REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5680 OF 2006

DLF Universal Ltd. & Anr.                           .....        Appellants

Versus

The Director General                                    [Investigation & Registration] & Anr.                                                        .....     Respondents

J U D G M E N T

Lokeshwar Singh Panta, J.

1. M/s DLF Universal  Limited (first  appellant herein)  and

DLF  Qutab  Enclave  Complex  Educational  Education

Charitable  Trust  (second  appellant  herein)  have  filed  this

appeal  under  Section  55  of  the  Monopolies  and  Restrictive

Trade Practices Act, 1969 [hereinafter referred to as ‘the MRTP

Act’] read with Order XX-A of the Supreme Court Rules, 1966

against  the  judgment  and  final  order  dated  3rd July,  2006

recorded  by  the  Monopolies  and Restrictive  Trade  Practices

Commission, New Delhi [for short ‘the Commission’]  in M.A.

No. 14 of 2004 (Review) in UTPE No. 350 of 1997 whereby and

whereunder  the  Commission has  directed  the  appellants  to

execute fresh lease deed in favour of Raj Kamal, complainant –

second respondent herein with amendments suggested by the

complainant – second respondent and to incorporate Clause

11(a)  and  (b)  in  the  agreement  to  lease  dated  1.12.1992

instead of Clause 4 in the draft lease deed which provided for

the refund in the event of termination of the lease deed.   

2. Briefly  stated  the  facts  giving  rise  to  the  filing  of  the

present appeal are as follows:-

M/s DLF Universal Limited is a public limited company

registered and incorporated under the Indian Companies Act,

1956.  It purchased free hold lands at Gurgaon in the State of

Haryana for setting up a colony known as ‘DLF Qutab Enclave

Complex’.  It applied for and was granted licence in terms of

the provisions of the Haryana Development and Regulation of

Urban Areas Act, 1975 [for short ‘the State Act’].   M/s DLF

Universal Limited and other group of companies created DLF

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Qutab  Enclave  Complex  Educational  Charitable  Trust

wherefor  a  large  number  of  sites  were  earmarked  for

construction of schools/community buildings in the complex.

In response to the advertisement issued by the appellants in

November,  1991 Raj Kamal, complainant-second respondent

applied  for  and  was  allotted  Nursery  School  site  No.  3136

admeasuring  0.20  acre  in  DLF  Qutab  Enclave,  Gurgaon.

Later  on,  this site  was substituted by another  site/plot  no.

3101 admeasuring 0.35 acre after charging of extra amount

for additional land allotted to him.  The complainant-second

respondent  filed  a  complaint  on  20.6.1997  before  the

Commission  which  was  referred  to  the  Director  General  of

Investigation  and  Registration  [for  short  ‘the  DG’]  –first

respondent herein.   A Preliminary Investigation Report  [PIR]

was submitted by DG-first respondent on 27th March, 1998 in

which it  was reported that  the  appellants  have  indulged  in

restrictive  and unfair  trade  practices  within the meaning  of

Section  2(o)(i)  and  Section  36A  of  the  MRTP  Act.   Taking

cognizance  of  the  PIR  on 4.6.1998,  the  Commission issued

notice of enquiry to the appellants. The allegations made in

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the complaint by the Complainant – second respondent were

that the appellants had not handed over the possession of the

alternate  plot  to  him  on  the  plea  that  the  Government  of

Haryana was not recognizing the fourth party rights.  During

the preliminary investigation, it came to light that at the time

of  advertisement  by  the  appellants  in  November,  1991,  the

title  of  the  sites  including  the  site/plot  allotted  to  the

complainant – second respondent was already transferred by

the first appellant to the second appellant on 27.11.1990.  The

first appellant was required to construct at its own cost or get

constructed by any other institution or individual at its cost,

schools/community buildings etc. on the land transferred to

them by the Government of Haryana under Section 3(a)(iv) of

the State Act.  25 different sites having a total area of 29,358

acres  were  earmarked  for  the  purposes  of  providing

educational  facilities  which  were  transferred  to  the  second

appellant  trust  for  a  sum  of  Rs.  1,05,000/-   It  was  also

provided that in case the appellants were unable to construct

the  said  site  within  the  stipulated  period,  the  same  would

automatically  be  reverted  to  the  State  Government.   In  the

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PIR, the following unfair/restrictive trade practices on the part

of the appellants have been alleged in this transaction based

on the investigation:-

(i) The  appellants  (respondents  before  the

Commission]  despite  not   having the   title  of  the

impugned  sites issued advertisement in November,

1991 inviting applications for allotment which is a

deceptive  and  unfair  trade  practice  within  the

meaning of Section 36A of the MRTP Act.

(ii) The  Trust  i.e.  appellant  No.  2  had  leased  out  the

sites  to  the  fourth  parties  after  7.8.1991  as  per

statement  furnished  during  investigation  by  the

second appellant to the DG.  It  is also alleged that

the second appellant was not allowed to create fourth

party  right  at  the  time  of  issuance  of  impugned

advertisement in November, 1991.  This tantamounts

to  unfair  trade  practices  within  the  meaning  of

Section 36A of the MRTP Act.

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(iii) Second  Appellant  created  fourth  party  rights  after

7.8.91 for a total consideration of over Rs. 1.85 crore

as against the nominal cost of Rs. 1,05,000/- paid by

them to  the  first  appellant  at  the  time  of  transfer.

The  allegation  was  that  in  terms of  the  guidelines

issued  by the Director, Town and Country Planning,

Haryana,  Gurgaon  [for  short  ‘the  DTCP’]  vide  their

letter dated 25.10.1994 this difference of money was

to  be  utilised  for  the  purpose  of  providing  better

amenities  to  the  colony  and  for  the  benefit  of

residents therein.  It has been alleged in the PIR that

the  appellants  have,  therefore,  manipulated  the

prices  as  well  as  conditions  of  delivery  of  the

impugned  community  sites  for  the  purpose  of

benefiting  the  Trust  wherein  the  Directors  of  the

appellant companies were interested.  The creation of

the  fourth  party  rights  in  the  impugned  sites

contrary to the guidelines issued by the DTCP is a

restrictive  trade  practice  which imposed unjustified

cost on the parties to whom fourth party rights has

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been created by the Trust in connivance with the first

appellant.   Further,  since  the  Trust  have  created

fourth  party  rights  after  7.8.1991  the  said  trade

practice  constitutes  deceptive  and  unfair  trade

practices within the meaning of Section 36A of the

Act.

(iv) The transfer deed entered into by the first appellant

with the second appellant did not make obligatory on

the part of the second appellant to utilize the amount

collected as such for the purpose of providing better

amenities  to  the  residents  of  DLF  Qutab  Enclave.

Second  Appellant  was  having  a  surplus  of  Rs.

5,489,223.86p. and Rs. 5,729,723.49p.  respectively

at the end of 31st March, 1996 and 31st March, 1997

respectively.  It has, therefore, been alleged that the

Trust has manipulated the prices and conditions of

delivery of impugned sites for its personal gain which

is a restrictive trade practice.

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(v) Originally  site  No.  3136  measuring  0.20  acre  was

allotted  to  the  complainant/informant  on

consideration  of  Rs.  4  lakhs  and  also  a  lease

agreement  dated  1.12.92  was  entered  into  for

constructing  and providing  educational  facilities  by

the  lessee.   Subsequently,  however,  the  appellants

offered  to  the  complainant/informant  an  alternate

site measuring 0.35 acre after receiving an additional

payment  of  Rs.  2,96,204/-  which  tantamount  to

unfair  trade  practice  since  the

complainant/informant  was  not  informed  that  the

previous site No. 3136 was subject to the revision of

lay out plan.

(vi) The  appellants  raised  maintenance  bills  for  the

nursery  school  plot  No.  3136  for  the  period  from

December, 92 to September, 93 though this plot was

omitted  in  the  revised  layout  plan which  is  unfair

trade practice.

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(vii) Similarly,  appellant-Trust  collected  lease  amount

from the complainant/informant for the period from

December,  92  to  March,  94  in  advance  without

handing over the plot in question to the lessee.

3. The appellants in their counter reply to the complaint of

the  complainant  –  second  respondent  inter  alia denied  the

allegations stated in the complaint and maintained that the

notice of inquiry and the PIR do not set out the specific and

precise allegations of unfair/restrictive trade practices against

them.  It was also submitted that the appellants had filed writ

petition in the High Court of Punjab and Haryana  inter  alia

challenging  the  letter  dated  9.2.1994  issued  by  the  DTCP,

whereby  the  appellants  have  been  restrained  from  creating

and recognising any fourth party rights and the said letter was

given retrospective effect from 7.8.1991.  The appellants then

stated  that  they  are  not  in  a  position  to  handover  the

possession and the site/plot in the absence of the sanction of

the  building  plans  by  the  authorities.   It  is  also  provided

under  the  lease  deed  entered  into  between  the  second

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appellant – Trust and the allottees that the possession of the

site/plot can be given only upon sanction of building plans by

appropriate authorities i.e. DTCP.  They also stated that the

agreement was entered into between the second appellant –

Trust and the complainant – second respondent and not by

the first appellant.  Therefore, there was no privity of contract

between  first  appellant  and  the  complainant–second

respondent. On these premises, the appellants submitted that

they have not indulged in any sort of unfair trade practices as

alleged in the complaint.   

4. On  the  controversial  pleadings  of  the  parties,  the

Commission framed the following issues:-

(i) Whether  the  appellants  (respondents  before the  Commission)  have  been  indulging  in restrictive and unfair trade practices as alleged in the Notice of Enquiry?

(ii) Whether the alleged restrictive trade practices are not prejudicial to public interest?

(iii) Whether the alleged unfair trade practices are prejudicial  to  the  interest  of  consumer/ consumers generally?

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5. It  appears  from  the  order  of  the  Commission  that  on

21.08.2001  the  learned  advocates  appearing  for  both  the

parties stated that the question which arose for consideration

in the complaint filed by complainant - second respondent has

been  decided  by  the  Division  Bench  of  the  High  Court  of

Punjab and Haryana in CWP No. 7245/1997 on 07.03.2001

and against the said judgment, special leave petition had been

filed in this Court.  In this view of the matter, the Commission

found that no purpose would be served to continue with the

present complaint and, accordingly, the matter was disposed

of.

6. Later on, an application was filed by the complainant –

second  respondent  seeking  to  review  the  order  of  the

Commission.   On  04.07.2003,  the  complainant  –  second

respondent stated before the Commission that the possession

of the site/plot  to which he was entitled to in terms of the

agreement  executed  between  the  parties  has  still  not  been

handed over to him.   Learned counsel appearing on behalf of

the  appellants  before  the  Commission  in  response  to  the

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review application stated that the appellants  were willing to

hand over the possession of the site/plot to the complainant –

second respondent  which was held  up in view of  the order

passed by the High Court of Punjab and Haryana and since

the order of the High Court of Punjab and Haryana has been

set aside by this Court in Civil Appeal No. 4908/2002 along

with  Civil  Appeal  Nos.  4909-11/2002  titled  DLF  Qutab

Enclave Complex Educational Charitable Trust  v. State

of Haryana & Ors. reported in [(2003) 5 SCC 622], therefore,

now the  appellants  are  ready  and willing  to  hand over  the

possession  of  the  site/plot  to  the  complainant–second

respondent within six weeks in terms of the agreement dated

01.12.1992.   Again  on 16.01.2004,  the  appellants  informed

the Commission that they will execute a fresh lease deed in

favour of the complainant – second respondent provided the

commercial terms as contained in the first lease deed dated

1.12.1992 shall  not be ordered to be modified or altered or

deviated and the appellants will indicate the amount of lease

rent  which  shall  be  paid  by  the  complainant–second

respondent  within  one  week  and  thereafter  the  appellants

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shall  sign  the  modified  lease  deed  and  thereafter  the

possession  of  the  site/plot  shall  be  handed  over  to  the

complainant–second  respondent.   On  the  basis  of  the

pleadings of  the parties,  the earlier  order  dated 21.08.2001

came to be modified accordingly by the Commission.  Again,

the  complainant–second  respondent  filed  miscellaneous

application seeking incorporation of some proposed clauses in

the new lease deed.  The appellants submitted their comments

to the proposed amendments suggested in the draft lease deed

to be executed by the parties.  The parties did not choose to

examine any witness but they filed their written submissions.

7. In  the  backdrop  of  the  facts  enumerated  hereinabove,

limited  question  before  the  Commission was with regard  to

handing over the site/plot  of the land to the complainant –

second respondent on a fresh lease deed supplied to him in

place of the earlier lease deed executed between the parties in

December, 1992 and any deviation from the earlier lease deed

could be construed as unfair trade practices.  The dispute was

with regard to certain provisions in the draft lease deed, which

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read and are discussed by the Commission in its impugned

order as under:-

(a) The  complainant/informant  has insisted on the insertion of clause 1.3 in the draft lease deed with regard to “No  Objection  Certificate”  (NOC) particularly that NOC is being issued in pursuance of the agreement to lease entered into with you by the Trust on 1st day  of  December,  1992  and  does not confer on you any lien, right, title or  ownership  to  the aforesaid  plot  in question of the Trust till such time you make full payment of the price of the plot along with other dues payable by you and the lease deed is executed in your favour”.  It also seeks to provide that “during the interim period i.e. till the  lease  deed  is  executed  in  your favour,  you  shall  not  transfer,  sub- lease,  mortgage  or  otherwise  either encumber  the  aforesaid  plot  or  part with  it  without  the  prior  approval  in writing of the Trust”.  The respondents have stated that the NOC in terms of the  agreement  dated  1.12.1992  was issued to enable the proposed lessee to submit  building  plans  to  the authorities  as  well  as  the  lessor  for approval.   This was only  required for interim period till the lease is granted, so that there was no delay in getting the  plans  approved.   Since  NOC had already  been  given  to  the complainant/informant, there were no requirements  to  give  it  again  and no

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provision for this need be made in the new lease deed.  The purpose of NOC was clearly indicated there whereas in the  proposed  amendment  new implications  are  being  sought  to  be brought  in  which  were  not contemplated  in  the  agreement  dated 1.12.92.  It is, however, seen from the agreement dated 1.12.92 that the said NOC  was  issued  for  the  purpose  of enabling  the  complainant/informant for getting the plans and specifications approved.  It is also on record that the NOC  was  issued  in  favour  of  the complainant/informant  by  the respondents  and  since  now  the  final deed is being proposed to be executed between the parties,  there should not be  neither  any  need  nor  any justification  for  incorporating  this  in the  draft  lease  deed  in  the  manner indicated  by  the complainant/informant.   This  “No Objection  Certificate”  was  issued  on 1.12.92  with regard to plot  No.  3136 measuring 0.20 acres.  It is, however, seen  from  the  record  that  this  “No Objection  Certificate”  issued  on 1.12.92  by  the  respondents  was relating  to  plot  No.  3136  measuring 0.20  acres.   The  Commission  noted that  subsequently  this  plot  was changed  to  plot  No.  3101  measuring 0.35 acres after charging extra amount from  the  complainant/informant. Therefore, technically the NOC issued on 1.12.92 does not relate to the plot which is proposed to be transferred to the complainant/ informant.   In view

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of this, we are unable to agree with the respondents  that  there  is  no requirement  to  give  “No  Objection Certificate” for the plot proposed to be transferred  to  the complainant/informant  now  and therefore,  no  provision  is  required  in the draft lease deed.  The respondents are, therefore, directed that in order to enable  the  complainant/informant  to get  the  NOC  for  the  new  plot,  the provisions  of  issue  of  NOC  as incorporated in clause 5(i) and 5(ii) of the agreement dated 1.12.92  may be incorporated in the lease agreement to be executed now.

(b) The second issue is with regard to the amendment in clause 2.3 of the draft agreement  in  which  it  has  been suggested  by  the complainant/informant that the lessor shall pay to the lessee, the value of the said  plot  along  with  building  and fixtures at the date of determination of the lease, such value to be determined by  a  sole  arbitrator  agreed  upon  by both the parties or by two arbitrators one  by each  party.   The  provision  of Arbitration  Act,  1940  amended  from time to time will be referred to at such occasion,  if  arises.   The  respondents have  argued  that  Clause  17  of  the agreement dated 1.12.92 provides that on  determination  of  the  lease,  the lessee shall hand over the plot and the building  constructed  thereon  to  the lessor.  The complainant/informant is seeking  through  the  amendment

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introduction  of  an  arbitration  clause and handing over the plot along with the  building  and  fixtures  after payment  of  the  value  which  was  not envisaged  in  the  agreement  dated 1.12.92.   Since  Clause  17  of  the agreement  dated  1.12.92  did  not envisage  payment  to  be  made  to  the lessee for the constructed building on the  plot,  no  question  of  valuation arose.   The  dispute  resolution  has been provided in clause 15 of the draft agreement  and  therefore,  there  is  no justification  for  an  arbitration  clause in this behalf.  We have gone through the  agreement  dated  1.12.92  and  we find  that  in  clause  25  of  that agreement,  the  dispute  resolution  is provided  arbitration  mechanism  and not in the manner provided in clause 15 of  the  draft  agreement  but at  the same time it  is also clear that clause 17  of  the  agreement  dated  1.12.92 does not envisage any payment for the constructed  building  on  the  plot  on resumption  which  is  covered  under clause  11  of  the  agreement  dated 1.12.92.  Therefore, we hold that there is  no  justification  in  introducing  the amendment  to  clause  2.3  in  the manner  suggested  by  the complainant/informant  but  at  the same  time,  clause  15  of  the  draft agreement  need  to  provide  for  the Arbitration  clause  as  existing  in  the agreement  dated  1.12.92  and  it  is directed accordingly.

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(c) The  complainant  has  also  suggested amendments  to  clause  4  of  the  draft agreement in line with clause 11(a)(b) (i)  and  (ii)  as  appearing  in  the  lease deed  agreement  dated  1.12.92  which relates to the period for the completion of the construction of the building and in the event of its failure to construct the  school  and  other  ancillary building, the lessor will have the right to  terminate  the  agreement  to  the lease.   In  the  written arguments,  the respondents have stated that in clause 11 of the agreement dated 1.12.92, the proposed  lessee  was  required  to complete  the  construction  within  a stipulated  period  which  has  already expired and no request has been made for  extension  of  time.  The  proposed lessee has not submitted any building plans  to  the  authority  and  no  copy thereof has been sent to the lessor and as  such  he  is  not  entitled  to  any extension  of  time.  The  case  of  the respondent, therefore, is that since the agreement  dated  1.12.92  has  already become  terminable;  no  further  rights can be given to the lessee by including this  as  appearing  in  the  earlier agreement.    It  has  also  been  stated that if the lessee does not agree to the clauses  suggested  now  in  the  draft agreement  i.e.  clauses  4.1,  4.2  and 4.3,  the  respondents  would  be  at liberty  to  take  action  for  non- compliance.

From  the  perusal  of  records  before  us  is clear that clause 4 of the agreement is not

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on the lines of the agreement dated 1.12.92. The arguments of the respondents that the period of 24 months is already over and no request  was  made  for  extension  of  time thereby  making  the  agreement  dated 1.12.92  is  terminable  is  not  convincing because  the  respondents  themselves  have stated  that  they  could  not  hand  over  the possession of the land to the lessee due to the  litigation  in  this  matter.   It  has  also come  on  record  that  the  appropriate authority  of  the  Haryana  Government  has not sanctioned building plan on the ground of the respondents having created the third party or fourth party rights, a matter which has now been settled by the judgment of the Apex Court.  There is no reason therefore, in  our  opinion  for  respondents  for  not agreeing  to  this  amendment  in  clause  4, which  should  be  carried  out  in  the  draft lease deed and it is ordered accordingly.  

(d) Another  amendment  which  has  been suggested  to  the  draft  lease  deed  by the  complainant/informant  is  with regard to clause 5.1 of the draft lease deed  by which the  lessee  undertakes “it  shall  not  use  the  demised  plot  or building  constructed  thereon  for  any purpose  other  than  the  activities incidental  or  ancillary  to  the  said activities  such  as  residence  of teachers,  staff  and  other  persons employed  in  connection  with  the running  of  the  school”.   The respondents  have  opposed  this amendment  on  the  ground  that  the existing  clause 5.1 of the draft lease deed  is  based  on the  decision  of  the

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Hon’ble  Supreme  Court  order  dated 17.2.2003  in  terms  of  the  law  laid down.   We  notice  that  under  clause 5.1,  the  use  of  the  land  has  been specifically  indicated and it  has been provided that the lessee shall use that land  strictly  in  accordance  with  the terms  and  conditions  of  the  layout plan,  building  plans,  sanctions, approvals  etc.  granted  by  the concerned  authorities  including  but not  limited  to  Director,  Town  and Country  Planning,  Haryana, Chandigarh”.  Keeping in view the ratio of  the  judgment  of  the  Hon’ble Supreme  Court  in  which it  has been clearly laid down that the transferees will  also  be  bound by the  terms and conditions of the licence and the right of  control  of  the  State  and  other regulatory measures will continue, we find no justification in the amendment as  suggested  by  the complainant/informant  in  this  clause and it is directed accordingly.”

8. The Commission finally directed the appellants to modify

the draft lease deed as indicated in Para 7(a) to (d) above and

furnish  the  final  lease  deed  to  the  complainant  –  second

respondent within two weeks and hand over the possession of

the plot for the purpose it was leased out to him within two

weeks  of  the  execution  of  the  draft  lease  deed  by  the

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complainant – second respondent.  The appellants were also

directed to file the affidavit of compliance within eight weeks.

9. Hence,  the  appellants  by  way  of  this  statutory  appeal

have challenged the correctness and validity of the impugned

order of the Commission.

10. We have heard the learned counsel for the parties and

perused the entire material on record.

11. Mr.  Ravindra  Narain,  learned  counsel  appearing  on

behalf  of  the appellants,  in support  of  the  appeal  inter alia

contended that the Commission has no jurisdiction to direct

the appellants to execute the fresh lease deed on terms and

conditions in modification of the standard draft lease deed to

be  executed  by  all  such  intended  lessees  and  deviation  or

modification of the standard draft lease deed would amount to

breach  of  specific  purpose  of  the  contract  or  any  other

contractual  matter  regarding  implementation  of  agreement

etc. He submitted that the allegations made in the complaint

by the complainant – second respondent on the basis of which

directions were issued by the Commission did not constitute

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unfair trade practice under Section 36A of the MRTP Act nor

do they constitute restrictive trade practices under Section 2

(o) of  the MRTP Act.   According to the learned counsel,  the

Commission failed to appreciate that after the decision of this

Court  in  DLF  Qutab  Enclave  Complex  Educational

Charitable Trust v. State of Haryana and Others (2003)  5

SCC  622  whereby  fourth  party  rights  are  recognised,  the

appellants have prepared the standard form of lease deed for

sites/plots earmarked for construction of schools/community

buildings  in  the  complex  and draft  lease  deed  was  handed

over to the complainant –second respondent but he has raised

objections  for  the  purpose  of  changing  the  lease  so  as  to

confirm ownership rights upon him and to enable him use the

plot for residential purpose in the garb of putting up of school.

12. Mr.  A.  Mariarputham,  learned  counsel  appearing  on

behalf of the first respondent – DG, submitted that by order

dated 03rd July, 2006, the Commission in substance directed

due compliance of its earlier order dated 16th January, 2004

and incorporation of certain terms in the fresh lease which are

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consistent  with  the  earlier  agreement  dated  1.12.1992  and

also  handing  over  the  possession  of  the  site/plot  to  the

complainant  –  second  respondent.   It  is  submitted  that  as

order dated 16th January, 2004 has not been challenged by

the appellants, therefore, the said order has attained finality

and, the order now impugned in this appeal by the appellants

on the plea raised cannot be assailed and objected to.

13. Raj  Kamal,  the  complainant  –  second  respondent

appearing in person has sought to support the order of the

Commission  inter alia contending  that  this  Court  ordinarily

would  not  interfere  in  the  well-reasoned  and  well-merited

order of the Commission which on the face of it cannot be held

as  perverse  or  illegal.   In  nutshell,  he  submits  that  after

prolonged legal battle with the mighty and strong appellants,

he has succeeded in getting relief; therefore, this Court shall

not be obliged to exercise its power under Section 55 of the

MRTP Act to interfere with the findings of fact.

14. We have given our thoughtful and anxious consideration

to the respective  contentions of  the learned counsel  for  the

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parties.   The  submissions  of  Mr.  Ravindra  Narain,  learned

counsel  for  the  appellants  at  the  first  blush  appears  to  be

attractive, but in the facts and circumstances of the present

case, we are afraid to accept them.

15. It is not in dispute that DLF is a colonizer.  It is further

not  in dispute  that  licences  had been  granted  to  it  for  the

construction  of  a  colony.   It  also  stands  admitted  that  the

schools, hospitals, community centres and other community

buildings  were  required  to  be  constructed  in  the  colony  in

terms of the licences granted under the State Act.   

16. The  complainant  –  second  respondent  filed  complaint

which  was  entertained  by  the  Commission  in  purported

exercise of its jurisdiction under Section 2(o) (i)  and Section

36A of the MRTP Act.  The said complaint was referred to the

first respondent – DG for investigation and on receipt of the

PIR submitted by the first respondent – DG, notice was issued

to  the  appellants  by  the  Commission  on  27.03.1998.   In

response to the notice, the appellants submitted their detailed

reply.

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17. The  Statement  of  Objects  and  Reasons  for  the

enactments  of  MRTP  Act  is  designated  to  ensure  that  the

operation  of  the  economic  system  does  not  result  in  the

concentration  of  economic  power  to  the  common  detriment

and  to  prohibit  such  monopolistic  and  restrictive  trade

practices as are prejudicial to public interest.

18. Section 2(o) defines ‘Restrictive Trade Practice’ to mean ‘a

trade  which  has,  or  may  have  the  effect  of  preventing,

distorting  or  restricting,  competition  in  any manner  and  in

particular, -

(i) XXX

(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 services

in  such  manner  as  to  impose  on  the  consumers

unjustified costs or restrictions.”

The definition of Section 2(o)  clearly goes to show that it is

exhaustive and not an inclusive one.  The decision whether

trade  practice  is  restrictive  or  not  has  to  be  arrived  at  by

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applying the rule of reason and not on the doctrine that any

restriction as to area or price will per se be a restrictive trade

practice.  

19. Part B of Chapter 5 of the MRTP Act deals with ‘Unfair

Trade Practices’.   Section 36A defines “unfair trade practice”

to mean “a trade practice which, for the purpose of promoting

the sale, use or supply of any goods or for the provision of any

services,  [adopts  any  unfair  method  or  unfair  or  deceptive

practice  including  any  of  the  following  practices]”  as

enumerated therein.   

20.  It  was  the  admitted  case  of  the  parties  before  the

Commission that agreement to lease of land bearing site/plot

No.  3136  admeasuring  0.20  acres  for  starting  a  Nursery

School  for  a  consideration  of  Rs.  4  lakhs  was  entered  into

between  the  appellants  and  second  respondent  on

01.12.1992.   The  appellants  later  on  issued  a  letter  dated

19.5.1994  making allotment  of  0.35 acres  of  alternate  land

bearing  site/plot  no. 3103 in place  of  plot  No.  3136 to the

complainant-respondent on payment of additional charges to

26

the tune of Rs. 2,96,204 on account of increase in area.  The

order of the Commission reveals that  some instructions were

issued  by  the  Government  of  Haryana  on  25.10.1994  and

13.2.1996 regarding transferring of community sites to third

and fourth parties under the following three heads:-

(i) Where  the  community  sites  are  still  in  the ownership of the colonizer.

(ii) Sites where colonizers have created third party rights before 7.8.1991.

(iii) Cases where the licences have created fourth pay right on community sites.

21. An addendum appears to have been issued by the State

Government  on  13.2.1996  to  the  instructions  dated

25.10.1994 specifying that the time schedule of three years for

the construction of community buildings shall also apply to all

sites where third and fourth party rights have been created

before  7.8.1991  and  the  remaining  conditions  of  the

instructions  dated  25.10.1994  would  continue  to  apply

without any change therein.  The legality  and validity of  the

directions/instructions  contained  in  the  two  letters  dated

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25.10.1994 and 13.2.1996 was the subject matter of the Civil

Writ Petition No. 7245 of 1997 filed by the second appellant in

the  High  Court  of  Punjab  and  Haryana.   As  noticed

hereinabove,  the  writ  petition  was  finally  dismissed  by  the

High Court on 7.3.2001 which order was challenged by the

aggrieved parties in Civil Appeal Nos. 4908/2002 along with

4909-11/2002.   This Court  finally  decided the said appeals

vide  decision  dated  17th February,  2003  titled  DLF  Qutab

Enclave Complex Educational Charitable Trust  v. State

of Haryana and Others (2003) 5 SCC 622.  This Court while

dealing with and construing the various provisions of Haryana

Development  and Regulation of  Urban Areas  Act,  1975 and

Haryana Development and Regulation of Urban Areas Rules,

1976,  Transfer  of  Property  Act  and  Article  300A  of  the

Constitution of India  besides  basic  rules  on construction of

statutes, held:- [see pp.634-635 paras 36, 37, 38 and 39]

“36.   Right  of  transfer  of  land  is indisputably  incidental to the right of ownership. Such a right can be curtailed or taken away only by reason of  a  statute.   An embargo  upon the owner  of  the  land  to  transfer  the  same  in  the opinion  of  this  Court  should  not  be  readily

28

inferred.   Section 3(3)(a)(iv)  of  the Act  does  not expressly  impose  any restriction.   The  same  is merely a part of an undertaking.  Assuming that a  prohibition  to  transfer  the  land  can  be  read therein by necessary implication, it is interesting to note that the consequence of violation of such undertaking  has  not  been  specified.   In  other words, if   a transfer is made in violation of the undertaking,  the  statute  does  not  provide  that the same would be illegal or the transferee would not derive any title by reason thereof.

37. The  right  of  a  transferee,  however, would  be  subject  to  the  building  laws  or regulatory  statute  relating  to  user  of  the property.  In terms of the said Act, in the event the Government takes over the plots, it would be at liberty to transfer such land to any person or institution including a local authority as it may deem fit.  Purpose of such a clause, therefore, is to  ensure  that  schools,  hospitals,  community centres  and  other  community  buildings  are established at the places reserved therefor in the sanction  plan  but  there  does  not  exist  any embargo as regards the person or persons who would run and manage the same.

38. A  regulatory  Act  must  be  construed having regard to the purpose it seeks to achieve. The State as a statutory authority cannot ask for something which is not contemplated under the Act.   A statute  relating to regulation of user  of land  must  not  be  construed  to  be  a  limitation prohibiting transfer of land which does not affect its user.

39. The  plan  provides  that  schools, hospitals  etc.  would  be  located  at  particular sites.  When that purpose is satisfied, the court in the name of interpretation would not make a further attempt to find out who did so.”

29

22. The  Commission,  in  the  light  of  the  above-noted

judgment  of  this  Court,  disposed  of  the  complaint  of  the

second-respondent on 21.8.1991 without going into the merits

of  the case.   Later  on,  on a review  application filed  by  the

complainant – second respondent, it was submitted before the

Commission on 4.7.2003 that the appellants were now willing

to  hand  over  the  possession  of  the  site/plot  to  the

complainant – second respondent subject to execution of the

fresh  lease  deed  without  modification  and  deviation  of  the

standard lease deed to be executed by all such lessors.   The

complainant – second respondent suggested the above-stated

modifications and their incorporation in the draft agreement

in  line  with  clause  11(a)(b)(i)  of  the  lease  deed  agreement

dated 01.12.1992.  

23. The Commission disposed of the review application of the

complainant – second respondent by order dated 16.01.2004,

which reads as under:-

“The  learned  counsel  for  the  respondent states that the respondent is willing to execute a

30

fresh lease deed in favour of the informant.  The commercial  terms  as  contained  in  the  earlier lease deed dated 01.12.1992 shall not modified and altered and shall remain the same in framing of  the  new lease  deed  which shall  be  executed between  the  parties.   The  respondent  will indicate  the  amount  of  lease  rent  which  is payable by the informant within one week.  The informant shall pay the said lease rent within one week  thereafter.   The  informant  as well  as  the respondent  shall  sign  the  modified  lease  deed and the possession of the plot shall be handed over  to  the  informant.   The  present  review application is disposed of in these terms and the order  passed  on  21st August,  2001  is  modified accordingly.”

24. Thereafter,  another  order  recorded  by  the  Commission

on 29.07.2005 reads as under:-

“The  learned  counsel  for  the  respondent states  that  they  have  already  furnished  a standard lease  draft  to  the  applicant  which he acknowledges  to  have  received.   The  learned advocate  is  directed  to  file  the  same  with  the Commission.   The  applicant  is  directed  to suggest the amendments, if any, he proposes on the draft lease furnished by the informant to him within  four  weeks  with  a  copy  to  the Commission.  The respondents thereafter would prepare  a  second  draft  after  incorporating necessary  changes  that  they  feel  would  be accommodated in the agreement.  A copy of the 2nd draft  shall  also  be  made  available  to  the respondent  and  also  to  the  Commission.

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Thereafter  the  case  could  be  taken  for consideration.  List on 18.10.2005.”

25. The case of the complainant – second respondent before

the  Commission  was  that  he  has  furnished  necessary,

effective and valid suggestions which are to be incorporated in

the  fresh  lease  because  of  delay  in  handing  over  the

possession of the alternate site/plot to him.  It is the admitted

case that the appellants have not challenged the order of the

Commission  dated  16.01.2004  by  which  the  parties  were

directed that the commercial terms as contained in the earlier

lease deed dated 01.12.1992 shall not be modified and altered

and shall remain the same in framing of the new lease deed

which shall be executed between the parties.

26. Section  13A  empowers  the  Commission  to  cause

investigation  to  find  out  whether  or  not  orders  made  by  it

under  this  Act  have  been  complied  with  or  any  obligation

imposed upon any person by or under any order made by the

Commission under this Act, authorizes the Director General or

any officer of the Commission to make investigation into the

32

matter and the Director General or the officer so authorized,

may, for the purpose of making such investigation, exercise all

or  any  of  the  powers  conferred  on  the  Director  General  by

Section 11.  In terms of sub-section (2), the Director General ,

or, as the case may be, the officer so authorized, shall submit

to the Commission a report of the investigation to enable the

Commission to take such action in the matter as it may think

fit.

27. The Commission under Section 13B is also empowered

to exercise  the powers,  jurisdiction and authority to punish

the person in respect of contempt of itself.

28. In the backdrop of the facts of the present case, once the

appellants have accepted the earlier order of the Commission

dated 16.01.2004 which has attained finality, the appellants

are left with no other option but to execute a fresh lease deed

with the complainant – second respondent on modified terms

suggested by him.  The order of the Commission impugned in

this  appeal  does  not  suffer  from  any  manifest  error  or

perversity or invalidity.  

33

29.  In the result, for the above stated reasons, we find no

merit in this appeal and it is, accordingly, dismissed.  In the

facts and circumstances of the case, we leave the parties to

bear their own costs.

30. Time granted by the MRTP Commission, however, shall

be extended by four weeks as prayed.  

........................................J.                                                 (S. B. Sinha)

........................................J.                                                 (Lokeshwar Singh Panta)

New Delhi, May 16, 2008.

34