ESKAY ENTERPRISES Vs. RAVISH INFUSION LTD

JUDGEMENT

(1.) The applicant, Eskay Enterprises as represented by Shri Vijay Deepak, partner, has made an application under Sec.12b of the MRTP Act, 1969 (the Act for brief) charging the respondent, Ravish Infusion Ltd. with adoption of and indulgence in unfair and restrictive trade practices and alleging therein, that the respondent is engaged in the manufacture and distribution of I V fluids and to market its product, it entered into an agreement with the applicant and pursuant thereto, appointed the applicant its C and F Stockist for East, South and part of Central Delhi. It has been further stated that the agreement was for a period of two years with effect from 31st March, 1995 and the applicant was required to deposit a sum of Rs.10,00,000/- with the respondent as security deposit which was to earn interest @ 15%. The details of the payments made to the respondent pursuant to the agreement have been indicated in the compensation application. It has been further stated that all the payments were made through cheques except the amount of Rs.2,25,000/- which was paid in cash and in lieu thereof, a receipt was issued by the respondent. The grievance of the applicant is that the respondent did not start commercial production even after two years of the date of entering into the above agreement and although the respondent issued three cheques of the total amount of Rs.1,90,605/- with its letter dated 16.3.1995 by way of payment of interest on the security deposit in terms of Clause 3 of the aforesaid agreement, the cheques were not honoured when presented to the State Bank of India for encashment and the advice received from the Bank was "not arranged". It has also been alleged that the cheques were again presented and the same were again returned by the Bank with the remarks "payment stopped by the drawer". In the above compensation application registered as C. A.126/1997 the applicant has not only claimed refund of the security deposit with interest accruing on it but also compensation for the loss of business suffered due to non supply of I V fluids by the respondent, amounting to Rs.20,20,000/- in all.

(2.) Likewise another application under Sec.12b of the Act, against the same respondent, has been filed by the applicant, Shri O. P. Aggarwal, partner on behalf of Prakash Medical Agencies alleging therein that pursuant to an agreement entered into with the respondent, he had deposited Rs.5,00,000/- for appointment as a C and F Stockist of the respondent for certain areas of South Delhi. In this application which has been registered as C. A.432/1997, it has been stated that the respondent issued a cheque No.155019 dated 15.2.1996, drawn on Goa State Cooperative Bank, of Rs.47,542/- towards payment of interest, on the security deposit, in terms of Clause 3 of the aforesaid agreement, but the cheque when presented for encashment was returned by the Bank with the remarks "funds insufficient". In this application also, while seeking refund of the security deposit with interest, compensation for loss of business has been claimed, totalling a sum of Rs.19,52,500/-. As these two compensation applications arise from the same cause of action involving the same respondent, the same are being taken up together, for disposal, by this single common order.

(3.) A notice in respect of each of the two applications was issued to the respondent. The respondent filed a reply to the C. A.126/1997 and denied the charge of adoption of unfair and restrictive trade practices but no reply was filed in C. A.432/1997. The respondent also made an application under Sec.34 of the Arbitration Act in C. A.126/1997 stating that in terms of Clause 9 of the agreement entered into by the applicant with the respondent, disputes between the parties were required to be referred to an Arbitrator and, therefore, the present proceedings were not maintainable.