G.R. Luthra, J. (Chairman)
1. The present application is under Section 12A of the Monopolies and Restrictive Trade Practices Act, 1969. The Director-General of Investigation and Registration, in compliance with the order of this Commission dated February 9, 1987 (communicated to him vide letter dated February 12, 1987), carried out investigation and submitted a preliminary investigation report dated April 3, 1987, recommending taking action against the respondent in respect of commission of unfair trade practices. The said preliminary investigation report was considered on April 6, 1987, and notice of enquiry was directed to be issued.
2. The respondent is carrying on business at Bangalore. It claims to be, a builder and seller of plots of land. It has been issuing advertisements from time to time that sites in Banashankari, Yelahanka and Magadi Road could be booked from it on prices ranging from Rs. 15,000 onwards and that the booking commenced from December 1, 1986. It was also mentioned in the advertisement that there was a special bumper offer for those who booked sites in December, 1986, and they could save Rs. 5,000 per booking. Photocopy of one such advertisement was sent to the Director-General by the Karnataka Consumer Protection Board along with its letter dated December 15, 1986. Another advertisement appeared in Deccan Herald of February 13, 1987, in which the names of the road and areas in which those sites were located were mentioned. The names of the villages, field and survey numbers were not mentioned.
3. Investigations by the Director-General revealed that the respondent has been indulging in misrepresentation and misleading statements to the public. Some of the misleading statements can be summarised as under :
(1) According to the provisions of Section 17 of the Karnataka Town and Country Planning Act and Section 32 of the Bangalore Development Authority Act, any person intending to sub-divide his plots or layouts has to obtain prior sanction from the Bangalore Development Authority. It appears from a communication from the Bangalore Development Authority sent to the Director-General that no such sanction was taken. The Bangalore Development Authority stated that before the announcement of booking of sites, it was necessary that sanction should be obtained from it. In that communication, it was also stated that the Bangalore Development Authority sent notice through their advocate that they could not offer any site without prior sanction ; that replies were received but the same were totally evasive because it merely emphasised that full compliance of law would be made. The Bangalore Development Authority warned the respondent that it was illegal on its part to receive money from intending buyers without informing them about the non-existence of sanction of the Bangalore Development Authority and they also issued a public notice cautioning the public not to be taken in by the misleading publicity of the respondent and not to book the sites. In spite of the above, advertisements have been continued by the respondent without mentioning that it had not obtained any sanction from the Bangalore Development Authority. On the other hand, the respondent had been warned by the Bangalore Development Authority not to book the sites without prior permission from them. This is material suppression of facts and hence not only in the nature of misrepresentation but also committing a fraud.
4. It is also in the communication sent by the Bangalore Development Authority to the Director-General that the public were requested to cooperate and refrain from giving room for sub-standard urban sprawl, legal and financial complications for themselves by accepting offers relating to sites. This fact has also not been mentioned in the advertisements by the respondent.
(ii) Some of the areas in which sites are being offered are within the green belt where no building activities are permissible. Those areas are Majognagar, Jigani and Bannerghatta. In spite of that, the respondent is offering the sites in those areas without mentioning, by way of material suppression of facts, that no building activities are permissible in the said areas.
(iii) The respondent, in its advertisement dated February 13, 1981, has also made certain claims in respect of various sites offered by it. For example, in respect of Yelahanka, it is stated that the above land is a stud farm and exempted under the Urban Land Ceiling Act. This has been refuted by the Bangalore Development Authority by stating that this land falls very much within the limits of the Bangalore Development Authority. Another example is that in respect of J. P. Nagar layout, the respondent has claimed that the land has already been converted and exempted under the Urban Land Ceiling Act and the layout has been approved by the Bangalore Development Authority. These claims have not been accepted by the Bangalore Development Authority in its note appended to the letter furnished by the Town Planner, Bangalore Development Authority (an-nexure I to the application). The Director-General also has been successful in laying its hand on a notification published by the Income-tax Department of the Government of India which notified for the information of the public that the immovable properties known as Ali Estate and Stud Farm Yelahanka, belonging to Mr. Mahmood Ali Mumtaj Ali (famous cine star) will be sold by public auction for the recovery of income-tax and wealth-tax arrears. This clearly shows that the respondent's offer of land in Yelahanka town cannot be correct as the same has already been attached by the Income-tax Department for the satisfaction of income-tax and wealth-tax arrears. This is a clear-cut indication of the misleading publicity campaign launched by the respondent to hoodwink gullible investors.
(iv) The respondent has claimed that it will be offering a special bumper offer to those who booked sites in December, 1986, and there will be a saving of Rs. 5,000. This means that the buyers booking sites in December, 1986, would be able to have sites at Rs. 10,000 and onwards as against the Bangalore Development Authority offering of sites at a rate of not less than Rs. 20,000. Therefore, there is an assurance by the respondent which is not possible to be fulfilled and thus it becomes misleading and a misrepresentation.
(v) The respondent has claimed that all sites would be easily accessible but it has suppressed the details as to in which village or villages the sites would be and how far they would be from the road(s). That means that the " easily accessible " claim is unfounded and false.
5. The respondent has also claimed that it has completed successfully layout projects in J. P. Nagar and Jigani. In this connection, a note furnished by the Bangalore Development Authority revealed that in respect of J. P. Nagar layout, the respondent was asked to pay development charges of Rs. 15.15 lakhs and betterment levy of Rs. 1 lakh but the respondent has not paid the amount- It clearly shows that the respondent's claims that it has already completed layouts in J.P. Nagar is totally misleading and has been made only to allure the intending buyers by their fake past performance.
6. The investigation by the Director-General reveals a prima facie case. However, it is to be seen as to how the case conies prima facie within the purview of the Monopolies and Restrictive Trade Practices Act. It is necessary because we have been informed by the Director-General that the letter dated March 13, 1987, was received by the Director-General on March 20, 1987, in which the respondent had stated that the provisions of the Monopolies and Respective Trade Practices Act were not applicable to the respondent, being builders. It is contended by the Director-General that, inter alia, purveying of news and other information is " service " within the meaning of Section 2(r)of the Monopolies and Restrictive Trade Practices Act; that the definition is both generic and specific ; that, in the present case, the respondent is giving false and misleading information and tempting the intending buyers to make investment for purchase of plots although they cannot be used as building sites when there is no permission from competent authorities to construct buildings. Therefore, what the respondent is doing is " service. " This fact will be determined after hearing the parties but prima facie the contention of the Director-General appeals to the reasoning.
7. Obviously, the aforesaid misleading statements amount to unfair trade practice within the meaning of Section 36A of the Monopolies and Restrictive Trade Practices Act and the said trade practice affects prejudicially the public interest as well as the consumers who are potential investors. It is absolutely necessary that those investors should be saved from loss and injury in the shape of being deprived of their hard-earned money.
8. According to Order 39, Rule 3, Civil Procedure Code, which is applicable in view of Section 12A(2) of the Monopolies and Restrictive Trade Practices Act, before an injunction is issued, notice should be given unless the injunction is such that delay in its issue will defeat its purpose in which case an ex parte injunction can be issued. The Director-General in order to serve the public interest is keen to have an ex parte injunction issued. We also agree because if injunction is not issued forthwith ex parte, there is every chance of many people losing their hard-earned money.
9. Under the above circumstances, we issue an ex parte temporary injunction, until further orders, restraining the respondent from continuing with tall and false claims in its advertisements and other modes of publicity. An intimation of the injunction order along with notice of the application shall be sent to the respondent for showing cause on April 28, 1987, as to why the injunction should not be made absolute during the pendency of the enquiry.
10. In accordance with Order 39, Rule 3, Civil Procedure Code, a copy of the application and a copy of the affidavit filed by the Director-General along with copies of annexures shall be sent by the Director-General to the respondent by registered post with acknowledgment due by tomorrow and affidavit of compliance in this behalf be filed. It may be mentioned that whatever has been stated herein will not, in any way, prejudice the decision of the enquiry on merits as well as the decision of this application and making suitable order relating to injunction.