Shares pending allotment and debentures were excluded from "goods"; public issue subscription was not a service under the MRTP Act.

Shares pending allotment and debentures were held not to be "goods" under section 2(e) of the MRTP Act in the pre-1991 regime, because shares do not come into existence as property before allotment and debentures are ordinary debt instruments. The 1991 amendment enlarging the definition to include shares and stocks was treated as a substantive expansion, not a mere clarification. The Court further held that a public issue invitation for subscription of capital does not amount to sale of goods or rendition of a service, and therefore does not by itself constitute a trade practice under the Act. The Commission's view that it lacked jurisdiction was upheld.

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Issues: (i) Whether shares or convertible debentures before allotment are goods within the meaning of section 2(e) of the Monopolies and Restrictive Trade Practices Act, 1969. (ii) Whether a public issue invitation for allotment of debentures or shares amounts to trade practice or rendition of service under the Act.

Issue (i): Whether shares or convertible debentures before allotment are goods within the meaning of section 2(e) of the Monopolies and Restrictive Trade Practices Act, 1969.

Analysis: Debentures are instruments of debt and, in their ordinary character, do not fall within the concept of goods. Shares before allotment do not come into existence as property capable of being treated as goods. The 1991 amendment enlarging the definition of goods by specifically including shares and stocks, including issue of shares before allotment, was held to be an enlargement of the earlier definition and not merely clarificatory. The Court therefore treated the position prior to that amendment as excluding shares pending allotment and debentures from the statutory definition of goods.

Conclusion: Shares before allotment and debentures are not goods within section 2(e) of the Act in the relevant regime.

Issue (ii): Whether a public issue invitation for allotment of debentures or shares amounts to trade practice or rendition of service under the Act.

Analysis: The invitation to subscribe for capital does not amount to sale of goods or performance of a service to the prospective applicant. The activity of raising capital through invitation for allotment was held not to constitute a service made available to users, and therefore the complaint could not be sustained as one involving unfair trade practice on that footing. The Court also applied a strict construction to the provisions controlling trade practices under the statute.

Conclusion: The public issue invitation does not amount to trade practice or service under the Act.

Final Conclusion: The Commission's view that it lacked jurisdiction on the complaints was upheld, and the appeals failed.

Ratio Decidendi: Prior to the statutory enlargement of the definition, shares pending allotment and debentures are not goods, and an invitation to subscribe for capital does not by itself amount to a service or trade practice under the MRTP Act.

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