The Monopolies and Restrictive Trade Practices Act (MRTP Act) was enacted in 1969 to prevent concentration of economic power and monopolistic/restrictive trade practices. It established the MRTP Commission to investigate such practices and grant injunctions/compensation. The Act defined monopolistic, restrictive, and unfair trade practices and was amended several times before provisions around concentration of economic power were repealed in 1991. The MRTP Commission had investigation powers like a civil court along with remedies under the Act.

1. Monopolies and
Restrictive Trade
Practices Act
PRESENTED BY:
AKASH SHARMA
MBA(Gen.)

3. MRTP Act
The Monopolies and Restrictive Trade Practices Act, 1969, brought into force from
1st June 1970, was a very common controversial piece of legislation.
The Monopolistic and Restrictive Trade Practices Act, 1969, was enacted
1. To ensure that the operation of the economic system does not result in the
concentration of economic power in hands of few,
2. To provide for the control of monopolies, and
3. To prohibit monopolistic and restrictive trade practices.
The MRTP Act extends to the whole of India except Jammu and Kashmir.

4.  The MRTP Act sought to prevent the concentration of economic power
to the common detriment by preventing those developments which
might result in the concentration of economic power such as
substantial expansion of existing undertaking; mergers and
amalgamations; takeovers; and interconnection of undertakings.
 The MRTP Act was significantly amended in 1982, 1984, 1985 and
1991.
 The amendment of 1985 was to raise the asset threshold of
undertaking (s) from Rs. 20 Crores to Rs. 100 Crores for applying the
provisions of the MRTP Act relating to prevention of concentration of
economic power.

5. 1991 Changes
The Industrial Policy Statement of July 24, 1991, announced very drastic
changes in the MRTP Act, viz:
 Repeal of the provisions of Act pertaining to concentrating of
economic power i.e. investment limits, except the provisions
empowering the government to defuse concentration of economic
power to the common detriment.
 The provisions of the MRTP Act pertaining to the concentration of
economic power were much criticized because of their negative
impact on growth and competition.

6. Monopolistic Trade Practice
A monopolistic trade practice is a trade practice which has, or is likely to
have, the effect of reasonably preventing or lessening competition in the
production, supply or distribution of any goods or services; limiting
technical development and capital investment to the common detriment;
or allowing the quality of goods or services to deteriorate.

7. A monopolistic trade practice shall be deemed to be prejudicial to the
public interest, if having regard to the economic conditions prevailing in
the country, and to all other matters which are relevant in the particular
circumstances, the effect of the trade practice is or would be:
 To increase unreasonably the cost relating to the production, supply
or distribution of goods or the performance of any service.
 To increase unreasonably:
 The price at which goods are sold
 The profits derived from the production, supply or distribution of any
goods (including their sale or purchase) or from the performance of
any service.

8.  To reduce or limit unreasonably competition in the production, supply
or distribution of any goods (including their sale or purchase) or the
provision of any service
 To limit or prevent unreasonably the supply of goods to consumers or
the provision of any service
 To result in a deterioration in the quality of any goods or in the
performance of any service.

9. Restrictive Trade Practice
 A restrictive trade practice is a trade practice which has the effect,
actual or probable of restricting, lessening or destroying competition.
Such trade practices may tend to obstruct the flow of production or to
bring about manipulation of prices or conditions of delivery etc. to
the common detriment.
 The distinction between the two is based, perhaps, on the Monopolies
Inquiry Commission, which confined the word “restrictive trade
practices” to mean restrictive trade practices other than those
pursued by monopolist.

10. Unfair Trade Practice
An unfair trade practice means a trade practice, which, for
the purpose of promoting any sale, use or supply of any
goods or services, adopts unfair method, or unfair or
deceptive practice.

11. Unfair practices may be categorised as
under:
 FALSE REPRESENTATION
 BARGAIN PRICE
 OFFERING OF GIFTS AND PRIZES
 NON-COMPLIANCE OF PRESCRIBED STANDARDS
 HOARDING OR DESTRUCTION OF GOODS

12. FALSE REPRESENTATION
 Falsely suggests that the goods are of a particular standard quality,
quantity, grade, composition, style or model.
 Falsely suggests any re-built, second-hand renovated, reconditioned
or old goods as new goods.
 Makes a false or misleading representation concerning the need for, or
the usefulness of, any goods or services.
 Materially misleads about the prices at which such goods or services
are available in the market.

13. BARGAIN PRICE
 The price stated in the advertisement in such
manner as suggests that it is lesser than the
ordinary price.
 The price which any person coming across the
advertisement would believe to be better than
the price at which such goods are ordinarily
sold.

14. OFFERING OF GIFTS AND PRIZES
 Creating impression that something is being offered free along with
the goods, when in fact the price is wholly or partly covered by the
price of the article sold.
 Offering some prizes to the buyers by the conduct of any contest,
lottery or game of chance or skill, with real intention to promote
sales or business.

15. NON-COMPLIANCE OF PRESCRIBED
STANDARDS
Any sale or supply of goods, for use by consumers, knowing or having
reason to believe that the goods do not comply with the standards
prescribed by some competent authority, in relation to their
performance, composition, contents, design, construction, finishing or
packing, as are necessary to prevent or reduce the risk of injury to the
person using such goods, shall amount to an unfair trade practice.

16. HOARDING OR DESTRUCTION OF GOODS
Any practice that permits the hoarding or destruction of goods, or refusal
to sell the goods or provide any services, with an intention to raise the
cost of those or other similar goods or services, shall be an unfair trade
practice.

17. MRTP COMMISSION
In accordance with the provisions of the Act, the Government of India
has set up a Commission known as the Monopolies and Restrictive Trade
Commission. The Act provides that the Commission shall consists of a
chairman, and not less than two and not more than eight other members,
to be appointed by the Central Government.

18. POWERS OF MRTP COMMISSION
1. Power of Civil Court under the Code of Civil Procedure, with respect to:
 Summoning and enforcing the attendance of any witness and examining him on
oath;
 Discovery and production of any document or other material object
 producible as evidence;
 Reception of evidence on affidavits;
 Requisition of any public record from any court or office.
 Issuing any commission for examination of witness; and
 Appearance of parties and consequence of non-appearance.

19. 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 authorise 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.

20. REMEDIES UNDER MRTP ACT
TEMPORARY INJUNCTION
Where, during any inquiry, the commission is satisfied that any undertaking or
any person is carrying on, or is about to carry on, any monopolistic, restrictive or
unfair trade practice, which is a pre-judicial to the public interest or the interest
of any trader or class of traders generally, or of any consumer or class of
consumers, or consumers generally, the commission may grant a temporary
injunction restraining such undertaking or person form carrying on such practice
until the conclusion of inquiry or until further orders.

21. COMPENSATION
Where any monopolistic, restrictive or unfair trade practice has caused
damage to any Government, or trader or consumer, an application may
be made to the Commission asking for compensation, and the
Commission may award appropriate compensation.
Where any such loss or damage is caused to a number of persons having
the same interest, compensation can be claimed with the permission of
the commission, by any of them on behalf of all of them.