judgement:
vil Appeal No. 2176 of 1968.
Appeal from the Judgment and Decree dated the 18 8 1965 of the Mysore High Court in M.F.A. No. 341 of 1964.
S.T. Desai, K.N. Bhat and R.B. Datar for the Appellants.
Narayan Nettar for Respondent.
The Judgment of the Court was delivered by GUPTA, J.
The only question disputed in this appeal is whether a temple, known as Varadaraj Venkataramana Temple at Gutput in Mangalore Taluk, in Karnataka, is a public temple or a temple belonging to Goud Saraswat Brahmin Community of Gurpur.
This is an ancient temple founded about 400 years ago.
In a proceeding under section 57 of the Madras Hindu Reli gious and Charitable Endowments Act, 1951 (hereinafter referred to as the Act), the Deputy Commissioner by his order dated January 17, 1961 held that the temple was a public temple and the Commissioner on appeal affirmed the order of the Deputy Commissioner on June 12, 1961.
Thereaf ter the appellants who are the trustees of the temple insti tuted a suit, O.S. No. 106 of 1961, in the court of the Subordinate Judge, South Kanara, for a declaration that the temple was a private temple and not a temple as defined in section 6(17) of the Act or, in the alternative, for a declaration that it was a denominational or sectional temple belonging to the Goud Saraswat Brahmin community of Gurpur.
There was also a prayer for cancellation or modification of the order of Commissioner dated June 12, 1961 affirming that of the Deputy Commissioner that this was a public temple.
The Subordinate Judge held on the evidence that this was a denominational or sectional temple belonging to the Goud Saraswat Brahmin community of Gurpur and not a private temple.
He further held that there was no evidence before the Deputy Commissioner justifying his order which was affirmed by the Commissioner that it was a public temple.
He observed that "it is incorrect to draw an inference of dedication to the public merely from the fact of user by the public".
Accordingly, he allowed the alternative declaration asked for by the plaintiffs and modified the order of June 12, 1961 made by the Commissioner affirming the order of the Deputy Commissioner dated January 17, 1961.
From the deci sion of the trial court, the respondents preferred an appeal to the High Court.
The appellants before us also filed a cross objection contending that the Subordinate Judge should have held that the temple was a private temple and not a denominational or sectional temple.
The High Court found that this was a temple as defined in section 6(17) of the Act.
On the evidence also the High Court took a different view from the trial court and held that the temple was a place of religious worship dedicated to and used as of right by the general Hindu community and was thus a public temple.
On this 634 view the High Court allowed the appeal and dismissed the cross objection.
The appeal before us is by the plaintiffs on certificate granted by the Karnataka High Court.
The Subordinate Judge held on the evidence that the temple was founded by 37 Goud Saraswat Brahmin families of Gurpur, that the trustees managing the temple belonged always to the members of the said community, that the landed properties owned by the temple had all been endowed by members of this community, and that there was no reliable evidence of endowment of any immovable property by any person outside the community.
The Subordinate Judge on considering the evidence of defendants ' witness Nos. 2 to 4, on whom the defendants relied to prove that the temple was dedicated to the general Hindu community, found that none of them claimed a right of worship in the temple and the 'sevas ' offered by them were voluntary and the income from such sevas was also small.
He further found that it was only the members of the Goud Saraswat Brahmin community who were allowed to participate in the more important ceremo nies.
It was observed that the fact that Hindus other than those belonging to the Goud Saraswat Brahmin community were not prevented from worshipping in the temple did not "de prive the temple of its sectional character", that it was "incorrect to draw an inference of dedication to the public merely from the fact of the user by the public".
Thus the decision of the Subordinate Judge was that the temple was not a public temple because it was not dedicated to the general Hindu community but for the benefit of Goud Saraswat Brahmin community of Gurpur.
The High Court held that the definition of temple in section 6(17) of the Act covers the temple in question.
The definition is as follows: ""temple" means a place by whatever designation known, used as a place of public religious worship, and dedicated to, or for the benefit of or used as of right by, the Hindu community or any section thereof, as a place of public religious worship;" Even on the findings recorded by the Subordinate Judge, this would be a temple dedicated to or for the benefit of a section of the Hindu community and as such covered by the definition.
The High Court reversed the decision of the Subordinate Judge and held that "facts of the present case lend support to the conclusion that the temple must have been dedicated for the benefit of and used by the Hindu community and is being used by them, as of right, as a place of public religious worship".
The facts that weighed with the High Court were that Hindus generally came to worship in the temple and were not turned away and that when the deity is taken out in procession, members o.f the Hindu community other than Goud Saraswat Brahmins also offer "araties".
The claim made by some of the witnesses for the defendants that they used to consult the oracle in the temple also seemed to the High Court a significant circumstance.
But the High Court appears to have overlooked that these witnesses admit ted that "before consulting the oracle, 635 the manager must be told of it and it is he, who could consult on their behalf".
The High Court has recorded a finding that "numerous endowments" have been made by Hindus not belonging to Goud Saraswat Brahmin community.
This is not however supported by the evidence in the case.
Another circumstance which impressed the High Court was the recital in an award (Ext.
A 13) which was made part of the decree (Ext.
A 3) in a previous proceeding between the members of Goud Saraswat Brahmin community themselves, that the trus tees of the temple should place the accounts of income and expenditure before the "general body".
This "general body" according to the High Court implied, the Hindu community generally.
In the context of the award (Ext.
A 13) it is however clear that the 'general body ' mentioned therein could only refer to the members of the Goud Saras wat Brahmin community because the proceeding concluded by the decree was confined to the members of the community.
The law is now well settled that "the mere fact of the public having been freely admitted to the temple cannot mean that courts should readily infer therefrom dedication to the public.
The value of such public user as evidence of dedi cation depends on the circumstances which give strength to the inference that the user was as of right".
(see Bihar State Board.
Religious Trust, Patna vs Mahant Sri Biseshwar Das(1).
We find that the circumstances disclosed in evi dence in this case do not support the inference that Hindus generally used the temple as a place of worship as of right.
The appeal is accordingly allowed.
The Judgment of the High Court is set aside and that of the trial court re stored.
In the circumstances of the case we make no order as to costs.
S.R. Appeal allowed.
(1) (689).
502SCI/77 2500 23 11 77 GIPF.

summary/full:
section 6(17) of the Madras Hindu Religious and Charitable Endowments Act, 1951 defines a temple as "temple" means a place by whatever designation known, used as a place of public religious worship, and dedication to, or for the benefit of or used as of right by, the Hindu Community or any section thereof, as a place of public religious worship.
The Deputy Commissioner, in a proceeding u/s 57 of Madras Hindu Religious and Charitable Endowments Act, 1951 and the Commissioner on appeal held that an ancient temple founded about 400 years ago known as Varadaraj Venkataraman Temple at Gurpur in Mangalore Taluk in Karnataka as a 'Public Temple '.
But in the suit No. DS.
106/1961 instituted by the appellant trustees of the temple for a declaration that the temple was a private temple and not a temple as defined in section 6(17) or in the alternative that it was a denominational or sectional temple belonging to the Goud Saraswat Brahmin Community of Gurpur, the Subordinate judge South Kanara, held on the evidence that this was a denominational or sectional temple belonging to the Goud Saraswat Community and allowed the alternative declaration.
The High Court on appeal found that this was a temple as defined in section 6(17) of the Act and taking a different view of the evidence held that the temple was a place of religious worship dedicated to and used as of right by the general Hindu Community and was thus a public temple.
On appeal by certificate the Court, HELD: (1) It is now well settled that "the mere fact of the public having been freely admitted to the temple cannot mean that Courts should readily infer therefrom dedication to the public.
The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right." [635 B C] Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das, (689) referred to.
(2) In the instant case the circumstances disclosed in evidence do not support the inference that Hindus generally used the temple as a place of worship as of right.
The evidence is to the effect (i) that the temple was founded by 37 Goud Saraswat Brahmin families of Gurpur, (ii) that the trustee managing the temple belonged always to the members of said community, (iii) that the lended properties owned by the temple had all been endowed by members of the Community, (iv) that none of the witnesses claimed a right of ownership in the temple and the small sevas were voluntary, (v) that it was the members of the Goud Saraswat Brahmin Community who were allowed to participate in the more important cere monies.
[634 B D; 635D] (3) The High Court 's finding that "numerous endowment" have been made by Hindus not belonging to Goud Saraswat Brahmin Community, is not subpotted by the evidence in the case.
In the context of the Award (Ext.
A 13) the term general body mentioned therein could only refer to the members 633 of the Goud Saraswat Brahmin Community and not to the Hindu Community generally, because the proceeding concluded by the decree was confined to the members of the Community.
[635 A B]


judgement:
Civil Appeal Nos.
2254 & 2255 of 1968.
(From the Judgment and Order dated the 10 1 1967 of the Madhya Pradesh High Court in Misc.
First Appeal No. 12/64) Ram Panjwani, Rameshwar Nath, for the appellant in both the appeals.
A. G. Ratnaparkhi, for respondent No. 1 in CA 2254/68.
S.K. Gambhir, for respondent No. 1 in CA No. 2255/68.
The Judgment of the Court was delivered by GUPTA, J.
On June 23, 1961 a bus owned by the appellant which was going from Gwalior to Indore met with an accident as a result of which two of the passengers, Mrs. Usha Kotas thane, aged about 23 years, and her one year old son, died and several others received serious injuries.
Among the injured was one Sailesh Kumar, a boy of about four years.
Claims for compensation were filed before the Motor Acci dent Claims Tribunal at Gwalior.
The application for com pensation for the death of Mrs. Usha Kotasthane and her child was made by her husband Shri Sudhakar Kotasthane, and the claim in respect of the injury to minor Sailesh Kumar was made on his behalf by his guardian mother Shrimati Indubala Bhandari.
Sudhakar Kotasthane and Indubala Bhand ari were also travelling in the same bus and both sustained injuries and were awarded compensation by the tribunal, but these appeals do not concern their cases or the claim in respect of Kotasthane 's dead child.
The two appeals before us at the instance of the Madhya Pradesh State Road Trans port Corporation, on certificate granted by the Madhya Pradesh High Court, are against the common judgment of the High Court enhancing the quantum of damages awarded by the claims tribunal in respect of the death of Mrs. Usha Kotas thane and the injury sustained by Sailesh Kumar.
C.A. 2254 of 1968 relates to the award in Mrs. Kotasthane 's case and C.A. 2255 of 1968 to that in the case of Sailesh Kumar.
629 As regards the death of Mrs. Usha Kotasthane, the claims tribunal awarded Rs. 15000/ as damages to her hus band Sudhakar.
At the time of her death she was employed as a Physical Instructress in a school at Indore, getting a salary of Rs. 190/ per month, in the grade of Rs.150 10 250.
Admittedly Sudhakar remarried within a year of the death of his first wife.
This is how the tribu nal dealt with the claim: "In the present case, it is a case of the death of the wife.
The husband was not dependent on the earning of his wife.
He was himself earning independently.
The applicant has no where stated that on account of the death of his former wife, he has been deprived of her income, nor that he was dependant upon her.
It is true; that 'the wife of the appli cant was educated, healthy, employed, and earning.
As far as, the loss of companionship is concerned, it is again true that he faced this loss for nearly, 11 months, after which, he married for the second time.
No cross examination has been led by the non applicant on the point that the second wife is as accom plished, educated, and healthy as the former one was.
The death of the wife of the appli cant must have caused him mental shock, pain and inconvenient in his house hold.
The work in the house, which he could take from his wife in looking to the household was also not available to the applicant during this period of 11 month.
The advantage of established married life with a child in the lap, was also lossed to the applicant during this time.
Taking into consideration all these facts, in favour of the applicant, and the fact, against him that he was married again after 11 months, of the death of his wife, I think, it will be proper to award damages amounting to Rs. 15000/ for the loss of life of his wife, which resulted into conditions of inconven ience, suffering shock derangement in house and the life, for a period of nearly 11 months.
" Both sudhakar Kotasthane and Madhya Pradesh State Road Transport Corporation preferred appeals to the High Court from the decision of the tribunal.
The High Court proceeded as follows.
The "span of her earning life" was counted as 35 years taking 58 years as the age of superannuation.
For the first six years from the date of accident, the High Court took Rs. 200/ as the average monthly income, and for the remaining twenty nine years of service the average income per month was fixed at Rs. 250/ .
On this basis the High Court computed her total earning to be Rs. 96,000/ .
Giving allowance for her own expenses and also taking into account the promotions and consequently the increased salary she might have earned, the High Court thought that she could have "easily spread" half of this amount for the household and estimated the loss of income on account of her death in round figures, at Rs. 50,000/ .The High Court enhanced the compensation accordingly.
Regarding Sudhakar 's second, marriage the High Court observed: 630 "But even so the second marriage cannot be said to be a substitute for the ' first one.
The second wife is not an earning member of the family nor is it shown that Sudhakar has in any way benefitted from the second marriage financial ly.
Therefore the financial loss would be there despite the second marriage.
" On these findings the High Court allowed the appeal filed by Sudhakar Kotasthane and dismissed that preferred by the Madhya Pradesh State Road Transport Corporation.
The extract from the tribunal 's order quoted above suggests that in fixing the quantum of compensation the tribunal was under the impression that the applicant had made no claim on the ground of ' pecuniary loss resulting from his wife 's death.
In this the tribunal was clearly in error.
In paragraph 11 of the claim petition, Rs. 75,000/is claimed as compensation and the paragraph makes it clear, that the sum is computed on the deceased 's expected earn ings.
If there were no such claim the tribunal would have been hardly justified in awarding Rs. 15000/ as damages for the mental shock and inconvenience suffered by the applicant for a period of 11 months only, after which he remarried.
The High Court also does not seem to be right in estimating the damages at Rs. 50,000/ in the manner it did.
Whether the deceased 's average monthly salary is taken to be Rs. 200/ or Rs. 250/we find it difficult to agree that only half of that amount would have been sufficient for her monthly expenses till she retired from service, so that the remaining half may be taken as the measure of her husband 's monthly loss.
It is not impossible that she would have contributed half of her salary to the household but then it is reasonable to suppose that the husband who was employed at a slightly higher salary would have contributed his share to the common pool which would have been utilised for the lodging and board of both of them.
We do not therefore think it is correct to assume that the husband 's loss amounted to half the monthly salary the deceased was likely to draw until she retired.
If on an average she contributed Rs. 100/every month to the common pool, then his loss would be roughly not more than Rs. 50/ a month and, assuming she worked till she was 58 years, the total loss would not exceed Rs. 19,000/ .
But in assessing damages certain other factors have to be taken note of which the High Court over looked, such as the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife 's death would have been available to him in driblets over a number of years Allowance must be made for the uncertainties and the total figure scaled down accordingly.
The deceased might not have been able to earn till the age of retirement for some reason or other, like illness or for having.
to spend more time to look after the family which was expected to grow.
Thus the amount assessed has to be reduced taking into account these imponderable factors.
Some element of conjecture is inevitable in assessing damages Pearce in Mallet v Mc Monagle, 1970 (A.C.) (H.L.) 166 Lord( 174)calls it "reson able prophecy"sTaking note of all the relevant factors, the sum of Rs.15000/ awarded by the tribunal appears to be a reasonable figure which h we do not find any reason to disturb.
631 A method of assessing damages, usually followed in England, as appears from Mallet vs Mc Monagle (supra), is to calculate the net pecuniary loss upon an annual basis and to "arrive at the total award b multiplying the figure as sessed as the amount of the annual "dependency" by a number of "year 's purchase" ", (p. 178) that is, the number of years the benefit was expected to last, taking into consid eration the imponderable factors in fixing either the multi plier or the multiplicand, The husband may not be dependant on the wife 's income, the basis of assessing the damages payable to the husband for the death of his wife would be similar.
Here, the lady had 35 years of service before her when she died.
We have found that the claimant 's loss reasonably works out to Rs. 50/ a month i.e. Rs. 600/ a year.
Keeping in mind all the relevant facts and contingen cies and taking 20 as the suitable multiplier, the figure come to Rs. 12,000/ .
The tribunal 's award cannot there fore ' be challenged as too low though it was not based on proper grounds.
In a decision of the Kerala.
High Court relied on by the appellant (P. B. Kader vs Thatchamma: AIR 1970 Kerala 241 ), to which one of us was a party, the same method of assessing compensation was adopted.
The other appeal (C.A. No. 2255 of 1968) relates to the injury sustained by a boy aged about four years.
He suf fered compound fracture of his right tibia and fabula lower third near the ankle joint with infection of the wound.
Skin grafting had to be done and the boy had to remain in hospital from June 25, to August 4, 1961.
AccOrding to the doctor who examined him, the child was likely to develop a permanent limp which might require another operation at the age of 16 years or so.
In any case, in the opinion of the doctor the deformity was certain to persist till the boy was 16 years when another operation might remove it.
The tribu nal awarded Rs. 10,000/as general damages and Rs. 890/ as special damages.
The High Court increased the general damages to Rs. 20,000/ .
It appears from the evidence that the boy comes from a well to do family.
Though the possibil ity was there of the deformity being removed by surgical operation when he grew up to be 16 years, the other possi bility cannot be altogether ruled out.
That being the position, we are not inclined to interfere with the sum awarded by the High Court.
In the result, appeal No. 2254 of 1968 is allowed, the judgment of the High Court is set aside and the award of the tribunal is restored; appeal No. 2255 of 1968 is dismissed.
There will be no order as to costs in either appeal.
C.A. 2254 of 1968 allowed.
S.R. C.A. 2255 of 1968 dismissed.

dataset_name: IN-Abs

summary/full:
In a bus accident on June 23, 1961, one Mrs. Usha Kotas thane and her one year old son died.
One Sailesh Kumar.
a boy of about four years coming from a well to do family was disabled due to a compound fracture of his right tibia and fabula lower third near the ankle joint.
_ Sudhakar Kotas thane, the husband of the deceased and respondent No. 1 in C.A. 2254 of 1968 and Smt.
Indu Bala Bhandari.
mother of Sailesh Kumar and respondent No. 1 in C.A. 2255 of 1968 applied to the Motor Accident Claims Tribunal, Gwalior for compensation.
The Tribunal took into consideration (i) the loss of life of Sudhakar 's wife which resulted into condi tions of inconvenience, suffering, shock, derangement in house and the life for a period of nearly 11 months i.e., till he remarried and (ii) The fact that Mrs. Usha was working as Physical Instructress in a school getting a salary of Rs. 190/ p,m.
in the scale of Rs. 150 10 250 and awarded a sum of Rs. 15,000/ as compensation as against the claim of Rs. 75,000/ computed on the deceased 's earn ings.
The Tribunal also awarded a sum of Rs. 10,000/ as damages and Rs. 890/ as special damages to Smt.
Indubala.
Both the respondents and the appellant preferred appeals to the High Court from the decision of the Tribunal.
The High Court enhanced the compensation to Rs. 50,000/ in the case of Sudhakar and to Rs. 20,000/ in the case of Indubala.
Allowing the appeal in C.A. No. 2254 of 1968 and dis missing the appeal in C.A. No. 2255 of 1968, the Court.
HELD: (1) A method of assessing damages usually followed in England is to calculate the net pecuniary loss upon an annual basis and "to arrive at a total award by multiplying the figure assessed as the amount of the annual 'dependency ' by a number of year 's purchase", that is, the number of years that benefit was expected to last taking into consid eration the imponderable factors in fixing either the multi plier or the multiplicand.
The husband may not be dependant on the wife 's income.
the basis of assessing the damages payable to the husband for the death of his wife would be similar.
[631 AB] Rule in Mallet vs Mc Mongale 1970 (A.C.) H.L. 166 at 174 quoted with approval.
P.B. Kaclar vs Thatchamma AIR 1970 Kerala 241, approved.
In assessing damages certain other factors have to be taken note of, such as, the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife 's death would have been available to him in driblets over a number of years.
Allowance must be made for the uncertainties and the total figure sealed down accordingly.
The deceased might not have been able to earn till the age of retirement 628 for some reason or other, like illness or for having to spend more time to look after the family which was expected to grow.
Thus, the amount assessed has to be reduced taking into account these imponderable factors.
[630 G H] In the instant case, the deceased had 35 years of serv ice before her when she died.
The claimant 's loss reasona bly works out to Rs. 50/ a month i.e., Rs. 600/ a year.
Keeping in mind all the relevant factors and contingencies and taking 20 as the suitable multiplier, the figure comes to Rs. 12,000.
The Tribunal 's award cannot, therefore, be challenged as too low though it was not based on proper grounds.
The High Court was also not right in estimating the damages at Rs. 50,000/ in the manner it did.
2255 of 1968: Though the possibility was there, in the instant case, of the deformity being removed by surgical operation when the boy grew up to be 16 years, the other possibility of "likelihood to develop a permanent limp" cannot be altogeth er ruled out.
That being the position, the increase of general damages to Rs. 20,000/ , in the instant case, in addition to Rs. 890/ as special damages is proper.
[631 D F]


judgement:
Appeal No. 680 of 1976.
From the Judgment and Order dated the 17th March, 1976 of the Monopolies and Restrictive Trade Practices Commis sion, New Delhi in R.T.P. Enquiry No. 11 of 1974.
L.M. Singhvi, Ravinder Narain, Talat Ansari and Shri Narain for the Appellant.
L.N. Sinha, Sol.General, B. Datta and Girish Chandra for Respondents Nos. 1 and 2.
G.A. Shah and N. Nettar for Respondent No. 13 The Judgment of the Court was delivered by C.J.
This is an appeal under section 55 of the Monop olies & Restrictive Trade Practices Act, 1969 (hereinafter referred to as 'the Act ') against the order and judgment of the Monopolies & Restrictive Trade Practices Commission, New Delhi (hereinafter referred to as the 'Commission '), in proceedings started under section 10(a) (iv) of the Act against the appellant M/s. Hindustan Lever Ltd. (hereinafter referred to as 'the Company '), upon information furnished by Bhogilal Manilal Shah of M/s. Shah Manilal Motichand & Sons of Poona (hereinafter referred to as the 'informant ').
The informant was a redistribution stockist of the appellant company carrying on business regulated by the terms of an agreement, known as the redistribution stockists agreement of the company, found in a standard printed form, entered into with each stockist.
The agreement has 23 terms or clauses in it.
The clauses complained of are 5 and 9, which may be reproduced here: "5.The Redistribution Stockist shall use his best endeavours to maintain and in crease the trade of the Products in the said town and for this purpose he shall at all times keep and 'maintain adequate stocks of the Products in all its packings and he shall carry.
out all instructions and directions including those as to the maximum resale price which may from time to time be given by the Company or by the Company 's accredited repre sentatives in respect of the sale or resale or disposal by the Redistribution Stockist of stocks of the Products supplied to him in pursuance of this Agreement.
The Redistribution Stockist is prohibited from charging in excess of the maximum resale prices stipulated by the Company, but he may, at his discretion, charge prices lower than the said maximum resale prices.
The Redistribution 459 Stockist shall purchase and accept from the Company such stock as the Company shall at its discretion send to the Redistribution Stockist for fulfilling its obligations under this Agreement.
In order to ensure equitable and reasonable distribution of stocks at fair prices, the Redistribution Stockist shall not rebook or in any way convey, transport or despatch parts of stocks of the products received by him outside the aforesaid town except when he is so expressly directed in writing by the Company.
He shall also whenev er so required by the Company make available from the stocks of Company 's merchandise purchased by him such part as the Company directs him.
to do for purposes of resale on his behalf by the Company 's employee."
It is alleged that the two clauses, set out above found in identical agreements entered into by the Company with its stockists, whose number is quite large, constitute or autho rise restrictions which are unreasonable and illegal.
Hence, it was submitted by the respondents that it must be struck down or modified so as to make the business and trade of the appellant company and its stockists conform to the requirements of law.
The Commission had accepted the case brought to its notice by the informant and made the following order : "(1).
Clause 5 of the Agreement (Exhib it F) shall stand modified so that the follow ing shall be substituted in place thereof: "5.
The Redistribution Stockists shall use his best endeavours to maintain and in crease the trade of the products in the said town and for this purpose he shah at all times keep and maintain adequate stocks of the products in all its packings and he shall carry out the instructions and directions including those as to maximum resale price which may from time to time be given by the Company or by the Company 's accredited repre sentatives in respect of the sale or resale or disposal by the Redistribution Stockist of stocks of the products supplied to him in pursuance of this Agreement.
The Redistribu tion Stockist is prohibited from charging in excess of the maximum resale prices stipulated by the Company but he may at his discretion charge prices lower than the said maximum resale prices". "(2).
The practices of resale price maintenance and full line forcing to which original clause 5 of the agreement related, shall be discontinued and shall not be repeat ed.
(3) Clause 9 of the Agreement (Exhibit F) shall be void.
(4) The practice of area allocation to which clause 9 of the Agreement (Exhibit F) related, shall be discontinued and shall not be repeated.
460 (5) In all future price circulars or lists to be issued by the Respondents, it shall be clearly stated that the prices there in mentioned are maximum prices and that prices lower than these prices may be charged.
(6) This order shall come into force with effect from 1st July, 1976.
On or before the said date, the Respondents shall intimate all Redistribution Stockists of the modifica tions in Clauses 5 of the Agreement (Exhibit F) and the voidity of clause 9 of the Agree ment (Exhibit F)".
There was some argument before us on the question whether proceedings before the Commission were maintainable at the instance of a "complainant" who had reasons to nurse a grievance against the Company and whose motives could be questioned.
It was pointed out that the agreement of the company with the informant had been terminated.
The version of the informant was that this had been done because his firm had sold Vanaspati at the rate of Rs. 127/ per tin which was below the price of Rs. 129.05 per tin fixed by the Company.
The informant stockist said that the price had to be reduced by him to remove public discontent.
We think that the motives of the informant are quite irrelevant in such a case.
All that the Commission, and, on appeal, this Court has to examine is whether what would undoubtedly be a "practice" by the appellant company, of introducing the two clauses complained of, in its agreements with its stockists, amounted to a restrictive trade practice.
The distinction sought to be made .,on behalf of the appellant, between a practice and clauses in a contract which give a company the power to regulate trade in a manner which may constitute a restriction, appears to be inconse quential here.
We do not think that we can isolate the terms of a contract from the actual practice of the company.
It is not the case of the company anywhere that the clauses in its agreement with its stockists are to be treated as deadletter.
Its case is that they do not operate as restrictions.
The introduction of such clauses in so many agreements meant to regulate relations, either between a principal and an agent or the seller and the stockist who acquires complete proprietary rights in the stock of goods purchased, is itself a trade practice.
The simple question before us is: Can powers conferred upon the company under such clauses be exercised in such a way as to constitute restrictive trade practices?
It is true that the practice of imposing restrictions under such clauses is one thing and the practice of intro ducing such clauses is quite another thing.
Both may con stitute separate practices.
Nevertheless, the introduction of such clauses into an agreement between the manufacturer and the seller who purchases and stocks his goods is in itself something practised.
It is immaterial that the use of powers under such clauses may constitute another set of practices which depend upon the existence of 'such clauses as sources or springs.
Inasmuch as the introduction of clauses in such an agreement is a practice, taken by itself, the question whether such a practice amounts to a restric tive trade practice or not could only be decided by consid ering 461 whether the clauses could be so used as to unjustifiably restrict trade? It would be specious reasoning, in such a case, to separate the clauses in the agreement from action under the agreement and then to urge that, as evidence of action under the clauses is meagre or even absent, the clauses are innocuous and should not be modified or struck down because we are only concerned with what is actually being practised under them or with the use that is being made of such clauses and not with what is permissible or possible under the clauses of the agreement of the kind before us.
This argument seems to us to overlook the definition of "restrictive trade practice" contained in section 2(0) of the Act which lays down: "(0) "restrictive trade practice" means a trade practice which has, or may have, the effect of preventing distorting or restricting competition in any manner and in particular (i) which tends to obstruct the flow of capital or resources into the stream of pro duction, or (ii) which tends to bring about manipula tion of prices, or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions." 0 It is clear from a bare perusal of the above mentioned definition that it is not only the actual practice of a restriction under a clause which is struck by the provisions of the Act, but also a "trade practice" which "may have" the effect of restrictions falling within the mischief" provided for.
In other words, if the introduction of the clause in itself is a trade practice and could be used to prevent, distort or restrict competition "in any manner" it may be struck down.
A trade practice is defined by section 2(u) of the Act as follows : "(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".
This definition is wide enough to include any "trade practice" if it is in relation to the carrying on of a trade.
It cannot be argued that the introduction of the clauses complained of does not amount to an action which relates to the carrying on of a trade.
If the result of that action or what could reasonably flow from it is to restrict trade in the manner indicated, it will, undoubted ly, be struck by the provisions of the Act.
Reliance was sought to be placed by learned counsel for the appellant company on a recent decision of this Court in Tata Engineering & Locomotive Co. Ltd. vs The Registrar of the Restrictive 3 502 SCI/77 462 Trade Agreements, New Delhi(1) (hereinafter referred to as the "Telco" case) where it was held: "The definition of restrictive trade practice iS an exhaustive and not, an inclusive one.
The decision whether trade practice is restrictive or not has to be arrived at by applying the rule of reason and not on the doctrine that any restriction as to area or price will per se be a restrictive trade practice.
Every trade agreement restrains or binds persons or places or prices.
The ques tion is whether the restraint is such as regulates and thereby promotes competition or whether it is such as may suppress or even destroy competition.
To determine this ques tion three matters are to be considered.
First, what facts are peculiar to the business to which the restraint is applied.
Second, what was the condition before and after the restraint was imposed.
Third, what is the nature of the restraint and what is its actual or probable effect".
It was also held there: "The question of competition cannot be considered in vacuo or in a doctrinaire spirit.
The concept of competition is to be understood in a commer cial sense.
Territorial restriction will promote competi tion whereas the removal of territorial restriction would reduce competition.
As a result of territorial restriction there is in each part of India open competition among the four manufacturers.
If the territorial restriction is removed there will be pockets without any competition in certain parts of India.
If the dealer in Kashmir is allowed to sell anywhere in India wealthy cities like Delhi, Bombay, Calcutta will buy up trucks allocated for Kashmir and the buyer in Kashmir will not be able to get the trucks.
The other three manufacturers whose trucks are not in equal demand will have Kashmir as an open field to them without competition by Telco.
Therefore, competition will be re duced in Kashmir by the successful competition being put out of the field".
It is evident that in the Telco case this Court was considering the territorial restrictions placed upon the stockists of Telco in the Light of the special facts and circumstances of that particular case.
Each type of busi ness has, undoubtedly, its peculiarities, its own mode of operation, the special features relating to the market for it, and the requirements of distribution of particular goods which may be the subject matter of an agreement so as to secure a just and equitable distribution consistently with maintenance of freedom of competition so that prices are not artificially pushed up.
In the Telco case, the subject matter of the agreement was sale of trucks of a type in which the Telco had a monopoly inasmuch as no other firm produced trucks which were of such special quality and specifications.
Hence, there was great demand for these trucks, which were in short supply.
Again, for the mainte nance and running of those especially designed trucks the manufacturer had to provide especially trained and skilled personnel and special equipment and tools so as to enable stockists to service and repair trucks distributed.
Unless the manufacturers were able to impose restrictions upon sales outside the areas in which they had (1) ; 463 established their stockist cum servicing suppliers, they could not at all render the kind of service they were giving in addition to selling.
In other words, it was a mixed practice for purchase of trucks and provision of specialised service to the consumers, through the stockists.
On the peculiar facts and circumstances of that case, it was found that the agreements did not, on the whole, result in re stricting trade or curtailing competition.
The facts of the case before us are entirely different.
We are concerned here with a manufacturer of mixed consumer goods of different varieties.
The appellant company pro duces dehydrogenated oil (known in the market as "Vanas pati"), toilet preparations of various kinds such as soaps, shaving creams, toothpastes, and baby milk powder, and animal feeds.
The soaps manufactured by it are undoubtedly the main type of goods supplied.
But, it manufactures other type of goods too.
It can, therefore, compel stockists to by them, whether stockists want these other goods or not, if the terms of the agreement are to be held to be binding and enforceable.
The manufacturer is under no obligation to render any service in relation to maintenance of the goods supplied.
The whole trade is completely unlike that of manufacture and sale of motor trucks for which the stock ists, selling to the actual consumers, had to, as already pointed out, also have the services of the manufacturer 's trained personnel for the purposes of maintenance and repair of the vehicles supplied.
It would mount to an application of the law in a thoroughly doctrinaire fashion if we were to deduce some general principles, from the very different facts of the Telco case and attempt to apply them to those of the case now before us.
Thus, the contention advanced on behalf of the appellant, against a doctrinaire approach in such cases, really weighs against the appellant company.
In the Telco case, the agreement could not be understood without reference to the actual facts to which they were sought to be applied.
Those facts explained the nature of the special agreements for restriction or distribution of areas.
In the case before us, the problem entirely different.
This is not a case in which certain terms of the agreement require to be explained by the facts to which they were meant to be applied.
It is a Clear case in which the meanings of the clauses are decisive.
If these clauses are capable of being so used, on the meanings which appear unambiguously from them, as to undoubtedly restrict trade, the intention to so use them to restrict trade could reason ably be inferred without any difficulty.
Otherwise, why have them ? No oral evidence could be led to deduce their meaning or to vary it in view of the provisions of sections 91 and 92 of the Evidence Act.
the principles of which were we think rightly applied by the Commission.
The Telco case, on the other hand, was one in which extraneous evi dence could be led under section 92 proviso (6)of the Evidence Act which may be set out here with Section 92: "92.When the terms of any such contract, grant or other disposition of property or any matter required by law to be reduced to the form of a document, have been proved 464 according to the last section, no evidence of any oral agreement or statement shah be admit ted, as between the parties to any such in strument or their representatives in interest, for the purpose of contradicting, varying, adding to or subtracting from, its terms: Proviso (6) Any fact may be proved which shows in what manner the language of a document is related to existing fact".
The principle embodied in section 92(6) of the Evidence Act, which was applicable in Telco case (supra), is not, for the reasons given above, applicable in the case now before us.
Indeed, no attempt has been made by reference to any case law apart from the Telco case '(supra), which we have dis tinguished above, to show that extraneous evidence could have been led herein order to apply section 92 proviso (6) of the Evidence Act.
In the Telco case this provision was not directly referred to, but, we think, that it could have been applied there.
Thus, we think that the basic difficulty, placed before us by learned counsel for the appellant, in the way of examining the plain meaning and effect of clauses 5 and 9 of the Distribution Stockists agreement, does not exist at all in the case now under consideration.
We must, therefore, proceed to examine the meanings of these clauses from the point of view of what could be done by the Company under them.
If what may be done under these clauses could be a restrictive practice as defined by the Act, it was enough to vitiate them.
A clause having been introduced in an agreement entered into, as a part of the settled practice of the company, could be struck by the provisions of section 2(0) of the Act, set out above, quite apart from what is actually done under it.
We do not think that any other question is really relevant or need be considered by us at all in such a case.
It is not a case in which we could be taken through the oral evidence, as has been attempted to be done, because that is shut out by an application of provisions of sections 91 and 92 of the Evidence Act if all we need do is to interpret the agreement.
We are unable to see why these provisions do not apply here.
Not much argument appears to us to be needed to demon strate that the last sentence in paragraph 5 of the above mentioned clause places the redistribution stockist at the mercy of the company which can dictate to him what amounts of various commodities he "shall purchase and accept from the company" in the form of a total lot supplied to him.
The company need only send to the redistribution stockists what it "shah at its discretion send to the Redistribution Stockists for fulfilling its obligations under this Agree ment".
The meaning and effect are obvious here.
The intro duction of the word "shall" does not bind down the exercise of the discretion by reference to any requirements of the consumers in a particular area which the stockists may convey to the company.
Hence, if the stockists want to remain on the list of the redistribution stockists of the company.
the stockist is bound to accept and carry out the decision of the company.
Even if in view of some other practice adopted by the company 465 a power given in such wide terms was not meant to be exer cised unreasonably, its presence in the agreement would be a needless surplusage which could, whenever the company wanted it, be used to impede freedom of competition and trade.
This result was enough to make it quite objectionable.
We, therefore, think that the Commission was quite right in reframing clause 5 in the way it did.
We are unable to find any flaw in the detailed reasons given by the Commission for doing that.
The Commission rightly points out that, among agreements the registration of which is compulsory according to the provisions of Chapter V of the Act is, under section 33(1)(b) is "any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods".
The last part of clause 5, as we have observed, clearly makes it necessary ,for the stockist to purchase such goods and in such combination as the company may de cide.
Hence, it would be struck by section 33(1)(b) of the Act.
It has not been shown to have been registered under the Act.
It is also submitted on behalf of the respondent that clause 5 of the agreement infringes section 33(1)(f) of the Act which requires registration of .
"any agreement to sell goods on condi tion that the prices to be charged on resale by the purchaser shall be the prices stipulat ed by the seller unless it is clearly stated that prices lower than those prices may be charged". 0 The Commission held that clause 5 of the agreement meant provision for "prices stipulated" and that it had been so treated by the company in its circulars stating that prices lower than the "maximum resale price stipulated" by the company may be charged.
If that was clear, there was no reason why the company should have attempted to clarify by means of its circulars what, according to it, the stockist is free to do under the agreement.
Even if the practice of the company by issuing circulars is established, it does not justify the retention of clause 5 in a form which can be used to compel stockists to act on the company 's behests whether reasonable or not.
On the other hand, it justifies its clarification by an alteration of it in the manner directed by the Commission so as to make the clause covering price regulation also very clear.
The order of the Commis sion modifying clause 5 only makes the position crystal clear.
Inasmuch as clause 5, even before deletion of the last sentence of it by the Commission, expressly gives the stockist the discretion to sell at lower than maximum resale prices stipulated, the agreement was not struck by section 33(1)(b) of the Act.
But, the deletion of the last sentence was essential to prevent possible misuse of the company 's powers, by resort to it, so as to even regulate prices contrary to express provisions found earlier in the clause.
Turning now to clause 9 of the agreement, we think that the Commission was right in rejecting the argument that evidence led on behalf of the company was enough to estab lish that clause 9 fell within one 466 of the "gateways" provided by section 38 of the Act.
A power to impose restrictions falling under this provision had to be justified by the company by actual proof of a public interest which could not be better served without it.
The submission that section 38 could be applied here amounts at least to a concession that a clause conferring such wide power upon the manufacturer may be so used as to amount to a restrictive practice.
It is the practice of putting in such a clause which has to be justified.
The power given to the company under clause 9 is very wide.
The manufacturer can compel the redistribution stock ists to make available to the company any stocks purchased by the stockist.
It also compels the stockist to take the permission of the company for conveying, transporting, or despatching parts of stocks of the products received by him outside a specified town except when he is so expressly directed in writing by the company.
It directly prevents him from doing so without the company 's permission.
If the stockist violates this condition the whole agreement can be revoked by the company so that the stockist loses his right to carry on business under the agreement.
If what had to be justified is not how this power is actually used, but the practice of conferring such powers upon the company by placing the stockist at the mercy of the company, the evi dence of facts showing how the power is exercised could be relevant only very indirectly.
However, if it could be shown that some facts did exist which make it imperative to confer such a power on the company for the benefit of ' the public, that may be relevant to establish the existence of a "gateway" under section 38.
But, it could certainly not be used to determine the meaning of a clause for which it is not necessary here to go beyond the language of the clause involved.
We are primarily concerned in this case, as we have repeatedly emphasized, with the clear meanings of the two clauses.
As the Commission pointed out, it is immaterial that a purchaser from outside may be able to get round clause 9 by purchasing across the counter from the stockist inside a town.
The clause itself, however, gives to the company an unreasonably wide power of deciding what is actually fair and equitable distribution.
The Commission very rightly points out that this is more properly a part of the duty of governmental authorities which may be entrusted with powers of rationing such consumers ' goods if this is found to be necessary in public interest.
However, before any question of reasonableness of a power to ration any goods is entrusted by any method to any person or authority those goods must be shown to be scarce or in Short supply.
That was the position in the Telco case (supra).
Evidence establishing such a need has not been shown to exist.
And, in any case, it has to be a very exceptional set of facts indeed which could justify lodging of such a power in the manufacturer.
The Commission has dealt with a good deal of evidence to justify its conclusion that the need to justify the lodging of such a power in the company has not been established.
We see no reason to disturb it.
Under the provisions of section 55 of the Act, an appeal lies to this Court only on one of the grounds mentioned in section 100 of the 467 Code of Civil Procedure.
It is, therefore, necessary in all such cases for counsel to clearly formulate and direct our attention to only questions of law which arise so that these may be decided.
It is not permissible to go over the whole range of evidence led as was attempted before us.
Learned counsel for the appellant when asked by us to formulate the questions of law which arise mentioned the following questions: Firstly, whether the Commission was right in applying what he described as the "per se" rule as opposed to "the rule of reason".
It was submitted that the correct rule which should have been applied is stated in Board of Trade of the City of Chicago vs United States of America, as follows (at p. 237): "Every agreement concerning trade, every regulation of trade, restrains.
To bind to restrain, is of their very essence.
The true test of legality is whether the restraint imposed is such as merely regulates and per haps thereby promotes competition, or whether it is such as may suppress or even destroy competition.
To determine that question the Court must ordinarily consider the facts peculiar to the business to which the re straint is applied; its condition before and after the restraint was imposed; the nature of the restraint, and its effect, actual or probable.
The history of the restraint, the evil believed to exist, the reason for adopt ing the particular remedy, the purpose or end sought to be attained, are all relevant facts.
This is not because a good intention will save an otherwise objectionable regulation, or the reverse; but because knowledge of intent may help the court to interpret facts and to predict consequences".
We find no objection whatsoever in adopting the rule indi cated above in cases to which it applies.
That was a case in which a rule adopted by the Board of Trade of the City of Chicago (supra) prohibiting offers to purchase during the period between the close of the call and the opening of the session on the next business day for sales of wheat, corn, oats, or rye at a price other than at the closing bid, was challenged.
Hence, questions relating to effects of the rule arose so as to determine its reasonableness.
Such questions could not be determined without examining evidence of facts to which the rule was meant to apply and findings as to how it operated.
The issue was whether the rule, having regard to the facts to which it was to be applied, offended against the Anti trust laws.
The Government 's case was thus stated by Mr. Justice Brandeis (at p. 237) : "The Government proved the existence of the rule and described its application and the change in business practice involved.
It made no attempt to show that the rule was designed to or that it had the effect of limiting the amount of (1) 62 Law.p. 231.468 grain shipped to Chicago; or of retarding or accelerating shipment; or of raising or depressing prices; or of discriminating against any part of the public; or that it resulted in hardship to anyone.
The case was rested upon the bald proposition that a rule or agreement by which men occupying positions of strength in any branch of trade fixed prices at which they could buy or sell during an important part of the business day is an illegal restraint of trade under the Anti trust Law.
But the legality of an agree ment or regulation cannot be determined by so simple a test as whether it restrains competi tion".
Apparently, Dr. Singhvi means, by his plea against the use of a "per se rule", nothing more than an assumption, that a restriction is illegal in itself, should not be made without examining its impact upon the particular trade involved.
As contrasted with any such assumption what the learned counsel describes as "the rule of reason" was stated in the earlier passage quoted above giving the nature of facts to be considered so aS to determine the context in which the restraint was imposed.
This Court accepted the correctness, in the Telco case (supra), of the approach that no bald or simple test, divorced from the context or sur rounding circumstances, should be adopted in judging the legality of a restraint upon trade.
Such a view, applicable to actual restrictions imposed, has really nothing to do with the rules relating to interpretation of documents which are used in finding out the effect and intent of words used in a document.
It is after a difficulty of interpretation, if any, is resolved and a rule or a clause in an agreement is found to have either a clear meaning or to be ambiguous that its effect can be considered.
No doubt that effect has to be examined to determine how a restraint actually imposed affects trade.
It is one thing to say that the impact of the restraint imposed on trade should be considered with refer ence to the nature of the trade or business to be regulated.
It is quite another to say that the effect cannot be gauged, sometimes, even by a bare examination of the meaning of a clause giving power to impose restraints apart from other evidence of what its actual effects are or may be.
In some cases, the effect itself is given primarily by the clear meaning of the language used in the clause which is alleged to infringe the law We do not think that any "per se rule", if we may use this somewhat quaint expression is adopted whenever a Court determines the meaning and effects of the words of a rule or a clause in an agreement.
All that the Court does in such a case is simply to interpret the clause, the effect of which may become obvious on a bare determina tion of the meaning or may be seen from other evidence too.
Where that effect is not obvious, as we have already indi cated, evidence may be led to show how the language used is actually applied to the facts to which it was meant to apply.
That is also a recognised rule of interpretation.
It is the function Of Courts to indicate and explain the vary ing facts and circumstances to which different rules of interpretation may apply.
Where meaning and intent of lan guage used is given by the words used nothing more is needed.
469 Furthermore, the Commission held that, taking into account the nature of goods or the business to be regulated by the agreement under consideration, the clauses, as they stood, were not permissible.
It had applied the rule of reason in arriving at the conclusion that, upon the facts of a business in commonly used consumer goods of several varie ties, Which are not shown to be scarce, clauses under con sideration having the obvious meaning and effect which their language carried with them, are unreasonable and illegal.
We are unable to see how any law laid down in American deci sions, dealing with Anti trust laws, or in English cases, dealing with agreements in restraint of trade, lay down rules of reason at variance with the ones we are applying here.
The rules of reason applicable to a case like the one before us may be simply stated as follows: Firstly, the meaning of the impugned clause or clauses in an agreement said to offend the law must be determined according to law; secondly, the possible effects of such a clause upon compe tition in the trade to be regulated must be determined.
We think that the Commission had rightly applied these rules and found the clauses to be capable of misuse.
We think that this was enough to vitiate the impugned clauses.
We would like to make it clear that we are really con cerned only with the law as we find it in our own statute and can only examine evidence in the light of our own law of evidence.
We think that the confusion which may be created by using terms such as "per se" rule which could perhaps be more usefully applied to indicate doctrines or to de scribe practices developed under very different sets of circumstances in other countries with statutory provisions couched in language which differs from that before us, should be avoided so far as possible.
Secondly, it was submitted that we should look at evi dence of what takes place in the trade under consideration rather than clauses 5 and 9 of the agreement we have consid ered.
We have already indicated the correct procedure in 'such cases as the one before us.
Indeed, we think that a consideration of extraneous evidence is not required at all when the practice complained of is the introduction of clauses conferring wide powers which may be used to impose restrictions contrary to the Act.
In such a case, the introduction of clauses constitutes the restrictive prac tice.
Hence, their interpretation is all that we are really concerned with here in accordance with our law.
Evidence of what is actually practised could only be relevant 1or pur poses other than a determination of the meaning and the effect which follows logically or reasonably from such determination.
Thirdly, it was submitted that, in holding clause 9 to be invalid, the purpose of "equitable distribution", which imposes a limit on the powers of the company, was overlooked by the Commission.
For the reasons already given, we do not think that this supposed limitation reasonably restricts the company 's power to decide what to distribute.
The company is left entirely to itself to decide what is "equitable distri bution".
An interpretation of a document, according to well established rules, cannot be dispensed with by labelling it as an application of a "per se" doctrine.
We think that the clause, as it stands, 470 confers too wide a power and has to be struck down wholly as unreasonable on that ground.
Fourthly, our attention was sought to be drawn to the absence of evidence of distortion of competition and the presence of evidence that competition prevails in the market despite these clauses.
We have already held such oral evidence to to really unnecessary for judging the possible effects of the clauses.
The probability of the effect is only part of the rule of reason to be applied where extrane ous evidence is admissible.
In the instant case we are only, as already indicated above, concerned with a reasonable and natural interpretation of the clauses of the agreement and their reasonably possible effects.
Fifthly, it was submitted that there was clear evidence of public benefit from an equitable distribution in actual practice so that the requirements of a "gateway" under section 38 were satisfied.
We cannot assume public benefit from a mere declaration of intention to exercise a power so as to bene fit the public.
We are not satisfied, on the evidence actually adduced and placed before us, that this power was necessary so as to benefit the public.
Furtherfore, we cannot reassess evidence.
Actual benefit to the public is a question of fact on which find ings cannot be reopened unless some error of law is revealed.
No error of law in assessing evidence is disclosed.
This is an additional reason for not disturbing the findings of fact recorded by the Commission.
Sixthly, it was submitted that the Commission had ignored the last sentence of clause 9 in interpreting it.
We have, however, considered it and find that, far from making clause 9 more acceptable and reasonable, the last part of it makes it more objectionable and unreasonable inasmuch as it enhances the powers of the Company.
Learned counsel for the appellant company has pointed out that the order of the Commission was to come into force from 1 July 1976, ' so that the appellant company had nearly four months to rewrite the agreements which are over four thousands in number.
He prays for extension of time for six months from today for executing fresh agreements.
It is not really necessary for us to fix any particular time within which the company will print or get new agreements executed on freshly printed forms in accordance with law.
That is a matter for parties themselves to each agreement to decide and work out. ' All that we need make clear is that all agreements which are operative and binding between parties will be so interpreted now as if clause 9 was not there at all and clause 5 was there only in the ,modified form which omits the last sentence from clause 5 as it originally stood.
However, if the company wants, to complete any for malities for bringing each individual agreement into line with the law as declared by this Court it may do .so; and, it will file, within six months from today an affidavit showing that it has done this.
The requirement to file 471 such an affidavit showing compliance will ensure that the company has taken due steps to inform each stockist of the correct legal position.
The time given for doing this wilt not, however, authorise it to act under those parts of the agreement which this Court has declared to be illegal.
Subject to the observations made above we uphold the Commissions order and dismiss this appeal with costs.
P.B.R. Appeal dismissed.

summary/full:
According to section 2(0) of the Monopolies & Restric tive Trade Practices Act a "restrictive trade practice" means inter alia a trade practice which has, or may have, the effect of preventing, distorting or restricting competi tion in any manner.
The appellant, who was a manufacturer of consumer goods such as soaps and toilet preparations, entered into agreements with redistribution stockists for the wholesale distribution of its products.
Clause 5 of the agreement, inter alia, provides that a stockist shall keep and maintain adequate stocks and shall carry out instructions and direc tions given by the appellant.
He is prohibited from charg ing anything more than the stipulated maximum resale price.
The last part of the clause provides that "the redistribu tion stockist shall purchase and accept from the company such stock as the company shall, at its discretion, send to the redistribution stockist for fulfilling its obligations under this agreement".
Clause 9 prohibits the redistribution stockist from re booking or in any way conveying, transport ing or despatching parts of stocks of the products received by him outside the town except when he was so expressly directed in writing by the appellant.
He shall also, when ever so required by the appellant, make available from the stocks such part as the appellant directs him to do.
On a complaint made to the Monopolies & Restric tive Trade Practices Commission by one of the stockists the Commission, after examining cls.
5 and 9 of the impugned agreement, held that the practice of resale price mainte nance and full line forcing to which the original el.
5 related, shall be discontinued and shall not be repeated.
It directed deletion of the last sentence of cl. 5 and declared cl. 9 as void.
Dismissing the appeal to this Court.
HELD: The Commission was right in reframing cl. 5 in the way it did.
Deletion of the last sentence of cl. 5 was essential to prevent possible misuse of the appellant 's power so as to regulate the prices contrary to the express provisions in the clause.
(a) The last part of cl. 5 placed the redistri bution stockist at the mercy of the appellant which could dictate to him what amounts of various commodities he "shall purchase and accept from the company".
It also empowered the appellant to allocate send to the redistri bution stockist only what it "shall, at its discretion, send to the redistribution stockist for fulfilling its obliga tions" under the agreement.
[464 G] (b) The word "shall" used in the clause did not bind down the exercise of the appellant 's discretion by reference to any requirements of the consumers in a particu lar area in which the stockist might sell.
The stockist was bound to accept and carry out the appellant 's decisions.
[464 H] 2(a) The contention that though the clauses gave power to the appellant to regulate trade, in practice they did not operate as restrictions, is not well founded.
It is not possible to isolate the terms of a contract from the practice.
The appellant did not intend that the clauses in the agreement would be treated as 456 dead letter.
Although the practice of imposing restrictions under such clauses and the practice of introducing such clauses are separate practices, introduction of a clause like cl. 5 is itself a trade practice.
Moreover, even if the power given in such wide terms was not meant to be exercised unreasonably, its presence in the agreement was a needless surplusage which could be used to impede freedom of competition and trade and this made it objectionable.
[465 A] (b) Inasmuch as the introduction of clauses in an agree ment taken by itself, is a practice it would be specious reasoning to separate the clauses in the agreement from action under the agreement and then urge that the clauses are innocuous and should not be modified.
[460 H; 461 A] 3.
From the definition of "restrictive trade practice" it is clear that if the introduction of the clause in itself is a trade practice and could be used to prevent, distort or restrict competition "in any manner", it could be struck down.
The definition of "trade practice" is wide enough to include any "trade practice" if it is in relation to the carrying on of a trade.
If the result of introduc tion of a clause is to restrict trade it would be struck by the provisions of the Act.
[461 E G] 4(a) Each type of business has its peculiarities, its own mode of operation, the special features relating to the market for it and the requirements of distribution of par ticular goods, to secure a just and equitable distribution consistently with the maintenance of freedom of competition so that prices are not artificially pushed up.
[462 G] (b) The Telco case is distinguishable from the present on the ground that in that case the manufacturer who had the monopoly of special quality trucks, had to provide specially trained and skilled personnel with special equipment and tools for their maintenance and running.
Therefore, the agreements did not restrict trade or curtail competi tion.
[462 H] (c) In the instant case, the appellant could compel the stockist to buy the goods manufactured by it irrespective of whether the stockist wanted the goods or not.
The appel lant was under no obligation to render any service for the maintenance of the goods supplied.
Secondly, the present is not a case in which the terms of the agreement were required to be explained by the facts to which they were meant to be applied.
[463 C D] Tata Engineering & Locomotive Co., Ltd. vs The Registrar of Restrictive Trade Agreements ; distin guished.
If it was clear from the agreement that prices lower than the "maximum re sale price stipulated" might be charged by the stockist, then, there was no reason why it was necessary to clarify by circulars, what the stockist was free to do under the agreement.
Even if the appellant 's practice of issuing circulars was established, it did not justify retention of cl. 5 in a form which could be used to compel the stockist to act at the appellant 's behests.
The last part of cl. 5 made it necessary for the stockist to purchase such goods and in such combination as the appellant might decide.
Hence it would be struck by section 33(1)(b) of the Act.
[465 C] (b) Inasmuch as.
the original el. 5 gave the stockist the discretion to sell at lower than maximum resale prices the agreement was not struck by section 33 (1 ) (b).
But, the deletion of the sentence was essential to prevent possible misuse of the appellant 's power by resort to it.
[465 G] The Commission was justified in declaring cl. 9 as void and inoperative.
[465 H] 7(a) The power to impose restrictions falling under section 38 had to be justified by the appellant by actual proof of public interest which could not be better served without it [466 A].
(b) Clause 9 gave the appellant an unreasonably wide power of deciding what is actually fair and equitable distribution which is more a part of the duty of governmen tal authorities entrusted with powers of rationing such consumer goods in public interest.
Before any question of reasonableness of a power to 457 ration any goods is entrusted to any person or authority those goods must be shown to be scarce or in short supply and evidence establishing such a need has not been shown to exist in this case.
[466 F G] (c) The appellant was wrong in its contention that in holding cl. 9 to be invalid, the purpose of "equitable distribution" was overlooked by the Commission.
This sup posed limitation did not restrict the appellant 's power to decide what to distribute.
The appellant was left to itself to decide what is "equitable distribution".
The clause conferred too wide a power and is unreasonable.
[469 H] 9.
Under section 55 an appeal lies to the Supreme Court only on one of the grounds mentioned in section 100, C.P.C.
It is necessary for the parties to formulate questions of law that arise for decision.
[467 A] 10(a) The plea against use of "per se" rule referred to by the appellant means that on the assumption that a restriction is illegal in itself should not be made without examining its impact upon the particular trade involved.
On the other hand the "rule of reason" envisages consideration of facts of each case so as to determine the context in which the restraint was imposed.
[468 C] Board of Trade of the City of Chicago vs United States of America (b) In Telco case this Court accepted the correctness of the approach that no bald or simple test should be adopted in judging the legality of a restraint upon trade.
Such a view has nothing to do with rules _relating to inter pretation of documents used in finding out the effect and intent of words used in a document.
Whenever a court deter mines the meaning and effect of the words of a rule or a clause in an agreement it does not adopt what is termed as "per se" rule.
All that the court does in such a case is to interpret the clause, the effect of which may become obvious on a bare determination of the meaning or may be seen from other evidence.
Where that effect is not obvious, evidence may be led to show how the language used is actually applied to the facts to which it was meant to apply.
[468 D F] In the instant case, the Commission has correctly ar rived at the conclusion that the clauses were unreasonable and illegal after taking into account the relevant fac tors.
The rules of reason applicable to a case like the present are (i) the meaning of the impugned clause or clauses in an agreement must be determined according to law and (ii) the possible effects of such a clause upon competition in the trade to be regulated must be determined.
[469 B C] (c) Consideration of extraneous evidence is not required at all when the practice complained of is the introduction of clauses conferring wide powers, Which may be used to impose restrictions contrary to the Act.
In such a case the introduction of clauses constitute restrictive practice.
Evidence of what is actually practised could only be rele vant for purposes other than a determination of the meaning and the effect which follows logically or reasonably from such determination.
[469 F G] (d) No oral evidence could be led to adduce the meaning of the clauses in the agreement in view of sections 91 and 92 of the Evidence Act.
Section 92 proviso (6) is not applicable to the present case.
[464 C] (e) It is unnecessary to admit extraneous evidence as to the absence of distortion of competition.
The probability of the effect is only part of the rule of reason to be applied where extraneous evidence is admissible.
[470 B] (f) It is not possible to assume public benefit from a mere declaration of intention to exercise a power so as to benefit the public.
On the evidence adduced it was not shown that this power was necessary so as to benefit the public.
[470 D] (g) Actual benefit to the public is a question of fact on which findings cannot be reopened unless some error of law is revealed.
No error of law in assessing evidence was disclosed.
E] 458 (h) The confusion which may be created by using such terms as "per rule which could be applied to describe prac tices developed in other countries with different statutory provisions, should be avoided.
[469 D E] 10.
Proceedings before the Commission ' are maintainable at the instance of a complainant whose motives in making the complaint are quite irrelevant.
All that the Commission, and, on appeal, this Court, has to examine is whether a practice by a company of introducing clauses complained of in the agreements with the stockists, amounted to a restric tive trade practice.
[460 D]


judgement:
ition No. 156 of 1972.
(Under article 32 of the Constitution of India).
S.S. Javali, A. K. Srivastava and B.P. Singh, for the petitioner.
G.L. Sanghi, S.P. Mital and Girish Chandra, for respond ents Nos.
land3.
B. Datta, for respondent No. 194.
The Judgment of the Court was delivered by BEG, C.J.
This is a petition under Article 32 of the Constitution praying for a writ of certiorari, or a writ of Mandamus or, any other appropriate, writ, order or direction for the enforcement of the fundamental rights of the peti tioners under Article 14 and 16 of the Constitution.
The petitioners have been working as Upper Division Clerks and pray for the quashing of a list, issued with Office Memoran dum dated 7.2.1972, for making promotions to the next grade of Assistants on which the names of respondents 4 to 203 appear but not those of the petitioners.
They claim that the principles of seniority, contained in the Ministry of Home Affairs O.M. dated 22.6.1949, as interpreted by this Court in UNION OF INDIA vs
M. RAVI VERMA & ORS.
ETC.(1) had not been applied to them.
The contention seems to be that the last mentioned decision contained an invariable mechani cal rule of seniority applicable to all classes of services so that nothing beyond length of service in a particular grade could determine seniority.
It was alleged that the impugned list was formulated in an arbitrary fashion.
Hence, the petitioners complain of violation of Articles 14 and 16 of the Constitution.
In paragraph 6 of the petition it was stated that even persons appointed nine or ten years after the petitioners had been promoted as long ago as 1969 to the grade of As sistants to which the petitioners put forward their own claims.
It was also stated that a large number of persons have superseded the petitioners but a few names only have been mentioned from amongst them.
The whole case of the petitioners thus rests on the submission that nothing beyond length of service must determine the place on the list for promotion to the grade of Assistants.
The petitioners allege a common cause of action inasmuch as the impugned list of 17.2.1972 affects all of them.
They claim that all of them should have been governed by the principles contained in (1) ; 666 the Memorandum of 22.6.1949.
This Memorandum (Annexure 'C ' to the petition) shows that it was only directory laying down a general rule of seniority which was presumably sub ject to other exceptional factors which could also be taken into account.
Hence, an alleged violation of the rule of seniority according to length of service was not decisive even according to this Memorandum.
The counter affidavit filed by Shri P.L. Gupta, Deputy Secretary to the Government of India, gives the long history of a scheme which culminated in the promulgation of the statutory rules framed under Article 309 of the Constitu tion of India called the Central Secretariat Clerical Serv ice Rules, 1962 by the President of India.
It shows that the scheme of 1949 was given a final shape by the Cabinet in 1954.
and became effective from 1.5.1954.
Under the scheme, as finally framed, it was provided that those offi cers who were otherwise eligible for confirmation in the. services at the initial constitution, should also pass a typewriting test to be held by the Union Public Service Comntission within a period of two years from 1 5 1956.
It appears that the confirmation of the initial constitution of the service was delayed until 1958.
Some of the rather ambitious assertions of the petition ers suggest that their case is that they had been appointed to an Upper Division grade on a regular basis so that their seniority must date back to their date of promotion.
This suggestion was controverted by the respondents who alleged that the petitioners had been only allowed to continue provisionally on a temporary basis in the grade of Upper Division of Clerks.
It was stated, in the counter affida vit, that as typing test had to be passed within two years of 1st of May 1958, those who did not come within this class came in the, class of the petitioners who, were serving on an ad hoc or temporary basis.
Hence, it was submitted that those who had passed the typewriting test within two years of the fixed date belong to another cate gory altogether.
The respondents,.
therefore, submit that there has been no contravention of Articles 14 and 15.
Serious grounds of objection to the petitioner 's case are three fold: firstly, that there was a reasonable crite rion for the difference made between the cases of the peti tioners and those placed on the impugned list of 7.2.1972 who are above the petitioners because they have passed the prescribed typing test so that Articles 14 and 16 of the Constitution could not be said to have been violated in this case whatever else may have been infringed; secondly, that the petitioners, not having assailed the order of confirma tion of the scheme on 1.5.1958.
prescribing a reasonable ground for distinction between the class of cases in which typing test had been passed, to which the contesting re spondents in the impugned list belong and the class of the petitioners, which had not passed this test, the petition ers ' could not challenge the impugned scheme of 1972 at all; thirdly, a member of persons had been promoted and put above the petitioners since 1962, acting under the scheme providing the typing test, so that there was inordinate delay in filing the petition under Article 32 of the Consti tution on 24.4.1972.
667 In their Writ Petition the petitioners have no doubt challenged the validity of rule 17 of the Central Secretariat Clerical Service rules for inconsistency with the Memoranda of 22.6.1949 and 22.12.1959 and alleged that this also constitutes a violation of Articles 14 and 16 of the Constitution.
This rule was among rules notified on 28 9 1962.
It lays down as follows : "17. Seniority(1) The relative seniority of members of Service appointed to any Grade before the appointed day shall be regulated by their relative seniority as determined before that day.
Provided that if the seniority of any such officer had not been specifically deter mined before the appointed day it shall be as determined by the Department of Personnel in the Cabinet Secretariat.
MHA No. 6/2/67 CS II dated 20.12.67.
Provided further that the seniorty of an officer referred to in the proviso to clause (a) of rule 2 shall be determined by the Department of Personnel in the Cabinet Secre tariat by taking into account the continuous length of regular service rendered before the appointment day by such officer in the grade of lower Division or in any higher grade in the offices of the Central Government.
(2) All permanent officers included in the initial constitution of a Grade under rule 7 shall rank senior to all persons substan tively appointed to that Grade with effect from a date after the appointed day, and all temporary officers included in the initial constitution of a Grade under that rule shall rank senior to all temporary officers appoint ed to that Grade after the appointed day.
(3) Except as provided in sub rules (4) and (5), the seniority of persons appointed to the two grades of the service after the ap pointed day shall be determined in the follow ing manner, namely : 1.
UPPER DIVISION GRADE (i) Permanent Officers.
The seniority inter se of officers substantively appointed to the Grade after the appointed day shall be regulated by the order in which they are so appointed to the Grade.
(ii) Temporary Officers.
The seniority inter se of temporary officers appointed to the Grade after the appointed day shall be regulated as follows, namely: (a) Persons included in the Select List for a Grade shall rank senior en bloc to those not included in the Select list.
668 (b) The seniority inter se of person includ ed in the Select List shall be in the order in which their names are included in the Select List.
(c) The seniority inter se of persons not included in the Select List shall be regulated by the order in which they are approved for long term appointment to the Grade.
Rule 7 provides as follows "7.
Initial Constitution of each cadre.
The permanent and temporary officers of each Grade in each cadre on the appointed day shall be as determined by the Deptt.
of Personnel in the Cabinet Secretariat.
" We find that, acting under Rule 7 set out above, the Government of India had issued an order on 12 11 1962 allot ting permanent and temporary officers of the Upper Division grade to the Central Secretariat Clerical Service.
Apparently, that allotment also determined the order of seniority.
In other words, the rule relating to the passing of a typing test had been followed for a long period and had actually been given effect to under the statutory rules in promotions made and lists drawn up.
This explains the petitioners ' challenge to the validity of Rule 17.
We are unable to see how a rule prescribing a typing test is unconnected with the duties of Clerks who desire a promotion to the next grade.
We do not find that a dis crimination made on such a ground could violate Articles 14 or 16 of the Constitution whatever also it may be said to violate.
It is not necessary for us to hold that a violation of a statutory or other kind of rule in a particu lar case cannot amount to a violation of Articles 14 and 16 of the Constitution.
There may also be cases in which a rule made is ultra vires for mreasonableness or on any other ground and should not be deemed to exist.
In such a case, if the rule is enforced, it may, on the facts of the partic ular case, amount to a violation of Articles 14 and 16 of the Constitution also.
The case before us does not appear to be such a case at all.
It seems to be covered by what this Court said in P.C. Sethi & Ors.
vs Union of India & Ors.
, (1) with regard to the Office Memorandum of 22.6.1949 (at pp.
207 208): " . the Office Memorandum of June 22, 1949, is no bar to the Government in making separate provisions for the mode of constitution and future maintenance of the service of Assistants.
There is, therefore, no obligation under the aforesaid Office Memorandum on the part of the Government to enforce a rule of bald length of continuous service irrespective of other considerations than the service was sought to be reorga nised and reinforced.
As noticed earlier the service had to be reconstituted and the tempo rary Assis (1) 669 tanks properly observed keeping in view the question of quality and efficiency as well as at the same where regard being had to accom modate as large number as possible to gradual absorption.
In doing so we are unable to hold that the Government has violated the provi sions of articles 14 or 16 of the Constitu tion.
The Classification under the instruc tion for the constitution of regular temporary establishment in the manner done cannot be characterised as unreasonable in view of the object for which these had to be introduced in reconstituting the service to ensure security of temporary employees assistant with effi ciency in the Service.
There is no discrimi nation whatsoever amongst the equals as such nor any arbitrary exercise of power by the Government.
" This Court has also explained in Joginder Nath & Ors.
vs Union of India & Ors.(1) and Amrit Lal Berry vs Collector of Central Excise, New 'Delhi & Ors.(2) the principles on which this Court will interfere under Article 32 of the Constitution for an alleged violation of Articles 14 and 16 of the Constitution.
It is also explained, there how delay in invoking the jurisdiction of the Court, which may create equitable rights of others, may give rational grounds for discrimination so that it would cease to be a case of any violation of Articles 14 and 16 at all.
We think that the principles laid down in the cases mentioned above apply here.
Consequently, we dismiss this Writ Petition, but, in the circumstances of the case, the parties will bear their own costs.
S.R Petition dismissed.

summary/full:
Under the scheme which culminated in the promulgation of the Central Secretariat Clerical Service Rules, 1962 (effective from 1 5 1954), it was provided that those offi cers who were otherwise eligible for confirmation in the services at the initial constitution should also pass a typewriting test to be held by the Union Public Service Commission within a period of two years from 1 5 1956.
The names of the petitioners who had not passed the typewriting test did not figure in the gradation list dated 7 2 1972 prepared for making promotions to the next grade of Assist ants.
The petitioners challenged the orders on several grounds, namely, (i) The principle of seniority contained in the Ministry of Home Affairs ' O.M. dated 22 6 1949 as inter preted by this Court in ; had not been ap plied to them; (ii) The impugned list was formulated in an arbitrary fashion; (iii) Their seniority must date back to their dates of promotion as Upper Division Clerks; and (iv) Rule 17 of Central Secretariat Clerical Service Rules, 1962 being inconsistent with O.M. dated 22 6 1949 and 22 2 1959 violates Articles 14 and 16 of the Constitution.
The re spondent raised three objections to the petitioners ' case in their returns, namely, (i) There was a reasonable criterion for the difference made between the case of the petitioners and those placed on the impugned list of 7 2 1972 who are above the petitioners because they have passed the pre scribed typewriting test so that Articles 14 and 16 of the Constitution could not be said to have been violated in this case whateverelse may have been infringed; (ii) The peti tioners not having assailed the order of confirmation of the scheme on 1 5 1958 prescribing a reasonable ground for distinction between the class of cases in which typewriting tests have been passed to which the contesting respond ents in the impugned list below and the class of the peti tioners which had not passed the test.
the petitioners could not challenge the impugned scheme of 1972 at all; (iii) A number of persons have been promoted and put above the petitioners since 1962 acting under the scheme providing the typewriting test so that there was inordinate delay in filing the petition under article 32 of the Constitution.
Dismissing the petition, the Court, HELD: (1) The alleged violation of the rule of seniority according to length of service was not decisive even ac cording to the Ministry of Home Affairs O.M. dated 22 6 1949.
This memorandum shows that it was only directory laying down a general rule of seniority which was presumably subject to other exceptional factors which could also be taken into account.
[666 A] P.C. Sethi & Ors.
vs Union of India & Ors.
[1975] 3 S.C.R. 21, followed.
(2) A rule prescribing a typing test cannot be said to be unconnected with the duties of clerks who desire a promo tion to the next grade.
A discrimination made on such a ground could not violate Articles 14 and 16 of the Constitu tion whateverelse it may be said to violate.
[668 E] (3) A violation of statutory or other kind of rule in a particular case cannot amount to a violation of Articles 14 and 16 of the Constitution.
There may also be cases in which a rule made is ultra vires for unreasonableness or 665 an any other ground and should not be deemed to exist.
In such_ a case, if the rule is enforced it may on the facts of the particular case amount to a violation of Articles 14 and 16 of the Constitution also.
The petitioners case is not such a case at all.
[668 E F] (4) The principles laid down by this Court in Joginder Nath and Ors.
vs Union of India & Ors.
and in Amrit Lal Berry vs Collector of Central Excise ; , apply to the petitioners case regarding laches on their part.
[669 C El