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CASE NO.: Appeal (civil)  7079 of 1996

PETITIONER: M/s Peico Electronics & Electricals & Anr.

RESPONDENT: Union of India & Anr.    

DATE OF JUDGMENT: 09/03/2004

BENCH: P. VENKATARAMA REDDI & S.H. KAPADIA.

JUDGMENT: JUDGMENT

P. VENKATARAMA REDDI, J.

This is an appeal under Section 55 of the Monopolies  and Restrictive Trade Practices Act, 1969 (referred to  hereinafter as ’the Act’) against the order of the Commission  in R.T.P. Enquiry No. 1616 of 1987. The Commission, having  held that the appellant indulged in certain restrictive trade  practices prejudicial to public interest, directed the appellant  to desist from indulging in such practices in future and to  amend the offending clause in the dealership agreement.  The Commission further directed the appellant not to give  effect to the termination of dealership of the complainant  (2nd respondent herein) and to ensure the supply of Philips  products "at least to the extent of the supply made in the  year 1986" subject to the placement of necessary orders by  the complainant. The factual background leading to the filing of the  complaint is as follows: The appellant Company manufactures and sells certain  audio products. It has a vast network of dealers\027about  1800 throughout the country who are appointed on principal  to principal basis. In Gwalior, the appellant had a dealer by  name M/s. Evergreen operating since long from its shop at  Sarafa Bazar. In the year 1985, the appellant appointed the  2nd respondent (hereinafter referred to as ’R-2’ or  ’complainant’) having its place of business at Gwalior as  another dealer. An agreement dated 15.11.1985 which, it is  not in dispute, is in standard form was entered into. Clause  29 of the Agreement provided for termination of agreement  by either party by giving to the other 30 days notice in  writing. In terms of this clause, the appellant by its notice  dated 23.9.1987 gave 30 days notice to R-2, terminated the  dealership on expiry of the notice period. According to the  appellant, such a step was taken as it was not satisfied with  the performance of R-2. R-2 then filed a complaint before  the Commission. The complainant alleged that the appellant  felt aggrieved by some of the letters addressed by the  complainant pointing out preferential treatment to the old  dealer M/s. Evergreen to the detriment of R-2. Certain  instances of restrictive trade practices were enumerated in  the complaint. The complainant prayed for the issuance of  ’cease and desist order’ and a direction to restore the  dealership and resume supplies of Philips products. The  Commission decided to hold an enquiry. Accordingly, a  notice of enquiry was sent to the appellant on 21.1.1988. In  the said notice, as many as five restrictive trade practices

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alleged to have been committed by the appellant were set  out. They are as follows: (i)     The respondents prohibited the  complainant from dealing in or selling the  same type of products of the competitors.  The practice is restrictive trade practice  within the meaning of Section 33(1)(c) of  the MRTP Act;

(ii)    The respondents supplied to the  complainant all types of goods irrespective  of its order. For instance supply of 252 pcs  of infra lamps was made to the  complainant on 31st December, 1985 even  though the complainant had not placed  any order for them. Thus the respondent  in a trade practice of full line forcing/  dumping unwanted goods and also  delaying with holding the supply of wanted  and ordered goods. It is a restrictive trade  practice within the meaning of Section  2(o) and Section 33(1)(b) of the Act. The  practice is a restrictive trade practice  within the meaning of Section 339(1)(b) of  the MRTP Act.

(iii)   The complainant was allocated a particular  territory to which its dealership was  confined. The practice of allocating a  territory is a restrictive trade practice  within the meaning of Section 33(1)(g) of  the MRTP Act.

(iv)    The respondent fixed the prices at which  their products were to be sold without  giving liberty to the complainant to sell at  prices lower to its customers. The practice  is a restrictive trade practice within the  meaning of Section 33(1)(f) of the MRTP  Act.

(v)     The respondent discriminated against the  complainant and gave a favoured  treatment to their other dealer, viz.  Evergreen, Sarafa Bazar, Gwalior in  making supplies of Philip products. The  practice is a restrictive trade practice  within the meaning of Section 2(o)(ii) of  the MRTP Act.

It appears that during the pendency of the inquiry, the  Commission issued an order of ad interim injunction.  However, it was stayed by the Bombay High Court on a writ  petition filed by the appellant. The appellant while denying the charges took the stand  that the complainant was not conducting the business  properly inasmuch as the sales dropped considerably during  the period January, 1987 to September, 1987, that the  complainant delayed retirement of documents on more than  one occasion and even issued a cheque which was  dishonoured by the Bank. The appellant pleaded that the  power reserved to it under Clause 29 of the Agreement was  bona fide exercised in its business interest. The Commission  came to the conclusion that the allegations 3 and 5 (supra)  stood proved and the other allegations were not established.

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However, while discussing charge No.2, the Commission  having held that the allegation of dumping of unwanted  products has not been proved and that the refusal to send  supplies as per the orders of the complainant was quite  justified having regard to the defaults on the part of the  dealer, declared that Clause 7 of the Agreement per se  amounted to restrictive trade practice and therefore the  respondent shall take action to purge the same. The Tribunal recorded its findings that the restrictive  trade practices indulged in by R-2 had an adverse effect on  engendering competition, that the ’gateway’ pleaded by him  in terms of Clause (h) of Section 38(1) did not come to his  aid and that the restrictive trade practices in question were  prejudicial to public interest per se. We may now indicate the contentions advanced by the  learned Counsel for the appellant. (1)     The findings of the Commission with reference to  charges (iii) & (v) are legally unsupportable as the  Commission arrived at the findings arbitrarily without regard  to the evidence on record. The conclusions are perverse. (2) The Commission exceeded its jurisdiction and acted  in violation of principles of natural justice in giving a  direction to delete Clause 7. The validity of Clauses in the  Agreement should not have been considered at all by the  Commission when the Agreement itself stood terminated.  (3) The direction to restore the dealership and the  supplies is beyond the scope of powers of the Commission. (4) The Commission failed to give a finding that the  alleged restrictive trade practice is prejudicial to public  interest before passing a ’cease and desist’ order. Re : Contention No.1 [Charges (iii) & (v)]

We shall first deal with the contention of the learned  counsel for the appellant that the findings recorded by the  Commission in regard to charges (iii) & (v) are without basis  and unsupported by the evidence on record. Charge No. (iii) In the context of Charge No.(iii), we may notice that  under Clause 27 of the Agreement, "the Dealer shall be free  to sell the goods to customers from any part of India".        As observed by the Commission, the said clause by itself  "neither gives territorial freedom nor imposes any territorial  restriction". However, the Commission, after discussing the  evidence, recorded its conclusion that the ’third charge has  been proved in terms of Section 33(1)(g)’. Section 33(1)(g)  speaks of an agreement to limit, restrict or withhold the  output or supply of any goods or allocate any areas or  market for the disposal of the goods. Though the Agreement  does not place any restriction of the type envisaged by  Clause(g) of Section 33(1), there is a clear finding supported  by evidence that the appellant did resort to restrictive trade  practice by imposing a restriction on the complainant from  selling the products from Sarafa Bazar shop of the  complainant. In this context, the affidavit of the  complainant’s witness and the repeated letters addressed by  the complainant have been referred to by the Commission.  The Commission took note of the fact that the appellant sent  no reply to these letters and at no point of time, made it  clear to the complainant that it had no objection to the  products being sold from Sarafa Bazar complex. The  Commission observed that even if the complainant had  occasionally sold some products from Sarafa Bazar, it does  not demolish the complainant’s case that it was not allowed  to sell from Sarafa Bazar where the other dealer was having  his showroom. We cannot interfere with this finding of fact.

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If that be so, the act of the appellant falls within the ambit  of restrictive trade practice. By virtue of Section 33, read  with Clause (g), an agreement to allocate any area or  market for the disposal of the goods is deemed to be an  agreement relating to restrictive trade practice. The  appellant cannot take the plea that in the absence of any  such restriction in the Agreement itself, he is free to impose  such restriction in the course of dealings with the  complainant. The considerations set out in various clauses of  Section 33(1) would be equally relevant in deciding the  question whether the restrictions imposed in actual practice  amount to restrictive trade practices within the meaning of  the Act. Incidentally, we may observe that the allocation of a  particular area or market for the disposal of the goods is  likely to hamper or restrict the competition as held by the  Tribunal and in that sense, even the opening part of the  definition in Clause (o) of Section 2 gets attracted. Though  we feel that the phraseology used in charge No.3 viz.,  "allocation of a territory to which the dealership was  confined" is inappropriate, the Commission’s finding cannot  be set aside merely for that reason. The substance of the  charge was well understood by the appellant and the  complainant put in its defence accordingly. Charge No.(v) As per the charge, the appellant gave a favourable  treatment to the other dealer, namely, M/s Evergreen in  making supplies of Philips products and thus the appellant  discriminated against the complainant. In the context of this  allegation, the real grievance made out by the complainant  is that fast moving and popular products were being  supplied to M/s Evergreen, whereas the complainant was  mostly getting slow moving items. It was further alleged  that M/s Evergreen was free to sell the Philips products from  their showroom at Sarafa Bazar to any non Philips products  dealers not only at Gwalior but also in four other Districts  whereas the same facility was denied to the complainant.  The charge of discrimination was held established only on  the ground that M/s Evergreen was given freedom to sell the  appellant’s products from Sarafa Bazaar, but the  complainant was not allowed to sell from its Sarafa Bazaar  shop. This, according to the Commission, has resulted in  discriminatory treatment against the complainant, attracting  Section 2(o)(ii) of the Act. It may be recalled that the  Commission recorded the same finding while dealing with  charge No.(iii) i.e., area restriction. To the extent that the  area restriction was placed on the complainant but not on  M/s Evergreen, it will be an instance of discrimination and  the finding of the Commission to this extent cannot be  faulted. However, the Commission did not record any finding  with reference to the allegation that there was discrimination  in the matter of supply of goods. Not a word is said about it.  We are pointing out this particular aspect for the reason that  charge No.(v) held to have been proved by the Commission  is widely couched and it speaks of favourable treatment to  M/s Evergreen in regard to supply of goods. There is no  finding of the Commission on this aspect of the case. Yet,  the Commission proceeded on the basis that the charge as a  whole was proved. Be that as it may, there is a formidable  difficulty in sustaining this charge. The Commission held that  the act of discrimination, as found by it, is a restrictive trade  practice within the meaning of Section 2(o)(ii)? of the Act.  The said provision reads: (o) "restrictive trade practice" means a trade  practice which has, or may have the effect of  preventing, distorting  or restricting,

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competition in any manner and in particular\027 (i)     x x x x x  (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.

If Clause (ii) has to be applied, there must be a further  finding that the impugned trade practice has the effect of  imposing on the consumers unjustified costs or restrictions.  Construing the same provision, this Court in the case of  Hindustan Lever Ltd. Vs. Direction General  (Investigation & Registration) & Anr. [(2001) 2 SCC  474] observed thus: "As the plain reading of the said definition itself  discloses, and also as rightly understood by the  Commission in issuing the notice, there are two  parts to the definition\027one is which relates to  carrying on of such trade practice which has or  may have the effect of preventing, distorting or  restricting competition in any manner and  secondly, the carrying on of such trade practice  which inter alia has the effect of imposing  unjustified costs or restrictions on the consumers." It was then held in the next paragraph\027

"\005but what we have to see is as to whether the  appellant has been guilty of preventing, distorting  and restricting competition amongst the dealers  which was the allegation leveled against it. In the  absence of such a finding and there not being  even a whisper in the order that any action of the  appellant had the effect of imposing unjustified  costs or restrictions on the consumers, the  Commission fell in error in passing the order  against the appellant."

The same is the situation here. There is no finding  whatsoever with respect to one of the crucial ingredients of  Section 2(o)(ii). Moreover, we find nothing in the evidence  to enable the Commission to arrive at a finding on the  question whether the act of the appellant in disallowing the  complainant from effecting the sales from its second shop at  Sarafa Bazaar had resulted in or likely to result in the  imposition of unjustified burden on the consumers. We are  therefore of the view that the Commission’s finding under  charge No.(v) that the appellant resorted to restrictive trade  practice within the meaning of Section 2(o)(ii) is legally  erroneous and is liable to be set aside. Re : Contention No.2 (Clause 7 of Agreement)  Clause 7 of the Agreement reads as follows:  (7) The Company gives no guarantee or  undertaking that it will supply the Dealer’s  requirements of the Company’s products  against its orders and in any event can  accept no responsibility or liability for its  failure or refusal to give supply or delay in  effecting supply, for any reason whatsoever.

According to the Commission, Clause 7, in its present  form, has the potential of bringing about a restrictive trade  practice and therefore it should be amended. We are inclined  to endorse the view of the Commission on this point. Clause

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7 with its sweeping phraseology, is heavily weighted in  favour of the appellant. Taking umbrage under the latter  part of clause 7, the appellant can arbitrarily withhold or  delay the supply of goods without assigning any reason and  yet disown its responsibility or liability arising out of its  arbitrary action.  The Commission is justified in holding that  it is per se a restrictive trade practice. An agreement to  limit, restrict or withhold the output or supply of any goods  falls within the mischief of clause (g) of Section 33(1) and  therefore it must be deemed to be an agreement relating to  restrictive trade practice as per the mandate of Section  33(1). When once it is held that any clause of the  Agreement comes within the sweep of Clauses (a) to (l) of  sub-Section (1) of Section 33, no further enquiry is required  to find out whether it falls within the parameters of Section  2(o). This legal position has been settled by a three Judge  Bench of this Court in the case of Voltas Limited, Bombay  Vs. Union of India & Ors. [(1995) Suppl. (2) SCC 498].  This Court observed\005 "\005Trade practices enumerated in clauses (a) to (l)  of sub-Section (1) of Section 33 shall be deemed  to have now been statutorily determined and  specified as restrictive trade practices. It cannot,  therefore, be urged that although a particular  agreement is covered by one or other clauses of  sub-Section (1) of Section 33, still it shall not  amount to an agreement containing conditions  which can be held to be restrictive trade practices  within the meaning of the Act.

* * *

Now it is no more open to the Commission or to  the Supreme Court to test and examine any of the  trade practices mentioned in clauses (a) to (l) of  sub-Section (1) of Section 33 in the light of  Section 2(o) of the Act for the purpose of  recording a finding as to whether those types of  trade practices shall be restrictive trade practices  within the meaning of Section 2(o) of the Act. This  exercise has to be done only in respect of such  trade practices which have not been enumerated  in any of the clauses from (a) to (l). Only such  trade practices have to be examined in the light of  Section 2(o) of the Act, as to whether they  amounted to restrictive trade practices. \005"

Again it was clarified in paragraph 12\027

"\005But the fact remains that once the Commission  is satisfied that a particular agreement which has  not been registered under Section 35, falls within  any of the clauses from (a) to (l) of sub-Section  (1) of Section 33, then no further inquiry is to be  done, as to whether such agreement relates to  restrictive trade practices or not. The statutory  fiction incorporated in sub-Section (1) of Section  33 shall also be applicable in respect of such  agreements apart from the penalty provided under  Section 48 of the Act. As such there is not much  scope for discrimination between those who have  got their agreements registered and those who  have not got their agreements registered."

Referring to the case of Mahindra and Mahindra Ltd.

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Vs. Union of India [(1979) 2 SCC 529] on which reliance  has been placed by the appellant’s counsel in the present  case, the three Judge Bench made it clear  in Voltas case  that the situation has changed with the introduction of a  statutory fiction in the main part of sub-Section (1) of  Section 33. It was observed that Clauses (a) to (l) of sub- Section (1) of Section 33 are in the nature of statutory  illustrations of restrictive trade practices. Faced with this  difficulty, the learned counsel for the appellant harped on  the argument that the offensive nature of Clause 7 was not  the subject-matter of charge and enquiry and therefore no  direction should have been given by the Commission for the  deletion/amendment of Clause 7, especially when charge  No.(ii) has not been sustained. We find it difficult to accept  this contention, though plausible it is. Though in the notice of inquiry, the Commission did not  specifically refer to the invalidity of Clause 7, we find from  the pleadings and the order of the Commission that this  issue did crop up for consideration and the parties did  advance arguments on this point at length. It may be  noticed that in the rejoinder the complainant while referring  to the averments in para 5 of the reply, challenged the  appellant’s version that there were restrictive provisions in  the Agreement "giving arbitrary discretion to the Company  in meeting with the dealer’s requirement". It is not in  dispute that arguments were advanced on this aspect as  well. It is obvious that the Commission need not confine  itself to the points raised in the complaint. Under Section 10  of the Act, the Commission is invested with the power to  enquire into any restrictive or monopolistic trade practice  upon its own knowledge or information. In other words, the  Commission can suo motu enquire into such trade practices  and take necessary follow-up action. The knowledge or  information can as well be derived from the facts disclosed  in the complaint petition, the pleadings or from the material  adduced in the case. The Commission will be failing in its  duty if it does not take note of restrictive trade practices  that come to its notice in the course of enquiry into a  complaint. In our considered view, the omission to record a  formal proceeding framing an issue or the point for suo  motu consideration does not by itself vitiate the decision of  the Commission. However, it is implicit in the exercise of  such power that adequate opportunity ought to be given to  the affected party to meet the point which is the subject  matter of suo motu enquiry. There is no bar to the  combination of an enquiry into the allegations made by the  complainant and the suo motu enquiry into a matter coming  to its notice. In testing the validity of the action taken by the  Commission from the procedural angle, the approach of the  Court should be such as to promote the objectives of the  Act. A narrow or pedantic approach ought to be eschewed.  Viewed from this angle, we are unable to hold that the  Commission out-stepped its limits in testing the legality of  Clause 7 or that the appellant was handicapped in meeting  its case on account of non-framing of ’charge’ relating to  Clause 7 of the Agreement. The next question is whether in view of termination of  Agreement, the Commission was precluded from probing  into the validity of the relevant clause in the Agreement. It  is not in dispute that the clause of this nature is incorporated  in all the Agreements entered into with the dealers. In other  words, the Agreement is in a standard form. As held by the  Commission, apart from the fact that Clause 7 per se is a  restrictive trade practice, it has the potential of giving rise to  restrictive trade practices in future. Therefore, the

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Commission, in exercise of its power under Clause (b) of  Section 37(1), directed that the clause should be suitably  amended so as to remove the offensive sting in it. Having  regard to our decision on Contention No.3, the Commission’s  directive cannot be implemented in so far as the present  Agreement is concerned. At the same time, the appellant  shall not be allowed to perpetuate the unfair trade practice  inherent in Clause 7 of the standard form Agreement. We,  therefore, consider it just and proper to modify the order of  Commission by directing that the appellant should take  steps to purge the restrictive trade practice by suitably  amending Clause 7 or identical clause wherever it occurs in  all the Agreements with its dealers and file a report to the  Commission accordingly. Re : Contention No.3 (Termination of Agreement)         The next ground of attack  is on the order of the  Commission restraining the appellant from acting on letter of  termination of dealership and further directing the supply of   Philips products "atleast to the extent of supply made in the  year 1986".  It is contended that the contract having been  terminated, the Commission had no power and jurisdiction  to keep the contract alive.  To buttress this argument, the  learned counsel for the appellant has referred to the  provisions of Sections 14 and 41 of the Specific Relief Act  and contended that the contract, which is in its nature  terminable, cannot be specifically enforced and no injunction  can be granted on the ground of breach of contract.   Attention has been drawn to Clause 29 of the Agreement  under which the contract has been purportedly terminated.   Clause 29 reads:        "This agreement shall remain in force until  terminated by either party by giving to the  other 30 days’ notice in writing."

As against this, it is the contention of the learned counsel for  R-2 that the termination was not bona fide but it was done  only with a view to perpetuate the restrictive trade practices  against which R-2 was always protesting.  If the appellant- Company felt that R-2, as a dealer, acted in a manner  contrary to the interests of the Company or committed   breach of any of the terms of the Agreement, Clause 28  should have been invoked and R-2 should have been put on  notice regarding the alleged grounds of termination.   Termination under Clause 29 was resorted to for extraneous  reasons.  In regard to the power of the Commission to pass  such an order, it is submitted that the termination of  dealership was a sequel to and in aid of the restrictive trade  practices of the appellant.  According to the learned senior  counsel for R-2 the termination of dealership had a direct  and inextricable connection with the restrictive trade  practices adopted by the appellant and in such  circumstances the Commission was well within its power to  direct the restoration of the contract and the supplies.  We find it difficult to accept the contention of the  learned counsel for R-2.   Normally, the Commission is not  empowered to probe into the question whether the contract  was validly terminated under one Clause or the other of the  Agreement. The Commission cannot assume the role of the  civil Court in this regard.  True, as contended by the learned  counsel for the appellant the Commission has incidental and  ancillary power to consider whether the termination of the  dealership was a device to perpetuate the objectionable  trade practices and whether such termination is closely  inter-linked with the continuance of  restrictive trade  practice. But, we search in vain for a specific finding by the

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Commission in this regard.  The Commission did not hold  that the termination under Clause 29 which undoubtedly  gives a right to either party to the Agreement  to put an end  to it by giving 30 days’ notice would per se give rise to  restrictive trade practices or that the termination under  Clause 29 is a cloak to circumvent Clause 28 in order to go  ahead with the restrictive trade practices. In fact, some of  the findings of the Commission, which we have already  adverted to, indicate  that there was some justification to  feel dissatisfied with the manner of conducting business by  R-2.  The fact also remains that a number of letters which    R-2 had been writing to the appellant protesting against  alleged unfairness and discriminatory treatment, evoked no  response from the appellant.  Thus, when there is much to  be said on both sides, the Commission should have recorded  a specific finding on the lines indicated above.  No reason,  whatsoever, has been given as to why the contract which  was terminated ostensibly  in exercise of the right reserved  under the Agreement should be revived.   Obviously, the  direction of this nature cannot be construed to be one made  with a view to compensate the loss to the complainant.  As  far as the compensation for the loss is concerned, it is  Section 12 A which is applicable and an application has  already been filed under that provision.  Of course, it is open  to the Commission to pass suitable orders on that  application; but, the direction not to give effect to the  termination letter, thereby  reviving the contract goes  clearly beyond the powers of the Commission, especially for  the reason that the Commission did not record a finding that  the termination of the contract was in the teeth of the  provisions of the Act and was resorted to only with a view to  perpetuate the restrictive trade practices.  Consequently, the  direction to resume supplies of Philips products is equally  unsustainable. Re : Contention No.4 (Legality of ’cease and desist’ order) It is contended that the ’cease and desist’ order under  Section 37(a) should not have been passed unless the  Commission finds that the restrictive trade practice is  prejudicial to public interest. By virtue of Section 38(1)(h),  the restrictive trade practice would not be treated as  contrary to public interest if "the restrictive trade practice  does not directly or indirectly restrict or discourage  competition to any material degree in the relevant trade or  industry and is not likely to do so". It is contended that the  alleged restrictions imposed on a single dealer\027R-2 cannot  affect competition to any material degree, more so when the  audio products are not short-supply items. On the other  hand it is contended by the learned counsel for the            2nd respondent that there is a presumption under Section 38  that a restrictive trade practice is prejudicial to public  interest and therefore the burden is on the appellant to  make out a case under Clause (h) of Section 38(1) and such  burden has not been discharged by the appellant. Moreover,  it is pointed out that there is a specific finding in this regard  by the Commission that the ’gateway’ pleaded by the  appellant by taking recourse to Clause (h) cannot be  sustained. It is submitted that the Commission has given  certain reasons such as the trade scenario in Gwalior and  those reasons cannot be said to be irrelevant. Though there  is considerable force in the argument of respondent’s  counsel, there is no need to express an opinion in this  regard for the reason that the order to discontinue the  restrictive trade practice covered by charge No.3 becomes  otiose in view of our finding that the dealership agreement  which has been terminated, cannot be revived at this stage.

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Further discussion of the question whether the cease and  desist order under Clause 37(1)(a) could be passed in  relation to the restrictive trade practice held proved against  the appellant therefore becomes academic.  The conclusions we have reached are summed up as  follows: 1.      The finding of the Tribunal on charge No.iii is upheld. 2.      The finding in respect of the charge No.v is  unsustainable. 3.      The Commission is justified in holding that Clause 7 of  the Agreement is a restrictive trade practice within the  meaning of Clause (g) of Section 33(1) of M.R.T.P. Act  and it has the effect of distorting or restricting  competition. The direction of the Commission to amend  Clause 7 suitably is correct. Irrespective of the  termination of the Agreement between appellant and  R-2, the appellant should take steps to amend a similar  clause existing in other agreements of similar nature  with the dealers. 4.      The Commission exceeded its jurisdiction in giving a  direction not to give effect to the letter terminating the  Agreement and to restore the supplies to the  complainant. Such a direction cannot be sustained in  the absence of a finding that the termination of  Agreement was contrary to the provisions of the Act or  it is a device to circumvent the provisions of the Act so  as to perpetuate the restrictive trade practice. 5.      The ’cease and desist’ order passed under Section  37(1)(a) becomes otiose and inoperative in view of the  fact that the contract stands terminated. The remedy  of the complainant (R-2) is to pursue his claim for  compensation under Section 12-B for the loss suffered  by him on account of the restrictive trade practice  covered by charge No.iii. The appeal is disposed of accordingly without costs.