Legal Provision and Scope
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Section 3 of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, excluded public utilities such as government undertakings, government companies, and statutory corporations from its regulatory framework.
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This exemption was intended to exclude sectors like electricity, water, telecommunications, and railways, deemed essential services under state control.
Rationale for Exclusion
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Public utilities were viewed as providers of essential services for public welfare, not profit-driven entities.
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The state’s monopoly or control aimed at social welfare, economic planning, and equitable distribution, thus needing protection from competition law interference.
Impact under MRTP Act
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The MRTP Commission had no jurisdiction over public utilities, allowing these enterprises to operate without MRTP constraints, safeguarding government monopoly and policy goals.
Evolution Post-Liberalization
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Economic reforms led to the Competition Act, 2002 replacing the MRTP Act, expanding the scope of competition law to include public utilities.
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Only a narrow exemption remained for sovereign functions like atomic energy, currency, defense, and space.
Key Judicial Precedent
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In Coal India Limited v. Competition Commission of India (2023), the Supreme Court held that public sector undertakings cannot claim blanket immunity from competition law, emphasizing competitive neutrality and consumer welfare.
Practical Implications
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Today, public utilities are subject to competition law to promote efficiency, transparency, and prevent abuse of dominance while balancing public interest.
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This shift promotes a market-friendly regulatory environment in formerly protected sectors.
This represents a transition from the MRTP Act’s protective stance to the Competition Act’s balanced approach in regulating public utilities.
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