Amalgamation exemption under MRTP Act applies only where interconnected undertakings produce the same goods, not merely some common products.

Section 23(3) of the MRTP Act, 1969 exempts a merger or amalgamation of interconnected undertakings from prior Central Government approval only where the undertakings are not dominant and produce the same goods. That condition was construed in its ordinary and contextual sense with the scheme of Sections 20 to 25, so the presence of some common products was not enough if the undertakings also manufactured substantially different goods. The term "undertaking" in the amalgamation context did not enlarge the exemption beyond the statutory requirement. Prior approval of the Central Government was therefore necessary before sanction of the scheme.

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Issues: Whether a scheme of amalgamation of interconnected undertakings can be sanctioned without prior approval of the Central Government under Section 23(3) of the MRTP Act, 1969, when the undertakings are not dominant undertakings but produce some common goods along with other dissimilar goods.

Analysis: Section 23(3) grants an exemption only to a scheme of merger or amalgamation of interconnected undertakings that are not dominant undertakings and that produce the same goods. The expression "as produce the same goods" was construed in its ordinary and contextual sense, read with the scheme of Sections 20, 21, 23, 24 and 25 of the MRTP Act, 1969. The exemption was held to be unavailable where the two undertakings manufacture multiple goods that are substantially different, even if they have one or more items of common production. The word "undertaking" in Section 23(3) was also understood in the context of company amalgamation, but that did not widen the exemption beyond the statutory condition that the undertakings must produce the same goods.

Conclusion: The amalgamating companies could not be treated as undertakings producing the same goods merely because some products were common. Prior approval of the Central Government was therefore necessary before the scheme could be sanctioned.

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