MONOPOLIES AND RESTRICTIVE

TRADE PRACTICE (MRTP) ACT, 1969

 BACKGROUND

• Passed in Parliament : 18.12.1969

• Came into force : 01.06.1970
• Recommended by Dutt Committee
• Applicable to whole of India except Jammu
Kashmir
• Significantly amended in 1982, 1984, 1985 and
1991
 INTENT
 Prevent concentration of economic power in the
hands of few rich
 Provide control of monopolies
 Prohibit restrictive and unfair trade practices

A commission will be set-up to look after the

proceedings under this act
 GET TO KNOW THESE!

Monopolistic • Abuse market in terms of

production and sales
Trade Practice • Low quality product at high cost

• False representation of goods and

Unfair Trade services
Practice • Bogus advertisements to mislead
consumers

Restrictive • Block flow of capital into

production
Trade Practice • Prohibit competition
INQUIRY BY THE COMMISSION
 Upon receiving a complaint from any trade
association, consumer or a registered consumer
association, or
 Upon reference made to it by the Central
Government or State Government
 Upon an application to it by the Director General,
or
 Upon its own knowledge or information.
 POWER OF THE COMMISSION
o Summoning and enforcing the attendance of any witness and examining him on
oath;
o Discovery and production of any document or other material object producible
as evidence;
o Requisition of any public record from any court or office.
o Issuing any commission for examination of witness
o Appearance of parties and consequence of non-appearance.
o To require any person to produce before it and to examine and keep any books
of accounts or other documents relating to the trade practice, in its custody.
o To require any person to furnish such information as may be in his possession
in relation to the trade carried on by any other person.
o To authorize any of its officers to enter and search any undertaking or seize any
books or papers, relating to that particular undertaking, if the commission
suspects that such books or papers are being or may be destroyed, mutilated,
altered, falsified or secreted.
REMEDIES UNDER THE ACT
I. Temporary Injunction
 Activities of the undertaking charged with, will
be stopped until further orders

II. Compensation
 The particular concern is liable to pay the
compensation to those who were affected
CURRENT STATUS OF THE ACT
 Not in force now
 Replaced by ‘Competition Act, 2002’
 Came into force : 01.09.2009

Aim of the Act :

• Eliminate practices having adverse effect on competition
• Promote and sustain competition
• Protect interest of consumers
• Ensure freedom of trade carried on by other
participants
 COMPREHEND…
Case study
Colgate Palmolive (India) Ltd. vs MRTP Act,1969
Highlights:
 “Colgate Trigard Family Good Habits Contest”
 The commission alleged it to be:
¤ An unfair trade practice causing injury and loss to the
consumers (of tooth brushes) and
¤ A restrictive trade practice eliminating competition among the
manufacturers of tooth brushes
 Colgate Palmolive (India) Ltd. won the case!
THANK YOU!

Presented by:

BHARTI GOYAL D.
III B.COM [CA]