Actual engagement in business activity determines "undertaking" status under the MRTP Act, limiting amalgamation approval requirements.

An entity falls within the MRTP Act's definition of "undertaking" only if it is actually engaged at the material time in producing goods or providing services; mere legal capacity, past status, or preparatory acts are insufficient. Applying that test, the old Central Bank was found not to be carrying on banking or any other service activity after nationalisation, as the relied-on steps were only incidental to the proposed amalgamation. The phrase "any other undertaking" in section 23(1) was held to take its meaning from the statutory definition in section 2(v), so no departure was justified and prior Central Government approval was not required for the amalgamation scheme.

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Issues: (i) Whether the old Central Bank was an "undertaking" engaged in the provision of service within the meaning of the Monopolies and Restrictive Trade Practices Act, 1969; (ii) Whether the phrase "any other undertaking" in section 23(1) of that Act required departure from the statutory definition in section 2(v), so as to make prior Central Government approval necessary for the scheme of amalgamation.

Issue (i): Whether the old Central Bank was an "undertaking" engaged in the provision of service within the meaning of the Monopolies and Restrictive Trade Practices Act, 1969.

Analysis: The definition of "undertaking" in section 2(v) contemplates actual engagement in production of goods or provision of service. Mere legal capacity under the memorandum is not enough. After nationalisation, the old Central Bank no longer carried on banking business, and the acts relied on by the appellants, namely receipt of compensation, sale of promissory notes, making short-term deposits, board deliberations and alteration of objects, did not amount to carrying on a business of investment or other service activity. Those acts were preparatory or incidental to the proposed amalgamation and did not show present engagement in any service activity.

Conclusion: The old Central Bank was not engaged in the provision of service and did not fall within section 2(v) as an undertaking at the material time.

Issue (ii): Whether the phrase "any other undertaking" in section 23(1) of that Act required departure from the statutory definition in section 2(v), so as to make prior Central Government approval necessary for the scheme of amalgamation.

Analysis: The scheme of Chapter III shows that the Act controls concentration of economic power through the statutory definition of undertaking and the particular language used in each provision. The context of section 23(1) did not create any repugnancy in applying section 2(v) to the words "any other undertaking". The Act distinguished between an undertaking and its owner, and the general purpose of preventing concentration could not justify rewriting the provision. Since the old Central Bank was not an undertaking to which Part A applied, the absence of prior approval did not bar sanction of the amalgamation scheme.

Conclusion: No departure from section 2(v) was warranted, and prior Central Government approval was not required for the sanction of the scheme.

Final Conclusion: The sanction of the amalgamation scheme was upheld and the appeals failed.

Ratio Decidendi: For section 23(1) of the Monopolies and Restrictive Trade Practices Act, 1969, an entity must be actually engaged in the relevant business activity at the material time; mere legal capacity or an intention to act in future is insufficient, and the statutory definition in section 2(v) applies unless the context clearly compels a different meaning.

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