assignment on overall view of coompetiton act in india

1. MRTP Act: An Overview
Introduction
Lord Acton said that power corrupts and absolute power corrupts absolutely. This is hundred
percent true of economic power also. Keeping this in mind, various laws have been enacted
during the last hundred years in many parts of the world for controlling monopolies and unfair
trade practices. The founding fathers in the preamble to the Constitution of India pledged to
secure to all citizens economic, social and political justice, as well as, equality of status and of
opportunity. It was reaffirmed in the Directive Principles of State policy enshrined in the
Constitution under Articles 38 and 39. The Monopolies inquiry Commission submitted its report
on October 31, 1965. The report recognised the fact that there did exists concentration of
economic power in India in the form of product-wise and industry-wise concentration and the
presence of a few industrial houses controlling a larger number of companies. It also recognised
the existence of a fairly large scale of various restrictive and monopolistic trade practices.1
A commission known as the Monopolies and Restrictive Trade Practices Commission was
established under MRTP act, 1969. 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.2
1 Government of India, Manager of Publications, Report of the Monopolies Inquiry Commission, (Chairman
K.C.Das Gupta), Delhi, at - 159.
2Leela Kumar,April25,2014, MRTP Commission and Competition Commission of India,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2429261

2. Enactment of the Monopolies and Restrictive Trade Practice Act, 1969
The Bill, drafted by MIC and amended by a committee of the Parliament, became The
Monopolies and Restrictive Trade Practice Act, 1969 and was enforced from June 1, 1970. The
Act drew its inspiration from the mandate enshrined in the Directive Principle of State Policy in
the Constitution, which aims at securing social justice with economic growth. The premises on
which MRTP Act rest are unrestricted interaction of the competitive forces, maximum material
progress through rational allocation of economic resources, availability of goods and services of
quality at reasonable prices, and finally, a just and fair deal to theconsumers. An interesting
feature of the statute is that is envelops within its ambit, fields of production and distribution of
both goods and services.
Thus, one of the products of the planned and controlled economy was the MRTP Act 1969. Its
cousin, to regulate, control and grant foreign exchange, was born in 1973 christened the Foreign
Exchange Regulation Act. In the planned and controlled regime, the market suffered from little
or no competition resulting in detriment to economic efficiency and productivity. Self- reliance
was synonymous with import substitution and consequently, indigenous availability criteria
ensured automatic protection to domestic producers, regardless of cost, efficiency and
comparative advantage.
Objectives of MRTP Act
The principal objectives sought to be achieved through the MRTP Act are:
i) prevention of concentration of economic power to the common detriment;
ii) control of monopolies
iii) prohibition of Monopolistic Trade Practices (MTP
iv) prohibition of Restrictive Trade Practices (RTP)
v) Prohibition of Unfair Trade Practices (UTP).

3. Monopolies and Restricted Trade Practice Commission
An important organ of the Department of Company Affairs is the Monopolies and Restrictive
Trade Practices Commission (MRTP Commission) a quasi-judicial body. The MRTP
Commission established under Section 5 of the Monopolies and Restrictive Trade Practices Act,
1969, discharge functions as per the provisions of the Act. The main function of the MRTP
Commission is to enquire into and take appropriate action in respect of unfair trade practices and
restrictive trade practices. In regard to monopolistic trade practices the Commission is
empowered under section 10(b) to inquire into such practices (i) upon a reference made to it by
the Central Government or (ii) upon its own knowledge or information and submit its findings to
Central Government for further action.
Composition of MRTPC
Under the MRTP ACT, a commission has been established, the Chairman of which is required to
be a person who is or has been or is qualified to be a judge of the Supreme court or high court.
The member of the commission are required to be person of ability, integrity and standing who
have adequate knowledge or experience of, or have shown capacity in dealing with problem
relating to economics, law, commerce, accountancy, industry, public affairs or administration.
The commission is assisted by the Director General of investigation and Registration for carring
out investigation, for maintaining register of agreements and for undertaking carriage of
proceeding during the enquiry of the MRTPC.

4. Powers of MRTPC3
The powers of the Commission include the power vested in a Civil Court and include further
power: -
1. To direct an errant undertaking to discontinue a trade practice and not to repeat the
same
2. To pass a cease and desist order
3. To grant temporary injunction, restraining an errant undertaking from continuing an
alleged trade practice
4. To award compensation for loss suffered or injury sustained on account of RTP, UTP
or MTP
5. To direct parties to agreements containing restrictive clauses to modify the same; vi)
To direct parties to issue corrective advertisement
6. 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.
Powers of the Commission4
The MRTP Commission has the following powers:
1. Power of Civil Court under the Code of Civil Procedure, with respect to:
a. Summoning and enforcing the attendance of any witness and examining him on
oath;
b. Discovery and production of any document or other material object producible as
evidence;
c. Reception of evidence on affidavits;
3
Monopolistic and RestrictiveTradePractice,
https://www.advocatekhoj.com/library/lawareas/mono/powers.php?Title=Monopolistic%20and%20Res
trictive%20Trade%20Practice&STitle=Powers%20of%20The%20Commission#:~:text=The%20MRTP%20C
ommission%20has%20the,and%20examining%20him%20on%20oath%3B&text=Issuing%20any%20com
mission%20for%20examination%20of%20witness%3B%20and
4 Section 12 of the MRTP Act, 1969

5. d. Requisition of any public record from any court or office.
e. Issuing any commission for examination of witness; and
f. Appearance of parties and consequence of non-appearance.
2. Proceedings before the commission are deemed as judicial proceedings with in the
meaning of sections 193 and 228 of the Indian Penal Code.
3. To require any person to produce before it and to examine and keep any books of
accounts or other documents relating to the trade practice, in its custody.
4. To require any person to furnish such information as respects the trade practice as may be
required or such other information as may be in his possession in relation to the trade
carried on by any other person.
5. To authorize any of its officers to enter and search any undertaking or seize any books or
papers, relating to an undertaking, in relation to which the inquiry is being made, if the
commission suspects tat such books or papers are being or may be destroyed, mutilated,
altered, falsified or secreted.
Power of the Commission to Award Compensation
Section 12B of the MRTP Act, 1969
The MRTPC has the power to award compensation for loss or damage due to anticompetitive
practices since 1984, but it can be awarded only on an application by the central government,
state government, or a party suffering the loss or damage after the nature and extent of loss or
damage has been determined through an inquiry. The amendment made to the law in 1984
enabled the MRTPC to enforce its orders granting temporary injunction and compensation
through courts of law. The MRTPC can call for a compliance report of its orders through the
Director General or any other officer. Its powers relating to compliance were further enhanced
by providing it with power of contempt by amendment made in 1991.
Power of the Commission to Grant Temporary Injunctions
The power to grant temporary injunction was incorporated by the 1984 amendment. This was
further amplified in 1991 to enable granting of injunction without issue of notice to the affected

6. parties. These amendments were made to make the MRTPC more effective indealing with anti-
competitive practices. It was felt that without the authority to grant injunction, anti-competitive
practices would continue until the end of injury, by which time it may be too late to intervene.
Conclusion
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 motu. 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 case.