ION EXCHANGE (INDIA) LTD.versusUNION OF INDIA AND ORS.

A                       ION EXCHANGE (INDIA) LTD.
                                         v.
                         UNION OF INDIA AND ORS.

                              NOVEMBER 6, 1998

B    [S.P. BHARUCHA, K. VENKATASWAMI AND A.P MISRA, JJ.]


           Monopolies and Restrictive Trade Practices Act, 1969, Section 36-~
    Unfair Trade Practices-Commission's power to issue Cease had Desist
    Orders-Scope of-Director General of Investigation and Registration
C   instituting an inquiry of unfair trade practice against the appellant over an
    advertisement issued by it-Not contested by the appellant-Cease and Desist
    order passed by Commission subject to a condition that future advertisement
    to be issued by the appellant after prior approval by the Commission-Held,
    Commission not empowered to issue such direction-Commission has ample
D   power under the Act to deal with persons who violate its Cease and Desist
    order.
           The appellant, manufacturer of water purifier, issued advertisement
    that its water purifiers provided 100% safe drinking water instantly and
    that the water stayed bacteria free in storage. An enquiry was instituted by
E   the Monopolies and Restrictive Trade Practices Commission at the behest
    of its Director General of Investigation and Registration. Appellant did not
    contest the allegation made in the Notice of Enquiry and submitted to a
    Cease and Desist Order. However, the Commission passed such an order
    subject to the condition that any future advertisement would be subject to
    approval by the Commission. Appellant challenged this part of the order
    before High Court in a writ petition. High Court dismissed the writ petition
    on the ground that Commission had given the said direction to subserve
    the object of effectively checking repetition of the unfair trade practice
    affecting a large number of people. Hence this appeal.
          It was contended by the appellant that both un-amended as well as
    amended Section 36-B of the Act did not confer on the Commission to issue
    such direction; that however, the Commission had ample power to deal with
    any infraction of its Cease and Desist Orders.

          Allowing the appeal, this Court
          HELD: Both un-amended and amended provision of Section 36-D of
                                  560
             ION EXCHANGE (INDIA) LTD. v. U.0.1. [BHARUCHA, J.]            561
  the Monopolies and Restrictif! Trade Practices Act cannot be so read as          A
  enabling the Commission to require all advertisements that the appellant
  might issue in the future to be approved by the Commission in advance.
  The requirement to disclose information relates only to the unfair trade
  practice then undei: inquiry. As to public interest, the Commission is
  sufficiently armed under the Act with powers to take action against those        B
  who breach its Cease and Desist Orders. It does not require the additional
· power ofsupervision of the kind indicated either in the impugned direction
  of the Commission or in the order under challenge to effectively carry out
  its obligations. The Commission cannot incorporate such direction in its final
  Cease and Desist Orders. [563-E-F)
         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5517 of                    C
 1998.

      From the Judgment and Order dated 4.8.98 of the Bombay High Court
 in W.P. No. 2793 of 1988.

      A.M. Setalvad, Gaurav Joshi, Marco Wadia, Mahesh Agarwal and E.C.            D
 Agrawala for the Appellant.

       K.N. Rawat, Additional Solicitor General, and Ashok K. Srivastava and
 P. Parmeswaran for the Respondents.

         The Judgment of the Court was delivered by                                E
         BHARUCHA, J. Leave granted.

        The appellant manufactures water purifiers. It issued advertisements
 stating that these water purifiers provided 100% safe drinking water instantly
 and that the water stayed bacteria free in storage. An enquiry was instituted p
 by the Monopolies and Restrictive Trade Practices Commission at the behest
 of its Director General of Investigation and Registration. A Notice of Enquiry-
 was issued to the appellant. At the hearing ther'ilof the appellant did not
 contest the allegation made in the Notice of Enquiry and expressed willingness
 on the very first date of hearing before the Commission to submit to a Cease
 atid Desist Order, which was passed. What is objected to on behalf of the G
 appellant is this further direction of the Commission : "If the respondent
 wants to issue an advertisement in future about its product, it will get a draft
 of its advertisement approved by the Commission."
       Impugning the power of the Commission to issue such further direction,
 the appellant filed a writ petition in the High Court at Bombay. The High         H
    562                        SUPREME COURT REPORTS (1998] SUPP. 2 S.C.R.

A   Court considered the provisions of Section .;!6-B of the Monopolies and
    Restrictive Trade Practices Act as amended, and observed that the impugned
    direction was given to subserve the object of effectively checking repetition
    of the unfair trade practice affecting a large number of people. The High
    Court modified the impugned direction thus:                                  ·

B           The Petitioner - manufacturer shall submit the proposed draft
            advertisement to the Director General along with the necessary
            documents supporting or substantiating the contents of the
            advertisement. If they do not receive any objection from the Director
            General .within four weeks, the Petitioner manufacturer shall be at
            liberty to publish the said advertisement."
c
          The appellant is in appeal by special leave. It is submitted by learned
    counsel for the appellant that Section 36-B. as it read at the relevant time,
    clearly conferred no power on the Commission to issue the impugned direction.
    Even the amended Section 36-B, which really had no application to the
D   particular case, did not confer on the Commission the power to give such
    direction. Emphasis was laid on the fact that the direction, whether as issued
    by the Commission or as amended by the High Court, would operate for all
    time to come. It was also submitted that the Commission had ample powers
    to deal with any infraction of its Cease and Desist Orders. The learned
    Additional Solicitor General, appearing for the respondents. emphasized the
E   amended provision upon which the High Court had relied and submitted that
    there was power in the Commission to issue the impugned direction.

           Section 36-D, as it originally stood, read as follows : "36-D(I) The
           Commission may inquire into any unfair trade practice which may
           come before it for inquiry and, if, after such inquiry, it is of opinion
F          that the practice is prejudicial to the public interest, or to the interest
           of the consumer or consumers generally, it may, by order direct that-

            (a) the practice shall be discontinued or shall not be repeated; and

            (b) any agreement relating to such unfair trade practice shall be void
G           or shall stand modified in respect thereof in such manner as may be
            specified in the Order.

            (2) The Commission may, instead of making any order under this
            section, permit any party to carry on any trade practice, if it so applies
            and take such steps within the time specified by the Commission as
H           may be necessary to ensure that the trade practice is no longer
            ION EXCHANGE (INDIA) LTD. v. U.0.1. [BHARUCHA, J.J              563
         prejudicial to the public interest or to the interest of any consumer or   A
         consumers generally, and, in any such case, if the Commission is
         satisfied that necessary steps have been taken within the time so
         specified, it may decide not to make any order under this section in
         respect of that trade practice,
         (3) No order shall be made under sub-section (1) in respect of any B
         trade practice which is expressly authorised by any law for the time
         being in force."

This is the provision which ruled at the relevant time. There is, very clearly,
no empowennent of the Commission thereunder to issue a direction of the
kind which is impugned.                                                             C
      The amended provision, upon which the High Court rested its order
reads thus:
         "(c) any infonnation, statement or advertisement relating to such unfair
         trade practice, shall be disclosed , issued or published, as the case
         may be, in such manner as may be specified in the order."                  D
The amended provision cannot be so read as enabling the Commission to
require all advertisements that the appellant might issue in the future to be
approved by the Commission in advance. The requirement to disclose
information relates only to the unfair trade practice then under inquiry. As to
public interest, the Commission is sufficiently anned under the Act with            E
powers to take action against those who breach its Cease and Desist Orders.
We do not think that it requires the additional power of supervision of the
kind indicated either in the impugned direction of the Commission or in the
order under challenge to effectively carry out its obligations. The Commission
cannot incorporate such direction in its final Cease and Desist Orders.             F
       Accordingly, the appeal is allowed. The judgment and order of the
High Court under appeal is set aside. The writ petition filed by the appellants
before the High Court is allowed to the extent aforestated. No order as to
costs.
R.K.S.                                                         Appeal allowed. G