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  • R T P0001

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    Zakir Qureshi
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    Restrictive trade practice means a trade practice which has or may have the effect of preventing, distorting or restricting competition in any manner. Specific goods means goods identified and agreed UP9n at the time a contract of sale is made. Unascertained or generic goods are indicated by description and are not separately identified.

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    R.T.P0001

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    Restrictive trade practice means a trade practice which has or may have the effect of preventing, distorting or restricting competition in any manner. Specific goods means goods identified and agreed UP9n at the time a contract of sale is made. Unascertained or generic goods are indicated by description and are not separately identified.

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    23 views7 pages

    R T P0001

    Uploaded by

    Zakir Qureshi
    Restrictive trade practice means a trade practice which has or may have the effect of preventing, distorting or restricting competition in any manner. Specific goods means goods identified and agreed UP9n at the time a contract of sale is made. Unascertained or generic goods are indicated by description and are not separately identified.

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    of 7
    CHAPTER 2 RESTRICTIVE TRADE PRACTICES A. WHAT IS TRADE PRACTICE? [Sec. 2(u)] ‘Trade practice means any pra 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; ‘Trade means any trade, business, industry, profession or occupation relating to the production, supply, distribytion or control of goods and includes the provision of any services. (Sec. 2 (8)] HAT IS RESTRICTIVE TRADE PRACTICE? (Sec. 2 (0)] A 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 production; or Gi) which tends to bring about manipulation of prices or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner or to impose on the consumers unjustified costs or restrictions. A restrictive trade practice shall be deemed to be prejudicial to the public interest. C. WHAT IS PRICE? [Sec. 2 (1)] Price in relation to sale of any goods or to the performance of any services includes every valuable consideration, whether direct or indirect and includes any consideration which in effect relates to the sale of any goods or to the performance of any services although ostensibly relating to any other matter or thing ‘ D. WHAT IS GOODS? [Sec. 2 (e)] Goods may be existing or future. Existing goods may be specific goods or unascertained or generic goods. Specific goods means goods identified and agreed upon at the time a contract of sale is made. These ‘goods are already in existence and are physically present in some person's possession and ownership, for example, contract for the sale of a specific watch or specific car. Unascertained or generic goods are 604 Business Law for Management indicated by description and are not separately identified or example, sale of one kg. of oil from 100 kgs. of oil with the merchant is a sale of unascertained goods. When one kg. is separated from 100 kgs. of oil, the sale is of specific goods. Future goods means goods to be n anufactured or purchased or acquired by the seller after the making of the contract of sale, These goods do .10t exist atthe time of contract of sale but subsequently come into existence. The following are also included within the meaning of the term “goods”: (i) products manufactured, processed or mined in India; (Gi) shares and stocks including issue of shares before allotment; (iii) goodsimported into India wherever reference is made to goods supplied, distributed or controlled in India. Even things like goodwill, copyright, trademark, patent, etc. are all goods. Gas and electricity have also been held to be goods. Current money is not goods. Real estate transactions are not covered by the meaning of the term ‘goods’ E. WHAT IS SERVICE? [Sec. 2 (1)] Service means service which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, chit fund, real estate, transport, processing, supply of electrical or other energy, boarding or lodging orboth, entertainment, amusement or the purveying, of news or other information, Service does not include the rendering of any service free of charge or under a contract of personal service F, REGISTRATION OF AGREEMENTS RELATING TO RESTRICTIVE TRADE ~~ PRACTICES I, AGREEMENTS REGISTRABLE [Sec. 33] Agreement includes any arrangement or understanding, whether or not it is intended that such agreement shall be enforceable by legal proceedings. {Sec.2 (a)]. Any agreement relating to production, storage, supply, distribution or control of goods or for performance of any services, which restricts seller cor buyer of goods or services in any manner, is an agreement relating to restrictive trade practice. All agreements relating to restrictive trade practices are registrable, provided one party atleast to such an agreement carries on business in India. It is immaterial even if the other party to such an agreement does not carry on business in India. Deemed Restrictive Trade Practice Agreements: Deemed restrictive trade practice agreement was introduced in view of decisions of Hon'ble Supreme Court in Telco's case reported in 1977 (47) Comp. Cas. 520 (SC) and in Mahindra and Mahindra’s case reported in 1979 (49) Comp. Cas. 419 (SC) wherein it was held that a trade practicé must also satisfy definition of restrictive trade practice in Section 2(0). t does not become arestrictive trade practice merely because it falls within note of the clauses of Section 33(1). With the deeming provision Section 33 (1) covers all possible restrictive trade covenants. Therefore trade practices which ir term: 2 (0) may be termed as restrictive trade practice, if not covered by Section 33(1), are not subject to registration under the Act. Even if one of the clauses of the agreement is restrictive in nature, the whole of the agreement would require to be registered though other clauses in the agreement do nct relate to restrictive trade practice. If an agreement falls within one of the ciauses of Section 33(1), specifying a restrictive trade Restrictive Trade Practices bas practice in the light of Section 2 (0), it is no more open to the Commission or to the Court to test and examine any of the trade practice and to say that it shall not amount to restrictive trade practice (Voltas Ltd. v, Unicn of India & Ors. 1995 AIR SCW - 2928). Every agreement falling within one or more of the following categories shall be deemed to be an agreement relating to restrictive trade practices and shall be subject to registration: — (i) any agreement by any method, which restricts, or is likely to restrict, the persons or classes of persons to whom goods are sold or from whom goods are bought; (ii) any agreement requiring a purchaser of goods, to purchase some other goods as a condition of such purchase; ii) any agreement restricting in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person; (iv) any agreement to purchase or sell goods or to tender for the sale or purchase of goods only at prices or on terms or conditions agreed upon between the sellers or purchasers; (v) any agreement o grantor allow concessions or benefits, including allowances, discounts, rebates or credits in connection with, or by reason of dealings; (vi) any agreement to sell goods, on condition that the prices to be charged on resale by the purchaser shall be the prices stipulated by the seller unless itis clearly stated that prices lower than those prices may be charged; (vii) any agreement (o limit, restrict or withhold the output or supply of any goods or allocate any area or market for the disposal of the goods; (viii) any agreement not to employ or restrict the employment of any method, machinery or process in the manufacture of goods; (ix) any agreement for the exclusion from any trade association of any person carrying on or intending to carry on, in good faith the trade in relation to which the trade association is formed; (x) any agreement to sell goods at such prices as would have the effect of eliminating compet or a competitor, (xi) any agreement restricting in any manner, the class or number of wholesalers, producers or suppliers from whom any goods may be bought; (xii) any agreement as to the bids which any of the parties thereto may offer at an auction for the sale of goods or any agreement whereby any party thereto agrees to abstain from bidding at any auction for the sale of goods; 8 (xiii) any agreement not referred to above, which the Central Government may, (by notification), specify for the time being as being one relating to a restrictive trade practice pursuant to any recommendation made by the Commission in this behalf; (xiv) any agreement to enforce the carrying out of any such agreement; (Sec. 33 (1)] (xv) any agree aking provieiva for sor ‘Jatin to sgreements connected with the production, storage, supply, distribution or control of goods [Sec. 33 (2)]- Section 33(2) covers agreements relating to rendering of any service as defined in Section 2(r). Professional services rendered by lawyers, dociors, architects, consulting engineers, chartered accountaats, Cost accountants, and others, providing for rules and regulations of professional associations, if of restrictive nature falling under any of the clauses jon 33(1), would require to be registered. 606 Business Law for Management I AGREEMENTS WHICH DO NOT REQUIRE REGISTRATION [Sec. 33(3)] Following agreements are not subject to registration: (i) agreements expressly authorised by or under any law for the time being in force; or (ii) agreements which have the approval of the Central Government ; or (iii) if the Government is a party to an agreement. ‘The above exclusions are on account of public policy. Il, PROCEDURE FOR REGISTRATION OF AGREEMENTS [Sec. 35 & Rules 12 & 14] 1, Time limit for registration: ‘~The Central Government shall by notification specify the day on and from which every agreement requiring registration shall become registrable. Such a specified day shall be referred to as the appointed day. Different days may be appointed for different categories of agreements. Where an agreement is existing on that day, within.60 days from the appointed day, or where an agreement is made after the appointed day, within 60 days thereof, any party to the agreement or any person on behalf of such party shall furnish to the Director General the following particulars in respect of every such registrable agreement — (@ the names of the persons who are parties to the agreement; and (ii)_the whole of the terms of the agreement. Two copies of each documentin relation to that agreement shall be delivered to the Director General. One copy of such agreement shall béssigned or identified by the signature of the person furnishing it. A certificate in Form-XII shall be furnished signed by the person furnishing such copies and certifying that the whole of the terms of that agreement are comprised in the copies furnished. 2. In case of variation or determination of

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