UNION OF INDIA Vs. TRIVENI ENGINEERING WORKS LIMITED

JUDGEMENT

(1.) The question for consideration in this appeal is how to calculate the value of assets within the meaning of Section 2 (W) of the Monopolies & Restrictive Trade Practices Act (hereinafter to be called the Act) for the purpose of determining the registrability of an undertaking under Section 26 of the Act for the applicability of Chapter III, Part A of the Act which aims at preventing concentration of economic power.

(2.) This is an appeal against the order of Prakash Narain,J. (as his lordship then was) by which he quashed the impugned notices dated November 1,1971 and December 29, 1971 and prohibited the prosecution of the respondent company for its alleged non-registration under Section 26 of the Act.

(3.) Chapter III of the Act deals with regulation of concentration of economic power, the obvious purpose being to regulate the monopolistic tendencies in the economy of the country. Part A of Section 20 of the Act applies to an undertaking if the total value of its own assets, or its own assets together with the assets of its inter-connected undertakings is not less than Rs. 20.00 crores. The value of assets is defined in Section 2 (w) of the Act to mean the value of its assets as shown in its books of account after making provision for depreciation or for renewal or diminution in value. Explanation to Section 20 clarifies that the value referred in the case of an undertaking will be the value of assets on the last date of his financial year which closes during the calendar year, immediately preceding the calendar year in which the question arises as to whether this power does or does not apply to such an undertaking. Section 26 of the Act requires that every undertaking to which Part A applies at the commencement of this Act or to which the provisions of that part becomes applicable thereafter, shall within 60 days from such commencement or the date on which that part becomes first applicable to it, make an application to the Central Government for its registration as such undertaking. Section 48(2) of the Act provides that if any undertaking to which Part A of Chapter III applies fails without any reasonable excuse, to make an application under Section 26, to register itself as an undertaking, then the undertaking shall be punishable with a fine which may extend to Rs. 1,000.00 and where the offence is a continuing one, with a further fine of Rs. 50.00 for every day, after the first, during which such failure continues. The respondent company was informed by a letter dated 9.7.1971 that according to the information with the Central Government the undertaking was registers bie under Section 26 of the Act and asking it to show cause why it has not done so and why proceedings under Section 48(2) of the Act be not taken against it.