Undertaking under Monopolies law requires actual business activity; mere capacity is insufficient, so amalgamation approval was unnecessary.

Prior approval of the Central Government was not required for the proposed amalgamation because the transferor-bank was not an "undertaking" within section 2(v) of the Monopolies and Restrictive Trade Practices Act, 1969. Actual engagement in production, supply, distribution or services at the material time was necessary; mere capacity to do business or powers in the memorandum were insufficient. A temporary interruption could preserve undertaking status only where there was an intention to resume business, but here the main business had ceased and amalgamation was chosen instead of continued trading. Investment of compensation funds, short-term deposits, loans and share investments did not amount to relevant business activity on these facts.

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Issues: Whether the proposed amalgamation required prior approval of the Central Government under section 23(1)(a) of the Monopolies and Restrictive Trade Practices Act, 1969, on the footing that the transferor-bank was an "undertaking" within section 2(v) of that Act.

Analysis: The decisive question was whether the transferor entity was, at the material time, engaged in actual production, supply, distribution or provision of services so as to answer the statutory description of an undertaking. Mere capacity to carry on business, or the existence of powers in the memorandum of association, was held insufficient. The Court relied on the principle that a temporary interruption in activity does not destroy the character of an undertaking only where there is an intention to resume business; but where the main business had ceased and the entity had chosen amalgamation as an alternative to carrying on business, the required present engagement in activity was absent. The Court also noted that investment of compensation funds, short-term deposits, loans and share investments did not, on these facts, amount to business activity bringing the transferor within the statutory definition.

Conclusion: Prior approval of the Central Government was not required because the transferor-bank was not an undertaking engaged in relevant business activity within section 2(v) of the Monopolies and Restrictive Trade Practices Act, 1969.

Ratio Decidendi: For the purposes of section 2(v) of the Monopolies and Restrictive Trade Practices Act, 1969, an entity is an undertaking only if it is actually engaged in the relevant business activity at the material time, subject to the limited exception of a temporary cessation with an intention to resume; mere capacity or future intention is insufficient.

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