Government liquor trade can fall within competition law, and a prima facie investigation order does not ermine liability.

Government bodies engaged in production, supply or distribution can qualify as an "enterprise" under the Competition Act unless the activity is a narrow sovereign function. The analysis states that liquor procurement and distribution are commercial activities, so the sovereign-function exception does not apply merely because the policy reflects State control or monopoly. It also explains that an order under Section 26(1) is only a prima facie direction for investigation and does not finally determine rights or liabilities. Accordingly, the Competition Commission could examine whether the conduct attracted the Act, and the challenge to the investigation order failed.

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Issues: Whether the appellant Board was an "enterprise" under the Competition Act, whether its liquor procurement and distribution policy could be treated as a sovereign function exempt from the Act, and whether the Competition Commission could direct investigation on the basis of a prima facie view under Section 26(1).

Analysis: An order under Section 26(1) only records a prima facie view and directs investigation; it does not finally determine rights or liabilities. The expression "enterprise" includes a Government department engaged in activity relating to production, supply, distribution or provision of services, and excludes only activities relatable to sovereign functions. Conduct of trade or business by the State or its instrumentalities, even under monopoly or exclusive control, is not sovereign merely because it is backed by policy or governmental decision. The activities of procuring and distributing liquor were held to be commercial in nature and not within the narrow sovereign-function exception. The fact that the policy had survived judicial review under Article 226 did not prevent the Competition Commission from examining whether the impugned conduct attracted the Act, because the limits of writ review are different from the statutory scrutiny entrusted to the Commission.

Conclusion: The Board fell within the definition of "enterprise", its activities were not sovereign functions, and the Commission had jurisdiction to proceed with investigation. The challenge to the impugned order failed.

Ratio Decidendi: State or governmental bodies engaged in commercial trade or business do not become sovereign authorities merely because they exercise exclusive control or monopoly over that activity; only functions falling within the narrow sovereign-function exception are outside the Competition Act.

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