Inter-connected undertaking test under the MRTP Act requires strict statutory control conditions and common voting power across both companies.

Under Explanation 1(vii) to section 2(g)(iii)(c) of the Monopolies and Restrictive Trade Practices Act, 1969, inter-connected undertaking status required strict satisfaction of the statutory conditions: at least one-third of the voting power in each body corporate had to be exercised or controlled by the same person or body corporate, and the control had to relate to a matter concerning each company. The Court treated the language as clear and rejected a broader construction. On the facts, the foreign holding company had no independent shareholding in the petitioner and there was no common matter linking the petitioner with M.B. India Ltd. The petitioner and M.B. India Ltd. were therefore not inter-connected undertakings, and compulsory registration under section 26 was not attracted.

---

---

Issues: Whether the petitioner and M.B. India Ltd. were inter-connected undertakings within Explanation 1(vii) to section 2(g)(iii)(c) of the Monopolies and Restrictive Trade Practices Act, 1969, so as to attract registration under section 26 of that Act.

Analysis: The decisive conditions under Explanation 1(vii) were that not less than one-third of the total voting power of each of the two bodies corporate must be exercised or controlled by the same individual or body corporate, such control must relate to any matter concerning each of them, and the control must be exercised independently or together with relatives or subsidiaries. The Court found that the foreign holding company had no independent shareholding in the petitioner and the material showed no common matter relating to the petitioner and M.B. India Ltd. The words used in the provision were treated as clear and unambiguous, so the broader construction urged by the respondents was rejected.

Conclusion: The petitioner and M.B. India Ltd. were not inter-connected undertakings, and the petitioner was not liable to register under section 26 of the Act.

Final Conclusion: The impugned administrative direction was held unsustainable in law and the petitioner obtained relief against compulsory registration and consequential penal action.

Ratio Decidendi: A company is not an inter-connected undertaking under Explanation 1(vii) unless the same controlling person or body corporate exercises or controls the requisite voting power in respect of each company and the statutory conditions are strictly satisfied on the plain language of the provision.

---