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UNIVERSITY INSTITUTE OF LAWS

BUSINESS LAW
TOPIC: FEATURES OF MRTP ACT AND AN
OVERVIEW OF COMPETITION ACT,2002

SUBMITTED BY: SUBMITTED TO:

Gunika Dr. Homa Bansal
Roll no. 76/19f Assistant Prof. in
Class: B.A. LL.B. 8th Sem. Laws, PURC,LDH.
 ACKNOWLEDGMENT

First, I owe to my Mother who has given me the birth; Second, I owe to my
Father who is responsible for my birth; Third, I owe to my Teachers for what I
am today.

- Swami Vivekananda

The success and final outcome of this assignment required a lot of guidance and
assistance from many people and I am extremely fortunate to have got this all
along with the completion of my assignment work. I respect and thank

Dr.Homa Bansal for giving me an opportunity to do this assignment work and

providing all the support and guidance which made me complete my assignment on
time. I am really grateful because I managed to complete this assignment within
the time given by Dr.Homa Bansal.

Last but not the least, I would like to express gratitude to my friends and
respondents for support and willingness to work with me.
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Contents
LIST OF CASES..............................................................................................................................................4
CASES
1. INTRODUCTION
INTRODUCTION...................................................................................................................................5
2. COMMITTEES THAT LEAD TO MRTP ACT.............................................................................................6
ACT
3. SALIENT FEATURES OF THE ACT...........................................................................................................8
ACT
4. FAILURE OF MRTP ACT................................................................................................................14
ACT
5. AN OVERVIEW OF COMPETITION LAW....................................................................................15
LAW
6. DIFFERENCE BETWEEN MRTP ACT AND COMPETITION ACT..............................................................17
ACT
7. CONCLUSION:....................................................................................................................................18
CONCLUSION:
8. BIBLIOGRAPHY...................................................................................................................................19
BIBLIOGRAPHY
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LIST OF CASES

(i) Competition Commission of India v. Steel Authority of India Civil Appeal No. 7999
of 2010…………………………………………………………………………….. (15)
(ii) Director-General (Investigation and Registration) v. Negi & Co. Pvt. Ltd. (1998) 80
Comp Cas 449 (MRTPC)…………………………………………………………..(13)
(iii) Director-General of Investigation and Registration v. Cement Corporation of Gujarat
Ltd. (1994) 80 Comp Cas 15………………………………………………………..(9)
(iv) Nima Industries Lid. v. Director-General of Investigation and Registration AIR 1997
SC 2382 ……………………………………………………………………………(14)
(v) Re: Shree Raj Travels & Tours Pvt. Ltd 1994 79 Comp Cas 408 (MRTPC)……. (14)
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1. INTRODUCTION

India after independence chose a centrally planned economic structure also referred to as the
Nehruvian Socialism Model. The Nehruvian Model was also based on the Constitutional requirements
as under Article 381 and 39 (b) and (c)2.The Nehruvian Model was a mixed economy model – a model
that was neither a market economy like the United States of America nor a socialist economy one like the
USSR. Under the mixed model, both the private and public sector co-existed. The approach behind the
mixed economy model was to ensure that the Government played a significant role in capital
formation in the country in order to promote an inclusive economic growth and social justice.

To promote economic objective, the Government reserved for itself strategic industries such as mining,
electricity and heavy industries, serving public interest. The functions of the private sectors were made
subject to Industrial (Department and Regulation) Act of 1951(IDRA). The IDRA empowered the
Government to regulate almost every aspect of the functioning of private sector viz. size of plant and
production size, price of goods produced and its distribution, foreign trade and exchange control, labor
issues etc. The licensing policy or the License Raj as we call it popularly (of government favoured the
big) business houses because they were in a better position to raise huge capital and had managerial still
to run the industry Despite the laudable goals of the Nehruvian model, the result was unsatisfactory.

While the objective of the industrial licensing system was to direct resources in socially desired
directions, it however resulted in giving discretionary power to government authorities to control
investment decisions of private industries, resulting in trade barriers on competition and reduction
in efficiency and consequently, the growth of the economy. This compelled the Government to initiate
reformation of Indian economy, the reform wave began in mid-1980s, co-incidentally during the regime
of Mr. Nehru’s grandson Rajiv Gandhi. The limited reforms of 1980s were followed by wholesale
reforms in the year 1991. The Government brought the Liberalisation, Privatisation and Globalisation
policy.

The Nehruvian model was a mixed economy model, but it was tilting more towards socialistic pattern of
economic growth with the objective being ‘economic growth with social justice’. Despite more than a
decade of independence, it was apparent that the professed model was not yielding desired results.
Economy was growing at the rate of less than 3% per annum and income growth was around 1.75%.

1
Article 38 of the Indian Constitution --State to secure a social order for the promotion of welfare of the people-
(1)The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a
social order in which justice, social, economic and political, shall inform all the institutions of the national life.
(2) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to
eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also
amongst groups of people residing in different areas or engaged in different vocations.

2
Article 39 of the Indian Constitution-- (b) that the ownership and control of the material resources of the
community are so distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the concentration of wealth and means of
production to the common detriment;
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2. COMMITTEES THAT LEAD TO MRTP ACT

Due to the upsurge in the monopolistic practices by the giant industries and their consequent unfair,
restrictive trade practices the Government of India decided to have some Committees and Commissions
setup in this regard .The following were prominent Committees and Commissions that were set up;

a. Hazari Committee (1951)

In July 1966, Prof. R.K. Hazari3 was appointed as Honorary Consultant to the Planning Commission to
conduct a study of licensing under the Industries. (Development and Regulation) Act, 1951. The study
had two objectives:

(i) to review the operation of licensing under the Industries Act broadly over the last two plan
periods and more closely over the last six or seven years, including the orderly phasing at
licensing with reference to targets of capacity,
(ii) to consider and suggest in the light of the present stage of economic development, where and
in what direction modification may be made in the licensing policy.

The committee found that the licensing system led to the dis-proportionate growth of some big business
houses. It was also founded by the Committee that the large industrial houses should not be given
licenses for capital goods industries. Financial institutions should not show any favouritism to the
large houses in the provision of financial assistance. Also,the licensing system does not place
adequate emphasis upon entrepreneurial home work. It might be argued that excessive effort in
this preparatory work is worthwhile only if a license is assured and there is reasonable assurance of
other clearances.

Any project with total fixed investment of Rs. 1 crore and above or having a special goods import
components of Rs. 25 Lakhs and above only should be considered for approval by the Government, only
if it is supported by thorough feasible report, certified by a recognised consultant. Further, it was found
that the States have become biased in granting Industrial Licenses to Big Business Houses.

b. Subimal Dutt Committee

This committee was appointed to study the institutional design and the pattern of work of various
Business Houses. The committee in its report found that business houses were controlling around
56% of the economy; it therefore suggested introduction of MRTP Bill. 4

3
https://indianculture.gov.in/reports-proceedings/final-report-industrial-planning-and-licensing-policy
4
INDIA, & DUTT, S. (1969). Report of the Industrial Licensing Policy Inquiry Committee. [New Delhi], Dept. of
Industrial Development.
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c. Mahanlobis Committee on the Distribution of Income and Levels of Living (1964)

In October, 1960, a Committee was setup which was chaired by Prof. Mahanlobis. The Committee
enquired the distribution and level of income and came to conclusion in February, 1964 that top 10% of
the Indian Population conquered 40% of the Income and the big business companies were flourished
because of the existence of the countries planned economy.

d. The Monopolies Enquiry Commission (Gupta Commission on Monopolies enquiry, 1964)

The commission's report stated that there was concentration of economic power in the form of product
wise and industry wise. Few Industrial houses were controlling a large number of companies and there
existed a large scale restrictive and monopolistic trade practices. The Commission was chaired by Mr.
Dass Gupta . The Commission reached about the Monopoly practice in the Industry and its impact on the
Indian Economy. The Commission reported in 1965 that product wise and industry wise concentration of
economic power existed in the system due to large scale.

The introduction of Gupta Commission on monopolies enquiry let to the emergence of 'Monopolies and
Trade Restrictive Practices Act, 1969'(MRTP Act). MIC therefore drafted a bill to curb the monopolistic
and restrictive trade practices. The Act was enforced in 1970.

The basic principles of MRTP Act were in direct correlation with the Directive Principles of State Policy
(Article 38 and Article 39 of constitution of India).

The Monopolies and Restrictive Trade Practices. Bill was introduced in the Rajya Sabha on 18th
August. 1967 After a great deal of deliberations, the Bill was referred to a Joint Committee of after a
great deal of deliberations, the Bill was referred to a Joint Committee of both the Houses of Parliament
whose report was presented to Parliament on 26th February, 1969. Recommendations of the Joint
Committee were included in the Monopolies and Restrictive Trade Practices Bill which was later taken up
for consideration by the Parliament.

The new MRTP Act was greatly influenced by its foreign counterparts such as Sherman Act and
Clayton Act of USA, the MRTP (Inquiry and Control) Act, 1948 and the Resale Prices Act, 1964 of
the UK, etc.
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3. SALIENT FEATURES OF THE ACT

The following are the salient features of the MRTP Act.

(i)

i)
ii)
iii)
Objectives of the Act

The principal objectives sought to be achieved through the MRTP Act are:

prevention of concentration of economic power to the common detriment;

control of monopolies;
prohibition of Monopolistic Trade Practices (MTP);
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iv) prohibition of Restrictive Trade Practices (RTP);

v) prohibition of Unfair Trade Practices (UTP)5;
vi) Prevention of concentration of economic wealth by private enterprises.

(ii) Application of the Act

According to the section 1 of the Act, it applies to the whole of India except to the State of
Jammu and Kashmir. Further as according to Section 3 of the Act, unless the Central
Government otherwise directs, this act shall not apply to:

- Undertaking owned or controlled by the Government Company,

-Any undertaking owned or controlled by the Government,
-Any undertaking owned or controlled by a corporation (not being a company
established by or under any Central, Provincial or State Act,
-Any trade union or other association of workmen or employees formed for their
reasonable protection as such workmen or employees,
-Any undertaking engaged in an industry, the management of which has been taken
over by any person or body of persons under powers by the Central Government,
-Any undertaking owned by a co-operative society formed and registered under any
Central, Provincial, or State Act,
-Any financial institution.

It has been held in the case of Director-General of Investigation and Registration v. Cement
Corporation of Gujarat Ltd.6 that the share holding of public financial institutions is to be
excluded from section 3.

(iii) Command and Control Approach

The Act made it compulsory for enterprises having assets more than INR 20 crores to take approval from
the Central Government before under doing any kind of corporate restructuring or a proposed takeover. A
criterion was fixed to identify the dominant undertaking. Enterprises with assets of more than INR 1 crore
were automatically deemed to be dominant.

(iv) Monopolies and Restrictive Trade Practices Commission

Section 5 of the Act provides for the establishment of the Commission. For this, the Central Government
has been empowered. The Commission shall consist of a Chairman and not less than Two members and

5
Added after Amendment Act in 1984
6
(1994) 80 Comp Cas 15.
 P a g e | 10

not more than Eight other members appointed by the Central Government. Each member shall not hold
the office for more than Five years7 and shall be eligible for re-appointment. But , it has been provided
that no member shall withhold the office for the term exceeding Ten years or after he has attained the age
of Sixty-five, whichever is earlier. The Central Government has also been given power to remove these
members under certain circumstances given under section 7 of the Act.

POWERS AND FUNCTIONS OF THE COMMISSION:

The powers 8of the Commission include the power vested in a Civil Court and include further
power: -

i) To direct an errant undertaking to discontinue a trade practice and not to repeat the same;

ii) To pass a cease and desist order;

iii) To grant temporary injunction, restraining an errant undertaking from continuing an alleged
trade practice;

iv) To award compensation for loss suffered or injury sustained on account of RTP, UTP or
MTP;

v) To direct parties to agreements containing restrictive clauses to modify the same;

vi) To direct parties to issue corrective advertisement;

vii) To recommend to the Central Government, division of undertakings or severance of inter-

connection between undertakings, if their working is prejudicial to public interest or has led or is
leading to MTP or RTP.

Section 10 of the MRTP Act,1969 empowers the MRTP Commission to enquire into monopolistic or
restrictive trade practices upon a reference from the Central Government or upon its own knowledge or
on information. The MRTP Act,1969 also provides for appointment of a Director General of Investigation
and Registration for making investigations for the purpose of enquiries by the MRTP Commission and for
maintenance of register of agreements relating to restrictive trade practices.

The MRTP Commission receives complaints both from registered consumer and trade associations and
also from individuals either directly or through various Government Departments.

Complaints regarding Restrictive Trade Practices or Unfair Trade Practices from an association are
required to be referred to the Director General of Investigation and Registration for conducting

7
Section 6 (1)
8
Section 12
 P a g e | 11

preliminary investigation in terms of Sections 11 and 36C of the MRTP Act,1969 and Regulation 119 of
the MRTP Commission Regulations, 1974.

The Commission can also order a preliminary investigation by the Director General of Investigation and
Registration when a reference on a restrictive trade practice is received from the Central/ State
Government, or when Commission’s own knowledge warrants a preliminary investigation. Enquiries are
instituted by the Commission under relevant Sections of the MRTP Act,1969 after the Director General of
Investigation and Registration has completed the preliminary investigation and as a result of the findings,
submits an application to the Commission for an enquiry.

Every order made by the Commission under section 12-A granting a temporary injunction or under
section 12-B directing the owner of an undertaking or other person to make payment of any amount, may
be enforced by the Commission in the same manner as if it were a decree or order made by a Court in a
suit pending therein.9 The Commission shall have, and exercise, the same jurisdiction, powers and
authority in respect of contempt of itself as a High Court has 10

The MRTPC is the only body that has right to inquire , cease or award compensation in case there are
some restrictive and unfair trade practice being practiced.

(v) Monopolistic Trade Practices

As according to Section 2 (i) Monopolistic Trade Practice 11 means; "monopolistic trade

practice" means a trade practice which has, or is likely to have, the effect of-

(i) [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 [* * *] 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 investment to the common detriment or allowing
the quality of any goods produced, supplied or distributed, or any service rendered, in India to
deteriorate;

Further, the provisions relating to Monopolistic Trade Practice has been laid down in Chapter IV of
the Act. As according to section 31, where it appears to the Central Government that any such
practice prevails in respect of goods or services the government may refer such matter to the
Commission for inquiry . The Monopolistic Trade Practice is deemed to be prejudicial to the public
interest except in certain cases. 12 These exceptions are;

a) such trade practice is expressly authorised by any enactment for the time being in force, or
9
Section 12-C
10
Section 13-B
11
Bare Act
12
Section 32
 P a g e | 12

(b) the Central Government, being satisfied that any such trade practice is necessary-

(i) to meet the requirements of the defence of India or any part thereof, or for the security of the State;
or

(ii) to ensure the maintenance of supply of goods and services essential to the community; or

(iii) to give effect to the terms of any agreement to which the Central Government is a party, by a
written order, permits the owner of any undertaking to carry on any such trade practice.] 13

(vi) RESTRICTIVE TRADE PRACTICE

Restrictive Trade Practice (RTP) is generally one which has the effect of preventing, distorting
or restricting competition. In particular, a practice, which tends to obstruct the flow of capital or resources
into the stream of production, is a RTP. Likewise, manipulation of prices, conditions of delivery or flow
of supply in the market which may have the effect of imposing on the consumer unjustified costs or
restrictions is regarded as Restrictive Trade Practice. Certain common types of Restrictive Trade Practices
enumerated in the MRTP Act are14:

i) Refusal to deal

ii) Tie-up sales

iii) Full line forcing

iv) Exclusive dealings

v) Price discrimination

vi) Re-sale price maintenance

vii) Area restriction

All Restrictive Trade Practices under the MRTP Act are deemed legally to be prejudicial to
public interest. The onus is, therefore, on the entity, body or undertaking charged with the perpetration of
the Restrictive Trace Practice to plead for gateways provided in the MRTP Act itself to avoid being
indicted. the restriction is reasonably necessary to counteract measures taken by any one person not party
to the agreement with a view to preventing or restricting competition in or in relation to the trade or
business in which the persons party thereto are engaged;

That the restriction is reasonably necessary to enable the persons party to the agreement to negotiate fair
terms for the supply of goods to, or the acquisition of goods from, any one person not party thereto who
controls a preponderant part of the trade or business or acquiring or supplying such goods, or for the
supply of goods to any person not party to the agreement and not carrying on such a trade or business
who, either alone or in combination with any other such persons, controls a preponderant part of the
market for such goods;
13
Ibdi
14
Section 33
 P a g e | 13

The Commission has been empowered to investigate whether a practice comes under the definition of
Restrictive Trade Policy or not. that the restriction is necessary to ensure the maintenance of supply of
goods and services essential to the community.
If the gateways are satisfactory to the MRTP Commission and if it is further satisfied that the
restriction is not unreasonable having regard to the balance between those circumstances and any
detriment to the public interest or consumers likely to result from the operation of the restriction,
the Commission may arrive at the conclusion that the RTP is not prejudicial to public interest
and discharge the enquiry against the charged party.
In Director-General (Investigation and Registration) v. Negi & Co. Pvt. Ltd.15 it was held that The
mere fact that an agreement has been approved by the Central Government does not mean that the trade
practice flowing from such an agreement is expressly authorised by any law for the lime being in force.
Furthermore, if a trade practice is expressly authorized by any law for the time being in force, the
MRTP Commission is barred from passing any order against the charged party.

(vii) Unfair Trade Practice

Prior to 1984, the MRTP Act contained no provisions for
protection of consumers against false or misleading advertisements or other similar unfair
trade practices and a need was felt to protect them from practices, resorted to by the trade
and industry, to mislead or dupe them (Sachar Committee, 1978). The Sachar Committee
therefore recommended that a separate Chapter should be added to the MRTP Act defining
various Unfair Trade Practices so that the consumer, the manufacturer, the supplier, the trader
and other persons in the market can conveniently identify the practices, which are prohibited.
Essentially Unfair Trade Practices (UTP) 16 falling under the following categories were
introduced in 1984 in the MRTP Act :-

(i). Misleading advertisement and false representation.

(ii). Bargain sale, bait and switch selling.

(iii). Offering of gifts or prizes with the intention of not providing them and conducting promotional
contests.

(iv) Product safety standards.

(v) Hoarding or destruction of goods.

Making false or misleading representation of facts disparaging the goods, services or trade of another
person is also a prohibited trade practice under the Indian law.

it has been held in the case of Re: Shree Raj Travels & Tours Pvt. Ltd.17 that if the advertisement
issued is and misleading or the services offered are much below the standard, quality or grade, the
respondent can be said to have been indulged in unfair trade practice.
15
(1998) 80 Comp Cas 449 (MRTPC).
16
Section 36A
17
1994 79 Comp Cas 408 (MRTPC)
 P a g e | 14

Further, in Nima Industries Lid. v. Director-General of Investigation and Registration 18 the court
found that On the complaint of Director-General, Investigation and Registration alleging that company
while floating a scheme of prizes raised the prices of products and covered expenses over the prizes in the
transaction, Commission concluded of indulgence in restrictive trade practice. It was held by the Supreme
Court that the company needs to be given an opportunity to prove its case that they have not committed
any unfair trade practice under section 36A (3) (a) of the Act.

The Commission has been empowered to inquire into the Unfair Trade Practices 19 and before the issuance
of inquiry the Director General has also been empowered to a preliminary investigation. 20

4. FAILURE OF MRTP ACT

At the advent of MRTP Act it was considered to be a comprehensive enactment. But, in view of
policy of globalisation and as a result of arrival of foreign enterprises, it was realised that the
present form of MRTP Act was not capable to yield defined results and its shortcomings were
becoming route for unscrupulous gains. The concept of cartel and bid rigging developed among
enterprises to make an unfair, enormous profits and further question of corporate governance was
under challenge of course.
As India is signatory of various treaties at international level, this indigenous MRTP Act appears
to be ineffective and failed to check the undemocratic approach of the enterprises. It is to be
noted that MRTP Act mainly dealt against the monopolistic and restrictive trade practices,
but it was not competent to deal with anti market agreement and combination of the
enterprises and further it looked independent investigation machinery to trace-out the delinquent
association, combination in overall market. The anti-competitive agreements, abuse of dominant
position and anti-competitive combination led to distortous market scenario. It was clear that
MRTP Act was not efficient to deal with aforesaid menace. The MRTP Act lacks competition
advocacy and provisions of awarding compensation adequately were missing in the MRTP Act.
Further, to sustain economic development of the country and to route-out adverse effect on
competition, to promote and sustain competition in market and also ensure freedom of trade, the
MRTP Act failed to control these issues in absence of relevant provisions in the repealed Act,
1969. There was no machinery to allow democratic participation in the market by an ethical
corporate body. It is submitted that on account of these complexities and globalisation movement
and lack of legal norms finally the MRIP Act, 1969 embraced failure of course. Hence, It has
been repealed and replaced by the Competition Act, 2002.

18
AIR 1997 SC 2382
19
Section 36B
20
Section 36C
 P a g e | 15

5. AN OVERVIEW OF COMPETITION LAW

The need for new law has its origin in the budget speech in 1999. It was stated that MRTP act
has become obsolete in certain areas in the light of international economic developments relating
to competition laws. There is a need to shift the focus from curbing monopolies to promoting
competition'. It was realized by the Indian that MRTP Act is not useful in changing economic
and social condition of India. With the establishment of WTO whole international economic and
social condition of India changed. Pursuit to this the ministry of commerce set an expert group
on international trade and competition. Further, the government of India appointed a high level
Committee on Competition Law to protect fair competition or to check Anti-Competitive
practices. In this regard, Raghvan Committee was appointed in 1999 to advice on Competition
Law for the country. The Raghavan Committee declared the MRTP Act to be falling short of
squarely addressing competition and anti-competitive practices. Based on its analysis, the
Raghavan committee found it more expedient to have a new competition law. While the
committee presumed some anti-competitive behaviour to be injurious to the competition, it
recognized the primacy of rule of reason test for the rest. The Raghavan Committee laid great
emphasis on competition advocacy role for the competition authority. This report gave birth to a
modern competition law, the Competition Act, 2002.

India’s Competition Act, 2002 was enacted to fulfill the twin objective of regulation of anti-
competitive practices and give effect to the World Trade Organization Agreement by shifting
from monopolistic and restrictive trade practices.

The Competition Act, 2002 provided for the establishment of a Competition Commission, to
prevent practices having adverse effect on competition, to promote and sustain competition in
markets, to protect the interests of consumers and to ensure freedom of trade carried on by other
participants in markets in India, and for matters connected therewith or incidental thereto.

The Supreme Court, in the case of Competition Commission of India v. Steel Authority of
India21 the advantages of competition are three-fold which includes:

- Allocative Efficiency;
- Productive Efficiency and
- Dynamic Efficiency.

It prevents abusive behavior by monopolistic or dominant businesses with significant market

power that could be harmful to the consumer welfare. This unique feature of Competition law
fosters competition advocacy and awareness. The Act has extra-territorial reach. Its arm extends
21
Civil Appeal No. 7999 of 2010
 P a g e | 16

beyond the geographical contours of India to deal with practices and actions outside India which
have an appreciable adverse affect on competition in the relevant market in India.

The Act also provides for different types of Agreements (Anti-Competitive Agreement) as
Horizontal Agreements and Vertical Agreements. According to Section 3(3) of the Act
Hortizontal Agreements are essentially between the Competitors. These competitors are at the
same stage in the production chain and exist in the same market. The Vertical Agreements are
Agreements between firms performing at different levels of the production or distribution chain.
For instance, the agreements between manufacturers and distributors. These agreements are
invalid if these agreements cause or likely to cause Appreciable Adverse Effect on Competition
(AAEC) in India.

The Objectives of the Act are;

are;

- Facilitate & foster fair competition in the market.

- Establish a commission to prevent practices having an adverse effect on
competition in the market.
- Promote and sustain competition in markets.
- Protect the interests of consumers.
- Ensure freedom of trade in the Indian markets

Scope of the Act;

- Enquire into Anti-Competitive Agreements [Section - 3].

- Enquire Abuse of Dominant Position [Section- 41].

- Regulation of Combination & Mergers [Section 5 to 6].

- Undertake Competition Advocacy [Section 49].

Exclusion from the applicability of the Act;

- Those right protected as intellectual property rights.

- Agreement exclusively for exports.

The Act is thus based on the notion that Competition is good and it’s good to have competitive
market which ultimately will be beneficial for the consumers in the market.
 P a g e | 17

6. DIFFERENCE BETWEEN MRTP ACT AND COMPETITION ACT

BASIS MRTP COMPETITION ACT

1. Base It is based on Pre- It is based on Post-
Liberalization Liberalization

2. Registration of Compulsory Registration of It does not provide for

Agreements agreements relating to registration of the agreement.
restrictive trade practice.

3. Focus Curbing Monopolies Promoting Fair Competition

4. Dominance Dominance is itself bad Dominance per se is not but
only abuse of dominance is
considered bad.

5. Provisions for Does not contain provisions of This Act contains provisions
combination combination. of combination.

6. Penalties No penalties for offences Penalties for offences

7. Principles Rule of Law approach Rule of Reason approach
8. Power The powers of the DG have The DG is vested with all the
been found to be deficient and powers as are vested in Civil
limited in carrying out an Courts.
investigation.

9. Exclusion A Blanket exclusion of Exclusion of Intellectual

Intellectual Property Rights. property rights, but
unreasonable restrictions are
covered.
 P a g e | 18

7. CONCLUSION:

Thus, the MRTPC and CCI both are quasi-judicial body. The function of MRTPC is to inquire
into and take appropriate action in respect of unfair trade practice and restrictive trade practice, it
can take action upon a reference made to it by the central government or suo moto. The MRTPC
assisted by the Director General of investigation. The MRTPC direct an errant understanding to
discountinue a trade practice and not to repeat. It can pass a cease and desist order. It grant
temporary injunction, restraining an errant understanding from continuing an alleged practice.
The commission’s task was to enquire into the existence and effect of concentration of economic
power in the organized private sector. It excluded the public sector and agriculture from its
study. It had to suggest legislation and other measures to protect essential public interest and also
suggest agency for enforcement of the legislation. It award compensation for loss suffered an
injury sustained on account of restrictive trade practice, unfair trade practice or monopoly trade
practice. The MRTPC inquire into a restrictive trade practice on the basis of a complaint or
reference made by the Central government or suo motu. The power to grant temporary injunction
was incorporate by 1984 amendment. It made MRTPC more effective in dealing with
anticompetitive practices. The MRTPC has the power to award compensation for lass or
damages but only on an application by Central government, state government or party suffering
the loss or damage.it grant injunction through court of law. The MRTP Commission was poorly
resourced, which further constrained its functioning. Its budget was a very small proportion of
both the Gross Domestic Product and the budget of the Central Government. The MRTPC‟s
failure in curbing cartels is attributed to its toothless characterd. The “cease and desist” orders
were enforceable only through courts, while the absence of extra-territorial jurisdiction, critical
for according recognition to the “effects” doctrine arising out of cross border anti competitive
practices, made a mockery of such complaints as demonstrated in the ANSAC.
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8. BIBLIOGRAPHY

BOOKS

(i) Tripathi, Dr. S.C.(2021) Competition Law: Prayagraj: Central Law Publication.
(ii) Dr. Singh,Avtar.(2021) Competition Law: Lucknow: Eastern Book Company.

WEBLIOGRAPGY

(i) Bele,Dhanjay:Need for Competition Act:

https://www.academia.edu/27065392/Need_for_Competition_Act
(ii) Kapparshetty, Dr. B.V. : Impact of MRTP Act for the Development of Nation-A Study
https://www.researchgate.net/publication/
344209811_Impact_of_MRTP_Act_for_Development_of_Nation-A_Study
(iii) Chaturvedi,Shreya: Monopolies and Restrictive Trade Practices Act,1969
https://blog.ipleaders.in/mrtp/#_ftnref10

(iv) Chaturvedi,Dr.S.: MRTP Act Metamorphoses into Competition Act

https://dokumen.tips/documents/mrtp-act-metamorphoses-into-competition-act.html?
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