Explain MRTP amendment Act 1984 and give a critical estimate of the role of MRTP.
The MRTP
(Amendment) Act 1984 introduce with certain
Change in the
MRTP Act on the basis of the experience gained and the recommendation made by
Sachar committee.
Definitional
changes:
Definition
of Goods:
Goods have now the same definition
as in the sale of goods Act 1930 and include share and stokes. Thus, a major
deficiency in the existing provision of the MRTP Act has been removed and
investment companies have been brought within its ambit.
Group and Inter-Connected Undertakings:
The concept of
groups will include enterprises under the same management. Sachar committee
recognize of the concept in the companies Act in the companies of 1974 and
recommended it transference of MRTP Act since it had a special importance in
this context. The MRTP (Amendment) Act 1984 has incorporated it.
Interconnected Undertakings
Under the existing provision in the MRTP Act, not less than 1/3 rd. control over voting power or position of the Board is required for establishing inter-connection. The (Amendment) Act 1984 has reduce this proportion to 25 per cent.
Definition of undertaking:
the (Amendment) act of 1984 has made the definition of ‘undertaking’ exhaustive so as to widen the scope, of the MRTP Act. The revised definition of ‘undertaking’ covers enterprises engaged or proposed to be engaged in the production, storage, supply, distribution, acquisition or control of articles or goods or the provision of any service either directly or thought one or more units of its or division weather located at the same place or at difference place. Thus, any branch or office established for the provision of any service is also covered. A body corporate which is, or has been, engaged only in business of acquiring, underwriting or dealing with shares, debentures or other securities of any other body corporate shall be deemed to be an undertaking.
Limits to Capacity Expansion:
The
(Amendment) Act of 1984 has tried to limit the provision by taking resource to
expansion of capacity to an unlimited extent under the grab of modernization.
As recommended by the Sacher Committee, the Amendment provides that exemption
on these lines would be permitted only to the extent of 25 per cent of the
licensed capacity. However, it has been clarified that this is in addition to
the normal expansions up to 25 per cent of licenses capacity which does not
require approval under the Act. The Amendment Act has removed the concept of
monopolistic undertaking since it served no useful purpose because monopolistic
practice can exist even without “monopolistic undertaking” and what is relevant
in this context is the dominant undertaking. This has been incorporating in the
Amendment Act.
Severance of Inter- connection:
The central Government has been given power regarding severance of interconnection, if ‘is detrimental to the interest of the principal undertaking pertains or the public interest.” This new provision 27-A of the Amendment Act binds the government to the scheme suggested by the MRTP Commission once the central has decided to act on the report of the commission on the lines recommended by it. However, it is left open to the Central Government to reject the report as a whole.
Unfair Trade practices:
On The lines suggested by Sachar Committee,
the, MRTP (Amendment) Act 1984 has brought within the purview of the act
certain unfair trade practices like misleading advertisements, bargain
selling’s etc. The Amendment Act 1984 provides that every agreement falling
within one or more of the categories specified therein shall be deemed to be an
agreement relating to restrictive trade practices.
But under Section 38, the government has justified the provision of
certain restrictions to meet the requirements of the defense of the India or
the Security of the state, or where the restrictions are necessary to ensure
the maintenance of supply of goods and service essential to the community.
Public sector Enterprises and Undertaking Owned co-operation Societies:
The monopolies
Inquire Commission (1969) had indicated that “the possibility cannot be ruled
out that monopolies in the public sector are not less capable of charging
unreasonable prices and supplying inferior quality of goods and service than
private monopolistic.” In view of this Sachar Committee recommendation that the
MRTP Act should be made applicable to the recommendation of the Sachar
committee, and has added the undertaking owned by the co-operation society
under the exemption category.
Criticism
of the roles of the MRTP Commission:
Reluctance
and Delay in referring Matter to the MRTP Commission:
Thought an autonomous body in theory, the commission cannot, on its
own, take cognizance of certain monopolistic and restrictive practices and
start the process of inquiries. Between 1st June 1970 and December
1980, out of 655 application (I. e, 90 per cent) were disposed of by the
government without reference to the commission. Obviously, if later
these undertakings are found guilty of indulging in monopolistic restrictive
practices, it would be unfair to blame the MRTP commission. Sachar Committee had
recommended that thought the commission could exercise its powers under section
10 of the Act, it should be specially provided. Unfortunately, the government
has not agreed it. However, in the MRTP Amendment Act 1984 a provision has been
made that the commission its own can start an inquiry into unfair practices
without for a reference by the government. It would have been made in the
fitness of things if such a provision could be generalized to cover
monopolistic and restrictive trade practices.
No Mandatory power to pass final orders:
Sachar Committee
had recommended that the commission should be given full judicial power.
However, the Government did not accept recommendations and reserved to itself
the right to accept or not to accept the recommendation of the MRTP commission.
Government Never Appointed More Than One Chairman and Two Member:
In a vast country like India if Justice to be done it was
necessary that more benches of the commission had to be created. This require
competent and expert manpower. But the government does not intend to back its
radicalism by supportive measures of implementation. The ruling elite is acting
in close collaboration with big business. This explains reluctance on the part
of the government to either grants the autonomous power of inquire to the MRTP
commission or to grants it a quasi-judicial status.