation the DG submitted a Preliminary Investigation Report (PIR) stating therein that the respondent, Mother Dairy was a part of the National Cooperative Sector and had been created in order to stop the exploitation of milk producers by offering them reasonable prices for the milk supplied by them and also to ensure that milk and milk products were made available to the consumers at reasonable prices. In conclusion, it was mentioned that the price increase in question, was unjustified and, therefore, attracted the provisions of Sec.2 (o) (ii) of the MRTP Act, 1969 (the Act for brief ).

(2.) Based on the PIR, a Notice of Enquiry dated 28.7.1997 was issued to the respondent, Mother Dairy. The respondent, in its reply has stated that it is a subsidiary unit of the National Dairy Development Board but it is not getting any subsidy from the Government or any other agency and has to maintain its economic viability like any other commercial undertaking. It has been admitted that there was a price increase of full cream milk by Rs.1.50 per litre in May, 1995 and further Re.1 /- per litre in February, 1996 and similarly price of toned milk by 50 paise per litre in 1995 and Rs.2/- per litre in May, 1996. However, the allegation of adoption of and indulgence in restrictive trade practices within the meaning of Sec.2 (o) (ii) of the Act has been denied and it has been clarified in the reply that the prices of toned and poly pack milk were increased due to the increase in the procurement prices of milk paid by the respondent to the State Cooperative Dairy Federations of U. P. , Rajasthan, Punjab, Haryana and Gujarat. The details of the prices paid during the years 1995 and 1996 have also been furnished alongwith the reply. It has been further stated that the price increase was also necessitated by the upward revision of the electricity tariff and also the railway freight by 36% and 100% respectively. A copy of the notification issued by DESU increasing the tariff per unit of electricity has also been enclosed. Likewise, copies of the railway receipt dated 5th January, 1996, before the increase in freight and receipt dated 12th March, 1996 after the increase have been annexed with the reply. It has also been highlighted that the increase in the prices of milk was also due to reasons of economic viability of the respondent and further clarified that while the respondent made a profit of Rs.5.96 crores and Rs.4.05 crores in 1993-94 and 1994-95 respectively, in 1995-96 it showed a deficit of Rs.5.90 crores on account of higher prices paid for procurement of milk and other inputs and in order to earn a marginal profit of 2-3%, it had to increase the prices of milk.

(3.) On completion of pleadings, the following issues were framed : (1) Whether the present complaint is maintainable (2) Whether the respondent has been indulging in restrictive trade practices as alleged in the NOE (3) Whether these restrictive trade practices are not prejudicial to the public interest