IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:24.04.2008 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI WRIT PETITION NO.80 of 2006 PL.K.Nagappan Managing Director Ex-Nagappan Recoveries (P) Ltd., Flat No.7, 1st Floor Karpagam Apartments New No.9, Old No.22B Venkatesa Nagar 1st Main Road 2nd Extension Virugambakkam Chennai 600 092. .. Petitioner vs. 1.Monopolies and Restrictive Trade Practice Commission rep. by Director General MRTP House, Shajahan Road New Delhi 110 011. 2.Mr.Amit Yadav Head of Risk Management M/s.American Express International Inc. Travel Relates Services Enkay Centre A,A1,A2 Udyog Vihar Phase V, Gurgaon 122 106 Haryana, India. .. Respondents Writ petition filed under Article 226 of the Constitution of India praying for issuance of Writ of Certiorari as stated therein. For petitioner : Mr.PL.K.Nagappan Party-in-person For respondents : Mr.K.Suresh Babu for R.2 ORDER This writ petition is filed by the petitioner challenging the order of the first respondent dated 17.08.2005 made in C.A.No.136 of 2002. https://hcservices.ecourts.gov.in/hcservices/ 2. The petitioner was functioning as a Managing Director of Ex- Nagappan Recoveries (P) Ltd. According to him, he has entered into a debt collection service agreement with M/s.American Express Travel Related Services in November,1996 and the said Services are owned by American Express Bank Limited (in short, "Express"), which is a Scheduled Bank under the Reserve Bank of India Act,1934 which also holds a banking licence under the Banking Regulation Act,1949. 2(a). The second respondent is governed by the Reserve Bank of India Act and the Banking Regulation Act. As per the agreement between the petitioner and the second respondent, the petitioner was to collect credit card outstanding of M/s. Express and according to him, he has collected Rs.3 crores on behalf of the Express from defaulting credit card holders. According to the petitioner, he has been following only lawful methods for such collection. As per the agreement, he was to collect only the amount owed to Express from defaulting credit card holders. Even though the officers of the Express have been insisting the petitioner to collect the cheques which were bounced, in respect of which the second respondent's Advocate has issued notice to the defaulting parties under Section 138 of the Negotiable Instruments Act, the petitioner has refused to do so, since he is not authorised to do so under the agreement, and it is against his conscience. 2(b). It is the case of the petitioner that the second respondent has authorised one Vinu, who has been urging the petitioner to indulge in rowdyism, to use force for speedy collection of money. Since the petitioner has refused to do the same, the petitioner was intimidated by the said Vinu and the other employees of the Express. It is the further case of the petitioner that the Express has appointed one M/s.Dhun Collections, entrusting the same work which has been entrusted to the petitioner, viz., collecting money from the defaulting credit card holders and the second respondent has admitted the same by letter dated 05.11.1998. However, the appointment of the said M/s.Dhun Collections has not been informed to the petitioner. Therefore, according to him, two collection agents have been appointed for the very same set of work. 2(c). According to the petitioner, when the credit card holders have been knowing that the petitioner, who alone was appointed as representative for collection from the defaulting credit card holders, since the other person was indulged in rowdyism, the credit card holders have been under the impression that the petitioner has been sending the said M/s.Dhun Collections to indulge in rowdyism for the purpose of collection. The petitioner has in fact informed the same to Mr.Vinu of Express of Chennai by email. Thereafter, the second respondent by letter dated 01.08.1999, has arbitrarily terminated the petitioner's agency without giving 30 days' prior notice as per the agreement and also no reason has been given for such termination. 2(d). According to the petitioner, the termination is effected by the second respondent only for the reason that the petitioner has not agreed for the rowdyism method for collection, and therefore the termination is arbitrary, unilateral and monopolistic in nature. The petitioner has also issued a lawyer notice claiming compensation of Rs.2 crores. A reply notice was received from the second respondent https://hcservices.ecourts.gov.in/hcservices/ with untenable grounds on 01.02.1999. The petitioner, thereafter filed Compensation Application No.136 of 2002 before the Monopolistic and Restrictive Trade Practices Commission (in short, "MRTP Commission"), New Delhi, claiming compensation of Rs.2 crores along with interest at the rate of 16% per annum from the date of termination of the agency, viz., 01.08.1999. 2(e). According to the petitioner, the MRTP Commission has admitted his complaint and prima facie found that there is an unfair trade practice committed by the second respondent and the second respondent has evaded the receipt of notice and ultimately, on 23.04.2003, the counsel for Express appeared and undertook to file vakalath and later, a written statement was also filed by Sanjay Anand, as Principal Officer of the Express. According to the petitioner, the said Sanjay Anand has also filed an affidavit of evidence and thereby deliberately avoided to enter into the witness box. According to the petitioner, the Commission allowed such affidavit filed by Sanjay Anand, who has not been subjected to cross examination and the petitioner has filed rejoinder before the first respondent meeting all the contentions and also demonstrated about the genuineness of the claim of Rs.2 crores and made a good case in the enquiry as contemplated under Sections 12B, 36A and 55 of the Monopolistic and Restrictive Trade Practices Act,1969 (in short, "MRTP Act"). 2(f). The petitioner has also filed affidavit of proof and the matter has been adjourned by the first respondent for many days merely to harass the petitioner to travel from Chennai to New Delhi. It is the further case of the petitioner that Sanjay Anand, viz., the Principal Officer of Express, who has filed written statement has not even filed his power of attorney document showing the authorisation to appear in the case. Thereafter, Gowrah Bhulla, Team Leader of the Express filed another proof affidavit executed by one Sri.Shrikanth S.Grege, allegedly Senior Country Manager of the Indian Country of Express. According to the petitioner, Shrikant S.Grege has not subjected himself to the examination in the witness box to prove his authenticity. 2(g). It is also the further case of the petitioner that one Mr.Alok Wadhava, Accounts Controller of Express has written 15 letters to the petitioner to collect payment in respect of cheques, which were bounced but he has not chosen to be a witness before the first respondent. It is also the case of the petitioner that Mr.Vinu was also not examined and therefore, according to the petitioner, non- examination of witnesses was due to the deliberate conduct of the second respondent, which affected the right of the petitioner in proving his case. There are 14 hearings in the New Delhi and the petitioner has attended 12 hearings, while the second respondent attended 8 hearings. 2(h). It is the case of the petitioner that the second respondent has fabricated the letter dated 01.02.1999 to escape from the liability of proving the documents of Express by deliberately avoiding the authors of those documents to give evidence; that the material witnesses have been deliberately withheld by Express and the power of attorney filed by Express was not in force and therefore, the https://hcservices.ecourts.gov.in/hcservices/ affidavit filed based on the power has no legal value; that the Express has caused hardship and it is abuse of process; that the petitioner has filed a criminal complaint before the VII Metropolitan Magistrate in C.C.No.9120 of 2004 for various offences which has not been considered and there has been Non-Bailable Warrant against them. 2(i). It is the further case of the petitioner that the second respondent has been seeking adjournments from the first respondent Commission resulting in hardship to the petitioner. According to the petitioner, the second respondent is liable for prosecution under Sections 66 and 67 of the MRTP Act,1951 and Section 62 of the MRTP Act for filing fabricated document. Ultimately, the first respondent has dismissed the compensation application on 17.08.2005, against which the present writ petition has been filed. 2(j). The petitioner has challenged the order of the MRTP Commission dated 17.08.2005 on various grounds, including that the first respondent has erred in coming to the conclusion that the second respondent was not involved in any unfair trade practice; that the first respondent overlooked the order dated 01.08.2002 wherein the compensation application was admitted by the first respondent itself and therefore, it should be deemed that there is a prima facie case of unfair trade practice; that the first respondent has failed to appreciate the very object of the MRTP Act which is to promote social order with socio-economic and political justice; that the first respondent failed to appreciate that the second respondent has unilaterally and illegally terminated the agency of the petitioner; that the first respondent has overlooked the provisions of Section 2 (u) of the MRTP Act, which defines the unfair Trade Practice; that the first respondent ought to have considered that the second respondent has fabricated the alleged letter of termination, which is the offence committed by the second respondent under Section 15 of the MRTP Act; that the first respondent has failed to consider that the various witnesses have not been examined by the second respondent which resulted in great hardship to the petitioner; that the first respondent failed to consider the case of illegal conduct of the second respondent in arbitrarily terminating the agency of the petitioner as a result of which the petitioner had to close down his business; that the first respondent has not taken into account that no evidence has been let in on behalf of the second respondent to show that the second respondent has not committed unfair trade practice; that the first respondent failed to appreciate that the appointment of another agent, viz., M/s.Dhun Collections while the petitioner continued to be the agent of the second respondent itself is illegal; that the first respondent has not properly appreciated the provisions of Section 16B of the agreement; and that even though it is open to the second respondent to have another agent, there cannot be two agents for same transaction; that the first respondent ought to have considered that the second respondent's conduct in terminating the agency of the petitioner and in perpetuating the unfair trade practice; that the first respondent has not considered the criminal case filed by the petitioner against the officials of the second respondent; that the first respondent failed to consider that in fact a public interest litigation has been entertained against the Express https://hcservices.ecourts.gov.in/hcservices/ by the Bombay High Court. 3. The second respondent in the counter affidavit has raised a preliminary objection stating that the petitioner has not approached this Court with clean hands and he has suppressed the vital facts. According to the second respondent, as per the terms of the Collection Service Agreement dated 15.11.1996, the parties have specifically agreed to submit themselves to exclusive jurisdiction of the Courts in New Delhi and therefore, suppressing the said Clause, the writ petition has been filed before this Court. Further, this Court has no territorial jurisdiction to decide about the orders of the MRTP Commission. Further, as per the MRTP Act, against the order of MRTP Commission, an appeal is provided. It is also stated that the question of legality or otherwise of termination of the Agreement cannot be decided by the MRTP Commission. That apart, the second respondent has denied the various allegations raised by the petitioner. 3(a). It is also stated that as per the terms of the Agreement, the second respondent is entitled, at his discretion, to appoint any number of agents. It is also stated that the second respondent has entrusted the same collection cases which were already given to the petitioner to M/s.Dhun Collection and hence, there is no violation in the appointment of M/s.Dhun Collection as Collection Agent, since the Agreement provides a right on the part of the American Express to enter into similar Agreement with third parties during the currency of Agreement. 3(b). It is also denied that M/s.Dhun Collection has involved in rowdyism. Further the allegation that the termination of Agreement was arbitrary is denied. It is stated that the second respondent in the letter dated 01.02.1999 has informed the petitioner that in continuation of the discussion, the Agreement was terminated with effect from 01.03.1999. It is also denied that MRTP Commission was anywhere informed about the unfair trade practice on the part of the second respondent. It is also stated that Mr.Gaurav Bhulla has entered into witness box and he was examined and cross-examined by the petitioner completely, and therefore, the allegation is baseless. It is also stated that Mr.Sanjay Anand has also filed written statement. It is also stated that the finding of the first respondent Commission that the termination of Agreement is as per the terms of Agreement and it would not amount to unfair trade practice and the same is in accordance with law. 4. The petitioner has appeared party-in-person. He has repeated what he has stated in the affidavit filed in support of the writ petition. His contention is that when he was authorised agent for the purpose of collection from the defaulting credit card holders, the appointment of another person, viz., M/s.Dhun Collection, is opposed to the basic principles of law and therefore, it would amount to unfair trade practice. It is also his contention that the letter dated 01.02.1999, terminating the agency of the petitioner is a forged one. According to him, February,1999 was only having 29 days and therefore, the termination with effect from 01.03.1999 is not in https://hcservices.ecourts.gov.in/hcservices/ accordance with the terms of Agreement and therefore, it is treated as a restrictive trade practice. It is also his case that since there are no clear 30 days, the termination should be ignored. 4(a). It is his further contention that many witnesses who have been cited have not entered into the witness box. It is also his case that even in the termination order there is nothing about the show cause notice dated 01.02.1999. According to him, he, having 20 years of experience, has to close the business because of the unfair trade practice committed by the second respondent. It is his case that once MRTP Commission was prima facie satisfied about the unfair trade practice, it cannot go against its order unless concrete proof is available. According to the petitioner, the order of the MRTP Commission, which is challenged in this writ petition suffers from illegality, since the MRTP Commission has failed to take into consideration that no notice of termination was served on the petitioner. 4(b). It is also his case that MRTP Commission has wrongly come to the conclusion that no question of law is involved in this case. He would also submit that as per the oral order of the Commission dated 07.08.2003, the second respondent was to pay Rs.5,000/- as costs, but, the amount of Rs.2 crores arrived at by the petitioner has not been considered by the first respondent Commission. He would submit that the conduct of the second respondent is nothing but a restrictive trade practice as per the provisions of the Act. Since a deceptive method has been played, the second respondent is liable under Section 36A of the Act. He would also refer to various judgements, including he Commentary of MRTP Law by S.M.Dugar regarding the amount of damages. In respect of the issue of jurisdiction, it is his submission that the petitioner has received letters at Chennai. He would also submit that appeal to Supreme Court against the order of MRTP Commission will lie only in respect of proceedings under Section 12A of the Act. Relying upon the Commentary of MRTP Law of Dugar, he submitted that in cases where the order is relating to Section 12B, there is no appeal to Supreme Court. He would rely upon various judgements to impress that the first respondent being quasi-judicial authority must act judiciously and when prima facie case is made out it is not for the first respondent to go back from the said order. 5. On the other hand, it is the contention of the learned counsel for the second respondent that as per the clause of the agency agreement, the parties have agreed to submit to the jurisdiction of the Courts in Delhi and therefore, the writ petition in this Court is not maintainable. He would also rely upon the judgements in New Moga Transport Co. vs. United India Insurance Co. Ltd. (2004 (4) SCC 677); and Sanghi Transport Ltd., rep. By its General Manager having its registered office in M.I.Road, Jaipur vs. Oriental Insurance Company Ltd., rep. By its Manager, Tiruvallur (2007 (4) CTC 496). His further submission is that in fact the petitioner has questioned the validity of the order of termination of agency before the MRTP Commission, which has no jurisdiction at all as such question can only be raised in a Civil Court and he would also rely upon the judgement of the Supreme Court in Peico Electronics & Electricals vs. Union of India https://hcservices.ecourts.gov.in/hcservices/ (2004 (3) SCC 658). He would submit that termination of agreement is not at all unfair trade practice and therefore, the matter cannot be covered under MRTP Act. Even assuming otherwise, it is for the petitioner to prove the unfair trade practice committed by the second respondent. That apart, there is no unfair trade practice in termination of the agency of the petitioner. There is absolutely no evidence before the MRTP Commission about rowdyism stated to have been committed by the subsequent agent. He would submit that the complaint before the MRTP Commission is baseless and the MRTP Commission has no jurisdiction as per the judgement of the Supreme Court in National Textile Corporation Ltd., vs. M?s.Haribox Swalram [AIR 2004 SC 1998]. 6. I have heard learned counsel for the petitioner and respondents and perused the entire records. 7. At the outset, by virtue of passing of the Competition Act,2002 (Act 12 of 2003), Monopolies and Restrictive Trade Practices Act,1969 came to be repealed and the Monopolies and Restrictive Trade Practices Commission established under Section 5(1) of the said Act stood dissolved as it is seen from Section 66 of the Competition Act,2002. The said provision also states that all cases pertaining to unfair trade practices except those referred to in Clause (x) of sub- section (1) of Section 36-A of the Monopolies and Restrictive Trade Practices Act,1969 and pending before the Monopolies and Restrictive Trade Practices Commission on or before the commencement of Competition Act,2002, shall be transferred to the National Commission constituted under the Consumer Protection Act,1986. 8. Further, the cases covered under Clause (x) of sub-section (1) of Section 36-A of the Monopolies and Restrictive Trade Practices Act,1969 pertaining to unfair trade practices, on commencement of the Competition Act,2002, stand transferred to Competition Commission of India. Competition Act,2002 has come into force on notification by the Central Government on 31.03.2003 in respect of certain provisions and on 19.06.2003 in respect of other provisions. 9. Under the erstwhile Monopolies and Restrictive Trade Practices Act,1969, unfair trade practice was defined to mean "in relation to promoting the sale, use or supply of any goods or for the provision of any services, (adopts any unfair method or unfair or deceptive practice) including the false representation that goods are of a particular standard, quality or quantity, grade or composition, style or model or falsely representing that the services are of a particular standard, quality or grade; or falsely representing any re- built, second-hand, renovated, reconditioned or old goods as new goods; representing that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have; or representing that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have; or making a false or misleading representation concerning the need for, or the usefulness of any goods or services; or giving to public any warranty or https://hcservices.ecourts.gov.in/hcservices/ guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof; or making to the public a representation in form that purports to be a warranty or guarantee of a product or any goods or services or a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result; or materially misleading the public concerning the price at which a product or like products or goods or services have been; or are ordinarily sold or provided, etc." Of course, Clause (x) of sub-section (1) of Section 36-A of the erstwhile Monopolies and Restrictive Trade Practices Act,1969 deals about the false or misleading facts disparaging the goods, services or trade of another person. 10. The term "trade" is defined under Section 2(s) to mean any trade, business, industry, profession or occupation relating to the production, supply, distribution or control of goods and to include the provision of any service. Section 2(u) defines "trade practice" as under: "2(u). "trade practice" means any practice relating to the carrying on of any trade, and includes- (i) anything done by any person which controls or affects the price charged by, or the method of trading of, any trader or any class of traders; (ii) a single or isolated action of any person in relation to any trade." 11. On the facts and circumstances of the case, it is clear that what is claimed by the petitioner is that he is an agent for the purpose of collection of amounts from defaulting credit card holders on behalf of Express, viz., the second respondent. The authorisation which is purely a contract of agency has been given to the petitioner under a collection of service agreement entered between the parties. Under the terms of agreement, the petitioner has been authorised to collect from the defaulting credit card holders. The grievance of the petitioner is that while the authorisation given to him as a collecting agent continued, the second respondent has appointed another agent, viz., M/s.Dhun Collections for the same purpose and therefore, according to him it would amount to unfair trade practice. In addition to that, it is the case of the petitioner that the second respondent has arbitrarily terminated the service agreement and therefore, the termination would also amount to unfair trade practice. According to the petitioner, in the agreement it is provided that the petitioner must be given 30 days' time by registered post, but the termination notice dated 01.02.1999 states that the termination will be effective from 01.03.1999. According to him, in the year 1999, February month had only 29 days and therefore, the notice of termination is an unfair trade practice. 12. On the face of it, there is no difficulty to come to the https://hcservices.ecourts.gov.in/hcservices/ conclusion that the appointment of another agent in the place of the petitioner by the second respondent cannot be brought within the term of unfair trade practice under Section 36-A of the Act by any stretch of imagination and therefore, Monopolies and Restrictive Trade Practices Commission has correctly held that the petition itself is not maintainable. Clause 14 of the agreement which deals about the termination states as follows: "14. Termination. This Agreement may be terminated by either party by giving (30) days prior notice to the other party. Upon termination, you shall cease all collection activity in respect of all Accounts and you shall, upon request, immediately forward to American Express: (i) a detailed summary of all collection action taken by you; (ii) all monies collected on the relevant Accounts including all post dated cheques made payable to American Express; (iii) an evaluation of the strength of weakness of American Express' position; (iv) all