Monopolies and Restrictive Trade Practices Act : Definition. Indian Bare Acts :

Monopolies and Restrictive Trade Practices Act,1969

Act No : 54

Section : Definition.

2.Definition. In this Act, unless the context otherwise requires,.- (a) "agreement" includes any arrangement or understanding, whether or not It is intended that such agreement shall be enforceable (apart from any provision of this Act) by legal proceedings; (b) "Commission" means the Monopolies and Restrictive Trade Practices Commission established under section 5; (c) "Director General" means the 3[Director General of Investigation and Registration appointed under section 8, and includes any additional, Joint, Deputy or Assistant Director General of Investigation and Registration appointed under that section;] (d) 4["dominant undertaking" means- 5. * * * * * ---------------------------------------------------------------------- 1 1st June, 1970, see Notification No. S. O. 1981, dated 30-5-1970, Gazette of India, Extraordinary, 1970. Pt. 11, Sec. 3(ii), p. 833. 2 Subs by Act 30 of 1984, s.2, (w.e.f. 1-8-1984). 3 Subs by s. 3 ibid. (w.e.f. 1-8-1984) 4 Subs. by Act 30 of 1982 s.2, for certain words (w.e.f. 1-8-1984) 5 Omitted by Act. 58 of 1991, s.2 (w.e.f. 27-9-1991). ---------------------------------------------------------------------- 8 1 [(iii) an undertaking which, by itself or alongwith inter- connected undertakings produces, supplies, distributes or otherwise controls not less then one-fourth of the total goods that are produced, supplied or distributed in India or any substantial part thereof; or] (iv) an undertaking which provides or otherwise controls not less than one-fourth of any services that are rendered in India or any substantial part thereof : 2 * * * * * ---------------------------------------------------------------------- 1. Subs. & omitted by 58 of 1991, s.2 (w.e.f. 27-9-1991). 2. Omitted by s.2. ibid (w.e.f. 27-9-1991) ----------------------------------------------------------------------- 9 Explanation II.-Where any goods 1 * * * are the subject of different forms of production, supply, distribution or control, every reference in this Act to such goods shall be construed as reference to any of those forms of production, supply, distribution or control, whether taken separately or together or in such groups as may be prescribed. 2[Explanation III.-The question as to whether any undertaking, either by itself or along with inter-connected undertakings, produces, supplies, distributes or controls one-fourth of any goods or provides or controls one-fourth of any services may be determined according to any of the following criteria, namely, value, cost, price, quantity or capacity of the goods services.] 3[Explanation IV.-In determining,with reference to the features specified 4["in sub-clause (iii) or sub-clause (iv)"] as the case may be, the question as to whether an undertaking is or is not a dominant undertaking, regard shall be had to (i) the average annual production of the goods, or the average annual value of the services provided, by the undertaking during the relevant period; and (ii) the figures published by such authority as the Central Government may, by notification, specify, with regard to the total production of such goods made, or the total value of such services provided, in India or any substantial part thereof during the relevant period." ----------------------------------------------------------------------- 1. Omitted by Act 58 of 1991, s.2 (w.e.f.27.09.1991). 2. Subs. by s. 2. 30 of 1982, s. 2 for Explanation III (w.e.f. 18-8-1982). 3. Subs. by Act. 30 of 1984 s.3 (w.e.f. 1-8-1984). 4. Subs by Act. 58 of 1991, 522 (w.e.f. 27-9-1991) ---------------------------------------------------------------------- 10 1["Explanation V.-In determining the question as to whether an undertaking is or is not a dominant undertaking in relation to any goods supplied, distributed or controlled in India, regard shall be had to the average annual quantity of such goods supplied, distributed or controlled in India by the undertaking during the relevant period. Explanation VI.-For the purposes of this clause, "relevant period" means the period of three calendar years immediately preceding that calendar year which immediately precedes the calendar year in which the question arises as to whether an undertaking is or is not a dominant undertaking."] "[Explanation VII.-Where goods 3 * * * produced in India by an undertaking have been exported to a outside India, then the goods so exported shall not into account in computing for the purposes of this clause-- (i) the total goods 3 * * * that are produced in India by that undertaking; or (ii) the total goods 3 * * * that are produced, supplied or distributed in India or any substance part thereof; 1[(da) "financial institution" means,- (i) a public financial institution specified in or under section 4A of the Companies Act, 1956; (1 of 1956). (ii) a State Financial, Industrial or Investment Corporation; (iii) the State Bank of India or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959; (iv) a nationalised bank, that is to say, a corresponding new bank as defined in section 2 of- (i) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; or (ii) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; (v) the General Insurance Corporation of India established in pursuance of the provisions of section 9 of the General Insurance Business (Nationalisation) Act, 1972; (vi) the Industrial Reconstruction Corporation of India; or (vii) any other institution which the Central Government may, by notification, specify in this behalf 1[(e) "goods" means books as defined in the Sale of Goods Act, 1930, and includes,-- (i) products manufactured, processed or mined in India; 5[(ii) shares and stocks including issue of shares before allotment;] (iii) in relation to goods supplied, distributed or controlled in India, goods imported into India;] 4[(ef) "group" means a group of-- (i) two or more individuals, associations of individuals, firms, trusts, trustees or bodies corporate (excluding financial institutions), or any combination thereof, which exercises, or is established to be in a position to exercise, control, directly or indirectly, over any body corporate, firm or trust; or (ii) associated persons. Explanation.- For the purposes of this clause-- (I) a group of persons who are able, directly or indirectly, to control the policy of a body corporate, firm or trust, without having a controlling interest in that body corporate, firm or trust shall also be deemed to be in a position to exercise control over it; (ii) a State Financial, Industrial or Investment Corporation; (iii) the State Bank of India or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks Act, 1959; (iv) a nationalised bank, that is to say, a corresponding new bank as defined in section 2 of-- (i)the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; or (ii) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; or (v) the General Insurance Corporation of India established in pursuance of the provisions of section 9 of the General Insurance Business (Nationalisation) Act, 1972; (vi) the Industrial Reconstruction Corporation of India; or (vii) any other institution which the Central Government may, by notification, specify in this behalf; (f) "India" means, for the purposes of this Act, the territories to which this Act extends; 3 (ff) * * * * 3 (fff) * * * * (g) "inter-connected undertakings" means two or more undertakings which are inter-connected with each other in any of the following manner, namely:- (i)if one owns or controls the other, (ii) where the undertakings are owned by firms, if such firms have one or more common partners, --------------------------------------------------------------------- 1 Subs. by Act 30 of 1984, s.3 (w.e.f.1-8-1984). 2 Ins. by Act 60 of1980, s. 2 (w.e.f. 13-10-1980). 3 omitted by Act 58 of 1991, s.2 (w.e.f.27-9-1991). 4 Ins by Act 30 of 1984, s. 3 (w.e.f. 1-8-1984) 5 Subs. by 58 of 1991, s. 2 (w.e.f. 22-9-1991) --------------------------------------------------------------------- 10A 1[(iii) where the undertakings are owned by bodies cor- porate,-- (a) if one body corporate manages the other body corporate, or (b) if one body corporate is a subsidiary of the other body corporate , or (c) if the, bodies corporate are under the same management, or (d) if one body corporate exercises control over the other body corporate in any other manner;"] (iv) where one undertaking is owned by a body corporate and the other is owned by a firm, if one or more partners of the firm,- (a) hold, directly or indirectly, not less than fifty percent of the shares, whether preference or equity, of the body corporate, or (b) exercise control, directly or indirectly, whether as director or otherwise, over the body corporate, (v) if one is owned by a body corporate and the other is owned by a firm having bodies corporate as its partners, if such bodies corporate are under the same management 2 * * * (vi) if the undertakings are owned or controlled by the same person or 1[by the same group] (vii) if one is connected with the other either directly or through any number of undertakings which are inter- connected undertakings within the meaning of one or more of the foregoing sub-clauses. 2 [Explanation I.-For the purposes of this Act, 1[two bodies carporate] as para shall be deemed to be under the same management,- (i) if one such body corporate exercise control over the other or both are under the control of the same group or any of the constituents of the same group; or (ii) if the managing director or manager of one such body corporate is the managing director or manager of the other or (iii) if one such body corporate holds not less than 1[one fourth] of the equity shares in the other or controls the composition of not less than 1[one fourth] of the total membership of the Board of directors of the other ; or ______________________________________________________________________ 1 Subs. by Act 30 of 1984, s.3 (w.e.f.1-8-1984). 2 Certain words omitted by Act 41 of 1974, s. 43 (w.e.f. 1-2-1975). 3 Ins. by s. 43 ibid. (w.e.f.1-2-1975). ---------------------------------------------------------------------- 10B (iv) if one or more directors of one such body corporate Constitute, or at any time within a period of six months immediately preceding the day when the question arises a to whether such bodies corporate are under the management, constituted 1[whether independently or together with relatives of such directors or the employees of the first Mentioned body corporate) one fourth of the directors of the other; or] (v) if the same individual or individuals belonging to a group, while holding (whether by themselves or together with their relatives) not less than 1[one fourth] of the equity shares in one such body corporate also hold (whether by themselves or together with their relatives) not less than 1[one fourth] of the equity shares in the other; or (vi) if the 1[same body corporation or bodies corporate belonging to a group holding, whether independently or along with its or their subsidiary or subsidiaries, not less than one-fourth of the equity shares.] the other; or (vii) if not less than 1[one fourth] of the total voting power 1[in relation to] each of the two bodies corporate is exercised or controlled by the same in individual (whether independently or together with his relatives) or the same body corporate (whether independently or together with its subsidiaries); or (viii) if not less than 1[one fourth] of the total voting power 1[in relation to] each of the two bodies corporate is exercised or controlled by the same individuals belonging to a group or by the same, bodies corporate belonging to a group, or jointly by such individual or individuals and one or more of such bodies corporate; or (ix) if the directors of the one such body corporate are accustomed to act in accordance with the directions or in- structions of one or more of the directors of the other, or if the directors of both the bodies corporate are accustomed to act in accordance with the directions or instructions of an individual, whether belonging to a group or no. Explanation II.-If a group exercises control over a body corporate, that body corporate and every other body corporate, which is a constituent of or controlled by, the group shall be deemed to be under the same management. ______________________________________________________________________ 1 Subs. by Act 30 of 1984 s. 3 (w.e.f. 1-8-1984) ______________________________________________________________________ 10c Explanation III.-If two or more bodies corporate under the same management hold, in the aggregate, not less than 1[one fourth] equity share capital in any other body corporate, such other body corporate shall be deemed to be under the same management as the first-mentioned bodies corporate. Explanation IV.-In determining whether or not two or more bodies corporate are under the same management, the shares held by 1[financial institutions] in such bodies corporate shall not be taken into account.] Illustration Undertaking B is inter-connected with undertaking A and undertaking C is inter-connected with undertaking B. Under- taking C is inter-connected with undertaking A; if under- taking D is inter-connected with undertaking C, undertaking D will be inter-connected with undertaking B and consequently with undertaking A; and so on. Explanation 2[ * * * * * ] 3 (gg) * * * * * (h) "member" means a member of the Commission; _____________________________________________________________________ 1 Subs. by Act. 30 of 1984 s.3 (w.e.f. 1-8-1984). 2 Omitted by s. 3 ibid (w.e.f. 1-8-1984) 3 Omitted by Act 58 of 1991, s.2 (w.e.f. 27-9-1991). ______________________________________________________________________ 11 (i)"monopolistic trade practice" means a trade practice which has, or is likely to have, the effect of,- (i) 1[maintaining the prices of goods or charges for the services] at an unreasonable level by limiting, reducing or otherwise controlling the production, supply or distribution of goods 2 * * * or the supply of any services or in any other manner, (ii) unreasonably preventing or lessening competition in the production, supply or distribution of any goods or in the supply of any services, (iii) limiting technical development or capital invest- ment to the common detriment or allowing the quality of any goods produced, supplied or distributed, or any service rendered, in India to deteriorate; 3[(iv) increasing unreasonably,-- (a) the cost of production of any goods; or (b) charges for the provision, or maintenance, of any services; (v) increasing unreasonably,-- (a) the prices at which goods are, or may be, sold or re-sold, or the charges at which the services are, or may be, provided; or (b) the profits which are, or may be, derived by the production, supply or distribution (including the sale or purchase) of any goods or by the provision of any services; (vi) preventing or lessening competition in the production, supply or distribution of any goods or in the provision or maintenance of any services by the adoption of unfair methods or unfair or deceptive practices;"] (j) 1["notification" means a notification published in the Official Gazette; (ja) "owner", in relation to an undertaking, means an individual, Hindu undivided family, body corporate or other association of individuals, whether incorporated or not, or trust (whether public or private or whether religious or charitable) who or which, owns or controls, the whole or substantially the whole of such undertaking, and includes any associated person who is a constituent of a group and who has the Ultimate control over the affairs of such undertaking;] _____________________________________________________________________ 1 Subs. by Act 30 of 1984 s.3 (w.e.f. 1-8-1984). 2 Omitted by Act 58 of 1991, s. 2 (w.e.f. 27-9-1991). 3 Ins by Act 30 of1984, 53 (w.e.f. 1-8-1984). --------------------------------------------------------------------- 12 (k) "prescribed" means prescribed by rules made under this Act; (l) "price", in relation to the sale of any goods or to the performance of any services, includes every valuable consideration, whether direct or indirect, and includes any consideration which in effect relates to the sale of any goods or to the performance of any services although ostensibly relating to any other matter or thing; 13 1[(ll) "Produce" includes manufacture and all its grammatical variations and cognate expressions shall be construed accordingly;] (m) register means the register kept by 2[director general] under section 36 ; 3[(n) "registered consumers' association" means a voluntary association of persons registered under the Complete Act, 1956 or any other law for the time being in force which is formed for the purpose of protecting the interests of consumers generally and is recognised by the Central Government as such association On an application made in this behalf in such form and such manner as may be prescribed.] (o) "restrictive trade practice " means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular,- (i)which tends to obstruct the flow of capital or resources into the stream of production, or (ii) which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions ; (p) "retailer", in relation to the sale of any goods, includes every person, other than a wholesaler, who sells the goods to any other person ; and in respect of the sale of goods by a Wholesaler, to any person for any purpose other than re-sale, includes that wholesaler. 4 (q) * * * * * 5 * * * (r) "service" means service of any description which is made available to potential users and includes the provision of facilities in connection with 6[banking, financing, insurance, 7[chit fund, real estate,] transport,processing] supply of electrical or other energy, board or lodging or both, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any servi[ce free of charge or under a contract of personal service; 4[Explanation.-- For the removal of doubts, it is hereby declared that any dealings in real estate shall be included and shall be deemed always to have been included within the definition of "service";] (s)"trade" means any trade, business, industry, profession or occupation relating to the production, supply, distribution ______________________________________________________________________ 1 Ins by Act 30 of 1982 s. 2 (w.e.f. 18-8-1982). 2 Subs. by S. 2 Act 30 of 1984 (w.e.f. 1-8-1984). 3 Subs. by Act 74 of 1986, s. 2 (w.e.f. 1-6-1987). 4 Omitted by Act 58 of 1991, s.2 (w.e.f. 27-9-1991) 5 Omitted by Act 30 of 1984 s. 3 (w.e.f. 1-8-1984) 6 Subs. by s. 3, ibid (w.e.f. 1-8-1984) 7 Added by s. 3, ibid (w.e.f. 1-8-1984) 8 Ins by Act 58 of 1991 s. 2, (w.e.f. 27-9-1991) ______________________________________________________________________ 14 or control of goods and includes the provision of any services ; (t) "trade association" means a body of persons (whether in- corporated or not) which is formed for the purpose of furthering the trade interests of its members or of persons represented by its members ; (u) "trade practice" means any practice relating to the carrying on of any trade, and includes- (i) anything done by any person which controls or affects the price charged by, or the method of trading of, any trader or any class of traders, (ii) a single or isolated action of any person in relation to any trade ; 1[(v)"undertaking" means an enterprise which is, or has been, or is proposed to be, engaged in the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, either directly or through one or more of its units or divisions, whether such unit or division is located at the same place where the under-taking is located or at a different place or at different places. Explanation I.-In this clause,- (a)"article" includes a new article and "service" includes a new service; (b) "unit" or "division" in relation to an undertaking includes,- (i) a plant or factory established for the production, storage, supply, distribution, acquisition or control of any article or goods; (ii) any branch or office established for the provision of any service. Explanation II.-For the purposes of this clause, a body cor- porate, which is, or has been, engaged only in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate shall be deemed to be an undertaking. Explanation III.-For the removal of doubts, it is hereby declared that an investment company shall be deemed, for the purposes of this Act, to be an undertaking;] 2 * * * * * (x) "wholesaler", in relation to the sale of any goods means a person who 1[ sales the goods, either in bulk or in large quantities, to any person for the purposes of re-sale, whether in bulk or in the same or smaller quantities.] (y) words and expressions used but not defined in this Act and defined in the Companies Act, 1956, of 1956 have the meanings respectively assigned to them in that Act. 3[2A. Power of Central Government to decide certain matters. If any question arises as to whether,- (a) two or more individuals, trustees, associations of indivi- duals, firms or bodies corporate or any combination thereof, constitute, or fall within, a group, or (b) two or more undertaking are inter-connected under- takings within the meaning of this Act, or (c) two or more bodies corporate are under the same management, the Central Government or where the Board of Company Law Ad- ministration, constituted under section 10E of the Companies Act, 1956, 1 of 1956 is, by notification, authorised so to do by the Central Govern- ment, that Board, shall decide such question, after giving to the persons concerned a reasonable opportunity of being heard.]