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The Monopolies And Restrictive Trade Practices Act, 1969

1. SHORT TITLE, EXTENT AND COMMENCEMENT.

[ACT NO. 54 OF 1969]

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 :-

(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 as the Central Government may, by notification, appoint 1a.

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;

(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) “dominant undertaking” means –

(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.

Explanation II : Where any goods are the subject of different forms of production, supply, distribution or control, every reference in this Act to such goods shall be construed 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.

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.

Explanation IV : In determining, with reference to the features specified in sub-clause (iii) 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.

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 this clause, “relevant period” means the period of three calendar years immediately preceding that calendar year which immediately precedes the calendar year in which the question arises as to whether an undertaking is or is not a dominant undertaking.

Explanation VII : Where goods 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 that are produced in India by that undertaking; or

(ii) the total goods that are produced, supplied or distributed in India or any substantial part thereof;

(da) “financial institution” means, –

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

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

(iii) the 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 clause (d) of 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;

(e) “goods” means goods as defined in the Sale of Goods Act, 1930 (3 of 1930), and includes, –

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

(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;

(ee) Omitted by the MRTP (Amdt.) Act, 1991, w.e.f. 27-9-1991;

(ef) “group” means a group of –

(i) two or more individuals, association 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) “India” means, for the purposes of this Act, the territories to which this Act extends;

(ff) & (fff)

(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.

(iii) where the undertakings are owned by bodies corporate, –

(a) if one body corporate manages the other body corporate, or

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

(vi) if the undertakings are owned or controlled by the same person or 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.

Explanation 1 : For the purposes of this Act, 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 one-fourth of the equity shares in the other or controls the composition of not less than 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 (whether independently or together with relatives of such directors or the employees of the first mentioned body corporate) one-fourth of the director 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 one-fourth of the equity shares in one such body corporate also hold (whether by themselves or together with their relatives) not less than one-fourth of the equity shares in the other; or

(vi) if the 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 not less than one-fourth of the equity shares in the other; or

(vii) if not less than one-fourth of the total voting power 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 one-fourth of the total voting power 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 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 financial institutions in such bodies corporate shall not be taken into account.

Illustration

Undertaking 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.

(h) “member” means a member of the Commission :

(i) “monopolistic trade practice” means a trade practice which has, or is likely to have, 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 services rendered, in India to deteriorate;

(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 provision 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;

(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;

(ll) “produce” includes manufacture and all its grammatical variations and cognate expressions shall be construed accordingly;

(m) “register” means the register kept by the Director General under section 36;

(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 costs 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;

(r) “service” means service which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, chit fund, real estate, transport, processing, supply of electrical or other energy, boarding 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.

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;

(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” of “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;

(x) “wholesaler”, in relation to the sale of any goods, means a person who 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. POWER OF CENTRAL GOVERNMENT TO DECIDED 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.

3. ACT NOT TO APPLY IN CERTAIN CASES.

Unless the Central Government, 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,

(f) any undertaking owned by a co-operative society formed and registered under any Central, Provincial or State Act relating to co-operative societies,

(g) any financial institution.

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.

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 a 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.

5. ESTABLISHMENT AND CONSTITUTION OF THE COMMISSION.

(1) For the purposes of this Act, the Central Government shall establish, by notification, a Commission to be known as the Monopolies and Restrictive Trade Practices Commission which shall consist of a Chairman and not less than two and not more than eight other members, to be appointed by the Central Government.

(2) The Chairman of the Commission shall be a person who is, or has been or is qualified to be, a Judge of the Supreme Court or of a High Court and the members thereof shall be persons of ability, integrity and standing who have adequate knowledge or experience of, or have shown capacity in dealing with, problems, relating to economics, law, commerce, accountancy, industry, public affairs or administration.

(3) Before appointing any person as a member of the Commission, the Central Government shall satisfy itself that the person does not, and will not, have, any such financial or other interest as is likely to affect prejudicially his functions as such member.

6. TERMS OF OFFICE, CONDITIONS OF SERVICE, ETC., OF MEMBERS.

(1) Every member shall hold office for such period, not exceeding five years, as may be specified by the Central Government in the notification made under sub-section (1) of section 5, but shall be eligible for reappointment :

Provided that no member shall hold office as such for a total period exceeding ten years, or after he has attained the age of sixty-five years, whichever is earlier.

(2) Notwithstanding anything contained in sub-section (1), a member may –

(a) by writing under his hand and addressed to the Central Government resign his office at any time;

(b) be removed from his office in accordance with the provisions of section 7.

(3) A casual vacancy caused by the resignation or removal of the Chairman or any other member of the Commission under sub-section (2) or otherwise shall be filled by fresh appointment.

(3A) Where any such casual vacancy occurs in the office of the Chairman of the Commission, the senior most member of the Commission, holding office for the time being, shall discharge the functions of the Chairman until a person appointed to fill such vacancy assumes the office of the Chairman of the Commission.

(3B) When the Chairman of the Commission is unable to discharge the functions owing to absence, illness or any other cause, the senior most member of the Commission, if authorised so to do by the Chairman in writing, shall discharge the functions of the Chairman until the day on which the Chairman resumes the charge of his functions.

(4) No act or proceeding of the Commission shall be invalid by reason only of the existence of any vacancy among its members or any defect in the constitution thereof.

(5) The chairman of the Commission and other members shall receive such remuneration and other allowances and shall be governed by such conditions of service as may be prescribed :

Provided that the remuneration of the Chairman or any other member shall not be varied to his disadvantage after his appointment.

(6) In the case of a difference of opinion among the members of the Commission, the opinion of the majority shall prevail and the opinion or orders of the Commission shall be expressed in terms of the views of the majority.

(7) The Chairman of the Commission and every other member shall, before entering upon his office, make and subscribe to an oath of office and of secrecy in such form, in such manner and before such authority as may be prescribed.

(8) The Chairman or any member ceasing to hold office as such shall not hold any appointment in, or be connected with the management or administration of, any industry or undertaking to which this Act applies for a period of five years from the date on which he ceases to hold such office.

7. REMOVAL OF MEMBERS FROM OFFICE IN CERTAIN CIRCUMSTANCES.

(1) The Central Government may remove from office any member, who –

(a) has been adjudged an insolvent, or

(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude, or

(c) has become physically or mentally incapable of acting as such member, or

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a member, or

(e) has so abused his position as to render his continuance in office prejudicial to the public interest.

(2) Notwithstanding anything contained in sub-section (1), no member shall be removed from his office on the ground specified in clause (d) or clause (e) of that sub-section unless the Supreme Court, on a reference being made to it in this behalf by the Central Government, has on an inquiry held by it in accordance with such procedure as it may specify in this behalf, reported that the member ought, on such grounds, to be removed.

8. APPOINTMENT OF DIRECTOR GENERAL, ETC., AND STAFF OF THE COMMISSION.

(1) The Central Government may, by notification, appoint a Director General of Investigation and Registration, and as many Additional, Joint, Deputy or Assistant Directors General of Investigation and Registration, as it may think fit, for making investigation for the purposes of this Act and for maintaining a Register of agreements subject to registration under this Act and for performing such other functions as are, or may be, provided by, or under, this Act.

(2) The Director General may, by written order, authorise one of the Additional, Joint, Deputy or Assistant Directors General to function as the Registrar of agreements subject to registration under this Act.

(3) Every person authorised to function as the Registrar of agreements and every Additional, Joint, Deputy or Assistant Director General shall exercise his powers, and discharge his functions, subject to the general control, supervision and direction of the Director General.

(4) The Central Government may provide the staff of the Commission and may, in addition, make provisions for the conditions of service of the Director General, Additional, Joint, Deputy or Assistant Director General and of the members of the staff of the Commission.

(5) The conditions of service of the Director General or any Additional, Joint, Deputy or Assistant Director General or of any member of the staff of the Commission shall not be varied to his disadvantage after his appointment.

9. SALARIES, ETC., TO BE DEFRAYED OUT OF THE CONSOLIDATED FUND OF INDIA.

The salaries and allowances payable to the members and the administrative expenses, including salaries, allowances and pensions, payable to or in respect of officers and other employees of the Commission, shall be defrayed out of the Consolidated Fund of India.

10. INQUIRY INTO MONOPOLISTIC OR RESTRICTIVE TRADE PRACTICES BY COMMISSION

The Commission may inquiry into –

(a) any restrictive trade practice –

(i) upon receiving a complaint of facts which constitute such practice from any trade association or from any consumer or a registered consumers’ association, whether such consumer is a member of that consumers’ association or not, or

(ii) upon a reference made to it by the Central Government or a State Government, or

(iii) upon an application made to it by the Director General, or

(iv) upon its own knowledge or information;

(b) any monopolistic trade practice, upon a reference made to it by the Central Government or upon an application made to it by the Director General or upon its own knowledge or information.

11. INVESTIGATION BY DIRECTOR GENERAL BEFORE ISSUE OF PROCESS IN CERTAIN CASES.

(1) The Commission may, before issuing any process requiring the attendance of the person against whom an inquiry (other than an inquiry upon an application by the Director General) may be made under section 10, by an order, require the Director General to make, or cause to be made, a preliminary investigation in such manner as it may direct and submit a report to the Commission to enable it to satisfy itself as to whether or not the matter requires to be inquired into.

(2) The Director General may, upon his own knowledge or information or on a complaint made to him, make, or cause to be made, a preliminary investigation in such manner as he may think fit to enable him to satisfy himself as to whether or not an application should be made by him to the Commission under section 10.

(3) For the purpose of conducting the preliminary investigation under sub-section (1), or sub-section (2), as the case may be, the Director General or any other person making the investigation shall have the same powers as may be exercised by an Inspector under sub-section (2) of section 44.

(4) Any order or requisition made by a person making an investigation under sub-section (1), or sub-section (2), shall be enforced in the same manner as if it were an order or requisition made by an Inspector appointed under section 240 or section 240A of the Companies Act, 1956 (1 of 1956), and any contravention of such order or requisition shall be punishable in the same manner as if it were an order or requisition made by an Inspector appointed under the said section 240 or section 240A. 62.

12. POWERS OF THE COMMISSION.

(1) The Commission shall, for the purposes of any inquiry under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely :-

(a) the summoning and enforcing the attendance of any witness and examining him on oath;

(b) the discovery and production of any document or other material object producible as evidence;

(c) the reception of evidence on affidavits;

(d) the requisitioning of any public record from any court or office;

(e) the issuing of any commission for the examination of witnesses;

(f) the appearance of parties and consequence of non-appearance.

(2) Any proceeding before the Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, 1860 (45 of 1890), and the Commission shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

(3) The Commission shall have power to require any person –

(a) to produce before, and allow to be examined and kept by, an officer of the Commission specified in this behalf, such books, accounts or other documents in the custody or under the control of the person so required as may be specified or described in the requisition, being documents relating to any trade practice, the examination of which may be required for the purposes of this Act; and

(b) to furnish to an officer so specified such information as respects the trade practice as may be required for the purposes of this Act or such other information as may be in his possession in relation to the trade carried on by any other person.

(4) For the purpose of enforcing the attendance of witnesses the local limits of the Commission’s jurisdiction shall be the limits of the territory of India.

(5) Where, during any inquiry under this Act, the Commission has any grounds to believe that any books or papers of, or relating to any undertaking in relation to which such inquiry is being made or which the owner of such undertaking may be required to produce in such inquiry, are being, or may be, destroyed, mutilated, altered, falsified or secreted, it may, by a written order, authorise any officer of the Commission to exercise the same powers of entry, search and seizure in relation to the undertaking, or the books or papers, aforesaid as may be exercised by the Director General while holding a preliminary investigation under section 11. 67.

12A. POWER OF THE COMMISSION TO GRANT TEMPORARY INJUNCTIONS.

(1) Where, during an inquiry before the Commission, it is proved, whether by the complainant, Director General, any trader or class of traders or any other person, by affidavit or otherwise, that any undertaking or any person is carrying on, or is about to carry on, any monopolistic or any restrictive, or unfair, trade practice and such monopolistic or restrictive, or unfair, trade practice is likely to affect prejudicially the public interest or the interest of any trader, class of traders or traders generally or of any consumer generally, the Commission may, for the purposes of staying or preventing the undertaking or, as the case may be, such person from causing such prejudicial effect, by order, grant a temporary injunction restraining such undertaking or person from carrying on any monopolistic or restrictive, or unfair, trade practice until the conclusion of such inquiry or until further orders.

(2) The Provisions of rules 2A to 5 (both inclusive) of Order XXXIX of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall, as far as may be, apply to a temporary injunction issued by the Commission under this section, as they apply to a temporary injunction issued by a civil court, and any reference in any such rule to a suit shall be construed as a reference to an inquiry before the Commission.

Explanation 1 : For the purposes of this section, an inquiry shall be deemed to have commenced upon the receipt by the Commission of any complaint, reference, or, as the case may be, application or upon its own knowledge or information reduced to writing by the Commission.

Explanation II : For the removal of doubts, it is hereby declared that the power of the Commission with respect to temporary injunction includes power to grant a temporary injunction without giving notice to the opposite party. 70.

12B. POWER OF THE COMMISSION TO AWARD COMPENSATION.

(1) Where, as a result of the monopolistic or restrictive, or unfair, trade practice, carried on by any undertaking or any person, any loss or damage is caused to the Central Government, or any State Government or any trader or class of traders or any consumer, such Government or, as the case may be, trader or class of traders or consumer may, without prejudice to the right of such Government, trader or class of traders or consumer to institute a suit for the recovery of any compensation for the loss or damage so caused, make an application to the Commission for an order for the recovery from that undertaking or owner thereof or, as the case may be, from such person, of such amount as the Commission may determine as compensation for the loss or damage so caused.

(2) Where any loss or damage referred to in sub-section (1) is caused to numerous persons having the same interest, one or more of such persons may, with the permission of the Commission, make an application, under that sub-section, for and on behalf of, or for the benefit of, the persons so interested, and thereupon the provisions of rule 8 of Order I of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to the application before the Commission and the order of the Commission thereon.

(3) The Commission may, after an inquiry made into the allegations made in the application filed under sub-section (1), make an order directing the owner of the undertaking or other person to make payment, to the applicant, of the amount determined by it as realisable from the undertaking or the owner thereof, or, as the case may be, from the other person, as compensation for the loss or damage caused to the applicant by reason of any monopolistic or restrictive, or unfair, trade practice carried on by such undertaking or other person.

(4) Where a decree for the recovery of any amount as compensation for any loss or damage referred to in sub-section (1) has been passed by any court in favour of any person or persons referred to in sub-section (1), or, as the case may be, sub-section (2), the amount, if any, paid or recovered in pursuance of the order made by the Commission under sub-section (3) shall be set off against the amount payable under such decree and the decree shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, be executable for the balance, if any, left after such set off. 71.

12C. ENFORCEMENT OF THE ORDER MADE BY THE COMMISSION UNDER SECTION 12A OR 12B.

Every order made by the Commission under section 12A granting a temporary injunction or under section 12B 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 an suit pending therein and it shall be lawful for the Commission to send, in the event of its inability to execute it, such order to the court within the local limits of whose jurisdiction, –

(a) in the case of an order against a company, the registered office of the company is situated, or

(b) in the case of an order against any other person, the place where the person concerned voluntarily resides or carries on business of personally works for gain, is situated, and thereupon the court to which the order is so sent shall execute the order as if it were a decree or order sent to it for execution. 72.

13. ORDERS OF COMMISSION MAY BE SUBJECT TO CONDITIONS, ETC.

(1) In making any order under this Act, the Commission may make such provisions not inconsistent with this Act, as it may think necessary or desirable for the proper execution of the order and any person who commits a breach of or fails to comply with any obligation imposed on him by any such provision shall be deemed to be guilty of an offence under this Act.

(2) Any order made by the Commission may be amended or revoked at any time in the manner in which it was made.

(3) An order made by the Commission may be general in its application or may be limited to any particular class of traders or a particular class of trade practice or a particular trade practice or a particular locality.

13A. POWER OF THE COMMISSION TO CAUSE INVESTIGATION TO FIND OUT WHETHER OR NOT ORDERS MADE BY IT HAVE BEEN COMPLIED WITH.

(1) The Commission may, if it has any reasonable cause to believe that any person has omitted or failed to comply with any order made by it under this Act or any obligation imposed on him by or under any order made by the Commission under this Act, authorise the Director General or any officer of the Commission to make an investigation into the matter and the Director General, or the officer so authorised, may, for the purpose of making such investigation, exercise all or any of the powers conferred on the Director General by section 11.

(2) On the conclusion of the investigation, the Director General, or, as the case may be, the officer so authorised, shall submit to the Commission a report of the investigation to enable the Commission to take such action in the matter as it may think fit. 72.

13B. POWER TO PUNISH FOR CONTEMPT.

The Commission shall have, and exercise the same jurisdiction, powers and authority in respect of contempt of itself as a High Court has and may exercise and, for this purpose, the provisions of the Contempt of Courts Act, 1971 (70 of 1971) shall have effect subject to the modifications that –

(a) the reference therein to a High Court shall be construed as including a reference to the Commission;

(b) the references to the Advocate-General in section 15 of the said Act shall be construed as a reference to such Law Officer as the Central Government may, by notification 74 in the Official Gazette, specify in this behalf. 73.

14. The Monopolies And Restrictive Trade Practices

15. RESTRICTION OF APPLICATION OF ORDERS IN CERTAIN CASES.

No order made under this Act with respect to any monopolistic or restrictive trade practice shall operate so as to restrict –

(a) the right of any person to restrain any infringement of a patent granted in India, or

(b) any person as to the condition which he attached to a licence to do anything, the doing of which but for the licence would be an infringement of a patent granted in India, or

(c) the right of any person to export goods from India, to the extent to which the monopolistic or restrictive trade practice relates exclusively to the production, supply, distribution or control of goods for such export.

16. SITTINGS OF THE COMMISSION.

(1) The Central office of the Commission shall be in Delhi but the Commission may sit at such places in India and at such times as may be most convenient for the exercise of its powers or functions under this Act.

(2) The powers or functions of the Commission may be exercised or discharged by Benches formed by the Chairman of the Commission from among the members.

17. HEARING TO BE IN PUBLIC EXCEPT IN SPECIAL CIRCUMSTANCES.

(1) Subject to the provisions of sub-section (2), the hearing of proceedings before the Commission shall be in public.

(2) Where the Commission is satisfied that it is desirable to do so by reason of the confidential nature of any offence or matter or for any other reason, the Commission may –

(a) hear the proceedings or any part thereof in private;

(b) give directions as to the persons who may be present thereat;

(c) Prohibit or restrict the publication of evidence given before the Commission (whether in public or in private) or of matters contained in documents filed before the Commission.

18. PROCEDURE OF THE COMMISSION.

(1) Subject to the provisions of this Act, the Commission shall have power to regulate –

(a) the procedure and conduct of its business;

(b) the procedure of Benches of the Commission;

(c) the delegation to one or more members of such powers or functions as the Commission may specify and subject to any general or special direction given, or condition imposed, by the Commission, a member, to whom any powers or functions are so delegated, shall exercise such powers or discharge those functions in the same manner and with the same effect as if they had been conferred on such member directly by this Act and not by way of delegation and any order or other act or thing made or done by such member in pursuance of the power or function so delegated shall be deemed to be an order or other act or thing made or done, by the Commission.

(2) In particular, and without prejudice to the generality of the foregoing provisions, the powers of the Commission shall include the power to determine the extent to which persons interested or claiming to be interested in the subject-matter of any proceeding before it are allowed to be present or to be heard, either by themselves or by their representatives or to cross-examine witnesses or otherwise to take part in the proceeding.

19. ORDERS OF THE COMMISSION TO BE NOTED IN THE REGISTER.

The Commission shall cause an authenticated copy of every order made by it in respect of a restrictive trade practice or an unfair trade practice, as the case may be, to be forwarded to the Director General who shall have it recorded in such manner as may be prescribed.

20. UNDERTAKINGS TO WHICH THIS PART APPLIES. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

21. EXPANSION OF UNDERTAKINGS. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991

22. ESTABLISHMENT OF NEW UNDERTAKINGS. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

22A. POWER TO EXEMPT. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991

23. MERGER, AMALGAMATION AND TAKE OVER. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

24. MERGER, AMALGAMATION AND TAKE OVER IN CONTRAVENTION OF SECTION 23. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

25. DIRECTORS OF UNDERTAKINGS NOT TO BE APPOINTED DIRECTORS OF OTHER UNDERTAKINGS. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

26. REGISTRATION OF UNDERTAKINGS TO WHICH PART A APPLIES. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991

27. DIVISION OF UNDERTAKINGS.

(1) Notwithstanding anything contained in this Act or in any other law for the time being in force, the Commission may, –

(i) upon receiving a complaint of facts from any trade association or from any consumer or a registered consumers’ association, whether such consumer is a member of that consumers’ association or not, or

(ii) upon a reference made to it by the Central Government or a State Government, or

(iii) upon its own knowledge or information. If it is of opinion that the working of an undertaking is prejudicial to the public interest, or has led, or is leading, or is likely to lead, to the adoption of any monopolistic or restrictive trade practices, inquire as to whether it is expedient in the public interest to make an order, –

(a) for the division of any trade of the undertaking by the sale of any part of the undertaking or assets thereof, or

(b) for the division of any undertaking or inter-connected undertakings into such number of undertakings as the circumstances of the case may justify, and the Commission may, after such hearing as it thinks fit, report to the Central Government its opinion thereon and shall, where it is of opinion that a division ought to be made, specify the manner of the division and compensation, if any, payable for such division.

Explanation : For the purposes of this section all activities carried on by way of trade by an undertakings or two or more inter-connected undertaking may be treated as a single trade.

(2) If the Commission so recommends, the Central Government may, notwithstanding anything contained in any other law for the time being in force, by an order in writing, direct the division of any trade of the undertaking or of the undertaking or inter-connected undertakings.

(3) Notwithstanding anything contained in any other law for the time being in force, the order referred to in sub-section (2) may provide for all such matters as may be necessary to give effect to the division of any trade of the undertaking, or of the undertaking or inter-connected undertakings, including, –

(a) the transfer or vesting of property, rights, liabilities or obligations;

(b) the adjustment of contracts either by the discharge or reduction of any liability or obligation or otherwise;

(c) the creation, allotment, surrender or cancellation of any shares, stock or securities;

(d) the payment of compensation;

(e) the formation or winding up of an undertaking or the amendment of the memorandum and articles of association or any other instruments regulating the business of any undertaking;

(f) the extent to which and the circumstances in which provisions of the order affecting an undertaking may be altered by the undertaking and the registration thereof;

(g) the continuation, with such changes as may be necessary, of parties to any legal proceeding

(4) Where the Central Government makes, or intends to make, an order for any purpose mentioned in sub-section (3), it may, with a view to achieving that purpose, prohibit or restrict the doing of anything that might impede the operation or making of the order and may impose on any person such obligations as to the carrying on of any activities or the safeguarding of any assets, as it may think fit, or it may, by order, provide for the carrying on of any activities or safeguarding of any assets either by the appointment of a person to conduct, or supervise the conduct of, any such activities or in any other manner.

(5) Notwithstanding anything contained in any other law for the time being in force or in any contract or in any memorandum or articles of association, an officer of a company who ceases to hold office as such in consequence of the division of an undertaking or inter-connected undertakings shall not be entitled to claim any compensation for such cesser.

27A. POWER OF THE CENTRAL GOVERNMENT TO DIRECT SEVERANCE OF INTER-CONNECTION BETWEEN UNDERTAKINGS.

(1) Notwithstanding anything contained in this Act or in any other law for the time binge in force, the Commission may, –

(i) upon receiving a complaint of facts from any trade association or from any consumer or a registered consumers’ association, whether such consumer is a member of that consumers’ association or not, or

(ii) upon a reference made to it by the Central Government or a State Government, or

(iii) upon its own knowledge or information. If it is of opinion that the continuance of inter-connection of an undertaking (hereafter in this section referred to as the principal undertaking) with any other undertaking is detrimental to –

(a) the interests of the principal undertaking; or

(b) the future development of the principal undertaking; or

(c) the steady growth of the industry to which the principal undertaking pertains; or

(d) the public interest. Inquire 83 as to whether it is expedient in the public interest to make an order for the severance of such inter-connection on one or more of the grounds aforesaid, and the Commission may, after such hearings as it think fit, report to the Central Government its opinion thereon and shall, where it is of opinion that the severance of the inter-connection of the principal undertaking with any other undertaking ought to be made, include in its report a scheme with respect to such severance, providing therein for the matters specified in sub-section (2).

(2) Where, in any such report, the Commission recommends the severance of any such inter-connection, the scheme with respect thereto shall provide for the following matters, namely :-

(a) the manner in which, and the period within which, the severance of such inter-connection is to be effected;

(b) the appropriation or transfer of any share or other interest held by the owner in, or in relation to, the principal undertaking, in the other undertaking or the termination of any office or employment in such undertaking, which may be required for effecting the severance of such inter-connection;

(c) compensation, if any, payable for the severance of such interconnection; and

(d) such incidental, consequential and supplemental matters, as may be necessary to secure the severance of such inter-connection.

(3) If the Commission so recommends, the Central Government may, notwithstanding anything contained in any other law for the time being in force, by an order in writing, direct the severance of inter-connection between the undertakings, as far as may be, in accordance with the scheme included in the report of the Commission.

(4) Where the Central Government makes, or intends to make, an order for any purpose mentioned in sub-section (3), it may, with a view to achieving that purpose, prohibit or restrict the doing of anything that might impede the operation or making of the order and may impose on any person such obligations as to the carrying on of any activities or the safeguarding of any assets, as it may think fit, or it may, by order, provide for the carrying on of any activities or safeguarding of any assets either by the appointment of a person to conduct, or supervise the conduct of, any such activities or in any other manner.

(5) Notwithstanding anything contained in any other law for the time being in force or in any contract or in any memorandum or articles of association, an officer of a company who ceases to hold office as such in consequence of the severance of inter-connection between undertakings shall not be entitled to claim any compensation for such cesser.

Explanation : For the purposes of this section, “inter-connection” means inter-connection of an undertaking with any other undertaking in any manner specified in clause (g) of section 2. 82.

27B. MANNER IN WHICH ORDER MADE UNDER SECTION 27 OR SECTION 27A SHALL BE CARRIED OUT.

(1) Where in any report made by it, whether under section 27 or section 27A, the Commission recommends that the division of any trade of any undertaking or division of any undertaking or undertakings or of interconnected undertakings, or, as the case may be, the severance of interconnection between two or more undertakings, is to be effected by –

(a) the disinvestments by any person holding any share in the body corporate owning such undertaking or undertakings; or

(b) the sale of the whole or any part of such undertaking or undertakings, or, of any part of the assets thereof,

The Central Government may, in its order under the said section 27 or section 27A, specify that such disinvestments of shares or the sale of the whole or part of the undertaking or undertakings or of such assets, as the case may be, shall be effected within such period and in such one or more of the following methods as may be specified in such order, namely :-

(i) by directing the person holding such shares to make a public offer for the sale of such number of shares held by him in the body corporate owning the undertaking or undertakings, as may be specified in the order; or

(ii) by directing the body corporate owning the undertaking to make further issue of equity capital to the members of the public except to the person who is directed to disinvest the shares held by him in such body corporate; or

(iii) by directing that the sale of the undertaking or any part thereof, or, as the case may be, of such assets, be made by public auction; or

(iv) by such other prescribed method as the Central Government may specify :

Provided that the Central Government may extend on its own motion or on the application of the person concerned and for sufficient cause, the period specified as aforesaid in any order made by it under section 27 or section 27A by another order.

(2) Every order of the Central Government referred to in sub-section (1), shall have effect notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force or in the memorandum or articles of association of the body corporate owning the undertaking.

(3) Where any person who has been directed to do so by an order referred to in sub-section (1), omits or fails to disinvest any share or block of shares specified in the said order, the body corporate in which such shares are held shall not permit such person or his nominee or proxy to exercise any voting or other rights attaching to such share or block of shares. 84.

28. MATTERS TO BE CONSIDERED BY THE CENTRAL GOVERNMENT BEFORE ACCORDING APPROVAL. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991

29. OPPORTUNITY OF BEING HEARD. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30. TIME WITHIN WHICH ACTION SHOULD BE TAKEN. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30A. APPLICATION OF CHAPTER. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30B. RESTRICTIONS ON THE ACQUISITION OF CERTAIN SHARES. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30C. RESTRICTION ON TRANSFER OF SHARES. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30D. RESTRICTION ON THE TRANSFER OF SHARES OF FOREIGN COMPANIES. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30E. POWER OF THE CENTRAL GOVERNMENT TO DIRECT COMPANIES NOT TO GIVE EFFECT TO THE TRANSFER. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30F. TIME WITHIN WHICH REFUSAL TO BE COMMUNICATED. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

30G. NOTHING IN SECTIONS 30B TO 30E TO APPLY TO GOVERNMENT COMPANIES ETC. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

31. INVESTIGATION BY COMMISSION OF MONOPOLISTIC TRADE PRACTICES.

(1) Where it appears to the Central Government that the owners of one or more undertakings are indulging in any practice which is, or, may be, a monopolistic trade practice, or that, monopolistic trade practices prevail in respect of any goods or services, that Government may refer the matter to the Commission for an inquiry and the Commission shall, after such hearing as it thinks fit, report to the Central Government its findings thereon :

Provided that where the Commission receives any application from the Director General or any information, or comes to know, that the owner of any undertaking is, or, the owners of two or more undertakings are, indulging in any trade practice, which is, or may be, a monopolistic trade practice, or that monopolistic trade practices prevail in respect of any goods or services, it may on such application or on its own motion, and notwithstanding that no reference has been made to it by the Central Government under this sub-section, make an inquiry into the matter.

(2) If as a result of such inquiry, the Commission makes a finding to the effect that, having regard to the economic conditions prevailing in the country and to all other matters which appear in particular circumstances to be relevant, the trade practice operates or is likely to operate against the public interest, it shall make a report to the Central Government as to its findings thereon and on receipt of such report, the Central Government may, notwithstanding anything contained in any other law for the time being in force, pass such orders as it may think fit to remedy or prevent any mischief’s which result or may result from such trade practice.

(2A) If any such report contains a finding of the Commission to the effect that the owner of any undertaking is, or, the owners of two or more undertakings are, indulging in any monopolistic trade practice, or that monopolistic trade practice prevails in respect of any goods or services, and the Central Government is satisfied that it is necessary to take steps to remedy or prevent any mischief’s which result or may result from such monopolistic trade practice, and that such monopolistic trade practice does not fall within any of the exceptions specified in section 32, it may, notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, make such orders as it may think fit, –

(a) prohibiting the owner of the concerned undertaking or the owners of the concerned undertakings, as the case may be, from continuing to indulge in such monopolistic trade practice; or

(b) prohibiting the owners of any class of undertaking or undertakings generally, from continuing to indulge in any monopolistic trade practices in relation to such goods or services, and may also make such other orders as it may think fit to remedy or prevent any mischief which results, or may result, from the continuation of monopolistic trade practices in relation to the goods and services aforesaid.

(3) Without prejudice to the generality of the powers conferred by sub-section (2A), any order made by the Central Government under this section may also include an order –

(a) regulating the production, storage, supply, distribution or control of any goods by the undertaking or the control of supply of any service by it and fixing the terms of sale (including prices) or supply thereof;

(b) prohibiting the undertaking from resorting to any act or practice or from pursuing any commercial policy which prevents or lessens, or is likely to prevent or lessen, competition in the production, storage, supply or distribution of any goods or provision of any services;

(c) fixing standards for the goods used or produced by the undertaking;

(d) declaring unlawful, except to such extent and in such circumstances as may be provided by or under the order, the making or carrying out of any such agreement as may be specified or described in the order;

(e) requiring any party to any such agreement as may be so specified or described to determine the agreement within such time as may be so specified, either wholly or to such extend as may be so specified;

(f) regulating the profits which may be derived from the production, storage, supply, distribution or control of goods or from the provision of any service;

(g) regulating the quality of any goods or the provision of any service so that the standards thereof may not deteriorate.

(4) Whenever any order is made by the Central Government under sub-section (2A) prohibiting the owner of any undertaking or class of undertakings or undertakings generally from continuing to indulge in any monopolistic trade practice, –

(a) the owner of any undertaking or the owners of undertakings of any class, as the case may be, shall, within thirty days form the date of receipt of such order (or within such further time as the Central Government may, on sufficient cause being shown, allow) communicate to the Central Government his or their compliance with the order; and

(b) the Director General shall within ninety days from the date of such order (or from the expiry of the further time allowed by the Central Government) inform the Central Government, whether the order made by it has been complied with, and where the Director General has any reason to believe that any such order has been, or in being, contravened by the owner of any undertaking, he shall inform the Central Government about the particulars of the owner of such undertaking to, enable that Government to take such action, under this Act, as it may think fit.

32. MONOPOLISTIC TRADE PRACTICE TO BE DEEMED TO BE PREJUDICIAL TO THE PUBLIC INTEREST EXCEPT IN CERTAIN CASES.

For the purposes of this Act, every monopolistic trade practice shall be deemed to be prejudicial to the public interest, except where –

(a) such trade practice is expressly authorised by any enactment for the time being in force, or

(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.

33. REGISTRABLE AGREEMENTS RELATING TO RESTRICTIVE TRADE PRACTICES.

(1) Every agreement falling within one or more of the following categories shall be deemed, for the purpose of this Act, to be an agreement relating to restrictive trade practices and shall be subject to registration in accordance with the provisions of this Chapter, namely :-

(a) any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought;

(b) any agreement requiring a purchaser of goods, as a condition of such purchase, to purchaser some other goods;

(c) any agreement restricting in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person;

(d) any agreement to purchase or sell goods or to tender for the sale or purchase of goods only at prices or on terms or conditions agreed upon between the sellers or purchasers;

(e) any agreement to grant or allow concessions or benefits, including allowances, discounts, rebates or credit in connection with, or by reason of, dealings;

(f) any agreement to sell goods on condition that the prices to be charged on re-sale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that prices lower than those prices may be charged;

(g) any agreement to limit, restrict or withhold the output or supply of any goods or allocate any area or market for the disposal of the goods;

(h) any agreement not to employ or restrict the employment of any method, machinery or process in the manufacture of goods;

(i) any agreement for the exclusion from any trade association of any person carrying on or intending to carry on, in good faith the trade in relation to which the trade association is formed;

(j) any agreement to sell goods at such prices as would have the effect of eliminating competition or a competitor;

(ja) any agreement restricting in any manner, the class or number of wholesalers, producers or suppliers from whom any goods may be bought;

(jb) any agreement as to the bids which any of the parties thereto may offer at an auction for the sale of goods or any agreement whereby any party thereto agrees to abstain from bidding at any auction for the sale of goods;

(k) any agreement not hereinbefore referred to in this section which the Central Government may, by notification specify for the time being as being one relating to a restrictive trade practice within the meaning of this sub-section pursuant to any recommendation made by the Commission in this behalf;

(l) any agreement to enforce the carrying out of any such agreement as is referred to in this sub-section.

(2) The provisions of this section shall apply, so far as may be, in relation to agreements making provision for services as they apply in relation to agreements connected with the production, storage, supply, distribution or control of goods.

(3) No agreement falling within this section shall be subject to registration in accordance with the provisions of this Chapter if it is expressly authorised by or under any law for the time being in force or has the approval of the Central Government or if the Government is a party to such agreement.

34. REGISTRAR OF RESTRICTIVE TRADE AGREEMENTS. –

REPEALED BY THE MRTP (AMENDMENT) ACT, 1984, section 28 W.E.F. 1-8-1984.

35. REGISTRATION OF AGREEMENTS.

(1) The Central Government shall, by notification, specify a day hereinafter referred to as the appointed day on and from which every agreement falling within section 33 shall become registrable under this Act:

Provided that different days may be appointed for different categories of agreements.

(2) Within sixty days from the appointed day, in the case of an agreement existing on that day, and in the case of an agreement made after the appointed day, within sixty days from the making thereof, there shall be furnished to the Director General in respect of every agreement falling within section 33, the following particulars, namely :-

(a) the names of the persons who are parties to the agreement; and

(b) the whole of the terms of the agreement.

(3) If at any time after the agreement has been registered under this section, the agreement is varied (whether in respect of the parties or in respect of the terms thereof) or determined otherwise than by efflux of time, particulars of the variation or determination shall be furnished to the Director General within one month after the date of the variation or determination.

(4) The particulars to be furnished under this section in respect of an agreement shall be furnished –

(a) in so far as the agreement or any variation or determination of the agreement is made by an instrument in writing, by the production of the original or a true copy of that agreement; and

(b) in so far as the agreement or any variation or determination of the agreement is not so made, by the production of a memorandum in writing signed by the person by whom the particulars are furnished.

(5) The particulars to be furnished under this section shall be furnished by or on behalf of any person who is a party to the agreement or, as the case may be, was a party thereto immediately before its determination, and where the particulars are duly furnished by or on behalf of any such person, the provisions of this section shall be deemed to be complied with on the part of all such persons.

Explanation I : Where any agreement subject to registration under this section relates to the production, storage, supply, distribution or control of goods or the performance of any services in India and any party to the agreement carries on business in India, the agreement shall be deemed to be an agreement within the meaning of this section, notwithstanding that any other party to the agreement does not carry on business in India.

Explanation II : Where an agreement is made by a trade association the agreement for the purposes of this section shall be deemed to be made by all persons who are members of the association or represented thereon as if each such person were a party to the agreement.

Explanation III : Where specific recommendations, whether express or implied, are made by or on behalf of a trade association to its members, or to any class of its members, as to the action to be taken or not to be taken by them in relation to any matter affecting the trade conditions of those members, this section shall apply in relation to the agreement for the constitution of the association notwithstanding any provision to the contrary therein as if it contained a term by which each such member and any person represented on the association by any such member agreed with the association to comply with those recommendations and any subsequent recommendations affecting those recommendations.

36. KEEPING THE REGISTER.

(1) For the purpose of this Act, the Director General shall keep a register in the prescribed form and shall enter therein the prescribed particulars as regards agreements subject to registration.

(2) The Director General shall provide for the maintenance of a special section of the register for the entry or filing in that section of such particulars as the Commission may direct, being –

(a) particulars containing information, the publication of which would, in the opinion of the Commission, be contrary to the public interest;

(b) particulars containing information as to any matter being information the publication of which, in the opinion of the Commission, would substantially damage the legitimate business interest of any person.

(3) Any party to an agreement required to be registered under section 35 may apply to the Director General –

(i) for the agreement or any part of the agreement to be excluded form the provisions of this Chapter relating to the registration on the ground that the agreement or part thereof has no substantial economic significance; or

(ii) for inclusion of any provision of the agreement in the special section.

and the Director General shall dispose of the matter in conformity with any general or special directions issued by the Commission in this behalf.

36A. DEFINITION OF UNFAIR TRADE PRACTICE.

In this Part, unless the context otherwise requires “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely :-

(1) the practice of making any statement, whether orally or in writing or by visible representation which, –

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsorships, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof :

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii) makes to the public a representation in a form that purports to be –

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result.

if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleading the public concerning the price at which a product or like products or goods or services, have been, or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation : For the purposes of clause (1), a statement that is –

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public,

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation : For the purpose of clause (2), “bargain price” means –

(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears, or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(3) permits –

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole.

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale, or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

36B. INQUIRY INTO UNFAIR TRADE PRACTICES BY COMMISSION.

The Commission may inquire into any unfair trade practice, –

(a) upon receiving a complaint of facts which constitutes such practice from any trade association or from any consumer or a registered consumers’ association, whether such consumer is a member of that consumers’ association or not; or

(b) upon a reference made to it by the Central Government or a State Government; or

(c) upon an application made to it by the Director General; or

(d) upon its own knowledge or information.

36C. INVESTIGATION BY DIRECTOR GENERAL BEFORE AN ISSUE OF PROCESS IN CERTAIN CASES.

The Commission may, before issuing any process requiring the attendance of the person against whom an inquiry (other than an inquiry upon an application by the Director General) may be made under section 36B, by an order, require the Director General to make, or cause to be made, a preliminary investigation in such manner as it may direct and submit a report to the Commission, for the purpose of satisfying itself that the matter requires to be inquired into.

36D. POWERS WHICH MAY BE EXERCISED BY THE COMMISSION INQUIRING INTO AN UNFAIR TRADE PRACTICE.

(1) The Commission may inquire into any unfair trade practice which may come before it for inquiry and, if after such inquiry, it is of opinion that the practice is prejudicial to the public interest, or to the interest of any consumer or consumers generally, it may, by order direct that –

(a) the practice shall be discontinued or shall not be repeated;

(b) any agreement relating to such unfair trade practice shall be void or shall stand modified in respect thereof in such manner as may be specified in the order;

(c) any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published, as the case may be, in such manner as may be specified in the order.

(2) The Commission may, instead of making any order under this section, permit any party to carry on any trade practice, if it so applies and takes such steps within the time specified by the Commission as may be necessary to ensure that the trade practice is no longer prejudicial to the public interest or to the interest of any consumer or consumers generally, and, in any such case, if the Commission is satisfied that necessary steps have been taken within the time so specified, it may decide not to make any order under this section in respect of that trade practice.

(3) No order shall-be made under sub-section (1) in respect of any trade practice which is expressly authorised by any law for the time being in force.

36E. POWER RELATING TO RESTRICTIVE TRADE PRACTICES MAY BE EXERCISED OR PERFORMED IN RELATION TO UNFAIR TRADE PRACTICES.

Without prejudice to the provisions of section 12A, section 12B and section 36D, the Commission, Director General or any other person authorised in this behalf by the Commission or Director General, may exercise, or perform, in relation to any unfair trade practice, the same power of duty which it or he is empowered, or required, by or under this Act to exercise, or perform, in relation to a restrictive trade practice.

37. INVESTIGATION INTO RESTRICTIVE TRADE PRACTICES BY COMMISSION.

(1) The Commission may inquire into any restrictive trade practice, whether the agreement, if any, relating thereto has been registered under section 35 or not, which may come before it for inquiry and, if, after such inquiry it is of opinion that the practice is prejudicial to the public interest, the Commission may, by order, direct that-

(a) the practice shall be discontinued or shall not be repeated;

(b) the agreement relating thereto shall be void in respect of such restrictive trade practice or shall stand modified in respect thereof in such manner as may be specified in the order.

(2) The Commission may, instead of making any order under this section, permit the party to any restrictive trade practice, if he so applies, to take such steps within the time specified in this behalf by the Commission as may be necessary to ensure that the trade practice is no longer prejudicial to the public interest, and, in any such case, if the Commission is satisfied that the necessary steps have been taken within the time specified, it may decide not to make any order under this section in respect of that trade practice.

(3) No order shall be made under sub-section (1) in respect of –

(a) any agreement between buyers relating to goods which are bought by the buyers for consumption and not for ultimate resale whether in the same or different form, type or specie or as constituent of some other goods;

(b) a trade practice which is expressly authorised by any law for the time being in force.

(4) Notwithstanding anything contained in this Act, if the Commission, during the course of an inquiry under sub-section (1), finds that the owner of any undertaking is indulging in monopolistic trade practices, it may, after passing such orders under sub-section (1) or sub-section (2) with respect to the restrictive trade practices as it may consider necessary, submit the case along with its findings thereon to the Central Government for such action as that Government may take under section 31.

38. PRESUMPTION AS TO THE PUBLIC INTEREST.

(1) For the purposes of any proceedings before the Commission under section 37, a restrictive trade practice shall be deemed to be prejudicial to the public interest unless the Commission is satisfied of any one or more of the following circumstances, that is to say –

(a) that the restriction is reasonably necessary, having regard to the character of the goods to which it applies, to protect the public against injury (whether to persons or to premises) in connection with the consumption, installation or use of those goods;

(b) that the removal of the restriction would deny to the public as purchasers, consumers or users of any goods, other specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements or operations resulting there from;

(c) that 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,

(d) 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 party thereto who controls a preponderant part of the trade or business of 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;

(e) that, having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to have a serious and persistent adverse effect on the general level of unemployment in an area, or in areas taken together, in which a substantial proportion of the trade, or industry to which the agreement relates is situated;

(f) that, having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to cause a reduction in the volume or earnings of the export business which is substantial either in relation to the whole export business of India or in relation to the whole business (including export business) of the said trade or industry;

(g) that the restriction is reasonably required for purposes in connection with the maintenance of any other restriction accepted by the parties, whether under the same agreement or under any other agreement between them, being a restriction which is found by the Commission not to be contrary to the public interest upon grounds other than those specified in this paragraph, or has been so found in previous proceedings before the Commission;

(h) that the restriction does not directly or indirectly restrict or discourage competition to any material degree in any relevant trade or industry and is not likely to do so;

(i) that such restriction has been expressly authorised and approved by the Central Government;

(j) that such restriction is necessary to meet the requirements of the defence of India or any part thereof, or for the security of the State; or

(k) that the restriction in necessary to ensure the maintenance of supply of goods and services essential to the community.

and is further satisfied (in any such case) that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement (being purchasers, consumers or users of goods produced or sold by such parties, or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods) resulting or likely to result from the operation of the restriction.

(2) In this section, “purchasers”, “consumers” and “users” include person purchasing, consuming or using for the purpose or in the course of trade or business or for public purposes; and references in this section to any one person include references to any two or more persons being inter-connected undertakings or individuals carrying on business in partnership with each other.

39. SPECIAL CONDITIONS FOR AVOIDANCE OF CONDITIONS FOR MAINTAINING RESALE PRICES.

(1) Without prejudice to the provisions of this Act with respect to registration and to any of the powers of the Commission or of the Central Government under this Act, any term or condition of a contract for the sale of goods by a person to a wholesaler or retailer or any agreement between a person and a wholesaler or retailer relating to such sale shall be void insofar as it purports to establish or provide for the establishment of minimum prices to be charged on the resale of goods in India.

(2) After the commencement of this Act, no supplier of goods whether directly or through any person or association of persons acting on his behalf shall notify to dealers or otherwise publish on or in relation to any goods, a price stated or calculated to be understood as the minimum price which may be charged on the resale of the goods in India.

(3) This section shall apply to patented articles (including articles made by a patented process and articles made under any trade mark) as it applies to other goods and notice of any term or condition which is void by virtue of this section or which would be so void if included in a contract of sale or agreement relating to the sale of such article shall be of no effect for the purpose of limiting the right of a dealer to dispose of that article without infringement of the patent or trade mark, as the case may be :

Provided that nothing in this section shall affect the validity as between the parties and their successors, of any term or condition of a licence granted by the proprietor of a patent or trade mark or by a licensee of patent or trade mark or of any assignment of a patent or trade mark, so far as it regulates the prices at which articles produced or processed by the licensee or the assignee may be sold by him.

Explanation : In this section and in section 40, the term “supplier”, in relation to supply of any goods, means a person who supplies goods to any person for the ultimate purpose of resale and includes a wholesaler, and the term “dealer” includes a supplier and a retailer.

40. PROHIBITION OF OTHER MEASURES FOR MAINTAINING RESALE PRICES.

(1) Without prejudice to the provisions of this Act with respect to registration and to any of the powers of the Commission or of the Central Government under this Act, no supplier shall withhold supplies of any goods from any wholesaler or retailer seeking to obtain them for resale in India on the ground that the wholesaler or retailer –

(a) has sold in India at a price below resale price, goods obtained either directly or indirectly, from that supplier, or has supplied such goods, either directly or indirectly, to a third party who had done so; or

(b) is likely if the goods are supplied to him to sell them in India at a price below that price or supply them, either directly or indirectly, to a third party who would be likely to do so.

(2) Nothing contained in sub-section (1) shall render it unlawful for a supplier to withhold supplies of goods from any wholesaler or retailer or to cause or procure another supplier to do so if he has reasonable cause to believe that the wholesaler or the retailer, as the case may be, has been using as loss leaders any goods of the same or a similar description whether obtained from that supplier or not.

(3) A supplier of goods shall be deemed to be withholding supplies of goods from a dealer if he –

(a) refuses or fails to supply those goods to the order of the dealer;

(b) refuses of supply those goods to the dealer except at prices, or on terms or conditions as to credit, discount or other matters which are less favourable than those at or on which he normally supplies those goods to other dealers carrying on business in similar circumstances; or

(c) treats a dealer, in spite of a contract with such dealer for the supply of goods, in a manner less favourable than that in which he normally treats other dealers in respect of time or methods of delivery or other matters arising in the performance of the contract.

(4) A supplier shall not be deemed to be withholding supplies of goods on any of the ground mentioned in sub-section (1), if, in addition to that ground, he has any other ground which alone would entitle him to withhold such supplies.

Explanation I : “Resale price”, in relation to sale of goods of any description, means any price notified to the dealer or otherwise published by or on behalf of the supplier of the goods in question (whether lawfully or not) as the price or minimum price which is to be charged on, or is recommended as appropriate for, a sale of that description or any price prescribed or purporting to be prescribed for that purpose by any contract or agreement between the wholesaler or retailer and such supplier.

Explanation II : A wholesaler or retailer is said to use goods as loss leaders when he re-sells them otherwise than in a genuine seasonal or clearance sale not for the purpose of making a profit on the resale but for the purpose of attracting to the establishment at which the goods are sold, customers likely to purchase other goods or otherwise for the purpose of advertising his business.

41. POWER OF COMMISSION TO EXEMPT PARTICULAR CLASSES OF GOODS FROM SECTIONS 39 AND 40.

(1) The Commission may, on a reference made to it by the Director General or any other person interested, by order, direct that goods of any class specified in the order shall be exempt from the operation of sections 39 and 40 if the Commission is satisfied that in default of a system of maintained minimum resale prices applicable to those goods – 1

(a) the quality of goods available for sale or the varieties of goods so available would be substantially reduced to the detriment of the public as consumers or users of those goods, or

(b) the prices at which the goods are sold by retail would, in general and in the long run, be increased to the detriment of the public as such consumers or users, or

(c) any necessary services actually provided in connection with or after the sale of the goods by retail would cease to be so provided or would be substantially reduced to the detriment of the public as such consumers or users.

(2) On a reference under this section in respect of goods of any class which have been the subject of proceedings before the Commission under section 31, the Commission may treat as conclusive any evidence of fact made in those proceedings.

42. POWER OF DIRECTOR GENERAL TO OBTAIN INFORMATION.

(1) If the Director General has reasonable cause to believe that any person is a party to an agreement subject to registration under section 35, he may give notice to that person requiring him within such time, not less than thirty days, as may be specified in the notice, to notify to the Director General whether he is a party to any such agreement and, if so, to furnish to the Director General such particulars of the agreement as may be specified in the requisition.

(2) The Director General may give notice to any person by whom particulars are furnished under section 35 in respect of an agreement or to any other person being a party to the agreement requiring him to furnish to the Director General such further documents or information in his possession or control as the Director General may consider expedient for the purpose of, or in connection with, the registration of the agreement.

(3) Where a notice under this section is given to a trade association, the notice may be given to the secretary, manager or other similar officer of the association and for the purposes of this section any such association shall be treated as a party to an agreement to which members of the association, or persons represented on the association by those members, are parties as such.

(4) If the particulars called for under sub-section (1), or sub-section (2) are not furnished, the Commission may, on the application of the Director General-

(a) order the person or, as the case may be, the association to furnish those particulars to the Director General within such time as may be specified in the order, or

(b) authorise the Director General to treat the particulars contained in any document or information in his possession as the particulars relating to the agreement, or

(c) in case the Commission is satisfied that the failure to furnish the particulars is willful, make an order restraining wholly or partly the parties to the agreement from acting on such agreement and from making any other agreement to the like effect.

43. POWER TO CALL FOR INFORMATION.

Notwithstanding anything contained in any other law for the time being in force, the Central Government may, by a general or special order, call upon the owner of any undertaking to furnish to that Government periodically or as and when required any information concerning the activities carried on by the undertaking, the connection between it and any other undertaking, including such other information relating to its organisation, business, cost of production, conduct, trade practice or management, as may be prescribed to enable that Government to carry out the purposes of this Act.

44. POWER TO APPOINT INSPECTORS.

(1) The Central Government may, if it is of opinion that there are circumstances suggesting that an undertaking is indulging in any monopolistic or restrictive, or unfair, trade practice or is, in any way, trying to acquire any control over any dominant or inter-connected undertaking, appoint one or more Inspectors for making an investigation into the affairs of the undertaking.

(2) The provisions of section 240 and section 240A of the Companies Act, 1956 (1 of 1956), so far as may be, shall apply to an investigation made by an Inspector appointed under this section as they apply to an investigation made by the Inspector appointed under that Act.

45. PENALTY FOR CONTRAVENTION OF SECTION 21. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

46. PENALTY FOR CONTRAVENTION OF SECTION 27.

If any person contravenes the provisions of section 27, he shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to Rs. one lakh, or with both and where the offence is a continuing one, with a further fine which may extend to one thousand rupees for every day, after the first, during which such contravention continues.

47. PENALTY FOR CONTRAVENTION OF SECTION 25. –

OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991

48. PENALTY FOR FAILURE TO REGISTER AGREEMENTS.

(1) If any person fails, without any reasonable excuse, to register an agreement which is subject to registration under this Act, he shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees or with both, and where the offence is a continuing one, with a further fine which may extend to five hundred rupees for every day, after the first, during which such failure continues.

(2) Omitted by the MRTP (Amendment) Act, 1991, section 20, w.e.f. 27-9-1991.

48A. PENALTY FOR CONTRAVENTION OF ORDER MADE UNDER SECTION 27B OR FOR POSSESSION OF PROPERTY SOLD TO ANY PERSON UNDER SECTION 27B.

Any person or body corporate who or which, –

(a) being required by any order of the Central Government referred to in sub-section (1) of section 27B to effect disinvestments of any shares or sale of the whole or any part of any undertaking or undertakings by any method referred to in that sub-section, omits or fails to do so; or

(b) having in his possession, custody or control any property or assets or any part thereof which have been sold to any person in pursuance of an order of the Central Government referred to in sub-section (1) of section 27B (hereinafter in this section referred to as the “purchaser”), wrongfully withholds such property, assets or part thereof from the purchaser; or

(c) wrongfully obtains possession of any property, assets or any part thereof or retains any property, assets or any part thereof, which have been sole in pursuance of an order of the Central Government referred to in sub-section (1) of section 27B; or

(d) withholds or fails to furnish to the purchaser, any document in his possession, custody or control relating to the property, or any part or assets thereof, which have been sold in pursuance of an order of the Central Government referred to in sub-section (1) of section 27B; or

(e) fails to deliver to the purchaser the property, or any part or assets thereof which have been sold in pursuance of an order of the Central Government referred to in sub-section (1) of section 27B, or any books or account, registers and other documents in his possession, custody or control relating to such property, or nay part or assets thereof; or

(f) wrongfully removes or destroys any property or assets which have been sold in pursuance of an order of the Central Government referred to in sub-section (1) of section 27B; or

(g) prefers any claim, in relation to the property, or any part or assets thereof which have been sold in pursuance of an order of the Central Government referred to in sub-section (1) of section 27B, which he knows, or has reason to believe, to be false or grossly inaccurate, shall be punishable with imprisonment for a term which may extend to two years and also with fine which may extend to ten thousand rupees. 127.

48B. PENALTY FOR CONTRAVENTION OF SECTION 27B.

(1) Every person who exercises any voting right, in respect of any share in contravention of any order of the Central Government referred to in sub-section (1) of section 27B shall be punishable with imprisonment for a term which may extend to five years, and shall also be liable to fine.

(2) If any company gives effect to any voting or other right exercised in relation to any share held in contravention of an order or the Central Government referred to in sub-section (1) of section 27B, the company shall be Punishable with fine which may extend to five thousand rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both. 130.

48C. PENALTY FOR CONTRAVENTION OF ORDER MADE BY COMMISSION RELATING TO UNFAIR TRADE PRACTICES.

If any person contravenes any order made by the Commission under section 36D, he shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which may extend to ten lakh rupees:

Provided that the Court may, for reasons to be recorded in writing, impose a sentence of imprisonment for a term lesser than the minimum term specified in this section. 131.

49. PENALTY FOR OFFENCES IN RELATION TO FURNISHING OF INFORMATION.

(1) If any person fails, without any reasonable excuse, to produce any books or papers, or to furnish any information, required by the Director General under section 11, or to furnish any information required under section 43 or to comply with any notice duly given to him under section 42, he shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to two thousand rupees, or with both, and where the offence is a continuing one, with a further fine which may extend to one hundred rupees for every day, after the first, during which such failure continues.

(2) If any person, who furnishes or is required to furnish any particulars, documents or any information –

(a) makes any statement or furnishes any document which he knows or has reason to believe to be false in any material particular; or

(b) omits to state any material fact knowing it to be material; or

(c) willfully alters, suppresses or destroys any document which is required to be furnished as aforesaid, He shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.

50. PENALTY FOR OFFENCES IN RELATION TO ORDERS UNDER THE ACT.

(1) A person, who is deemed under section 13 to be guilty of an offence under this Act, shall be punishable with imprisonment for term which may extend to three years, or with fine which may extend to fifty thousand rupees, or with both, and where the offence is a continuing one, with a further fine which may extend to five thousand rupees for every day, after the first, during which such contravention continues.

(2) If any person contravenes, without any reasonable excuse, any order made by the Central Government under section 31 or any order made by the Commission under section 37, he shall be punishable with imprisonment for a term which shall not be less than, –

(a) in the case of the first offence, six months but not more than three years, and

(b) in the case of any second or subsequent offence in relation to the goods or services in respect of which the first offence was committed, two years but not more than seven years, and, in either case, where the contravention is a continuing one, also with fine which may extend to five thousand rupees for every day, after the first, during which such contravention continues :

Provided that the Court may, for reasons to be recorded in writing, impose a sentence of imprisonment for a term lesser than the minimum term specified in this sub-section.

(3) If any person carries on any trade practice which is prohibited by this Act, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both, and where the offence is a continuing one, with a further fine which may extend to five hundred rupees for every day, after the first, during which such contravention continues.

51. PENALTY FOR OFFENCES IN RELATION TO RESALE PRICE MAINTENANCE.

If any person contravenes the provisions of section 39 or section 40, he shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to five thousand rupees, or with both.

52. PENALTY FOR WRONGFUL DISCLOSURE OF INFORMATION.

If any person discloses an information in contravention of section 60, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.

52A. PENALTY FOR CONTRAVENTION OF ANY CONDITION OR RESTRICTION, ETC.

If any person contravenes, without any reasonable excuse, any condition or restriction subject to which any approval, sanction, direction or exemption in relation to any matter has been accorded, given, made or granted under this Act, he shall be punishable with fine which may extend to one thousand rupees and where the contravention is a continuing one, with a further fine which may extend to one hundred rupees for every day, after the first, during which such contravention continues.

52B. PENALTY FOR MAKING FALSE STATEMENT IN APPLICATION, RETURN, ETC.

If in any application, return, report, certificate, balance sheet, prospectus, statement or other document made, submitted, furnished or produced for the purpose of any provision of this Act, any person makes a statement, –

(a) which is false in any material particular, knowing it to be false, or

(b) which omits to state any material fact, knowing it to be material,

He shall be punishable with imprisonment for a term which may extend to two years and shall also be liable to fine.

53. OFFENCES BY COMPANIES.

(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation : For the purposes of this section –

(a) “company” means a body corporate and includes a firm or other association of individuals; and

(b) “director”, in relation to a firm, means a partner in the firm.

54. POWER OF CENTRAL GOVERNMENT TO IMPOSE CONDITIONS, LIMITATIONS AND RESTRICTIONS ON APPROVALS, ETC., GIVEN UNDER THE ACT.

(1) The Central Government may, while –

(a) according any approval, sanction, permission, confirmation or recognition, or

(b) giving any direction or issuing any order, or

(c) granting any exemption.

Under this Act in relation to any matter, impose such conditions, limitations or restrictions as it may think fit.

(2) Omitted by the MRTP (Amendment) Act, 1991, section 24, w.e.f. 27-9-1991.

(3) If any condition, limitation or restriction imposed by the Central Government under sub-section (1) is contravened, the Central Government may rescind or withdraw the approval, sanction, permission, confirmation, recognition, direction, order or exemption made or granted by it.

55. APPEALS.

Any person aggrieved by any decision on any question referred to in clause (a), clause (b) or clause (c) of section 2A, or any order made by the Central Government under Chapter III or Chapter IV, or, as the case may be, or the Commission under section 12A or section 13 or section 36D or section 37, may, within sixty days from the date of the order, prefer an appeal to the Supreme Court on one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908 (5 of 1908).

56. JURISDICTION OF COURTS TO TRY OFFENCES.

No Court inferior to that of a Court of Session shall try any offence under this Act.

57. COGNIZANCE OF OFFENCES.

No Court shall take cognizance of any offence punishable under this Act except on a report in writing of the facts constituting such offence made by a person who is a public servant as defined in section 21 of the Indian Penal Code 1860 (45 of 1860).

58. MAGISTRATES’ POWER TO IMPOSE ENHANCED PENALTIES. –

REPEALED BY THE MRTP (AMENDMENT) ACT, 1984, section 46 W.E.F. 1-8-1984.

59. PROTECTION REGARDING STATEMENTS MADE TO THE COMMISSION.

No statement made by a person in the course of giving evidence before the Commission shall subject him to, or be used against him in, any civil or criminal proceeding except a prosecution for giving false evidence by such statements :

Provided that the Statement –

(a) is made in respect to a question which he is required by the Commission to answer; and

(b) is relevant to the subject-matter of the inquiry.

60. RESTRICTION ON DISCLOSURE OF INFORMATION.

(1) No information relating to any undertaking being an information which has been obtained by or on behalf of the Commission for the purposes of this Act, shall, without the previous permission in writing of the owner for the time being of the undertaking, be disclosed otherwise than in compliance with or for the purposes of this Act.

(2) Nothing contained in sub-section (1) shall apply to a disclosure of an information made for the purpose of any legal proceeding pursuant to this Act or of any criminal proceeding which may be taken, whether pursuant to this Act or otherwise, or for the purposes of any report relating to any such proceeding.

(3) The provisions of sub-section (2) relating to the disclosure of information shall not extend to the disclosure of the source of such information, except where the disclosure of such source is required by any Court, Tribunal or other authority.

61. POWER OF THE CENTRAL GOVERNMENT TO REQUIRE THE COMMISSION TO SUBMIT A REPORT.

The Central Government may at any time require the Commission to submit to it a report on the general effect on the public interest of such trade practices as, in the opinion of that Government, either constitute or contribute to monopolistic or restrictive or unfair trade practices or concentration of economic power to the common detriment.

62. REPORTS OF THE COMMISSION TO BE PLACED BEFORE PARLIAMENT.

The Central Government shall cause to be laid before both Houses of Parliament an annual report, and every report which may be submitted to it by the Commission from time to time, pertaining to the execution of the provisions of this Act.

63. MEMBERS, ETC., TO BE PUBLIC SERVANTS.

Every member of the Commission, Director General, and every member of the staff of the Commission, and of the Director General, shall be deemed, while acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the India Penal Code 1860 (45 of 1860).

64. PROTECTION OF ACTION TAKEN IN GOOD FAITH.

(1) No suit, prosecution or other legal proceedings shall lie against the Commission or any member, officer or servants of the Commission, the Director General or any member of the staff of the Director General in respect of anything which is in good faith done or intended to be done under this Act.

(2) No suit shall be maintainable in any civil court against the Central Government or any officer or employee of that Government for any damage caused by anything done under, or in pursuance of any provisions of this Act.

65. INSPECTION OF AND EXTRACTS FROM, THE REGISTER.

(1) The register, other than the special section, shall be open to public inspection during such hours and subject to the payment of such fees, not exceeding rupees twenty-five, as may be prescribed.

(2) Any person may upon the payment of such fee, not exceeding rupee one, for every one hundred words, as may be prescribed, require the Director General to supply to him a copy of, or extract from, any particulars entered or filed in the register, other than the special section, certified by the Director General to be a true copy or extract.

(3) A copy of, or extract from, any document entered or filed in the register certified under the hand of the Director General or any officer authorised to act in this behalf shall, in all legal proceedings. be admissible in evidence as of equal validity with the original.

66. POWER TO MAKE REGULATIONS.

(1) The Commission may by notification make regulations for the efficient performance of its functions under this Act.

(2) In particular, and without prejudice to the generality of the foregoing provisions, such regulations may provide for all or any of the following matters, namely :-

(a) the conditions of service, as approved by the Central Government, of persons appointed by the Commission;

(b) the issue of the processes to Government and to other persons and the manner in which they may be served;

(c) the manner in which the special section of the registered shall be maintained and the particulars to be entered or filed therein;

(d) Omitted by the MRTP (Amendment) Act, 1984, w.e.f. 1-8-1984;

(e) the payment of costs of any proceedings before the Commission by the parties concerned and the general procedure and conduct of the business of the Commission;

(f) any other matter for which regulations are required to be, or may be, made under this Act.

(3) The Central Government shall cause every regulation made under this section to be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation should not be made, the regulations shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.

67. POWER TO MAKE RULES.

(1) The Central Government may, by notification, make rules to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :-

(a) the form and manner in which notices may be given or applications may be made to it under this Act and the fees payable therefore;

(ab) the form and the manner in which an application for recognition shall be made under clause (n) of section 2;

(ac) Omitted by the MRTP (Amendment) Act 1991, w.e.f. 27-9-1991.

(b) the particulars to be furnished under this Act and the form and manner in which and the intervals within which they may be furnished;

(ba) Omitted by the MRTP (Amendment) Act, 1991, w.e.f. 27-9-1991.

(c) the conditions of service of members of the Commission and the Director General;

(ca) the duties and functions of the Director General;

(d) the places and the manner in which the register shall be maintained and the particulars to be entered therein;

(da) the manner in which every authenticated copy of any order made by the Commission in respect of any restrictive, or unfair, trade practice shall be recorded;

(e) the fees payable for inspection of the register and for obtaining certified copies of particulars from the register;

(f) the travelling and other expenses payable to persons summoned by the Commission to appear before it;

(g) Omitted by the MRTP (Amendment) Act, 1991, w.e.f. 27-9-1991.

(h) any other matter which is required to be, or may be, prescribed.

(2A) Any rule made under clause (c) of sub-section (2) in relation to the conditions of service of the members of the Commission may be made retrospectively from a date not earlier than the 1st day of January, 1986, so, however, that such rule shall not prejudicially affect the interests of any such member.

(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Sch. Part I- 162 THE SCHEDULE

[See section 30C]

I OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

Sch. Part II- THE SCHEDULE

[See section 30C]

II OMITTED BY THE MRTP (AMENDMENT) ACT, 1991, W.E.F. 27-9-1991.

Bydeb

The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980

[Act No. 7 of 1980]

[12th February, 1980]

An Act to provide for Retention in certain cases for the purpose of prevention of’ black-marketing and maintenance of supplies of commodities essential to the community, and for matters connected therewith.

Be it enacted by parliament in the Thirty-first Year of the Republic of India as follows:

Section 1. Short title, extent and commencement

(1) This Act may be called the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980.

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

(3) It shall be deemed to have come into force on the 5th day of October 1979.

Section 2. Definitions

In this Act, unless the context otherwise requires,

(a) “Appropriate Government” means, as respects a detention order made by the Central Government or by an officer of the Central Government or a person detained under such order, the Central Government, and as respects a detention order made by a State Government or by an officer of a State Government or as respects a person detained under such order, the state Government (b) “Detention order” means an order made under Section 3;

(c) “State Government” in relation to a Union Territory, means the administrator thereof.

Section 3. Power to make orders detaining certain persons

(1) The Central Government or a State Government or any officer of the Central Government, not below the rank of a Joint Secretary to that Government specially empowered for the purposes of this section by that Government, or any officer of a State Government, not below the rank of a Secretary to that Government specially empowered for the purposes of this section by that Government, man, if satisfied, with respect to any person that with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies of commodities essential to the community it is necessary so to do, make an order directing that such person he detained.

Explanation. -For the purposes of this sub section, the expression “acting in any manner prejudicial to the maintenance of supplies of commodities essential to the community” means-

(a) Committing or instigating any person to commit any offence punishable under the Essential Commodities Act, 1955, or under any other law for the time being in force relating to the control of the production, supply or distribution of, or trade and commerce in, any commodity essential to the community; or

(b) Dealing in any commodity-

(i) Which is an essential commodity as defined in the Essential Commodities Act,

(ii) With respect to which provisions have been made in any such other law as is referred to in Clause (a),

With a view to making gain in any manner which may directly or indirectly defeat or tend to defeat the provisions of that Act or other law aforesaid.

(2) Any of the following officers, namely-

(a) District Magistrates;

(b) Commissioners of Police, wherever they have been appointed,

May also, if satisfied as provided in subsection (1), exercise the powers conferred by the said sub-section.

(3) When any order is made under this section by an officer mentioned in subsection (2), he shall forthwith report the fact to the State Government to which he is subordinate together with the grounds on which the order has been made and such other particulars as in his opinion have a bearing on the matter, and, no such order shall remain in force for more than twelve days after the making thereof unless in the meantime it has been approved by the State Government:

Provided that where under Section 8 the grounds of detention are communicated by the authority making the order after five days but not later than ten days from the (late of detention, this sub-section shall apply subject to the modification that for the words “twelve days”, the words “fifteen days” shall be substituted.

(4) When any order is made or approved by the State Government under this section or when any order is made under this section by an officer of the State Government not below the rank of Secretary to that Government specially empowered under subsection (1), the State Government shall, within seven days report the fact to the Central Government together with the grounds on which the order has been made and such other particulars as, in the opinion of the State Government, have a bearing on the necessity for the order.

Section 4. Execution of detention order

A detention order may be executed at any place in India in the manner provided for the execution of warrants of arrest under the Code of Criminal Procedure, 1973.

Section 5. Power to regulate place and conditions of detention

Every person in respect of whom a detention order has been made shall be liable-

(a) To be detained in such place and under such conditions, including conditions as to maintenance, discipline and punishment for breaches of discipline, as the appropriate Government may, by general or special order, specify; and

(b) To be removed from one place of detention to another place of detention, whether within the same State or in another State, by order of the appropriate Government:

Provided that no order shall be made by a State Government under Clause (b) for the removal of a person from one State to another State except with the consent of the Government of that other State.

Section 6. Detention orders not to be invalid or inoperative on certain grounds

No detention order shall be invalid or inoperative merely by reason

(a) That the person to be detained thereunder is outside the limits of the territorial jurisdiction of the Government or officer making the order, or that the place of detention of such person is outside the said limits.

Section 7. Powers in relation to absconding persons

(1) If 1[the appropriate Government or an officer mentioned in subsection (2) of Section 3, as the case may be] has reason to believe that of person in respect of whom a detention order has been made has absconded or is concealing himself so that the order cannot be executed, that Government 2[or officer] may-

(a) Make a report in writing of the fact to a Metropolitan Magistrate or a Judicial Magistrate of the first class having jurisdiction in the place where the said person ordinarily resides; and thereupon the provisions of Sections 82, 83, 84 and 85 of the Code of Criminal Procedure, 1973 (2 of 1974), shall apply in respect of the said person and his property as if the order directing that he detained were a warrant issued by the Magistrate;

(b) By order notified in the Official Gazette, direct the said person to appear before such officer, at such place and within such period as may be specified in the order; and if the said person fails to comply with such direction he shall, unless lie proves that it was not possible for him to comply therewith and that had within the period specified in the order informed the officer mentioned in the order of the reason which rendered compliance therewith impossible and of his whereabouts. Be Punishable with imprisonment for a term which may extend to one year or with fine or with both.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, every offence under Clause (b) of subsection –(l) shall be cognizable.

——————–

1. Subs. by Act No. 27 of 1982 (w.e.f. 5-8-1982).

2. Ins by Act No. 27 of 1982 (w.e.f. 5-8-1982).

Section 8. Grounds of order of detention to be disclosed to person affected by the order

(1) When a person is detained in pursuance of a detention order, the authority making the order shall, as soon as may be but ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing, not later than ten days, from the date of detention, communicate to him the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order to the appropriate Government.

(2) Nothing in sub-section (1) shall require the authority to disclose facts which it considers to be against the public interest to disclose.

Section 9. Constitution of Advisory Boards

(1) The Central Government and each State Government shall, whenever necessary, constitute one or more Advisory Boards for the purpose of this Act.

(2) Every such Board shall consist of three persons who are, or have been, or are qualified to be appointed as Judge of a High Court, and such persons shall be appointed by the appropriate Government.

(3) The appropriate Government shall appoint one of the members of the Advisory Board who is, or has been, a Judge of a High Court, to be its chairman, and it the case of a Union territory the appointment to the Advisory Board of any person who is Judge of the High Court of a State shall be with the, previous approval of the State Government concerned,

Section 10. Reference to Advisory Boards

Save as otherwise express in, provided in this Act, in every case where a detention order has been made under this Act, the appropriate Government shall, within three weeks from the date of detention of a person under the order, place before the Advisory Board constituted by it under Section 9, the grounds of which the order has been made and the representation, if any, made by the person affected by the order, and in case where the order his been made by all officer referred to in subsection (2) of Section 3, also the report by such officer under sub-section (3) of that section.

Section 11. Procedure of Advisory Boards

(1) The Advisory Boards shall, after considering the materials placed before it and after calling for such further information as it may deem necessary from the appropriate Government or from any person called for the purpose through the appropriate Government or from the person concerned, and if, in any particular case, it considers it essential so to do or if the person concerned desires to be heard, after hearing him in person, submits its report to the appropriate Government within seven weeks from the date of detention of the person concerned.

(2) The report of the Advisory Board shall specify in a separate part thereof the opinion of the Advisory Board as to whether or not there is sufficient cause for the detention of the person concerned.

(3) When there is a difference of opinion among are members forming the Advisory Board, the opinion of the majority of such members shall be deemed to be the opinion of the Board.

(4) Nothing in this section shall entitle any person against whom a detention order has been made to appear by any legal practitioner in any matter connected with the reference to the Advisory Board, and the proceedings of the Advisory Board, and its report, excepting that part of the report in which the opinion of the Advisory Board is specified, shall be confidential.

Section 12. Action upon the report of Advisory Board

(1) In any case where the Advisory Board has reported that there is in its opinion Sufficient cause for the detention of a person, the appropriate Government may confirm the detention order and continue the detention of the person concerned for Such period as it thinks fit.

(2) In any case where the Advisory Board has reported that there is in its opinion no sufficient cause for the detention of the person concerned, the appropriate Government shall revoke the detention order and cause the person to he released forthwith..

Section 13. Maximum period of detention

The maximum period for which any person may he detained in pursuance of any detention order which has been confirmed under Section12, shall be six months from the date of detention:

Provided that nothing contained in this section shall affect the power of the appropriate Government to revoke or modify the detention order at any earlier time.

Section 14. Revocation of detention orders

(1) Without prejudice to the provisions of Section 21 of the General Clauses Act, 1897, a detention order may, at any time, be revoked or modified-

(a) Notwithstanding that the order has been made by an officer of a State Government, by that State Government or by the Central Government;

(b) Notwithstanding that the order has been made by an officer of the Central Government or by State Government, or by the Central Government.

(2) The revocation or expiry of a detention order shall not bar the making of a fresh detention order under Section 3 against the same person in any case where fresh facts have arisen after the date of revocation or expiry on which the Central Government or a State Government or an officer, as the case may be, is satisfied that such an order should be made.

Section 15. Temporary release of persons detained

(1) The appropriate Government may, at any time. direct that any person detained in pursuance of a detention order may be released for any specified period either without conditions or upon such conditions, specified in the direction as that person accepts and may, it any time, cancel his release.

(2) In directing, the release of any person subsection (1), the appropriate Government may require him to enter into a with or without sureties for the due observance of the conditions specified in the direction.

(3) Any person released under subsection (1) shall Surrender himself at the time and place, and to the authority, specified in the order directing his release or cancelling his release, as the case may be.

(4) If any person fail without sufficient cause to surrender himself in the manner specified in subsection (3), he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with, both,

(5) If any person released under sub-section (1) fails to fulfil any of the conditions imposed upon him, under the said subsection or in the bond entered into by him, the bond shall be declared to be forfeited and any person bound thereby shall be liable to pay the penalty thereof.

Section 16. Protection of action taken in good faith

No suit or other legal proceeding shall lie against the Central Government or a State Government and no suit, prosecution or other legal proceeding shall lie against any person, for anything in good faith done or intended to be done in pursuance of this Act.

Section 17. Repeal and saving

(1) The Prevention of Blackmarketing and Maintenance of supplies of Essential Commodities Ordinance, 1979 (10 of 1979), is hereby repealed.

(2) Notwithstanding such repeal anything done or any action taken under the Ordinance so repealed shall be deemed to have been done or taken under the corresponding revisions of this Act.

Bydeb

Jammu and Kashmir Consumer Protection Act 1987

1. Short title, extent, commencement and application

 (1) This Act may be called the Jammu and Kashmir Consumer Protection Act, 1987.

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

 (3) It shall come into force on such date as the Government may, by notification in the Government Gazette, appoint and different dates may be appointed for different provisions of this Act.

 (4) Save as otherwise expressly provided by the Government by notification, in the Government Gazette, this Act shall apply to all goods and services.

2. Definitions

In this Act, unless the context otherwise requires,.

(a) “appropriate laboratory” means a laboratory or organisation recognised by the Government and includes any such laboratory or organisation established by or under any law for the time being in force, which is maintained, financed or aided by the Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect.

(b) “complainant” means.

(i) a consumer ; or

(ii) any voluntary consumer association registered under the Companies Act 1956 ; or

(iii) the Government who makes a complaint ;

(c) “complaint” means an allegation in writing made by a complainant that.

(i) as a result of any unfair trade practice adopted by any trader the complainant has suffered loss or damage ;

(ii) the goods mentioned in the complaint suffer from one or more defects ;

(iii) that services mentioned in the complaint suffer from deficiency in any respect ;

 (iv) a trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods ;

 with a view to obtaining any relief provided by or under this Act ;

 (d) “consumer” means any person who.

 (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised, or partly paid or partly promised or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose ; or

(ii) hires any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires the services for consideration paid or promised, or partly paid and partly promised or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person ;

(e) “consumer dispute” means a dispute where the person against whom a complaint has been made, denies of disputes the allegations contained in the complaint ;

(f) “defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standards which is required to be maintained by or under any law for the time being in force as is claimed by the trader in any manner whatsoever in relation to any goods ;

(g) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under in any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service ;

(h) “Divisional Forum” means a Consumer Disputes Redressal Forum established under clause (a) of Section 7 ;

(i) “goods” means goods as defined in the Jammu and Kashmir Sale of Goods Act, Samvat 1996;

(j) “Government” means the Government of Jammu and Kashmir ;

(k) “manufacture” means a person who,.

(i) makes or manufactures any goods or parts thereof, or

(ii) does not make or manufactures any goods but assembles parts thereof made or manufactured by others and claims the end product to be goods manufactured by himself,

(iii) puts or causes to be put his own mark on any goods made or manufactures by any other manufacturer and claims such goods to be goods made or manufactured by himself.

Explanation. Where a manufacturer despatches any goods or part thereof to any branch office maintained by him, such branch office shall not be deemed to be the manufacturer even though the parts so despatched to it are assembled at such branch office and are sold or distributed from such branch office ;

(l) “notification” means a notification published in the Government Gazette ;

(m) “person” includes,.

(i) a firm whether registered or not ;

(ii) a Hindu undivided family ;

(iii) a co-operative society ;

(iv) every other association of persons whether registered under the Jammu and Kashmir Societies Registration Act, Samvat 1998 or not ;

(n) “prescribed” means prescribed by rules made by the Government under this Act ;

(o) “service” means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, entertainment, amusement or the purveying a news or other information, under a contract of personal service;

(p) “State Commission” means a Consumer Disputes Redressal Commission established in the State under clause (b) of Section 7 ;

(q) “trader” in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and when such goods are sold or distributed in package form, includes the packer thereof ;

(r) “unfair trade practices” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any services, adopts one or more of the following practices and thereby causes loss or injury to the consumers of such goods or services whether by eliminating or restricting competition or otherwise namely :

(1) the practices of making any statement, whether orally or by visible representation which :

(i) falsely represents that the goods are of a particular standard, quality, grade, composition, style or model ;

(ii) falsely represents that the services are of a particular standard, quality or grade ;

(iii) falsely represents any rebuilt, second hand, renovated, reconditioned or old goods as new goods ;

(iv) represents that the goods or services, have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have ;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have ;

(vi) makes a false misleading representation concerning the need for, or the usefulness of any goods or services ;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of a product or of any goods that is not based on an adequate or proper test there :

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test ; the burden of proof of such defence shall lie on the person raising such defence ;

(viii) makes to the public a representation in a form that purports to be :

(i) a warranty or guarantee of a product or of any goods or services ;

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeal or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out ;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been, or are ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in, the relevant market unless it is clearly specified to be the price at which the product has been sold services have been, provided by the person by whom or on whose behalf the representation is made ;

(x) gives false or misleading facts disparaging the goods, services or trade of another person ;

Explanation. For the purposes of clause (1), a statement that is :

(a) expressed on an article offered or displayed for sale, or on its wrapper or container ; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale ; or

(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained.

(2)permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in, which the business is carried and size of business and the nature of the advertisement.

Explanation. For the purpose of clause (2), “bargain price” means.

(a) a price that is stated in advertisement to be bargain price, by reference to an ordinary price or otherwise ; or

(b) a price that a person who reads, hears, or sees the advertisement, would reasonably understand to be a bargain price having regard to the practices at which the product advertised or like product are ordinarily sold ;

(3) Permits.

(a) the offering of gifts, prizes or other terms with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole ;

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting directly or indirectly, the sale, use or supply or any product or any business interest ;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, construction furnishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods.

(5) permits the boarding or destruction of goods, or refuses to sell the goods or to make them available for sale, or to provide any service, if such boarding or destruction or refusal raises or tends to raise to or is intended to raise the cost of those or other similar goods or services

3. Act not in derogation of any other law

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

4. The State Consumer Protection Council.

The Government may, by notification in the Government Gazette establish with effect from such date as it may specify in such notification a Council to be known as the State Consumer Protection Council (hereinafter referred to as the State Council).

(2) The State Council shall consist of the following members, namely :.

(a) the Minister-in-charge of the Department of Food and Civil Supplies in the Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed.

5. Procedure for meetings of the State Council.

(1) The State Council shall meet as and when necessary but not less than three meetings of the Council shall be held every year.

(2) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of the its business as may be prescribed.

6. Objects of the State Council.

The objects of the State Council shall be to promote and protect the rights of the consumers such as,

(a) the right to be protected against the marketing of goods which are hazardous to life and property ;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair trade practices ;

(c) the right to be assured, wherever possible, access to variety of goods at competitive prices

(d) the right to be heard and to be assured that consumers interest will receive due consideration at appropriate forums ;

(e) the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers ;

(f) right to consumer education.

7. Establishment of Consumer Disputes Redressal Agencies.

There shall be established for the purposes of this Act, the following agencies, namely :.

(a) a Consumer Disputes Redressal Forum to be known as the ‘Divisional Forum’ established by the Government in each division of the State ;

(b) a Consumer Disputes Redressal Commission to be known as the “State Commission” established by the Government

8. Composition of the Divisional Forum.

Each Divisional Forum shall consist of.

(a) a person who is or has been or is qualified to be a District Judge to be nominated by the Government to be its President ;

(b) a person of eminence in the field of education, trade or commerce ;

(c) a lady social worker.

(2) Every member of the Divisional Forum shall hold office for a term of five years or up to the age of 62 years whichever is earlier, and shall not be eligible for re-appointment

Provided that a member may resign his office in writing under his hand addressed to the Government on such resignation being accepted, his office shall become vacant and may be filled by the appointment of person possessing any of the qualification mentioned in sub-section (1) in relation to the category of the member who has resigned.

(3) The salary or honorarium and other allowances payable to, and the other terms and conditions of service of the members of Divisional Forum shall be such as may be prescribed by the Government.

9. Jurisdiction of the Divisional Forum.

(1) Subject to the other provisions of this Act, the Divisional Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation if any, claimed is less than rupees fifty thousand.

(2) A complaint shall be instituted in a Divisional Forum within the local limits of whose jurisdiction :.

(a) the opposite party or each of the opposite parties, where there are more than one at the time of the institution of the complaint, actually and voluntarily resides or carries on business, or personally works for gain, or

(b) any of. the opposite parties, where there are more than one, at the time the institution of the complaint, actually and voluntarily resides or carries on business, or personally works for gain, provided that in such case either the permission of the Divisional Forum is given of the opposite parties who do not reside or, carry on business, or personally work for gain, as the case may be, acquiesce in such institution, or

(c) the cause of action, wholly or in part arises.

10. Manner in which complaint shall be made.

A complaint in relation to any goods sold or delivered or any service provided may be filed with a Divisional Forum by.

(a) the consumer to whom such goods are sold or delivered or such service provided ;

(b) any recognised consumer association, whether the consumer to whom the goods sold or delivered or service provided he is a member of such association or not ; or

(c) the Government :

Provided that in relation to District of Leh, Kargil, Poonch and Rajouri a complaint under this section may be filed with the concerned Deputy Commissioner, who shall forward such complaints to the Divisional Forum having jurisdiction to entertain such complaint.

Explanation. For the purpose of this section “recognised consumer association” means any voluntary consumer association registered under the Companies Act, 1956 or any other law for the time being in force.

11. Procedure on receipt of complaint.

(1) The Divisional Forum shall on receipt of a complaint, if it relates to any goods,.

(a) refer a copy of the complaint to the opposite party mentioned in the ; complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the Divisional Forum ;

(b) where the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the Divisional Forum, the Divisional Forum shall proceed to settle the consumer dispute in the manner specified in clauses (c) to (g) ;

(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods the Divisional Forum shall obtain a sample of the goods from the complainant, seal it and authenticate in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or suffer from any other defect and report its findings thereon to the Divisional Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the Divisional Forum ;

(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), the Divisional Forum may require the complainant to deposit to the credit of the Forum such fees as may be specified, for payment to the appropriate laboratory, for carrying out the necessary analysis or test in relation to the goods in question ;

(e) the Divisional Forum shall remit the amount deposited to its credit under clause (d) to the appropriate laboratory, to enable it to carry out the analysis or test mentioned in clause (c) and on receipt of the report from the appropriate laboratory, the Divisional Forum shall forward a copy of the report along with such remarks as the Divisional Forum may feel appropriate to the opposite party ;

(f) if any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the Divisional Forum shall require the opposite party or the complainant to submit in writing his objections in regard to the report made by the appropriate laboratory ;

(g) the Divisional Forum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report, made by the appropriate laboratory and also as to the objection made in relation thereto under clause (f) and issue an appropriate order under Section 12.

(2) The Divisional Forum shall, if the complaint received by it under Section 10 relates to goods in receipt of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any service :

(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the Divisional Forum ;

(b) Where the opposite party on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint or omits or fails to take any action to represent his case within the time given by the Divisional Forum, the Divisional Forum shall proceed to settle the consumer disputes :

(i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegations contained in the complaint, or

(ii) on the basis of evidence brought to its notice by complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum.

(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any Court on the ground that the principles of natural justice have not been complied with.

(4) For the purpose of this section, the Divisional Forum shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, Samvat 1977 while trying a suit in respect of the following matters, namely .

(i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath ;

(ii) the discovery and production of any documents or other material object producible as evidence ;

(iii) the reception of evidence on affidavits ;

(iv) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source ;

(v) issuing of any commission for the examination of any witness ; and

(vi) any other matter which may be prescribed.

(5) Every proceeding before the Divisional Forum shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Ranbir Penal Code, and the Divisional Forum shall be deemed to be a Civil Court for the purposes of Section 195 and Chapter XVII of the Code of Criminal Procedure, Samvat 1989.

12. Finding of the Divisional Forum.

(1) If, after proceeding conducted under Section 11, the Divisional Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to take one or more of the following things, namely :

(a) to remove the defect pointed by the appropriate laboratory from the goods in question ;

(b) to replace the goods with new goods of similar description which shall be free from any defect ;

(c) to return to the complainant the price, or as the case may be, the charges paid by the complainant ;

(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party.

(2) Every order made by the Divisional Forum under sub-section (1) shall be signed by all the members constituting it and if there is any difference of opium the order of the majority of the members constituting it shall be order of the Divisional Forum.

(3) Subject to the foregoing provisions, the procedure relating to the conduct of the meetings of the Divisional Forum, sitting and other matters shall be such as may be prescribed by the Government.

13. Appeal.

Any person aggrieved by an order made by the Divisional Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed :

Provided that the State Commission may entertain an appeal after the expiry of the said period of thirty days if it satisfied that there was sufficient cause for not filing it within that period.

14. Composition of the State Commission.

(1) Each State Commission shall consist of :

(a) a person who is or has been a Judge of a High Court appointed by the Government, who shall be its President ;

(b) two other members, who shall be person of liability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industries, public affairs, or administration, one of whom shall be a woman :

Provided that no sitting Judge of a High Court shall be appointed under this sub-section except after consultation with the Chief Justice of the High Court.

(2) The salary or honorarium and other allowance payable to and the other terms and conditions of service (including tenure of office) of, the members of the State Commission shall be such as may be prescribed by the Government.

15. Jurisdiction of the State Commission.

Subject to the other provisions of this Act the State Commission shall have jurisdiction :.

(a) to entertain.

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees fifty thousands but does not exceed rupees ten lakhs, and

(ii) appeal against the orders of Divisional Forum within the State ; and

(b) to call for the records and pass appropriate order in any consumer dispute which is pending before or has been decided by any Divisional Forum within the State, where it appears to the State Commission that such Divisional Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity.

16. Procedure applicable to State Commission.

The procedure specified in Sections 10, 11 and 12 and under the rules made thereunder for the disposal of complaints by the Divisional Forum shall, with such modifications as may be necessary, be applicable to the disposal of disputes by the State Commission.

17. Appeals.

Any person aggrieved by any order made by the State Commission in exercise of its power conferred by sub-clause (1) of clause (a) of Section 15 may prefer an appeal against such order to the High Court within a period of thirty days from the date of the order in such form and manner as may be prescribed :

Provided that the High Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.

18. Finality of orders.

Every order of a Divisional Forum, or the State Commission shall if no appeal has been preferred against such order under the provisions of this Act, be final.

19. Enforcement of order by the Forum or the State Commission.

Every order made by the Divisional Forum, or the State Commission may be enforced by the Divisional Forum, or the State Commission as the case may be in the same manner as if it were a decree or order made by a Court in a suit pending therein and it shall be lawful for the Divisional Forum or the State Commission to send in the event of its inability to execute it, such order to the Court within the local limits of whose jurisdiction.

(a) in the case of an order against a company, the registered office of the company is situated ; or

(b) in the case of an order against any other person, the place where the person concerned voluntarily resides or carries on business or personally works for gain, is situated,

and thereupon, the Court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution.

20. Dismissal of frivolous or vexatious complaints.

Where a complaint instituted is found to be frivolous or vexatious, the Divisional Forum or as the case may be, the State Commission may dismiss the complaint.

21. Penalties.

Where a trader or a person against whom a complaint made fails or omits to comply with any order made by the Divisional Forum or the State Commission, as the case may be, such trade or person shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both :

Provided that the Divisional Forum, or the State Commission, as the case may be, may if it is satisfied that the circumstances of any case so require, impose a sentence of imprisonment or fine, or both for a term lesser than the minimum term and amount lesser than the minimum amount specified in this section.

22. Protection of action taken in good faith.

No suit, prosecution or other legal proceedings shall lie against the member of the Divisional Forum or the State Commission or any Officer or person acting under the direction of the Divisional Forum or the State Commission for executing any order made by it or in respect of anything which is in good faith done or intended to be done by such member, officer or person under this Act, or under any rule or order made there under.

23. Power to remove difficulties.

(1) If any difficulty arises in giving effect to the provisions of this Act the Government may, by order in the Government Gazette make such

provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty.

Provided that no such order shall be made after the expiry of a period of two years from the commencement of this Act.

(2) Every order made under this section shall be as soon as may be after it is made, be laid before each House of the State Legislature.

24. Power to make rules.

The Government may, by notification, make rules for carrying out the provisions contained in clause (b) of sub-section (2) of Section 4, sub-section (2) of Section 5, sub-section (3) of Section 8, clause (c) of sub-section (1) and clause (b) of sub-section (4) of Section 11, sub-section (3) of Section 12, Section 13, sub-section (2) of Section 14 of this Act

25. Laying of rules.

Every rule made by the Government under this Act shall be laid, as soon as may be after it is made, before each House of State Legislature, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions and if, before the expiry of session immediately following the session or the successive sessions aforesaid both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no affect as the case may be so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Bydeb

The Essential Commodities Act, 1955

1 SHORT TITLE AND EXTENT.

(1) This Act may be called the Essential Commodities Act, 1955.

(2) It extends to the whole of India 1[***].

2 DEFINITIONS.

In this Act, unless the context otherwise requires, –

2[***]

2[3[(ia) “Collector” includes an Additional Collector and such other officer, not below the rank of Sub-Divisional Officer, as may be authorised by the Collector to perform the functions and exercise the powers of the Collector under this Act;]]

4[***]

(b) “food-crops” include crops of sugarcane;

(c) “notified order” means an order notified in the Official Gazette;

5[(cc) “order” includes a direction issued thereunder;]

6[(d) “State Government,” in relation to a Union territory, means the administrator thereof;]

7[(e) “sugar” means—

(i) any form of sugar containing more than ninety per cent., of sucrose, including sugar candy;

 (ii) khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powdered form; or

(iii) sugar in process in vacuum pan sugar factory or raw sugar produced therein.]

 8[***]

STATE AMENDEMNTS

Himachal Pradesh. —In section 2, in clause (a), after sub-clause (vi), insert the following sub-clause, namely:—

 “(via) packing cases made wholly or partly of wood, card-board or straw;”

 [ Vide Himachal Pradesh Act 1 of 1992, sec. 2 (w.e.f. 29-2-1992).]

 Maharashtra. —In section 2,—

(a) after the words “the context otherwise requires,” and before clause (a), insert the following clause, namely:—

“(ai) ‘Collector’ in Greater Bombay means the Controller of Rationing and includes any Deputy or Assistant Controller of Rationing, and elsewhere means the Collector of the District and includes any Assistant or Deputy Collector or District Supply Officer within his respective jurisdiction;”

 (b) after clause (b), insert the following clauses, namely:—

“(ba) ‘holder’, in relation to any agricultural land, means the person in actual possession of such land, and includes a company or other body corporate, firm, association, joint family or body of individuals in joint possession of such land;

 (bb) ‘holding’ means the aggregate of all lands in possession of a holder;”

[ Vide Maharashtra Act 1 of 1976, sec. 2 (w.r.e.f. 12-11-1975).]

 COMMENTS

Order made by the Central Government in respect of foodstuffs is intra vires the powers conferred by the provisions of section 2

 Seeds of foodstuffs is an item which has direct bearing with the production of the foodstuffs and consequently it is competent for the Parliament as well as the States to make laws in relation to seeds of foodstuffs. Surely seeds of food-crops and seeds of fruits and vegetable relate to foodstuffs. An order in respect of foodstuffs made by the Central Government is intra vires the powers conferred by sub-clause (xi) of clause (a) of section 2 of the Act; Rashu Seeds & Farms v. Union of India, AIR 1994 SC 533.

 Tea is not foodstuff

In common parlance ‘food’ is something that is eaten. In wider sense ‘food’ may include not only solid substances but also a drink. Still the fact remains that the substance called ‘food’ should possess the quality to maintain life and its growth; it must have nutritive or nourishing value so as to enable the growth, repair or maintenance of the body. Tea does not have any nutritive value. Therefore, tea is not a ‘foodstuff’; S. Samuel, M.D., Harrisons Malayalam v. Union of India , AIR 2004 SC 218.

Word “oil” used in regard to foodstuff is edible oil

 The word ‘oil’ was used in regard to foodstuff thus it pertains to only edible type of oils and not oils like kerosene; Tulsidas Modi v. State of Orissa, 1987 Cr LJ 664.

 ———-

1. Extended to Goa, Daman and Diu with modifications by Regulation 12 of 1962, sec. 3 and Sch., to Dadra and Nagar Haweli by Regulation 6 of 1963, sec. 2 and Sch. I and to Lakshadweep and Amindivi Islands by Regulation 8 of 1965, sec. 3 and Sch., to the State of Sikkim (w.e.f. 7-1-1976), vide S.O. 28(E), dated 7th January, 1976.

 This Act has been amended in Maharashtra by Maharashtra Act 71 of 1976, in Orissa by Orissa Act 8 of 1976, in Uttar Pradesh by Uttar Pradesh Acts 9 of 1974, 18 of 1975, 39 of 1975 and 16 of 1978.

2. Clause (ia) renumbered as clause (iia) and before clause (iia) so renumbered clause (ia) inserted by Act 18 of 1981, sec. 3(a) as amended by Act 34 of 1993, sec. 3 for a period of fifteen years which now stands ceased to have effect after the expiry of fifteen years. See Appendix—Section 3(a) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

 3. Ins. by Act 92 of 1976, sec. 2 (w.e.f. 2-9-1976).

 4. Clause (a) omitted by Act 54 of 2006, sec. 2 (w.e.f. 12-2-2007). Earlier clause (a) was amended by Act 30 of 1974, sec. 2 (w.r.e.f. 22-6-1974). Clause (a), before omission by Act 54 of 2006, stood as under:

‘(a) “essential commodity” means any of the following classes of commodities:—

 (i) cattle fodder, including oilcakes and other concentrates;

 (ii) coal including coke and other derivatives;

(iii) component parts and accessories of automobiles;

 (iv) cotton and woollen textiles;’.

(iva) drugs.

Explanation.— In this sub-clause, “drug” has the meaning assigned to it in clause (b) of section 3 of the Drugs and Cosmetics Act, 1940 (23 of 1940);

(v) foodstuffs, including edible oilseeds and oils;

(vi) iron and steel, including manufactured products of iron and steel;

(vii) paper, including newsprint, paperboard and straw board;

 (viii) petroleum and petroleum products;

(ix) raw cotton, whether ginned or unginned, and cotton seed;

(x) raw jute;

(xi) any other class of commodity which the Central Government may, by notified order, declare to be an essential commodity for the purposes of this Act, being a commodity with respect to which Parliament has power to make laws by virtue of entry 33 in List III in the Seventh Schedule to the Constitution;

5. Ins. by Act 36 of 1967, sec. 2(a) (w.e.f. 30-12-1967).

6. Subs. by the A.O. (No. 3) Order, 1956, for clause (d).

7. Ins. by Act 36 of 1967, sec. 2(b) (w.e.f. 30-12-1967).

8. Clause (f) ins. by Act 18 of 1981, sec. 3(b) as amended by Act 34 of 1993, sec. 3 for a period of fifteen years, which now stands ceased to have effect after the expiry of fifteen years. See Appendix —Section 3(b) of the Essential Commodities (Special Provisions) Act, 1981.

2A. Essential commodities declaration, etc.—

1[2A. Essential commodities declaration, etc.—(1) For the purposes of this Act, “essential commodity” means a commodity specified in the Schedule.

(2) Subject to the provisions of sub-section (4), the Central Government may, if it is satisfied that it is necessary so to do in the public interest and for reasons to be specified in the notification published in the Official Gazette, amend the Schedule so as to—

(a) add a commodity to the said Schedule;

(b) remove any commodity from the said Schedule,in consultation with the State Governments.

(3) Any notification issued under sub-section (2) may also direct that an entry shall be made against such commodity in the said Schedule declaring that such commodity shall be deemed to be an essential commodity for such period not exceeding six months to be specified in the notification:]

Provided that the Central Government may, in the public interest and for reasons to be specified, by notification in the Official Gazette, extend such period beyond the said six months.]

(4) The Central Government may exercise its powers under sub-section (2) in respect of the commodity to which Parliament has power to make laws by virtue of Entry 33 in List III in the Seventh Schedule to the Constitution.

(5) Every notification issued under sub-section (2) shall be laid, as soon as may be after it is issued, before both Houses of Parliament.]

 —————

1. Ins. by Act 54 of 2006, sec. 3.

3 POWERS TO CONTROL PRODUCTION, SUPPLY, DISTRIBUTION, ETC. OF ESSENTIAL COMMODITIES.

 (1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, 2[or for securing any essential commodity for the defence of India or the efficient conduct of military operations], it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

(2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide—

(a) for regulating by licences, permits or otherwise the production or manufacture of any essential commodity;

 (b) for bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food-crops generally or of specified food-crops, and for otherwise maintaining or increasing the cultivation of food-crops generally, or of specified food-crops;

 (c) for controlling the price at which essential commodity may be bought or sold;

 (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity;

 (e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale;

3[(f) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity,—

(a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or

(b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him,to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order.

 Explanation 1 .—An order made under this clause in relation to food-grains, edible oilseeds or edible oils, may, having regard to the estimated production, in the concerned area, of such foodgrains, edible oilseeds and edible oils, fix the quantity to be sold by the producers in such area and may also fix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate of the area held by, or under the cultivation of, the producers.

Explanation 2. —For the purposes of this clause, “production” with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar;]

 (g) for regulating or prohibiting any class of commercial or financial transactions relating to foodstuffs 4[***] which, in the opinion of the authority making the order, are, or, if unregulated, are likely to be, detrimental to the public interest;

(h) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters;

(i) for requiring persons engaged in the production, supply or distribution of or trade and commerce in, any essential commodity to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be specified in the order;

5[(ii) for the grant or issue of licences, permits or other documents, the charging of fees therefor, the deposit of such sum, if any, as may be specified in the order as security for the due performance of the conditions of any such licence, permit or other document, the forfeiture of the sum so deposited or any part thereof for contravention of any such conditions, and the adjudication of such forfeiture by such authority as may be specified in the order;]

6[(j) for any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveyances and animals, and the seizure by a person authorised to make such entry, search or examination,—

(i) of any articles in respect of which such person has reason to believe that a contravention of the order has been, is being, or is about to be, committed and any packages, coverings or receptacles in which such articles are found;

 (ii) of any aircraft, vessel, vehicle or other conveyance or animal used in carrying such articles, if such person has reason to believe that such aircraft, vessel, vehicle or other conveyance or animal is liable to be forfeited under the provisions of this Act;

 7[(iii) of any books of accounts and documents which in the opinion of such person, may be useful for, or relevant to, any proceeding under this Act and the person from whose custody such books of accounts or documents are seized shall be entitled to make copies thereof or to take extracts therefrom in the presence of an officer having the custody of such books of accounts or documents.]]

(3) Where any person sells any essential commodity in compliance with an order made with reference to clause (f) of sub-section (2), there shall be paid to him the price therefor as hereinafter provided—

 (a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price;

 (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any;

 (c) where neither clause (a) nor clause (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale.

 8[(3A) (i) If the Central Government is of opinion that it is necessary so to do for controlling the rise in prices, or preventing the hoarding, of any food-stuff in any locality, it may, by notification in the Official Gazette, direct that notwithstanding anything contained in sub-section (3), the price at which the food-stuff shall be sold in the locality in compliance with an order made with reference to clause (f) of sub-section (2) shall be regulated in accordance with the provisions of this sub-section.

(ii) Any notification issued under this sub-section shall remain in force for such period not exceeding three months as may be specified in the notification.

 (iii) Where, after the issue of a notification under this sub-section, any person sells foodstuff of the kind specified therein and in the locality so specified, in compliance with an order made with reference to clause (f) of sub-section (2), there shall be paid to the seller as the price therefor—

 (a) where the price can, consistently with the controlled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price;

(b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any;

 (c) where neither clause (a) nor clause (b) applies, the price calculated with reference to average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification.

 (iv) For the purposes of sub-clause (c) of clause (iii), the average market rate prevailing in the locality shall be determined by an officer authorised by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality; and the average market rate so determined shall be final and shall not be called in question in any court.]

 9[(3B) Where any person is required, by an order made with reference to clause (f) of sub-section (2), to sell to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government, any grade or variety of foodgrains, edible oilseeds or edible oils in relation to which no notification has been issued under sub-section (3A), or such notification having been issued, has ceased to be in force, there shall be paid to the person concerned, notwithstanding anything to the contrary contained in sub-section (3), an amount equal to the procurement price of such foodgrains, edible oilseeds or edible oils, as the case may be, specified by the State Government, with the previous approval of the Central Government having regard to—

(a) the controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of foodgrains, edible oilseeds or edible oils;

(b) the general crop prospects;

(c) the need for making such grade or variety of foodgrains, edible oilseeds or edible oils available at reasonable prices to the consumers, particularly the vulnerable sections of the consumers; and

 (d) the recommendations, if any, of the Agricultural Prices Commission with regard to the price of the concerned grade or variety of foodgrains, edible oilseeds or edible oils.]

 10[(3C) Where any producer is required by an order made with reference to clause (f) of sub-section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Government or to any other person or class of persons) and either no notification in respect of such sugar has been issued under sub-section (3A) or any such notification, having been issued, has ceased to remain in force by efflux of time, then, notwithstanding anything contained in sub-section (3), there shall be paid to that producer an amount therefor which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to—

(a) the minimum price, if any, fixed for sugarcane by the Central Government under this section;

(b) the manufacturing cost of sugar;

(c) the duty or tax, if any, paid or payable thereon; and

(d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar,

and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar.

Explanation. —For the purposes of this sub-section, “producer” means a person carrying on the business of manufacturing sugar.]

11[(3D) The Central Government may direct that no producer, importer or exporter shall sell or otherwise dispose of or deliver any kind of sugar or remove any kind of sugar from the bonded godowns of the factory in which it is produced, whether such godowns are situated within the premises of the factory or outside or from the warehouses of the importers or exporters, as the case may be, except under and in accordance with the direction issued by the Government:

 provided that this sub-section shall not affect the pledging of such sugar by any producer or importer in favour of any scheduled bank as defined in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934) or any corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), so, however, that no such bank shall sell the sugar pledged to it except under and in accordance with a direction issued by the Central Government.

(3E) The Central Government may, from time to time, by general or special order, direct any producer or importer or exporter or recognised dealer or any class of producers or recognised dealers, to take action regarding production, maintenance of stocks, storage, sale, grading, packing, marking, weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in the direction.

Explanation. —For the purposes of sub-section (3D) and this sub-section,—

(a) “producer” means a person carrying on the business of manufacturing sugar;

(b) “recognised dealer” means a person carrying on the business of purchasing, selling or distributing sugar;

(c) “sugar” includes plantation white sugar, raw sugar and refined sugar, whether indigenously produced or imported.]

 (4) If the Central Government is of opinion that it is necessary so to do for maintaining or increasing the production and supply of an essential commodity, it may, by order, authorise any person (hereinafter referred to as an authorized controller) to exercise, with respect to the whole or any part of any such undertaking engaged in the production and supply of the commodity as may be specified in the order such functions of control as may be provided therein and so long as such order is in force with respect to any undertaking or part thereof,—

 (a) the authorized controller shall exercise his functions in accordance with any instructions given to him by the Central Government, so, however, that he shall not have any power to give any direction inconsistent with the provisions of any enactment or any instrument determining the functions of the persons in-charge of the management of the undertaking, except in so far as may be specifically provided by the order; and

 (b) the undertaking or part shall be carried on in accordance with any directions given by the authorised controller under the provisions of the order, and any person having any functions of management in relation to the undertaking or part shall comply with any such directions.

12[***]

(5) An order made under this section shall,—

(a) in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette; and

(b) in the case of an order directed to a specified individual be served on such individual—

(i) by delivering or tendering it to that individual, or

(ii) if it cannot be so delivered or tendered, by affixing it on the outer door or some other conspicuous part of the premises in which that individual lives, and a written report thereof shall be prepared and witnessed by two persons living in the neighbourhood.

 (6) Every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made.

STATE AMENDMENTS

Bihar. —In section 3,—

(i) in sub-section (2), for clause (f), substitute the following clause which shall be deemed always to have been substituted, namely:—

 “(f) for requiring any person holding in stock, or engaged in the manufacture or production of, or in the business of buying or selling any essential commodity to sell the whole or a specified part of the quantity held in stock or produced or caused to be produced or likely to be manufactured or produced or caused to be produced by him or received or likely to be received by him in the course of the said business, to the Central Government or a State Government or to such other person or class of persons and in such circumstances as may be specified in the order.

 Explanation .—An order relating to foodgrains made with reference to this clause,—

 (i) may specify the prices, fixed by the Central/State Government in this behalf, after taking into account the recommendations, if any of the Agricultural Prices Commission and with the prior concurrence of the Central Government as the amount which shall be paid for the foodgrain required to be sold under the order,

 (ii) may fix or provide for the fixation of the quantity to be sold by a producer with reference to the area under cultivation and the availability of irrigation for production of the particular foodgrain which the order relates, and also fix or provide for the fixation of such quantities on a graded basis having regard to the aggregate area held by or under the cultivation of different producers.”

 (ii) in sub-section (3), for clause (c), substitute the following clauses which shall be deemed always to have been substituted, namely:—

 “(c) in the case of foodgrains, where neither clause (a) nor clause (b) applies, the price, if any specified in the said order;

 (d) where neither clause (a), nor clause (b), nor clause (c) applies, the price calculated at the market rate prevailing in the locality at the date of sale.”

(iii) in sub-section (3B), after clause (a), insert the following clause which shall be deemed always to have been inserted, namely:—

 “(aa) in the case of foodgrains, where no controlled price is fixed by an order made with reference to clause (c) of sub-section (2), the amount specified in the said order made with reference to clause (f) of sub-section (2) for such grade or variety of foodgrains; or”

 [ Vide Bihar Act 9 of 1978, sec. 3 (w.e.f. 6-9-1978).]

Maharashtra. —In section 3,—

 (a) in sub-section (2), for clause (f), substitute the following clause which shall be deemed always to have been substituted, namely:—

 “(f) for requiring any person holding in stock, or likely to hold in stock, or engaged in the manufacture or production or processing of, or in the business of buying or selling, any essential commodity, to sell, the whole or a specified part of the quantity of the essential commodity held in stock or likely to be held in stock by him or manufactured or produced or processed or likely to be manufactured or produced or processed by him or received or likely to be received by him in his business of buying or selling to the Central Government or the State Government or to an officer or agent of any Government or to such other person or class of persons and in such circumstances as may be specified in the order.

 Explanation. —An order made under this clause in respect of foodgrains may fix or provide for fixation of the quantity to be sold by a producer with reference to the nature and extent of his holding or the land revenue payable by him with certain weightages which may be prescribed for certain crops or lands enjoying irrigation or other facilities and also fix or provide for fixation of the quantity to be sold on a graded basis having regard to the size of the holdings of different producers.”

 (b) In sub-section (3), for clause (c), substitute the following clause which shall be deemed always to have been substituted, namely:—

“(c) where neither clause (a) nor clause (b) applies, in the case of foodgrains, the amount, if any, specified in or calculated in accordance with the order made under clause (f) of sub-section (2) read with sub-section (3B), and in the case of any other essential commodity, the price calculated at the market rate prevailing in the locality at the date of sale.”

(c) for sub-section (3B), substitute the following sub-section which shall be deemed always to have been substituted, namely:—

 “(3B) where, by an order made with reference to clause (f) of sub-section (2), any person is required to sell any grade or variety or foodgrains, edible oilseeds or edible oils to the Central Government or a State Government or an officer or agent of such Government or a corporation owned or controlled by such Government or to a person or class of persons specified in the order, and either no notification in respect of such foodgrains, edible oilseeds or edible oils has been issued under sub-section (3A) or any such notification having been issued, has ceased to remain in force by efflux of time then, notwithstanding anything contained in sub-section (3), there shall be paid to the person concerned an amount determined by the Central Government or the State Government, as the case may be,—

 (a) having regard to the Controlled price, if any, fixed under this section or by or under any law for the time being in force for such grade or variety of foodgrains, edible oilseeds or edible oils, or

(b) having regard to the prices recommended by the Agricultural Prices Commission for the concerned essential commodity, where no controlled price in relation to such commodity, has been fixed by or under any law for the time being in force.”

 [ Vide Maharashtra Act 1 of 1976, sec. 3(c) (w.r.e.f. 12-11-1975).]

Orissa. —In section 3,—

 (a) in sub-section (2), for clause (f), substitute the following clause which shall be deemed always to have been substituted, namely:—

“(f) for requiring any person holding in stock or engaged in the manufacture or production of, or in the business of buying or selling, any essential commodity to sell the whole or a specified part of the quantity held in stock or manufactured or produced or caused to be produced or likely to be manufactured or produced or caused to be produced by him or received or likely to be received by him in the course of the said business, to the Central Government or a State Government or to an officer or agent of such Government or to such other person or class of persons and in such circumstances as may be specified in the order.

Explanation .—An order relating to foodgrains made with reference to this clause,—

 (i) may specify the prices, fixed by the State Government in this behalf, after taking into account the recommendations, if any, of the Agricultural Prices Commission and with the prior concurrence of the Central Government, as the amount which shall be paid for the foodgrain required to be sold under the order,

(ii) may fix or provide for the fixation of the quantity to be sold by a producer with reference to the area under cultivation and the availability of irrigation for production of the particular foodgrain to which the order relates, and also fix or provide for the fixation of such quantities on a graded basis having regard to the aggregate area held by or under the cultivation of different producers.”

 (b) in sub-section (3), for clause (c), substitute the following clauses which shall be deemed always to have been substituted, namely:—

“(c) in the case of foodgrains, where neither clause (a) nor clause (b) applies, the price, if any, specified in the said order;

 (d) where neither clause (a) nor clause (b), nor clause (c) applies, the price calculated at the market rate prevailing in the locality at the date of sale.”

(c) in sub-section (3B), after clause (i), insert the following clause which shall be deemed always to have been inserted, namely:—

 “(ia) in the case of foodgrains, where no controlled price is fixed by an order made with reference to clause (c) of sub-section (2), the amount specified in the said Order made with reference to clause (f) of sub-section (2) for such grade or variety of foodgrains; or”

[ Vide Orissa Act 8 of 1976, sec. 2 (w.e.f. 29-3-1976).]

Uttar Pradesh. —In section 3,—

(i) in sub-section (2), in clause (f), for Explanation 1 , substitute the following Explanation , namely:—

 Explanation 1 .—An order made under this clause in relation to rice, having regard to the milling capacity of a rice mill, fix the quantity to be sold by the licensed miller and may also fix or provide for the fixation of such quantity on a graded basis.”

 [ Vide Uttar Pradesh Act 16 of 1978, sec. 3 (2).]

 (ii) in sub-section (3), for clause (c), substitute the following clauses which shall be deemed always to have been substituted, namely:—

“(c) in the case of foodgrains, where neither clause (a) nor clause (b) applies, the amount, if any, specified in the said order made with reference to clause (f) of sub-section (2);

 (d) where neither clause (a), nor clause (b), nor clause (c) applies, the price calculated, at the market rate prevailing in the locality at the date of sale.”

[ Vide Uttar Pradesh Act 18 of 1975, sec. 3 (b).]

(iii) in clause (f) as substituted by the Central Amendment (Act 92 of 1976), after Explanation 1 , insert the following Explanation , namely:—

Explanation 1A .—An order made under this clause in relation to rice may having regard to the milling capacity of a rice mill, fix the quantity to be sold by the licenced miller and may also fix or provide for the fixation of such quantity on a graded basis.”

 [ Vide Uttar Pradesh Act 16 of 1978 (w.e.f. 27-4-1978).]

COMMENTS

Award of Gas Agency in the defence category

 The purpose of obtaining the eligibility certificate from the Director-General of Resettlement in defence services is obviously with a view to identify suitable candidates in the defence category for being considered for selection and appointment for award of gas agency. The candidate who has been certified to be covered in the defence category and fulfilling the required income limit cannot lose his eligibility merely because certificate was not obtained pursuant to a particular advertisement and for a particular location; Sunil Dutt v. Chief Regional Manager, HPC Ltd ., AIR 2004 SC 157.

Ban on manufacture of skimmed milk powder is illogical

The ban imposed on manufacture of skimmed milk powder from skimmed milk during the season when milk is available in abundance and when there is no ban on manufacture of ghee, khoya, paneer, was held wholly illogical, irrational and arbitrary on the point that it is not logical on the face of it and further more skimmed milk powder can be reconverted to milk unlike the other by-products such as paneer, khoya, etc.; Daily Foods v. Union of India , AIR 1993 Del 278.

 Kerosene dealership

In the case of wholesale kerosene dealership the parties to the agreement are the dealer and the petrol company and the State Government and any of its officials are complete strangers to that agreement. Further as in case of a dealership under the public distribution system a wholesale dealer of kerosene oil must obtain a wholesale kerosene dealer’s licence under the unification order and on the basis of that licence alone he can carry on the wholesale business in kerosene. The grant and revocation of licence is regulated by the provisions of the unification order and a licence issued under the unification order can by no means be cancelled by directions contained in executive instructions; Veena Devi v. State of Bihar , AIR 2004 Pat 113.

 Public Distribution System

It was found that most of the existing sub-wholesalers reside at far off places, i.e., 30 to 80 kms. away from the residential places and it has become difficult on their part to go to their depots at regular intervals. The Collector after taking into consideration all the various factors, recommended the appointment of opposite parties as sub-wholesalers. The State Government on due consideration accordingly appointed them as sub-wholesalers. Further, the petitioners have no inherent right to get a particular quota. The aim and purpose of Public Distribution System is that a common man should get the essential commodities easily and any inconvenience caused to him is against the system; Manas Ranjan Das v. State of Orissa , AIR 2004 Ori 62.

 ———-

1. Extended to Goa, Daman and Diu with modifications by Regulation 12 of 1962, sec. 3 and Sch., to Dadra and Nagar Haweli by Regulation 6 of 1963, sec. 2 and Sch. I and to Lakshadweep and Amindivi Islands by Regulation 8 of 1965, sec. 3 and Sch., to the State of Sikkim (w.e.f. 7-1-1976), vide S.O. 28(E), dated 7th January, 1976.

 This Act has been amended in Maharashtra by Maharashtra Act 71 of 1976, in Orissa by Orissa Act 8 of 1976, in Uttar Pradesh by Uttar Pradesh Acts 9 of 1974, 18 of 1975, 39 of 1975 and 16 of 1978.

2. Ins. by Act 36 of 1967, sec. 3(a) (w.e.f. 30-12-1967).

 3. Subs. by Act 92 of 1976, sec. 3(a)(i), for clause (f) (w.e.f. 2-9-1976). Earlier clause (f) was substituted by Act 28 of 1957, sec. 2 (w.e.f. 17-9-1957).

 4. The words “or cotton textiles” omitted by Act 54 of 2006, sec. 4 (w.e.f. 12-2-2007).

5. Ins. by Act 17 of 1961, sec. 2(a) (w.e.f. 10-5-1961).

6. Subs. by Act 66 of 1971, sec. 2(i), for clause (j) (w.e.f. 23-12-1971). Earlier clause (j) was amended by Act 17 of 1961, sec. 2(b) (w.e.f. 10-5-1961).

7. Subs. by Act 92 of 1976, sec. 3(a)(ii), for sub-clause (iii) (w.e.f. 2-9-1976).

 8. Ins. by Act 13 of 1957, sec. 2 (w.e.f. 4-6-1957).

9. Subs. by Act 92 of 1976, sec. 3(b) (w.e.f. 2-9-1976). Earlier sub-section (3B) was inserted by Act 25 of 1966, sec. 2 (w.e.f. 3-9-1966) and was amended by Act 66 of 1971, sec. 2(ii) (w.e.f. 23-12-1971), by Act 30 of 1974, sec. 3 (w.r.e.f. 22-6-1974).

 10. Ins. by Act 36 of 1967, sec. 3(c) (w.e.f. 30-12-1967).

11. Ins. by Act 37 of 2003, sec. 2 (w.r.e.f. 14-6-1999).

12. Sub-sections (4A), (4B) and (4C) as inserted by Act 14 of 1967, sec. 2 (w.e.f. 1-4-1967) ceased to have effect from 31st day of March, 1968, vide Act 14 of 1967, sec. 1(2).

4 IMPOSITION OF DUTIES ON STATE GOVERNMENTS, ETC.

An order made under Sec. 3 may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government, and may contain directions to any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such
duties.

5 DELEGATION OF POWERS.

The Central Government may, by notified order, direct that 1[the power tomake orders or issue notification under Sec. 3 ] shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by, –

 (a) such officer or authority subordinate to the Central Government, or

(b) such State Government or such officer or authority subordinate to State Government; as may be specified in the direction.

—————

1.  Subs. by Act 66 of 1971, sec. 3, for “the power to make orders under section 3” (w.e.f. 23-12-1971).

6 EFFECT OF ORDERS INCONSISTENT WITH OTHER ENACTMENTS.

Any other made under Sec. 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act.

6-A CONFISCATION OF ESSENTIAL COMMODITY.

2[6A. Confiscation of essential commodity:- 3[(1)] Where any 4[essential commodity is seized] in pursuance of an order made under section 3 in relation thereto, 5[a report of such seizure shall, without unreasonable delay, be made to] the Collector of the district or the Presidency town in which such 4[essential commodity is seized] and whether or not a prosecution is instituted for the contravention of such order, the Collector 6[may, if he thinks it expedient so to do, direct the essential commodity so seized to be produced for inspection before him, and if he is satisfied] that there has been a contravention of the order 7[may order confiscation of—

 (a) the essential commodity so seized;

(b) any package, covering or receptacle in which such essential commodity is found; and

 (c) any animal, vehicle, vessel or other conveyance used in carrying such essential commodity : 27 ]

 Provided that without prejudice to any action which may be taken under any other provision of this Act, no foodgrains or edible oilseeds in pursuance of an order made under Sec.3 in relation thereto from a producer shall, if the seized foodgrains or edible oilseeds have been produced by him, be confiscated under this section :

8Provided further that in the case of any animal, vehicle, vessel or other conveyance used for the carriage of goods or passengers for hire, the owner of such animal, vehicle, vessel or other conveyance shall be given an option to pay, in lieu of its confiscation, a fine not exceeding the market
price at the date of seizure of the essential commodity sought to be carried by such animal, vehicle, vessel or other conveyance 28 ].

9(2) Where the Collector, on receiving a report of seizure or on inspection of any essential commodity under sub-section (1), is of the opinion that the essential commodity is subject to speedy and natural decay or it is otherwise expedient in the public interest so to do, he may,

(i) order the same to be sold at the controlled price, if any, fixed for such essential commodity under this Act or under any other law for the time being in force; or

(ii) where no such price is fixed order the same to be sold by public auction :

 10 Provided that in the case of any such essential commodity the retail sale price whereof has been fixed by the Central Government or a State Government under this Act or under any other law for the time being in force, the Collector may. for its equitable distribution and availability at fair
prices, order the same to be sold through fair price shops at the price so fixed. 30 ]

 (3) Where any essential commodity is sold, as aforesaid, the sale proceeds thereof, after deduction of the expenses of any such sate or auction or other incidental expenses relating thereto, shall, –

 (a) where no order of confiscation is ultimately passed by the Collector,

 (b) where an order passed on appeal under sub-section (1) of Sec. 6-C so requires, or

 (c) where in a prosecution instituted for the contravention of the order in respect of which an order of confiscation has been made under this section, the person concerned is acquitted, be paid to the owner or the person from whom it is seized. 29 ]

STATE AMENDMENTS

Bihar . —For section 6A, substitute the following section, namely:—

“6A. Confiscation of foodgrains, edible oilseeds, edible oils, etc. —(1) Where any essential commodity is seized in pursuance of an order made under section 3 in relation thereto it shall be reported without any reasonable delay to the Collector of the district in which such essential commodity is seized and the Collector may, if he thinks it expedient so to do, inspect or cause to be inspected such essential commodity, whether or not the prosecution is instituted for the contravention of such order and the Collector, if satisfied that there has been a contravention of the order, may order confiscation of­—

 (a) the essential commodities so seized;

(b) any package, covering or receptacle in which such essential commodity is found; and

 (c) any animal, vehicle, vessel or other conveyance used in carrying such essential commodity:

Provided that, without prejudice to any action which may be taken under any other provision of this Act, no foodgrains or edible oilseeds seized in pursuance of an order made under section 3 in relation thereto from producer shall, if the seized foodgrains or edible oil-seeds have been produced by him, be confiscated under this section.

(2) Where the Collector, on receiving a report of seizure or in inspection of any essential commodity under sub-section (1), is of the opinion that such essential commodity is subject to speedy and natural decay or that it is otherwise, expedient in the public interest so to do, he may order the same to be sold at the controlled price if any, fixed under any law for the time being in force.

 (3) In the case of foodgrains, where there is no controlled price, the Collector, if he thinks fit, may order the foodgrains seized under sub-section (1) to be sold through fair price shops at the price fixed by the Central Government or the State Government, as the case may be for the sale of such foodgrains to the public through these shops or may order such foodgrains by public auction.

(4) The Collector shall whenever it is practicable so to do having regard to the nature of the essential commodity take and preserve sample of the same in the prescribed manner before its sale or distribution.

 (5) Where any essential commodity is sold as aforesaid, the sale proceeds thereof, after deduction of all expenses of the sale or auction, as the case may be, shall—

(a) where no order of confiscation is ultimately passed by the Collector; or

 (b) where an order passed on appeal under sub-clause (1) of section 6C so requires; or

 (c) in the case of prosecution being instituted for the contravention of the order in respect of which an order of confiscation has been made under this section and where the person concerned is acquitted to paid to the owner thereof or the person from whom it is seized:

 Provided that in the case of foodgrains sold through fair price shops in accordance with sub-sections (2) and (3) the owner shall be paid for the foodgrains so sold, the price fixed by the State Government, for retail sale of such foodgrains through such shops less all expenses of sale or auction under sub-sections (2) and (3).

(6) Notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), when Collector or the appellate authority is seized with the matter under this section no court shall entertain any application in respect of essential commodities, any package covering, receptacle, any animal, vehicle or other conveyance used in carrying such commodities as far as its release, distribution etc. is concerned and the jurisdiction of Collector or the appellate authority with regard to the disposal of the same shall be exclusive.

(7) The State Government may by notification in the Official Gazette, authorise any officer not below the rank of Sub-Divisional Magistrate, to discharge all or any of the functions of a Collector under this section.

(8) The Collector shall for the purposes of this Act have the same powers as are vested in a Court under the Code of Civil Procedure, 1908 when making enquiries under this section in respect of following matters, namely:—­

(a) receiving evidence on affidavits;

(b) summoning and enforcing the attendance of any person and examining him on oath; and

(c) compelling the production of documents.

(9) All enquiries and proceedings under this section before the Collector and the appellate authority shall be deemed to be judicial proceeding and while discharging functions under this section the Collector and the appellate authority shall be deemed to be a Court.

 Explanation .—For the purposes of this section the Collector shall include ‘Additional Collector’ and any officer specially authorized under sub- section (7).”

[ Vide Bihar Act 9 of 1978, sec. 4 (w.e.f. 6-9-1978).]

Maharashtra. —For section 6A, substitute the following section, namely:—

“6A. Confiscation of seized commodities. —(1) Where any essential commodity is seized in pursuance of an order made under section 3 in relation thereto, a report to that effect shall, without any unreasonable delay, be sent to the Collector within whose jurisdiction the seizure is made, and the Collector may, if he thinks it expedient so to so, inspect or cause to be inspected such essential commodity, and whether or not a prosecution is instituted for the contravention of such order, the Collector, if satisfied that there has been contravention of the order, may order confiscation of—

(a) the essential commodity so seized;

(b) any package, covering or receptacle in which such essential commodity is found; and

 (c) any animal, vehicle, vessel or other conveyance used in carrying such essential commodity:

 Provided that without prejudice to any action that may be taken under any other provision of this Act, no foodgrains or edible oilseeds seized in pursuance of an order made under section 3 in relation thereto from a producer shall, if the seized foodgrains or edible oilseeds have been produced by him, be confiscated under this section:

 Provided further that where any animal, vehicle, vessel or other conveyance is used for the carriage of goods or passengers for hire, the owner of such animal, vehicle, vessel or other conveyance shall be given an option to pay in lieu of its confiscation a fine not exceeding the market price at the date of seizure of the essential commodity sought to be carried.

 (2) Where the Collector on receiving a report of seizure or on inspection of any essential commodity under sub-section (1) is of the opinion that such essential commodity is subject to speedy and natural decay or that it is otherwise expedient in the public interest so to so , he may order the same to be sold at the controlled price if any, fixed under any law for the time being in force; or where no such price is fixed by auction:

Provided that, in the case of foodgrains where there is no controlled price, the Collector may order the foodgrains seized to be sold through fair price shops at the price fixed by the Central Government or the State Government, as the case may be, for the sale of such foodgrains to the public through these shops:

 Provided further that, whenever it is practicable so to so, having regard to the nature of the essential commodity, he shall take and preserve sample of the same before its sale or auction.

 (3) Where any essential commodity is sold as aforesaid, the sale proceeds thereof after deduction of the expenses of the sale or auction, as the case may be, shall—

(a) where no order of confiscation is ultimately passed by the Collector; or

(b) where an order passed, on appeal under sub-clause (1) of section 6C so requires; or

 (c) in the case of a prosecution being instituted for the contravention of the order in respect of which an order of confiscation has been made under section, where the person concerned is acquitted, be paid to the owner thereof or the person from whom it is seized:

 Provided that, in the case of foodgrains sold through fair price shops in accordance with the first proviso to sub-­section (2) the owner shall be paid for the foodgrains so sold the price fixed by the State Government, for retail sale of such foodgrains through such shops, less all expenses of sale or auction under sub-section (2).”

[ Vide Maharashtra Act 1 of 1976, sec. 4 (w.r.e.f. 12-11-1975).]

COMMENTS

Scope of expression “it is otherwise expedient in the public interest”

The expression, ‘it is otherwise expedient in the public interest’ in section 6A (2) has to be understood so as to advance the legislative objective of ensuring that the goods do not suffer either in quality or quantity, for instance, fertilizer may not be susceptible to speedy and natural decay but it is expedient in public interest to ensure that it is either sold to the agriculturist or disposed of at least before the next season; N. Nagendra Rao & Co. v. State of Andhra Pradesh, AIR 1994 SC 2663.

———-

1. Extended to Goa, Daman and Diu with modifications by Regulation 12 of 1962, sec. 3 and Sch., to Dadra and Nagar Haweli by Regulation 6 of 1963, sec. 2 and Sch. I and to Lakshadweep and Amindivi Islands by Regulation 8 of 1965, sec. 3 and Sch., to the State of Sikkim (w.e.f. 7-1-1976), vide S.O. 28(E), dated 7th January, 1976.

This Act has been amended in Maharashtra by Maharashtra Act 71 of 1976, in Orissa by Orissa Act 8 of 1976, in Uttar Pradesh by Uttar Pradesh Acts 9 of 1974, 18 of 1975, 39 of 1975 and 16 of 1978.

2. Ins. by Act 25 of 1966, sec. 3 (w.e.f. 3-9-1966).

3. Section 6A renumbered as sub-section (1) thereof by Act 92 of 1976, sec. 4 (w.e.f. 2-9-1976). Earlier section 6A, before it was renumbered as sub-section (1), was amended by Act 30 of 1974, sec. 4 (w.r.e.f. 22-6-1974).

4. Subs. by Act 36 of 1967, sec. 4(a), for “foodgrains, edible oilseeds or edible oils are seized” (w.e.f. 30-12-1967).

5. Subs. by Act 92 of 1976, sec. 4(a)(i), for “it may be produced without any unreasonable delay, before” (w.e.f. 2-9-1976).

6. Subs. by Act 92 of 1976, sec. 4(a)(i), for “if satisfied” (w.e.f. 2-9-1976).

7. Subs. by Act 30 of 1974, sec. 4, for “may order confiscation of the essential commodity so seized” (w.r.e.f. 22-6-1974).

8. Ins. by Act 92 of 1976, sec. 4(a)(ii) (w.e.f. 2-9-1976).

9. Ins. by Act 92 of 1976, sec. 4(b) (w.e.f. 2-9-1976).

10. Proviso was substituted by Act 18 of 1981, sec. 4 as amended by Act 34 of 1993, sec. 3 for a period of fifteen years which now stands ceased to have effect after the expiry of fifteen years. The original proviso has been restored. See ppendix—Section 4 of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

6-B ISSUE OF SHOW-CAUSE NOTICE BEFORE CONFISCATION OF ESSENTIAL COMMODITY.

1[6B. Issue of show cause notice before confiscation of foodgrains, etc.— 2[(1)] No order confiscating 3[any 4[essential commodity, package, covering or receptacle, animal, vehicle, vessel or other conveyance]] shall be made under section 6A unless the owner of such 4[essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance] or the person from whom 5[it is seized]—

(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the 6essential commodity 37 ], package, covering, receptacle. animal, vehicle, vessel or other conveyance 36 ];

 (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation; and

(c) is given a reasonable opportunity of being heard in the matter. 31 ]

7(2) Without prejudice to the provisions of sub-section

(1). no order confiscating any animal, vehicle, vessel or other conveyance shall be made under section 6A if the owner of the animal, vehicle, vessel or other conveyance proves to the satisfaction of the Collector that it was used in carrying the essential commodity without the knowledge or connivance of the owner himself, his agent, if any, and the person in harge of the animal, vehicle, vessel or other conveyance and that each of them had taken all reasonable and necessary precautions against such use 38 ].

8(3) No order confiscating any essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance shall be invalid merely by reason of any defect or irregularity in the notice given under clause (a) of sub-section (1), if, in giving such notice, the provisions of that clause have been substantially complied with 39 ].

 State Amendment

Uttar Pradesh.—After section 6B, insert the following section, namely:—

“6BB. Review.—(1) Where the Collector is satisfied that an order of confiscation or an order refusing confiscation made under section 6A suffers from a mistake apparent on the face of the record (including any mistake of law) he may within one month of such order issue notice to the owner of the essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance, or, as the case may be, the person from whom it was seized, to show cause why that order should not be reviewed, and after giving him a reasonable opportunity of being heard, pass such order on review as he thinks fit.

 (2) The provisions of sections 6C and 6D shall apply in relation to an order passed originally under section 6A.”

[Vide Uttar Pradesh Act 18 of 1975, sec. 6 (w.e.f. 31-3-1975).]

Comments

 Reasonable opportunity of being heard is required to be given Under section 6B of the Act, a reasonable opportunity of being heard is required to be given before making any order confiscating any essential commodity under section 6A of the Act; Kiran Oil Industries v. District Collector, AIR 1997 Guj 153.

 —————

1. Ins. by Act 25 of 1966, sec. 3 (w.e.f. 3-9-1966).

2. Section 6B re-numbered as sub-section (1) thereof by Act 30 of 1974, sec. 5 (w.e.f. 22-6-1974).

 3. Subs. by Act 36 of 1967, sec. 5, for “any foodgrains, edible oilseeds or edible oils” (w.e.f. 30-12-1967).

 4. Subs. by Act 30 of 1974, sec. 5, for “essential commodity” (w.e.f. 22-6-1974).

 5. Subs. by Act 36 of 1967, sec. 5, for “they are seized”.

6. Subs. by Act 36 of 1967, sec. 5, for “any foodgrains, edible oilseeds or edible oils” (w.e.f. 30-12-1967).

 7. Ins. by Act 30 of 1974, sec. 5 (w.e.f. 22-6-1974).

8. Ins. by Act 92 of 1976, sec. 5 (w.e.f. 2-9-1976).

6-C APPEAL.

2[ 6C. Appeal. —(1) Any person aggrieved by an order of confiscation under section 6A may, within one month from the date of the communication to him of such order, appeal to 3[any judicial authority appointed by the State Government concerned and the judicial authority] shall, after giving an opportunity to the appellant to be heard, pass such order as it may think fit, confirming, modifying or annulling the order appealed against.

 (2) Where an order under section 6A is modified or annulled by 4[such judicial authority], or where in a prosecution instituted for the contravention of the order in respect of which an order of confiscation has been made under section 6A, the person concerned is acquitted, and in either case it is not possible for any reason to 5[return the essential commodity seized],

6[such persons shall, except as provided by sub-section (3) of section 6A, be paid] the price therefor 7[as if the essential commodity,] had been sold to the Government with reasonable interest calculated from the day of the seizure of 6 [the essential commodity] 8[and such price shall be determined—

(i) in the case of foodgrains, edible oilseeds or edible oils, in accordance with the provisions of sub-section (3B) of section 3;

(ii) in the case of sugar, in accordance with the provisions of sub-section (3C) of section 3; and

(iii) in the case of any other essential commodity, in accordance with the provisions of sub-section (3) of section 3.]]

State Amendment

Bihar. —For section 6C, substitute the following section, namely:—

“6C. Appeal. —(1) Any person aggrieved by an order of confiscation under section 6A may, within one month from the date of the communication to him of such order, appeal to any judicial authority appointed by the State Government concerned and the judicial authority shall, after giving an opportunity to the appellant to be heard, pass such order as it may think fit, confirming, modifying or annulling the order appealed against.

 (2) Where an order under section 6A modified or annulled by such judicial authority, or where in a prosecution for the contravention of the order in respect of which an order of confiscation has been made under section 6A, the person concerned is acquitted and in either case it is not possible for any reason to return the essential commodity seized, such person shall, save as provided by sub-section (3) of section 6A, be paid the price thereof as if the essential commodity had been sold to the Government with reasonable interest calculated from the day of the seizure of the essential commodity and such price shall be determined—

(i) in the case of foodgrains, edible oilseeds or edible oils, in accordance with the provisions of sub-section (3B) of section 3;

(ii) in the case of sugar in accordance with the provisions of sub-section (3C) of section 3; and

 (iii) in the case of any other essential commodity, in accordance with the provisions of sub-section (3) of section 3.”

[ Vide Bihar Act 9 of 1978, sec. 5 (w.e.f. 6-9-1978).]

 COMMENTS

Order passed under section 6A (2) does not attract section 6C

There is a difference in orders of confiscation passed by the Collector under section 6A(1) and section 6A(2) of the Act. Thus, an order passed under section 6A(2) of the Act does not attract section 6C and hence no appeal lies. Section 6C is clear in its words that an appeal is provided only for orders issued for confiscation under section 6A(1) of the Act; State of U.P . v. Ram Avtar Jaiswal , 1983 All LJ 1197.

Scope of expression “for any reason”

The expression, ‘for any reason’ used in section 6C (2) of the Act should be understood in broader and larger sense as it appears from the context in which it has been used; N. Nagendra Rao & Co. v. State of Andhra Pradesh , AIR 1994 SC 2663.

 ———-

1. Extended to Goa, Daman and Diu with modifications by Regulation 12 of 1962, sec. 3 and Sch., to Dadra and Nagar Haweli by Regulation 6 of 1963, sec. 2 and Sch. I and to Lakshadweep and Amindivi Islands by Regulation 8 of 1965, sec. 3 and Sch., to the State of Sikkim (w.e.f. 7-1-1976), vide S.O. 28(E), dated 7th January, 1976.

 This Act has been amended in Maharashtra by Maharashtra Act 71 of 1976, in Orissa by Orissa Act 8 of 1976, in Uttar Pradesh by Uttar Pradesh Acts 9 of 1974, 18 of 1975, 39 of 1975 and 16 of 1978.

2. Ins. by Act 25 of 1966, sec. 3 (w.e.f. 3-9-1966).

3. The words “the State Government concerned and the State Government” subs. by Act 18 of 1981, sec. 5(a) as amended by Act 34 of 1993, sec. 3, for “any judicial authority appointed by the State Government and the judicial authority” for a period of fifteen years, now they stand ceased to have effect after the expiry of fifteen years. See Appendix — Section 5(a) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

 4. The words “the State Government” subs. by Act 18 of 1981, sec. 5(b) as amended by Act 34 of 1993, sec. 3, for “such judicial authority” for a period of fifteen years, now they stand ceased to have effect after the expiry of fifteen years, See Appendix — Section 5(b) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

5. Subs. by Act 36 of 1967, sec. 6(a), for “return the foodgrains or edible oilseeds or edible oils seized” (w.e.f. 30-12-1967).

6. Subs. by Act 92 of 1976, sec. 6, for “such person shall be paid”

7. Subs. by Act 36 of 1967, sec. 6(b), for “as if the foodgrains, edible oilseeds or edible oils, as the case may be,” (w.e.f. 30-12-1967).

8. Subs. by Act 36 of 1967, sec. 6(c), for “articles” (w.e.f. 30-12-1967).

9. Subs. by Act 36 of 1967, sec. 6(d), for certain words (w.e.f. 30-12-1967).

6-D AWARD OF CONFISCATION NOT TO INTERFERE WITH OTHER PUNISHMENTS.

 The award of any confiscation under this Act by the Collector shall not prevent the infliction of any punishment to which the person affected thereby is liable under this Act. 21 ]

 —————

1.  Ins. by Act 25 of 1966, sec. 3 (w.e.f. 3-9-1966).

6E. Bar of jurisdiction in certain cases.

1[6E. Bar of jurisdiction in certain cases.—

Whenever any essential commodity is seized in pursuance of an order made under Sec. 3 in relation thereto, or any package, covering or receptacle in which such essential commodity is found, or any animal, vehicle, vessel or other conveyance used in carrying such essential commodity is seized pending confiscation under Sec. 6-A, the Collector,

or, as the case may be,2[the judicial authority appointed under section 6C] shall have, and, notwithstanding anything to the contrary contained in any other law for the time being in force, 3[any other court, tribunal or authority] , jurisdiction to make orders with regard to the possession, delivery, disposal, release or distribution of such essential commodity, package, covering, receptacle, animal, vehicle, vessel or other conveyance. 46 ]

—————

1. Ins. by Act 92 of 1976, sec. 7 (w.e.f. 2-9-1976) and subs. by Act 42 of 1986, sec. 2 (w.e.f. 9-9-1986).

 2. The words “the State Government concerned under section 6C” subs. by Act 18 of 1981 as amended by Act 34 of 1993, for “the judicial authority appointed under section 6C” for a period of fifteen years, now they stand ceased to have effect after the expiry of fifteen years. See Appendix — Section 6(a) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

3. The words “any court, tribunal or other authority” subs. by Act 18 of 1981 as amended by Act 34 of 1993, for “any other court, tribunal or authority” for a period of fifteen years, now they stand ceased to have effect after the expiry of fifteen years. See Appendix — Section 6(b) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

7 PENALTIES.

2PENALTIES. 1(1) If any person contravenes any order made under Sec. 3, – (a) he shall be punishable, –

(i) in the case of an order made with reference to Cl.(h) or Cl.(i) of sub-section (2) of that section, with imprisonment for a term which may extend to one year and shall also be liable to fine, and

 (ii) in the case of any other order, with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine;

 3[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three months;]

 (b) any property in respect of which the order has been contravened shall be forfeited to the Government;

 (c) any packing, covering or receptacle in which the property is found and any animal, vehicle, vessel or other conveyance used in carrying the property shall, if the Court so orders, be forfeited to the Government.

(2) If any person to whom a direction is given under Cl. (b) of sub-section (4) of Sec. 3 fails to comply with the direction, he shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine.

 5[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three months.]

 4(2-A) If any person convicted of an offence under sub-clause(ii) of Cl. (a) of sub-section (1) or under sub-section (2) is again convicted of an offence under the same provision, he shall be punishable with imprisonment for the second and for every subsequent offence for a term which shall not be
less than six months but which may extend to seven years and shall also be liable to fine :

 6[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment impose a sentence of imprisonment for a term of less than six months.]

 7[(2B) For the purposes of sub-sections (1), (2) and (2A), the fact that an offence under sub-clause (ii) of clause (a) of sub-section (1) or under sub-section (2) has caused no substantial harm to the general public or to any individual, shall be an adequate and special reason for awarding a sentence of imprisonment for a term of less than three months, or six months, as the case may be.]]

8(3) Where a person having been convicted of an offence under sub-section (1) is again convicted of an offence under that sub-section for contravention of an order in respect of an essential commodity, the Court by which such person is convicted shall, in addition to any penalty which may be imposed on him under that sub-section, by order, direct that person shall not carry on any business in that essential commodity for such period, not being less than six months, as may be specified by the Court in the order. 52 ]

STATE AMENDMENTS

Punjab : Haryana: Chandigarh. —After section 7, insert the following section, namely:—

 “7A. Forfeiture of certain property used in the commission of the offence .—Whenever any offence relating to foodstuffs which is punishable under section 7 had been committed, the Court shall direct that all the packages, coverings or receptacles in which any property liable to be forfeited under the said section is found and all the animals, vehicles, vessels or other conveyances used in carrying the said property shall be forfeited to the Government.”

 [ Vide Punjab Act 34 of 1959, sec. 2 (w.e.f. 27-8-1959).]

Rajasthan. —After section 7, insert the following section, namely:—

“ 7A. Same as in Punjab with following proviso:

Provided that if the Court is of opinion that it is not necessary to direct forfeiture in respect of all such packages, coverings or receptacles or such animals, vehicles, vessels, or other conveyances or any of them, it may, for reasons to be recorded, refrain from doing so.”

 [ Vide Rajasthan Act 32 of 1960, sec. 2 (w.e.f. 24-9-1960).]

1. Extended to Goa, Daman and Diu with modifications by Regulation 12 of 1962, sec. 3 and Sch., to Dadra and Nagar Haweli by Regulation 6 of 1963, sec. 2 and Sch. I and to Lakshadweep and Amindivi Islands by Regulation 8 of 1965, sec. 3 and Sch., to the State of Sikkim (w.e.f. 7-1-1976), vide S.O. 28(E), dated 7th January, 1976.

This Act has been amended in Maharashtra by Maharashtra Act 71 of 1976, in Orissa by Orissa Act 8 of 1976, in Uttar Pradesh by Uttar Pradesh Acts 9 of 1974, 18 of 1975, 39 of 1975 and 16 of 1978.

 2. Subs. by Act 30 of 1974, sec. 6, for sub-section (1) (w.r.e.f. 22-6-1974). Earlier sub-section (1) was amended by Act 25 of 1966, sec. 4 (w.e.f. 3-9-1966) and by Act 36 of 1967, sec. 7(a) (w.e.f. 30-12-1967).

3. Proviso was omitted by Act 18 of 1981, sec. 7(a) as amended by Act 34 of 1993, sec. 3 for a period of fifteen years which now stands restored after the expiry of fifteen years. See Appendix — Section 7(a) Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

4. Subs. by Act 30 of 1974, sec. 6, for sub-section (2) (w.r.e.f. 22-6-1974). Earlier sub-section (2) was amended by Act 36 of 1967, sec. 8(b) (w.e.f. 30-12-1967).

 5. Proviso was omitted by Act 18 of 1981, sec. 7(b) as amended by Act 34 of 1993, sec. 3 for a period of fifteen years which now stands restored after the expiry of fifteen years. See Appendix — Section 7(b) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

 6. Proviso was omitted by Act 18 of 1981, sec. 7(c) as amended by Act 34 of 1993, sec. 3 for a period of fifteen years which now stands restored after the expiry of fifteen years. See Appendix — Section 7(c) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

7. Sub-section (2B) was omitted by Act 18 of 1981, sec.7(d) as amended by Act 34 of 1993,sec. 3 for a period of fifteen years which now stands restored after the expiry of fifteen years. See Appendix —Section 7(d) of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

8. Ins. by Act 36 of 1967, sec. 7(c) (w.e.f. 30-12-1967).

Section 7-A POWER OF CENTRAL GOVERNMENT TO RECOVER CERTAIN AMOUNTS AS ARREARS OF LAND REVENUE.

1POWER OF CENTRAL GOVERNMENT TO RECOVER CERTAIN AMOUNTS AS ARREARS OF LAND REVENUE.

 (1) Where any person, liable to, –

(a) pay any amount in pursuance of any order made under Sec. 3, or

(b) deposit any amount to the credit of any account or fund constituted by or in pursuance of any order made under that section. makes any default in paying or depositing the whole or any part of such amount, the amount in respect of which such default has been made shall whether such order was made before or after the commencement of the Essential Commodities (Amendment) Act, 1984, and whether the liability of such person to pay or deposit such amount arose before or after such commencement be recoverable by Government together with simple interest due thereon computed at the rate 2[fifteen per cent.] per annum from the date of such default to the date of recovery of such amount, as an arrear of land revenue 3[or as a public demand].

 (2) The amount recovered under sub-section (1) shall be dealt with in accordance with the order under which the liability to pay or deposit such amount arose.

(3) Notwithstanding anything contained in any other law for the time being in force or any contract to the contrary, no Court, Tribunal or other authority shall grant any injunction or make any order prohibiting or restraining any
Government from recovering any amount as an arrear of land revenue [ 56 or as a public demand 56 ] in pursuance of the provisions of sub-section (1).

 (4) If any order, in pursuance of which any amount has been recovered by Government as an arrear of land revenue [ 57 or as a public demand 57 ] under sub-section (1) is declared by a competent Court, after giving to the Government a reasonable opportunity of being heard, to be invalid, the Government shall refund the amount so recovered by it to the person from whom it was recovered, together with simple interest due thereon, computed at the rate of 4[ fifteen per cent. ] per annum, from the date of recovery of such amount to the date on which such refund is made.

Explanation :

For the purposes of this section, “Government” means the Government by which the concerned order under Sec. 3 was made or where such order was made by an officer or authority subordinate to any Government, that Government. 53 ]

 —————

1. Ins. by Act 34 of 1984, sec. 2 (w.e.f. 1-7-1984).

2. Subs. by Act 42 of 1986, sec. 3, for “six per cent.” (w.e.f. 8-9-1986).

3. Ins. by Act 42 of 1986, sec. 3 (w.e.f. 8-9-1986).

4. Subs. by Act 42 of 1986, sec. 3, for “six per cent.” (w.e.f. 8-9-1986).

8 . ATTEMPTS AND ABETMENT.

Any person who attempts to contravene, or abets contravention of any order made under section 3 shall be deemed to have contravene that order:

 1[***]

—————

1. Proviso was ins. by Act 18 of 1981 as amended Act 34 of 1993 for a period of fifteen years. It now stands ceased to have effect after the expiry of fifteen years. See Appendix — Section 8 of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

9 FALSE STATEMENT.

If any person. –

 (i) when required by any order made under Sec. 3 to make any statement or furnish any information, makes any statement or furnishes any information which is false in any material particular and which he knows or has reasonable cause to believe to be false, or does not believe to be true, or

 (ii) makes any such statement as aforesaid in any book, account, record declaration, return or other document which he is required by any such order to maintain or furnish, he shall be punishable with imprisonment for a term which may extend to 1[ five years,] or with fine, or with both.

—————

1.  Subs. by Act 36 of 1967, sec. 8, for “three years” (w.e.f. 30-12-1967).

10 OFFENCES BY COMPANIES.

(1) If the person contravening an order made under Sec. 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against
and punished accordingly :

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any Director, Manager, Secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation :

For the purposes of this section, –

(a) “company” means any body corporate, and includes a firm or other association of individuals; and

(b) “director” in relation to a firm means a partner in the firm.

Section 10-A

1[10A. Offences to be cognizable 2[3[***]]—Notwithstanding anything contained in 4[the Code of Criminal Procedure, 1973 (2 of 1974)] every offence punishable under this Act shall be *cognizable 2[3[***]]].

5[***]

—————

1. Ins. by Act 36 of 1967, sec. 9 (w.e.f. 30-12-1967).

2. The words “and bailable” omitted by Act 30 of 1974, sec. 7 (w.r.e.f. 22-6-1974).

 3. After the word “cognizable” the words “and non-bailable” were ins. by Act 18 of 1981 as amended by Act 34 of 1993 for a period of fifteen years, now they stand ceased to have effect after the expiry of fifteen years. See Appendix — Section 9 of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

 4. Subs. by Act 30 of 1974, sec. 7, for “the Code of Criminal Procedure, 1898 (5 of 1898)” (w.e.f. 22-6-1974).

 5. Section 10AA was ins. by Act 34 of 1993 for a period of fifteen years which now stands ceased to have effect after the expiry of fifteen years. See Appendix — Section 9A of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

Section 10-B

1 POWER OF COURT TO PUBLISH NAME, PLACE OF BUSINESS, ETC., OF COMPANIES CONVICTED UNDER THE ACT.

(1) Where any company is convicted under this Act, it shall be competent for the Court convicting the company to cause the name and place of business of the company, nature of the contravention, the fact that the company has been so convicted and such other particulars as the Court may consider to be appropriate in the circumstances of the case, to be published at the expense of the company in such newspapers or in such other manner as the Court may direct.

(2) No publication under sub-section (1) shall be made until the period for preferring an appeal against the order of the Court has expired without any appeal having been preferred, or such an appeal, having been preferred, has been disposed of.

 (3) The expenses of any publication under sub-section (1) shall be recoverable from the company as if it were a fine imposed by the Court.

Explanation :

For the purposes of this section, “company” has the meaning assigned to it in Cl.(a) of the explanation to See. 10.

 —————

1.  Ins. by Act 30 of 1974, sec.8 (w.r.e.f. 22-6-1974).

10-C PRESUMPTION OF CULPABLE MENTAL STATE.

1 PRESUMPTION OF CULPABLE MENTAL STATE. (1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the Court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act
charged as an offence in that prosecution.

  Explanation :

In this section, “culpable mental state” includes intention, motive, knowledge of a fact and the belief in, or reason to believe, a fact.

 (2) For the purposes of this section, a fact is said to the proved only when the Court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability. 67 ]

————

1.  Ins. by Act 30 of 1974, sec. 8 (w.r.e.f. 22-6-1974).

11 Cognizance of offences.

 No Court shall take cognizance of any offence punishable under this Act except on a report in writing of the facts constituting such offence made by a person who is a public servant as defined in Sec. 21 of the Indian Penal Code (45 of 1860) [ 68 or any person aggrieved or any recognised consumer association, whether such person is a member of that association or not 68 ].

 1 Explanation :

For the purposes of this section and Sec. 12-AA. 70
“recognised consumer association” means a voluntary consumer association registered under the Companies Act, 1956(1 of 1956) or any other law for the time being in force.

state amendment

Uttar Pradesh.—In section 11, for the wrods “by a person who is a public servant as defined in section 21 of the Indian Penal Code,” substitute the words “by order of, or under authority from the District Magistrate or such other officer as may be empowered by the State Government by general or special order in this behalf.”

 [Vide Uttar Pradesh Act 9 of 1974, sec. 7 (w.e.f. 24-4-1974).]

—————

1. Ins. by Act 73 of 1986, sec. 2 (w.e.f. 1-5-1987).

Section 12. Special provision regarding fine.

1[2[12. Special provision regarding fine.—Notwithstanding anything contained in section 29 of the Code of Criminal Procedure, 1973 (2 of 1974), it shall be lawful for any Metropolitan Magistrate, or any Judicial Magistrate of the first class specially empowered by the State Government in this behalf, to pass a sentence of fine exceeding five thousand rupees on any person convicted of contravening any order made under section 3.]]

—————

1. Subs. by Act 30 of 1974, sec. 9 (w.r.e.f. 22-6-1974).

2. Section 12 was omitted by Act 18 of 1981 as amended by Act 34 of 1993 for a period of fifteen years which now stands restored after the expiry of fifteen years. See Appendix — Section 10 of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

Section 12-A. Power to try summaril

2[3[12A. Power to try summaril y.—(1) If the Central Government is of opinion that a situation has arisen where, in the interests of production, supply or distribution of 4[any essential commodity not being an essential commodity referred to in clause (a) of sub-section (2)] or trade or commerce therein and other relevant considerations, it is necessary that the contravention of any order made under section 3 in relation to such essential commodity should be tried summarily, the Central Government may, by notification in the Official Gazette, specify such order to be a special order for purposes of summary trial under this section, and every such notification shall be laid, as soon as may be after it is issued, before both Houses of Parliament:

5[Provided that—

(a) every such notification issued after the commencement of the Essential Commodities (Amendment) Act, 1971, shall, unless sooner rescinded, cease to operate at the expiration of two years after the publication of such notification in the Official Gazette;

(b) every such notification in force immediately before such commencement shall, unless sooner rescinded, cease to operate at the expiration of two years after such commencement:

Provided further that nothing in the foregoing proviso shall affect any case relating to the contravention of a special order specified in any such notification if proceedings by way of summary trial have commenced before that notification is rescinded or ceases to operate and the provisions of this section shall continue to apply to that case as if that notification had not been rescinded or had not ceased to operate.]

6[(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) all, offences relating to—

 a) the contravention of an order made under section 3 with respect to—

7[***]

(ii) foodstuffs, including edible oilseeds and oil; or

(iii) drugs; and

(b) where any notification issued under sub-section (1) in relation to a special order is in force, the contravention of such special order, shall be tried in a summary way by a Judicial Magistrate of the First Class specially empowered in this behalf by the State Government or by a Metropolitan Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trial:

 Provided that, in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year:

Provided further that when at the commencement of, or in the course of, a summary trial under this section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses who may have been examined and proceed to hear or re-hear the case in the manner provided by the said Code.]

(3) Notwithstanding anything to the contrary contained in 8[the Code of Criminal Procedure, 1973 (2 of 1974),] there shall be no appeal by a convicted person in any case tried summarily under this section in which the Magistrate passes a sentence of imprisonment not exceeding one month, 9[and of fine not exceeding two thousand rupees] whether or not any order of forfeiture of property or an order under 10[section 452] of the said Code is made in addition to such sentences, but an appeal shall lie where any sentence 11[***] in excess of the aforesaid limits is passed by the Magistrate.

 12[(4) All cases relating to the contravention of an order referred to in clause (a) of sub-section (2), not being a special order, and pending before a Magistrate immediately before the commencement of the Essential Commodities (Amendment) Act, 1974, and, where any notification is issued under sub-section (1) in relation to a special order, all cases relating to the contravention of such special order and pending before a Magistrate immediately before the date of the issue of such notification, shall, if no witnesses have been examined before such commencement or the said date, as the case may be, be tried in a summary way under this section, and if any such case is pending before a Magistrate who is not competent to try the same in a summary way under this section, it shall be forwarded to a Magistrate so competent.]]]

STATE AMENDMENTS

Uttar Pradesh. —In section 12,—

(i) after sub-section (1), insert the following sub-section, namely:—

 “(1A) without prejudice to the powers of the Central Government under sub-section (i) if the State Government is of opinion that a situation has arisen where, in the interests of production, supply or distribution of any essential commodity, or trade or commerce therein, and other relevant considerations, it is necessary that the contravention of any order made under section 3 in relation to such essential commodity should be tried summarily, the State Government may, by notification in the Official Gazette, specify such order to be a special order for purposes of summary trial under this section and every such notification shall be laid as soon as may be after it is issued, before both Houses of the State Legislature.”;

(ii) in sub-section (2), after the words, figure and brackets “under sub-section (1)” the words, figure, letter and brackets “or under sub-section (1A)” shall be inserted and for the words “a Megistrate of the first class specially empowered in this behalf by the State Government”, the words “a Magistrate of the first class having experience as such of not less than five years” shall be substituted;

(iii) in sub-section (4), after the words, figure and brackets, “under sub-section (1)” the words, figure, letter and brackets “or under sub-section (1A)” shall be inserted.

[ Vide Uttar Pradesh Act 9 of 1974 (w.e.f. 27-9-1974).]

Ed. These amendments are prior to the amendments made by the Central Act 30 of 1974 (w.e.f. 22-6-1974).

13[***]

 ———-

1. Extended to Goa, Daman and Diu with modifications by Regulation 12 of 1962, sec. 3 and Sch., to Dadra and Nagar Haweli by Regulation 6 of 1963, sec. 2 and Sch. I and to Lakshadweep and Amindivi Islands by Regulation 8 of 1965, sec. 3 and Sch., to the State of Sikkim (w.e.f. 7-1-1976), vide S.O. 28(E), dated 7th January, 1976.

This Act has been amended in Maharashtra by Maharashtra Act 71 of 1976, in Orissa by Orissa Act 8 of 1976, in Uttar Pradesh by Uttar Pradesh Acts 9 of 1974, 18 of 1975, 39 of 1975 and 16 of 1978.

2. Ins. by Act 47 of 1964, sec. 2 (w.e.f. 5-11-1964).

3. Section 12A was substituted by Act 18 of 1981, sec. 11 as amended by Act 34 of 1993,

sec. 3 for a period of fifteen years which now stands ceased to have effect after the expiry of fifteen years. The original section 12A as inserted by Act 47 of 1964, sec. 2 (w.e.f. 5-11-1964) and amended by Act 66 of 1971 and by Act 30 of 1974, sec. 10 (w.r.e.f. 22-6-1974) has been restored. See Appendix — Section 11 of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

4. Subs. by Act 30 of 1974, sec. 10, for “any essential commodity” (w.r.e.f. 22-6-1974).

 5. Added by Act 66 of 1971, sec. 5 (w.e.f. 23-12-1971).

6. Subs. by Act 30 of 1974, sec. 10, for sub-section (2) (w.r.e.f. 22-6-1974).

 7. Sub-clause (i) omitted by Act 54 of 2006, sec. 5 (w.e.f. 12-2-2007). Sub-clause (i), before omission, stood as under: ‘(i) cotton or woollen textiles; or’.

 8. Subs. by Act 30 of 1974, sec. 10, for “the Code of Criminal Procedure, 1898 (5 of 1898)” (w.r.e.f. 22-6-1974).

9. Subs. by Act 30 of 1974, sec. 10, for “or of fine not exceeding two thousand rupees or both” (w.r.e.f. 22-6-1974).

10. Subs. by Act 30 of 1974, sec. 10, for “section 517” (w.r.e.f. 22-6-1974).

11. The words “of imprisonment or fine” omitted by Act 30 of 1974, sec. 10 (w.r.e.f. 22-6-1974).

12. Subs. by Act 30 of 1974, sec. 10, for sub-section (4), (w.r.e.f. 22-6-1974).

13. Sections 12AA, 12AB, 12AC were substituted by Act 18 of 1981, sec. 11, for section 12 as amended by Act 34 of 1993, sec. 3 for a period of fifteen years which now stand ceased to have effect after the expiry of fifteen years. Earlier section 12AA was amended by Act 42 of 1986, sec. 4 (w.e.f. 8-9-1986) and by Act 73 of 1986, sec. 3 (w.e.f. 1-5-1987). See Appendix — Section 11 of the Essential Commodities (Special Provisions) Act, 1981 (18 of 1981).

Section 12-B GRANT OF INJUNCTION, ETC., BY CIVIL COURTS.

1GRANT OF INJUNCTION, ETC., BY CIVIL COURTS.

No Civil Court shall grant an injunction or make any order for any other relief, against the Central Government or any State Government or a public officer in respect of any act done or purporting to be done by such Government, or such officer in his official capacity, under this Act or any order made thereunder, until after notice of the application for such injunction or other relief has been given to such Government or officer.

  —————

1.  Ins. by Act 30 of 1974, sec. 11 (w.r.e.f. 22-6-1974).

13 PRESUMPTION AS TO ORDERS.

Where an order purports to have been made and signed by an authority in exercise of any power conferred by or under this Act, a court shall presume that such order was so made by that authority within the meaning of the Indian Evidence Act, 1872 (1 of 1872).

 14 BURDEN OF PROOF IN CERTAIN CASES.

Where a person is prosecuted for contravening any order made under Sec. 3 which prohibits him from doing any act or being in possession of a thing without lawful authority or without a permit, licence or other document, the burden of proving that he has such authority, permit, licence or other
document shall be on him.

15 PROTECTION OF ACTION TAKEN UNDER ACT.

(1) No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any order made under Sec. 3.

  (2) No suit or other legal proceeding shall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of any order made under Sec. 3.

Section 15-A. PROSECUTION OF PUBLIC SERVANT.

 1 PROSECUTION OF PUBLIC SERVANT.

Where any person who is a public servant is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his duty in pursuance of an order made under Sec. 3. no Court shall take cognizance of such offence except with the previous
sanction, –

 (a) of the Central Government, in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union,

 (b) of the State Government, in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the State.

 —————

1. Ins. by Act 92 of 1976, sec. 8 (w.e.f. 2-9-1976).

16. Repeals and savings.—

(1) The following laws are hereby repealed:—

(a) the Essential Commodities Ordinance, 1955 (1 of 1955);

(b) any other law in force in any State immediately before the commencement of this Act in so far as such law controls or authorises the control of the production, supply and distribution of, and trade and commerce in, any essential commodity.

(2) Notwithstanding such repeal, any order made or deemed to be made by any authority whatsoever, under any law repealed hereby and in force immediately before the commencement of this Act, shall, in so far as such order may be made under this Act, be deemed to be made under this Act and continue in force, and accordingly any appointment made, licence or permit granted or direction issued under any such order and in force immediately before such commencement shall continue in force until and unless it is superseded by any appointment made, licence or permit granted or direction issued under this Act.

(3) The provision of sub-section (2) shall be without prejudice to the provision contained in section 6 of the General Clauses Act, 1897 (10 of 1897), which shall also apply to the repeal of the Ordinance or other law referred to in sub-section (1) as if such Ordinance or other law had been an enactment.

Bydeb

The Consumer Protection Act, 1986

PREAMBLE

(ACT NO. 68 OF 1986)

An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith. Be it enacted by Parliament in the Thirty-seventh Year of the Republic of India as follows:-

CHAPTER I: PRELIMINARY

1. Short title, extent, commencement and applications

(1) This Act may be called the Consumer Protection Act, 1986.

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

(3) It shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different States and for different provisions of this Act.

(4) Save as otherwise expressly provided by the Central Government by notifications, this Act shall apply to all goods and services.

2. Definitions

(1) In this Act, unless the context otherwise requires,-

1[(a) “appropriate laboratory” means a laboratory or organisation-

(i) recognised by the Central Government;

(ii) recognised by a State Government, subject to such guidelines as may be prescribed by the Central Government in this behalf; or

(iii) any such laboratory or organisation established by or under any law for the time-being in force, which is maintained, financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect;

2[(aa) “branch office” means-

(i) any establishment described as a branch by the opposite party, or

(ii) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the establishment;

(b) “complainant” means-

(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956), or under any other law for the time being in force; or

(iii) the Central Government or any State Government,

2[(iv) one or more consumers, where there are numerous consumers having the same interest;] who or which makes a complaint;

(c) “complaint” means any allegation in writing made by a complainant that-

1[(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader;]

(ii) 1[the goods bought by him or agreed to be bought by him] suffer from one or more defect;

(iii) 1[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;

(iv) a trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods;

2[(v) goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods. with a view to obtaining any relief provided by or under this Act;

(d) “consumer” means any person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) 1[hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 1[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person;

2[Explanation: For the purposes of sub-clause (i), “commercial purpose” does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;]

(e) “consumer dispute” means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;

(f) “defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or 2[under any contract, express or] implied, or as is claimed by the trader in any manner whatsoever in relation to any goods;

(g) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;

(h) “District Forum” means a Consumer Disputes Redressal Forum established under clause (a) of section 9;

(i) “goods” means goods as defined in the Sale of Goods Act, 1930 (3 of 1930);

(j) “manufacturer” means a person who-

(i) makes or manufactures any goods or parts thereof; or

(ii) does not make or manufacture any goods but assembles parts thereof made or manufactured by others and claims the end product to be goods manufactured by himself; or

(iii) puts or causes to be put his own mark on any goods made or manufactured by any other manufacturer and claims such goods to be goods made or manufactured by himself.

Explanation : Where a manufacturer despatches any goods or part thereof to any branch office maintained by him, such branch office shall not be deemed to be the manufacturer even though the parts so despatched to it are assembled at such branch office and are sold or distributed from such branch office.

2[(jj) “member” includes the President and a member of the National Commission or a State Commission or a District Forum, as the case may be;]

(k) “National Commission” means the National Consumer Disputes Redressal Commission established under clause (c) of section 9;

(l) “notification” means a notification published in the Official Gazette;

(m) “person” includes-

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (22 of 1860) or not;

(n) “prescribed” means prescribed by rules made by the State Government, or as the case may be, by the Central Government under this Act;

2[(nn) “restrictive trade practice” means any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as a condition precedent for buying, hiring or availing of other goods or services;]

(o) “service” means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, 6[housing construction], 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;

(p) “State Commission” means a Consumer Disputes Redressal Commission established in a State under clause (b) of section 9;

(q) “trader” in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and where such goods are sold or distributed in package form, includes the packer thereof;

2[(r) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely,-

(1) the practice of making any statement, whether orally or in writing or by visible representation which,-

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof: PROVIDED that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii) makes to the public a representation in a form that purports to be-

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation: For the purposes of clause (1), a statement that is-

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale of supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement;.

Explanation: For the purposes of clause (2), “bargaining price” means-

(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(3) permits-

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

(b) the conduct of any contest, lottery, games of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such-hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to have a reference to the corresponding Act or provision thereof in force in such area.

3. Act not in derogation of any other law

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

CHAPTER II: CONSUMER PROTECTION COUNCILS

4. The Central Consumer Protection Council

(1) The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).

(2) The Central Council shall consist of the following members, namely,-

(a) the Minister in charge of 1[consumer affairs] in the Central Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed.

5. Procedure for meetings of the Central Council

(1) The Central Council shall meet as and when necessary, but 1[at least one meeting] of the council shall be held every year.

(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

6. Objects of the Central Council

The objects of the Central Council shall be to promote and protect the rights of the consumers such as-

(a) the right to be protected against the marketing of goods 2[and services] which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods 1[or services, as the case may be], so as to protect the consumer against unfair trade practices;

(c) the right to be assured, wherever possible, access to a variety of goods and services at competitive prices;

(d) the right to be heard and to be assured that consumers’ interests will receive due

consideration at appropriate forums;

(e) the right to seek redressal against unfair trade practices 1[or restrictive trade practices] or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

7. The State Consumer Protection Councils

(1) The State Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Consumer Protection Council (hereinafter referred to as the State Council).

1[(2) The State Council shall consist of the following members, namely,-

(a) the Minister in-charge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non-official members representing such interests as may be prescribed by the State Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

8. Objects of the State Council

The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.

CHAPTER III: CONSUMER DISPUTES REDRESSAL AGENCIES

9. Establishment of Consumer Disputes Redressal Agencies

There shall be established for the purposes of this Act, the following agencies, namely,-

(a) a Consumer Disputes Redressal Forum to be known as the “District Forum” established by the State Government 3[* * *] in each district of the State by notification:

2[PROVIDED that the State Government may, if it deems fit, establish more than one District Forum in a district;

(b) a Consumer Disputes Redressal Commission to be known as the “State Commission” established by the State Government 3[* * *] in the State by notification; and

(c) a National Consumer Disputes Redressal Commission established by the Central Government by notification.

10. Composition of the District Forum

1[(1) Each District Forum shall consist of-

(a) a person who is, or has been, or is qualified to be a District Judge, who shall be its President;

(b) two other members, who shall be persons of ability, integrity and standing, and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman.

2[(1A) Every appointment under sub-section (1) shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely,-

(i) the President of the State Commission-Chairman,

(ii) Secretary, Law Department of the State-Member,

(iii) Secretary in-charge of the Department dealing with consumer affairs in the State-Member.

(2) Every member of the District Forum shall hold office for a term of five years or up to the age of

65 years, whichever is earlier, and shall not be eligible for re-appointment: PROVIDED that a member may resign his office in writing under his hand addressed to the State

Government and on such resignation being accepted, his office shall become vacant and may be filled by the appointment of a person possessing any of the qualifications mentioned in subsection

(1) in relation to the category of the member who has resigned.

(3) The salary or honorarium and other allowances payable to, and the other terms and

conditions of service of the members of the District Forum shall be such as may be prescribed by the State Government.

11. Jurisdiction of the District Forum

(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed 1[does not exceed rupees five lakhs].

(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction-

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or 1[carries on business, or has a branch office or] personally works for gain; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or 1[carries on business or has a branch office, or personally works for gain: PROVIDED that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or 1[carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

1[12. Manner in which complaint shall be made

A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided, may be filed with a District Forum, by-

(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;

(b) any recognised consumers association whether the consumer to whom the goods sold or delivered or service provided or agreed to be provided is a member of such association or not; or

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or

(d) the Central or the State Government.

13. Procedure on receipt of complaint

(1) The District Forum shall, on receipt of a complaint, if it relates to any goods-

(a) refer a copy of the complaint to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;

(b) where the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute in the manner specified in clauses (c) to (g);

(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis with a view to finding out whether such goods suffer from any defect alleged in the complaint or suffer from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;

(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), the District Forum may require the complainant to deposit to the credit of the Forum such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test in relation to the goods in question;

(e) the District Forum shall remit the amount deposited to its credit under clause (d) to the appropriate laboratory to enable it to carry out the analysis or test mentioned in clause (c) and on receipt of the report from the appropriate laboratory, the District Forum shall forward a copy of the report along with such remarks as the District Forum may feel appropriate to the opposite party;

(f) if any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the District Forum shall require the opposite party or the complainant to submit in writing his objections in regard to the report made by the appropriate laboratory;

(g) the District Forum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the objection made in relation thereto under clause (f) and issue an appropriate order under section 14.

(2) The District Forum shall, if the complaint received by it under section 12 relates to goods in respect of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any services,-

(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;

(b) where the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute,-

(i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegation contained in the complaint, or

(ii) on the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum.

(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.

(4) For the purposes of this section, the District Forum shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely,-

(i) the summoning and enforcing attendance of any defendant or witness and examining the witness on oath;

(ii) the discovery and production of any document or other material object producible as evidence;

(iii) the reception of evidence on affidavits;

(iv) the requisitioning of the report of the concerned analysis or test from the appropriate

laboratory or from any other relevant source;

(v) issuing of any commission for the examination of any witness; and

(vi) any other matter which may be prescribed.

(5) Every proceeding before the District Forum shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860), and the District Forum shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

2[(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of subsection (1) of section 2, the provisions of Rule 8 of Order I of Schedule I to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon.]

14. Finding of the District Forum

(1) If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to 1[do] one or more of the following things, namely,-

(a) to remove the defect pointed out by the appropriate laboratory from the goods in question;

(b) to replace the goods with new goods of similar description which shall be free from any defect;

(c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant;

(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party.

2[(e) to remove the defects or deficiencies in the services in question;

(f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them;

(g) not to offer the hazardous goods for sale;

(h) to withdraw the hazardous goods from being offered for sale;

(i) to provide for adequate costs to parties.]

4[(2) Every proceeding referred to in sub-section (1) shall be conducted by the President of the District Forum and at least one member thereof sitting together:

PROVIDED that where the member, for any reason, is unable to conduct the proceeding till it is completed, the President and the other member shall conduct such proceeding de novo:

(2A) Every order made by the District Forum under sub-section (1) shall be signed by its

President and the member or members who conducted the proceedings:

PROVIDED that where the proceeding is conducted by the President and one member and they differ on any point or points, they shall state the point or points on which they differ and refer the same to the other member for hearing on such point or points and the opinion of the majority shall be the order of the District Forum.

(3) Subject to the foregoing provisions, the procedure relating to the conduct of the members of the District Forum, its sittings and other matters shall be such as may be prescribed by the State Government.

15. Appeal

Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed:

PROVIDED that the State Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not finding it within that period.

16. Composition of the State Commission

(1) Each State Commission shall consist of-

(a) a person who is or has been a Judge of a High Court, appointed by the State Government, who shall be its President:

2[PROVIDED that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court.

(b) two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman:

2[PROVIDED that every appointment under this clause shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely,-

(i) President of the State Commission-Chairman,

(ii) Secretary of the Law Department of the State-Member

(iii) Secretary in-charge of the department dealing with consumer affairs in the State-Member.]

(2) The salary or honorarium and other allowances payable to, and. the other terms and

conditions of service 3[* * *] of the members of the State Commission shall be such as may be prescribed by the State Government.

2[(3) Every member of the State Commission shall hold office for a term of five years or up to the age of sixty-seven years, whichever is earlier and shall not be eligible for re-appointment.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.

17. Jurisdiction of the State Commission

Subject to the other provisions of this Act, the State Commission shall have jurisdiction-

(a) to entertain-

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees 1[five lakhs but does not exceed rupees twenty lakhs;] and

(ii) appeals against the orders of any District Forum within the State; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise on its jurisdiction illegally or with material irregularity.

18. Procedure applicable to State Commission

1[The provisions of sections 12, 13 and 14 and the rules made thereunder] for the disposal of complaint by the Districts Forum shall, with such modification as may be necessary, be applicable to the disposal of disputes by the State Commission:

5[18A. Vacancy in the office of the President When the office of the President of the District Forum or of the State Commission, as the case may be, is vacant or when any such President is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such person, who is qualified to be appointed as President of the District Forum or, as the case may be, of the State

Commission, as the State Government may appoint for the purpose.]

19. Appeals

Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 17 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed:

PROVIDED that the National Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.

CHAPTER III: CONSUMER DISPUTES REDRESSAL AGENCIES

20. Composition of the National Commission

(1) The National Commission shall consist of-

(a) a person who is or has been a Judge of the Supreme Court, to be appointed by the Central Government, who shall be its President:

2[PROVIDED that no appointment under this clause shall be made except after consultation with the Chief Justice of India;]

(b) four other members who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman:

2[PROVIDED that every appointment under this clause shall be made by the Central Government on the recommendation of a selection committee consisting of the following, namely,-

(a) a person who is a Judge of the Supreme Court, to be nominated by the Chief Justice of India- Chairman,

(b) the Secretary in the Department of Legal Affairs in the Government of India-Member.]

(2) The salary or honorarium and other allowances payable to and the other terms and conditions of service 3[* * *] of the members of the National Commission shall be such as may be prescribed by the Central Government.

2[(3) Every member of the National Commission shall hold office for a term of five years or up to the age of seventy years, whichever is earlier and shall not be eligible for re-appointment.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.]

21. Jurisdiction of the National Commission

Subject to the other provisions of this Act, the National Commission shall have jurisdiction-

(a) to entertain

(i) complaints where the value of the goods or services and cornpensation, if any, claimed exceeds rupees 1[twenty lakhs]; and

(ii) appeals against the orders of any State Commission; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

22. Power of and procedure applicable to the National Commission

The National Commission shall, in the disposal of any complaints or of any proceedings before it, have

(a) the powers of a civil court as specified in sub-sections (4), (5) and (6) of section 13;

(b) the power to issue an order to the opposite party directing him to do any one or more of the things referred to in clauses (a) to (i) of sub-section (1) of section 14, and follow such procedure as may be prescribed by the Central Government.

23. Appeal

Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order: PROVIDED that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.

24. Finality of order

Every order of a District Forum, State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.

2[24A. Limitation period

(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:

PROVIDED that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.

24B. Administrative control

(1) The National Commission shall have administrative control over all the State Commissions in the following matters, namely,-

(i) calling for periodical returns regarding the institution, disposal, pendency of cases;

(ii) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior service of copies of documents produced by one party to the opposite parties, furnishing of English translation of judgments written in any language, speedy grant of copies of documents;

(iii) generally overseeing the functioning of the State Commissions or the District Fora to ensure that the objects and purposes of the Act are best served without in any way interfering with their quasi-judicial freedom.

(2) The State Commission shall have administrative controls over all the District Fora within its jurisdiction in all matters referred to in sub-section (1).]

25. Enforcement of orders by the Forum, the State Commission or the National

Commission

Every order made by the District Forum, the State Commission or the National Commission, may be enforced by the District Forum, the State Commission or the National Commission as the case may be, in the same manner as if it were a decree or order made by a court in a suit pending therein and it shall be lawful for the District Forum, the State Commission or the National Commission to send, in the event of its inability to execute it, such order to the court within the local limits of whose jurisdiction-

(a) in the case of an order against a company, the registered office of the company is situated, or

(b) in the case of an order against any other person, the place where the person concerned voluntarily resides or carries on business or personally works for gain, is situated, and thereupon, the court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution.

1[26. Dismissal of frivolous or vexatious complaints

Where a complaint instituted before the District Forum, the State Commission or, as the case may be, the National Commission, is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, dismiss the complaint and make an order that the complainant shall pay to the opposite party such cost, not exceeding ten thousand rupees, as may be specified in the order.

27. Penalties

Where a trader or a person against whom a complaint is made 2[or the complainant] fails or omits to comply with any order made by the District Forum, the State Cornmission or the National Commission, as the case may be, such trader or person 2[or complainant] shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both:

PROVIDED that the District Forum, the State Commission or the National Commission, as the case may be, may, if it is satisfied that the circumstances of any case so require, impose a sentence of imprisonment or fine, or both, for a term lesser than minimum term and the amount lesser than the minimum amount, specified in this section.

CHAPTER IV: MISCELLANEOUS

28. Protection of action taken in good faith

No suit, prosecution or other legal proceedings shall lie against the members of the District Forum, the State Commissions or the National Commission or any officer or person acting under the direction of the District Forum, the State Commission or the National Commission for executing any order made by it or in respect of anything which is in good faith done or intended to be done by such member, officer or person under this Act or under any rule or order made thereunder.

29. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

PROVIDED that no such order shall be made after the expiry of a period of two years from the commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

5[29A. Vacancies or defects in appointment not to invalidate orders No act or proceeding of the Districts Forum, the State Commission or the National Commission

shall be invalid by reason only of the existence of any vacancy amongst its members or any defect in the constitution thereof.]

30. Power to make rules

(1) The Central Government may, by notification, make rules for carrying out the provisions contained in 2[clause (a) of sub-section (1) of section 2], clause (b) of sub-section (2) of section 4, sub-section (2) of section 5, clause (vi) of sub-section (4) of section 13, section 19, sub-section (2) of section 20 and section 22 of this Act.

(2) The State Government may, by notification, make rules for carrying out the provisions contained in 2[clause (b) of sub-section (2) and sub-section (4) of section 7], sub-section (3) of section 10, clause (c) of sub-section (1) of section 13, sub-section (3) of section 14, section 15 and sub-section (2) of section 16.

31. Laying of rules

(1) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

(2) Every rule made by a State Government under this Act shall be laid as soon as may be after it is made, before the State Legislature.

Foot Notes

1 Substituted by Act No. 50 of 1993, w.e.f. 18th. June, 1993.

2 Inserted by Act No. 50 of 1993, w.e.f. 18th. June, 1993.

3 Omitted by Act No. 50 of 1993, w.e.f. 18th. June, 1993.

4 Substituted by Act No. 34 of 1991, w.e.f. 15th. June, 1991.

5 Inserted by Act No. 34 of 1991, w.e.f. 15th. June, 1991.

Bydeb

The Competition Act, 2002

Chapter I – Preliminary

EXTRAORDINARY

PART II — Section 1

PUBLISHED BY AUTHORITY

NO. 12 NEW DELHI, TUESDAY, JANUARY 14, 2003 / PAUSA 24, 1924

Separate paging is given to this Part in order that it may be filed as a separate compilation.

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 14th January, 2003/Pausa 24, 1924 (Saka)

The following Act of Parliament received the assent of the President on the 13lh January, 2003 and is hereby published for general information:—

THE COMPETITION ACT, 2002

No. 12 OF 2003

 [13th January, 2003.]

An Act to provide, keeping in view of the economic development of the country, for the establishment of a 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.

BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:—

Section 1. Short title, extent and commencement

(1) This Act may be called the Competition Act, 2002.

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

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Section 2. Definitions

In this Act, unless the context otherwise requires,—

(a) “acquisition” means, directly or indirectly, acquiring or agreeing to acquire—

(i) shares, voting rights or assets of any enterprise; or

(ii) control over management or control over assets of any enterprise;

(b) “agreement” includes any arrangement or understanding or action in concert,—

(i) whether or not, such arrangement, understanding or action is formal or in writing; or

(ii) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings;

(c) “cartel” includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services;

(d) “Chairperson” means the Chairperson of the Commission appointed under sub-section (1) of section 8;

(e) “Commission” means the Competition Commission of India established under sub-section (1) of section 7;

(f) “consumer” means any person who—

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, whether such purchase of goods is for resale or for any commercial purpose or for personal use;

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use;

(g) “Director General” means the Director General appointed under sub-section (1) of section 16 and includes any Additional, Joint, Deputy or Assistant Directors General appointed under that section;

(h) “enterprise” means a person or a department of the Government, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space.

Explanation.-—For the purposes of this clause,—

(a) “activity” includes profession or occupation;

(b) “article” includes a new article and “service” includes a new service;

(c) “unit” or “division”, in relation to an enterprise, 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;

(i) “goods” means goods as defined in the Sale of Goods Act, 1930 (8 of 1930) and includes—

(A) products manufactured, processed or mined;

(B) debentures, stocks and shares after allotment;

(C) in relation to goods supplied, distributed or controlled in India, goods imported into India;

(j) “Member” means a Member of the Commission appointed under sub-section (/) of section8 and includes the Chairperson;

(k) “notification” means a notification published in the Official Gazette;

(l) “person” includes—

(i) an individual;

(ii) a Hindu undivided family;

(iii) a company;

(iv) a firm;

(v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

(vi) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956);

(vii) any body corporate incorporated by or under the laws of a country outside India;

(viii) a co-operative society registered under any law relating to cooperative societies;

(ix) a local authority;

(x) every artificial juridical person, not falling within any of the preceding sub-clauses;

(m) “practice” includes any practice relating to the carrying on of any trade by a person or an enterprise;

(n) “prescribed” means prescribed by rules made under this Act;

(o) “price”, in relation to the sale of any goods or to the performance of any services, includes every valuable consideration, whether direct or indirect, or deferred, 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;

(p) “public financial institution” means a public financial institution specified under section 4A of the Companies Act, 1956 (1 of 1956) and includes a State Financial, Industrial or Investment Corporation;

(q) “regulations” means the regulations made by the Commission under section 64;

(r) “relevant market” means the market which may be determined by the Commission with reference to the relevant product market or the relevant geographic market or with reference to both the markets;

(s) “relevant geographic market” means a market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in the neighbouring areas;

(t) “relevant product market” means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use;

(u) “service” means service of any description which is made available to potential users and includes the provision of services in connection with business of any industrial or commercial matters such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising;

(v) “shares” means shares in the share capital of a company carrying voting rights and includes—

(i) any security which entitles the holder to receive shares with voting rights;

(ii) stock except where a distinction between stock and share is expressed or implied;

(w) “statutory authority” means any authority, board, corporation, council, institute, university or any other body corporate, established by or under any Central, State or Provincial Act for the purposes of regulating production or supply of goods or provision of any services or markets therefor or any matter connected therewith or incidental thereto;

(x) “trade” means any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and includes the provision of any services;

(y) “turnover” includes value of sale of goods or services;

(z) words and expressions used but not defined in this Act and defined in the Companies Act, 1956 (1 of 1956) shall have the same meanings respectively assigned to them in that Act.

Chapter II – Prohibition of Certain Agreements, Abuse of Dominant Position and Regulation of Combinations – Prohibition of agreements

Section 3. Anti competitive agreements

(1) No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India.

(2) Any agreement entered into in contravention of the provisions contained in subsection (1) shall be void.

(3) Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which—

(a) directly or indirectly determines purchase or sale prices;

(b) limits or controls production, supply, markets, technical development, investment or provision of services;

(c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way;

(d) directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable adverse effect on competition:

Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services.

Explanation.—For the purposes of this sub-section, “bid rigging” means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding

(4) Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services, including—

(a) tie-in arrangement;

(b) exclusive supply agreement;

(c) exclusive distribution agreement;

(d) refusal to deal;

(e) resale price maintenance,

shall be an agreement in contravention of sub-section (1) if such agreement causes or is likely to cause an appreciable adverse effect on competition in India.

Explanation.—For the purposes of this sub-section,—

(a) “tie-in arrangement” includes any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods;

(b) “exclusive supply agreement” includes any agreement restricting in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person;

(c) “exclusive distribution agreement” includes any agreement to limit, restrict or withhold the output or supply of any goods or allocate any area or market for the disposal or sale of the goods;

(d) “refusal to deal” includes any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought;

(e) “resale price maintenance” includes any agreement to sell goods on condition that the prices to be charged on the resale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that prices lower than those prices may be charged.

(5) Nothing contained in this section shall restrict—

(i) the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under—

(a) the Copyright Act, 1957 (14 of 1957);

(b) the Patents Act, 1970 (39 of 1970);

(c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999);

(d) the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999);

(e) the Designs Act, 2000 (16 of 2000);

(f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000);

(ii) the right of any person to export goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export.

Section 4. Abuse of dominant position

Prohibition of abuse of dominant position

(1) No enterprise shall abuse its dominant position.

(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise.—-

(a) directly or indirectly, imposes unfair or discriminatory—

(i) condition in purchase or sale of goods or service; or

(ii) price in purchase or sale (including predatory price) of goods or service,

Explanation.— For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such discriminatory condition or price which may be adopted to meet the competition;

or

(b) limits or restricts—

(i) production of goods or provision of services or market therefore; or

(ii) technical or scientific development relating to goods or services to the prejudice of consumers; or

(c) indulges in practice or practices resulting in denial of market access; or

(d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or

(e) uses its dominant position in one relevant market to enter into, or protect, other relevant market.

Explanation.—For the purposes of this section, the expression—

(a) “dominant position” means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to—

(i) operate independently of competitive forces prevailing in the relevant market; or

(ii) affect its competitors or consumers or the relevant market in its favour;

(b) “predatory price” means the sale of goods or provision of services, at a. price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

Section 5. Combination

Regulation of combinations

The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises, if—

(a) any acquisition where—

(i) the parties to the acquisition, being the acquirer and the enterprise, whose control, shares, voting rights or assets have been acquired or are being acquired jointly have,—

(A) either, in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or turnover more than fifteen hundred million US dollars;

or

(ii) the group, to which the enterprise whose control, shares, assets or voting rights have been acquired or are being acquired, would belong after the acquisition, jointly have or would jointly have,—

(A) either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees twelve thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than two billion US dollars or turnover more than six billion US dollars; or

(b) acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service, if—

(i) the enterprise over which control has been acquired along with the enterprise over which the acquirer already has direct or indirect control jointly have,—

(A) either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees three thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or turnover more than fifteen hundred million US dollars;

or

(ii) the group, to which enterprise whose control has been acquired, or is being acquired, would belong after the acquisition, jointly have or would jointly have,—

(A) either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees twelve thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than two billion US dollars or turnover more than six billion US dollars; or

(C) any merger or amalgamation in which—

(i) the enterprise remaining after merger or the enterprise created as a result of the amalgamation, as the case may be, have,—

(A) either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees, three thousand crores; or

(B) in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or turnover more than fifteen hundred million US dollars;

or

(ii) the group, to which the enterprise remaining after the merger or the enterprise created as a result of the amalgamation, would belong after the merger or the amalgamation, as the case may be, have or would have,—

(A) either in India, the assets of the value of more than rupees four-thousand crores or turnover more than rupees twelve thousand crores; or

(B) in I ndia or outside India, the assets of the value of more than two billion US dollars or turnover more than six billion US dollars.

Explanation.— For the purposes of this section,—

(a) “control” includes controlling the affairs or management by—

(i) one or more enterprises, either jointly or singly, over another enterprise or group;

(ii) one or more groups, either jointly or singly, over another group or enterprise;

(b) “group” means two or more enterprises which, directly or indirectly, are in a position to —

(i) exercise twenty-six per cent. or more of the voting rights in the other enterprise; or

(ii) appoint more than fifty percent, of the members of the board of directors in the other enterprise; or

(iii) control the management or affairs of the other enterprise;

(c) the value of assets shall be determined by taking the book value of the assets as shown, in the audited books of account of the enterprise, in the financial year immediately preceding the financial year in which the date of proposed merger falls, as reduced by any depreciation, and the value of assets shall include the brand value, value of goodwill, or value of copyright, patent, permitted use, collective mark, registered proprietor, registered trade mark, registered user, homonymous geographical indication, geographical indications, design or layout-design or similar other commercial rights, if any, referred to in sub-section (5) of section 3.

Section 6. Regulation of combinations

(1) No person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void.

(2) Subject to the provisions contained in sub-section (1), any person or enterprise, who or which proposes to enter into a combination, may, at his or its option, give notice to the Commission, in the form as may be specified, and the fee which may be determined, by regulations, disclosing the details of the proposed combination, within seven days of—

(a) approval of the proposal relating to merger or amalgamation, referred to in clause (c) of section 5, by the board of directors of the enterprises concerned with such merger or amalgamation, as the case may be;

(b) execution of any agreement or other document for acquisition referred to in clause (a) of section 5 or acquiring of control referred to in clause (h) of that section.

(3) The Commission shall, after receipt of notice under sub-section (2), deal with such notice in accordance with the provisions contained in sections 29, 30 and 31.

(4) The provisions of this section shall not apply to share subscription or financing facility or any acquisition, by a public financial institution, foreign institutional investor, bank or venture capital fund, pursuant to any covenant of a loan agreement or investment agreement.

(5) The public financial institution, foreign institutional investor, bank or venture capital fund, referred to in sub-section (4\ shall, within seven days from the date of the acquisition, file, in the form as may be specified by regulations, with the Commission the details of the acquisition including the details of control, the circumstances for exercise of such control and the consequences of default arising out of such loan agreement or investment agreement, as the case may be.

Explanation.—For the purposes of this section, the expression—

(a) “foreign institutional investor” has the same meaning as assigned to it in clause (a) of the Explanation to section 115AD of the Income-tax Act, 1961(43 of 1961);

(b) “venture capital fund” has the same meaning as assigned to it in clause (b) of the Explanation to clause (23 FB) of section 10 of the Income-tax Act, 1961(43 of 1961);.

Chapter III – Competition Commission of India

Section 7. Establishment of Commission

(1) With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Commission to be called the “Competition Commission of India”.

(2) The Commission shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued,

(3) The head office of the Commission shall be at such place as the Central Government may decide from time to time.

(4) The Commission may establish offices at other places in India.

Section 8. Composition of Commission

(1) The Commission shall consist of a Chairperson and not less than two and not more than ten other Members to be appointed by the Central Government:

Provided that the Central Government shall appoint the Chairperson and a Member during the first year of the establishment of the Commission.

(2) The Chairperson and every other Member shall be a person of ability, integrity and standing and who, has been, or is qualified to be, a judge of a High Court; or, has special knowledge of, and professional experience of not less than fifteen years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which, in the opinion of the Central Government, may be useful to the Commission.

(3) The Chairperson and other Members shall be whole-time Members.

Section 9. Selection of Chairperson and other Members

The Chairperson and other Members shall be selected in the manner as may be prescribed.

Section 10. Term of office of Chairperson and other Members

(1) The Chairperson and every other Member shall hold office as such for a term of five years from the date on which he enters upon his office and shall be eligible for re-appointment:

Provided that no Chairperson or other Member shall hold office as such after he has attained,—

(a) in the case of the Chairperson, the age of sixty-seven years;

(b) in the case of any other Member, the age of sixty-five years.

(2) A vacancy caused by the resignation or removal of the Chairperson or any other Member under section 11 or by death or otherwise shall be filled by fresh appointment in accordance with the provisions of sections 8 and 9.

(3) The Chairperson and every other Member shall, before entering upon his office, make and subscribe to an oath of office and of secrecy in such form, manner and before such authority, as may be prescribed.

(4) In the event of the occurrence of a vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most Member shall act as the Chairperson, until the date on which a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(5) When the Chairperson is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member shall discharge the functions of the Chairperson until the date on which the Chairperson resumes the charge of his functions.

Section 11. Resignation, removal and suspension of Chairperson and other members

(1) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office:

Provided that the Chairperson or a Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

(2) Notwithstanding anything contained in sub-section (1), the Central Government may, by order, remove the Chairperson or any other Member from his office if such Chairperson or Member, as the case may be,—

(a) is, or at any time has been, adjudged as an insolvent; or

(b) has engaged at any time, during his term of office, in any paid employment, or

(c) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Member; or

(e) has so abused his position as to render his continuance in office prejudicial to the public interest;

or

(f) has become physically or mentally incapable of acting as a Member.

(3) Notwithstanding anything contained in sub-section (2), no Member shall be removed from his office on the ground specified in clause (d) or clause (e) of that subsection unless the Supreme Court, on a reference being made to it in this behalf by the Central Government, has, on an inquiry, held by it in accordance with such procedure as may be prescribed in this behalf by the Supreme Court, reported that the Member, ought on such ground or grounds to be removed.

Section 12. Restriction on employment of Chairperson and other Members in certain cases

The Chairperson and other Members shall not, for a period of one year from the ‘ date on which they cease to hold office, accept any employment in, or connected with the management or administration of, any enterprise which has been a party to a proceeding before the Commission under this Act:

Provided that nothing contained in this section shall apply to any employment under the Central Government or a State Government or local authority or in any statutory authority or any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956).

Section 13. Financial and administrative powers of Member Administration

The Central Government shall designate any Member as Member Administration who shall exercise such financial and administrative powers as may be vested in him under the rules made by the Central Government:

Provided that the Member Administration shall have authority to delegate such of his financial and administrative powers as he may think fit to any other officer of the Commission subject to the condition that such officer shall, while exercising such delegated powers continue to act under the direction, superintendence and control of the Member Administration.

Section 14. Salary and allowances and other terms and conditions of service of Chairperson and other Members

(1) The salary, and the other terms and conditions of service, of the Chairperson and other Members, including travelling expenses, house rent allowance and conveyance facilities, sumptuary allowance and medical facilities shall be such as may be prescribed.

(2) The salary, allowances and other terms and conditions of service of the Chairperson or a Member shall not be varied to his disadvantage after appointment.

Section 15. Vacancy, etc. not to invalidate proceedings of Commission

No act or proceeding of the Commission shall be invalid merely by reason of—

(a) any vacancy in, or any defect in the constitution of, the Commission; or

(b) any defect in the appointment of a person acting as a Chairperson or as a Member; or

(c) any irregularity in the procedure of the Commission not affecting the merits of the case.

Section 16. Appointment of Director General, etc.

(1) The Central Government may, by notification, appoint a Director General and as many Additional, Joint, Deputy or Assistant Directors General or such other advisers, consultants or officers, as it may think fit, for the purposes of assisting the Commission in conducting inquiry into contravention of any of the provisions of this Act and for the conduct of cases before the Commission and for performing such other functions as are, or may be, provided by or under this Act

(2) Every Additional, Joint, Deputy and Assistant Directors General or such other advisers, consultants and officers, shall exercise his powers, and discharge his functions, subject to the general control, supervision and direction of the Director General.

(3) The salary, allowances and other terms and conditions of service of the Director General and Additional, Joint, Deputy and Assistant Directors General or such other advisers, consultants or officers, shall be such as may be prescribed.

(4) The Director General and Additional, Joint, Deputy and Assistant Directors General or such other advisers, consultants or officers shall be appointed from amongst persons of integrity and outstanding ability and who have experience in investigation, and knowledge of .accountancy, management, business, public administration, international trade, law or economics and such other qualifications as may be prescribed.

Section 17. Registrar and officers and other employees of Commission

(1) The Commission may appoint a Registrar and such officers and other employees as it considers necessary for the efficient performance of its functions under this Act.

(2) The salaries and allowances payable to and other terms and conditions of service of the Registrar and officers and other employees of the Commission and the number of such officers and other employees shall be such as may be prescribed.

Chapter IV – Duties, Powers and Functions of Commission

Section 18. Duties of Commission

Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with the prior approval of the Central Government, with any agency of any foreign country.

Section 19. Inquiry into certain agreements and dominant position of enterprise

(1) The Commission may inquire into any alleged contravention of the provisions contained in subsection (1) of section 3 or sub-section (1) of section 4 either on its own motion or on—

(a) receipt of a complaint, accompanied by such fee as may be determined by regulations, from any person, consumer or their association or trade association; or

(b) a reference made to it by the Central Government or a State Government or a statutory authority.

(2) Without prejudice to the provisions contained in sub-section (1), the powers and functions of the Commission shall include the powers and functions specified in sub-sections (3) to (7).

(3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on competition under section 3, have due regard to all or any of the following factors, namely:—

(a) creation of barriers to new entrants in the market;

(b) driving existing competitors out of the market;

(c) foreclosure of competition by hindering entry into the market;

(d) accrual of benefits to consumers;

(e) improvements in production or distribution of goods or provision of services;

(f) promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services.

(4) The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not under section 4, have due regard to all or any of the following factors, namely:—

(a) market share of the enterprise;

(b) size and resources of the enterprise;

(c) size and importance of the competitors;

(d) economic power of the enterprise including commercial advantages over competitors;

(e) vertical integration of the enterprises or sale or service network of such enterprises;

(f) dependence of consumers on the enterprise;

(g) monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government company or a public sector undertaking or otherwise;

(h) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry, marketing entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or service for consumers;

(i) countervailing buying power;

(j) market structure and size of market;

(k) social obligations and social costs;

(l) relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition;

(m) any other factor which the Commission may consider relevant for the inquiry.

(5) For determining whether a market constitutes a “relevant market” for the purposes of this Act, the Commission shall have due regard to the “relevant geographic market” and “relevant product market”.

(6) The Commission shall, while determining the “relevant geographic market”, have due regard to all or any of the following factors, namely:—

(a) regulatory trade barriers;

(b) local specification requirements;

(c) national procurement policies;

(d) adequate distribution facilities;

(e) transport costs;

(f) language;

(g) consumer preferences;

(h) need for secure or regular supplies or rapid after-sales services.

(7) The Commission shall, while determining the “relevant product market”, have due regard to all or any of the following factors, namely:—

(a) physical characteristics or end-use of goods;

(b) price of goods or service;

(c) consumer preferences;

(d) exclusion of in-house production;

(e) existence of specialised producers;

(f) classification of industrial products.

Section 20. Inquiry into combination by Commission

(1) The Commission may, upon its own knowledge or information relating to acquisition referred to in clause (a) of section 5 or acquiring of control referred to in clause (b) of section 5 or merger or amalgamation referred to in clause (c) of that section, inquire into whether such a combination has
caused or is likely to cause an appreciable adverse effect on competition in India:

Provided that the Commission shall not initiate any inquiry under this sub-section after the expiry of one year from the date on which such combination has taken effect.

(2) The Commission shall, on receipt of a notice under sub-section (2) of section 6 or upon receipt of a reference under sub-section (1) of section 21, inquire whether a combination referred to in that notice or reference has caused or is likely to cause an appreciable adverse effect on competition in India.

(3) Notwithstanding anything contained in section 5, the Central Government shall, on the expiry of a period of two years from the date of commencement of this Act and thereafter every two years, in consultation with the Commission, by notification, enhance or reduce, on the basis of the wholesale price index or fluctuations in exchange rate of rupee or foreign currencies, the value of assets or the value of turnover, for the purposes of that section.

(4) For the purposes of determining whether a combination would have the effect of or is likely to have an appreciable adverse effect on competition in the relevant market, the Commission shall have due regard to all or any of the following factors, namely:—

(a) actual and potential level of competition through imports in the market;

(b) extent of barriers to entry into the market;

(c) level of combination in the market;

(d) degree of countervailing power in the market;

(e) likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins;

(f) extent of effective competition likely to sustain in a market;

(g) extent to which substitutes are available or arc likely to be available in the market;

(h) market share, in the relevant market, of the persons or enterprise in a combination, individually and as a combination;

(i) likelihood that the combination would result in the removal of a vigorous and effective competitor or competitors in the market;

(j) nature and extent of vertical integration in the market;

(k) possibility of a failing business;

(l) nature and extent of innovation;

(m) relative advantage, by way of the contribution to the economic development, by any combination having or likely to have appreciable adverse effect on competition;

(n) whether the benefits of the combination outweigh the adverse impact of the combination, if any.

Section 21. Reference by statutory authority

(1) Where in the course of a proceeding before any statutory authority an issue is raised by any party that any decision which such statutory authority has taken or proposes to take. is or would be, contrary to any of the provisions of this Act, then such statutory authority may make a reference in respect of such issue to the Commission.

(2) On receipt of a reference under sub-section (1), the Commission shall, after hearing the parties to the proceedings, give its opinion to such statutory authority which shall thereafter pass such order on the issues referred to in that sub-section as it deems fit:

Provided that the Commission shall give its opinion under this section within sixty days of receipt of such reference.

Section 22. Benches of Commission

(1) The jurisdiction, powers and authority of the Commission may be exercised by Benches thereof.

(2) The Benches shall be constituted by the Chairperson and each Bench shall consist of not less than two Members.

(3) Every Bench shall consist of at least one Judicial Member.

Explanation.—For the purposes of this sub-section, “Judicial Member” means a Member who is, or has been, or is qualified to be, a Judge of a High Court.

(4) The Bench over which the Chairperson presides shall be the Principal Bench and the other Benches shall be known as the Additional Benches.

(5) There shall be constituted by the Chairperson one or more Benches to be called the Mergers Bench or Mergers Benches, as the case may be, exclusively to deal with matters referred to in sections 5 and 6.

(6) The places at which the Principal Bench, other Additional Bench or Mergers Bench shall ordinarily sit, shall be such as the Central Government may, by notification, specify.

Section 23. Distribution of business of Commission amongst Benches

(1) Where any Benches are constituted, the Chairperson may, from time to time, by order, make provisions as to the distribution of the business of the Commission amongst the Benches and specify the matters, which may be dealt with by each Bench.

(2) If any question arises as to whether any matter falls within the purview of the business allocated to a Bench, the decision of the Chairperson thereon shall be final.

(3) The Chairperson may—

(i) transfer a Member from one Bench to another Bench; or

(ii) authorise the Members of one Bench to discharge also the functions of the Members of other Bench:

Provided that the Chairperson shall transfer, with the prior approval of the Central Government, a Member from one Bench situated in one city to another Bench situated in another city.

(4) The Chairperson may, for the purpose of securing that any case or matter which, having regard to the nature of the questions involved, requires or is required in his opinion or under the rules made by the Central Government in this behalf, to be decided by a Bench composed of more than two Members, issue such general or special orders as he may deem fit.

Section 24. Procedure for deciding a case where Members of a Bench differ in opinion

If the Members of a Bench differ in opinion on any point, they shall state the point or points on which they differ, and make a reference to the Chairperson who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members and such point or points shall be decided according to the opinion of the majority of the Members who have heard the case, including those who first heard it.

Section 25. Jurisdiction of Bench

An inquiry shall be initiated or a complaint be instituted or a reference be made under this Act before a Bench within the local limits of whose jurisdiction—

(a) the respondent, or each of the respondents, where there are more than one, at the time of the initiation of inquiry or institution of the complaint or making of reference, as the case may be, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the respondents, where there are more than one, at the time of the initiation of the inquiry or institution of complaint or making of reference, as the case may be, actually and voluntarily resides or carries on business or personally works for gain provided that in such case either the leave of the Bench is given, or the respondents who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

Explanation.—A respondent, being a person referred to in sub-clause (iii) or sub-clause (vi) or sub-clause (vii) or sub-clause (viii) of clause (l) of section 2, shall be deemed to carry on business at its sole or principal place of business in India or at its registered office in India or where it has also a subordinate office at such place.

Section 26. Procedure for inquiry on complaints under Section 19

(1) On receipt of a complaint or a reference from the Central Government or a State Government or a statutory authority or on its own knowledge or information, under section 19, if the Commission is of the opinion that there exists a prima facie case, it shall direct the Director General to cause an investigation to be made into the matter.

(2) The Director General shall, on receipt of direction under sub-section (1), submit a report on his findings within such period as may be specified by the Commission.

(3) Where on receipt of a complaint under clause (a) of sub-section (1) of section 19, the Commission is of the opinion that there exists no prima facie case, it shall dismiss the complaint and may pass such orders as it deems fit, including imposition of costs, if necessary.

(4) The Commission shall forward a copy of the report referred to in sub-section (2) to the parties concerned or to the Central Government or the State Government or the statutory authority, as the case may be.

(5) If the report of the Director General relates on a complaint and such report recommends that there is no contravention of any of the provisions of this Act, the complainant shall be given an opportunity to rebut the findings of the Director General.

(6) If, after hearing the complainant, the Commission agrees with the recommendation of the Director General, it shall dismiss the complaint.

(7) If, after hearing the complainant, the Commission is of the opinion that further inquiry is called for, it shall direct the complainant to proceed with the complaint.

(8) If the report of the Director General relates on a reference made under sub-section (/) and such report recommends that there is no contravention of the pro visions of this Act, the Commission shall invite comments of the Central Government or the State Government or the statutory authority, as the case may be, on such report and on receipt of such comments, the Commission shall return the reference if there is no prima facie case or proceed with the reference as a complaint if there is a prima facie case.

(9) If the report of the Director General referred to in sub-section (2) recommends that there is contravention of any of the provisions of this Act, and the Commission is of the opinion that further inquiry is called for, it shall inquire into such contravention in accordance with the provisions of this Act.

Section 27. Orders by Commission after inquiry into agreements or abuse of dominant position

Where after inquiry the Commission finds that any agreement referred to in section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case may be, it may pass all or any of the following orders, namely:—

(a) direct any enterprise or’association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, t’o discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be;

(b) impose such penalty, as it may deem fit which shall be not more than ten per cent. of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreements or abuse:

Provided that in case any agreement referred to in section 3 has been entered into by any cartel, the Commission shall impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty equivalent to three times of the amount of profits made out of such agreement by the cartel or ten per cent. of the average of the turnover of the cartel for the last preceding three financial years, whichever is higher;

(c) award compensation to parties in accordance with the provisions contained in section 34;

(d) direct that the agreements shall stand modified to the extent and in the manner as may be specified in the order by the Commission;

(e) direct the enterprises concerned to abide by such other orders as the Commission may pass and comply with the directions, including payment of costs, if any:

(f) recommend to the Central Government for the division of an enterprise enjoying dominant position;

(g) pass such oilier order as it may deem fit.

Section 28. Division of enterprise enjoying dominant position

(1) The Central Government, on recommendation under clause (f) of section 27, may, notwithstanding anything contained in any other law for the time being in force, by order in writing, direct division of an enterprise enjoying dominant position to ensure that such enterprise does not abuse its dominant
position.

(2) In particular, and without prejudice to the generality of the foregoing powers, the order referred to in sub-section (1) may provide for all or any of the following matters, namely:—

(a) the transfer or vesting of property, rights, liabilities or obligations;

(b) the adjustment of contracts either by discharge or reduction of any liability or obligation or otherwise;

(c) the creation, allotment, surrender or cancellation of any shares, stocks or securities;

(d) the payment of compensation to any person who suffered any loss due to dominant position of such enterprise;

(e) the formation or winding up of an enterprise or the amendment of the memorandum of association or articles of association or any other instruments regulating the business of any enterprise;

(f) the extent to which, and the circumstances in which, provisions of the order affecting an enterprise may be altered by the enterprise and the registration thereof;

(g) any other matter which may be necessary to give effect to the division of the enterprise.

(3) Notwithstanding anything contained in any other law for the time being in force or in any contract or in any memorandum or articles of association, an officer of a company who ceases to hold office as such in consequence of the division of an enterprise shall not be entitled to claim any compensation for such cesser.

Section 29. Procedure for investigation of combination

(1) Where the Commission is of the opinion that a combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India, it shall issue a notice to show cause to the parties to combination calling upon them to respond within thirty days of the receipt of the notice, as to why investigation in respect of such combination should not be conducted.

(2) The Commission, if it is prima facie of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall, within seven working days from the date of receipt of the response of the parties to the combination, direct the parties to the said combination to publish details of the combination within ten working days of such direction, in such manner, as it thinks appropriate, for bringing the combination to the knowledge or information of the public and persons affected or likely to be affected by such combination.

(3) The Commission may invite any person or member of the public, affected or likely to be affected by the said combination, to file his written objections, if any, before the Commission within fifteen working days from the date on which the details of the combination were published under sub-section (2).

(4) The Commission may, within fifteen working days from the expiry of the period specified in sub-section (3), call for such additional or other information as it may deem fit from the parties to the said combination.

(5) The additional or other information called for by the Commission shall be furnished by the parties referred to in sub-section (4) within fifteen days from the expiry of the period specified in sub-section (4).

(6) After receipt of all information and within a period of forty-five working days from the expiry of the period specified in sub-section (5), the Commission shall proceed to deal with the case in accordance with the provisions contained in section 31.

Section 30. Inquiry into disclosures under sub-section (2) of section 6

Where any person or enterprise has given a notice under sub-section (2) of section 6. The Commission shall inquire—

(a) whether the disclosure made in the notice is correct;

(b) whether the combination has, or is likely to have, an appreciable adverse effect on competition.

Section 31. Orders of Commission on certain combinations

(1) Where the Commission is of the opinion that any combination does not, or is not likely to, have an appreciable adverse effect on competition, it shall, by order, approve that combination including the combination in respect of which a notice has been given under sub-section (2) of section 6.

(2) Where the Commission is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall direct that the combination shall not take effect.

(3) Where the Commission is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition but such adverse effect can be eliminated by suitable modification to such combination, it may propose appropriate modification to the combination, to the parties to such
combination.

(4) The parties, who accept the modification proposed by the Commission under subsection (3), shall carry out such modification within the period specified by the Commission.

(5) If the parties to the combination, who have accepted the modification under subsection (4), fail to carry out the modification within the period specified by the Commission, such combination shall be deemed to have an appreciable adverse effect on competition and the Commission shall deal with such combination in accordance with the provisions of this Act.

(6) If the parties to the combination do not accept the modification proposed by the Commission under sub-section (3), such parties may, within thirty working days of the modification proposed by the Commission, submit amendment to the modification proposed by the Commission under that sub-section.

(7) If the Commission agrees with the amendment submitted by the parties under subsection (6), it shall, by order, approve the combination.

(8) If the Commission does not accept the amendment submitted under sub-section (6), then, the parties shall be allowed a further period of thirty working days within which such parties shall accept the modification proposed by the Commission under sub-section (3).

(9) If the parties fail to accept the modification proposed by the Commission within thirty working days referred to in sub-section (6) or within a further period of thirty working days referred to in sub-section (8), the combination shall be deemed to have an appreciable adverse effect on competition and be dealt with in accordance with the provisions of this Act.

(10) Where the Commission has directed under sub-section (2) that the combination shall not take effect or the combination is deemed to have an appreciable adverse effect on competition under sub-section (9), then, without prejudice to any penalty which may be imposed or any prosecution which may be initiated under this Act, the Commission may order that—

(a) the acquisition referred to in clause (a) of section 5; or

(b) the acquiring of control referred to in clause (b) of section 5; or

(c) the merger or amalgamation referred to in clause (c) of section 5, shall not be given effect to:

Provided that the Commission may, if it considers appropriate, frame a scheme to implement its order under this sub-section.

(11) If the Commission does not, on the expiry of a period of ninety working days from the date of publication referred to in sub-section (2) of section 29, pass an order or issue direction in accordance with the provisions of sub-section (1) or sub-section (2) or sub-section (7), the combination shall be deemed to have been approved by the Commission.

Explanation.—For the purposes of determining the period of ninety working days specified in this subsection, the period of thirty working days specified in sub-section (6) and a further period of thirty working days specified in sub-section (8) shall be excluded.

(12) Where any extension of time is sought by the parties to the combination, the period of ninety working days shall be reckoned after deducting the extended time granted at the request of the parties.

(13) Where the Commission has ordered a combination to be void, the acquisition or acquiring of control or merger or amalgamation referred to in section 5, shall be dealt with by the authorities under any other law for the time being in force as if such acquisition or acquiring of control or merger or amalgamation had not taken place and the parties to the combination shall be dealt with accordingly.

(14) Nothing contained in this Chapter shall affect any proceeding initiated or which may be initiated under any other law for the time being in force.

Section 32. Acts taking place outside India but having an effect on competition in India

The Commission shall, notwithstanding that,—

(a) an agreement referred to in section 3 has been entered into outside India; or

(b) any party to such agreement is outside India; or

(c) any enterprise abusing the dominant position is outside India; or

(d) a combination has taken place outside India; or

(e) any party to combination is outside India; or

(f) any other matter or practice or action arising out of such agreement or dominant position or combination is outside India, have power to inquire into such agreement or abuse of dominant position or combination if such agreement or dominant position or combination has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India.

Section 33. Power to grant interim relief

(1) Where during an inquiry before the Commission, it is proved to the satisfaction of the Commission, by affidavit or otherwise, that an act in contravention of sub-section (1) of section 3 or sub-section (1) of section 4 or section 6 has been committed and continues to be committed or that such act is about to be committed, the Commission may, by order, grant a temporary injunction restraining any party from carrying on such act until the conclusion of such inquiry or until further orders, without giving notice to the opposite party, where it deems it necessary.

(2) Where during the inquiry before the Commission it is proved to the satisfaction of the Commission by affidavit or otherwise that import of any goods is likely to contravene sub-section (1) of section 3 or subsection (1) of section 4 or section 6, it may, by order, grant a temporary injunction restraining any party from importing such goods until the conclusion of such inquiry or until further orders, without giving notice to the opposite party, where it deems it necessary and a copy of such order granting temporary injunction shall be sent to the concerned authorities.

(3) The provisions of rules 2A to 5 (both inclusive) of Order XXXIX of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall, as far as may be, apply to a temporary injunction issued by the Commission under this Act, as they apply to a temporary injunction issued by a civil court, and any reference in any such rule to a suit shall be construed as a reference to any inquiry before the Commission.

Section 34. Power to award compensation

(1) Without prejudice to any other provisions contained in this Act, any person may make an application to the Commission for an order for the recovery of compensation from any enterprise for any loss or damage shown to have been suffered, by such person as a result of any contravention of the provisions of Chapter II, having been committed by such enterprise.

(2) The Commission may, after an inquiry made into the allegations mentioned in the application made under sub-section (1), pass an order directing the enterprise to make payment to the applicant, of the amount determined by it as realisable from the enterprise as compensation for the loss or damage caused to the applicant as a result of any contravention of the provisions of Chapter II having been committed by such enterprise.

(3) Where any loss or damage referred to in sub-section (1) is caused to numerous persons having the same interest, one or more of such persons may, with the permission of the Commission, make an application under that sub-section for and on behalf of, or for the benefit of, the persons so interested, and thereupon, the provisions of rule 8 of Order 1 of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall apply subject to the modification that every reference therein to a suit or decree
shall be construed as a reference to the application before the Commission and the order of the Commission thereon.

Section 35. Appearance before Commission

A complainant or defendant or the Director General may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of his or its officers to present his or its case before the Commission.

Explanation.—For the purposes of this section,—

(a) “chartered accountant” means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(b) “company secretary” means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(c) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.

Section 36. Power of Commission to regulate its own procedure

(1) The Commission shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules made by the Central Government, the Commission shall have powers to regulate its own procedure including the places at which they shall have their sittings, duration of oral hearings when granted, and times of its inquiry.

(2) The Commission shall have, for the purposes of discharging its functions umder this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908(5 of 1908), while trying a suit, in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses or documents;

(e) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office;

(f) dismissing an application in default or deciding it ex parte;

(g) any other matter which may be prescribed.

(3) Every proceeding before the Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code (45 of 1860) and the Commission shall be deemed to be a civil court for the purposes of section 195 (2 of 1974) and Chapter XXVI of the Code of Criminal Procedure, 1973.

(4) The Commission may call upon such experts, from the fields of economics, commerce, accountancy, international trade or from any other discipline as it deems necessary, to assist the Commission in the conduct of any inquiry or proceeding before it.

(5) The Commission may direct any person—

(a) to produce before the Director General or the Registrar or an officer authorised by it, such,books, accounts or other documents in the custody or under the control of such person so directed as may be specified or described in the direction, being documents relating to any trade, the examination of which may be required for the purposes of this Act;

(b) to furnish to the Director General or the Registrar or any officer authorised by it, as respects the trade or such other information as may be in his possession in relation to the trade carried on by such person, as may be required for the purposes of this Act.

(6) If the Commission is of the opinion that any agreement referred to in section 3 or “abuse of dominant position referred to in section 4 or the combination referred to in section 5 has caused or is likely to cause an appreciable adverse effect on competition in the relevant market in India and it is necessary to protect, without further delay, the interests of consumers and other market participants in India, it may conduct an inquiry or adjudicate upon any matter under this Act after giving a reasonable oral hearing to the parties concerned.

Section 37. Review of orders of Commission

Any person aggrieved by an order of the Commission from which an appeal is allowed by this Act but no appeal has been preferred, may, within thirty days from the date of the order, apply to the Commission for review of its order and the Commission may make such order thereon as it thinks fit:

Provided that the Commission may entertain a review application after the expiry of the said period of thirty days, if it is satisfied that the applicant was prevented by sufficient cause from preferring the application in time:

Provided further that no order shall be modified or set aside without giving an opportunity of being heard to the person in whose favour the order is given and the Director General where he was a party to the proceedings.

Section 38. Rectification of orders

(1) With a view to rectifying any mistake apparent from the record, the Commission may amend any order passed by it under the provisions of this Act.

(2) Subject to the other provisions of this Act, the Commission may make—

(a) an amendment under sub-section (1) of its own motion;

(b) an amendment for rectifying any such mistake which has been brought to its notice by any party to the order.

Explanation.—- For the removal of doubts, it is hereby declared that the Commission shall not, while rectifying any mistake apparent from record, amend substantive part of its order passed under the provisions of this Act.

Section 39. Execution of orders of Commission

Every order passed by the Commission under this Act shall be enforced by the Commission in the same manner as if it were a decree or order made by a High Court or the principal civil court in a suit pending therein and it shall be lawful for the Commission to send, in the event of its inability to execute it, such order to the High Court or the principal civil court, as the case may be, within the local limits of whose jurisdiction,—

(a) in the case of an order against a person referred to in sub-clause (iii) or sub-clause (vi) or subclause (vii) of clause (l) of section 2, the registered office or the sole or principal place of business of the person in India or where the person has also a subordinate office, that subordinate office, is
situated;

(c) in the case of an order against any other person, the place, where the person concerned voluntarily resides or carries on business or personally works for gain, is situated, and thereupon the court to which the order is so sent shall execute the order as if it were a decree or order sent to it for execution.

Section 40. Appeal

Any person aggrieved by any decision or order of the Commission may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Commission to him on one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908 (5 of 1908):

Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days:

Provided further that no appeal shall lie against any decision or order of the Commission made with the consent of the parties.

Chapter V – Duties of Director General

Section 41. Director General to investigate contravention

(1) The Director General shall, when so directed by the Commission, assist the Commission in investigating into any contravention of the provisions of this Act or any rules or regulations made thereunder.

(2) The Director General shall have all the powers as are conferred upon the Commission under subsection (2) of section 36.

(3) Without prejudice to the provisions of sub-section (2), sections 240 and 240A of the Companies Act, 1956 (1 of 1956), so far as may be, shall apply to an investigation made by the Director General or any other person investigating under his authority, as they apply to an inspector appointed under that Act.

Chapter VI – Penalties

Section 42. Contravention of orders of Commission

(1) Without prejudice to the provisions of this Act, if any person contravenes, without any reasonable ground, any order of the Commission, or any condition or restriction subject to which any approval, sanction, direction or exemption in relation to any matter has been accorded, given, made or granted under this Act or fails to pay the penalty imposed under this Act, he shall be liable to be detained in civil prison for a term which may extend to one year, unless in the meantime the Commission directs his release and he shall also be liable to a penalty not exceeding rupees ten lakhs.

(2) The Commission may, while making an order under this Act, issue such directions to any person or authority, not inconsistent with this Act, as it thinks necessary or desirable, for the proper implementation or execution of the order, and any person who commits breach of. or fails to comply with, any obligation imposed on him under such direction, may be ordered by the Commission to be detained in civil prison for a term not exceeding one year unless in the meantime the Commission directs his release and he shall also be liable to a penalty not exceeding rupees ten lakhs.

Section 43. Penalty for failure to comply with directions of Commission and Director General

If any person fails to comply with a direction given by—

(a) the Commission under sub-section (5) of section 36; or

(b) the Director General while exercising powers referred to in sub-section (2) of section 41, the Commission shall impose on such person a penalty of rupees one lakh for each day during which such failure continues.

Section 44. Penalty for making false statement or omission to furnish material information

If any person, being a party to a combination,—

(a) makes a statement which is false in any material particular, or knowing it to be false; or

(b) omits to state any material particular knowing it to be material, such person shall be liable to a penalty which shall not be less than rupees fifty lakhs but which may extend to rupees one crore, as may be determined by the Commission.

Section 45. Penalty for offences in relation to furnishing of information

(1) Without prejudice to the provisions of section 44, if any person, who furnishes or is required to furnish under this Act any particulars, documents or any information,—

(a) makes any statement or furnishes any document which he knows or has reason to believe to be false in any material particular; or

(b) omits to state any material fact knowing it to be material; or

(c) wilfully alters, suppresses or destroys any document which is required to be furnished as aforesaid, the Commission shall impose on such person a penalty which may extend to rupees ten lakhs.

(2) Without prejudice to the provisions of sub-section (1), the Commission may also pass such other order as it deems fit.

Section 46. Power to impose lesser penalty

The Commission may, if it is satisfied that any producer, seller, distributor, trader or service provider included in any cartel, which is alleged to have violated section 3, has made a full and true disclosure in respect of the alleged violations and such disclosure is vital, impose upon such producer, seller, distributor, trader or service provider a lesser penalty as it may deem fit, than leviable under this Act or the rules or the regulations:

Provided that lesser penalty shall not be imposed by the Commission in cases where proceedings for the violation of any of the provisions of this Act or the rules or the regulations have been instituted or any investigation has been directed to be made under section 26 before making of such disclosure:

Provided further that lesser penalty shall be imposed by the Commission only in respect of a producer, seller, distributor, trader or service provider included in the cartel, who first made the full, true and vital disclosures under this section:

Provided also that the Commission may, if it is satisfied that such producer, seller, distributor, trader or service provider included in the cartel had in the course of proceedings,—

(a) not complied with the condition on which the lesser penalty was imposed by the Commission; or

(b) had given false evidence; or

(c) the disclosure made is not vital,

and thereupon such producer, seller, distributor, trader or service provider may be tried for the offence with respect to which the lesser penalty was imposed and shall also be liable to the imposition of penalty to which such person has been liable, had lesser penalty not been imposed.

Section 47. Crediting sums realised by way of penalties to Consolidated Fund of India

All sums realised by way of penalties under this Act shall be credited to the Consolidated Fund of India.

Section 48. Contravention by companies

(1) Where a person committing contravention of any of the provisions of this Act or of any rule, regulation, order made or direction issued thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable lo any punishment if he proves that the contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such contravention.

(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, regulation, order made or direction issued thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that contravention and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section,—

(a)”company” means a body corporate and includes a firm or other association of individuals: and

(b) “director”, in relation to a firm, means a partner in the firm.

Chapter VII – Competition Advocacy

Section 49. Competition advocacy

(1) In formulating a policy on competition (including review of laws related to competition), the Central Government may make a reference to the Commission for its opinion on possible effect of such policy on competition and on receipt of such a reference, the Commission shall, within sixty days of making such reference, give its opinion to the Central Government, which may thereafter formulate the policy as it deems fit.

(2) The opinion given by the Commission under sub-section (1) shall not be binding upon the Central Government in formulating such policy.

(3) The Commission shall take suitable measures, as may be prescribed, for the promotion of competition advocacy, creating awareness and imparting training about competition issues.

Chapter VIII – Finance, Accounts and Audit

Section 50. Grants by Central Government

The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Commission grants of such sums of money as the Government may think fit for being utilised for the purposes of this Act.

Section 51. Constitution of Fund

(1) There shall be constituted a fund to be called the “Competition Fund” and there shall be credited thereto—

(a) all Government grants received by the Commission;

(b) the monies received as costs from parties to proceedings before the Commission;

(d) the fees received under this Act;

(e) the interest accrued on the amounts referred to in clauses (a) to (c).

(2) The Fund shall be applied for meeting—

(a) the salaries and allowances payable to the Chairperson and other Members and the administrative expenses including the salaries, allowances and pension payable to the Director General, Additional, Joint, Deputy or Assistant Directors General, the Registrar and” officers and other employees of the Commission;

(b) the other expenses of the Commission in connection with the discharge of its functions and for the purposes of this Act.

(3) The Fund shall be administered by a committee of such Members of the Commission as may be determined by the Chairperson.

(4) The committee appointed under sub-section (3) shall spend monies out of the Fund for carrying out the objects for which the Fund has been constituted.

Section 52. Accounts and Audit

(1)The Commission shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the Commission shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Commission to the Comptroller and Auditor-General of India.

Explanation.—For the removal of doubts, it is hereby declared that the orders of the Commission, being matters appealable to the Supreme Court, shall not be subject to audit under this section.

(3) The Comptroller and Auditor-General of India and any other person appointed by him in connection with the audit of the accounts of the Commission shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General of India generally has, in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Commission.

(4) The accounts of the Commission as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament.

Section 53. Furnishing of returns, etc., to Central Government

(1) The Commission shall furnish to the Central Government at such time and in such form and manner as may be prescribed or as the Central Government may direct, such returns and statements and such particulars in regard to any proposed or existing measures for the promotion of competition advocacy, creating awareness and imparting training about competition issues, as the Central Government may, from time to time, require.

(2) The Commission shall prepare once in every year, in such form and at such time as may be prescribed, an annual report giving a true and full account of its activities during the previous year and copies of the report shall be forwarded to the Central Government.

(3) A copy of the report received under sub-section (2) shall be laid, as soon as may be after it is received, before each House of Parliament.

Chapter IX – Miscellaneous

Section 54. Power to exempt

The Central Government may, by notification, exempt from the application of this Act, or any provision thereof, and for such period as it may specify in such notification—

(a) any class of enterprises if such exemption is necessary in the interest of security of the State or public interest;

(b) any practice or agreement arising out of and in accordance with any obligation assumed by India under any treaty, agreement or convention with any other country or countries;

(c) any enterprise which performs a sovereign function on behalf of the Central Government or a State Government:

Provided that in case an enterprise is engaged in any activity including the activity relatable to the sovereign functions of the Government, the Central Government may grant exemption only in respect of activity relatable to the sovereign functions.

Section 55. Power of Central Government to issue directions

(1) Without prejudice to the foregoing provisions of this Act, the Commission shall, in exercise of its powers or the performance of its functions under this Act, be bound by such directions on questions of policy, other than those relating to technical and administrative matters, as the Central Government may give in writing to it from time to time:

Provided that the Commission shall, as far as practicable, be given an opportunity to express its views before any direction is given under this sub-section.

(2) The decision of the Central Government whether a question is one of policy or not shall be final.

Section 56. Power of Central Government to supersede Commission

(1) If at any time the Central Government is of the opinion—

(a) that on account of circumstances beyond the control of the Commission, it is unable to discharge the functions or perform the duties imposed on it by or under the provisions of this Act; or

(b) that the Commission has persistently made default in complying with any direction given by the Central Government under this Act or in the discharge of the functions or performance of the duties imposed on it by or under the provisions of this Act and as a result of such default the financial position of the Commission or the administration of the Commission has suffered; or

(c) that circumstances exist which render it necessary in the public interest so to do, the Central Government may, by notification and for reasons to be specified therein, supersede the Commission for such period, not exceeding six months, as may be specified in the notification:

Provided that before issuing any such notification, the Central Government shall give a reasonable opportunity to the Commission to make representations against the proposed supersession and shall consider representations, if any, of the Commission.

(2) Upon the publication of a notification under sub-section (1) superseding the Commission,—

(a) the Chairperson and other Members shall as from the date of supersession, vacate their offices as such;

(b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or discharged by or on behalf of the Commission shall, until the Commission is reconstituted under sub-section (3), be exercised and discharged by the Central Government or such authority as the Central Government may specify in tins behalf;

(c) all properties owned or controlled by the Commission shall, until the Commission is reconstituted under sub-section (3), vest in the Central Government.

(3) On or before the expiration of the period of supersession specified in the notification issued under subsection (1), the Central Government shall reconstitute the Commission by a fresh appointment of its Chairperson and other Members and in such case any person who had vacated his office under clause (a) of sub-section (2) shall not be deemed to be disqualified for re-appointment.

(4) The Central Government shall cause a notification issued under sub-section (1) and a full report of any action taken under this section and the circumstances leading to such action to be laid before each House of Parliament at the earliest.

Section 57. Restriction on disclosure of information

No information relating to any enterprise, being an information which has been obtained by or on behalf of the Commission for the purposes of this Act, shall, without the previous permission in writing of the enterprise, be disclosed otherwise than in compliance with or for the purposes of this Act or any other law for the time being in force.

Section 58. Members, Director General, Registrar, officers and other employees, etc. of Commission to be public servants

The Chairperson and other Members and the Director General, Additional, Joint, Deputy or Assistant Directors General and Registrar and officers and other employees of the Commission shall be deemed, while acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

Section 59. Protection of action taken in good faith

No suit, prosecution or other legal proceedings shall lie against the Central Government or Commission or any officer of the Central Government or the Chairperson or any Member or the Director-General, Additional, Joint, Deputy or Assistant Directors General or Rcgistrar or officers or other employees of the Commission for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.

Section 60. Act to have overriding effect

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

Section 61. Exclusion of jurisdiction of civil courts

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Commission is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Section 62. Application of other laws not barred

The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.

Section 63. Power to make rules

(1) The Central Government may, by notification, make rules to carry out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-—

(a) the manner in which the Chairperson and other Members shall be selected under section 9;

(b) the form and manner in which and the authority before whom the oath of office and of secrecy shall be made and subscribed to under sub-section (3) of section 10;

(c) the financial and administrative powers which may be vested in the Member Administration under section 13;

(d) the salary and the other terms and conditions of service including travelling expenses, house rent allowance and conveyance facilities, sumptuary allowance and medical facilities to be provided to the Chairperson and other Members under sub-section (1) of section 14;

(e) the salary, allowances and other terms and conditions of service of the Director General, Additional, Joint, Deputy or Assistant Directors General or such other advisers, consultants or officers under sub-section (3) of section 16;

(f) the qualifications for appointment of the Director General, Additional, Joint, Deputy or Assistant Directors General or such other advisers, consultants or officers under sub-section (4) of section 16;

(g) the salaries and allowances and other terms and conditions of service of the Registrar and officers and other employees payable, and the number of such officers and employees under sub-section (2) of section 17;

(h) for securing any case or matter which requires to be decided by a Bench composed of more than two Members under sub-section (4) of section 23;

(i) any other matter in respect of which the Commission shall have power under clause (g) of subsection (2) of section 36;

(j) the promotion of competition advocacy, creating awareness and imparting training about competition issues under sub-section (3) of section 49;

(k) the form in which the annual statement of accounts shall be prepared under sub-section (1) of section 52;

(l) the time within which and the form and manner in which the Commission may furnish returns, statements and such particulars as the Central Government may require under sub-section (1) of section 53;

(m) the form in which and the time within which the annual report shall be prepared under sub-section (2) of section 53;

(n) the manner in which the monies transferred to the Central Government shall be dealt with by that Government under the fourth proviso to sub-section (2) of section 66;

(o) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be, or may be, made by rules.

(3) Every notification issued under sub-section (3) of section 20 and section 54 and every rule made under this Act by the Central Government shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session, or in two or more successive sessions, and if. before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notification or rule, or both Houses agree that the notification should not be issued or rule should not be made, the notification or rule shall thereafter have effect only in such modified form or
be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification or rule, as the case may be.

Section 64. Power to make regulations

(1) The Commission may, by notification, make regulations consistent with tills Act and the rules made thereunder to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing provisions, such regulations may provide for all or any of the following matters, namely:—

(a) the cost of production to be determined under clause (b) of the Explanation to section 4;

(b) the form of notice as may be specified and the fee which may be determined under sub-section (2) of section 6;

(c) the form in which details of the acquisition shall be filed under subsection (5) of Section 6;

(d) the fee which may be determined under clause (a) of sub-section (1) of section 19;

(e) any other matter in respect of which provision is to be, or may be, made by regulations.

(3) Every regulation made under this Act shall be laid, as soon as may be after it is made. before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.

Section 65. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act as may appear to it to be necessary for removing the difficulty:

Provided that no such order shall be made under this section after the expiry of a period of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

Section 66. Repeal and saving

(1) The Monopolies and Restrictive Trade Practices Act, 1969 is hereby repealed and the Monopolies and Restrictive Trade Practices Commission established under sub-section (1) of section 5 of the said Act
(hereinafter referred to as the repealed Act) (54 of 1969) shall stand dissolved.

(2) On the dissolution of the Monopolies and Restrictive Trade Practices Commission, the person appointed as the Chairman of the Monopolies and Restrictive Trade Practices Commission and every other person appointed as Member and Director General of Investigation and Registration, Additional, Joint, Deputy, or Assistant Directors General of Investigation and Registration and any officer and other employee of that Commission and holding office as such immediately before such dissolution shall vacate their respective offices and such Chairman and other Members shall be entitled to claim compensation not exceeding three months’ pay and allowances for the premature termination of term of their office or of any contract of service:

Provided that the Director General of Investigation and Registration, Additional, Joint, Deputy or Assistant Directors General of Investigation and Registration or any officer or other employee who has been, immediately before the dissolution of the Monopolies and Restrictive Trade Practices Commission appointed on deputation basis to the Monopolies and Restrictive Trade Practices Commission, shall, on such dissolution, stand reverted to his parent cadre, Ministry or Department, as the case may be:

Provided further that the Director General of Investigation and Registration, Additional, Joint, Deputy or Assistant Directors General of Investigation and Registration or any officer or other employee who has been, immediately before the dissolution of the Monopolies and Restrictive Trade Practices Commission, employed on regular basis by the Monopolies and Restrictive Trade Practices Commission, shall become, on and from such dissolution, the officer and employee, respectively, of the Central Government with the same rights and privileges as to pension, gratuity and other like matters as would have been admissible to him if the rights in relation to such Monopolies and Restrictive Trade Practices Commission had not been transferred to, and vested in, the Central Government and shall continue to do so unless and until his employment in the Central Government is duly terminated or until his remuneration, terms and conditions of employment are duly altered by that Government:

Provided also that notwithstanding anything contained in the Industrial Disputes Act, 1947(14 of 1947), or in any other law for the time being in force, the transfer of the services of any Director General of Investigation and Registration, Additional, Joint, Deputy or Assistant Directors General of Investigation and Registration or any officer or other employee, employed in the Monopolies and Restrictive Trade Practices Commission, to the Central Government shall not entitle such Director General of Investigation and Registration, Additional, Joint, Deputy or Assistant Directors General of Investigation and Registration or any officer or other employee any compensation under this Act or any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority:

Provided also that where the Monopolies and Restrictive Trade Practices Commission has established a provident fund, superannuation, welfare or other fund for the benefit of the Director General of Investigation and Registration, Additional, Joint, Deputy or Assistant Directors General of Investigation and Registration or the officers and other employees employed in the Monopolies and Restrictive Trade Practices Commission, the monies relatable to the-officers and other employees whose services have been transferred by or under this Act to the Central Government shall, out of the monies standing, on the dissolution of the Monopolies and Restrictive Trade Practices Commission to the credit of such provident fund, superannuation, welfare or other fund, stand transferred to, and vest in, the Central Government and such monies which stand so transferred shall be dealt with by the said Government in such manner as may be prescribed.

(3) All cases pertaining to monopolistic trade practices or restrictive trade practices pending before the Monopolies and Restrictive Trade Practices Commission on or before the commencement’of this Act, including such cases, in which any unfair trade practice has also been alleged, shall, on such commencement, stand transferred to the Competition Commission of India and shall be adjudicated by that Commission in accordance with the provisions of the repealed Act as if that Act had not been repealed.

(4) Subject to the provisions of sub-section (3), all cases pertaining to unfair trade practices other than those referred to in clause (x) of sub-section (1) of section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) and pending before the Monopolies and Restrictive Trade Practices Commission on or before the commencement of this Act shall, on such commencement, stand transferred to the National Commission constituted under the Consumer Protection Act, 1986 (68 of 1986) and the National Commission shall dispose of such cases as if they were cases filed under that Act:

Provided that the National Commission may, if it considers appropriate, transfer any case transferred to it under this sub-section, to the concerned State Commission established under section 9 of the Consumer Protection Act, 1986 (68 of 1986) and that State Commission shall dispose of such case as if it was filed under that Act.

(5) All cases pertaining to unfair trade practices referred to in clause (x) of sub-section (1) of section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) and pending before the Monopolies and Restrictive Trade Practices Commission on or before the commencement of this Act shall, on such commencement, stand transferred to the Competition Commission of India, and the Competition Commission of India shall dispose of such cases as if they were cases filed under that Act,

(6) All investigations or proceedings, other than those relating to unfair trade practices, pending before the Director General of Investigation and Registration on or before the commencement of this Act shall, on such commencement, stand transferred to the Competition Commission of India, and the Competition Commission of India may conduct or order for conduct of such investigation or proceedings in the manner as it deems fit.

(7) All investigations or proceedings, relating to unfair trade practices, other than those referred to in clause (x) of sub-section (1) of section 36A of the Monopolies and Restrictive Trade Practices Act, 1969(54 of 1969) and pending before the Director General of Investigation and Registration on or before the commencement of this Act shall, on such commencement, stand transferred to the National Commission constituted under the Consumer Protection Act, 1986 (68 of 1986) and the National Commission may conduct or order for conduct of such investigation or proceedings in the manner as it deems fit.

(8) All investigations or proceedings relating to unfair trade practices referred to in clause (x) of subsection (1) of section 36A of the Monopolies and Restrictive Trade Practices Act, 1969(54 of 1969), and pending before the Director General of Investigation and Registration on or before the commencement of this Act shall, on such commencement, stand transferred to the Competition Commission of India and the Competition Commission of India may conduct or order for conduct of such investigation in the manner as it deems fit.

(9) Save as otherwise provided under sub-sections (3) to (8), all cases or proceedings pending before the Monopolies and Restrictive Trade Practices Commission shall abate.

(10) The mention of the particular matters referred to in sub-sections (3) to (8) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal.