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Monopolies and Restrictive Trade Practices Act, 1969


27A. Power of the Central Government to direct severance of inter-connection between undertakings

(1) 38 [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, f 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] 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 hearing as it thinks fit, report to the Central Government its opinion thereon and shall, where it is of opinion that the severance of the interconnection 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 inter-connection; 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 undertaking, 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 case.

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.]



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