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MRTPC pulls up Mahindras

Richa Mishra

NEW DELHI, Aug. 15

THE automobile major Mahindra & Mahindra (M&M) has been pulled up by the Monopolies & Restrictive Trade Practices Commission (MRTPC) for indulging in restrictive trade practice on the issue of `special allocation' of vehicles.

The informant - Badara Petroleum Products, had lodged a complaint in November 1994 with regard to the delayed delivery of Armada jeep which was booked in March 1993. Mulling over the matter, the commission observed that no intimation was received from th e company even after a lapse of 18 months.

Therefore, the company was liable to pay simple interest on the booking advance which was payable only if the call was sent after 12 months of the booking, it was contended. Later the informant, however, sold/transferred the booking to another party, who sent the entire payment to the company.

Again, there was no response from the dealer and when the dealer was contacted after two and a half months, it merely informed that the delivery of the vehicle was in the pipeline. Finally the vehicle was delivered on June 5, 1995 - almost three months a fter the date of making full payment.

The counsel for Director (Research) of the MRTPC has not raised the plea of interest and conceded that the charge of non-payment of interest, if the booking matured within one year was not a restrictive trade practice since the Government has issued comp rehensive guidelines covering the trade practice of booking of cars for sale, collecting of booking advances from prospective buyers, interest payable and also whether interest was to be paid if the period was less than 12 months, the commission noted.

Now, the only surviving contention of the counsel for the Director (Research) is that two customers who had booked vehicles after the informant, but received deliveries before the informant. The counsel for the company stated that these customers were un der the category of `special allocation' and they were not similarly situated as the informant and consequently given delivery of the vehicles earlier.

Further, the informant had asked for the supply of vehicle in Olympic white colour and it is established on records that a large number of vehicles indicating monthly production for a period March to June 1995 was specified though M&M took the stand that the vehicle of this colour could not be supplied to the informant, the commission noted.

The question of `special allocation' to persons who made the payment nearly two years after the booking was made by the informant, was clearly illegal and it was merely used as a cloak to justify the long delay in delivery of vehicle to the informant, th e MRTPC observed.

Therefore, it is established that the company has clearly indulged in a restrictive trade practice as defined in the MRTP Act, 1969. ``...We deprecate the trade practice adopted by the company in the present case,'' the commission said.

Although the informant has withdrawn the complaint vide a letter dated April 1996 addressed to the company, appropriate action has to be taken for the restrictive trade practice adopted by the company. The company was accordingly directed to cease the re strictive trade practice and restrain from repeating the mistake in future.