The MRTP Act, 1969 Post independence, many new and big firms have entered the Indian

market. They had little competition and they were trying to monopolize the market. The Government of India understood the intentions of such firms. In order to safeguard the rights of consumers, Government of India passed the MRTP bill. The bill was passed and the Monopolies and Restrictive Trade Practices Act, 1969, came into existence. Through this law, the MRTP commission has the power to stop all businesses that create barrier for the scope of competition in Indian economy. The MRTP Act, 1969, aims at preventing economic power concentration in order to avoid damage. The act also provides for probation of monopolistic, unfair and restrictive trade practices. The law controls the monopolies and protects consumer interest. Monopolistic Trade Practice Such practice indicates misuse of ones power to abuse the market in terms of production and sales of goods and services. Firms involved in monopolistic trade practice tries to eliminate competition from the market. Then they take advantage of their monopoly and charge unreasonably high prices. They also deteriorate the product quality, limit technical development, prevent competition and adopt unfair trade practices. Unfair Trade Practice The following may result in an unfair trade practice:
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False representation and misleading advertisement of goods and services. Falsely representing second-hand goods as new. Misleading representation regarding usefulness, need, quality, standard, style etc of goods and services. False claims or representation regarding price of goods and services. Giving false facts regarding sponsorship, affiliation etc. of goods and services. Giving false guarantee or warranty on goods and services without adequate tests.

Restrictive Trade Practice The traders, in order to maximize their profits and to gain power in the market, often indulge in activities that tend to block the flow of capital into production. Such traders also bring in conditions of delivery to affect the flow of supplies leading to unjustified costs. About the MRTP Act, 1969 The MRTP Act extends to the whole of India except the state of Jammu and Kashmir. This law was enacted:

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To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few, To provide for the control of monopolies, and To prohibit monopolistic and restrictive trade practices.

Unless the Central Government otherwise directs, this act shall not apply to: 1. Any undertaking owned or controlled by the Government Company, 2. Any undertaking owned or controlled by the Government, 3. Any undertaking owned or controlled by a corporation (not being a company) established by or under any Central, Provincial or State Act, 4. Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees, 5. 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, 6. Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or state Act, 7. Any financial institution. MRTP Commission and Filing of Complaint For the purpose of this Act, the Central Government has established a commission to be known as the Monopolies and Restrictive Trade Practices Commission. This commission shall consist of a Chairman and minimum 2 and maximum 8 other members, all to be appointed by the Central Government. Every member shall hold the office for a period specified by the Central Government. This period shall not exceed 5 years. However, the member will be eligible for reappointment. In case of any unfair trade practice, monopolistic trade practice and/or restrictive trade practice, a complaint can be filed against such practices to the MRTP commission. The procedure for filing a complaint is as follows:
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Complaint is filed either by the individual consumer or through a registered consumer organization. The Director General of the MRTP commission would carry on the investigation for finding facts of the case. If the prima facie case is not made, the complaint is dismissed. If the compliant is true, an order is passed to its effect. The commission restricts and restrains the concerned party from carrying on such practices by granting temporary injunction. Then the final order is passed. The complainant may be compensated for his loss.

The Ministry of Corporate Affairs, Government of India has issued a Notification dated 28th August 2009, whereby the most controversial the Monopolies and Restrictive Trade

Practices Act, 1969 (the MRTP Act) stands repealed and is replaced by the Competition Act, 2002, with effect from September 1, 2009. As you would recall, the MRTP Act was a grim reminder of the licence-quota- permit-raj of 1970s & 1980s. The Act had become redundant post July 1991 when the new economic policy was announced and Chapter III of the MRTP Act dealing with restrictions on M&A activities was made inoperative. The MRTP Commission will continue to handle all the old cases filed prior to September 1, 2009 for a period of 2 years. It will, however, not entertain any new cases from now onwards. I wish to clarify that the provisions relating to M&A transactions (Sections 5 & 6 of the new Competition Act dealing with regulation of combinations) are yet to be notified. As of now, there is no clarity as to when these provisions would be made effective. It is also not clear whether these new provisions will be applicable in cases where definitive agreements have been signed before the notification but closing of the transaction has not happened. It would, therefore, be advisable to put a clause in all M&A transaction documents executed from now onwards that the closing of the transaction would be subject to any prior clearance that may be required from the Competition Commission of India under the provisions of the Competition Act, 2002, if applicable. We are giving below details of the transitional provisions:Date: September 1, 2009 Subject Transitional Provisions the MRTP Act, 1969 to the Competition Act, 2002 w.e.f. September 1, 2009) The Ministry of Corporate Affairs, Government of India has issued a Notification dated 28th August 2009, whereby the most controversial the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act) stands repealed and is replaced by the Competition Act, 2002, with effect from September 1, 2009. The following transitional provisions would apply as provided in Section 66 of the Competition Act, 2002:1. MRTP Commission a) The MRTP Commission will continue to exercise jurisdiction and power under the repealed MRTP Act in respect of any case or proceeding filed before 1 September 2009, for a period of two years. It will not, however entertain any new case arising under the MRTP Act on or after 1 September 2009. b) Upon the expiry of the specified two year period, the MRTP Commission shall stand dissolved. 2. Transfer of pending cases Upon the expiry of two years from 1 September 2009, cases pending before the MRTP Commission will be transferred as follows:a) Monopolistic or restrictive trade practice cases: All pending cases pertaining to monopolistic or restrictive trade practices, including cases having an element of unfair trade practice, shall

stand transferred to the Competition Appellate Tribunal, which shall adjudicate such cases in accordance with the provisions of the repealed MRTP Act. b) Unfair trade practice cases: All pending cases relating solely to unfair trade practices shall stand transferred to the National Commission as constituted under the Consumer Protection Act, 1986, which may in turn transfer such cases to a State Commission constituted under the said Act under circumstances it deems appropriate. These cases will be dealt with by them in accordance with the provisions of the Consumer Protection Act. c) Cases relating to giving false or misleading facts disparaging the goods, services or trade of another person under the MRTP Act: All such pending cases shall be transferred to the Competition Appellate Tribunal which will be dealt in accordance with the provisions of repealed MRTP Act. 3. Investigations/proceedings undertaken by the Director General under the MRTP Act With effect from 1 September 2009, all pending investigations and proceedings by the Director General relating to:a) Monopolistic/ restrictive trade practices will be transferred to the Competition Commission of India (CCI), who may conduct such investigations/ proceedings in any manner it deems appropriate. b) Unfair trade practices will be transferred to the National Commission under the Consumer Protection) Act 1986. c) Cases giving false or misleading facts disparaging the goods, services or trade of another person will be transferred to the CCI.