Date:26/03/2004 URL: http://www.thehindubusinessline.com/2004/03/26/stories/2004032600590300.htm

Back Production, sale of aero tyres — MRTPC disposes of complaint against Dunlop India

Richa Mishra

New Delhi , March 25

DUNLOP India Ltd (DIL) can now heave a sigh of relief. The Monopolies & Restrictive Trade Practices Commission (MRTPC) has disposed of a complaint against the company indulging in monopolistic and restrictive trade practices in the production and sale of aero tyres.

Disposing of the complaint, the Commission observed that the demand for increased price by the company was neither agreed upon nor implemented.

The proceedings arose out of a reference being made by the then (in 1994) Ministry of Law, Justice & Company Affairs to the Commission. According to the reference, on the basis of the information available with the Department of Company Affairs (DCA), it prima facie appeared to the Union Government that Dunlop India was indulging in monopolistic and restrictive trade practices in the production and sale of aero tyres.

When the reference was made, Dunlop India was the only manufacturer of aero tyres in the country with the installed capacity of 17,000 units. The production of such tyres in 1990-91 was 14,605 units, and the capacity utilisation was 85.9 per cent. The major consumers are Indian Airlines, Air India and the Indian Air Force.

MRF Ltd was given industrial licence for manufacturing 60,000 pieces each of aircraft tyres and tubes. But the company had not installed the capacity for production of aircraft tyres or tubes, as per its balance sheet and annual report for the year ending September 30, 1991.

Further, the DCA had received the cost-audit report in respect of Dunlop India for the year 1988-89 and also for 1990-91, which inter alia furnished information regarding cost of production, cost of sales and sales realisation for aero tyres for the two years and also for the corresponding previous year. As per the reference, the analysis of the information relating to cost of production and sales as well as sales realisation for the two years showed that the company had substantially increased the prices of aero tyres during 1988-89 compared to the previous year, thus earning higher profit margins.

"... . After the complainant/informant sought the intervention of the Commission, the complainant/informant paid the price of the tyres at the negotiated prices and the demand of 36 per cent increase in price was neither agreed upon nor implemented," the Commission noted referring to an affidavit filed by IA.

"In view of the above, the present complaint does not survive," it noted. Further, there has been no manufacturing of aero tyres during the last three years, the Commission observed.