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Repeal of the MRTP Act, 1969: Reducing
the Twilight Period
T. Ramappa, ACS, Advocate, Chennai.
THE BACKGROUND
The MRTP Act has been the subject of repeal twice. Section 66 of the Competition Act, 2002
declared that the Monopolies and Restrictive Trade Practices Act, 1969 [“MRTP Act”] be repealed
and the Monopolies and Restrictive Trade Practices Commission [“MRTPC”] be dissolved. In
addition to providing for the settlement of the status of the employment of those working in
the MRTPC, consequent on such dissolution, it also laid down the principle on which cases
and investigations pending under the MRTP Act were to be transferred to the Competition
Commission of India or the National Commission constituted under the Consumer Protection
Act, 1986, as indicated in the section. This section was not brought into force and as the
Competition Commission was not duly constituted, the MRTPC was receiving complaints
and deciding them under the MRTP Act.
THE AMENDED SECTION 66
Along with a number of other amendments to the Act made by the Competition
(Amendment) Act, 2007, the date of commencement of which was October 12, 2007, a new
section 66 was substituted in the place of the original section 66. Under section 66, as
amended, which has not yet been notified as having been brought into force, the basic
position is that the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) has
been repealed and the Monopolies and Restrictive Trade Practices Commission established
under section 5(1) of the said Act (hereinafter referred to as the repealed Act) shall stand
dissolved. However, under section 66, the MRTP Commission is permitted to continue to
exercise jurisdiction and power under the MRTP Act for a period of two years from the date
of the commencement of the Competition [Amendment] Act of 2007, which in effect
means two years from the notification of section 66 as being brought into force. But the
MRTP Commission cannot decide or adjudicate any case or proceeding arising under the
MRTP Act on or after the said commencement. The present section 66 also provides for the
vacation of the offices of the Chairman and Members of the Commission and the officers
of the Commission on its dissolution and for settlement of conditions of service of those
working in the MRTP Commission. The section also provides for saving any right that
may have accrued and for continuance of any liability that may have been incurred under
the repealed Act.
PENDING CASES
All cases pertaining to monopolistic trade practices or restrictive trade practices pending
(including such cases, in which any unfair trade practice has also been alleged), before the
Monopolies and Restrictive Trade Practices Commission shall, after the expiry of the said two
years, stand transferred to the Competition Appellate Tribunal and shall be adjudicated by
that Appellate Tribunal in accordance with the provisions of the MRTP Act, as if that Act had
not been repealed.
As far as cases relating to unfair trade practices pending at the relevant time , the amendment
provides that all cases under section 36A[1] of the MRTP Act, excepting those falling under
The starting point of the twoyear
period for the repeal of
the MRTP Act and the
dissolution of the MRTPC has
not yet been determined. In
the nature of things the
Central Government will be
in a position to notify section
66 as having been brought
into force only on its
appointing members and
other officers of the
Competition Commission and
the Competition Appellate
Tribunal.
e-mail :
ramappat92@gmail.com
Articles Articles
clause [x] of that section* shall stand transferred to the National
Commission established under the Consumer Protection Act,
1986, and that those falling under section 36A[1][x] shall stand
transferred to the Competition Appellate Tribunal. In both cases,
they shall be disposed of as if they were cases filed under the
Consumer Protection Act, 1986.
PENDING INVESTIGATIONS OR
PROCEEDINGS
Investigations or proceedings, other than those relating to unfair
trade practices, pending before the Director General of
Investigation and Registration on or before the commencement
of the operation of section 66 shall, on such commencement,
stand transferred to the Competition Commission of India, and
the Competition Commission of India may conduct or order for
conduct of such investigation or proceedings in the manner as it
deems fit.
All investigations or proceedings, relating to unfair trade
practices, other than those referred to in section 36A[1][x] of the
MRTP Act pending before the Director General of Investigation
and Registration on or before the said commencement shall, on
such commencement, stand transferred to the National
Commission constituted under the Consumer Protection Act,
1986 (68 of 1986) and the National Commission may conduct or
order for conduct of such investigation or proceedings in the
manner as it deems fit.
Investigations or proceedings relating to cases falling under
section 36A[1][x] of the MRTP Act pending before the Director
General of Investigation and Registration on or before the said
commencement shall, on such commencement, stand transferred
to the Competition Commission and the Competition
Commission of India may conduct or order for conduct of such
investigation in the manner as it deems fit.
AVOIDABLE TWILIGHT PERIOD
The new section 66 has so far not been notified as having brought
into force. It means that the starting point of the two-year period
for the repeal of the MRTP Act and the dissolution of the MRTPC
has not yet commenced. In the nature of things the Central
Government will be in a position to notify section 66 as having
been brought into force only on its appointing members to the
Competition Commission and the Competition Appellate
Tribunal and the other officers.
The ground on which the Government decided to repeal the
MRTP Act was that it considered that the Act was enacted to
contain concentration of economic power and that it was not the
right mechanism suited to deal with issues relating to the
preservation and protection of competition and that too in the
new industrial scene. Today, seven years after the first section 66
repealed the MRTP Act, in 2002, the question whether the repeal
was justified and on the grounds stated by the Government, is no
longer relevant. But what should be a matter of concern is the
loss of time in changing over to the full operation of the
Competition Act, 2002. The delay in bringing into force of the
pre-amendment Competition Act, 2002 was forced on the
Government by its having to await the decision of the Supreme
Court in Brahm Dutt v. Union of India, where the validity of the
Competition Act, 2002 and Rule 3 of the Competition
Commission of India (Selection of Chairperson and Other
Members of the Commission) Rules, 2003 were challenged. But
there is no justification now for the present delay after the
Competition [Amendment] Act, 2007, after the proceedings
before the Supreme Court, has been notified as having been
brought into force.
Section 66 repealing the MRTP Act and providing for the
dissolution of the MRTPC and disposal of pending cases and
investigations could be brought into force only after the
positions in the Competition Commission and the Competition
Appellate Tribunal are filled up. But the Government chose a
very inappropriate method to select persons to be members of
the Competition Commission. Having agreed to arrange a
structure in which the Competition Commission would only
function as a market regulator, an expert body performing
advisory and regulatory functions, the Government resorted to
the procedure of inviting applications for filling up the posts of
Chairperson and other Members of the Competition and lost
much time. This is done in no country and it is only here that
the impression is sought to be given that in the process of
appointing members to the Competition Commission, India is
inventing the wheel. It is now reported in a newspaper, which
has been reproduced on the website of the Competition
Commission of India, that the Central Government has
appointed five members, including the Chairperson of the
Competition Commission. The Chairman and members of the
Competition Appellate Tribunal will have to be appointed and
the offices of the Director General and others will have to be
filled up and then only the system will be fully operational.
This should be done as expeditiously as possible so that the
transition from the MRTP Act regime to the mechanism under
the Competition Act is completed well in time even before the
prescribed period of two years.
The delay also breeds other undesirable consequences. The first
is the uncertainty as to which agency will ultimately decide the
case and this is no inducement for anyone to quicken the process.
Added to this, handing over to newly constituted bodies, viz. the
Competition Commission and the Appellate Tribunal, unfinished
part-heard cases is certainly of no advantage to anybody, since
the process will, in actual practice, have to be virtually started de
novo. In the matter of investigations, with two successive
* This is an unfair trade practice which gives false or misleading facts disparaging investigators, with different outlooks, it is certain that there will
the goods, services or trade of another person.
Repeal of the MRTP Act, 1969 : Reducing the Twilight Period
Articles
be little co-operation and coordination.
What is the pace at which this vital legislation has progressed,
if there is progress in any sense? The record is highly
disenchanting. The High level committee on competition policy
and law submitted its report to the Government of India in 2000
and the Competition Act, 2002, excepting the key sections, were
notified in 2003 on different dates as having been brought into
force. The challenge to the validity of the Act and the mode of
selection of the Chairman and Members of the Competition
Commission left it in a state of dormancy till the 2007
amendments were made. The Central Government notified
12th day of October, 2007 as the date on which section 1 of the
Competition (Amendment) Act, 2007 (39 of 2007), shall come
into force. By a separate notification on the same day, certain
other sections of the 2007 Amendment Act were brought into
force with effect from 12th day of October, 2007. The key sections
including the new section 66 have not yet been brought into
force.
By a notification dated February 27, 2008 the Competition
Commission of India (Term of the Selection Committee and the
Manner of Selection of Panel of Names) Rules, 2008 were issued.
The Competition Appellate Tribunal [Term of the Selection
Committee and the Manner of Selection of Panel of Names] Rules,
2008 were published on May 16, 2008. The appointments to the
Competition Commission have been made one year after the
Rules for the selection of members of the Commission were
issued.
It is a sad commentary on the spirit in which the mechanism for
preserving competition in the market is taking shape. The
number of countries that have established legal regimes for the
preservation of competition in the market is very large and
they are at different stages of industrial growth and India
should not be seen as dragging its feet in establishing such a
regime.
Recognizing that in a growing economy such as ours, which
seeks participation of enterprises from across the globe, the
establishment of a machinery for the preservation of effective
competition is crucial and urgent. Credibility will be established
only when it is seen as staffed with the best that the country can
obtain. Therefore, all the other positions should be filled
quickly, thus reducing the twilight area of as short a duration
as possible. 􀂉
Repeal of the MRTP Act, 1969 : Reducing the Twilight Period

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