STATE OF UTTAR PRADESH versus GIR PRASAD AND ORS.

Citation: [2004] 2 S.C.R. 637 · Decided: 25-02-2004 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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ST A TE OF UTT AR PRADESH 
A 
v. 
GIR PRASAD AND ORS. 
FEBRUARY 25, 2004 
[RUMA PAL AND P. VENKATARAMA REDDT, JJ.] 
B 
Monopolies and Restrictive Trade Practices Act, 1969-Sections 2(o) 
and I 0-Complaint of restrictive trade practice against State-Element of 
competition between the State and any other party not alleged-Jurisdiction c 
of Restrictive Trade Practices Commission to entertain the complaint-Held: 
For restrictive trade practice, element of commercial competition is necessary-
In the present case 'service' provided by the State not having element of 
competition, there was no restrictive trade practice-Hence Commission did 
not have jurisdiction to entertain the complaint. 
D 
Appellant-State introduced an irrigation programme in respect of 
certain lands including that of the respondent-complainant. Respondent filed 
a complaint under Monopolies and Restrictive Trade Practices Act, 1969 
charging the appellant with having manipulated the conditions of delivery of 
service of supplying irrigation water and having indulged in restrictive trade 
E 
practices within the meaning of the Act. Appellant questioned the jurisdiction 
of the Commission to entertain the complaint. The Commission held that it 
had the jurisdiction as Government Departments which render "service" in 
terms of Section 2 of the Act, are covered by the provisions of the Act. Hence 
the present appeal. 
Allowing the appeal, the Court 
F 
HELD: 1. Unless there is a "restrictive trade practice" as defined in 
Section 2(o) of Monopolies and Restrictive Trade Practices Act, 1969, the 
Commission would not have the power to entertain the complaint. The 
jurisdictional facts as prescribed under Section 2(o) are (i) that there is a trade G 
practice and (ii) that the trade practice has, or may have the effect of 
preventing, distorting or restricting competition in any manner. The two 
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instances which ha~e been particularized as clauses (i) and (ii) of Section 2( o) 
do not narrow down the definition of restrictive trade practice nor do they 
exclude the necessity of establishing the prevention, distortion or restriction 
H 
637 
638 
SUPREME COURT REPORTS 
[2004] 2 S.C.R. 
A of competition. [639-G-H) 
Hindusthan Lever Ltd v. Director General, (200112SCC474, referred 
to. 
2. The element of competition must be present before the question of 
B · any restrictive trade practice would arise and that the concept of competition 
is to be understood in a commercial sense. [640-B] 
c 
Tata Engineering and Locomotive Co. Ltd., Bombay v. The Registrar of the 
Restrictive Trade Agreement, New Delhi, [1977] 2 SCC 55 and Mahindra and 
Mahindra ltd v. Union of India and Anr., [1979] 2 SCC 529, relied on. 
3. In the present case, it has not been alleged that there is any element 
of competition involved between the State and any other party. Even if one 
were to assume that the State was an undertaking as defined in Section 2(v) 
and that the activity of arranging for the supply of water is a "service" as 
D contemplated under the Act, in the absence of this vital element of competition, 
the Commission could not have held that there was any restrictive trade 
practice within the meaning of Section 10 of the Act giving it the jurisdiction 
to entertain the complaint. (640-H; 64t-A) 
Valtas Limited, Bombay v. Union of Jmtia and Ors., [1985] Supp. 2 SCC 
E 498, referred to. 
CIVIL APPELLATE JURI<;DICTION : Civil Appeal No. 16809 of 
1996. 
From the Judgment and Order dated 1.7.96 of the M.R.T.P. Commission, 
F New Delhi in R.T.P.E. No. 241 of 1995. 
G 
N.S. Gahlot and Jatinder Kr. Bhatia, for the Appellants. 
Jeevan Prakash and K.B. Sounder Rajan for the Respondents. 
The Judgment of the Court was delivered by 
RUMA PAL, J. The question to be decided in this appeal is whether 
the Monopolies & Restrictive Trade Practices Commission had the jurisdiction 
to entertain a complaint filed by the respondent No. I relating to an irrigation 
programme sought to be implemented by the appellant-State. According to 
H the appellants, the irrigation programme or "Warbandi" had been introduced 
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STATE v. GIRPRASAD [PAL,J.] 
639 
w.e.f. 19th August 1995 in respect of certain lands including that of the A 
respondent-complainant. The allegation in the complaint was that by the 
irrigation programme, the complainant's agricultural crops would be affected. 
The complaint charged the appellants with "having manipulated the conditions 
of delivery of service of supplying ir
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