Paragraph numbers below are the court’s original numbering, recovered from the source text.
17. Several submissions have been made by Shri A.N. Haksar, IE~arned senior counsel for the appellant, but it is not necessary to deal with all of them since we are of the opinion that these appeals deserve to be allowed on the first submis- sion.
18. The legal question involved in the first submission is c whether a party can be held guilty of unfair trade practice as referred to in Section 36A of the MRTP Act, although he did not supply any goods at all.
19. Section 36Awhich was inserted in 1984 and amended in 1991 now reads as follows :- "36A. DEFINITION OF UNFAIR TRADE PRACTICE. In this Part, unless the context otherwise requires "unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, adopts any unfair method or unfair or deceptive practice including any of the' following practices, namely:- (1) the practice of making any statement, whether orally or in writing or by visible representation which,- (i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model; (ii) falsely represents that the services are of a particular standard, quality or grade; (iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods; (iv) represents that the goods or services have M/S PHILIPS MEDICAL SYS, (CLEV.) INC. v. M/S IND. MRI DIAG. & RESEARCH LTD. & ANR. [MARKANDEY KAT JU, J.] sponsorships, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have; (v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have; (vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services; (vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof; Provided that where a' defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the . person raising such defence; (viii) makes to the public a representation in a form that·purports to be – (i) a warranty or guarantee of a product or of any goods or services; or c (ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue ·a servic~ until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, . guarantee or promise will be Ci'!rried out; (ix) materially misleading the public concerning the price at which a product or like products or goods or services, have been, or are, ordinarily sold or provided, and, for this purpose, a H representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made; c (x) gives false or misleading facts disparaging the goods, services or trade of another person. Explanation : For the purposes of clause (1 ), a statement that is – (a) expressed on an article offered or displayed for sale, or on its wrapper or container; or (b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or (c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained; (2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services thatare not intended to be offer.ed for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement. .J M/S PHILIPS MEDICAL SYS, (CLEV.) INC. v. M/S 1153 IND. MRI DIAG & RESEARCH LTD. & ANR. [MARKANDEY KAT JU, J.] Explanation: For the purpose of clause (2), "bargain price" means – (a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or (b) a price that a person who reads, hears, or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold; (3) permits – (a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole, (b) the conduct of any contest, lottery, game of chance c or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or E any business interest; (4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not . comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods; (5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale, or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the _G cost of those or other similar goods or services."
20. In this connection it may be mentioned that as origi- nally enacted the MRTP Act 1969 was made with the object of ensuring that the operation of the economic system does not result in a concentration of economic power to the common detri- ment, for the control of monopolies, and for the prohibition of B monopolistic and restrictive trade practices.
21. There was no provision like Section 36A in the original Act. However, it was later felt that there was need for some modi- fication of the Act. In the original Act there was no specific provi- sion for regulating unfair trade practices like misleading adver- C tisements, bargain selling, etc. It was realized that the consumer needs to be protected not only from the effects of restrictive trade practices, but also from practices which are resorted to by cer- tain unscrupulous businessmen who mislead or dupe the con- sumers. Hence, the MRTP Act was amended in 1984 and the D Statement of Objects and Reasons of the amendment has given the reasons as to why this amendment was necessary.
22. The 1984 amendment was in pursuance of the recom- mendations of the Sachar Committee. This committee expressed the view that the Act contained no provision for the protection of E .· the consumers from false or misleading advertisements or other similar unfair trade practices, and that the provisions of the Act directed against restrictive or monopolistic trade practices pro- ceeded on the assumption that if th§! manufacturer, producers or dealer can be prevented from distorting competition, the con- F sumer would automatically get a fair deal. Since this was found to be only partly true, the committee was of the opinion that the consumer need to be protected not only from the effects of re- strictive trade practices, but also from the practices which are resorted to by some businessmen to mislead or dupe the con- G sumers. The object of the amendment was broadly to prevent false or misleading advertisements, or false representations claiming that the goods sold are of a certain standard or have certain qualities, which, in fact, they do not possess.
23. Thus, the very object of the 1984 amendment was to ……. _, M/S PHILIPS MEDICAL SYS, (CLEV.) INC. v. MIS 1155 IND. MRI DIAG & RESEARCH LTD. &ANR. [MARKANDEY KATJU, J.] ensure that the persons buying certain goods were not duped or misled-by a representation or advertisement which stated that these goods have certain features or qualities which, in fact, they do not possess. Thus the amendment had nothing to do with a situation where goods are not sold at all.
24. In the original Section 36A which was introduced by 8 1984 amendment, it was necessary to attract the provision that some injury or the unfair trade practice should have caused some loss to the consumer. By the 1991 amendment to Sec- tion 36A, the requirement to establish loss or injury to the con~ sumer has been deleted. Also, another change brought out by . C · the 1991 amendmentwas that while the original Section 36A. had adopted an exhaustive definition of unfair trade practice, the 1991 amendment has given an inclusive and not an exhaus- tive definition of unfair trade practice.
25. However, we are of the opinion that principles of ejus- dem genf!ris and noscitur a sociis will apply to the interpreta- tion of Section 36A as amended in 1991. Applying these well- known principles of interpretation we are of the opinion that Section 36A does not apply in a situation where goods are not sold at all. It only applies where goods in fact are sold.
26. It is a settled principle of interpretation that when an amendment is made to an Act, or when a new enactment is made, Heydon's mischief rule is often utilized in interpreting the same. Applying this principle we are of the opinion that Sec- tion 36A was inserted in the MRTP Act because there was no provision therein for protection of consumers against false or misleading advertisement or other similar unfair trade practices. It is well-known that in a trade suppliers often have a dominant bargaining position, and the bargaining power in the market is often weighed against the consumer. In this situation, it was re- alized by Parliament in its wisdom when it inserted Section 36A t that the public must be prevented from being made victims ·of false representations about the products sold, even though it may have no adverse effect on competition. The purpose of H (2008) 13 S.C.R. Section 36A was to prevent frauds against the consumers who may be falsely induced to buy goods which do not possess the qualities which they are given out to have by advertisement or other representations.
27. Taking the above object of Section 36A into account it B is obvious that Section 36A was never meant to deal with a situation where goods are not sold at all. Section 36A was re- ally meant to protect consumers against defective goods or goods sold which do not have features or qualities which they were represented to have. Since the appellant did not sell the c CT Scanner at all to the respondent, we fail to understand how Section 36A was attracted at all.
28. No doubt by the 1991 amendment the definition of un- fair trade practice was made inclusive and not exhaustive, but D this does not mean that when interpreting the amended Section 36A we should disregard the object for which Section 36A was enacted. Thus in Hemens (Valuation Officer) vs. Whitsbury Farm and Stud Ltd (1988) 1 All ER 72 (HL), in construing Section 2(3) of the Rating Act, 1971 which defines 'Livestock' to include any mammal or bird kept for the production of food or wool or for the purpose of its use in the farming of land, the word livestock was not given the wide meaning (in contradiction to deadstock) to include any animal whatsoever and was held not to extend to thorough bred horses not kept for use in the farming of land.
29. Similarly, in South Gujarat Roofing Tile Manufactur- ers Association vs. State of Gujarat AIR 1977 SC 90 (vide pp 93-94) and Hindustan Aluminium Corporation vs. State of UP AIR 1981SC1649, the inclusive definition was given a restric- tive meaning. As observed by Wanchoo, J. in Va~guard Fire G and General Insurance Co. Ltd., Madras vs. Fraser & Ross AIR 1960 SC 971, the Court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the cir- H cumstances. No doubt, because of the inclusive definition the _, M/S PHILIPS MEDICAL SYS, (CLEV.) INC. v. M/S 1157 IND. MRI DIAG & RESEARCH LTD. &ANR. [MARKANDEY KAT JU, J.] meaning of the expression 'unfair trade practice' goes beyond the specific clauses mentioned in Section 36A, but that does not mean that the meaning will go beyond the very object of Section 36A.
30. In view of the above discussion, we are of the opinion that the impugned judgment and order dated 29.11.2005 passed by the MRTP Commission cannot be sustained and it is hereby set aside. The appeals are allowed. There shall be no order as to costs. ALTAMAS KABIR, J. 1. Having had an opportunity of go- ing through the draft judgment prepared by my learned brother, while I generally agree with the same, I would like to add a few words of my own with regard to the interpretation of Section 36- A of the Monopolies and ~strictive Trade Practices Act, 1969, (hereinafter referred to as 'the 1969 Act') which has been intro- duced in the Act by way of amendment in 1984 and further amendment in 1991. 2. As was submitted by Mr. A.N. Haksar, learned Senior Advocate for the appellant, the ·1969 Act, as originally enacted, lacked definition of the term 'unfairtra~e practice'. While 'trade practice' was defined in Section 2(u) of the original enactment in the following terms: "2. Definitions-In this Act, unless the context otherwise requires,- (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 charge 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." the term 'restrictive trade practice' was aiso defined in Section 2(o) in the following terms: c c "2.Definitions-ln this Act, unless the context otherwise requires,- (o) '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 (ii) 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 s.ervices in such manner as to impose on the consumers unjustified costs or restrictions; (iii) "retailer," in relation to the sale of any goods, includes every person other than a wholesaler, 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." 3. The expression "unfair trade practice" was not defined in the 1969 Act, as originally enacted. The said defining was removed by the amendment effected in 1984 by introducing Section 36-A which has been fully reproduced by my learned F brother in his judgment. In paragraph 18 of the judgment my learned brother has formulated the following question: "The legal question involved in the first submission is whether a party can be held guilty of unfair trade practice as referred to in Section 36A of the MRTP Act, although he did not supply any goods at all." 4. My learned brother has interpreted the provisions of Section 36-A of the 1969 Act as amended in the context of the question formulated by him. After having analysed the object H and reasons for the enactment of the 1969 Act, my learned MIS PHILIPS MEDICAL SYS, (CLEV.) INC. v MIS IND. MRI DIAG & RESEARCH LTD. &ANR [MARKANDEY KATJU, J.] c ' j brother has indicated that the very object of the 1991 Amendment A was to prevent a person from doing certain acts such as publish- ing false or misleading advertisements, or false representations, claiming that the goods sold are of a certain standard or have cer- tain qualities, which, in fact, they do not possess. My learned brother, therefore, was of the view that the Amendment had nothing to do in a situation where goods were not sold at all. While also observing · that by the 1991 amendment Section 36-A was given an inclusive and not an exhaustive definition of unfair trade practice, my learned brother was also of the opinion that the principles of ejusdem generis and noscitur a sociis will apply to Section 36-A as C . amended in 1991 and applying the said principles the High Court was of the opinion that Section 36-A would not apply in a situation where goods are not sold at all. 5. The said view has been reiterated throughout the latter part of my learned brother's judgment, but I am of the view that o such an interpretation is too rigid and situations may arise, which though falling under the wider concept of unfair trade practice, may not strictly be covered by Section 36-A of the 1969 Act. In my view, there may be situations where a promise to supply a particular good, which the supplier knew that he was in no posi- tion to supply, with a motive of promoting of some other model, as has happened in the instant case, could occur. In such a case a customer may be forced to obtain the same material from sbme other party and suffer losses in the process. In my view, even without actual sale of goods, such an act on the part of the sup- plier could also amount to 'unfair trade practice' and Section 36- A cannot in absolute terms be said not to apply to a situation where goods may not have been sold at all. In fact, such a situa- tion may also be covered even by the provisions of Sub-clause·- — (ii) or (vi) of sub-section ( 1) of Section 36-A of the above _Act. 6. I, however, agree with my learned brother that the judg- ment of the MRTP Commission cannot be sustained and is re- quired to be set aside. I would, therefore, also allow the appeal,· but without any order as to costs. N.J. Appeal allowed.