MRTPC won’t take up fresh cases from Sept 1

Business Line, August 30, 2009

An institution which has sunk into the consciousness of Indians is about to fade away into oblivion after four decades. The anti-monopoly watchdog Monopolies and Restrictive Trade Practices Commission (MRTPC) will stop entertaining fresh cases from September 1, as it makes way for the new Competition Commission of India (CCI).

A notification to this effect will be issued by the Government, the Minister of State for Corporate Affairs, Mr Salman Khurshid, said here on Saturday at a function organised by the PHD Chamber of Commerce and Industry.

Repeal of ACT

This would mean that the MRTP Act, 1969 would be repealed and new cases regarding restrictive trade practices and monopolies will come up before the CCI.

Simultaneously, the Government is also considering notifying the merger control provisions in the amended Competition Act and the Prime Minister, Dr Manmohan Singh, is looking into it, Mr Khurshid said.

The Minister said the Government would consider suggestions from stakeholders regarding the relevant provisions on mergers and acquisitions (M&A) for a few more days.

However, he did not give any timeline for notification of Section 5 and 6 of the amended Competition Act.

Section 5 is about “combinations” and the thresholds for regulating them, while Section 6 gives powers to the CCI to investigate combinations that are higher than the said threshold levels. The combinations may include mergers, acquisitions of assets, shares, control or voting rights as well as amalgamations that in turn affects competition.

MRTPC had stopped looking into M&A cases after 1991.

Mr M M Sharma, Head (Competition Law and Policy), Vaish Associates Advocates, told Business Line: “The Government had notified the provisions (Section 3 and 4 of the Competition Act) regarding anti-competitive agreements and abuse of dominant position this May. But they are delaying the notification of M&A provisions without giving adequate reasons.”

The relevant provision that will put an end to fresh cases being filed before MRTPC, a quasi-judicial body, is Section 66 of the amended Competition Act. After the notification of Section 66, MRTPC will function only for another two years to dispose of pending cases.

Transfer of cases

Following the two-year period, the pending unfair trade practices (UTP) will be shifted to the National Consumer Disputes Redressal Commission, while the pending restrictive trade practices (RTP) cases and those involving a combination of UTP, RTP and monopolies will be transferred to CCI.

Mr Pradeep Mehta, Secretary General of the NGO ‘CUTS International’ and a competition law expert, told Business Line: “The Competition Act was badly drafted as far as Section 66 is concerned. It has resulted in wastage of time and money for many. There were some vested interests behind the kind of grayness in the law. It should have been an automatic provision giving powers to the CCI, rather than one that had to go back to the Government for notification. The Competition Act of the UK had an inbuilt clause saying provisions contravening the Act will stand automatically repealed after the notification of the Act.”

Long overdue

Pointing out that the notification of Section 66 was “long overdue”, Mr O.P. Dua, Senior Advocate, told Business Line that while there was no fee to file a case before the MRTPC. According to the CCI norms, one has to pay a fee of Rs 50,000 for registering a case, he said, adding “this is a heavy amount and many people think twice before filing a case with CCI. The Government should look at lowering it.”

Only recently, CCI had commenced looking into cases pertaining to abuse of dominant position and cartelisation. Prior to that CCI was only playing the role of an advisory body.

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