THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969

Year : 1969

[Act No. 54 of 1969]
[27th December, 1969]


PREAMBLE

An Act to provide that the operation of the economic system does not result in the concentration of economic power to the common detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Twentieth Year of the Republic of India as follows:-

Section -1 Short title, extent and commencement

 
(1) This Act may be called the Monopolies and Restrictive Trade Practices Act, 1969.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date 1*as the Central Government may, 2*[by notification], appoint.

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1. Came into force on 1-6-1970, vide S.O. 1981, dated 30th May, 1970, published in the Gazette of India, Extra., 1970, P. II, Section 3 (ii), pg. 833.

2. Substituted by Act 30 of 1984, section 2, for "by notification in the Official Gazette" w.e.f. 1-8-1984.

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Section -2 Definitions

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;

1*[(c)"Director General" means the 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) 2*["Dominant undertaking" means-

3 [***]

4*[(iii) An undertaking which, by itself or along with inter-connected undertakings produces, supplies, distributes or otherwise controls not less than 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;

5 [***]

Explanation II.-Where any goods 6 [***] are the subject of different forms of production, supply, distribution or control, every reference in this Act to such goods shall be constructed 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.

7*[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 or services.]

8*[Explanation IV.-In determining, with reference to the features specified 9*[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.]

10*[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 the clause, "relevant period" means the period of three calendar years immediately preceding that calendar year which immediately proceeds the calendar year in which the question arises as to whether an undertaking is or is not a dominant undertaking.]

11*[Explanation VII.-Where goods 12 [***] produced in India by an undertaking have been exported to a country outside India, then the goods so exported shall not be taken into account in computing for the purposes of this clause-

(i) The total goods 12 [***] that are produced in India by that undertaking; or

(ii) The total goods 12 [***] that are produced, supplied or distributed in India or any substantial part thereof;]

13*[(da) "Financial institution" means,-

(i) A public financial institution specified in or under section 4A of the Companies Act, 1956 (1 of1956);

(ii) A State Financial, Industrial or Investment Corporation;

(iii) State Bank of India or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 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 (5 of 1970); or

(ii) The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 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 (57 of 1972);

(vi) The Industrial Reconstruction Corporation of India; or

(vii) Any other institution which the Central Government may, by notification, specify in this behalf;]

14*[(e) "Goods" means goods as defined in the Sale of Goods Act, 1930 (8 of 1930), and includes,-

(i) Products manufactured, processed or mined in India;

15*[(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;]

16 [***]

17*[(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) "Associated persons"-

(a) In relation to a director of a body corporate, means-

(i) A relative of such director, and includes a firm in which such director or his relative is a partner;

(ii) Any trust of which any such director or his relative is a trustee;

(iii) Any company of which such director, whether independently or together with his relatives, constitutes one-fourth of its Board of directors;

(iv) Any other body corporate, at any general meeting of which not less than one-fourth of the total number of directors of such other body corporate are appointed or controlled by the director of the first mentioned body corporate or his relative, whether acting singly or jointly;

(b) In relation to the partner of a firm, means a relative of such partner and includes any other partner of such firm; and

(c) In relation to the trustee of a trust, means any other trustee of such trust;

(III) Where any person is an associated person in relation to another, the latter shall also be deemed to be an associated person in relation to the former;]

(f) "Indian" means, for the purposes of this Act, the territories to which this Act extends;

18 [***]

(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,

19*[(iii) Where the undertakings are owned by bodies corporate,-

(a) If one body corporate manages the other body corporate,

(b) If one body corporate is 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 per cent 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 other is owned by a firm having bodies corporate as its partners, if such bodies corporate are under the same management

20 [***],

(vi) If the undertakings are owned or controlled by the same person or 21 [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;

22*[Explanation I.-For the purposes of this Act,23*[two bodies corporate,] shall be deemed to be under the same management,-

(i) If one such body corporate exercises 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 24 [one-fourth] of the equity shares in the other or controls the composition of not less than 24 [one-fourth] of the total membership of the Board of directors of the other; or

(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 as to whether such bodies corporate are under the same management, constituted 25* [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 26*[one-fourth] of the equity shares in one such body corporate also hold (whether by themselves or together with their relatives) not less than 26*[one-fourth] of the equity shares in the other; or

(vi) If the 27*[same body corporate 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] in one body corporate, also hold into less than 26 [one-fourth] of the equity shares in the other; or

(vii) If not less than 26*[one-fourth] of the total voting power 28* [in relation to] each of the two bodies corporate is exercised or controlled by the same 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 26*[one-fourth] of the total voting power 28* [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 instructions 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 not.

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.

Explanation III.-If two or more bodies corporate under the same management hold, in the aggregate, not less than 26*[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 29* [financial institutions] in such bodies corporate shall not be taken into account.]

Illustration

Undertakings B is inter-connected with undertaking A and undertaking C is inter-connected with undertaking B. Undertaking C is inter-connected with undertaking A; if undertaking D is inter-connected with undertaking C, undertaking D, will be inter-connected with undertaking B and consequently with undertaking A; and so on.

30 [***]

31 [***]

(h) "Member means a member of the Commission;

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

(i) 32*[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 33 [***] 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 service;

(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;

34*[(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 provisions 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;]

35*[(j) "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;]

(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;

36*[(ll) "Produce" includes manufacture and all its grammatical variations and cognate expressions shall be construed accordingly;]
(m) "register" means the register kept by the 37*[Director General] under section 36;

38*[(n) "Registered consumers' association" means a voluntary association of persons registered under the Companies Act, 1956 (1 of 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 cost 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;
39[***]

(r) "Service" means service 40 [***] which is made available to potential users and includes the provision of facilities in connection with 41*[banking, financing, insurance 42*[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 service free of charge or under a contract of personal service;

43*[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 or control of goods and includes the provision of any services;

(t) "Trade association" means a body of persons (whether incorporated 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;

44*[(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 undertaking 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 corporate, 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;]

45 [* * *]

46 [* * *]

(x) "Wholesaler", in relation to the sale of any goods, means a person who 47*[sells 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 (1 of 1956), have the meanings respectively assigned to them in that Act.

2A -48* Power of Central Government to decide certain matters

If any question arises as to whether,-

(a) Two or more individuals, trustees, associations of individuals firms or bodies corporate or any combination thereof, constitute, or fall within, a group, or

(b) Two or more undertakings are inter-connected undertakings 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 Administration, constituted under section 10E of the Companies Act, 1956 (1 of 1956), is, by notification, authorised so to do by the Central Government, that Board, shall decide such question, after giving to the persons concerned a reasonable opportunity of being heard.]

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1. Substituted by Act 30 of 1984 section 3, for clause (c).

2. Substituted by Act 30 of 1982, section 2, for certain words w.e.f. 18-8-1982.

3. Sub-clauses (i) and (ii) omitted by Act 58 of 1991, section w.r.e.f. 27-9-1991.

4. Substituted by Act 58 of 1991, section 2, for sub-clause (iii) w.r.e.f. 27-9-1991.

5. Proviso and Explanation I omitted by Act 58 of 1991 section 2 w.r.e.f. 27-9-1991.

6. The words "of any description" omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

7. Substituted by Act 30 of 1982, section 2, for Explanation III w.e.f. 18-8-1982.

8. Substituted by Act 30 of 1984, section 3, for Explanation IV w.e.f. 1-8-1984.

9. Substituted by Act 58 of 1991, section 2, for "in sub-clauses (ii), (iii) or (iv)" w.r.e.f. 27-9-1991.

10. Substituted by Act 30 of 1984, section 3, for Explanations V and VI w.e.f. 1-8-1984.

11. Inserted by Act 60 of 1980, section 2 w.e.f. 13-10-1980.

12. The words "of any description" omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

13. Inserted by Act 30 of 1984, section 3 w.e.f. 1-8-1984.

14. Substituted by Act 30 of 1984, section 3, for clause (e) w.e.f. 1-8-1984.

15. Substituted by Act 58 of 1991, section 2, for sub-clause (ii) w.r.e.f. 27-9-1991.

16. Clause (ee) Inserted by Act 30 of 1982, section 2 w.e.f. 18-8-82 and omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

17. Inserted by Act 30 of 1984, section 3 w.e.f. 1-8-1984.

18. Clauses (ff) and (fff) Inserted by Act 30 of 1982, section 2 w.e.f. 18-8-1982 and omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

19. Substituted by Act 30 of 1984, section 3, for sub-clause (iii) w.e.f. 1-8-1984.

20. The words "within the meaning of the said section 370" omitted by Act 41 of 1974, section 43 w.e.f. 1-2-1975.

21. Substituted by Act 30 of 1984, section 3, for "group of persons" w.e.f. 1-8-1984.

22. Inserted by Act 41 of 1974, section 43 w.e.f. 1-2-1975.

23. Substituted by Act 30 of 1984, section 3, for "two undertakings, owned by bodies corporate" w.e.f. 1-8-1984.

24. Substituted by Act 30 of 1984, section 3, for "one-third" w.e.f. 1-8-1984.

25. Substituted by Act 30 of 1984, section 3, for certain words w.e.f. 1-8-1984.

26. Substituted by Act 30 of 1984, section 3, for "one-third" w.e.f. 1-8-1984.

27. Substituted by Act 30 of 1984, section 3, for certain words w.e.f. 1-8-1984.

28. Substituted by Act 30 of 1984, for "with respect to any matter relating to" w.e.f. 1-8-1984.

29. Substituted by Act 30 of 1984, section 3 for, "public financial institutions" w.e.f. 1-8-1984.

30. Explanation omitted by Act 30 of 1984, section 3 w.e.f. 1-8-1984.

31. Clause (gg) Inserted by Act 30 of 1982, section 2 w.e.f. 18-8-1982 and omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

32. Substituted by Act 30 of 1984, section 3, for "maintaining prices" w.e.f. 1-8-1984.

33. The Words "of any the description" omitted by Act 1991, section 2 w.r.e.f. 27-9-1991.

34. Inserted by Act 30 of 1984, section 3 w.e.f. 1-8-1984.

35. Substituted by Act 30 of 1984, section 3, for clause (j) and explanations thereto w.e.f. 1-8-1984.

36. Inserted by Act 30 of 1982, section 2 w.e.f. 18-8-1982.

37. Substituted by Act 30 of 1984, section 2 for "Registrar" w.e.f. 1-8-1984.

38. Clause (n) omitted by Act 30 of 1984, section 3 w.e.f. 1-8-1984 and Inserted by Act 74 of 1986, section 3 w.e.f. 1-6-1987.

39. Clause (q) omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

40. The words "of any description" omitted by Act 58 of 1991 section 2 w.r.e.f. 27-9-1991.

41. Substituted by Act 30 of 1984, section3, for "banking, insurance, transport" w.e.f. 1-8-1984.

42. Inserted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

43. Inserted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

44. Substituted by Act 30 of 1984, section 3, for clause (v) w.e.f. 1-8-1984.

45. Clause (vv) Inserted by Act 30 of 1982, section 2 w.e.f. 18-8-1982 and omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

46. Clause (w) omitted by Act 58 of 1991, section 2 w.r.e.f. 27-9-1991.

47. Substituted by Act 30 of 1984, section 3, for "sells the goods to any person for the purpose of re-sale w.e.f. 1-8-1984.

48. Inserted by Act 30 of 1984, section 4 w.e.f. 1-8-1984.

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Section -3 Act not to apply in certain cases

Unless the Central Government, 1*[by notification], otherwise directs, this Act shall not apply to-

(a) Any undertaking owned or controlled by a Government company,

(b) Any undertaking owned or controlled by the Government,

(c) Any undertaking owned or controlled by a corporation (not being a company) established by or under any Central Provincial or State Act,

(d) Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees,

(e) Any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons in pursuance of any authorisation made by the Central Government under any law for the time being in force,

1*[(f) Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or State Act relating to co-operative societies, any financial institution.]

2*[Explanation.-In determining, for the purposes of clause (c), whether or not any undertaking is owned or controlled by a corporation, the shares held by financial institutions shall not be taken into account.]

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1. Substituted by Act 30 of 1984 section 2, for "by notification in the Official Gazette" w.e.f. 1-8-1984.

2. Inserted by Act 30 of 1984, section 5 w.e.f.1984.

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Section -4 Application of other laws not barred.

(1) Save as otherwise provided in sub-section (2) or elsewhere in this Act, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force.

(2) Notwithstanding anything contained in section 3 or elsewhere in this Act, so much of the provisions of this Act, as relate to matters in respect of which specific provisions exist in the-

(i) Reserve Bank of India Act, 1934 (2 of 1934), or the Banking Regulation Act, 1949 (10 of 1949), or

(ii) State Bank of India Act, 1955 (23 of 1955), or the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or

(iii) Insurance Act, 1938 (4 of 1938), shall not apply to a banking company, the State Bank of India or subsidiary bank, as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or an insurer, as the case may be.