D.P. Wadhwa, J.
(1) By this petition field under Article 226 of the Constitution the petitioner, a public limited company. engaged in the manufacture of paper seek to have a notice of inquiry issued by the Monopolies and Restrictive Trade Pra.ctices Commission, the second respondent (tor short'the Commission') and the further order of the Commissionrefusing, to set aside the said notice of inquiry and the proceedings in pursuance thereto quashed.
(2) The facts which are in brief may be set out.
(3) On 3-6-1985 the Commission issued a notice under Section 10(a)(i) and 10(a)(iv) and Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969 (for short'the Act') and Regulation 58 of the Monopolies and Restrictive Trade Practices Commission Regulations. 1974 (for short'the Regulations') ordering that an inquiry be instituted against the petitioner to inquire into certain trade practices alleged against the petitioner and it those trade practices had or might have the effect of preventing/distorting or restricting competition or having the. effect of imposing unjustified costs or restriction.s on the consumers and if such trade practices were prejudicial to public interest. It was mentioned in the notice of inquiry that a complaint under Section 10(a)(i) of the Act had been received against the petitioner by the Commission and that the Commission had also received information alleging certain restrictive trade practices being indulged in by the petitioner. The complaint and the information were referred to the Director General as defined in Section 2(c) of the Act under Section 11 of the Act for the purpose of investigation and report. The Director General submitted two reports. On examination of the complaint and the reports it appeared to the Commission that the petitioner, a manufacturer of paper and paper products had appointed wholesalers/stockists/distributors for the purpose of distribution of itsproducts. It was also found:
(A)That the petitioner was supplying popular varietiesof paper to favorite wholesalers or stockists andhad denied supply of such variets to otherwholesalers.
(B)That the petitioner had also refused to supply even-non-popular varieties to some of its wholesalers.
(C)That the petitioner had permitted its favorite
wholesalers/Stoekists to charge prices from the consumers in excess of fair selling prices fixed for its products.
(D)That the petitioner had resorted to discriminationamong the wholesalers in the matter relating tothe extent of credit facilities granted to them.
(E)That the petitioner had been demanding depositsfrom wholesalers in a discriminatory manner.
(F)That the petitioner had also demanded in advanceblank cheques from some of the wholesaler- forsupply of goods.
(G)That the .petitioner discouraged or prevented itswholesalers or distributors from submitting competing quotations without its permission with regardto supply of paper and paper products in response to tenders called for by certain parties.
THEcomplaint under Section 10(a)(i) was filed by
variousdistributors/dealers nmnberinag thirty one who are marketingand selling paper manufactured and supplied by the petitioner.As mentioned in the notice of inquiry, this complaint wassent by the Commission to the Director General for preliminary investigation and report. On receipt of the notice ofinquiry the petitioner filed, an application before the Commission praying that. the notice of inquiry be set aside andthe proceedings in pursuance thereto quashed. It was submittedbefore the Commission that issue of notice of inquiry simultaneously under two sub-clauses, namely, 10(a)(i) and10(a) (iv) was void ab initio because all the four sub-clausesot, Section 10(a) were exclusive and independent and couldnot be combined with one and the. other and therefore, thecommission lacked inherent jurisdiction in the matter of initiation of the inquiry and the proceedings, there under, It wassubmitted that the notice of inquiry could relate only to oneof the alternatives as provided under Section 10(a) of theAct. It was also submitted that the complaint by thirty onetrades did not satisfy the provisions of Section 10(a)(i) of the Act, the traders not being the consumers and further thatsome of the signatories had informed the petitioner that theirsignatures were obtained on a blank sheet of paper on theplea that signatures were required to make representation tothe petitioner for increased supply of paper. That being so,it was submitted that in any case the complaint by thesetraders would fall short of the requisite number of twentyfive and Commission, therefore, had no jurisdiction to inquireinto the restrictive trade practices alleged against the petitioner. All these objections did not find favor with theCommission and the application of the petitioner (I.A. 585)was rejected by the Commission by its order dated 18-2-1986.This led to the filing of the present writ petition.
(4) When this petition was instituted there were three respondents, respondent No. 1 being the Director General,respondent No. 2 the Commission and respondent No. 3- M/s. Ghasita Mal Mela Ram alleged to be the principal complainant who lodged the complaint against the petitioner beforethe Commission by annexing along with that the names andsignatures of thirty other persons and who (respondent No. 3)was allowed by the Commission to participate in the proceedings arising out of the notice of inquiry against the petitioner.Subsequently, it appears that all the thirty one complainntswere made parties to the petition by amending the same. THE petition was further got amended. By this amendment the petitioner now chalienged the validity of Regulation 73(5)whereby it made an informant party to the proceedings beforethe Commisson under Section 10(a)(iv) of the Act as according to the petitioner only those complainants who fulfill theconditions precedent as set out in Section 10(a)(i) of the Actcould be made parses to the proceedings before the Commission.Regulation 73(5) and to the extent Regulation 73(2) empowering the Commission to make informant a party to the proceedings under Section 10(a)(iv) were contended to be ultra viresthe Act as these provisions enlarged the scope of Section 10(a)(iv) which was. slated to be not permissible in law.
(5) Mr. O. P. Malhotra appearing for the petitioner raisedthree principal contentions before us, namely, (i) notice ofinquiry in so far as it was under Section 10(a)(i) was invalidinasmuch as there was no complaint by any trade or consumers'association having a membership of twenty five persons ormore and that individual traders of any number could notfile a complaint; (ii) Section 10(a)(iv) was unconstitutionalas it vested arbitrary and uncanalised powers in the. Coinmission; and (iii) Regulation. 73(5) was ultra vires the Actas it equated an informant with the parties mentioned in subclauses (i), (ii) and (iii) of Section 10(a) of the Act makingthe informant to the a deemed party. On the other handMr. O. P. Dua appearing on behalf of respondants 1 and 2submitted that provisions of the Act and the Regulationswere valid and that the complaint under Section 10(a)(i) bythirty one .traders was also valid. Accordnig to Mr. Duaunder this sub clause complaint could be filed by twenty liveor more consumers as well and he said that traders wouldalso be consumers keeping in view the objectives which theAct sought to achieve.
(6) Before we proceed to examine rival contentions of theparties, it may be appropriate to set out the relevant provisions of law -at this stage.
(7) Under Section 2(0) restrictive trade practice is definedto mean trade practice which has or may have the effect ofpreventing, distorting or restricting competition in any mannerand in particular-
(I)which tends to obstruct the flow of capital orresources into the stream of production ,
(II)which tends to bring about manipulation of pricesor conditions of delivery or to effect the flow ofsupplies in the market relating to goods or servicein such manner as to impose on the consumersunJustified costs or restrictions.'
"RETAILER"under Section 2(p) means "in relation to the saleof any poods, includes every person, or other than a wholesales.Who sells the goods to any other person; and in respect of the sale of goods by a wholesaler, to any person for any purpose other than re-sale includes that wholesaler."
(8) "TRADE" means any trade, business, industry, professionor occupation relating to the production, supply, distribution orcontrol of poods and includes the proision of any services.'[Section 2(s)1.]
(9) "TRADE association" under Section 2(t) means "a bodyof persons (Whether incorporated or not) which is formed fortire purpose of furthering the trade interests of its membes orof persons presented by its members."
(10) "TRADE practice" means "any practice relaring to thecarrying on of any trade, and includes:-
(I)anything done by any person which controls in-affects the price. charged by, or this method oftrading of, any trader or any class of traders.
(II)a single or isolated action of any person in relationto any trade."
(11) "WHOLESALER" in relation to the sale of any goodsmeans "a person who (sells the goods, either in bulk or inlarge quantities, to any person for the purpuses. of resale.whether inbulk or in the same or smaller quantities" [Section 2(x)].
(12) Under Section 5 of the Act the .Commission consists ofChairman and member? numbering two to eight. Under subsection (2) of Section 5 the Chairman shall be a person who is, or has been or is qualified, to be .a judge of the SupremeCourt or of a High court and the members thereof shall hepersons of ability, integrity and standing who have adequateknowledge of experience of or have shown, capacity in dealingwith problems relating to economics, law. commerce, accountancy. industry, public affairs or administration. DirectorGeneral is appointed under Section 8.of the Act for makinginvestigation for the purposes of the .Act and for maintainsa Register of agreements and for performing such other functions as or are provided by or under the Act. Section 10 isas under -
"INQUIRYinto monopolistic or restrictive trade. practicesby Commilssion-The Commission may inquireinto- .
(A)any restrictive trade practice-(i) upon receiving a complaint of facts whichconstitute such practice from any trade ofconsumers' association having a membership ofnot less than twenty five persons or fromtwenty five or more consumers, or
(II)upon a reference made to it by the CentralGovernment or a State Government, or
(III)upon an application made to it by the (DirectorGeneral) or
(IV)upon its own knowledge or infcnnation;
(B)any monopolistic trade practice, upon a reference made to to by the Central Government ofupon its own knowledge or information."
(13) Section 11 in so far as it is relevant is as under:-
"INVESTIGATIONby Director General before issue of process in certain cases-
(1) Where any complaint is received by the Commission under sub-clause (i) of clause (a) of
SECTION 10. it may, before issuing any processrequiring the attendance of the person complainedagainst, by an order, require the Director Generalto make, or cause to be made, a
preliminaryinvestigation in such manner as it may direct andsubmit a report to the Commission to enable tosatisfy itself as to whether or not the complaintrequires to be inquired into.
(2)The Director General may, upon his own knowledge or information or on a complaipt made tohim make, or cause to be made. a preliminaryInvestigation in such manner as he may think fitto enable him to satisfy himself as to whether ornot an application should be made by him tothe Commission under sub-clause (iii) of clause(a) of section 10."
under Section 18 the Commission has power to regulate theprocedure and conduct of its business, subject, of course tothe provisions of the Act. Sub-section (2) of this Section isas under:--
"(2)In particular, and without prejudice to the generalityof the foregoing provisions, the powers of theCommission shall include the power to determinethe extent to which persons interested on claimedto be interested in the subject-matter of any proceeding before it are allowed to be present or tobe heard, cither by themselves or by their representatives or to cross-examins witnesses orotherwise to take part in the proceeding."
Under Chapter Vi, which contains Section 37 to 41, the Commission investigates into various restrictive trade practices endpasses orders thereon. The Commission has power to frameregulations for the efficient performance of its functions underthe Act. This is provided under Section 66 of the Act. TheCommission has framed regulations in exercise of its powerconferred on it by Sections 18 and 66 of the Act Chapter IIof the Regulations deals with the preliminary investigation andreport by the Director General. Regulation 19 falling underthis chapter is relevant and may be set out as hereunder
"19.(1) On receipt of a complaint under sub-clause(i) of clause (a) of section 10 and clause (a) ofsection 36B) of the Act the Commission shall(before issuing any process) direct the (DirectorGeneral) to enquire into the complaint and submita report.
(2)The Commisson may order a preliminary investigation by the (Director General).
(A)when a reference is received under sub-clause(ii) of clause (a.) of Section 10 or under clause(b) of Section 10 [or clause (b) of Section 36B].
(B)when the Registrar has an application undersub-clause (iii) of clause (a) of Section 10 (orclause (c) of Section 36B and
(C)when the Commission decides to enquire infoany restrictive trade practices under sub-clause(iv) of clause (a) of Section 10 of the Act orany monopolistic trade practices under clause(b) of Section 10 [or any unfair trade practicesunder clause (d) of Section 36B] of the Actupon its own knowledge or information.
REGULATION.73, which has been the subject matter of controversy,may also be reproduced as under:-
"73. Joinder of parties
(1)Any parties to the proceedings may at any timeapply to the Commission (with 4 additional copiesof the application) for an order that any personnot already a party be added as a party to theproceedings and shall give notice of the applicationto all other parties and to the person sought to beadded.
(2)The Commission may at any stage of the proceedings either of its own motion or on the applicationof any party to the proceedings, on such terms as may appeal to the Commission just and equitableorder that the name of any party inrporperly joinedbe struck out, and that the name of any person whoought to have been joined or whose presence before the Commission may be neceeeary in order toenable the Commission effectively and completelyto adjudicate upon and settle all questions involvedof the proceedings, be added.
(3)Where any party is added or the name of any partyis struck out, the pleadings shall, unless the Commission otherwise directs, be amended in suchmanner as may be necessary.
(4)The provisions or Order I of the Code of CivilProcedure, 1908 (5 of 1908) shall apply mututismnutandis to these proceedings.
(5)Any complainant, applicant, informant or Government authority who makes refereace under clause
(A)of Section 10 shall, if he or it is not a party tothe proceedings, bedeemed to be a party and shallbe entitled to be heard in the proceedings. theSecretary may, and if so, directed by the Commission shall, furnish to him or it a copy of thedocuments filed with him under Regulations 53,54,55, 65, 67. 69 and 72."
(14) The Act was amended by Amending Act 30 of 1984d apart from other amendments part-B was added ia Chapterof the Act relating to Unfair Trade Practices. Section 36A defines-unfair trade "practice" meaning a trade practice which,for the purpose of promoting the sale, use or supply of anygoods or for the provision of any services, adopts one or moreof the practices mentioned in the section and thereby causesloss or injury to the consumers of such goods or services, whether by eliminating or restricting competition or otherwise. TheCommission under Section 36-B may inquire into any UnfairTrade Practice and the provisions are same as those given inSection 10(a) of the Act. The Act was further amended bythe Amending Act 74 of 1986 which came into force on1-6-1987. Section 10 of the Principal Act was amended asunder :-
'INsection 10 of the principal Act, in sub-clause (i)for the words "from any trade or consumers association having a membership of not less than twentyfive persons or from twenty five or more consumers", the wolds "from any trade association orfrom any consumer or a registered consumers association, whether such consumer is a member of thatconsumers association or not" shall be substituted."
SECTION 36-B has also been similarly amended. "Registeredconsumer;. association" has been defined to mean "a voluntaryassociation of persons registered under the Companies Act, 1956(1 of 1956) or any other law for the time being in force whichis formed for the purpose of protecting the interests of consumers generally and is recognised by the Central Governmentas such association on an application made in this behalf insuch from and such manner as may be prescribed." (Section 2(n) ).
(15) At almost the same time Consumer Protection Act 1986(for short 'the Consumer Act') has been brought into force.The object of this Act is to provide for better protection of theinterest of consumers and for that purpose it it makes provisionfor the establishment of consumers' councils and other facilities, for the settlement of consumers' disputes and other relatedmatters Section 2(d.) of the Consumer Act defins a "consumer" to mean any person who "buys any "goods for a consideration which has been paid or promised or partly paid and partlv promised. or under any system of deferred payment and includes any use of such goods other than the person who buyssuch goods for consideration paid or promised or partly paidof partly promised, or under any system of deferred paymentwhen such use is made with the approval of such person, butdoes not include a person who obtains such goods for resale orfor any commercial purpose, or (ii) hires any services for aconsideration which has been paid or promised or partly paidand partly promised, or under any system of deferred paymentand includes any beneficiary of such services other than theperson who hires the services for consideration paid or promised. o rpartly paid and partly promised, or under any system ofdeferred payment, when such services are availed of with theapproval of the first mentioned person." Under Section 2(q)"trader" in relation to any good means "a person who sells ordistributes any goods for sale and includes the manufacturerthereof, and where such goods are sold or distributed in package form, includes the packer thereof". Then. under Section 2(r) the expression unfair trade practice would have the samemeaning as in section 36A of the Monopolies and Restrictive Trade Practice Act, 1969 (54 of 1969), but shall not includean unfair trade practice adopted by the owner of an undertaking to which Part A of Chapter Iii of that Act applies or byany person acting on behalf of, or for the benefit of such owner.Complainant under Section 2(b) has also been defined to mean(i) a consumer, or (ii) any voluntary consumer association registered under the Companies Act, 1956 (1 uf 1956) or underany other law turn the time being in force, or (iii) the CentralGovernment or any State Government, who or which makes acomplaint, and under Section 2(c) complaint means any allegation in writing made by a complainant that--(i) as a resultof any unfair trade practice adopted by any trader, the complainant has suffered loss or damage, (ii) the sood" mentionedin the complain: suffer from one or mure defects, (lii) the services mentioned in the complaint suffer from deficiency in anyrespect, (iv) a trader has charged for the goods mentioned inthe complaint a price in excess of the price fixed by or underany law for the time being in force or displayed on the goodsor any package containing such goods, with a view to obtainingany relief provided by or under this Act.
(16) We may also note that Section 38 of the Act uses theexpression purchasers, consumers and users and sub-section(2)of this section includes persons purchasing, consming or usingfor the purpose or in course of trade or business or for publicpurposes. Then, if reference is made to legal glossary 1983issued by .the Ministry of Law, Justice and Company Atfairs.the Hindi meaning of the word 'consumer' is Upbuogta.
(17) The first and foremost question that now arises forconsideration is if the complaint is valid under Section 10(a)(i) fur the Commission to get jurisdiction to inquire into a restrictive trade practice. Under this sub-clause a complaint of tactsconstituting a restrictive trade practice has to be from an association of traders or consumers having a membership of notless than twenty live persons or from consumers numberingtwenty live or more. The complaint in the present case is bythe distribdtors/dealers marketing and selling papers manufactured and supplied by the petitioner. Mr. Dua said that
thesedistributors/dealers should be treated as consumers keeping inview the objectives of the Act and in any case he said thatsince the instant complaint is by thirty one traders, it might betaken to have been submitted by a trade association havinga membership of not less than twenty five persons. His argument was that in so far as these distributors./dealers were concerned they were consumers of the paper qua the petitioners.As noted above, Mr. Dua had submitted that trader would include consumer as well. He also referred to a decision of theSupreme Court in Anwarkhan Mahboob Co. v. The State ofBombay (Now Maharashtra) and others to the meaning of the
expression 'consumption.' This judgment was rendered with reference to explanation to Article 286(1) of the Constitution which Explanation has sines beenomitted by an amendment to the Constitution. The petitionersin the case beforc the Supreme Court were carrying on thebusiness of manufacture of bidis in the State of Madhya Pradesh after purchasing raw tobacco from the cultivators in theState of Bombay where the raw tobacco was subjected to process leading to its conversion into bidi patties. That tobaccowas then sent to the State of Madhya Pradesh to be manufactured into bidis. The raw tobacco and bidi catties were distinct and different commercial articles. The question was thenthe tobacco was delivered in the State of Bombay for the purpose of changing it into a commercially different article, viz.bidi patty, was the deliver for the purpose of consumption,though bidis were finally manufactured in the State of MadhyaPradesh The court held that whenever a commodity was so'dealt with as to change it into another commercial commeditythere was consumption of the first commodity within the meansing of Explanation to Article 286. The court then explninedthe word 'consumption', though it observed that it was nutnecessary and indeed inexpedient to attempt and exhaustivedefination of the word 'consumption' as used in the Explanationto Article 286 of the Constitution. The court observed thatgoods or for the provision, of any services, adopts one or morethe act of consumption with which the people were most familiar occurred when they ate, drank or smoked. Thus wespeak of people consuming bread, or fish or meat or vegetables,why they eat these articles of food, we speak of people consuming tea or coffee or water or wine, when th'ey drinkthese articles, we speak of people consuming cigars or cigarettesor bidis, when they smoke these. For some commodities theremay be even more than one kind of consumption. Thus grapesmay be "finally consumed" by eating them as fruits, they mayalso be consumed by drinking the wine prepared from grapes.Then. the court observed as under :-
"...-But the fact that there is for each commodity whatmay be considered ordinarily to be. the final act ofconsumption, should not take us forger that in reaching the .stage at which this final act of consumptiontakes place the commodity may pass through different stages of production and for such differentstages, there would exist one or more intermediateacts of consumption. Thus, the final act, of consumption of cotton may be considered to be theuse as wearing apparel of the cloth produced fromit. But before cotton has become a wearing apparel, it passes through the hands of different producers, each of whom adds some utility to the commodity received by him. There is first the act ofginning, sinned cotton is spun into yarn by the spinner, the spun yarn is woven into cloth by the weaver. the woven cloth is made into wearing apparelby the tailor. At each of these stages distinct utilities are produced and what is prodused is at thenext tags consumed. It is usual and correct tospeak of raw cotton being consumed in ginning,of ginned cotton being consumed in spinning, ofspun yarn being consumed in weaving, of wovencloth being consumed in the making of wear'sanparel. The final product-the wearing apparelis ultimately consumed by men, women and children in using it as dress. In the absence of anywords to limit the connotation of the word "consumption" to the final act of consumption, it willbe proper to think that the
Constitution-makersused the word to connote any kind of user whichis ordinarily spoken of as consumption of the particular commodity."
(18) It is not clear to us as to how this judgment supportsMr. Dua. In the present case the distributors/dealers of paperdo not convert the paper into any other commodity but theymerely sell the paper to retailers who would again sell the sameto purchasers for ultimate consumption. The word 'consumer'has not been defined in the Act. It is defined in the Consumers Act. Trader has been separately defined in the Consumers Act. To an extent the Act and the Consumers Act havemuch in common with one another. In a way, they are cognatelegislation when it comes to unfair trade practices. They wouldappear to form one code and should be taKen together as forming one system. It would perhaps be more appropriate to adoptthe definition of consumer as given in the Consumer Act. Wedo not think that Mr. Dua is right when he says that a consumerwould be included in the word trader because a trader wouldnormally re-sell the commodity without in any way making thecommodity different by any process or otherwise. The Supreme Court decision referred to above would rather support theview which we are taking. If the word is not defined in theAct, it should be given its ordinary meaning as it is commonlyunderstood. Consumer would thus mean a person who buysand uses goods. It also appears to us that the word 'consumer'in Section 36B of the Act will have same meaning particularlyafter the amendment of the Act by the Amending Act 1986 asin the Consumers Act and we are of the opinion that same meaning should hold good for the word 'consumer' in Section 10(a)(i) of the Act. As noted above, there has been vital changein Section 10(a)(i) after its amendment by the Amending Act,1986 and all this discussion may, therefore, appear to he ratheracademic. Nevertheless, it does appear to us that consumeris a separate category apart from the trader either wholesaleror retailer and the complaint in the present case doe? not satisfythe requirement of Section 10(a)(i) and is an invalid complaintit not having been filed by consumers and not having been filedby a trade association having the membership of twenty five persons or more. The ar,eument of Mr. Dua that the 'complainthe taken to have been filed by such an association of traders asIT is signed by thirty one traders is of no relevance. A complaint by a trade association having a membership of twentypersons or more cannot be equated with a complaint filed bytwenty live or more persons even though jointly. Trade Association has been defined under Section 2(e) "of the Act to meana body of persons formed turn the purpose of furthering the tradeinterests of its members. It is nobody's case that thirty onepersons who have filed the complaint in question, formed anytrade association for the purpose of furthering the trade interests of these persons. An association is normally understodto mean a body which brings together people with a commoninterest or purpose as a trade association defined under theAct. These thirty one persons could at best be described toform a group, but then group has been separately defined in theAct. S-2 (e.f.). They may also be working in associationwith each other, but they certainly cannot be said to form anassociation.
(19) But, then the present notice of inquiry has been issusdboth under Section 10(a)(i) and Section 10(a)(iv) of the Act.Mr. Malhotra, learned counsel for the petitioner, contended thata complaint under Section 10(a)(i) could not be converted intothat under Section 10(a)(iv). But, this point stands concludednot only by this court but also by the High Courts of Calcuttaand Allahabad. Commission in its earlier orders has also heldthat an invalid complaint under Section 10(a)(i) could be treatedas one under Section 10(a)(iv) to enable the Commissionto inquire into any restrictive trade practice. It was of the viewthat if the Commission proposed to institute an enquiry uponits own knowledge or information such knowledge or information could be derived from a defective complaint made under Section 10(a)(i). [See in re. An Agreement Relating toNylon Filament Yarn, (1975) 45 Comp. Cas. 646]. This viewof the Commission was challenged in this court in Nirlon Synthetic Fibres And Chemicals. Ltd. and another v. R. D Saxena.Director of Investigation and others (1976) 46, Comp. Cas,419 (T).B.)C2). One of the arguments was that a certain tradeassociation had filed a complaint on the basis of which the Commission issued notice without complying with the provisions ofSection 11 of the Act. which enjoins upon the Commission to have
"CERTAINpreliminary investigation made before issue of process.the whole proceedings were void ab initio. This court observedas under :---
"...-We see no substance in this argument Section 10 authorises the Commission to inquire into any restrictive trade practice not only upon receiving acomplaint but also "upon its own knowledge andinformation." It is true that the Crimpers Association had filed the complaint but thereafter the Commission has token upon the matter itself and wefee no bar to its doing so. This aspect of thematter was fully gone into by the Commission inits order dated 5/03/1974, with which weagree."
CALCUTTAHigh Court in I.T.C. Ltd. v. M.R.T.P; Commission and Ors.: (1976) 46, Comp. Cas. 619(3), is also of the view thatCommission's jurisdiction to inquire into restrictive trade practices upon its own knowledge or information under Section 10(a)(iv) of the said Act is not restricted only to the informationderived from a proceeding under Section 12(3) of the Act.Upon information derived horn an invalid or irregular complaint or even from an annoymous letter or from a complaintmade by less than twenty five consumers, the Commission iscompetent to exercise its jurisdiction under Section 10(a)(iv) of the Act. It also held in this case that provisions-of Section 10(a) were mutually exclusive but that did not mean that anyinformation derived from any source or even from an invalidcomplaint could not be used by the Commission as its ownknowladge and information under clause (iv) and that onlylimitation was that there could not be any simultaneous inquiryon different alternatives enumerated in Section 10(a). In J. K.Synthetics Ltd. v. R. D. Saxena, Director of lnvestigation and ors. 1(1977) 47. Comp. Cas: 323, Allahabad (4), it was contended that an invalid complaint could not form the basis ofits knowledge or information of the Commission so as to eatitleit to take action under Section 10(a)(iv). The court held thatthis was not correct and that there was nothing in Section 10(a)(iv) to restrict the source of information or own knowledge of the Commission which could form the basis of suo motu action.The source and the manner in which this information was conveyed was of no conseaucnce. The Commission could takeaction under Section 10(a)(iv) even on the basis of an invalidcomplaint.
(20) Mr. Malhotra then contended that there could not beone notice for cases falling under Section 10(a)(i) and Section 10(a)(iv) and relying on the decision of the Calcutta HighCourt, referred to above, he said that there had to be twogenarate notices of inquiry and separate inquiries held. Wea... unable to subscribe' to this view. the Commission may inquire into any restrictive trade practice upon receiving a complaint or upon a reference from the Central or State Governmentor upon an application by the Director General or upon its ownknowledge or information. We see no difficulty in holding aninquiry when allegation regarding restrictive trade practices aresame and against the same party and it is immaterial which maythe Commission assumes jurisdiction. We may also note thatRegulation 15(2) provides, that subject to the provisions of subsection (1) of section 12 of Act, where no specific provision hasbeen made in these regulations the Code of Civil Procedure1908, to the extent as may be deemed expedient by the Commission, shall apply to the proceedings. Thus, even if we holdthat there was no proper complaint under Section 10(a)(i) theCommission could proceed under Section 10(a)(iv) of the Act.
(21) Then, it was contended by Mr. Malhotra that Section. 10(a)(iv) was unconstitutional and invalid. This ground wasnot taken either before the Commission or in the grounds inthis writ petition. We, however, permitted Mr. Malhotra toraise this argument as the question raised was a pure question of law which could be decided on the basis of the factson record in the case. For this purpose we relied on a decision of the Supreme Court in Town Municipal Council, Athaniv. Presiding Officer, Labour Court, Hubli and others etc. . It was submitted that on a complaintreceived under Section 10(a)(i) the Commission might requirethe Director General to make or cause to be made a preliminary investigation in a manner as may be directed by the Commission to enable it to satisfy itself as to whether or not thecomplaint made is to be inquired into. There was no safeguard if the Commission wanted to inquire into any Restrictive Trade practice upon its own knowledge or information. But.then also no preliminary investigation is required when areference is made by the Central Government or a Slate Government or an application is made by the Director General. Though,when a complaint is made by the Director General he can makeOr cause to be made & preliminary investigation for him tosatisfy as to whether or not an application should be madeunder Section 10(a)(iii). Mr. Dua referred to Regulation-19of the Regulations under which the Commission may order apreliminary investigation by the Director General when theCommission decides to inquire into any restrictive trade practice under Section 10(a)(iv). He said that on this accountallegation for aibitrariness could not be mads against theCommission. This argument was countered by Mr. Nanmanwho also appeared for the petitioner and supplemented The arguments of Mr. Malhotra to submit that a statute which wasotherwise invalid as being unreasonable could not be saved byits being administered in a reasonable manner. He referred toa decision of the Supreme Court in Collector of Customs v.Sampathu Chetty where the
courtobserved as under :-
"THEpossibility of abuse of a statute otherwise validdoes not impart to it any element of invalidity.The converse must also follow that a statute whichis otherwise invalid as being unreasonable cannot besaved by it being administered in a reasonablemanner. The constitutional validity of the statutewould have to be determined on the basis of its provisions and on the ambit of its operation asreasonably construed. If so judged it passes thetest of reasonableness, possibility of the powers conferred being, improperly used is no ground forpronouncing the law itself invalid and similarly If the law properly interpreted and tested in the lightof the requirements set out in Part Iii of sheConstitution does not pass the test it cannot bepronounced valid merely because it is administeredin a manner which might not conflict with theconstitutional reqairements. In saying this we arcnot to be understood as laying down that a lawwhich might operate harshly but still be constitutionally valid should be operated always withharshness or that reasonableness and justness oughtnot to guide the actual administration of suchlaws."
(22) Mr. Nariman also submitted that Section 10(a)(iv) wasviolative of the principles of natural justice. He said therewas no provision for preliminary investigation and that it couldbe that the Commission was not fully aware of the authenticityof its information. The issue of notice could cause great harmto the party. He said that the Act laid down a conditionpercedent that complaint under Section 10(a)(i) could be bytwenty five persons or more. It could not be said that therewas no basis for it and when requirement of law was that apreliminary investigation be held to enable to the Commissionto satisfy itself if the complaint was required to be inquiredinto of not, there was no safeguard when a came to Section 10(a)(iv). There was no provision, for notice to the partybefore the Commission issued notice under Section 10(a)(iv).Then, Mr. Nariman said that it was a case where the judgein the case was himself a witness and there was no protectionagainst bias and trial being not fair. He referred to decisionof the Supreme Court in S. L. Kapoor v. Jagmohan and Ors. and Swadeshi
Cotton Mills etc. y.Union of India etc. Mr. Dua,
however, submitted that the Act was beyond the realm of challengeand that it was protected by Section 31B of the Constitution.the Act appearing at item 91 of 9th Schedule to the Constitution. He said Article 39(C). under the Directive Principlesof State Policy would also protect the Act from any challengeto its validity. An argument was also raised by Mr. Malhotrathat Commission was in fact a Court and no one could bejudged in his own cause. He relied on a decision of theSupreme Court in Virinder Kumar Satyawadi v. The State oFPunjab . In a bench decision of thiscourt in Premier Tyres Ltd v. M.R.T.P. Commission (Company Cases (Vol. 46, 1976) 297], (10) referred to by Mr. Dua.it was observed that under Section 12 of the Act the Commission was deemed to be a civil court for certain purposesand had been conferred with certain powers of the civil court.We are of the opinion that challenge of the petitioner to thevalidity of Section 10(a)(iv) is not of any avail. It is no;.that proceedings only under sub-clauses (i), (ii) and (iii) arcof adversorial nature and that tinder sub-clause (iv) ofinquisitorial nature. All would be of adversorial nature. TheCommission is a high powered body constituted of a Chairman.a person who is or has been or is qualified to be a judge of the Supreme Court, or High Court and the members whoare persons of ability integrity a.nd standing having adequateknowledge or experience of. or have shown capacity in dealingproblems relating to economics. law, commerce, accountancy,industry, public affairs or administration. Only such a highpowered body had been entrusted with the job to administerthe Act the object of which is to provide that the operationof economic system does not result in the concentration ofeconomic power to the common detriment, turn the control ofmonopolies for the prohibition of monopolistic and Restrictive Trade practices and such other matters connected therewith orincidental thereto. It is, therefore, difficult to comprehend thatsuch a body will act in an arbitrary fashion when it choosesto inquire into a restrictive trade practice upon its own knowledge or information. Provisions of the Act and the objectsprovide enough guidance for the Commission to act under subclause (iv)(a) of Section 10. It is incorrect to say that Commission is a court. It has been conferred with certain powersof a civil court under Sections 12, 12(a), 12(b), 12(c) etc.Commission can certainly be not equated with a civil court.When the Commission issues notice under Section 10(a)(iv) itonly directs that inquiry be instituted against the person concerned in respect of the restrictive trade practices alleged against him and opportunity is granted to that person to beheard in the matter. No grievance can be made that beforeissuing of notice the party concerned is not heard. The issueof notice under Section 10(a)(iv) does not thus concludethe matter. It appears to us that whole procedure will standnullified if before issuing such notice a party is to be heard.No rule? of natural justice can be said to have been violated.No doubt that the horizons of natural justice are ever expanding but then the aim of natural justice is to secure justice andto prevent miscarriage of justice. The Act and the Regulations give full protection to the party concerned to contest the notice of inquiry. In the circumstances we cannot read therequirement of an opportunity to the party concerned beforeissue of notice of inquiry and we feel that the legislature hasadvisedly made no such provision for hearing before issue ofnotice of inquiry as it has provided a detailed procedure to hearthe party. The rules of natural justice only require that aparty against whom an allegation is being inquired into shouldbe given a hearing. In Nagendra Nath Bora and another v.Commissioner of Hills Division thecourt observed that the rules of natural justice vary. with thevarying constitutions of statutory bodies and the rules prescribed by the Act under which they function and the questionwhether or not any rules of natural justice had been contravened should be decided not under any pre-conceived notions,but in the light of the statutory rules and provisions. We,therefore, reject the argument that Section 10(a)(iv) is invalid.
(23) We are also not impressed with the argument thatprovisions of Regulation 73(5) are in any way illegal beingbeyond the rule making powers of the Commission. As notedabove, the Regulations have been framed under Sections 18 and 66 of the Act. Under Regulation 73(5) any complainantapplicant I informant or the government authority who makesreference under Section 10(a) is deemed to be a party andis entitled to be heard in the proceedings. No exception canbe found to this provision. Mr. Malhotra did refer to a certaindecisions of the Supreme Court, notably in The State ofKerala v. K. M. Charia Abdulla and Co. to contend that the Commission could not
transcendits powers conferred on it by the Act and he said that Regulation 73(5) did not find place in the scheme of the Act. Wedo not agree. As noted above, full opportunity is granted tothe petitioner to participate in the proceedings before theCommission, to cross-examine the witnesses deposing againsthim and to produce evidence in defense. Almost all provisions of the Code of Civil Procedure could be made applicable tothe proceedings before the Commission by virtue of the Regulations. Under sub-section (2) of Section 18, Commissionhas powers to determine the extent to which persons interestedor claimed to be interested in the subject matter of any procceding before it are allowed to be present or to be heard,either by themselves or by their representatives or to cross-examine witnesses or otherwise to take part in the proceedingsbefore the Commission. Regulation 73(5) squarely falls withinthis power. The grievance of the petitioner has been to the order of the Commission allowing respondent No. 3 to be added as a party. There is nothing wrong in it. We. therefore, reject the argument that Regulation 73(5) is ultra viresthe powers of the Commission.
(24) In the result this petition fails and is dismissed with costs. Counsel's fee Rs. 1,000.