Monopolies & Restrictive Trade Practices Act, 1969
Section 2. Definitions. -

(g) "inter-connected undertakings" means two or more undertakings which are inter-connected with each other in any of the following manner, namely :-

(i) if one owns or controls the other;

(ii) where the undertakings are owned by firms, if such firms have one or more common partners;

(iii) where the undertaking are owned by bodies corporate,-

(a) if one body corporate manages the other body corporate, or (b) if one body corporate is a subsidiary of the other bodycorporate, or

(c) if the bodies corporate are under the same management, or (d) if one body corporate exercises control over the other bodycorporate in any other manner;

(iv) where one undertaking is owned by a body corporate and the other is owned by a firm, if one or more partners of the, firm,(a) hold, directly or indirectly not less than fifty per cent of the shares, whether preference or equity, of the body corporate or

(b) exercise control, directly, or indirectly, whether as director or otherwise, over the body corporate.

(v) if one is owned by a body corporate and the other is owned by, firm having bodies corporate as its partners, if such bodies corporate are under the same management;

(vi) if the undertaking are owned or controlled by the same person orby the same group;

(vii) if one is connected with the other either directly or through any number of undertakings which are inter-connected undertakings within the meaning of one or more of the forgoing sub-clauses.

Explanation I. -For the purpose of this Act two bodies corporate shall be deemed to be under the same management,-

(i) if one such body corporate exercises control over the other or both an under the control of the same group or any of the constituents of the same group; or

(ii) if the managing director or manager of one such body corporate is then managing director or manager of the other; or

(iii) if one such body corporate holds not less than one-third of the equity shares in the other or controls the composition of not less than one-third of the total membership of the board of directors of the other; or

(iv) if one or more directors or one such body corporate constitute, or at any time within a period of six months immediately preceding the day when the question arises as to whether such bodies corporate are under the same management constituted whether independently 01 together with relatives of such directors or the employees of the first mentioned body corporate] one fourth of the directors of the other; or

(v) if the same individual or individuals belonging to a group, while holding (whether by themselves or together with their relatives) not less than one fourth of the equity shares in one such body corporate also hold (whether by themselves or together with their relatives) not less than one-fourth of the equity shares in the other; or

(vi) if the same body corporate or bodies corporate belonging to a group holding, whether independently or along with its or their subsidiary or not less than one-fourth of the equity shares in one body corporate, also hold not less than one fourth of the equity shares in the other; or

(vii) if not less than one-fourth of the total voting power in relation to each of the two bodies corporate is exercised or controlled by the sameindividual whether independently or together with his relatives or the same body corporate (whether independently or together with its subsidiaries); or

(viii) if not less than one-fourth of the total voting power in relation to each of the two bodies corporate is exercised or controlled by the same individuals belonging to a group or by the same bodies corporate belonging to a group, or jointly by such individual or individuals and one or more of such bodies corporate; or

(ix) if the directors of the one such body corporate are accustomed to act in accordance with the directions or instructions of one or more of the directors of the other or if the directors of both the bodies corporate are accustomed to act in accordance with the directions or instructions of an individual, whether belonging to a group or not.

Explanation II. -If a group exercises control over a body corporate, that body corporate and every other body corporate, which is constituent of, or controlled by, the group shall be deemed to be under the same management.

Explanation III. -If two or more bodies corporate under the same management hold, in the aggregate, nor less than one-fourth equity share capital in any other body corporate, such other body corporate shall be deemed to be under the same management as the first-mentioned bodies corporate.

Explanation IV. -In determining whether or not two or more bodies corporate are under the same management, the shares held by financial institutions such bodies corporate shall not be taken into account.

Illustration

Undertaking B is inter-connected with undertaking A and undertaking C is inter-connected with undertaking B. Undertaking C is inter-connected with undertaking A; if undertaking D is inter-connected with undertaking C, undertaking D will be inter-connected with undertaking B and consequently with undertaking A; and so on.