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MRTPC gives Godrej-GE a clean chit

03-September-2001
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MRTPC gives Godrej-GE a clean chit

The Monopolies & Restrictive Trade Practices Commission (MRTPC) has dismissed the case against Godrej-GE Appliances Ltd on the charges of restrictive trade practices.

The Director-General (Investigation & Registration) (DG-I&R) had moved an application charging Godrej-GE Appliances, engaged in manufacture, sale and distribution of refrigerators and washing machines. The DG9I&R complaint said the company indulged in restrictive trade practices in the context of appointing dealers for sale and distribution of its products.

The DG (I&R)'s application was based on the agreement between Godrej-GE and Venkateshwara Traders, the commission noted. ``The impugned clauses of the agreement do not fall within the purview of various clauses of Section 33(1) of the MRTP Act, 1969, as alleged by the DG(I&R). The DG(I&R)'s application, accordingly fails,'' the commission said.

It was alleged that Clause 17(c) of the agreement attracts the provisions of Section 33(1)(a) of the MRTP Act, the commission observed. To this, the company explained that the impugned clause merely stipulates that the dealer shall sell the goods to actual consumers and not to resellers to ensure free and proper availability of genuine Godrej service to end-users. This can be availed of only from the dealers appointed by the company as they are properly trained to do the job.

Further, the unauthorised dealers and retailers will not be able to fulfill other obligations such as installation, commissioning and warranty, the company submitted.

It was added that rendering after-sales service is the responsibility of the dealer alone, who not only gets requisite training, but also acquires infrastructure to provide the same to the customer, the commission observed.

This clause also guards against the possibility of supplying spurious parts to consumers, the company said. ``The explanation given by the company is quite satisfactory,'' the commission observed. In view of this, restrictions contained in the said clause does not cause any prejudice to the consumer. Rather, they are in the interest of the consumer, the commission said.

On Clause 21 of the agreement, the commission said here again, it was inclined to accept the explanation given by the company. ``Godrej-GE is a multi-product company and it is entirely the privilege of the company to decide the allotment of various products among its dealers and distributors, depending on their ability and expertise to handle the same,'' the commission said.

``It will be wrong to insist that dealers should be allowed to handle the whole range of products as all of them may not have the required expertise and infrastructure to handle various kinds of products and to provide the required after-sales service. In view of this, the restriction contained in Clause 21 of the agreement does not infringe upon the provisions of Section 33(1)(g) of the MRTP Act,'' the commission said.

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