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Palak Jain   09 March 2021

UGC came in enterprise or not

Whether an University grants commission is come under an enterprise or not in context to competition law


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 1 Replies

Ishaan   17 March 2021

'Enterprise' has been defined under Section 2(h) of the Competition act and brings within its ambit any firm or person engaged in activities relating to production, storage, supply, distribution, acquisition etc of goods. Rendering services (of any kind) is also a critical inclusion in the definition.

The term 'services' has a particularly wide meaning within the Act, encompassing sectors such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, conveyancing of news or information and advertising, etc.[Section 2(u) of the Act].

Therefore, it is the functional aspects and not the institutional aspects that are paramount in determining whether an entity is an "enterprise". A critical inclusion in the definition of the term 'enterprise' is a Government Department. 

Yes, Government Departments qualify as an enterprise. However, exemptions do exist for performing sovereign functions such as collection of taxes, or for statutory functions such as determination of tariff by electricity commissions. However, the COMPAT recently ruled that the issuing of policy circular mandating co-operative societies to purchase from a particular seller did make the Government department an "enterprise" as the policy in question had the effect of regulating purchase of goods from a particular entity .


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