Section 23(3) exception for amalgamation applies to interconnected undertakings producing the same goods, including coal used internally.

The Bombay HC construed section 23(3) of the Monopolies and Restrictive Trade Practices Act, 1969 to cover the amalgamation of interconnected undertakings that were not dominant undertakings. It held that "produce the same goods" must be read with the statutory definitions of "goods" and "undertaking", and is not limited to marketable end-products; production of coal for raw material use or home consumption also falls within the expression. On the undisputed figures, neither undertaking separately nor both together was dominant, so the scheme met the section 23(3) exception and prior Central Government approval under section 23(1) and (2) was not required.

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Issues: Whether the proposed amalgamation of two inter-connected undertakings, neither of which was a dominant undertaking, and both of which produced coal, fell within the exception in section 23(3) of the Monopolies and Restrictive Trade Practices Act, 1969 so as to dispense with prior approval of the Central Government under section 23(1) and (2).

Analysis: The scheme involved undertakings that were inter-connected because the transferor was wholly a subsidiary of the petitioner. On the undisputed production figures, neither undertaking separately nor both together constituted a dominant undertaking within the meaning of the Act. The expression "produce the same goods" was construed according to the statutory definitions of "goods" and "undertaking"; it was not confined to marketable end-products, and included production of coal used as raw material or for home consumption. The prior Division Bench observations relied on were treated as obiter, because the true scope of section 23(3) had not been in issue there.

Conclusion: The proposed amalgamation satisfied all the requirements of section 23(3) and did not require prior approval of the Central Government; sanction to the scheme was therefore competent.

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