J K CHEMICALS LTD Vs. STATE

JUDGEMENT

(1.) A Notice of Enquiry (NOE) was issued on 24.6.1997 to J. K. Chemicals Limited, Mumbai under Sec.10 (a) (iv) of the Monopolies and Restrictive Trade Practices Act, 1969 (for brief the Act) charging it with indulgence in restrictive trade practices based on a Preliminary Investigation Report (PIR) submitted by the Director General of Investigation and Registration (the DG ).

(2.) The respondent who manufactures and markets its products entered into a wholesale distributor agreement with its wholesalers/stockists/dealers for sale of its products. Clause (1) of the agreement allocated territories to the wholesalers. Clause (16) of the agreement requires the wholesale distributors to bill the stockists according to the recommended price-list of the Company which stipulated not only the profit margin for the wholesale dealers but also its selling price to the stockists. The margin of profit to the stockists as well as for the retailers has been fixed by the respondent with the result that the footnote that the retailers are free to charge a price lower than the maximum recommended retail price becomes redundant and the conditions imposed by the respondent has the effect of resale price maintenance. The price lists of the Company also provided for an incentive scheme for the stockists and retailers which tantamount to grant of concessions or benefits in connection with or by reason of dealings. The NOE alleged that the above clauses of agreement attracted the provisions of Sec.33 (1) (g), (f) and (e) of the Act.

(3.) During the course of the enquiry the Senior Manager of J. K. Ansell Limited, Mumbai filed an affidavit stating that the concerned product division of the respondent has since been taken over by J. K. Ansell Limited. An application supported by an affidavit has been filed by J. K. Ansell Limited under Sec.37 (2) of the Act.