IN THE HIGH COURT OF MADRAS 

Appearances : Prakasam Gokhaney for the Petitioners. G. Sankaran, S. Subhiah, P. B. Krishnamurthi, R. Suresh Kumar & T. Easwardhas for the respondents. 

ORDER 

1. In all these cases, the issue involved is one and the same. The petitioners are dealers in various consumer goods, groceries and dairy products. They have been purchasing butter/ghee flavoured milk and other products of the respondent No. 3 sold under the brand name "Aavin" from the respondent No. 5 who was the distributor for the concerned area. The petitioners have sold the said products giving discount to the public. On the basis that the petitioners were selling the products to the consumers at prices lower than the maximum retail prices fixed for the products, the respondent No. 5 refused to sell the dairy products of the respondent No. 3 to the petitioners. So the petitioners have filed the above writ petitions, seeking to issue a writ of mandamus, directing the respondent Nos. 1 to 4, their officers and agents to take action to ensure compliance with the law by their distributors and wholesalers including the respondent No. 5. 

2. According to the petitioners, though the maximum retail price of a 500 gms. butter pack is Rs. 55, they are selling it for Rs. 51.95 per 500 grams. By that, according to them, they are getting profit of six paise. The price of the same to the wholesale dealer is Rs. 49.89. They are allowed to get a margin of Rs. 2. So, the retailers price for the said product would be Rs. 51.89. The maximum retail price is fixed at Rs. 55 after allowing retailer price margin of Rs. 3.11. The fact is not under dispute. 

3. Now, we have to decide whether, on the basis that the petitioners are not selling the said product at Rs. 55 and they are selling it only at Rs.51.95, the respondent No. 5 can refuse to sell the dairy products of the respondent No. 3 to the petitioners. 

4. It is also not in dispute that the transaction in question will come under the provisions of the Monopolies and Restrictive Trade Practices Act, 1969 ('the Act'). So, the respondents can refuse to sell the said products to the petitioners only in accordance with section 40 of the Act. 

5. As submitted by the learned counsel appearing for the petitioners, Rs. 55 is only the maximum retail price for the said product and there is no prohibition under the said Act to sell the said product for lesser price, except in cases, it covers the wholesaler or retailer who should not use the goods as loss-leaders. Section 39 of the Act, which is also relevant for the case, is as follows : 

"Special conditions for avoidance of conditions for maintaining re-sale prices : (1) Without prejudice to the provisions of this Act with respect to registration and to any of the powers of the Commission or of the Central Government under this Act, any term or condition of a contract for the sale of goods by a person to a wholesaler or retailer or any agreement between a person and a wholesaler or retailer relating to such sale shall be void insofar as it purports to establish or provide for the establishment of minimum prices to be charged on the resale of goods in India. 

(2) After the commencement of this Act, no supplier of goods whether directly or through any person or association of persons acting on his behalf shall notify to dealers or otherwise publish on or in relation to any goods, a price stated or calculated to be understood as the minimum price which may be charged on the resale of the goods in India. 

(3) This action shall apply to patented articles (including articles made by a patented process and articles made under any trade mark) as it applies to other goods and notice of any term or condition which is void by virtue of this section or which would be so void if included in a contract of sale or agreement relating to the sale of such article shall be of no effect for the purpose of limiting the right of a dealer to dispose of that article without infringement of the patent or trade mark, as the case may be : 

Provided that nothing in this section shall affect the validity as between the parties and their successors, of any term or condition of a licence granted by the proprietor of a patent or trade mark by a licensee under any such licence or of any assignment of a patent or trade mark, so far as it regulates the price at which articles produced or processed by the licensee or the assignee may be sold by him." 

From the abovesaid provision, it is clear that any condition in a contract providing for establishment of minimum price to be charged and the re-sale of goods in India is established void, the retailer can sell the products as low as possible, but subject to section 40 (2). Section 40 reads as follows : 

'Prohibition of other measures for maintaining re-sale prices : (1) Without prejudice to the provisions of this Act with respect to registration and to any of the powers of the Commission or of the Central Government under this Act, no supplier shall withhold supplies of any goods from any wholesaler or retailer seeking to obtain them for re-sale in India on the ground that the wholesaler or retailer : 

(a) has sold in India at a price below re-sale price, goods obtained, either directly or indirectly, from the supplier, or has supplied such goods, either directly or indirectly, to a third party who had done so; or 

(b) is likely if the goods are supplied to him to sell them in India at a price below that price or supply them, either directly or indirectly, to a third party who would be likely to do so. 

(2) Nothing contained in sub-section (1) shall render it unlawful for a supplier to withhold supplies of goods from any wholesaler or retailer or to cause or procure another supplier to do so if he has reasonable cause to believe that the wholesaler or the retailer, as the case may be, has been using as loss leaders any goods of the same or a similar description whether obtained from that supplier or not. 

(3) A supplier of goods shall be deemed to be withholding supplies of goods from a dealer if he : 

(a) refuses or fails to supply these goods to the order of the dealer; 

(b) refuses to supply those goods to the dealer except at prices, or on terms or conditions as to credit, discount or other matters which are less favourable than those at or on which he normally supplies those goods to other dealers carrying on business in similar circumstances; or 

(c) treats a dealer, in spite of a contract with such dealer for the supply of goods in a manner less favourable than that in which he normally treats other dealers in respect of time or methods of delivery other matters arising in the performance of the contract. 

(4) A supplier shall not be deemed to be withholding supplies of goods on any of the grounds mentioned in sub-section (1), if, in addition to that ground, he has any other ground which alone would entitle him to withhold such supplies. 

Explanation I : "Resale price", in relation to sale of goods of any description, means any price notified to the dealer or otherwise published by or on behalf of the supplier of goods in question (whether lawfully or not) as the price or minimum price which is to be charged on, or is recommended as appropriate for, a sale of that description or any price prescribed or purporting to be prescribed for that purpose by any contract or agreement between the wholesaler or retailer and any such supplier. 

Explanation II : A wholesaler or retailer is said to use goods as loss leaders when he resells them otherwise than in a genuine seasonal or clearance sale not for the purpose of making a profit on the resale but for the purpose of attracting to the establishment at which the goods are sold, customers likely to purchase other goods or otherwise for the purpose of advertising his business.' 

6. The learned counsel appearing for the respondents, on the basis of the counter, has submitted that for the purpose of attracting or selling the said products for lesser price than the price fixed as maximum retail price, the petitioners are using their products as loss-lenders, for the purpose of attracting to the establishment at which the goods are sold to customers to purchase other goods and also for the purpose of advertising their business. To substantiate the said submission, the respondents have to establish that their products are being used as 'loss-leaders'. 

7. 'Loss-leader', as explained in the Concise Oxford Dictionary, 8th edn., refers to an item sold at a loss to attract customers. So, to bring the petitioners' case within the abovesaid provision of section 40 (2), the respondents should establish that the petitioners are selling the said products and are incurring loss. But, unfortunately, even according to the respondents, the petitioners are selling the butter at the rate of Rs.51.95 per 500 grams which is over and above the purchase price of the petitioners, i.e., Rs. 51.89 per 500 grams. By that, the petitioners are making six paise profit. So, it cannot be said that the petitioners are incurring loss, and so the said products are being used as loss-leaders. After all, the petitioners are getting profit of six paise. This cannot be said as a loss. As stated already, the respondents cannot insist the petitioners to sell the said products only at the rate fixed as maximum retail price. From the above, it is very clear that the refusal to supply the said products to the petitioners by the respondents is not in accordance with law and so the attitude of the respondents to refuse to supply the said products to the petitioners cannot be sustained in law. 

8. The learned counsel appearing for the respondent No. 5 in these writ petitions have submitted that if the petitioners are allowed to sell the said products for lesser price than the price fixed as the maximum retail price, the other retail dealers who are purchasing the said products from them will be put to great hardship, and they are making complaint about the petitioners' way of selling the said products. According to them, if the petitioners are allowed to sell the products as such, the other retailer will be constrained to go out of the market, and thereafter the petitioners alone will be there as distributors, and they will raise the prices of the said products thereafter. I am not able to accept the said submission, which is irrelevant to decide whether the refusal to supply of the said products to the petitioners is in compliance with the provisions of the said Act. If the petitioners do not contravene any of the provisions under the said Act, they are entitled to get supply of the said products, and, merely because the other retail dealers will be affected, the respondent No. 5 cannot refuse to supply the said products to the petitioners. So, the said submission of the learned counsel, as already stated, is irrelevant for the purpose of the present cases. Even if the petitioners raise the prices of the said products at a later stage, they can do so only upto the maximum retail price of the said product fixed by the respondent No. 3, and they cannot sell the same more than that. 

9. The learned counsel appearing for the respondent No. 3 has raised an objection regarding the maintainability of the writ petitions as no writ petition will lie against the co-operative societies. The Apex Court, recently, in U.P. State Co-operative Land Development Bank Ltd. v. Chandra Bhan Dubey [1999] 1 CTC 467, while dealing with the maintainability of writ petition against the co-operative society, has held as follows : 

'....A Full Bench of the Andhra Pradesh High Court in Sri Konaseema Co-operative Central Bank Ltd. v. N. Seetharama Raju AIR 1990 AP 171 was considering the question whether a writ petition lay against a co-operative society and if it does, in what circumstances. After examining various decisions and treatises on the subject it was stated that even if a society could not be characterised as a "State" within the meaning of article 12 even so a writ would lie against it to enforce a statutory public duty which an employee is entitled to enforce against the society. In such a case, it is unnecessary to go into the question whether the society is being treated as a "person", or an "authority", within the meaning of article 226 of the Constitution. What is material is the nature of the statutory duty placed upon it, and the court is to enforce such statutory public duty. 

25. In view of the fact that control of the State Government on the appellant is all pervasive and the employees had statutory protection and, therefore, the appellant being an authority or even instrumentality of the State would be amenable to writ jurisdiction of the High Court under article 226 of the Constitution. It may not be necessary to examine any further the question if article 226 makes a divide between public law and private law. Prima facie from the language of the article 226 there does not appear to exist such a divide. To understand the explicit language of the article it is not necessary for us to rely on the decision of English courts as rightly cautioned by the earlier Benches of this court. It does not appear to us that article 226 while empowering the High Court for issue of orders or directions to any authority or person does not make any such difference between public functions and private functions. It is not necessary for us in this case to go into this question as to what is the nature, scope and amplitude of the writs of habeas corpus, mandamus, prohibition, quo warranto and certiorari. They are certainly founded on the English system of jurisprudence. Article 226 also speaks of directions and orders which can be issued to any person or authority including in appropriate cases, any Government. Under clause (1) of article 367 unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under article 372 apply for the interpretation of the Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India. "Person" under section (42) of the General Clauses Act shall include any company, or association or body of individuals, whether incorporated or not. Constitution is not a statute. It is a fountain head of all the statutes. When the language of article 226 is clear, we cannot put shackles on the High Courts to limit their jurisdiction by putting an interpretation on the words which would limit their jurisdiction. When any citizen or person is wronged, the High Court will step into protect him, be that wrong be done by the State, an instrumentality of the State, a company or a cooperative society or association or body of individuals whether incorporated or not, or even an individual. Right that is infringed may be under Part III of the Constitution or any other right which the law validly made might confer upon him. But then the power conferred upon the High Courts under article 226 of the Constitution is so vast, this court has laid down certain guidelines and self-imposed limitations have been put there subject to which High Courts would exercise jurisdiction, but those guidelines cannot be mandatory in all circumstances. High Court does not interfere when an equally efficacious alternative remedy is available or when there is established procedure to remedy a wrong or enforce a right. A party may not be allowed to bye-pass the normal channel of civil and criminal litigation. High Court does not act like a proverbial "bull in China shop" in the exercise of its jurisdiction under article 226.' 

Even in these cases, the petitioners are being regulated under the provisions of MRTP Act. So, in the event of non-supply of the said products, it is the duty of the court to enforce the same. Moreover, the respondent No. 3 is under the all pervasive control of the State Government. In view of the above, the submission of the learned counsel for the respondent No. 3 that these writ petitions are not maintainable against the respondent No. 3 cannot be sustained in law. 

10. In view of the above discussion, the case of the petitioners has to be accepted. Accordingly, these writ petitions are allowed with costs of Rs. 2,000 to be paid by the respondent No. 5 in each case. Consequently, WMP No. 6735 to 6737 of 1999 are closed. 

Petitions allowed.