Competition Act, 2002: After Reading This Chapter, You Will Be Able To Understand

1
COMPETITION ACT, 2002
LEARNING OUTCOMES
After reading this chapter, you will be able to understand:

 Prohibition of certain agreements and abuse of dominant position which
causes or is likely to cause an appreciable adverse effect on competition
 Regulation of combinations of enterprises and persons, Appreciable
Adverse Effect on Competition
 Competition Commission of India, its Composition, Selection of
Chairperson and Members and related matters
 Duties, Powers and Functions of Commission
 Duties of Director General
 Penalties, Competition Advocacy
 Finance, Accounts and Audit
 Appellate Tribunal, its Powers and Functions
© The Institute of Chartered Accountants of India

1.2 ECONOMIC LAWS
1. INTRODUCTION
What is the Competition?
The term “Competition” is not defined in the Competition Act 2002. Chapter 1 of the joint report
‘A Framework for the Design and Implementation of Competition Law and Policy’ by the
World Bank and the OECD, broadly defines the competition as;
“A situation in a market in which firms or sellers independently stride for the buyers’ patronage
in order to achieve a particular business objective, for example, profit, sales, or market share”.
Need of Competition
A pre-requisite for a good competition is trade. In the 19 th century, Philip Harwood, the journalist
theologian defined trade as “the mutual relief of wants by the exchange of superfluities”
He further added that free trade is exactly the
opposite of trade. Free trade is ‘the unrestricted
liberty of every man to buy, sell and barter, when, The essence of free
trade
where, and how, of whom and to whom he
pleases’.
But mind it, the purchase of goods in the buy in the cheapest sell in the dearest
cheapest market is no guarantee that they will be market which one market which one
sold where they are most needed, and this can find can find
becomes the inherent drawback of the free
market.
Let’s take a scenario to understand this, in a low or middle-income group country; those who
are in most need of relevant product (be goods or services) may not be able to buy the same;
because they don’t have the necessary income to buy, whereas those who can pay the highest
price (because they have income and wealth) will most be able to purchase the goods regardless
their relative needs. However, in this scenario, the real culprit is income distribution system and
not the competitive system, but this signify the need of fostering the competition.
Another shortcoming of the unregulated free market is a situation where the owner withholds
goods from the market in order to extract higher prices. The efforts to regulate prices to
overcome these situations have been unsuccessful due one or other reasons.
The drawbacks of the free market which is unregulated can easily be overcome by posturing
competition by which the interest of the consumers can be protected.
Hence competition becomes essential to efficient trade.

COMPETITION ACT, 2002 1.3
Role of Competition in Economic Development

The positive relationship between competition and innovation, productivity and economic
growth, is proved by a number of empirical studies.
It was found that prices were more than halved through competition in international
telecommunication and air-fares, in a study conducted by the Centre for Competition Policy,
University of East Anglia. The importance of competition in an increasingly innovative and
globalised economy is highlighted in the UK White Paper on World Class Competition Regime.
A world-renowned competition strategist Michael Porter in his book Can Japan Compete?
(Released in 2000) along with co-authors Hirotaka Takeuchi and Mariko Sakakibara based upon
research conducted during the entire decade of 1990, explained after the recent economic
downturn in Japan; only those sectors remain internationally competitive which are
characterized by strong domestic competition
Hence competition policy and law to implement the same is essential to ensure the efficient
working of the market which is capable to foster a competitive trade environment and lead to
economic development.
Competition Policy and Law
The Occasional Paper No. 26 ‘The Instruments of Competition Policy and their Relevance for
Economic Development’ by Private Sector Development Department at World Bank, in 1996
defines competition policy as Government measures that directly affect the behaviour of
enterprises and the structure of the industry.
The central economic goal of the Competition Policy is the preservation and promotion of
effective competition.
Raghavan committee (1999) observed, in the conditions of effective competition, competitors
will be having equal opportunities to compete for their own economic interest and therefore the
quality of their outputs and resource deployment will be given top priority in order to sustain and
succeed in the market by meeting consumers’ demand at the lowest possible cost.
Hence, the competition policy is an instrument which can ensure efficient allocation of
resources, technical progress, and consumer welfare.
The 2001-Nobel Prize winner Joseph Stieglitz has rightly said “Strong competition policy is not
just a luxury to be enjoyed by rich countries, but a real necessity for those striving to create
democratic market economies”.
Competition Law is a sub-set of Competition Policy.
Competition Law provides necessary powers to the Competition Commission to enforce and
implement the Competition Policy.

1.4 ECONOMIC LAWS
Evolution of Competition Law in India

Given the fact that the structure of world economy and trade has taken rapid strides and
undergone vast changes, India has been taking adequate steps for integrating itself with the
new changes and challenges thereby market functioning, positioning becomes effective and
competitive.
The socio–economic philosophy expressed in article 38 of the Constitution of India as the
Directive Principles of State Policy prepared the ground to enact MRTP Act, 1969; which
became first legislation in India to deal with competition.
In the pursuit of globalisation, India in 1991 opened-up its economy, remove control, and restore
to liberalisation; which substantially redefine the nature, scope, and degree of competition both
within and from outside the country.
In the mean-time, GATT (General Agreement on Tariffs and Trade) lost its existence to the
World Trade Organization (WTO). WTO was established on 1st January 1995 as per Uruguay
Round Agreements which was signed by 123 nations. After ministerial declaration at first WTO
ministerial conference held in the Singapore during December 1996, an expert group was
constituted by the Union Ministry of Commerce in October 1997; to study issues relating to the
interaction between trade and competition policy, including anti-competitive practices and the
effect of mergers and practices and the effect of mergers and amalgamations on competition in
order to identify areas that may merit consideration in the WTO framework. Group gave its report
in January 1999 and suggested the enactment of the new Competition Law.
On 27th February 1999 in budget speech, the then Finance Minister (Mr. Yashwant Sinha)
mentioned that The Monopolies and Restrictive Trade Practices Act has become obsolete in
certain areas in the light of international economic developments relating more particularly to
competition laws. We need to shift our focus from curbing monopolies to promoting
competition.
Raghavan Committee Report (2000)
In this regard, the Government constituted a High-Level Committee on Competition Policy and
Law on 15th September 1999 under the Chairmanship of Mr. S.V.S. Raghavan, to examine this
range of issues and propose a suitable modern Competition.
The Raghavan Committee in its report inter alia submitted to the Government in May 2000,
observed that the Government needs to address the pre-requisites for a Competition Policy as
it is an instrument to achieve efficient allocation of resources, technical progress, consumer
welfare and regulation of concentration of economic power. It also noticed that the MRTP Act
is limited in its sweep and in the present competitive milieu it fails to fulfil the needs of a
competition law. This Committee went into the modalities of bringing into existence a law and a
law enforcement authority in the form of the Competition Act and the CCI respectively.

The Parliamentary Standing Committee on Home Affairs

The Department Related Parliamentary Standing Committee on Home Affairs to which the
Competition Bill, 2001 was referred for examination, concluded that the rigidly structured MRTP
Act also necessitate its repeal in view of Government’s policy of being facilitator rather than
regulator. It also noted that the objective of economic policy is to sustain competition culture in
the country for economic efficiency and maximisation of public / consumer interest. Further,
sustenance of competition culture could be ensured by free and fair competition amongst
economic enterprises.
The Government, after considering the report and suggestions from various organizations,
institutions, and general public introduced the Competition Bill in the Parliament. This Bill
became an Act i.e., the Competition Act, 2002 (12 of 2003) (here-in-after referred to as ‘Act’ or
‘this Act’) after receiving assent from the President on 13th January 2003 and came into force
on different dates notified by Central Government in the official gazette for different provisions.
This Act extends to the whole of India except the State of Jammu and Kashmir.
Scheme of the Act
The Competition Act 2002 has been split into nine chapters containing a total of 66 sections.
Later in 2007 (vide Act 39 of 2007) chapter VIIIA (containing section 53A to 53U) inserted
regarding ‘Competition Appellate Tribunal’.
Further later in 2017 through Finance Act 2017 ‘Competition Appellate Tribunal’ is substituted
with ‘Appellate Tribunal’, because w.e.f. 26 th May 2017, NCLAT constituted under section 410
of the Companies Act 2013 be the Appellate Tribunal for purpose of this Act (Competition Act).
The object behind the enactment of the Competition Act, 2002
 The object behind the enactment of this Act is clearly mentioned in the Preamble, which
provides that for keeping in view of the economic development of the country for:
Establishment of the Competition Commission of India (CCI);
 To prevent practices having adverse effect on competition;
 To promote and sustain competition in markets;
 To protect the interests of consumers;
 To ensure freedom of trade carried on by other participants in markets, in India; and
 For matters connected therewith or incidental thereto.
In the Civil Appeal No 7779 of 2010 (Competition Commission of India Vs Steel Authority
of India Ltd 1) the Hon’ble Supreme Court (in its judgement dated 9 th September, 2010) opined
1 https://main.sci.gov.in/jonew/judis/36828.pdf

1.6 ECONOMIC LAWS
that the main objective of the competition law is to promote economic efficiency using
competition as one of the means of assisting the creation of market responsive to consumer
preferences. The advantages of perfect competition are threefold:
 Allocative efficiency, which measures the effective allocation of resources;
 Productive efficiency, which measures that costs of production are kept at a minimum
and
 Dynamic efficiency, which promotes innovative practices
The Apex Court further added that as per the statement of objects and reasons, this enactment
is India’s response to the opening up of its economy, removing controls and resorting to
liberalization. The natural corollary of this is that the Indian market should be geared to face
competition from within the country and outside.
The other object was to curb the negative aspects of competition through such a body namely,
the Competition Commission of India which has the power to perform different kinds of functions,
including passing of interim orders and even awarding compensation and imposing penalty.
In short, the establishment of the Commission and enactment of the Act was aimed at
preventing practices having an adverse effect on competition, to protect the interest of
the consumer and to ensure fair trade carried out by other participants in the market in
India and for matters connected therewith or incidental thereto.
The Competition Act, 2002 – At a Glance
The Act consists of 66 sections divided into 9 Chapters, details of which are as under:
Arrangements of Chapters/Sections under

the Competition Act, 2002
Chapter II
Prohibition of
Certain Chapter III Chapter IV Duties,
Chapter V Duties
Chapter 1: Agreements, competition Powers and
of Director
Preliminary Abuse of Dominant commission of Functions of
Genereal [Section
[Section 1 & 2] Position and India [Section 7 to commission
41]
Regulation of 17] [Section 18 to 40]
combinations
[Section 3 to 6]
Chapter VII Chapter VIII Chapter VIIIA

Chapter VI Chapter IX
Competition Finance, Accounts Appellate Tribunal
Penalties [Section Miscellaneous
Advocacy [Section and Audit [Section [Section 53A to
42 to 48] [Section 54 to 66]
49] 50 to 53] 53U]

CHAPTER I: PRELIMINARY
2. PRELIMINARY
2.1 Short Title, extent and Commencement – Section 1
(1) This Act may be called the Competition Act, 2002.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date 1 as the Central Government may, by notification in
the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any
reference in any such provision to the commencement of this Act shall be construed as a
reference to the coming into force of that provision.
Comments
This part contains the title of the Act, extent and the date of its commencement. By the
enactment of the Jammu and Kashmir Reorganization Act, 2019 (Act 34 of 2019), the State
of Jammu and Kashmir had been reorganized into Union Territory of Ladakh and Union
Territory of Jammu and Kashmir.
The different dates when the sections of this Act were notified are as under:
• 31st March, 2003, vide Notification No. S.O. 340(E), dated 31st March 2003 in respect
of [s. 1, cls. (d), (g), (j), (k), (l) and (n) of s. 2, ss. 8, 9, 10, 14, 16, 17, sub-sec. (1) of
s. 63 and cls. (a), (b), (d), (e), (f) and (g) of sub-sec. (2) of s. 63];
• 19th June, 2003, vide Notification No. S.O. 715(E), dated 19th June 2003 in respect
of [s. 2 {except cls. (d), (g), (j), (k), (l) and (n)}, ss. 7, 11, 12, 13, 15, 22, 23, 36, 49,
50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, s. 63 {except cls. (a), (b), (d), (e), (f),
(g) and (n) of sub-sec. (2)}, 64 and 65]
• 20th May, 2009, vide Notification No. S.O. 1241(E), dated 15th May 2009 in respect
of [s. 3, 4, 18, 19, 21, 26, 27, 28, 32, 33, 35, 38, 39, 41, 42, 43, 45, 46, 47, 48, 54, 55
and 56.]
2.2. Definitions
Acquisition [Section 2(a)]
"Acquisition" means, directly or indirectly, acquiring or agreeing to acquire,
(i) Shares, voting rights, or assets of any enterprise; or

1.8 ECONOMIC LAWS
(ii) Control over management or control over assets of any enterprise.

Notes
 The term acquisition is relevant in order to determine whether a combination is formed
or not under section 5.
 The term ‘Control’ is defined as an explanation to section 5
Agreement [Section 2(b)]
"Agreement" includes:
 any arrangement; or
 understanding; or
 action in concert,
(i) Whether or not, such arrangement, understanding or action is formal or in writing;
or
(ii) Whether or not such arrangement, understanding or action is intended to be
enforceable by legal proceedings.
Notes
 The term is relevant to decide the scope of section 3 ‘Anti-Competitive Agreements’.
 Meaning of Arrangement: It means a common course of conduct or behaviour involving
some sort of communication or exchange of views between the parties, each of whom is
led to expect that the other or others will act in a certain way. However, parallel behaviour
of parties is only an indicator of collusion and not a conclusive proof and is treated at
best as a circumstantial evidence.
 Understanding: It means some sort of behavioural communication between two or more
parties resulting in a particular course of conduct by them. It can also operate in a manner
where one party makes the representation with the understanding that the others will
follow.
 Action in Concert: It means where two or more persons having regard to their relation,
their conduct and common interest and on the basis of such evidence, it may be inferred
that they are acting in concert.
 The identical action of two or more parties can be termed as action in concert, where
such parties teaming up together to reach the same result.
 Let’s understand it through an illustration. Securities law in certain cases requires
whosoever intended to takeover or buy a commanding share in another entity, must state
these intentions publicly, after having bought up a certain percentage of the shares. One

may try to avoid hitting that percentage by spreading the purchases among a number of
related or unrelated parties having cooperation among themselves based upon previous
arrangement.
 Agreements may be classified either as
horizontal agreements and vertical
agreements. Agreements
 A horizontal agreement entered between
two or more competing enterprises
operating at the same level of business,
whereas agreements between non- Horizontal
Vertical agreements
competing enterprises operating at a agreements
different level of production and distribution
chain are called vertical agreements.
These will be further detailed later in this chapter, in reference to section 3 ‘Anti-
Competitive Agreements’.
Appellate Tribunal [Section 2 (ba)]
It means the National Company Law Appellate Tribunal (NCLT) referred to in
section 53A(1) .
Cartel [Section 2(c)]

"Cartel" includes an association of producers, sellers, distributors, traders, or service providers
who, by agreement amongst themselves, limit, control or attempt to control the production,
distribution, sale, or price of, or, trade in goods or provision of services.
Notes:
Cartels are ‘cancers on the open market economy 2.
The 1998 OECD Recommendation proclaimed that cartels are “the most egregious violations of
competition law. OECD defines a hard-core cartel as, “an anti-competitive agreement,
anticompetitive concerted practice or anticompetitive arrangement by companies to fix prices,
make rigged bids (collusive tenders), establish output restrictions or quotas or share or divide
markets by allocating customers, suppliers, territories, or lines of commerce... the most
egregious violations of competition law. 3
As per ICN report, it is difficult to deal with cartels due to the following: a) Cartels are secretive
about their illicit behaviour, and therefore agencies have to undertake great efforts to detect
concealed cartels. b) Competition authorities need extraordinary powers and skills to collect
2 Speech by Mario Monti on 11 September 2000, available at www.ec.europa.eu/comm/competition/ speeches

3 OECD Council, Recommendations concerning effective action against hardcore cartels, (1998)

1.10 ECONOMIC LAWS
sufficient evidence to mount a viable case against sometimes uncooperative defendants. c) In

the cartel area, competition authorities operate sophisticated leniency programmes to
destabilise such conspiracies, which is practically difficult to implement. d) The investigation of
international cartels tests the limits of competition authority jurisdictional reach. e) Last but not
least, the growing trend to criminalize cartel behaviour obliges many agencies to work to a
particularly high standard of procedure and proof 4.
Cartel
A cartel is said to exist when two or more enterprises enter into an explicit or implicit
agreement:
 to fix prices,
 to limit production and supply,
 to allocate market share or sales quotas, or
 to engage in collusive bidding or bid-rigging in one or more markets.
An important dimension in the definition of a cartel is that it requires an agreement between
competing enterprises not to compete or to restrict competition.
Types of Cartel
 International Cartel: An international cartel is said to exist, when not all of the
enterprises in a cartel are based in the same country or when the cartel affects markets
of more than one country.
 Import Cartel: An import cartel comprises enterprises (including an association of
enterprises) that get together for the purpose of imports into the country.
 Export Cartel: An export cartel is made up of enterprises based in one country with
an agreement to cartelize markets in other countries. In the Act, cartels meant
exclusively for exports from India have been excluded from the provisions relating to
anti-competitive agreements.
Common characteristics of cartels
 Usually cartels function in secrecy.
 The members of a cartel, by and large, seek to camouflage their activities to avoid
detection by the Commission.
 Perpetuation of cartels is ensured through retaliation threats. If any member cheats,
the cartel members retaliate through temporary price cuts to take business away or
4 International Competition Network, ‘Defining hard core cartel conduct effective institutions effective
penalties’. Building blocks for effective Anti-Cartel regimes, Vol1. (2005)

can isolate the cheating member.

 Another method, known as compensation scheme, is resorted to in order to discourage
cheating. Under this scheme, if a member of a cartel is found to have sold more than
its allocated share, it would have to compensate the other members.
Conditions conducive to formation of cartels
If there is effective competition in the market, cartels would find it difficult to be formed and
sustained. Some of the conditions that are conducive to cartelization are:
 high concentration - few competitors
 high entry and exit barriers
 homogeneity of the products (similar products) a similar production costs
 excess capacity a high dependence of the consumers on the product
 history of collusion
 active trade association
In case No. 29 of 2010 based upon information furnished Builders Association of India
against 11 cement companies, Competition Commission of India (CCI) vide its order found
that, the act and conduct of the cement companies to be a ‘Cartel’ as the cement companies
were acting together to limit, control, and also attempted to control the production and the price
of cement in the market in India. The penalty of INRs. 6316.59 crore was imposed on the 11
cement companies, fixed at a rate of 50 percent of their profits during the years 2009 -10 and
2010 -11, apart from a penalty at the rate of 10% of total receipts for such two years is also
hereby imposed upon Cement Manufacturers Association amounts to INRs 0.73 crore.
Note – It was alleged that these 11 companies collectively control around 65% of the market,
whereas the remaining 43 players have control over only 35% of market share, hence these 11
companies collectively capable to control the price by controlling the production and supply.
Further Note – In another connected matter, In re: Alleged Cartelization by Cement
Manufacturers (RTPE No. 52 of 2006); where MRTP Commission took suo-moto cognizance of
this matter in the 2006, and was later transferred to CCI under section 66(6) of this Act. CCI found
Shree cement is also guilty and order a penalty of INRs 397.51 crores (at the rate of 50 percent
of their profits during the years 2009 -10 and 2010 -11).

1.12 ECONOMIC LAWS
Notes
 Despite the fact, that term cartel has been
given an inclusive meaning, but an
association which is formed for the welfare
of the trade or formed for any other purpose
not mentioned in the aforesaid definition will
not be a cartel. It is only when an
association, by agreement amongst
themselves, limits control or attempts to
control the production, distribution, sale or
Mind it, the purpose is important; not

the form; to classify any association
price of, or, trade in goods or provision of
services, that it will be a cartel.
 The curses of cartelisation, for the
consumers; may include higher prices, poor quality, less or no choice.
 A cross border cartel may categories either as an international cartel or import/export
cartel. It is important here to note that exclusive export cartel don’t have an adverse effect
on competition in India, hence not fall in the category of the anti-competitive agreements
which are prohibited.
 Some features, which are persuasive evidence of cartel - few competitors with
homogeneous products, significance necessity of the product by the customer, high entry
and exit barriers, excess capacity available with producers.
 Some significant probes by CCI into cartelisation in past
December 2010  when onion prices touched INRs 80 per kg, the CCI instituted a probe to
examine, is there was any cartelization among traders? But did not find sufficient evidence of
market manipulation.
October 2015  CCI had penalized the Jet Airways, Indigo, and Spice Jet for cartelization in
determining the fuel surcharge on air cargo.
May 2017  based upon a complaint filed by Reliance Jio against the cartelization by its rivals
Bharati Airtel, Vodafone India and Idea cellular, CCI ordered a probe into the functioning of the
Cellular Operators Association of India.
Example
Examine whether the following will be considered as a cartel within the meaning of Section 2(c)
of the Competition Act, 2002.

a. The owners of oranges’ orchards from Nagpur, have

formed an association to limit the supply of oranges.
b. The maize growers of Punjab forms a co-operative
body to help member farmers to take their produce
to market places.
Answer
As per section 2(c) of the Competition Act, 2002 the term “cartel” includes an association of
producers, sellers, distributors, traders, or service providers who, by agreement amongst
themselves, limit, control, or attempt to control the production, distribution, sale or price of, or,
trade in goods or provision of services.
Despite the fact that term cartel has been given an inclusive meaning, but an association which
is formed for the welfare of the trade or formed for any other purpose not mentioned in the
aforesaid definition will not be a cartel. It is only when an association, by agreement amongst
themselves, limits, control, or attempts to control the production, distribution, sale or price of,
or, trade in goods or provision of services, that it will be a cartel.
Mind it, the purpose is important; not the form; to classify any association as a cartel.
a. Thus, an association of owners of oranges’ orchards from Nagpur will be considered as
a cartel under the provisions of the Act, because it’s purpose is to limit the supply of
oranges
b. Thus, a co-operative body to help member farmers to take their produce to market places
is not a cartel, because maize growers of Punjab in no way through co-operative body
agreed amongst themselves to limits, control or attempts to control the production,
distribution, sale, or price of maize.
Chairperson [Section 2(d)]

"Chairperson" means the Chairperson of the Commission appointed under section 8(1);
Commission [Section 2(e)]

"Commission" means the Competition Commission of India established under section 7(1);
Notes
 The objectives of the Act are sought to be achieved
through the Competition Commission of India (CCI)
 CCI was established by the Central Government with
effect from 14th October 2003, (as the successor of
Monopolies and Restrictive Trade Practices Commission).

1.14 ECONOMIC LAWS
Consumer [Section 2(f)]

"Consumer" means any person who,
(i) buys any goods for a consideration which has been paid or
promised or partly paid and partly promised, or under any
system of deferred payment and includes any user of such
goods other than the person who buys such goods for
consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment when such use is made with the
approval of such person, whether such purchase of goods is for resale or for any
commercial purpose or for personal use;
(ii) hires or avails of any services for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment and includes
any beneficiary of such services other than the person who hires or avails of the services
for consideration paid or promised, or partly paid and partly promised, or under any
system of deferred payment, when such services are availed of with the approval of the
first-mentioned person whether such hiring or availing of services are for any commercial
purpose or for personal use;
 It is noteworthy that the definition of consumer is substantially the same has given to the
expression under section 2(7) of the Consumer Protection Act, 2019 (35 of 2019). The
difference is that under clause (i), in the Competition Act, it uses the words “whether such
purchase of goods is for the resale or for any commercial purpose or for personal use” in
places of the words “but does include a person who obtains such goods for resale or for
any commercial purpose”, as in the Consumer Protection Act. Likewise, in clause (ii), the
language used in the Competition Act is “whether such hiring or availing of services is
for any commercial purpose or for personal use” in place of the words “but does not
include a person who avails of such services for any the commercial purpose” as in the
Consumer Protection Act. Thus, the interpretation of “consumer” in the Consumer
Protection Act will be the same as in the Competition Act. But the scope is wider in the
latter Act, because “consumer” will also include a person who purchases goods for resale
or for any commercial purpose or for personal use.
 The expressions "buys any goods" and "hires or avails any services" includes offline or
online transactions through electronic means or by teleshopping or direct selling or multi-
level marketing.
Example
Whether a person purchasing goods not for personal use, but for resale can be considered as
a ‘consumer’ under the Competition Act, 2002.

Answer
Consumer: The term ‘consumer’ is defined in section 2(f) of the Competition Act, 2002.
Accordingly, ‘consumer’ means any person who buys any goods for a consideration, which has
been paid or promised or partly paid and partly promised, whether such purchase of goods is
for resale or for any commercial purpose or for personal use.
Hence, it is not necessary that a person must purchase the goods for personal use in order to
be considered as a ‘consumer’ under Competition Act, 2002. Even a person purchasing goods
for resale or for any commercial purpose will also be considered as a ‘consumer’ within the
meaning of Section 2(f) of the Competition Act, 2002.
Director General [Section 2(g)]

"Director General" means the Director General appointed under section 16(1) and includes any:
 Additional Director General,
 Joint Director General,
 Deputy Director General, or
 Assistant Directors General
appointed under that section.
Enterprise [Section 2(h)]

"Enterprise" means a person or a department of the Government, who or which is, or has
been, engaged in any activity, relating to the production, storage, supply, distribution,
acquisition or control of articles or goods, or the provision of services, of any kind, or in
investment, or in the business of acquiring, holding, underwriting or dealing with shares,
debentures, or other securities of any other body corporate, either directly or through one
or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is
located at the same place where the enterprise is located or at a different place or at different
places, but does not include any activity of the Government relatable to the sovereign
functions of the Government including all activities carried on by the departments of the
Central Government dealing with atomic energy, currency, defence, and space.
For the purposes of this clause,
(a) "Activity" includes profession or occupation;
(b) "Article" includes a new article and "service" includes a new service;
(c) "Unit" or "division", in relation to an enterprise includes;
(i) A plant or factory established for the production, storage, supply, distribution,
acquisition or control of any article or goods;

1.16 ECONOMIC LAWS
(ii) Any branch or office established for the provision of any service;
Notes
 Here, the department of the Government is also considered as an enterprise, hence can
sue and sued by others as a juristic person for its right and legal remedies. However, the
Government Departments engaged in activities relatable to sovereign functions of the
Government, are excluded from the definition of an enterprise.
 Sovereign functions are those actions for which state is not answerable before the Court
of Law. It includes matters such as defence of the country, raising and maintaining armed
forces, space, and making peace in retaining territory.
The principle of sovereign functions of the Government had been drawn while deciding the extent of
liability and immunity of the state in the historical case of Peninsular and Oriental Steam
Navigation Co. v. Secretary of State for India 5. [Citation: (1861) 5 Bom. H.C.R. App. I,p.1]. This
case was decided by the Supreme Court of Calcutta in 1861 bases on Section 65 of the
Government of India Act, 1858. In this case, when the notion “The King can do no wrong” was
still prevalent under English Common Law and thus, the King wasn’t to blame for the wrongs of
its servants. The classic decision was the first case during which the excellence between
sovereign functions and non-sovereign functions was made. This crucial embodiment of
common law decision still has some valid crucial headings and influence most of the present
times relating to vicarious liability and disputes to establish liability on a sole individual or group
of the organization. The court held that the East India Company was not a sovereign, and the
personal exemption from suit which is the attribute of sovereignty did not attach to it. The Court
held that the Company having been invested with powers usually called sovereign powers did
not constitute them sovereigns. And this is further shown by the circumstances that the
Company was held liable for the negligence or misconduct of its officers in cases in which the
Sovereign would not have been held liable even on petition of right (p. 179). Not only was the
Company liable to suit in the courts of the Sovereign, but it also submitted to the jurisdiction of
its own Courts.
Goods [Section 2(i)]
"Goods" means goods as defined in the Sale of Goods Act, 1930 and includes—
(A) Products manufactured, processed, or mined;
(B) Debentures, stocks, and shares after allotment;
(C) In relation to goods supplied, distributed, or controlled in India, goods imported into India;
5https://indiankanoon.org/docfragment/1591621/?formInput=peninsular%20and%20oriental%20steam%20na
vigation%20company

Notes
 Section 2(7) of the Sale of Goods Act, 1930 defines goods as “every kind of movable
property other than actionable claims and money, and include stock and shares, growing
crops, grass, and things attached to or forming part of the land which are agreed to be
severed before sale or under the contract of sale”.
 Here, the Sale of Goods Act, 1930 simply consider share and stock as goods, but
Competition Act, 2002 become specific and included debentures, stocks, and shares after
allotment
It was held in the case of State Bank of India Vs. Smt. Neeta Ashok Naik, AIR 2000 Bom 151,
the fixed deposit receipts are goods within the meaning of section 176 of the Indian Contract
Act 1872 read with section 2(7) of the Sale of Goods Act, 1930.
Example
ABC Ltd. made an initial public offer of a certain number of equity shares. Examine whether
these shares can be considered as ‘Goods’ under the Competition Act, 2002 before allotment.
Answer
Section 2(i) of Competition Act, 2002 defines ‘goods’ as follows:
‘Goods’ means goods as defined the Sale of Goods Act, 1930 and includes –
(a) Products manufactured, processed, or mined;
(b) Debentures, stock and shares after allotment;
(c) In relation to goods supplied, distributed, or controlled in India, goods imported into India.
Hence, shares can be considered as ‘goods’ within the meaning of section 2(i) of Competition
Act, 2002 only after allotment and not before allotment.
Here one may argue against the answer mentioned above, that section 2(7) of the Sale of Goods
Act, 1930 specifically include stock and shares while defining the good, so share must consider the
as good even prior to allotment. But this argument is not tenable due to the following two reasons;
1. Specific will prevail over general (if legislation specifically mentioned that shares after
allotment will be considered goods, then share during pre-allotment stage can’t be
considered as good)
2. Hon’ble Supreme Court in case of Morgan Stanley Mutual Fund vs. Kartick Das (1994)
4 SCC 225 decided that share become goods only after allotment and during the pre-
allotment stage, when application money is paid against share/s then such till time
allotment is not made, such application money shall be considered as an actionable

1.18 ECONOMIC LAWS
claim. Actionable claims are specifically excluded from the definition of goods under
section 2(7) of the Sale of Goods Act, 1930.
Member [Section 2(j)]

"Member" means a member of the Commission appointed under sub-section (1) of section 8
and includes the chairperson.
So Chairperson is a member by default.
Notification [Section 2(k)]

"Notification" means a notification published in the Official Gazette.
Person [Section 2(l)]
"Person" includes—
(i) An individual;
(ii) A Hindu Undivided Family;
(iii) A company;
(iv) A firm;
(v) An association of persons or a body of individuals, whether incorporated or not, in India or
outside India;
(vi) any corporation established by or under any Central, State or Provincial Act or a Government
company as defined in section 617 of the Companies Act, 1956 (1 of 1956);
(vii) Anybody corporate incorporated by or under the laws of a country outside India;
(viii) A co-operative society registered under any law relating to cooperative societies;
(ix) A local authority;
(x) Every artificial judicial person, not falling within any of the preceding sub-clauses;
Notes
 The Companies Act, 1956 is repealed through section 465 of the Companies Act, 2013).
 As per clause 45 to section 2 of the Companies Act, 2013 (18 of 2013) "Government
company" means any company in which not less than fifty-one per cent of the paid-up
share capital is held by the Central Government, or by any State Government or
Governments, or partly by the Central Government and partly by one or more State
Governments, and includes a company which is a subsidiary company of such a
Government company.

 For the purposes of above-mentioned clause, the "paid-up share capital" shall be
construed as "total voting power", where shares with differential voting rights have been
issued.
Practice [Section 2(m)]

"Practice" includes any practice relating to the carrying on of any trade by a person or an
enterprise.
Prescribed [Section 2(n)]

"Prescribed" means prescribed by rules made under this Act.
Price [Section 2(o)]

"Price", in relation to the sale of any goods or to the performance of any services includes every
valuable consideration, whether direct or indirect, or deferred, and includes any consideration,
which in effect relates to the sale of any goods or to the performance of any services although
ostensibly relating to any other matter or thing.
Note
The term price is very important, because it gives the basis to determine any agreement anti-
competitive and abuse of dominance.
Public financial institution [Section 2(p)]

"Public financial institution" means a public financial institution specified under section 4A of
the Companies Act, 1956 and includes a State Financial, Industrial or Investment Corporation.
Notes
 The Companies Act, 1956 is repealed through section 465 of the Companies Act, 2013, hence
vide section 8 of the General Clauses Act, 1897 ‘Construction of references to repealed
enactments’, clause 72 to section 2 of the Companies Act, 2013 need to be referred.
 As per clause 72 to section 2 of the Companies Act, 2013 (18 of 2013) "public financial
institution" means;
 The Life Insurance Corporation of India, established under section 3 of the Life
Insurance Corporation Act, 1956 (31 of 1956);
 The Infrastructure Development Finance Company Limited referred to in clause
(vi) of sub-section (1) of section 4A of the Companies Act, 1956 (1 of 1956);
 Specified company referred to in the Unit Trust of India (Transfer of Undertaking
and Repeal) Act, 2002 (58 of 2002);

1.20 ECONOMIC LAWS
 Institutions notified by the Central Government under sub-section (2) of section 4A

of the Companies Act, 1956 (1 of 1956);
 Such other institution as may be notified by the Central Government in consultation
with the RBI.
Provided that no institution shall be so notified unless it has been established or constituted by
or under any Central or State Act other than this Act or the previous company law; or not less
than fifty-one percent of the paid-up share capital is held or controlled by the Central
Government or by any State Government or Governments or partly by the Central Government
and partly by one or more State Governments.
Regulations [Section 2(q)]

"Regulations" means the regulations made by the Commission under section 64;
Relevant Market [Section 2(r)]

"Relevant Market" means the market, which may be determined by the Commission with
reference to the relevant product market or the relevant geographic market or with reference
to both the markets.
The Supreme Court in the case of Competition Commission Of India vs Co-Ordination
Committee of artists and technicians of WB. Film and Television and Ors, Civil Appeal No. 6691
of 2014, dated 7 March, 2017 stated that the purpose of defining the 'relevant market' is to
assess with identifying in a systematic way the competitive constraints that undertakings face
when operating in a market. This is the case in particular for determining if undertakings are
competitors or potential competitors and when assessing the anti-competitive effects of conduct
in a market. The concept of relevant market implies that there could be an effective competition
between the products which form part of it and this presupposes that there is a sufficient degree
of interchangeability between all the products forming part of the same market in so far as
specific use of such product is concerned.
Notes
 It includes all interchangeable or substitutable goods or services of all competitors.
 The determination of the relevant market is a crucial aspect, in order to identify whether
agreement is anti-competitive or not? and is there are adverse effects on competition or
not due to abuse of dominance or formation of combination?
Relevant Geographic Market [Section 2(s)]

"Relevant Geographic Market" means a market comprising the area in which the conditions of
competition for supply of goods or provision of services or demand of goods or services are

distinctly homogenous and can be distinguished from the conditions prevailing in the
neighbouring areas.
Notes
 The Relevant Geographic Market can be as narrow as one metropolitan area or as broad
as the nation as a whole.
 Marking the relevant geographic markets are basically involves the identification of
geographical areas within which separate degree, nature, and conditions of competition
take place.
Relevant Product Market [Section 2(t)]

"Relevant Product Market" means a market comprising all those products or services which are
regarded as interchangeable or substitutable by the consumer, by reason of characteristics of
the products or services, their prices, and intended use.
In the matter of Belaire Apartment Owner’s Association, COMPAT upheld the CCI decision
regarding the identification of Relevant Geographical Market and Relevant Product Market for
DLF.
DLF is alleged and found guilty for enjoying dominant position in the relevant market. DLF action
of cancelling allotments, forfeiting deposits, keeping buyers in the dark about the eventual
shape, size, location, earnest money, instalments, timely payments, delivery of possession,
alternations and additional constructions etc. of the apartments was held unfair.
Provision of services of development of high-end residential flats are identified as a Relevant
Product Market.
Gurgaon (now Gurugram) of Haryana is identified as Relevant Geographical Market.
Service [Section 2(u)]

"Service" means service of any description which is made available to potential users and
includes the provision of services in connection with the business of any industrial or commercial
matters such as banking, communication, education, financing, insurance, chit funds, real
estate, transport, storage, material treatment, processing, supply of electrical or other energy,
boarding, lodging, entertainment, amusement, construction, repair, conveying of news or
information and advertising.
Note
 It is noteworthy that the definition of services has wider scope here in comparison to its
expression under section 2(42) of the Consumer Protection Act, 2019 (35 of 2019).
Likewise education is considered as service here, services in connection with industrial
matter also included here.

1.22 ECONOMIC LAWS
Shares [Section 2(v)]

"Shares" means shares in the share capital of a company carrying voting rights and includes,
(i) Any security which entitles the holder to receive shares with voting rights;
(ii) Stock except where a distinction between stock and share is expressed or implied;
Notes
 It is important here to note that provision related to voting rights are explained in section
47 of the Companies Act, 2013 (18 of 2013) and as per sub-section 2 to said section
preference shareholders also have voting rights in certain scenarios.
 A share need to be in the post allotment stage, to be goods; hence all shares are not
goods.
 Here share also include the embedded securities, such as convertible preference shares
and debentures.
Statutory Authority [Section 2(w)]

"Statutory authority" means any authority, board, corporation, council, institute, university, or
any other body corporate, established by or under any Central, State or Provincial Act for the
purposes of regulating production or supply of goods or provision of any services or markets
therefor or any matter connected therewith or incidental thereto;
Trade [Section 2(x)]

"Trade" means any trade, business, industry, profession, or occupation relating to the production,
supply, distribution, storage, or control of goods and includes the provision of any services;
Turnover [Section 2(y)]

"Turnover" includes the value of sale of goods or services;
Notes
 The amount of turnover is very much crucial in order to determine whether combination
under section 5 of Act is formed are not and to charge penalty.
 As part of judicial precedence, while imposing penalty as a percentage of turnover in the
order under section 27 of Act, the relevant turnover shall be considered.
The Supreme Court in the case of Excel Corp. Care, [AIR 2017 SC 2734 ] has laid down that in
case of multi- product companies, the Commission must not take average of the turnover of the
last three preceding years in respect of all products, goods or services of an enterprise or
associations of enterprises or a person or associations of persons, but must impose penalties
only on the turnover of such products or services, which have been affected by the

contravention. The Court, thus, has ruled in favour of relevant turnover rather than total turnover
in case of multi-product companies.
Words and Expressions [Section 2(z)]

"Words and Expressions" used but not defined in this Act and defined in the Companies Act,
1956 shall have the same meanings respectively assigned to them in that Act.
Note
The Companies Act, 1956 is repealed through section 465 of the Companies Act, 2013 and vide
section 8 of the General Clauses Act, 1897 ‘Construction of references to repealed enactments’,
reference shall be made to Companies Act, 2013.
CHAPTER II: PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF

DOMINANT POSITION AND REGULATION OF COMBINATIONS
3. PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF

DOMINANT POSITION AND REGULATION OF COMBINATIONS
Under the Competition Act, 2002, the competition Commission of India is empowered to inquire
into anti-competitive agreements (section 3) and instances of abuse of dominant position
including predatory pricing (section 4) to declare them void. The Commission is also empowered
to regulate the combinations (sections 5 & 6).
1. Anti-competitive agreements [Section 3]
Prohibition of Anti-Competitive Agreements -Section 3(1)
No enterprise or association of enterprises or person or association of persons shall enter into
any agreement in respect of:
 production,
 supply,
 distribution,
 storage,
 acquisition; or
 control of goods; or
 provision of services,
which causes or is likely to cause an appreciable adverse effect on competition within India.
(AAEC)

1.24 ECONOMIC LAWS
Agreement
An “agreement” includes any arrangement or understanding or concerted action entered into
between parties. It need not be in writing or formal or intended to be enforceable in law.
An anti-competitive agreement is an agreement having appreciable adverse effect on competition.
Anti-competitive agreements include, but are not limited to:-
 agreement to limit production and/or supply;
 agreement to allocate markets;
 agreement to fix price;
 bid rigging or collusive bidding;
 conditional purchase/ sale (tie-in arrangement);
 exclusive supply / distribution arrangement;
 resale price maintenance; and
 refusal to deal.
Appreciable Adverse Effect on Competition (AAEC)
The Act does not define the meaning of AAEC. However, only the probable factors that need to
be looked into whilst determining whether or not an agreement is likely to have an AAEC in the
market is provided in the Act.
These factors mentioned under section 19(3) of the Act, provide that the Commission while
deciding whether or not an agreement is likely to have an AAEC in the market shall bring into
consideration any or all of the following factors:
 creation of barriers to new entrants in the market;
 driving existing competitors out of the market;
 foreclosure of competition by hindering entry into the market;
 accrual of benefits to consumers;
 improvements in production or distribution of goods or provision of services; and
 promotion of technical, scientific and economic development by means of production or
distribution of goods or provision of services.
Anti-Competitive Agreements are Void Agreements – Section 3(2)

Any agreement entered into in contravention of the provisions contained in sub-section (1) shall
be void.

Horizontal Agreements which are treated as an appreciable adverse effect on

competition- Section 3(3)
Any agreement entered into between:
 Enterprises; or
 Associations of enterprises; or
 Persons; or
 Associations of persons; or
 Any person and enterprise; or
practice carried on, or decision taken by, any association of enterprises or association of
persons, including cartels, engaged in identical or similar trade of goods or provision of
services, which—
(a) directly or indirectly determines purchase or sale prices;
(b) limits or controls production, supply, markets, technical development, investment or
provision of services;
(c) shares the market or source of production or provision of services by way of allocation of
(d) geographical area of market, or type of goods or services, or number of customers in the
market or any other similar way;
(e) directly or indirectly results in bid rigging or collusive bidding,
shall be presumed to have an appreciable adverse effect on competition:
Provided that nothing contained in this sub-section shall apply to any agreement entered into
by way of joint ventures if such agreement increases efficiency in production, supply,
distribution, storage, acquisition or control of goods or provision of services.
Explanation.—For the purposes of this sub-section, “bid rigging” means any agreement,
between enterprises or persons referred to in sub-section (3) engaged in identical or similar
production or trading of goods or provision of services, which has the effect of eliminating
or reducing competition for bids or adversely affecting or manipulating the process for
bidding.
Bid rigging
Bid rigging takes place when bidders collude and keep the bid amount at a pre-determined
level. Such pre-determination is by way of intentional manipulation by the members of the bidding
group. Bidders could be actual or potential ones, but they collude and act in concert.

1.26 ECONOMIC LAWS
Collusive bidding or bid rigging may occur in various ways. Some of the most commonly adopted
ways are:
 An agreement to submit identical bids
 An agreement as to who shall submit the lowest bid, agreements for the submission of
cover bids (voluntarily inflated bids)
 An agreement not to bid against each other,
 An agreement on common norms to calculate prices or terms of bids
 An agreement to squeeze out outside bidders
 An agreement designating bid winners in advance on a rotational basis, or on a
geographical or customer allocation basis
 An agreement as to the bids which any of the parties may offer at an auction for the sale
of goods or any agreement through which any party agrees to abstain from bidding for any
auction for the sale of goods, which eliminates or distorts competition
Forms of Bid rigging
 Bid Suppression: In this, one or more competitors who otherwise would be expected to
bid, or who have previously bid, agree to refrain from bidding or withdraw a previously
submitted bid so that the designated winning competitor’s bid will be accepted.
 Complementary Bidding: In this some competitors agree to submit bids that are either
too high to be accepted or contain special terms that will not be acceptable to the buyer.
Such bids are not intended to secure the buyer’s acceptance, but are merely designed to
give the appearance of genuine competitive bidding.
 Bid Rotation: In this all conspirators submit bids but take turns to be the lowest bidder.
The terms of the rotation may vary; for example, competitors may take turns on contracts
according to the size of the contract, allocating equal amounts to each conspirator or
allocating volumes that correspond to the size of each conspirator.
 Sub-contracting: In this the competitors, who agree not to bid or to submit a losing bid,
frequently receive sub-contracts or supply contracts in exchange from the successful
bidder. In some schemes, a low bidder will agree to withdraw its bid in favour of the next
low bidder in exchange for a lucrative sub-contract that divides the illegally obtained higher
price between them.
Vertical Agreements which are treated as an appreciable adverse effect on

competition- Section 3(4)
Any agreement amongst enterprises or persons at different stages or levels of the production
chain in different markets, in respect of production, supply, distribution, storage, sale or price

of, or trade in goods or provision of services, including—

(a) tie-in arrangement;
(b) exclusive supply agreement;
(c) exclusive distribution agreement;
(d) refusal to deal;
(e) resale price maintenance,
shall be an agreement in contravention of sub-section (1) if such agreement causes or is likely
to cause an appreciable adverse effect on competition in India.
Explanation.—For the purposes of this sub-section,—
(a) “tie-in arrangement” includes any agreement requiring a purchaser of goods, as a
condition of such purchase, to purchase some other goods;
(b) “exclusive supply agreement” includes any agreement restricting in any manner the
purchaser in the course of his trade from acquiring or otherwise dealing in any goods
other than those of the seller or any other person;
(c) “exclusive distribution agreement” includes any agreement to limit, restrict or withhold
the output or supply of any goods or allocate any area or market for the disposal or sale
of the goods;
(d) “refusal to deal” includes any agreement which restricts, or is likely to restrict, by any
method the persons or classes of persons to whom goods are sold or from whom goods
are bought;
(e) “resale price maintenance” includes any agreement to sell goods on condition that the
prices to be charged on the resale by the purchaser shall be the prices stipulated by the
seller unless it is clearly stated that prices lower than those prices may be charged.
Exemptions of certain agreements- Section 3(5)
Nothing contained in this section shall restrict—
(i) the right of any person to restrain any infringement of, or to impose reasonable
conditions, as may be necessary for protecting any of his rights which have been or may
be conferred upon him under—
(a) the Copyright Act, 1957 (14 of 1957);
(b) the Patents Act, 1970 (39 of 1970);
(c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act,
1999 (47 of 1999);

1.28 ECONOMIC LAWS
(d) the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48
of 1999);
(e) the Designs Act, 2000 (16 of 2000);
(f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000);
(ii) the right of any person to export goods from India to the extent to which the agreement
relates exclusively to the production, supply, distribution or control of goods or provision
of services for such export.
While reasonable use of IPRs stand exempted from the rigours of section 3 related to anti-
competitive agreements, no such derogation is available in case of abuse of Intellectual
Property Rights by right holders, in respect of specified abusive acts.
Intellectual Property Rights and Competition laws are generally considered as contradictory
to each other as IPRs grant exclusivity which hinders competition. But it is an established
principle that the two are complementary and focus on same goal, i.e., innovations and
general welfare. Therefore, IPRs are covered under competition laws but given special
treatment in assessment.
Section 3 relating to agreements explicitly exempts reasonable conditions imposed for
protecting IPRs and section 4 relating to abuse of dominance on account of holding of IPRs
considers all the factors under the framework of competition harm before arriving at any
conclusion.
An�-Compe��ve Agreements
Horizontal V/s Ver�cal
An�-Compe��ve Agreements
Hori zonta l (Sec�on 3(3) Ver�ca l (Sec�on 3(4)

(Sa me Level of Produc�on) (Di ﬀerent Level of
Produc�on)
Fi xi ng Pri ce Ti e-i n Agreements
Li mi �ng Qua n�ty Excl us i ve Suppl y Agreement
Sha ri ng of Ma rket Excl us i ve Di s tri bu�on Agreement
Bi d Ri ggi ng Refus a l to Dea l
Res a l e Pri ce Ma i ntena nce

Notes
 Adverse effect on competition shall be appreciable and must be within India (exclusive
export cartel are not classified as anti-competitive under the Competition Act, 2002).
 Such agreements are classified as horizontal agreements because they are entered by
persons, enterprises, or association of persons/enterprises engaged in identical or similar
trade of goods or provisioning of services.
 However, if any agreement entered into by way of joint ventures, and if such
agreement increases efficiency in production, supply, distribution, storage,
acquisition or control of goods or provision of services, then it shall not be
considered to be an anti-competitive agreement.
 Since it is presumed, that specified horizontal agreement have an appreciable adverse
effect on competition, hence onus lies with defendant to prove otherwise.
 Bid rigging means any agreement, between enterprises or persons engaged in identical
or similar production or trading of goods or provision of services, which has the effect of
eliminating or reducing competition for bids or adversely affecting or manipulating
the process for bidding.
In re: Aluminium Phosphide Tablets Manufacturers, (Suo Moto Case No 02 of 2011)
The director general at the order of Commission examined the allegation of Food Corporation of
India (FCI) against the M/s Excel Crop Care Limited, M/s United Phosphorous Limited, M/s Sandhya
Organics Chemicals (P) Limited and Agrosynth Chemicals Limited, to become a part of an anti-
competitive agreement in violation of Section 3 of the Competition Act and forming a cartel for the
purpose of bidding in tenders (for procurement of Aluminium Phosphide Tablets required for the
preservation of central pool of food grains by FCI)
It was noted that the identical bid price is not possible unless there is some sort of prior and
collective understanding. Further the common entry in the premises of FCI before submission
of bids is also valid evidence of the existence of an understanding among the parties. The
Commission imposed a penalty upon each of the contravening party at a rate of 9% of the
average turnover of the company apart from the issue of cease and desist order.
B. P. Khare, Principal Chief Engineer, South Eastern Railway vs. M/s Orissa Concrete and
Allied Industries Ltd. and Ors.
A tender notice was floated by South Eastern Railway for procurement of Anti-Theft Elastic Rail
Clips with Circlips from RDSO approved firms. Responses were submitted by 29 firms, the rate
quoted by most of the firms was @ 66.50 (all-inclusive). The quantity quoted by each of the
firms was far less than 50% of the total tender quantity. It is also alleged that the quoted rate
was about 10% higher than the neighbouring Railways' last purchase rate.

1.30 ECONOMIC LAWS
Commission prima-facie noted that the rate was inclusive of freight. Bidders were located across
the country, the cost of freight for supplying the product from different parts of the country could
not have been the same hence identical rates, indicative of meeting of minds.
Director General during scrutiny of the case found that all the 29 firms have quoted identical
bids which were in the range of Rs.66.49 to Rs.66.51. Further bid documents revealed that the
19 firms, 4 firms, and 2 firms respectively had similar handwriting in which the prices were
quoted in their respective bid documents. 17 bids are supported by cover letter and the format
of the cover letter was the same in all such 17 cases.
Commission held that conduct of parties was amounting to bid-rigging. Commission issue cease
and desist order.
A cease and desist order is issued when a court, tribunal, or quasi-judicial authority
intend to direct someone to stop engaging in illegal activity and not to restart it.
Alleged cartelization in the matter of supply of spares to Diesel Loco Modernization

Works, Indian Railways, Patiala, Punjab. (Suo Moto Case No. 3 of 2012)
Based on a letter received from the Manager of Diesel Loco Modernization Works, Punjab CCI
suo-moto examine the alleged cartelization among the 3 respondents (from West Bengal, Tamil
Nadu, and Haryana) to the tender for the Feed Valves (used in diesel locomotives).
The rate quoted by these 3 bidders was identical (Rs. 17,147.54 per piece, 33% higher than
last purchase). Since the manufacturing units located in different parts of the country for all
three bidders hence the cost of production, transportation can be the same so they can’t quote
the identical rates in the bid unless there was collusion amongst them. Commission found them
guilty and impose penalties at a rate of 2% of average turnover.
Vertical anti-competitive agreements
Any agreement amongst enterprises or persons at different stages or levels of the production
chain in different markets, in respect of production, supply, distribution, storage, sale or price
of or trade in goods or provision of services shall be a void agreement if it causes or is likely
to cause an appreciable adverse effect on competition in India, including;
a. Tie-in arrangement - includes any agreement requiring a purchaser of goods, as a
condition of such purchase, to purchase some other goods.
b. Exclusive supply agreement - includes any agreement restricting in any manner the
purchaser in the course of his trade from acquiring or otherwise dealing in any goods
other than those of the seller or any other person;
c. Exclusive distribution agreement- includes any agreement to limit, restrict or withhold
the output or supply of any goods or allocate any area or market for the disposal or sale
of the goods;

d. Refusal to deal - includes any agreement which restricts, or is likely to restrict, by any
method the persons or classes of persons to whom goods are sold or from whom goods
are bought;
e. Resale price maintenance - includes any agreement to sell goods on a condition that
the prices to be charged on the resale by the purchaser shall be the prices stipulated by
the seller unless it is clearly stated that prices lower than those prices may be charged.
Notes
 Adverse effect on competition shall be appreciable and must be within India
 Such agreements are classified as vertical agreements because parties involved are
operating at different stages of the same supply chain (including production stages).
Following the principle of natural justice, the rule of reason needs to be applied in order to
determine the effect of Vertical anti-competitive agreements on the competition. OCED explain
the Rule of reason as a legal approach used by competition authorities or the courts where an
attempt is made to evaluate the pro-competitive features of a restrictive business practice
against its anticompetitive effects in order to decide whether or not the practice should be
prohibited. But one can easily oppose this rule by relying on illegal are per se illegal. In the
case of Sodhi Transport Co. vs. State of UP held that rule of reason is applicable to vertical
agreements.
In Re Mr. Mohit Manglani and M/s Flipkart India Private Limited and 4 Ors. (Case No.
80/2014). It was alleged that e-commerce websites are indulged in anti-competitive practices
through exclusive natured agreements with sellers/manufacturers. Consumer either have to
buy as per term of reference mentioned by the e-commerce portal or not to buy. E-commerce
platforms replied that consumer has the option to switch to near substitute products hence
relevant market (which include substitute products) not force customer ‘not to buy’ secondly
their agreement are not of exclusive nature with sellers, the same seller can sell through other
platforms and means.
The Commission observed that e-commerce platforms provide an opportunity for consumers to
compare the prices as well as the pros and cons of the product. Furthermore, it offers delivery
right at door steps of consumers. Therefore, it does not appear that the exclusive
arrangement between manufacturers and such e-commerce platforms lead to an
appreciable adverse effect on competition in the market.
In Re Shamsher Kataria and Honda Siel Cars and 13 Ors. (Case No. 03/2011) Commission
imposed the penalty upon 14 major car manufacturers, although Mr. Kataria informed about
involvement of only Honda Siel Cars India Ltd, Volkswagen India Pvt. Ltd, and Fiat India
Automobiles Ltd in anti-competitive agreements (exclusive distribution and refusal to deal).

1.32 ECONOMIC LAWS
It was held that all the major auto manufactures were not allowing its spare parts and diagnostic
tools to be sold in the open car market and forcing the consumers to buy it from their authorized
dealers at high prices. Authorized dealers are also forces to buy these from the Original
Equipment Manufacturers (OEMs) only. This denial of market access for independent repairer.
The Appellate Tribunal partially upheld the order passed by the CCI on merits, only differing on
the amount of penalty. It further held that the Indian car spare-parts market forms a separate
market from that of cars, inter alia, as the consumers do not engage in whole life costing while
buying cars, and the OEMs, who were generally the car manufacturers monopolized this spare-
parts market. Now the matter is pending in Supreme Court.
Exceptions to an anti-competitive agreement
Sub-section 5 to section 3 protects the right of specific persons by restricting the application of
section 3 to their rights, hence become exceptions to section 3.
Exception 1 - Any Act or agreement shall not be considered anti-competitive causing
appreciable adverse effects on competition, hence not void; if the purpose of same is to restrain
any infringement or to impose reasonable conditions for protecting any of rights which
have been or may be conferred upon a person under any of further stated legislation;
a. The Copyright Act, 1957 (14 of 1957)
b. The Trade and Merchandise Marks Act, 1958 (43
of 1958)
c. The Patents Act, 1970 (39 of 1970)
d. The Trade Marks Act, 1999 (47 of 1999)
e. The Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999)
f. The Designs Act, 2000 (16 of 2000)
g. The Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000)
In the case of Shri Ashok Kumar Sharma vs. Agni devices Private Limited, it was held that
a mere restriction on the use of the trademark would not be in violation section 3 and 4 of the
Competition Act, 2002.
Exception 2 – Any agreement or part there-of shall not be considered as anti-competitive,
hence not void; to extent it is exclusively related to the production, supply, distribution or
control of goods or provision of services for purpose of export goods from India.
2. Abuse of dominant position [Section 4]
Abuse of dominant position is prohibited – [Section 4(1)]
No enterprise or group shall abuse its dominant position.

Dominance is not considered bad per se but its abuse is. Abuse is stated to occur when an
enterprise or a group of enterprises uses its dominant position in the relevant market in an
exclusionary or/ and an exploitative manner.
List of practices that constitutes abuse of dominant position – [Section 4(2)]

There shall be an abuse of dominant position under sub-section (1), if an enterprise or a
group,—
(a) directly or indirectly, imposes unfair or discriminatory—
(i) condition in purchase or sale of goods or service; or
(ii) price in purchase or sale (including predatory price) of goods or service.
Explanation.—For the purposes of this clause, the unfair or discriminatory
condition in purchase or sale of goods or service referred to in sub-clause (i) and
unfair or discriminatory price in purchase or sale of goods (including predatory
price) or service referred to in sub-clause (ii) shall not include such discriminatory
condition or price which may be adopted to meet the competition; or
(b) limits or restricts—
(i) production of goods or provision of services or market therefor; or
(ii) technical or scientific development relating to goods or services to the prejudice
of consumers; or
(c) indulges in practice or practices resulting in denial of market access in any manner; or
(d) makes conclusion of contracts subject to acceptance by other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection
with the subject of such contracts; or
(e) uses its dominant position in one relevant market to enter into, or protect, other relevant
market.
 The Act gives an exhaustive list of practices that shall constitute abuse of dominant
position and, therefore, are prohibited. Such practices shall constitute abuse only
when adopted by an enterprise enjoying dominant position in the relevant market in
India.
 Abuse of dominance is judged in terms of the specified types of acts committed by
a dominant enterprise. Such acts are prohibited under the law.
Explanation.—For the purposes of this section, the expression—

(a) “dominant position” means a position of strength, enjoyed by an enterprise, in
the relevant market, in India, which enables it to—

1.34 ECONOMIC LAWS
(i) operate independently of competitive forces prevailing in the relevant

market; or
(ii) affect its competitors or consumers or the relevant market in its favour;
Factors determining the dominant position
 Dominance has been traditionally defined in terms of market share of the
enterprise or group of enterprises concerned. However, a number of other
factors play a role in determining the influence of an enterprise or a group of
enterprises in the market. These include:
 market share,
 the size and resources of the enterprise;
 size and importance of competitors;
 economic power of the enterprise;
 vertical integration;
 dependence of consumers on the enterprise;
 extent of entry and exit barriers in the market;
 countervailing buying power;
 market structure and size of the market;
 source of dominant position viz. whether obtained due to statute etc.;
 social costs and obligations and contribution of enterprise enjoying dominant
position to economic development.
 The CCI is authorized to take into account any other factor which it may
consider relevant for the determination of dominance.
(b) “predatory price” means the sale of goods or provision of services, at a price
which is below the cost, as may be determined by regulations, of production of the
goods or provision of services, with a view to reduce competition or eliminate the
competitors;
 Predation is exclusionary behaviour and can be indulged in only by
enterprises(s) having dominant position in the concerned relevant market.
 The major elements involved in the determination of predatory behaviour
are:
 Establishment of dominant position of the enterprise in the relevant market.

 Pricing below cost for the relevant product in the relevant market by the
dominant enterprise.
 Intention to reduce competition or eliminate competitors. This is traditionally
known as the predatory intent test.
(c) “group” shall have the same meaning as assigned to it in clause (b) of the
Explanation to section 5.
Exploitative and Exclusionary Behaviour
Abuses as specified in the Act fall into two broad categories: exploitative (excessive or
discriminatory pricing) and exclusionary (for example, denial of market access).
Abuse of Dominance
Exploita�ve
(Such as Excessive
Abuse of Pricing)
Dominance Exclusionary
(Such as Denial of
Market Access
In the matter of Belaire Apartment Owner’s Association, COMPAT upheld the CCI decision
regarding identification of Relevant Geographical Market and Relevant Product Market for DFL.
DLF is alleged and found guilty for enjoying the dominant position in the relevant market. DLF
action of cancelling allotments, forfeiting deposits, keeping buyers in the dark about the eventual
shape, size, location, earnest money, instalments, timely payments, delivery of possession,
alternations and additional constructions, etc. of the apartments was held unfair
Provision of services of development of high-end residential flats are identified as a Relevant
Product Market. Gurgaon (now Gurugram) of Haryana is identified as Relevant Geographical
Market.
In the case of Maharashtra State Power Generation Co, Coal India Limited slammed with a
fine of INRs 591.01 crores (originally penalty was INRs 1773.05 crores) for abusing its dominant
position. It was found that the CIL operates independently of market forces through its
subsidiaries and enjoys dominance in the relevant market of production and supply of non-
coking coal in India. CIL and its subsidiaries are imposing unfair/discriminatory conditions
in the supply of non-coking coal to the power producers through Fuel Supply Agreements.
In February 2013, CCI imposed a penalty of INRs 52.20 crores on the Board of Control for
Cricket in India (BCCI) for abusing its dominant position. The Commission found that IPL team

1.36 ECONOMIC LAWS
ownership agreements were unfair and discriminatory. These are loaded in favour of BCCI.
BCCI denying market access to potential competitors using its regulatory powers in deciding
matters relating to its commercial activities. Commission also issued the cease and desist order.
In February 2018, Commission slammed the fine of INRs 135.86 crores on Alphabet Inc. (the
parent company of Google) for 'search bias'. Further based on a case disposed in the European
Union against google, in which google was found guilty and fined; In May 2019 the Commission
ordered a probe against Google for abusing its dominant position to block market rivals with
Android.
3. Combination [Section 5]
The acquisition of one or more enterprises by one or more persons or merger or amalgamation
of enterprises shall be a combination of such enterprises and persons or enterprises, if—
(a) any acquisition where—
(i) the parties to the acquisition, being the acquirer and the enterprise, whose control,
shares, voting rights or assets have been acquired or are being acquired jointly
have,—
(A) either, in India, the assets of the value of more than rupees one thousand
crores or turnover more than rupees three thousand crores; or
(B) in India or outside India, in aggregate, the assets of the value of more than
five hundred million US dollars or turnover more than fifteen hundred million
US dollars; or
(ii) the group, to which the enterprise whose control, shares, assets or voting rights
have been acquired or are being acquired, would belong after the acquisition,
jointly have or would jointly have,—
(A) either in India, the assets of the value of more than rupees four thousand
crores or turnover more than rupees twelve thousand crores; or
two billion US dollars or turnover more than six billion US dollars; or
(b) acquiring of control by a person over an enterprise when such person has already direct
or indirect control over another enterprise engaged in production, distribution or trading
of a similar or identical or substitutable goods or provision of a similar or identical or
substitutable service, if—
(i) the enterprise over which control has been acquired along with the enterprise
over which the acquirer already has direct or indirect control jointly have,—
(A) either in India, the assets of the value of more than rupees one thousand

US dollars; or
(ii) the group, to which enterprise whose control has been acquired, or is being
acquired, would belong after the acquisition, jointly have or would jointly have,—
(A) either in India, the assets of the value of more than rupees four thousand
(B) in India or outside India, in aggregate, b; or
(c) any merger or amalgamation in which—
(i) the enterprise remaining after merger or the enterprise created as a result of the
amalgamation, as the case may be, have,—
(A) either in India, the assets of the value of more than rupees one thousand
US dollars; or
(ii) the group, to which the enterprise remaining after the merger or the enterprise
created as a result of the amalgamation, would belong after the merger or the
amalgamation, as the case may be, have or would have,—
(A) either in India, the assets of the value of more than rupees four-thousand
(B) in India or outside India, the assets of the value of more than two billion US
dollars or turnover more than six billion US dollars.
Explanation.—For the purposes of this section,—
(a) “control” includes controlling the affairs or management by—
(i) one or more enterprises, either jointly or singly, over another enterprise or
group;
(ii) one or more groups, either jointly or singly, over another group or enterprise;
(b) “group” means two or more enterprises which, directly or indirectly, are in a
position to—
(i) exercise twenty-six per cent. or more of the voting rights in the other
enterprise; or

1.38 ECONOMIC LAWS
(ii) appoint more than fifty per cent. of the members of the board of directors in
the other enterprise; or
(iii) control the management or affairs of the other enterprise;
(c) the value of assets shall be determined by taking the book value of the assets as
shown, in the audited books of account of the enterprise, in the financial year
immediately preceding the financial year in which the date of proposed merger
falls, as reduced by any depreciation, and the value of assets shall include the
brand value, value of goodwill, or value of copyright, patent, permitted use,
collective mark, registered proprietor, registered trade mark, registered user,
homonymous geographical indication, geographical indications, design or layout-
design or similar other commercial rights, if any, referred to in sub-section (5) of
section 3.
Categories of Combinations
Categories of Combinations
Acquisitions Mergers/Amagamations
Acquisition of control by Acquiring of control over the

acquiring shares, voting rights enterprises
Notes
 Control includes controlling the affairs or management by one or more, enterprises or
group, either jointly or singly, over another enterprise or group.
 The *thresholds mentioned in section 5 can be further simplified with help of the following table;
Threshold applicable to Enterprises Group Level
Level
Joint Assets ₹ 1,000 Cr ₹ 4,000 Cr
In India
Joint Turnover ₹ 3,000 Cr ₹ 12,000 Cr
Joint Total Assets US$ 500 Million US$ 2000 Million
In India Minimum Indian Component ₹ 500 Cr ₹ 500 Cr
and
Outside Joint Total Turnover US$ 1500 Million US$ 6000 Million
Minimum Indian Component ₹ 1500 Cr ₹ 1500 Cr

 It is important to note here that, under section 20 (3) the Central Government shall at the
expiry of every two years, in consultation with the Commission, by notification, enhance
or reduce the value of assets or the value of turnover mentioned above (for purpose of
section 5 ‘combination’), on the basis of the wholesale price index or fluctuations in the
exchange rate of rupee or foreign currencies. *Vide notification number S.O. 675(E)
dated 4th March 2016, in the exercise of the powers conferred by section 20 (3) the
Central Government enhances, the value of assets and the value of turnover, by hundred
percent from the date of publication of this notification in the Official Gazette. The
publication date is also 4th March 2016.
Hence w.e.f. 4th March 2016 above table (threshold under section 5) shall be read as;
Threshold applicable to Enterprises Level Group Level
Joint Assets ₹ 2,000 Cr ₹ 8,000 Cr
In India
Joint Turnover ₹ 6,000 Cr ₹ 24,000 Cr
Joint Total Assets US$ 1000 Million US$ 4000 Million
In India Minimum Indian Component ₹ 1000 Cr ₹ 1000 Cr
and
Outside Joint Total Turnover US$ 3000 Million US$ 12000 Million
Minimum Indian Component ₹ 3000 Cr ₹ 3000 Cr
 Group means two or more enterprises which, directly or indirectly, are in a position to
exercise at least 26 percent voting rights or to appoint more than fifty percent of the
directors or controls the management or affairs in the other enterprise. Vide notification
S.O. 673 (E) dated 4th March 2016, the government has exempted “Group” exercising
less than fifty percent of voting rights in other enterprise from the application of section
5 of the Act for a period of five years from the date of notification (i.e. 4 th March 2016
itself).
 The turnover shall be determined by taking into account the values of sales of goods or
services.
 The value of assets shall be determined by taking the book value of the assets as shown
in the audited books of account of the enterprise, in the financial year immediately
preceding the financial year in which the date of the proposed merger falls, as reduced
by any depreciation. The value of assets shall include the brand value, the value of
goodwill, or Intellectual Property Rights, etc. referred to in explanation (c) to section 5 of
the Act.
Vide S.O. 988 (E) dated 27 th March 2017 where a portion of an enterprise or division or
business is being acquired, taken control of, merged or amalgamated with another enterprise,
the value of assets of the said portion or division or business and or attributable to it shall be
the relevant assets and turnover to be taken into account for the purpose of calculating (Using

1.40 ECONOMIC LAWS
the basis mentioned in the above paragraph) the thresholds under section 5 of the Act. The
turnover of the said portion or division or business shall be as certified by the statutory auditor
on the basis of the last available audited accounts of the company.
Notifications granting exemption from application of section 5
Under clause (a) of section 54, the Central Government may by notification, exempt any class
of enterprises from the application of this act, or any provision thereof in the public interest.
Following are the exemption granted from the application of section 5 & 6;
Notification no. Category Duration
S.O. 2561(E) Regional Rural Banks in respect of which the Central 5 Years
10 th August 2017 Government has issued a notification under sub-section
(1) of section 23A of the Regional Rural Banks Act, 1976
(21 of 1976),
S.O. 2828(E) All cases of reconstitution, transfer of the whole or any 10 Years
30 th August 2017 part thereof and amalgamation of nationalized banks,
under the Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1970 (5 of 1970) and the Banking
Companies (Acquisition and Transfer of Undertakings)
Act, 1980 (40 of 1980)
S.O. 3714(E) Central Public Sector Enterprises operating in the Oil 5 Years
22 November 2017 and Gas Sectors under the Petroleum Act, 1934 (30 of
nd
1934) or under the Oilfields (Regulation and
Development) Act, 1948 (53 of 1948) and the rules made
thereunder, along with their wholly or partly owned
subsidiaries operating in the Oil and Gas Sectors
Vide notification S.O. 673 (E) dated 4th March, 2016, the government has exempted “Group”
exercising less than fifty percent of voting rights in other enterprise from the application of
section 5 of the Act for a period of five years from the date of notification (i.e. 4 th March 2016).
Vide notification S.O. 988 (E) dated 27 th March 2017 De Minimis exemption is granted from
the application of section 5 for a period of five years from the date of publication of the
notification (i.e. 27 th March 2017 itself) if the target enterprise whose control, shares, voting
rights, or assets are being acquired, has either assets of the value of not more than INR 350
crore in India or turnover of not more than INR 1000 crore in India.
4. Regulation of combinations [Section 6]
Combination of an appreciable adverse effect on competition is void- [(Section 6(1)]
No person or enterprise shall enter into a combination which causes or is likely to cause an
appreciable adverse effect on competition within the relevant market in India and such a
combination shall be void.

Notice to CCI – Section 6(2)

Subject to the provisions contained in sub-section (1), any person or enterprise, who or which
proposes to enter into a combination, may, at his or its option, give notice to the Commission,
in the form as may be specified, and the fee which may be determined, by regulations, disclosing
the details of the proposed combination, within seven days of—
(a) approval of the proposal relating to merger or amalgamation, referred to in clause (c) of
section 5, by the board of directors of the enterprises concerned with such merger or
amalgamation, as the case may be;
(b) execution of any agreement or other document for acquisition referred to in clause (a) of
section 5 or acquiring of control referred to in clause (b) of that section.
Effective date of combination -[(Section 6(2A)]
No combination shall come into effect until:
 Two hundred and ten days (210 days) have passed from the day on which the notice has
been given to the Commission under sub-section (2); or
 The Commission has passed orders under section 31,
Whichever is earlier.
The CCI to deal with the combination - [(Section 6(3)]
The Commission shall, after receipt of notice under sub-section (2), deal with such notice in
accordance with the provisions contained in sections 29, 30 and 31.
Exemption -[(Section 6(4)]
The provisions of this section shall not apply to:
 Share subscription; or
 Financing facility; or
 Any acquisition, by a
• public financial institution,
• foreign institutional investor,
• bank; or
• venture capital fund,
pursuant to any covenant of a loan agreement or investment agreement.

1.42 ECONOMIC LAWS
Filing of information of combination to CCI - [Section 6(5)]

The public financial institution, foreign institutional investor, bank or venture capital fund,
referred to in sub-section (4), shall, within seven days (7 days) from the date of the acquisition,
file, in the form as may be specified by regulations, with the Commission the details of the
acquisition including the details of control, the circumstances for exercise of such control and
the consequences of default arising out of such loan agreement or investment agreement, as
the case may be.
Explanation.—For the purposes of this section, the expression—
(a) “foreign institutional investor” has the same meaning as assigned to it in clause (a) of
the Explanation to section 115AD of the Income-tax Act, 1961(43 of 1961);
(b) “venture capital fund” has the same meaning as assigned to it in clause (b) of the
Explanation to clause (23 FB) of section 10 of the Income-tax Act, 1961(43 of 1961).
Vide notification S.O. 2039(E) dated 29 th June 2017 in the exercise of the
powers conferred by clause (a) of section 54, the Central Government, in the
public interest, exempts every person or enterprise who is a party to a
combination as referred to in section 5 from giving notice within thirty days
mentioned in sub-section (2) of section 6, but subject to the provisions of sub-
section (2A) of section 6 and section 43A, for a period of five years from the date of publication
of this notification in the Official Gazette (i.e. 29 th June 2017 itself).
Notes
 Exemption vide notification S.O. 2039(E) is from a time limit of 30 days, not from filling
the notice to Commission.
 The Commission shall, after receipt of the notice, deal with such notice in accordance
with the provisions contained in sections 29, 30, and 31.
 No combination shall come into effect until 210 days have passed from the day on which
the notice has been given to the Commission or the Commission has passed orders under
section 31, whichever is earlier.
 Here days shall mean calendar days.
 The provisions of this section shall not apply to share subscription or financing facility or
any acquisition, by a public financial institution, foreign institutional investor, bank or
venture capital fund, pursuant to any condition of a loan or investment agreement. But in
the case of acquisition, details including the details of control, the circumstances which
trigger the exercise of such control and the consequences of default shall be filed with
Commission within seven days of such acquisition in Form III.

 Public financial institution is defined under section 2 (p) of this act. Foreign institutional
investor and Venture capital fund has the same meaning as assigned to it in clause (a)
of the Explanation to section 115AD and in clause (b) of the Explanation to clause (23
FB) of section 10 of the Income-tax Act, 1961.
 Section 64 of this Act confers the power with the Commission to make the regulation by
notification in consistence to this Act. Using stated power for the purpose of prescribing the
manner/s to give effect to section 6, Commission notify Competition Commission of India
(Procedure in Regard to the Transaction of Business relating to Combinations)
Regulations, 2011. These regulations contained the procedural aspects regarding the
regulation of combinations.
The principal regulations (combination regulations) were published vide notification number F.
No. 1-1/ Combination Regulations/2011-12/CD/CCI in the Gazette of India, Extraordinary, Part
III, Section 4, dated the 11th May 2011 and were subsequently amended for 8 times; twice in
the year 2019.
It is worth noting here that notification dated 13th August 2019 has amended the
regulations to introduce Green Channel for certain specified categories of combinations. A
combination notified under Green Channel would be deemed to have been approved upon filing
a notice. However, the parties have to self-assess and determine whether their combination is
eligible for being subjected to Green Channel.
In order to gain knowledge regarding the procedural aspects of filing notice under section 6 of
this act, different forms, fees, and disposal thereof, the major and relevant provisions contained
in combination, regulations will be detailed where it is relevant in this chapter (likewise section 29
to 31 dealing with an inquiry into combination by Commission and orders thereof).
CHAPTER III: COMPETITION COMMISSION OF INDIA
4. COMPETITION COMMISSION OF INDIA

Establishment of Commission [Section 7]
Establishment of office of Commission (CCI) [Section7(1)]
With effect from such date as the Central Government may, by notification, appoint, there shall
be established, for the purposes of this Act, a Commission to be called the “Competition
Commission of India”.

1.44 ECONOMIC LAWS
Status of CCI [Section 7(2)]

The Commission shall be:
 a body corporate by the name aforesaid
 having perpetual succession and a common seal
 with power, subject to the provisions of this Act,
• to acquire,
• hold and
• dispose of property, both movable and immovable, and
• to contract and shall, by the said name,
• sue or be sued.
Head Office of CCI at New Delhi [Section 7(3)]
The head office of the Commission shall be at such place as the Central Government may
decide from time to time.
The Central Government vide its Notification NO. S.O. 1198(E), dated 14th October, 2003,
notified that the Head Office of the CCI shall be at New Delhi. The complete address is as under:
Competition Commission of India,
9th Floor, Office Block – 1,
Kidwai Nagar (East), New Delhi- 110023, India.
CCI Offices [Section 7(4)]
The Commission may establish offices at other places in India.
Composition of Commission [Section 8]
Chairperson and Members [Section 8(1)]
The Commission shall consist of:
 a Chairperson and
 not less than two and not more than six other Members
to be appointed by the Central Government.
Qualifications / Eligibility Criteria of Chairperson and Member [Section 8(2)]
The Chairperson and every other Member shall be a person of ability, integrity and standing
and who has special knowledge of, and such professional experience of not less than fifteen
years in:

 International Trade,
 Economics,
 Business, Commerce,
 Law,
 Finance,
 Accountancy,
 Management,
 Industry,
 Public Affairs or Competition matters, including competition law and policy,
which in the opinion of the Central Government, may be useful to the Commission.
The Chairperson and other Members shall be whole-time Members. [Section 8(3)]
Selection Committee for Chairperson and other Members of the Commission
[Section 9]
Appointing Authority of Chairperson and Other Member [Section 9(1)]
The Chairperson and other Members of the Commission shall be appointed by the Central
Government from a panel of names recommended by a Selection Committee consisting of:
(a) the Chief Justice of India or his nominee 1 Chairperson;
(b) the Secretary in the Ministry of Corporate Affairs 1 Member;
(c) the Secretary in the Ministry of Law and Justice 1 Member;
(d) two experts of repute who have special knowledge of, and 2 Members.
professional experience in international trade, economics,
business, commerce, law, finance, accountancy,
management, industry, public affairs, or competition matters
including competition law and policy.
Term of Selection Committee and Manner of Selection [Section 9(2)]

The term of the Selection Committee and the manner of selection of panel of names shall be
such as may be prescribed.
CCI (Term of the Selection Committee and the Manner of Selection of Panel of Names)
Rules 2009
Term of the Committee-Rule 3
The term of the Committee constituted shall be for a period of one year and six months from
the date of its constitution.

1.46 ECONOMIC LAWS
Manner of Selection of a panel of names- Rule 4

1. Whenever any vacancy of Chairperson or other Members of the Commission exists or as
and when such vacancy arises or is likely to arise, the Central Government may make a
reference to the Committee in respect of such vacancy or vacancies for recommendation
of a panel of names.
2. The Committee shall devise its own procedure for selecting the persons for inclusion in the
panel of names to be recommended for appointment as the Chairperson or a Member of
the Commission.
3. The Committee shall make its recommendations to the Central Government, within a
period not exceeding one hundred and twenty days (120 days) from the date of
reference made under subrule (1).
4. An officer not below the level of Joint Secretary nominated by the Ministry of Corporate
Affairs shall be the Convener of the Committee.
Functions of Committee- Rule 5
On a reference made by the Central Government, -
(i) the Committee shall recommend a panel of not more than three persons, selected under
sub-rule (2) of rule 4, in respect of each vacancy that has been referred to the Committee.
(ii) the Committee shall review the appointments made to the Competition Commission of
India before the commencement of these rules and make appropriate recommendations,
in respect of such appointments.
Term of office of Chairperson and other Members [Section 10]

Term [Section 10(1)]
The Chairperson and every other Member shall hold office as such for a term of five years
from the date on which he enters upon his office and shall be eligible for re-appointment:
Provided that the Chairperson or other Members shall not hold office as such after he has
attained the age of sixty-five years.
Vacancy due to resignation or removal [Section 10(2)]
A vacancy caused by the resignation or removal of the Chairperson or any other Member under
section 11 or by death or otherwise shall be filled by fresh appointment in accordance with the
provisions of sections 8 and 9.
Oath [Section 10(3)]
The Chairperson and every other Member shall, before entering upon his office, make and
subscribe to an oath of office and of secrecy in such form, manner and before such authority,
as may be prescribed.
Charge of office of Chairperson until new incumbent joins [Section 10(4)]
In the event of the occurrence of a vacancy in the office of the Chairperson by reason of his
death, resignation or otherwise, the senior-most Member shall act as the Chairperson, until

the date on which a new Chairperson, appointed in accordance with the provisions of this Act
to fill such vacancy, enters upon his office.
Absence of Chairperson [Section 10(5)]
When the Chairperson is unable to discharge his functions owing to absence, illness or any
other cause, the senior-most Member shall discharge the functions of the Chairperson
until the date on which the Chairperson resumes the charge of his functions.
CCI (Oath of Office and of Secrecy for Chairperson and other Members) Rules, 2003
Oath of office and of secrecy – Rule 3
(1) Every person appointed to be the Chairperson shall, before entering upon his office, make
and subscribe to an oath of office and of secrecy before the Minister in charge of the
Department of Company Affairs in the Form I and Form II, respectively, as specified in
the Schedule annexed to these rules.
(2) Every person appointed to be a member shall, before entering upon his office, make and
subscribe to an oath of office and of secrecy before the Chairperson, or, in his absence,
before the senior-most member acting as Chairperson, or, in the absence of such
Chairperson or senior-most member acting as Chairperson, before the Secretary to the
Government of India in the Department of Company Affairs, in Form I and Form II,
respectively, as specified in the Schedule annexed to these rules.
Example
Mr. Vineet Kulkarni, a retired 1985 batch IRS officer, attained the Age 61 years on 31 st
December 2020. The Central Government appointed him as the Chairperson of the Competition
Commission of India with effect from 4 th January 2021. You are required to state, with reference
to the provisions of the Competition Act, 2002, whether he can be reappointed and till when he
can remain as Chairperson of the Competition Commission of India?
Answer
According to section 10(1) of the Competition Act, 2002, the terms of office of Chairperson and
every other Member shall be five years and eligible for re-appointment. However, no
Chairperson or other Member shall hold office as such after he has attained the age of sixty-
five years.
Mr. Kulkarni appointed as the chairperson of the Competition Commission of India can assume
the office either for five years from the date of appointment or till the attainment of the age of
65 whichever is earlier. Since Mr. Kulkarni shall be attaining the age of 65 years as on 31 st
December 2024 prior to completion of five years (i.e. 3 rd January 2026) from his appointment
date hence he will have to vacate the office on 31 st December 2024.
Since he already attains the age of 65 hence he can’t be reappointed.

1.48 ECONOMIC LAWS
Resignation, removal, and suspension of Chairperson and other members

[Section 11]
Resignation by the Chairperson / Member [Section 11(1)]
The Chairperson or any other Member may, by notice in writing under his hand addressed to
the Central Government, resign his office:
Provided that the Chairperson or a Member shall, unless he is permitted by the Central
Government to relinquish his office sooner, continue to hold office:
 until the expiry of three months from the date of receipt of such notice; or
 until a person duly appointed as his successor enters upon his office; or
 until the expiry of his term of office,
whichever is the earliest.
Removal of Chairperson /Members by Central Government [Section 11(2)]
Notwithstanding anything contained in sub-section (1), the Central Government may, by order,
remove the Chairperson or any other Member from his office if such Chairperson or Member,
as the case may be,—
(a) is, or at any time has been, adjudged as an insolvent; or
(b) has engaged at any time, during his term of office, in any paid employment; or
(c) has been convicted of an offence which, in the opinion of the Central Government,
involves moral turpitude; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions
as a Member; or
(e) has so abused his position as to render his continuance in office prejudicial to the public
interest; or
(f) has become physically or mentally incapable of acting as a Member.
Removal of Members on account of specified reasons only by the Supreme Court
[Section 11(3)]
Notwithstanding anything contained in sub-section (2), no Member shall be removed from his
office on the ground specified in clause (d) or clause (e) of that sub-section unless the Supreme
Court, on a reference being made to it in this behalf by the Central Government, has, on an
inquiry, held by it in accordance with such procedure as may be prescribed in this behalf by the
Supreme Court, reported that the Member, ought on such ground or grounds to be removed.

Restriction on employment of Chairperson and other Members in certain

cases [Section 12]
The Chairperson and other Members shall not, for a period of two years from the date on which
they cease to hold office, accept any employment in, or be connected with the management or
administration of, any enterprise which has been a party to a proceeding before the Commission
under this Act.
Provides that nothing contained in this section shall apply to any employment under:
 the Central Government; or
 a State Government; or
 local authority; or
 in any statutory authority; or
 any corporation established by; or
 under any Central, State or Provincial Act; or
 a Government company as defined in section 617 of the Companies Act,1956 .
Note
The Companies Act, 1956 is repealed through section 465 of the Companies Act, 2013 and vide
section 8 of the General Clauses Act, 1897 ‘construction of references to repealed enactments’,
reference shall be made to clause 45 to section 2 of the Companies Act, 2013 instead of section
617 of the Companies Act, 1956.
Administrative powers of Chairperson [Section 13]
The chairperson shall have the powers of general superintendence, direction, and control
in respect of all administrative matters of the Commission. The Chairperson may delegate
such of his powers relating to administrative matters of the Commission, as he may think fit, to
any other member or officer of the Commission.
Salary and allowances and other terms and conditions of service of
Chairperson and other Members [Section 14]
The salary, and the other terms and conditions of service, of the Chairperson and other
Members, including travelling expenses, house rent allowance and conveyance facilities,
sumptuary allowance and medical facilities shall be such as may be prescribed.
The salary, allowances and other terms and conditions of service of the Chairperson or a
Member shall not be varied to his disadvantage after appointment.

1.50 ECONOMIC LAWS
CCI (Salary, Allowances and other Terms and Conditions of Service of Chairperson and
other Members) Rules, 2003.
Consolidated Monthly Salary (Rule 3)
Chairperson • ` 4,00,000/- per month
Members • ` 3,75,000/- per month
Vacancy, etc. not to invalidate proceedings of Commission [Section 15]

No act or proceeding of the Commission shall be invalid merely by reason of-
(a) any vacancy in, or any defect in the constitution of, the Commission; or
(b) any defect in the appointment of a person acting as a Chairperson or as a Member; or
(c) any irregularity in the procedure of the Commission not affecting the merits of the case.
Appointment of Director General, etc. [Section 16]
Central Government to Appoint of Director General [Section 16(1)]
The Central Government may, by notification, appoint a Director General for the purposes of
assisting the Commission in conducting inquiry into contravention of any of the provisions of
this Act and for performing such other functions as are, or may be, provided by or under this
Act.
The CCI (Director General) Recruitment Rules 2009, deals with the matters relating to the
number of posts, classification, pay band, method of recruitment, eligibility, disqualification etc.
of the Director General.
Appointment and Number of Other Director(s) /Other Officers [Section 16(1A)]
The number of other Additional, Joint, Deputy or Assistant Directors General or such officers or
other employees in the office of Director General and the manner of appointment of such
Additional, Joint, Deputy or Assistant Directors General or such officers or other employees
shall be such as may be prescribed.
The CCI (Number of Additional, Joint, Deputy or Assistant Director-General other officers
and employees, their manner of appointment, qualification, salary, allowances and other
terms and conditions of service) Rules, 2009 deals with the matters relating to the salary and
allowances of Director-General and other Director(s) and Officers/ employees, Conditions of
service, deputation allowances, procedure of recruitments, qualifications etc.

Director General to exercise Control and Supervision of Other Director(s) / Officers

[Section 16(2)]
Every Additional, Joint, Deputy and Assistant Directors General or such officers or other
employees, shall exercise his powers, and discharge his functions, subject to the general
control, supervision and direction of the Director General.
Salary etc. of the Director General and others [Section 16(3)]
The salary, allowances and other terms and conditions of service of the Director General and
Additional, Joint, Deputy and Assistant Directors General or, such officers or other employees,
shall be such as may be prescribed.
Eligibility of Appointments [Section 16(4)]
The Director General and Additional, Joint, Deputy and Assistant Directors General or such
officers or other employees, shall be appointed from amongst persons of integrity and
outstanding ability and who have:
 experience in investigation, and
 knowledge of accountancy,
 management,
 business,
 public administration,
 international trade,
 law or
 economics and
 such other qualifications
as may be prescribed.
Secretary and officers and other employees of Commission [Section 17]
The Commission may appoint a Secretary and such officers and other employees as it considers
necessary for the efficient performance of its functions under this Act. [Section 17(1)]
The salaries and allowances payable to, and other terms and conditions of service of, the
Secretary and officers and other employees of the Commission and the number of such officers
and other employees shall be such as may be prescribed. [Section 17(2)]
The Commission may engage, in accordance with the procedure specified by regulations, such
number of experts and professionals of integrity and outstanding ability, who have special
knowledge of, and experience in, economics, law, business or such other disciplines related to

1.52 ECONOMIC LAWS
competition, as it deems necessary to assist the Commission in the discharge of its functions
under this Act. [Section 17(3)]
The CCI (Salary, Allowances, Other terms and conditions of service of the Secretary and officers
and other employees of the Commission and the number of such officers and other employees)
Rules, 2009, deals with the matters relating to the salary, allowances and other service conditions.
CHAPTER IV: DUTIES, POWERS AND FUNCTIONS OF

COMMISSION
5. DUTIES, POWERS AND FUNCTIONS OF COMMISSION

Duties of Commission [Section 18]
Subject to provisions of this Act Commission shall be duty-bound;
to eliminate practices having adverse effect on competition,
to promote and sustain competition in markets in India,
to protect the interests of consumers and
to ensure freedom of trade carried on by other participants in markets in India.
The proviso to this section provides that the Commission may, for the purpose of discharging
its duties or performing its functions under this Act, enter into any memorandum or
arrangement with the prior approval of the Central Government, with any agency of any
foreign country.
Inquiry into certain agreements and dominant position of enterprise
[Section 19]
Inquiry of Anti-competitive agreements / Abuse of dominance – Section 19(1)
The Commission may inquire into any alleged contravention resulting in entering into an anti-
competitive agreement [section 3 (1)] or abuse of dominance [section 4 (1)] either on its own
motion or on;
(a) receipt of any information, in such manner (Refer Regulation 12, 13 and 23) and
accompanied by such fee (Refer Regulation 49(1))as may be determined by regulation,
from any person, consumer or their association or trade association; or

(b) A reference made to it by the Central Government or a State Government or statutory

authority.
The Competition Commission of India (General) Regulations, 2009
Procedure for filing of information or reference - Regulation 12
(1) Information or reference or responses thereto to the Commission shall be presented
to the Secretary or to an officer authorized in this behalf by the Secretary, in person or sent
by registered post or courier service or facsimile transmission addressed to the Secretary or
to such authorized officer.
(2) Any separate or additional document(s) that a party to the proceedings wishes to rely
upon in support of it’s information, or reference shall be filed in the form of a “Paper Book”,
at least seven days prior to the date of the ordinary meeting, after serving the copies of the
said document(s) on the other parties to the proceedings, with documentary proof of such
service. Such documents shall be serially numbered, prefaced by an index and shall be
supported by a verification.
(3) An information(s) or reference sent by post or courier service or facsimile transmission
under sub-regulation (1) shall be deemed to have been presented to the Secretary or to the
officer authorized by the Secretary, on the day on which it is received in the office of the
Secretary or the authorized officer, as the case may be.
Procedure for filing of information or reference in electronic form- Regulation 13
Subject to the provisions of regulation 12, information or a reference to the Commission may
be sent by a person or an enterprise to the Secretary in an electronic form duly authenticated
with digital signature by the subscriber as and when so desired by the Commission through
a public notice.
Explanation – For the purpose of this regulation, –
(a) “digital signature” means the digital signature as defined under clause (p) of section 2
of the InformationTechnology Act, 2000 (21 0f 2000);
(b) "electronic form" with reference to an information or a document means the electronic
form as defined under clause (r ) of section 2 of the Information Technology Act, 2000
(21 0f 2000);
(c) “subscriber” means the subscriber as defined under clause (zg) of section 2 of the
Information Technology Act, 2000 (21of 2000).
Filings before Commission – Regulation 23
(1) All information(s) or references or responses thereto, or other documents which are
required to be filed before the Commission shall be typed in Arial 12 fonts on one side of A4
size (210 x 297mm or 8.27”x11.69”) white bond paper in double space with 2” margin on the

1.54 ECONOMIC LAWS
left and 1” margin on all other sides.

(2) Only neat and legible photocopies or scanned documents duly certified as true copies
may be filed as exhibits or annexes.
(3) Eight copies of each document referred to in sub-regulation (1), in addition to a soft
copy in document format, wherever possible, shall be filed: Provided that the Secretary may,
through public announcement, increase or decrease the number of copies depending on the
number of Members of the Commission and the number of parties to the proceedings:
Provided further that the Secretary may, through public announcement, vary the format in
which the soft copy is to be filed.
Fee under section 19(1)(a) of the Act - Regulation 49(1)
(1) Each information received under section 19(1)(a) of the Act from any person shall be
accompanied by proof of having paid the fee as under,-
(a) ` 5,000 (five thousand) in case of individual or Hindu Undivided Family (HUF), or
(b) ` 10,000 (ten thousand) in case of Non-Government Organisation (NGO), or Consumer
Association, or a Co-operative Society, or Trust, or
(c) ` 40,000 (forty thousand) in case of firm (including proprietorship, partnership or
Limited Liability Partnership) or company (including one person company) having
turnover in the preceding year upto rupees two crore, or
(d) ` 1,00,000 (one lac) in case of firm (including proprietorship, partnership or Limited
Liability Partnership) or company (including one person company) having turnover in
the preceding year exceeding rupees two crore and upto rupees 50 crore
(e) ` 5,00,000 (five lacs) in the cases not covered under clause (a) or (b) or (c) or (d).
Powers and Functions of CCI – Section 19(2)

Without prejudice to the provisions contained in sub-section (1), the powers and functions of
the Commission shall include the powers and functions specified in sub-sections (3) to (7).
Factors determining an appreciable adverse effect on competition - Section 19(3)
The Commission shall, while determining whether an agreement has an appreciable adverse
effect on competition under section 3, have due regard to all or any of the following factors,
namely:—
(a) creation of barriers to new entrants in the market;
(b) driving existing competitors out of the market;
(c) foreclosure of competition by hindering entry into the market;
(d) accrual of benefits to consumers;

(e) improvements in production or distribution of goods or provision of services;

(f) promotion of technical, scientific and economic development by means of production or
(g) distribution of goods or provision of services.
Factor determining abuse of dominance – Section 19(4)
The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not
under section 4, have due regard to all or any of the following factors, namely:—
(a) market share of the enterprise;
(b) size and resources of the enterprise;
(c) size and importance of the competitors;
(d) economic power of the enterprise including commercial advantages over competitors;
(e) vertical integration of the enterprises or sale or service network of such enterprises;
(f) dependence of consumers on the enterprise;
(g) monopoly or dominant position whether acquired as a result of any statute or by virtue of
(h) being a Government company or a public sector undertaking or otherwise;
(i) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of
entry, marketing entry barriers, technical entry barriers, economies of scale, high cost of
substitutable goods or service for consumers;
(j) countervailing buying power
(k) market structure and size of market;
(l) social obligations and social costs;
(m) relative advantage, by way of the contribution to the economic development, by the enterprise
enjoying a dominant position having or likely to have an appreciable adverse effect on
competition;
(n) any other factor which the Commission may consider relevant for the inquiry.
Factors determining Relevant Market – Section 19(5)
For determining whether a market constitutes a “relevant market” for the purposes of this Act,
the Commission shall have due regard to the:
 Relevant Geographic Market; and
 Relevant Product Market.

1.56 ECONOMIC LAWS
Factors determining Relevant Geographical Market – Section 19(6)

The Commission shall, while determining the “relevant geographic market”, have due regard to
all or any of the following factors, namely:—
(a) regulatory trade barriers;
(b) local specification requirements;
(c) national procurement policies;
(d) adequate distribution facilities;
(e) transport costs;
(f) language;
(g) consumer preferences;
(h) need for secure or regular supplies or rapid after-sales services.
Factor determining Relevant Product Market - Section (7)
The Commission shall, while determining the “relevant product market”, have due regard to all
or any of the following factors, namely:—
(a) physical characteristics or end-use of goods;
(b) price of goods or service;
(c) consumer preferences;
(d) exclusion of in-house production;
(e) existence of specialised producers;
(f) classification of industrial products
In the case of Competition Commission of India vs. Coordination Committee of artist
and technicians of W.B. Films and Television (AIR 2017 SC 1449), the Supreme Court opined
that the purpose of defining ‘relevant market’ is to assess with identifying in a systematic way
competitive constraints that undertakings face when operating in a market.
Inquiry into combination by Commission [Section 20]
Appreciable Adverse Effect on Competition (AAEC) – Section 20(1)
The Commission may, upon its own knowledge or information relating to:
 Acquisition referred to in Section 5(a); or
 Acquiring of control referred to in section 5(b); or
 Merger or amalgamation referred to section 5(c),

inquire into whether such a combination has caused or is likely to cause an appreciable adverse
effect on competition in India:
Provided that the Commission shall not initiate any inquiry under this sub-section after the expiry
of one year from the date on which such combination has taken effect.
Inquiry into whether a combination caused or likely to cause AAEC – Section 20(2)
The Commission shall, on receipt of a notice under section 6(2) or upon receipt of a reference
under section 21(1), inquire whether a combination referred to in that notice or reference has
caused or is likely to cause an appreciable adverse effect on competition in India.
Review in value of assets or turnover Section 20(3)
Notwithstanding anything contained in section 5, the Central Government shall, on the expiry
of a period of two years from the date of commencement of this Act and thereafter every two
years, in consultation with the Commission, by notification, enhance or reduce, on the basis
of the wholesale price index or fluctuations in exchange rate of rupee or foreign
currencies, the value of assets or the value of turnover, for the purposes of that section.
Factor determining Combination as AAEC - Section 20(4)
For the purposes of determining whether a combination would have the effect of or is likely to
have an appreciable adverse effect on competition in the relevant market, the Commission
shall have due regard to all or any of the following factors, namely:—
(a) actual and potential level of competition through imports in the market;
(b) extent of barriers to entry into the market;
(c) level of combination in the market;
(d) degree of countervailing power in the market;
(e) likelihood that the combination would result in the parties to the combination being able to
significantly and sustainably increase prices or profit margins;
(f) extent of effective competition likely to sustain in a market;
(g) extent to which substitutes are available or arc likely to be available in the market;
(h) market share, in the relevant market, of the persons or enterprise in a combination,
individually and as a combination;
(i) likelihood that the combination would result in the removal of a vigorous and effective
competitor or competitors in the market;
(j) nature and extent of vertical integration in the market;
(k) possibility of a failing business;

1.58 ECONOMIC LAWS
(l) nature and extent of innovation;

(m) relative advantage, by way of the contribution to the economic development, by any
combination having or likely to have appreciable adverse effect on competition;
(n) whether the benefits of the combination outweigh the adverse impact of the combination, if
any.
Actual and potential level of

Extent of barriers to entry Level of combination in the
competition through imports
into the market market
in the market
Likelihood that the

combination would result in
the parties to the Extent of effective
Degree of countervailing
combination being able to competition likely to sustain
power in the market
significantly and sustainably in a market
increase prices or profit
margins
Market share, in the relevant Likelihood that the

Extent to which substitutes market, of the persons or combination would result in
are available or are likely to enterprise in a combination, the removal of a vigorous
be available in the market individually and as a and effective competitor or
combination competitors in the market
Nature and extent of vertical Possibility of a failing Nature and extent of

integration in the market business innovation
Relative advantage, by way

of the contribution to the Whether the benefits of the
economic development, by combination outweigh the
any combination having or adverse impact of the
likely to have appreciable combination, if any.
adverse effect on competition
Reference by statutory authority [Section 21]

Any Statutory Authority may refer the matter to CCI -Section 21(1)
Where in the course of a proceeding before any statutory authority an issue is raised by any
party that any decision which such statutory authority has taken or proposes to take, is or would

be, contrary to any of the provisions of this Act, then such statutory authority may make a
reference in respect of such issue to the Commission:
Provided that any statutory authority, may, suo motu, make such a reference to the
Commission.
CCI to revert within 60 days of such reference - Section 21(2)
On receipt of a reference under sub-section (1), the Commission shall give its opinion, within
sixty days of receipt of such reference, to such statutory authority which shall consider the
opinion of the Commission and thereafter, give its findings recording reasons therefor on the
issues referred to in the said opinion.
Reference by Commission [Section 21 A]
CCI may make reference to any statutory authority - Section 21A(1)
Where in the course of a proceeding before the Commission an issue is raised by any party that
any decision which, the Commission has taken during such proceeding or proposes to take, is
or would be contrary to any provision of this Act whose implementation is entrusted to a statutory
authority, then the Commission may make a reference in respect of such issue to the statutory
authority:
Provided that the Commission, may, suo motu, make such a reference to the statutory authority.
Statutory Authority to revert within 60 days - Section 21A(2)
On receipt of a reference under sub-section (1), the statutory authority shall give its opinion,
within sixty days of receipt of such reference, to the Commission which shall consider the
opinion of the statutory authority, and thereafter give its findings recording reasons therefor on
the issues referred to in the said opinion.
Meetings of Commission [Section 22]
Meetings – Section 22(1)
The Commission shall meet at such times and places, and observe such rules and procedure
in regard to the transaction of business at its meetings as may be provided in the Competition
Commission of India (Meeting for Transaction of Business) Regulations, 2009.
Absence of Chairperson – Section 22(2)
The Chairperson, if for any reason, is unable to attend a meeting of the Commission, the senior
most Member present at the meeting, shall preside at the meeting.
Vote of majority – Section 22 (3)
All questions which come up before any meeting of the Commission shall be decided by a
majority of the Members present and voting, and in the event of an equality of votes, the

1.60 ECONOMIC LAWS
Chairperson or in his absence, the Member presiding, shall have a second or casting vote:
Quorum of Meeting
The proviso to section 21(3) provides that the quorum for such meeting shall be three Members.
Section 23, 24 and 25: [Omitted]
Procedure for inquiry under Section 19 [Section 26]
This section must be read with regulation 15 to 21 of the Competition Commission of India
(General) Regulations, 2009 to gain knowledge on the procedural part. Hence all regulations
referred to in this section are of said regulations.
 Step 1 - On receipt of a reference from the Central Government or a State Government
or statutory authority or on its own knowledge or information received under section 19,
after scrutiny (Regulation 15) at preliminary conference of Commission (Regulation 17)
the Commission shall form the opinion on the existence of prima facie case
(Regulation 16).
Notes
If the subject matter of information received is, in the opinion of the Commission,
substantially the same as or has been covered by any previous information received,
then the new information may be clubbed with the previous information.
The answer may be Yes (existence of prima facie case) or No (non-existence of prima
facie case)
 Step 2A – If the answer is no  Commission shall close the matter forthwith and pass
such orders (Regulation 19) as it deems fit and send a copy of its order to the Central
Government or the State Government or statutory authority or the parties concerned, as
the case may be.
Or
Step 2B - If the answer is yes  Commission shall direct the Director General to cause
an investigation to be made into the matter (Regulation 18)
Note
If matter routed through step 2B, then move to step 3.
 Step 3 - Director General shall submit the report within such time as may be specified by
the Commission and report shall contain his findings on each of the allegations made in
the information or reference.
Notes
The Commission may forward a copy of the report to the parties concerned.

The Commission shall forward a copy of the report to Central Government or the State
Government or the statutory authority if the investigation is caused to be made based on
reference received from them.
Report from director general may recommend either Contravention or No-
Contravention.
 Step 4A – If contravention  If Commission is of the opinion that further inquiry is
called for, it shall inquire into such contravention in accordance with the provisions of this
Act (Regulation 21)
Step 4B – If no contravention  Commission shall invite objections or suggestions from
the Central Government or the State Government or the statutory authority or the parties
concerned, as the case may be, on such a report of the Director General.
(Regulation 21)
Note
If matter routed through step 4B then move to step 5A or 5B as the case may be;
 Step 5A – If, after consideration of the objections and suggestions if any, the Commission
agrees with the recommendation of the Director General  Commission shall close the
matter forthwith and pass such orders as it deems fit and sends a copy of its order to the
Central Government or the State Government or the statutory authority or the parties
concerned, as the case may be (Regulation 21).
Or
Step 5B - If, after consideration of the objections or suggestions if any, the Commission
is of the opinion that further investigations are called for  it may direct further
investigation in the matter by the Director General or cause a further inquiry to be
made by in the matter or itself proceed with further inquiry in the matter in accordance
with the provisions of this Act (Regulation 21).
Hon’ble Supreme Court in case of Competition Commission of India vs. Steel Authority of
India Limited (2010) 10 SCC 744, held that; neither any statutory duty is cast on the
Commission to issue notice or grant hearing, nor can any party claim as a matter of right, notice,
and/or hearing at the stage of formation of opinion by Commission in terms of section 26 (1) of
the Act that a prima facie case exists for issuance of a direction to the director general to cause
an investigation to be made into the matter. However Commission, being a statutory body
exercising regulatory jurisdiction, even at that stage, in its discretion and in an appropriate case
may call upon the concerned party(s) to render required assistance or produce requisite
information as per its directive.

1.62 ECONOMIC LAWS
Orders by Commission after inquiry into agreements or abuse of dominant

position [Section 27]
Where after inquiry the Commission finds that any agreement referred to in section 3 or action
of an enterprise in a dominant position, is in contravention of section 3 or section 4, as the case
may be, it may pass all or any of the following orders, namely:
(a) Cease and desist order - direct any enterprise or association of enterprises or person
or association of persons, as the case may be, involved in such agreement, or abuse of
dominant position, to discontinue and not to re-enter such agreement or discontinue such
abuse of dominant position, as the case may be.
(b) Impose penalty - as it may deem fit which shall not be more than ten percent of the
average of the turnover for the last three preceding financial years, upon each of
such person or enterprises which are parties to such agreements or abuse.
Penalty in case of Cartel
The proviso provides that in case any agreement referred to in section 3 has been entered
into by a cartel, the Commission may impose upon each producer, seller, distributor,
trader or service provider included in that cartel, a penalty of:
• up to three times of its profit for each year of the continuance of such agreement; or
• ten per cent. of its turnover for each year of the continuance of such agreement,
whichever is higher.
(c) [Omitted]
(d) direct that the agreements shall stand modified to the extent and in the manner as may
be specified in the order by the Commission;
(e) direct the enterprises concerned to abide by such other orders as the Commission may
pass and comply with the directions, including payment of costs, if any;
(f) [Omitted]
(g) pass such other order or issue such directions as it may deem fit:
Provided that while passing orders under this section, if the Commission comes to a finding,
that an enterprise in contravention to section 3 or section 4 of the Act is a member of a group
as defined in clause (b) of the Explanation to section 5 of the Act, and other members of such
a group are also responsible for, or have contributed to, such a contravention, then it may pass
orders, under this section, against such members of the group.
Notes
In case any agreement referred to in section 3 has been entered into by a cartel, the commission
may impose upon each producer, seller, distributor, trader or service provider included in that
cartel, a penalty of up to three times of its profit for each year of the continuance of such
agreement or ten percent of its turnover for each year of the continuance of such agreement,

whichever is higher. [Reasoning - Anti-competitive agreement entered in contravention of

section 3 (1) may time bound or forever; hence it makes sense to link the quantum of penalty
with the length of benefit (means length of agreement)]
Competition Appellate Tribunal (COMPAT) reduced the penalty by applying principle of relevant
turnover in case of Excel Crop Care Limited vs. CCI against the order of CCI wherein the
penalty was imposed on basis of total turnover. CCI moved to Supreme Court through civil
appeal number 2480 of 2014 against the order of COMPAT.
While disposing the appeal Supreme Court held that deciding the penalty on the total turnover
would give inequitable results. The court reiterated that a penal provision should not lead
to the ‘death of the entity’
Now the question may arise, what is relevant turnover?  In the supplementary order, the
term relevant turnover was defined as ‘the entity’s turnover pertaining to products and services
that have been affected by such contravention’.
Another question arises here, what shall be the rate of penalty?  In said case only, the
court decided the percentage of the penalty imposed on the parties are left to the discretion of
the CCI, bearing in mind the facts and circumstances of the case.
 Modification the terms of such agreements - Agreements shall stand modified to the
extent and in the manner as may be specified in the order by the Commission;
 To abide - Which direct the enterprises concerned to abide by such other orders as the
commission may pass and comply with the directions, including payment of costs, if any
 Such other order or issue such directions as it may deem fit.
Note
While passing orders under this section, if the commission comes to a finding, that an enterprise
in contravention to section 3 or section 4 of this Act is a member of a group as defined in clause
(b) of the explanation to section 5 of this Act, and other members of such a group are also
responsible for or have contributed to such a contravention; then it may pass orders under this
section against such members of the group.
Division of enterprise enjoying dominant position [Section 28]
Commission to director for division of an Enterprises enjoying Dominant Position–
Section 28(1)
The Commission may, notwithstanding anything contained in any other law for the time being
in force, by order in writing, direct division of an enterprise enjoying dominant position to ensure
that such enterprise does not abuse its dominant position.

1.64 ECONOMIC LAWS
Methods of division of enterprise -Section 28(2)

In particular, and without prejudice to the generality of the foregoing powers, the order referred
to in sub-section (1) may provide for all or any of the following matters, namely:—
Adjustment of contracts either

Transfer or vesting of Creation, allotment, surrender
by discharge or reduction of
property, rights, liabilities or or cancellation of any shares,
any liability or obligation or
obligations stocks or securities
otherwise
Formation or winding up of an
The extent to which, and the
enterprise or the amendment
circumstances in which,
of the memorandum of Any other matter which may
provisions of the order
association or articles of be necessary to give effect to
affecting an enterprise may
association or any other the division of the enterprise.
be altered by the enterprise
instruments regulating the
and the registration thereof
business of any enterprise
No Compensation payable to any Officer for Cessation of his office on account

Division of Enterprise – Section 28(3)
Notwithstanding anything contained in any other law for the time being in force or in any contract
or in any memorandum or articles of association, an officer of a company who ceases to hold
office as such in consequence of the division of an enterprise shall not be entitled to claim
any compensation for such cesser.
Procedure for investigation of combination [Section 29]
Appreciable Adverse Effect on Competition - Section 29(1)
Where the Commission is of the prima facie opinion that a combination is likely to cause, or
has caused an appreciable adverse effect on competition within the relevant market in India, it
shall issue a notice to show cause to the parties to combination calling upon them to respond
within thirty days of the receipt of the notice, as to why investigation in respect of such
combination should not be conducted.
Report from DG – Section 29(1A)
After receipt of the response of the parties to the combination under sub-section (1), the
Commission may call for a report from the Director General and such report shall be submitted
by the Director General within such time as the Commission may direct.

Publication of details of Combination – Section 29(2)

The Commission, if it is prima facie of the opinion that the combination has, or is likely to have,
an appreciable adverse effect on competition, it shall,
 within seven working days from the date of receipt of the response of the parties to the
combination, or
 the receipt of the report from Director General called under sub section (1A),
 whichever is later,
direct the parties to the said combination to publish details of the combination within ten working
days of such direction, in such manner, as it thinks appropriate, for bringing the combination to
the knowledge or information of the public and persons affected or likely to be affected by such
combination.
Objections invited – Section 29(3)
The Commission may invite any person or member of the public, affected or likely to be affected
by the said combination, to file his written objections, if any, before the Commission within
fifteen working days from the date on which the details of the combination were published under
sub-section (2).
Calling for additional information - Section 29(4)
The Commission may, within fifteen working days from the expiry of the period specified in
sub-section (3), call for such additional or other information as it may deem fit from the parties
to the said combination.
Submission of additional Information – Section 29(5)
The additional or other information called for by the Commission shall be furnished by the parties
referred to in sub-section (4) within fifteen days from the expiry of the period specified in sub-
section (4).
CCI to proceed as per the provisions of the Act – Section 29(6)
After receipt of all information and within a period of forty-five working days from the expiry
of the period specified in sub-section (5), the Commission shall proceed to deal with the case
in accordance with the provisions contained in section 31.
Notes
This section must be read with The Competition Commission of India (Procedure in regards to
the transaction of business relating to combinations) Regulations, 2011 to gain knowledge on
the procedural part. Hence all regulation referred to in this section are of said regulations.

1.66 ECONOMIC LAWS
 Read section 30 and 31 simultaneously for better understanding

Step 1 - Where the commission is of the prima-facie opinion (Regulation 19) that a combination
is likely to cause, or has caused an appreciable adverse effect on competition within the relevant
market in India, it shall issue a show-cause notice to the parties to combination to respond
within thirty days of the receipt of the notice, as to why investigation in respect of such
combination should not be conducted. (Regulation 19)
Step 2 - After receipt of the response of the parties to the combination, the Commission may
call (Regulation 20) for a report from the Director General and such report shall be submitted
by the Director General within such time as the Commission may direct.
Step 3 - If Commission is prima facie of the opinion that the combination has, or is likely to have
an appreciable adverse effect on competition, then it shall direct the parties to the said
combination to publish details of the combination (Regulation 22) in form IV specified in
schedule II to combination regulations (discussed earlier in this chapter under heading 3 –
subheading regulation of combinations) within ten working days of such direction, in such
manner, as it thinks appropriate, for bringing the combination to the knowledge or information
of the public and persons affected or likely to be affected by such combination;
Notes
 Such direction shall be given within seven working days from the date of receipt of the
response of the parties to the combination, or the receipt of the report from the Director
General (Regulation 21) whichever is later.
 Shall publish in 4 leading daily newspapers including at least two business newspapers apart
from hosting on the website of respective enterprise (Commission may also host the same
on its official website)
 Parties need to submit the proof of publication under Regulation 23 within 15 calendar days
of such direction
Step 4 - The Commission may invite any person or member of the public, affected or likely
to be affected by the said combination, to file his written objections, if any, before the
Commission within fifteen working days from the date on which the details of the combination
were published.
Step 5 - The Commission may, within further fifteen working days from the expiry of the period
specified in step 4, call for such additional or other information as it may deem fit from the
parties to the said combination.
Note
The additional or other information called for by the Commission shall be furnished by the parties
to the said combination within fifteen days from the expiry of the period specified in step 5.

There is a lacuna in the law here  undoubtedly in no case available, days will be less than
15, but provision is unjust; because in current set-up it may possible that time available in all
cases may not be the same (Commission send the notice on the first day in step 5 party will
have 29 days, if on 15 th (last) day then the party will have only 15 days). 15 days shall be from
the day of communication rather than expiry of the period specified in the previous step, to bring
all cases on the equitable ground and equal footing.
Step 6 - After receipt of all information, the commission shall proceed to deal with the case of
accordance within the provisions contained in Section 31, within a period of forty-five working
days from the expiry of the period granted to parties for furnishing of additional information.
Procedure in case of notice under section 6(2) [Section 30]
Where any person or enterprise has given a notice under section 6(2) the Commission shall
inquire—
(a) whether the disclosure made in the notice is correct;
(b) whether the combination has, or is likely to have, an appreciable adverse effect on
competition.
The Commission shall examine the notice filled under sub-section 2 to section 6 in form I or
form II as the case may be under Regulation 5 and 5A and form its prima facie opinion
(Regulation 19) to proceed as per provisions contained in Section 29.
Orders of Commission on certain combinations [Section 31]
Where the Combination does not have an Appreciable Adverse Effect on Competition
(AAEC) – Section 31(1)
Where the Commission is of the opinion that any combination does not, or is not likely to, have
an appreciable adverse effect on competition, it shall, by order, approve that combination
including the combination in respect of which a notice has been given under section 6(2).
Where the Combination have an Appreciable Adverse Effect on Competition (AAEC) –
Section 31(2)
Where the Commission is of the opinion that the combination has, or is likely to have, an
appreciable adverse effect on competition, it shall direct that the combination shall not take
effect.
Where the Combination have an Appreciable Adverse Effect on Competition (AAEC)
but can be modification– Section 31(3)
Where the Commission is of the opinion that the combination has, or is likely to have, an
appreciable adverse effect on competition but such adverse effect can be eliminated by suitable
modification to such combination, it may propose appropriate modification to the
combination, to the parties to such combination.

1.68 ECONOMIC LAWS
Acceptance of modification by the parties – Section 31(4)

The parties, who accept the modification proposed by the Commission, under sub-section (3),
shall carry out such modification within the period specified by the Commission.
Failure to carry out modification by the parties – Section 31(5)
If the parties to the combination, who have accepted the modification, under sub-section (4),
fail to carry out the modification within the period specified by the Commission, such
combination shall be deemed to have an appreciable adverse effect on competition and
the Commission shall deal with such combination in accordance with the provisions of this Act.
Amendment to the modification proposed by the CCI – Section 31(6)
If the parties to the combination do not accept the modification proposed by the Commission,
under sub-section (3), such parties may, within thirty working days (within 30 days) of the
modification proposed by the Commission, submit amendment to the modification proposed by
the Commission under that sub-section.
Acceptance of amendment in modification by CCI – Section 31(7)
If the Commission agrees with the amendment submitted by the parties under sub-section (6),
it shall, by order, approve the combination.
Non-acceptance of amendment in modification by CCI – Section 31(8)
If the Commission does not accept the amendment submitted under sub-section (6), then, the
parties shall be allowed a further period of thirty working days within which such parties shall
accept the modification proposed by the Commission.
Failure of acceptance by the parties of modification proposed by the CCI –
Section 31(9)
If the parties fail to accept the modification proposed by the Commission:
 within thirty working days referred to in sub-section (6); or
 within a further period of thirty working days referred to in sub-section (8),
the combination shall be deemed to have an appreciable adverse effect on competition and
be dealt with in accordance with the provisions of this Act.
Acquisition / Acquiring of Control / Merger-Amalgamation shall not be given effect to
– Section 31(10)
Where the Commission has directed under sub-section (2) that the combination shall not take
effect or the combination is deemed to have an appreciable adverse effect on competition under
sub-section (9), then, without prejudice to any penalty which may be imposed or any prosecution
which may be initiated under this Act, the Commission may order that—

(a) the acquisition referred to in section 5(a); or

(b) the acquiring of control referred to in section 5(b); or
(c) the merger or amalgamation referred to in section 5(c),
shall not be given effect to:
The proviso to this sub-section provides that the Commission may, if it considers appropriate,
frame a scheme to implement its order under this sub-section.
Deemed Approval of Combination – Section 31(11)
If the Commission does not, on the expiry of a period of ninety working days (90 working days)
from the date of publication referred to in section 29(2), pass an order or issue direction in
accordance with the provisions of:
 Sub-section (1); or
 Sub-section (2); or
 Sub-section (7),
the combination shall be deemed to have been approved by the Commission.
Regulation 15 of the CCI (Procedure in regard to the transaction of business relating to
combinations) Regulations, 2011 provides that subject to the provisions of these regulations,
the time period under section 31(11) of the Act shall commence from the date of receipt of
notice, in writing, filed under regulation 5 of these regulations.
Further, the proviso to Regulation 19(2) provides that the time taken by the parties to the
combination, in furnishing the additional information or for offering modification shall be
excluded from the period provided in sub-regulation (1) of this regulation and section 31(11) of
the Act.
Calculation of 90 working days
The Explanation to this sub-section provides that for the purposes of determining the period of
ninety working days (90 working days) specified in this sub-section:
 the period of thirty working days (30 working days) specified in sub-section (6); and
 a further period of thirty working (30 working days) days specified in sub- section (8)
shall be excluded.
Extension sought by the parties – Section 31(12)
Where any extension of time is sought by the parties to the combination, the period of ninety
working days shall be reckoned after deducting the extended time granted at the request of the
parties.

1.70 ECONOMIC LAWS
Where the CCI Orders any Combination as Void Combination – Section 31 (13)
Where the Commission has ordered a combination to be void:
 the acquisition; or
 acquiring of control; or
 merger or amalgamation referred to in section 5,
shall be dealt with by the authorities under any other law for the time being in force as if such
acquisition or acquiring of control or merger or amalgamation had not taken place and the
parties to the combination shall be dealt with accordingly.
Effect of initiation of any proceedings by CCI - Section 31(14)
Nothing contained in this Chapter 6 shall affect any proceeding initiated or which may be initiated
under any other law for the time being in force.
This section must be read with The Competition Commission of India (Procedure in regards
to the transaction of business relating to combinations) Regulations, 2011 to gain
knowledge on the procedural part. Hence all regulation referred to in this section are of said
regulations.
 Step 1
While passing order (Regulation 28) or issuing directions, Commission

may have either of three possible opinion on any combination
Have appreciable adverse

Not having appreciable effects on competition but
Have appreciable adverse
adverse effects on such adverse effects can
effects on competition
competition be eliminated through
modifications
Opinion 1 - Have appreciable adverse effects on competition – if Commission is of

the opinion that the combination has, or is likely to have an appreciable adverse effect
on competition, by order, it shall direct that the combination shall not take, be given,
effect. [Regulation 28(2)]
Notes
 In response to the show-cause notice issued under section 29 (1) (refer step 1 and
2 explained under section 29, earlier in this chapter), it may be possible that parties
6 (Chapter IV: Duties, Powers and Functions of Commission)

themselves suggest the modifications and considering such modifications

Commission approves the proposed combination.
 The Commission may however if it considers appropriate, frame a scheme to
implement its order.
 Such order shall not be prejudice to any penalty which may be imposed or any
prosecution which may be initiated under this Act.
Opinion 2 - Not having appreciable adverse effects on competition – if the
Commission is of the opinion that the combination does not or is not likely to have an
appreciable adverse effect on competition, it shall, by order, approve that combination
including the combination in respect of which a notice has been given of section 6(2).
[Regulation 28(1)]
Opinion 3 - Have appreciable adverse effects on competition but such adverse
effects can be eliminated through modifications - Where the Commission is of the
opinion that the combination has, or is likely to have, an appreciable adverse effect on
competition but such adverse effect can be eliminated by suitable modification to such
combination, it may propose appropriate modification to the combination, to the parties
to such combination. [Regulation 25 & Regulation 28(3)]
Note
The possible responses of parties to the combination discussed and detailed in step 2 below.
 Step 2
When modification are directed by Commission to parties, then the party

can give either of three possible responses
Response 2
Response 3
Response 1 Accept but fails to carry out
such modifcation within period Don't Accept the
Accept and carry out such modification and such
specified by Commission
modifcation within period parties may also suggests
specified by Commission combination shall be deemed amendment to the
to have an appreciable modifications proposed by
Then Commission shall
adverse effect on competition Commission within 30
approve the combination
and be dealt with in days of issue of direction
[Regulation 25(2)]
accordance with the to them
provisions of this Act

1.72 ECONOMIC LAWS
Note
 Parties after compliance need to file compliance report to the secretary of
Commission within 7 days (Regulation 26)
 In the case of response 3, if the parties don’t accept the modification within thirty
working days, where no amendment suggested the combination shall be deemed
to have an appreciable adverse effect on competition and be dealt with in
accordance with the provisions of this Act. Basically Commission by order shall
direct that the combination shall not be given effect. The Commission may,
however, if it considers appropriate, frames a scheme to implement its order. Such
an order shall not be prejudice to any penalty which may be imposed or any
prosecution which may be initiated under this Act. Such 30 days shall be excluded
while the computing time period for deemed approval [Regulation 25(4)]
 Step 3
In the scenario of response 3, where parties also suggests

amendment to the modifications proposed, the Commission may
If the Commission does not accept the amendment

If the Commission agrees with then, the parties shall be allowed a further period of
the amendment it shall, by order, thirty working days within which such parties shall
approve the combination accept the modification orginally directed by
Commission
If the parties fail to accept the

modification within further period of thirty
working days the combination shall be
deemed to have an appreciable adverse
effect on competition and be dealt with
in accordance with the provisions of this
Act. (see note below)

Note
 Consequences of failure to accept - Basically Commission by order shall direct that
the combination shall not be given effect. The Commission may, however, if it
considers appropriate, frame a scheme to implement its order. Such order shall not be
prejudice to any penalty which may be imposed or any prosecution which may be initiated
under this Act. Such 30 days shall be excluded while computing time period for deemed
approval [Regulation 25(4)]

Section – vide Notes

 Deemed Approval - If the Commission does not pass an order to approve the
combination [under sub-section 1 (opinion 2) or 7 (response 1)] or doesn’t issue the
direction that combination shall not take effect [under sub-section 2 (opinion 1)] until the
expiry of a period of 210 days from the date of notice given to the Commission under
section 6 (2) as mentioned in regulation 5 or 5A (Regulation 15) the combination shall be
deemed to have been approved by the Commission.
There is a lacuna in law here  It may be possible that within 210 days, an order under
sub-section 10 is passed due to the effect of sub-section 9 (deemed to have an
appreciable adverse effect on competition), then also deemed approval shall not presume
– section 11 which talk about deemed approval, expressly mentioned order issued and
direction is given in accordance with the provision of sub-section 1, 2, and 7; but didn’t
include sub-section 10.
 Where any extension of time is sought by the parties to the combination, the period of
ninety working days shall be reckoned after deducting the extended time granted at the
request of the parties.
 The consequence of a combination declared void by Commission - Where the
Commission has ordered a combination to be void, it shall be dealt with by the authorities
under any other law for the time being in force as if such combination giving effect to the
acquisition or acquiring of control or merger or amalgamation had not taken place and
the parties to the combination shall be dealt with accordingly.
 As per regulation 24 where Commission deems it necessary to give an opportunity of
being heard to the parties to the combination before deciding to deal with the case in
accordance with the provision of section 31, the secretary to the Commission shall by
giving the notice of such period as directed by the Commission.
Nothing contained in chapter 4 of this Act i.e. Duties, Powers and Function of Commission
shall affect any proceeding initiated or which may be initiated under any other law for the
time being in force.
Acts taking place outside India but having an effect on competition in India
[Section 32]
The Commission shall notwithstanding that-
(a) an agreement referred to in section 3 has been entered into outside India; or
(b) any party to such agreement is outside India; or
(c) any enterprise abusing the dominant position is outside India; or
(d) a combination has taken place outside India; or
(e) any party to combination is outside India; or

1.74 ECONOMIC LAWS
(f) any other matter or practice or action arising out of such agreement or dominant position
or combination is outside India,
have power to inquire in accordance with the provisions contained in:
 Section 19 (Inquiry into certain agreements and dominant position of enterprise),
 Section 20 (Inquiry into combination by commission),
 Section 26 (Procedure for inquiry under section 19),
 Section 29 (Procedure for investigation of combinations) and
 Section 30 (Inquiry into disclosures under section 6(2)
of the Act into such agreement or abuse of dominant position or combination if such
agreement or dominant position or combination has, or is likely to have, an appreciable
adverse effect on competition in the relevant market in India and pass such orders as it may
deem fit in accordance with the provisions of this Act.
Power to issue interim orders [Section 33]
Where during an inquiry, the commission is satisfied that an act in contravention of:
 section 3(1); (Anti-competitive agreements) or
 section 4(1); (Abuse of dominant position ) or
 section 6 (Regulation of combinations)
has been
 committed and
 continues to be committed; or that
 such act is about to be committed,
the Commission may, by order, temporarily restrain any party from carrying on such act
until the conclusion of such inquiry or until further orders, without giving notice to such
party, where it deems it necessary.The CCI (General) Regulations, 2009
Interim Order - Regulation 31
(1) Where the Commission, during an inquiry, has, by an order, temporarily restrained any
party from carrying on any act in contravention of section 3(1) or of section 4(1) of the
Act, until the conclusion of such inquiry or until further orders, under section 33 of the
Act, such order, if any, shall be signed and dated by the Members, including a
dissenting note by the dissenting Member, if that be the case, and shall be made at
the earliest.

(2) Where during an inquiry, the Commission has passed interim order, referred to in sub-
regulation (1), it shall hear the party against whom such an order has been made
thereafter, as soon as possible.
(3) Where in a case an interim order under Section 33 of the Act has been passed, a final
order, as far as possible, shall be passed by the Commission, within ninety days from
the date of interim order.
Appearance before Commission [Section 35]

A person or an enterprise or the Director General, may either appear in person or authorize one
or more:
 Chartered Accountant(s) in Practice; or
 Company Secretary(s) in Practice; or
 Cost Accountant(s) in Practice; or
 Legal Practitioners (means as Advocate, Vakil or An Attorney of any High Court and included
a Pleader in Practice); or
 Any of his or its officer(s)
to present his or its case before the Commission.
Power of Commission to regulate its own procedure [Section 36]
CCI to follow Principle of Natural Justice -Section 36(1)
In the discharge of its functions, the Commission shall be guided by the principles of natural
justice and, subject to the other provisions of this Act and of any rules made by the Central
Government, the Commission shall have the powers to regulate its own procedure.
CCI shall be vested the powers of a Civil Court – Section 36(2)
The Commission shall have, for the purposes of discharging its functions under this Act, the
same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, while trying
a suit, in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination of witnesses or documents;
(e) requisitioning, subject to the provisions of sections 123 and 124 of the Indian Evidence
Act, 1872 (1 of 1872), any public record or document or copy of such record or document
from any office.

1.76 ECONOMIC LAWS
CCI may avail services of experts for conducting inquiry – Section 36(3)
The Commission may call upon such experts, from the fields of:
 Economics,
 Commerce,
 Accountancy,
 International Trade; or
 from any other discipline
as it deems necessary, to assist the Commission in the conduct of any inquiry by it.
CCI may ask any person to produce documents – Section 36(4)
The Commission may direct any person—
(a) to produce before the Director General or the Secretary or an officer authorised by
it, such books or other documents in the custody or under the control of such person so
directed as may be specified or described in the direction, being documents relating to
any trade, the examination of which may be required for the purposes of this Act;
(b) to furnish to the Director General or the Secretary or any other officer authorised by
it, as respects the trade or such other information as may be in his possession in relation
to the trade carried on by such person as may be required for the purposes of this Act.
Execution of orders of Commission imposing monetary penalty [Section 39]
Recovery of Penalty – Section 39(1)
If a person fails to pay any monetary penalty imposed on him under this Act, the Commission
shall proceed to recover such penalty, in such manner, as may be specified by the Competition
Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011.
Recovery of penal amount in accordance with the Income-tax Act -Section 39(2)
In a case where the Commission is of the opinion that it would be expedient to recover the
penalty imposed under this Act in accordance with the provisions of the Income-tax Act, 1961
(referred to as ‘that Act’ here), it may make a reference to this effect to the concerned income-
tax authority under that Act for recovery of the penalty as tax due under the that Act.
Assess in Default – Section 39(3)
Where a reference has been made by the Commission under sub-section (2) for recovery of
penalty, the person upon whom the penalty has been imposed shall be deemed to be the
assessee in default under the Income-tax Act, 1961 and the provisions contained in sections
221 to 227, 228A, 229, 231 and 232 of the said Act and the Second Schedule to that Act and
any rules made there under shall, in so far as may be, apply as if the said provisions were the

provisions of this Act and referred to sums by way of penalty imposed under this Act instead of
to income- tax and sums imposed by way of penalty, fine and interest under the Income–tax
Act, 1961 and to the Commission instead of the Assessing Officer.
 Explanation 1.—Any reference to sub-section (2) or sub-section (6) of section 220 of the
Income-tax Act, 1961, in the said provisions of that Act or the rules made thereunder shall be
construed as references to sections 43 to 45 of this Act.
 Explanation 2.—The Tax Recovery Commissioner and the Tax Recovery Officer referred to
in the Income-tax Act, 1961 shall be deemed to be the Tax Recovery Commissioner and the
Tax Recovery Officer for the purposes of recovery of sums imposed by way of penalty under
this Act and reference made by the Commission under sub-section (2) would amount to
drawing of a certificate by the Tax Recovery Officer as far as demand relating to penalty
under this Act.
 Explanation 3.—Any reference to appeal in Chapter XVIID and the Second Schedule to the
Income-tax Act, 1961, shall be construed as a reference to appeal before the Competition
Appellate Tribunal under section 53B of this Act.
CHAPTER V: DUTIES OF DIRECTOR GENERAL
6. DUTIES OF DIRECTOR GENERAL

Director General to investigate contravention [Section 41]
DG to assist CCI – Section 41(1)
The Director General shall, when so directed by the Commission, assist the Commission in
investigating into any contravention of the provisions of this Act or any rules or regulations made
thereunder.
Powers of CCI are conferred upon DG - Section 41(2)
The Director General shall have all the powers as are conferred upon the Commission under
section 36(2).
Investigation made by the DG -Section 41(3)
Without prejudice to the provisions of sub-section (2), sections 240 and 240A of the Companies
Act, 1956, so far as may be, shall apply to an investigation made by the Director General or any
other person investigating under his authority, as they apply to an inspector appointed under
that Act.

1.78 ECONOMIC LAWS

(a) the words “the Central Government” under section 240 of the Companies Act,1956 shall
be construed as “the Commission”;
(b) the word “Magistrate” under section 240A of the Companies Act, 1956 (1 of 1956) shall
be construed as “the Chief Metropolitan Magistrate, Delhi”.
Notes
 The Companies Act, 1956 (1 of 1956) is repealed through section 465 of the Companies Act, 2013
(18 of 2013), hence vide section 8 of the General Clauses Act, 1897 (10 of 1897)
‘Construction of references to repealed enactments’, Section 217 and 220 of the
Companies Act, 2013 need to be referred to instead of section 240 and 240A of the Companies
Act, 1956.
 For the purposes of this section, the words “the Central Government” under section 217 of the
Companies Act, 2013 shall be construed as “the Commission” and the word “Magistrate” under
section 220 of the Companies Act, 2013 shall be construed as “the Chief Metropolitan Magistrate,
Delhi”.
CHAPTER VI: PENALTIES
7. PENALTIES
A penalty being a punitive measure, incorporated in an Act (or law) are the essence to follow
a law. The penalty provisions don’t acts as deterrence only but also for retribution and
denunciation. Section 42 to 48 deals with penalties.
Contravention of orders of Commission [Section 42]

(1) he Commission may cause an inquiry to be made into compliance of its orders or
directions made in exercise of its powers under the Act.
Fine - Section 42(2)
If any person, without reasonable clause, fails to comply with the orders or directions of the
Commission issued under:
 Sections 27 (Orders by Commission after inquiry into agreements or abuse of dominant
position),
 Section 28 (Division of enterprise enjoying dominant position),
 Section 31(Orders of Commission on certain combinations)

 Section 32 (Acts taking place outside India but having an effect on competition in India),
 Section 33 (Power to issue interim orders),
 Section 42A (Compensation in case of contravention of orders of Commission) and
 Section 43A (Penalty for failure to comply with directions of Commission and Director
General) of the Act,
he shall be punishable with fine:
 which may extend to rupees one lakh for each day during which such non-compliance
occurs,
 subject to a maximum of rupees ten crore,
as the Commission may determine.
Imprisonment - Section 42(3)
If any person does not comply with the orders or directions issued, or fails to pay the fine
imposed under sub-section (2), he shall, without prejudice to any proceeding under section 39,
be punishable with:
 Imprisonment for a term which may extend to three years, or
 with fine which may extend to rupees twenty-five crore,
 or with both,
as the Chief Metropolitan Magistrate, Delhi may deem fit:
Cognizance of Offence
The provision to this sub-section provides that the Chief Metropolitan Magistrate, Delhi shall not
take cognizance of any offence under this section save on a complaint filed by the Commission
or any of its officers authorised by it.
Compensation in case of contravention of orders of Commission
[Section 42A]
Without prejudice to the provisions of this Act, any person may make an application to the
Appellate Tribunal for an order for the recovery of compensation from any enterprise for any
loss or damage shown to have been suffered, by such person as a result of the said enterprise
violating directions issued by the Commission or contravening, without any reasonable ground,
any decision or order of the Commission issued under sections 27, 28, 31, 32 and 33 or any
condition or restriction subject to which any approval, sanction, direction or exemption in relation
to any matter has been accorded, given, made or granted under this Act or delaying in carrying
out such orders or directions of the Commission.

1.80 ECONOMIC LAWS
Note – This section gives right to specified person to make an application to the appellate
tribunal against a specified enterprise, which may result in an award of compensation; if
compensation awarded then such compensation is kind of penalty on such an enterprise.
 Cause Effect of cause Action
An enterprise if Such violation, Without prejudice
contravention or to the provisions
 Violating directions issued by the Commission
delaying causes of this Act, such
or
loss or damage person may make
 Contravening any decision or order of the to any person an application to
Commission issued under sections 27, 28, 31, the Appellate
32, and 33 without any reasonable ground or Tribunal for an
 Contravening any condition or restriction order for the
subject to which any approval, sanction, recovery of
direction, or exemption in relation to any compensation
matter has been accorded, given, made or from such an
granted under this Act or enterprise.
 Delaying in carrying out such orders or

directions of the Commission
Penalty for failure to comply with directions of Commission and Director

General [Section 43]
If any person fails to comply, without reasonable cause, with a direction given by—
(a) the Commission under sub-sections (2) and (4) of section 36; or
(b) the Director General while exercising powers referred to in section 41(2),
such person shall be punishable with fine which may extend to rupees one lakh for each
day during which such failure continues subject to a maximum of rupees one crore, as may
be determined by the Commission.
The Supreme Court in the case of SCM Solifert Limited v. Competition Commission of India,
Civil Appeal No. 10678 of 2016, decided on 17 April 2018 (SC) opined that “There is no
requirement of mens rea or an intentional breach as an essential element for levy of penalty
under Competition Act. The Act does not use the expression "the failure has to be willful or mala
fide” for the purpose of imposition of penalty. The breach of the provisions of the Act is
punishable and considering the nature of the breach, it is discretionary to impose the extent of
penalty. The imposition of penalty under section 43A is on account of breach of a civil obligation,
and the proceedings are neither criminal nor quasi-criminal. Thus, a penalty has to follow.
Discretion in the provision under section 43A is with respect to quantum.”

Power to impose penalty for non-furnishing of information on combinations

[Section 43A]
If any person or enterprise who fails to give notice to the Commission under section 6(2) , the
Commission shall impose on such person or enterprise a penalty which may extend to one per
cent. (1%) of the total:
 Turnover or
 The assets,
whichever is higher, of such a combination.
Penalty for making false statement or omission to furnish material
information [Section 44]
If any person, being a party to a combination,—
(a) makes a statement which is false in any material particular, or knowing it to be false; or
(b) omits to state any material particular knowing it to be material,
such person shall be liable to a penalty which shall not be less than rupees fifty lakhs but
which may extend to rupees one crore, as may be determined by the Commission.
Penalty for offences in relation to furnishing of information [Section 45]
(1) Without prejudice to the provisions of section 44, if a person, who furnishes or is required
to furnish under this Act any particulars, documents or any information,—
(a) makes any statement or furnishes any document which he knows or has reason to
believe to be false in any material particular; or
(b) omits to state any material fact knowing it to be material; or
(c) wilfully alters, suppresses or destroys any document which is required to be
furnished as aforesaid,
such person shall be punishable with fine which may extend to rupees one crore as
may be determined by the Commission.
(2) Without prejudice to the provisions of sub-section (1), the Commission may also pass
such other order as it deems fit.
Power to impose lesser penalty [Section 46]
The Commission may, if it is satisfied that any producer, seller, distributor, trader or service
provider included in any cartel, which is alleged to have violated section 3, has made a full and
true disclosure in respect of the alleged violations and such disclosure is vital, impose upon
such producer, seller, distributor, trader or service provider a lesser penalty as it may deem fit,

1.82 ECONOMIC LAWS
than leviable under this Act or the rules or the regulations:

Provided that lesser penalty shall not be imposed by the Commission in cases where the report
of investigation directed under section 26 has been received before making of such disclosure.
Provided further that lesser penalty shall be imposed by the Commission only in respect of a
producer, seller, distributor, trader or service provider included in the cartel, who has made the
full, true and vital disclosures under this section:
Provided also that lesser penalty shall not be imposed by the Commission if the person making
the disclosure does not continue to cooperate with the Commission till the completion of the
proceedings before the Commission.
Provided also that the Commission may, if it is satisfied that such producer, seller, distributor,
trader or service provider included in the cartel had in the course of proceedings,—
(a) not complied with the condition on which the lesser penalty was imposed by the
Commission; or
(b) had given false evidence; or
(c) the disclosure made is not vital,
and thereupon such producer, seller, distributor, trader or service provider may be tried for the
offence with respect to which the lesser penalty was imposed and shall also be liable to the
imposition of penalty to which such person has been liable, had lesser penalty not been
imposed.
Case Law: The Commission in the Cement cartel case (Builders Association of India v.
Cement Manufacturers’ Association (CMA) and Ors. 2012 Comp LR629(CCI) observed at
para:
“5.6.13 The Commission holds that evidences as above are indicative of the fact that the
Opposite Parties meet frequently in various meetings organized by CMA and collect retail and
whole sale prices using the platform of CMA. It is also evident that the details of actual
production, available capacities of competing cement companies are also circulated by CMA. In
view of these facts, price parallelism does not remain a mere reflection of non-collusive
oligopolistic market as has been argued by certain Opposite Parties but mirrors a condition of
coordinated behaviour and existence of an anti-competitive agreement in violation of provisions
of section 3(3) (a) of the Act which prohibits any agreement or arrangement among the Opposite
Parties which directly o/ indirectly determine the prices in the market.”
[Note: Penalties were imposed by the Commission on cement companies, who were part of the
agreement. National Company Law Appellate Tribunal (NCLAT) has confirmed the Order of the
Commission. The cement companies have preferred appeal before the Supreme Court.

The Competition Commission of India (Lesser Penalty) Regulations, 2009

Conditions for lesser penalty- Regulation 3
(1) An applicant, seeking the benefit of lesser penalty under section 46 of the Act, shall-
(a) cease to have further participation in the cartel from the time of its disclosure
unless otherwise directed by the Commission;
(b) provide vital disclosure in respect of contravention of the provisions of section
3 of the Act;
(c) provide all relevant information, documents and evidence as may be required
by the Commission;
(d) co-operate genuinely, fully, continuously and expeditiously throughout the
investigation and other proceedings before the Commission; and
(e) not conceal, destroy, manipulate or remove the relevant documents in any
manner that may contribute to the establishment of a cartel.
(1A) Where the applicant is an enterprise, it shall also provide the names of the individuals
who have been involved in the cartel on its behalf and for whom lesser penalty is
sought by such an enterprise.
(2) Where an applicant fails to comply with the conditions mentioned in sub- regulation
(1), the Commission shall be free to use the information and evidence submitted by
the applicant, in accordance with the provisions of section 46 of the Act.
(3) Without prejudice to sub-regulations (1) and (2), the Commission may subject the
applicant to further restrictions or conditions, as it may deem fit, after considering the
facts and circumstances of the case.
(4) The discretion of the Commission, in regard to reduction in monetary penalty under
these regulations, shall be exercised having due regard to –
(a) the stage at which the applicant comes forward with the disclosure;
(b) the evidence already in possession of the Commission;
(c) the quality of the information provided by the applicant; and (d) the entire facts
and circumstances of the case.
Grant of lesser penalty – Regulation 4
Subject to the conditions laid down in regulation 3, the applicant and individual mentioned in sub-
regulation (1A) of regulation 3 shall be granted benefit of lesser penalty than leviable under clause
(b) of section 27 and section 48 of the Act, as the Commission may decide, in the following
manner, namely;—

1.84 ECONOMIC LAWS
(a) The applicant and individual mentioned in sub-regulation (1A) of the regulation 3 may
be granted benefit of reduction in penalty upto or equal to one hundred percent, if the
applicant is the first to make a vital disclosure by submitting evidence of a cartel,
enabling the Commission to form a prima facie opinion regarding the existence of a
cartel which is alleged to have contravened the provisions of section 3 of the Act and
the Commission did not, at the time of application, have sufficient evidence to form
such an opinion:
 Provided that the Commission may also grant benefit of reduction in penalty up to or equal
to one hundred per cent, to the applicant and individual mentioned in sub-regulation (1A)
of regulation 3, if the applicant is the first to make a vital disclosure by submitting such
evidence which establishes the contravention of the provisions of section 3 of the Act, by
a cartel, in a matter under investigation and the Commission, or the Director General did
not, at the time of application, have sufficient evidence to establish such a contravention.
(b) The applicants who are subsequent to the first applicant may also be granted benefit
of reduction in penalty on making a disclosure by submitting evidence, which in the
opinion of the Commission, may provide significant added value to the evidence
already in possession of the Commission or the Director General, as the case may be,
to establish the existence of the cartel, which is alleged to have contravened the
provisions of section 3 of the Act.
Explanation — For the purposes of these regulations, ―added value means the extent
to which the evidence provided enhances the ability of the Commission or the Director
General, as the case may be, to establish the existence of a cartel, which is alleged to
have contravened the provisions of section 3 of the Act.
(c) The reduction in monetary penalty referred to in clause (b) shall be in the following
order—
(i) the applicant and individual mentioned in sub-regulation (1A) of regulation 3
marked as second in the priority status may be granted reduction of monetary
penalty up to or equal to fifty percent of the full penalty leviable; and
(ii) the applicant and individual mentioned in sub-regulation (1A) of regulation 3
marked as third or subsequent in the priority status may be granted reduction
of penalty up to or equal to thirty percent of the full penalty leviable.
Leniency Programme is a type of whistle-blower protection, i.e. an official system of offering

lenient treatment/penalty to a cartel member who comes forward to reports about the cartel (submit
information honestly and cooperate till the conclusion of proceedings) to Commission; who would
otherwise have to face stringent action by the Commission if the existence of a cartel is detected by
the Commission on its own. Section 46 lays the foundation for Leniency Programme.

The commission may impose a lesser penalty (than otherwise leviable under this Act, rules or
regulations) as it may deem fit, on any producer, seller, distributor, trader or service provider
who is included in any such cartel which is alleged to have violated section 3, but subject to
following conditions.
Condition 1 - If Commission is satisfied that such producer, seller, distributor, trader, or service
provider, has made a full and true disclosure in respect of the alleged violations and such
disclosure is vital.
Condition 2 - Such disclosure shall be made before the report of investigation by director
general under section 26 (3).
Condition 3 – Such producer, seller, distributor, trader, or service provider shall continue to
cooperate with the Commission till the completion of the proceedings before the Commission.
Notes
 The Competition Commission of India (Lesser Penalty) Regulations, 2009 is
applicable to all Leniency Programs, wherein less penalty imposed under this section
 Any such producer, seller, distributor, trader, or service provider shall be tried for an
offence (for which lesser penalty charged earlier) and liable to pay penalty as normal (if
the lesser penalty didn’t charge), if Commission is satisfied that; it
 failed to comply with the condition on which the lesser penalty was imposed; or
 had given false evidence; or
 the disclosure made is not vital
Crediting sums realised by way of penalties to Consolidated Fund of India
[Section 47]
All sums realised by way of penalties under this Act shall be credited to the Consolidated Fund
of India.
Contravention by companies [Section 48]
Company Official in Charge shall be responsible - Section 48(1)
Where a person committing contravention of any of the provisions of this Act or of any rule,
regulation, order made or direction issued thereunder is a company, every person who, at the
time the contravention was committed, was in charge of, and was responsible to the company
for the conduct of the business of the company, as well as the company, shall be deemed to
be guilty of the contravention and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment if he proves that the contravention was committed without his knowledge or that he

1.86 ECONOMIC LAWS
had exercised all due diligence to prevent the commission of such contravention.
Consent or connivance of Director etc. - Section 48(2)
Notwithstanding anything contained in sub-section (1), where a contravention of any of the
provisions of this Act or of any rule, regulation, order made or direction issued thereunder has
been committed by a company and it is proved that the contravention has taken place with
the consent or connivance of, or is attributable to any neglect on the part of, any director,
manager, secretary or other officer of the company, such director, manager, secretary or other
officer shall also be deemed to be guilty of that contravention and shall be liable to be proceeded
against and punished accordingly.
(a) “company” means a body corporate and includes a firm or other association of
individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.
CHAPTER VII COMPETITION ADVOCACY
8. COMPETITION ADVOCACY
Competition advocacy [Section 49]
Reference to CCI by Central / State Government in formulating a Policy on Competition
- Section 49(1)
The Central Government may, in formulating a policy on competition (including review of
laws related to competition) or on any other matter, and a State Government may, in
formulating a policy on competition or on any other matter, as the case may be, make a
reference to the Commission for its opinion on possible effect of such policy on competition
and on the receipt of such a reference, the Commission shall, within sixty days (within 60
days) of making such reference, give its opinion to the Central Government, or the State
Government, as the case may be, which may thereafter take further action as it deems fit.
Central / State Government is bound by opinion of CCI – Section 49(2)
The opinion given by the Commission under sub-section (1) shall not be binding upon the
Central Government or the State Government, as the case may be, in formulating such policy.
CCI to promote Competitive Advocacy – Section 49(3)
The Commission shall take suitable measures for the promotion of competition advocacy,
creating awareness and imparting training about competition issues.

Advocacy is the act of influencing or supporting a particular idea or policy. Public Policy
advocacy is geared towards changing particular public policy and involves taking position on
specific policy issues.
Competition advocacy refers to those activities conducted by the competition authority related
to the promotion of a competitive environment for economic activities by means of non-
enforcement mechanisms, mainly through its relationships with other governmental entities
and by increasing public awareness of the benefits of competition. Successful
implementation of competition policy and law largely depends upon the willingness of the people
to accept these. Advocacy plays a vital role in securing the willingness and acceptability of
competition policy and law.
Competition advocacy can also be looked at as law enforcement without intervention. It has
maximum impact with least intervention and an effective way to garner support to attain
competition policy objectives.
CHAPTER VIII FINANCE, ACCOUNTS AND AUDIT
9. FINANCE, ACCOUNTS AND AUDIT

Grants by Central Government [Section 50]
The Central Government may, after due appropriation made by Parliament by law in this behalf,
make to the Commission grants of such sums of money as the Government may think fit for
being utilised for the purposes of this Act.
Constitution of Fund [Section 51]
Competition Fund - Section 51(1)
There shall be constituted a fund to be called the “Competition Fund” and there shall be
credited thereto—
(a) all Government grants received by the Commission;
(b) [Omitted]
(c) the fees received under this Act;
(d) the interest accrued on the amounts referred to in 2[clauses (a) and (c)].
Utilisation of Competition Fund - Section 51(2)
The Fund shall be applied for meeting—

1.88 ECONOMIC LAWS
(a) the salaries and allowances payable to the Chairperson and other Members and
(b) the administrative expenses including the salaries, allowances and pension payable to
the Director General, Additional, Joint, Deputy or Assistant Directors General, the
Registrar and officers and other employees of the Commission;
(c) the other expenses of the Commission in connection with the discharge of its functions
and for the purposes of this Act.
Administration of Competition Fund Section 51(3)
The Fund shall be administered by a committee of such Members of the Commission as may
be determined by the Chairperson.
Spending of Amount to meet Competition Fund’s Objects - Section 51(4)
The committee appointed under sub-section (3) shall spend monies out of the Fund for carrying
out the objects for which the Fund has been constituted.
The Competition Commission of India (Form of Annual Statement of Accounts) Rules, 2009
Incurring of Expenditure by the Commission- Rule 4
Every officer of the Commission incurring or authorizing expenditure from the Competition Fund
should be guided by the Standards of financial propriety and other rules of General Financial
Rules, 2005.
Accounts and Audit [Section 52]

Maintenance of Accounts by the CCI - Section 52 (1)
The Commission shall maintain proper accounts and other relevant records and prepare an
annual statement of accounts in such form as may be prescribed under the Competition
Commission of India (Form of Annual Statement of Accounts) Rules, 2009 by the Central
Government in consultation with the Comptroller and Auditor-General of India.
Forms of Financial Statements – Rule 3
The Commission shall maintain its accounts in the Form of financial statements annexed to these
rules. In maintaining the financial statements, the Commission shall follow the instructions and
accounting principles as are indicated by the Central Government from time to time.
Annual Statement of Accounts – Rule 5
(1) At the end of a period of twelve months ending with 31st March of every year, the
Commission shall prepare the following financial statements along with necessary
schedules, notes on accounts and significant accounting policies in accordance with
the notes and instructions for compilation of financial statements prescribed by

Government of India, Ministry of Finance, Controller-General of Accounts as modified

and annexed to these rules:
(i) Balance Sheet,
(ii) Income and Expenditure Account,
(iii) Receipt and Payment Account.
(2) The balance sheet, income and expenditure account and receipt and payment account
and the schedules referred to in sub-rule (1), shall be approved and adopted by the
Commission or a Committee authorised by the Commission in this behalf and, for
purposes of authentication, be signed by the Chairman and one Member of the
Commission.
(3) The approved accounts of the Commission shall be forwarded by the Commission
to the Comptroller and Auditor-General of India or any other person appointed by
him on his behalf within three months after the expiry of the year for the purposes of
audit.
(4) The annual accounts of the Commission, as certified by the Comptroller and Auditor
General of India or any other person appointed by him in his behalf, together with the
audit report thereon after adoption by the Commission shall be forwarded to the Central
Government for laying before both the Houses of Parliament.
Maintenance of Accounts etc. – Rule 6
The Commission shall preserve the balance sheet, income and expenditure account, schedules
to above statements, and the receipt and payment account, referred to in sub-rule (1) of rule 4 for
a minimum period of ten years, following the year to which they relate.
Audit of Accounts of CCI by CAGI Section 52 (2)

The accounts of the Commission shall be audited by the Comptroller and Auditor-General of
India at such intervals as may be specified by him and any expenditure incurred in connection
with such audit shall be payable by the Commission to the Comptroller and Auditor-General of
India.
Explanation.—For the removal of doubts, it is hereby declared that the orders of the
Commission, being matters appealable to the Appellate Tribunal or the Supreme Court, shall
not be subject to audit under this section.
Authority of Officers appointed by CAGI -Section 52 (3)
The Comptroller and Auditor-General of India and any other person appointed by him in
connection with the audit of the accounts of the Commission shall have the same rights,
privileges and authority in connection with such audit as the Comptroller and Auditor-General
of India generally has, in connection with the audit of the Government accounts and, in

1.90 ECONOMIC LAWS
particular, shall have the right to demand the production of books, accounts, connected
vouchers and other documents and papers and to inspect any of the offices of the Commission.
Audit Report by CAGI to be laid before Parliament - Section 52 (4)
The accounts of the Commission as certified by the Comptroller and Auditor-General of India or
any other person appointed by him in this behalf together with the audit report thereon shall be
forwarded annually to the Central Government and that Government shall cause the same to be
laid before each House of Parliament.
Furnishing of returns, etc., to Central Government [Section 53]
Preparation of Competition Advocacy Material - Section 53(1)
The Commission shall furnish to the Central Government at such time and in such form and
manner as may be prescribed or as the Central Government may direct, such returns and
statements and such particulars in regard to any proposed or existing measures for the:
 promotion of competition advocacy,
 creating awareness and
 imparting training about competition issues,
as the Central Government may, from time to time, require.
Preparation of Annual Return -Section 53 (2)
The Commission shall prepare once in every year, in such form and at such time as may be
prescribed, an annual report giving a true and full account of its activities during the previous
year and copies of the report shall be forwarded to the Central Government.
The Competition Commission of India (Form and Time of Preparation of Annual Report)
Rules, 2008.
Preparation and furnishing of the Annual Report – Rule 3
(1) The Commission shall prepare once in every year an Annual Report in the form
specified in the schedule, giving a true and full account of its activities performed in
the year.
(2) The Commission may also include in the Annual Report any other item, not included
in the form specified in the schedule, with the prior permission of the Central
Government.
(3) The Commission, shall forward the annual report to the Central Government within a
period of one hundred eighty days (within 180 days) immediately following the
close of the year for which it has been prepared.

(4) The matters relating to form and time of preparation of Annual Report, with respect to
which no express provision has been made in these rules, shall be referred in each
case to the Central Government for its decision and the decision of the Central
Government thereon shall be final.
Annual Report to be perused before Parliament - Section 53 (3)

A copy of the report received under sub-section (2) shall be laid, as soon as may be after it is
received, before each House of Parliament.
CHAPTER VIIIA APPELLATE TRIBUNAL
10. APPELLATE TRIBUNAL

It is hereby informed that the Competition Appellate Tribunal (Procedure) Regulations,
2011 has been mistakenly published twice in the Gazette of India, that is, vide the Gazette of
India, weekly, dated 25th June to 1st July 2011, Part III, Section 4, No. 28 under the title “The
Competition Appellate Tribunal (Procedure for Appeals and Applications) Regulations, 2010”
and vide the Gazette of India (Extraordinary), dated 18th July 2011, Part III, Section 4, No.142
under the title “The Competition Appellate Tribunal (Procedure) Regulations, 2011”.
The Regulations published in the Gazette of India (Extraordinary) Part – II- Section 4, No.142,
New Delhi dated 18th July 2011 under the heading “The Competition Appellate Tribunal,
Notification, New Delhi, the 15th July 2011 titled “The Competition Appellate Tribunal
(Procedure) Regulations, 2011” shall be treated as the correct one.
Appellate Tribunal [Section 53A]

The National Company Law Appellate Tribunal (NCLAT) constituted under section 410 of the
Companies Act, 2013 shall, on and from the commencement of Part XIV of Chapter VI of the
Finance Act, 2017, be the Appellate Tribunal for the purposes of this Act and the said Appellate
Tribunal shall—
(a) hear and dispose of appeals against any direction issued or decision made or order
passed by the Commission under
• Section 26(2) & (6): Procedure for inquiry under section 19,
• Section 27: Orders by Commission after inquiry into agreements or abuse of dominant
position,
• Section 28: Division of enterprise enjoying dominant position,
• Section 31: Orders of Commission on certain combinations.

1.92 ECONOMIC LAWS
• Section 32: Acts taking place outside India but having an effect on competition in India
• Section 33: Power to issue interim orders,
• Section 38: Rectification of orders,
• Section 39: Execution of orders of Commission imposing monetary penalty,
• Section 43: Penalty for failure to comply with directions of Commission and Director
General,
• Section 43A: Power to impose penalty for non-furnishing of information on
combinations,
• Section 44: Penalty for making false statement or omission to furnish material
information,
• Section 45: Penalty for offences in relation to furnishing of information; or
• Section 46: Power to impose lesser penalty, of this Act; and
(b) adjudicate on claim for compensation that may arise from the findings of the Commission
or the orders of the Appellate Tribunal in an appeal against any finding of the Commission
or under section 42A or under section 53Q(2) of this Act, and pass orders for the recovery
of compensation under section 53N of this Act.
Note
Prior to 26 th May 2017, Competition Appellate Tribunal (COMPAT) was in place.
Appeal to Appellate Tribunal [Section 53B]
Appeal to NCLAT - Section 53B(1)
The Central Government or the State Government or a local authority or enterprise or any
person, aggrieved by any direction, decision or order referred to in section 53A(a) may prefer
an appeal to the Appellate Tribunal.
Time period to prefer Appeal - Section 53B(2)
Every appeal under sub-section (1) shall be filed within a period of sixty days from the date
on which a copy of the direction or decision or order made by the Commission is received by
the Central Government or the State Government or a local authority or enterprise or any person
referred to in that sub-section and it shall be in such form and be accompanied by such fee as
may be prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period
of sixty days if it is satisfied that there was sufficient cause for not filing it within that period.

Parties to be heard - Section 53B(3)

On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the
parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit,
confirming, modifying or setting aside the direction, decision or order appealed against.
Copy of Order - Section 53B(4)
The Appellate Tribunal shall send a copy of every order made by it to the Commission and the
parties to the appeal.
Disposal of Appeal - Section 53B(5)
The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as
expeditiously as possible and endeavour shall be made by it to dispose of the appeal within
six months from the date of receipt of the appeal.
Appeal to NCLAT
Central or State Government or Local Authority or
Enterprise or Any person
Aggrieved from the direc�on issued or decision made or order passed

by the CCI
Under Sec�on 26(2) &(6), Sec�on 27, Sec�on 28, Sec�on 31, Sec�on 32,
Sec�on 33, Sec�on 38, Sec�on 39, Sec�on 43, Sec�on 43A, Sec�on 44,
Sec�on 45 or Sec�on 46 of the Compe��on Act, 2002
May prefer an appeal to the NCLAT within a period of 60 days from the
date of such direc�on / order made by the CCI.
The NCLAT shall deal with expedi�ously as possible and dispose of the
appeal within 6 months from the date of receipt of the appeal.
Section 53C to 53M: [Omitted]

Awarding compensation [Section 53N]
Claim for Compensation - Section 53N(1)
Without prejudice to any other provisions contained in this Act,
 the Central Government; or
 a State Government; or
 a local authority; or
 any enterprise; or

1.94 ECONOMIC LAWS
 any person
may make an application to the Appellate Tribunal:
 to adjudicate on claim for compensation that may arise from the findings of the Commission;
or
 the orders of the Appellate Tribunal in an appeal against any findings of the Commission; or
 under section 42A (Compensation in case of contravention of orders of Commission); or
 under section 53Q(2): (Contravention of orders of Appellate Tribunal), of the Act, and
to pass an order for the recovery of compensation from any enterprise for any loss or
damage shown to have been suffered, by the Central Government or a State Government or a
local authority or any enterprise or any person as a result of any contravention of the provisions
of Chapter II (P rohibition of Certain Agreements, Abuse of Dominant Position and Regulation of Combinations)
having been committed by enterprise.
Appeal supported with findings of CCI and Fee - Section 53N (2)
Every application made under sub-section (1) shall be accompanied by the findings of the
Commission, if any, and also be accompanied with such fees as may be prescribed.
NCLAT to Pass Orders - Section 53N (3)
The Appellate Tribunal may, after an inquiry made into the allegations mentioned in the
application made under sub-section (1), pass an order directing the enterprise to make payment
to the applicant, of the amount determined by it as realisable from the enterprise as
compensation for the loss or damage caused to the applicant as a result of any contravention
of the provisions of Chapter II having been committed by such enterprise:
Provided that the Appellate Tribunal may obtain the recommendations of the Commission before
passing an order of compensation.
Loss to several persons - Section 53N (4)
Where any loss or damage referred to in sub-section (1) is caused to numerous persons
having the same interest, one or more of such persons may, with the permission of the Appellate
Tribunal, make an application under that sub-section for and on behalf of, or for the benefit of,
the persons so interested, and thereupon, the provisions of rule 8 of Order 1 of the First
Schedule to the Code of Civil Procedure, 1908, shall apply subject to the modification that every
reference therein to a suit or decree shall be construed as a reference to the application before
the Appellate Tribunal and the order of the Appellate Tribunal thereon.
Explanation.—For the removal of doubts, it is hereby declared that—
(a) an application may be made for compensation before the Appellate Tribunal only after
either the Commission or the Appellate Tribunal on appeal under clause (a) of sub-section

(1) of section 53A of the Act, has determined in a proceeding before it that violation of
the provisions of the Act has taken place, or if provisions of section 42A or section 53Q(2)
of the Act are attracted;
(b) enquiry to be conducted under sub-section (3) shall be for the purpose of determining
the eligibility and quantum of compensation due to a person applying for the same, and
not for examining afresh the findings of the Commission or the Appellate Tribunal on
whether any violation of the Act has taken place.
Procedures and powers of Appellate Tribunal [Section 53 O]
NCLAT be guided by the Principles of Natural Justice - Section 53-O(1)
The Appellate Tribunal shall not be bound by the procedure laid down in the Code of Civil
Procedure, 1908, but shall be guided by the principles of natural justice and, subject to the
other provisions of this Act and of any rules made by the Central Government, the Appellate
Tribunal shall have power to regulate its own procedure including the places at which they shall
have their sittings.
NCLAT have powers of Civil Court - Section 53-O (2)
The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act,
the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of
1908) while trying a suit in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872,
requisitioning any public record or document or copy of such record or document from
any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) reviewing its decisions;
(g) dismissing a representation for default or deciding it ex-parte;
(h) setting aside any order of dismissal of any representation for default or any order passed
by it ex- parte;
(i) any other matter which may be prescribed.
Proceedings before NCLTA shall be Deemed Judicial Proceedings - Section 53-O (3)
Every proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings
within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian

1.96 ECONOMIC LAWS
Penal Code, 1860) and the Appellate Tribunal shall be deemed to be a civil court for the
purposes of section 195 and Chapter XXVI of the Code or Criminal Procedure, 1973. (2 of 1974)
Execution of orders of Appellate Tribunal (Section 53P)
Enforcement of Orders of NCLAT - Section 53P(1)
Every order made by the Appellate Tribunal shall be enforced by it in the same manner as if it
were a decree made by a court in a suit pending therein, and it shall be lawful for the Appellate
Tribunal to send, in case of its inability to execute such order, to the court within the local limits
of whose jurisdiction,—
(a) in the case of an order against a company, the registered office of the company is
situated; or
(b) in the case of an order against any other person, place where the person concerned
voluntarily resides or carries on business or personally works for gain, is situated.
Transmitting of Order - Section 53P (2)
Notwithstanding anything contained in sub-section (1), the Appellate Tribunal may transmit
any order made by it to a civil court having local jurisdiction and such civil court shall execute
the order as if it were a decree made by that court.
Contravention of orders of Appellate Tribunal [Section 53Q]
Penalty for Contravention of the order of the NCLAT - Section 53Q(1)
Without prejudice to the provisions of this Act, if any person contravenes, without any
reasonable ground, any order of the Appellate Tribunal, he shall be liable for:
 a penalty of not exceeding rupees one crore; or
 imprisonment for a term up to three years; or
 with both
as the Chief Metropolitan Magistrate, Delhi may deem fit:
Provided that the Chief Metropolitan Magistrate, Delhi shall not take cognizance of any offence
punishable under this sub-section, save on a complaint made by an officer authorised by the
Appellate Tribunal.
Contravention Penalty
If any person, without reasonable Penalty of not exceeding rupees one crore or Imprisonment
cause contravenes any order of for a term which may extend to three years, or with both, as
the Appellate Tribunal the Chief Metropolitan Magistrate, Delhi may deem fit.
Recovery of Compensation from any Enterprise – Section 53Q(2)

Without prejudice to the provisions of this Act, any person may make an application to the
Appellate Tribunal for an order for the recovery of compensation from any enterprise for any

loss or damage shown to have been suffered, by such person as a result of the said enterprise
contravening, without any reasonable ground, any order of the Appellate Tribunal or delaying in
carrying out such orders of the Appellate Tribunal.
 Cause Effect of cause Action
An enterprise if Such violation, Such a person may make an
 Contravening any order of contravention or application to the Appellate
Appellate Tribunal or delaying causes loss Tribunal for an order for the
 Delaying in carrying out or damage to any recovery of compensation
such orders of the Appellate person from such an enterprise.
Tribunal
Section 53R: [Omitted]

Right to legal representation [Section 53S]
Who may appear on behalf of a person -Section 53S(1)
A person preferring an appeal to the Appellate Tribunal may either appear in person or
authorise one or more:
 Chartered Accountants in Practice; or
 Company Secretaries in Practice; or
 Cost Accountants in Practice; or
 Legal Practitioners; or
 Any of its officers
to present his or its case before the Appellate Tribunal.
Who may appear on behalf of Govt / Local Body - Section 53S(2)
The Central Government or a State Government or a local authority or any enterprise preferring
an appeal to the Appellate Tribunal may authorise one or more:
 Chartered Accountants in Practice; or
 Company Secretaries in Practice; or
 Cost Accountants in Practice; or
 Legal Practitioners; or
 Any of its officers
to act as presenting officers and every person so authorised may present the case with respect
to any appeal before the Appellate Tribunal.
Who may appear on behalf of CCI - Section 53S(3)
The Commission may authorise one or more chartered accountants or company secretaries or

1.98 ECONOMIC LAWS
cost accountants or legal practitioners or any of its officers to act as presenting officers and
every person so authorised may present the case with respect to any appeal before the
Appellate Tribunal.
Explanation.—The expressions “chartered accountant” or “company secretary” or “cost
accountant” or “legal practitioner” shall have the meanings respectively assigned to them in the
Explanation to section 35.
Explanation to section 35
(a) “chartered accountant” means a chartered accountant as defined in section 2(1)(b) of
the Chartered Accountants Act, 1949 and who has obtained a certificate of practice
under section 6(1) of that Act;
(b) “company secretary” means a company secretary as defined in section 2(1)(c) of the
Company Secretaries Act, 1980 and who has obtained a certificate of practice under
section 6(1) of that Act;
(c) “cost accountant” means a cost accountant as defined in section 2(1)(b) of the Cost and
Works Accountants Act, 1959 and who has obtained a certificate of practice under of
section 6(1) of that Act;
(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and
includes a pleader in practice.
Appeal to Supreme Court [Section 53T]

The Central Government or any State Government or the Commission or any statutory authority
or any local authority or any enterprise or any person aggrieved by any decision or order of
the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the
date of communication of the decision or order of the Appellate Tribunal to them:
Provided that the Supreme court may, if it is satisfied that the applicant was prevented by
sufficient cause from filing the appeal within the said period, allow it to be filed after the expiry
of the said period of sixty days.
Appeal from CCI NCLAT Supreme Court
Aggrieved from the Orders/ Direc�ons of CCI
May prefer an Appeal to the NCLAT within 60 days

from the date of Orders/ Direc�ons of the CCI
Aggrieved from the Orders of NCLAT
May prefer an Appeal to the Supreme Court within

60 days from the date of Orders of the NCLAT

Power to Punish for contempt [Section 53U]

The Appellate Tribunal shall have, and exercise, the same jurisdiction, powers and authority in
respect of contempt of itself as a High Court has and may exercise and, for this purpose, the
provisions of the Contempt of Courts Act, 1971 shall have effect subject to modifications that,—
(a) the reference therein to a High Court shall be construed as including a reference to the
Appellate Tribunal;
(b) the references to the Advocate-General in section 15 of the said Act shall be construed
as a reference to such Law Officer as the Central Government may, by notification,
specify in this behalf
CHAPTER IX MISCELLANEOUS
11. MISCELLANEOUS
Power to exempt [Section 54]
The Central Government may by notification, exempt any of the following from the application
of this Act, or any provision thereof, and for such period as it may specify in such notification -
Any practice or agreement

Any class of enterprises if such arising out of and in accordance Any enterprise which performs
exemption is necessary in the with any obligation assumed by a sovereign function on behalf
interest of security of the State India under any treaty, of the Central Government or a
or public interest agreement or convention with State Government
any other country or countries
The proviso to this section provides that in case an enterprise is engaged in any activity
relatable to the sovereign functions of Government, the Central Government may grant
exemption only in respect of activity relatable to the sovereign functions.
Power of Central Government to issue directions [Section 55]
CCI to follow the directions on Questions of Policy – Section 55(1)
Without prejudice to the foregoing provisions of this Act, the Commission shall, in exercise of
its powers or the performance of its functions under this Act, be bound by such directions on
questions of policy, other than those relating to technical and administrative matters, as the
Central Government may give in writing to it from time to time:
Provided that the Commission shall, as far as practicable, be given an opportunity to express
its views before any direction is given under this sub-section.

1.100 ECONOMIC LAWS
Question of Policy – Section 55(2)

The decision of the Central Government whether a question is one of policy or not shall be final.
Power of Central Government to supersede Commission [Section 56]
Circumstances in which the Central Government can supersede to CCI - Section 56(1)
If at any time the Central Government is of the opinion—
(a) that on account of circumstances beyond the control of the Commission, it is unable to
discharge the functions or perform the duties imposed on it by or under the provisions of
this Act; or
(b) that the Commission has persistently made default in complying with any direction given
by the Central Government under this Act or in the discharge of the functions or
performance of the duties imposed on it by or under the provisions of this Act and as a
result of such default the financial position of the Commission or the administration of the
Commission has suffered; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification and for reasons to be specified therein, supersede
the Commission for such period, not exceeding six months, as may be specified in the
notification:
Provided that before issuing any such notification, the Central Government shall give a
reasonable opportunity to the Commission to make representations against the proposed
supersession and shall consider representations, if any, of the Commission.
Publication of Notification superseding CCI -Section 56(2)
Upon the publication of a notification under sub-section (1) superseding the Commission,—
(a) the Chairperson and other Members shall, as from the date of supersession, vacate their
offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be
exercised or discharged by or on behalf of the Commission shall, until the Commission
is reconstituted under sub-section (3), be exercised and discharged by the Central
Government or such authority as the Central Government may specify in this behalf;
(c) all properties owned or controlled by the Commission shall, until the Commission is
reconstituted under sub-section (3), vest in the Central Government.
Reconstitution of CCI – Section 56(3)
On or before the expiration of the period of supersession specified in the notification issued
under sub-section (1), the Central Government shall reconstitute the Commission by a
fresh appointment of its Chairperson and other Members and in such case any person who

had vacated his office under sub-section (2)(a) shall not be deemed to be disqualified for re-
appointment.
Perusal of Action Taken Report- Section 56 (4)
The Central Government shall cause a notification issued under sub-section (1) and a full
report of any action taken under this section and the circumstances leading to such action to
be laid before each House of Parliament at the earliest.
Effect of publication of
notification of supersede
All properties owned or

The Chairperson and other All the powers, functions and duties controlled by the
Members shall as from the vested with Commission shall be Commission shall, vested
date of supersession, discharged by Commission until in the central government
vacate their offices as such the Commission is reconstituted until the Commission is
reconstituted
Restriction on disclosure of information [Section 57]

No information relating to any enterprise, being an information which has been obtained by
or on behalf of:
 the Commission; or
 the Appellate Tribunal
for the purposes of this Act, shall, without the previous permission in writing of the
enterprise, be disclosed otherwise than in compliance with or for the purposes of this Act or
any other law for the time being in force.
Chairperson, Members, Director General, Registrar, officers and other
employees, etc. of Commission to be public servants [Section 58]
The Chairperson and other Members and the Director General, Additional, Joint, Deputy or
Assistant Directors General, Secretary, officers, and other employees of the Commission and
the Chairperson, Members, officers and other employees of the Appellate Tribunal, shall be
deemed, while acting or purporting to act in pursuance of any of the provisions of this Act, to
be public servants within the meaning of section 21 of the Indian Penal Code, 1860.
Protection of action taken in good faith [Section 59]
No suit, prosecution or other legal proceedings shall lie against:
 The Central Government; or

1.102 ECONOMIC LAWS
 Commission; or
 Any officer of the Central Government; or
 The Chairperson or any Member or the Director General, Additional, Joint, Deputy or
Assistant Directors General or the Secretary or officers or other employees of the
Commission; or
 the Chairperson, Members, officers and other employees of the Appellate Tribunal for
anything which is in good faith done or intended to be done under this Act or the rules or
regulations made thereunder.
Act to have overriding effect [Section 60]
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force.
Note
Simply stated, the provision of this Act will prevail over the provision of other laws (legislations)
where contradiction exists.
Exclusion of jurisdiction of civil courts [Section 61]
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter
which:
 the Commission; or
 the Appellate Tribunal
is empowered by or under this Act to determine; and
 no injunction shall be granted by any court; or
 other authority in respect of any action taken or to be taken
in pursuance of any power conferred by or under this Act.
Application of other laws not barred [Section 62]
The provisions of this Act shall be in addition to, and not in derogation of the provisions of any
other law for the time being in force.
Power to make rules [Section 63]
Central Government to make Rules - Section 63(1)
The Central Government may, by notification, make rules to carry out the provisions of this Act.
Subject matter of Rules – Section 63(2)
In particular, and without prejudice to the generality of the foregoing power, such rules may

provide for all or any of the following matters, namely:—

(a) the term of the Selection Committee and the manner of selection of panel of names under
section 9(2);
(b) the form and manner in which and the authority before whom the oath of office and of
secrecy shall be made and subscribed to under section 10(3);
(c) Omitted
(d) the salary and the other terms and conditions of service including travelling expenses,
house rent allowance and conveyance facilities, sumptuary allowance and medical
facilities to be provided to the Chairperson and other Members under section 14(1);
(da) the number of Additional, Joint, Deputy or Assistant Directors General or such officers or
other employees in the office of Director General and the manner in which such
Additional, Joint, Deputy or Assistant Directors General or such officers or other
employees may be appointed under section 16(1A);
(e) the salary, allowances and other terms and conditions of service of the Director General,
Additional, Joint, Deputy or Assistant Directors General or such officers or other
employees under section16(3);
(f) the qualifications for appointment of the Director General, Additional, Joint, Deputy or
Assistant Directors General or such officers or other employees under section 16(4);
(g) the salaries and allowances and other terms and conditions of service of the Secretary
and officers and other employees payable, and the number of such officers and
(h) to (j) Omitted
(k) the salaries and allowances and other terms and conditions of service of the Secretary
and officers and other employees payable, and the number of such officers and
(l) the time within which and the form and manner in which the Commission may furnish
returns, statements and such particulars as the Central Government may require under
section 53(1);
(m) the form in which and the time within which the annual report shall be prepared under
section 53(2);
(ma) the form in which an appeal may be filed before the Appellate Tribunal under sub-section
(2) of section 53B and the fees payable in respect of such appeal;
(mb) to (md) Omitted
(me) the fee which shall be accompanied with every application made under section 53N(2);
(mf) the other matters under section 53-O(2)(i) in respect of which the Appellate Tribunal
shall have powers under the Code of Civil Procedure, 1908 while trying a suit;

1.104 ECONOMIC LAWS
(n) the manner in which the monies transferred to the Competition Commission of India or
the Appellate Tribunal shall be dealt with by the Commission or the Appellate Tribunal,
as the case may be, under the fourth proviso to sub-section (2) of section 66;
(o) any other matter which is to be, or may be, prescribed, or in respect of which provision
is to be, or may be, made by rules.
The Central Government have made the following Rules:
 CCI (Selection of Chairperson and other members of the Commission) Rules 2003
 CCI (Oath of Office and of Secrecy ) for Chairperson and Other Members) Rules 2003
 CCI (Salary, allowances and other terms and conditions of service of chairperson and other
members) Rules, 2003
 CCI (Term of the selection committee and the manner of selection of panel of names)
Rules, 2008
 CCI (Return on measures for the promotion of Competition Advocacy, awareness and
training on Competition issues) Rules, 2008
 CCI (Form and time of preparation of annual report) Rules, 2008
 CCI ( Form of Annual Statement of Accounts ) Rules 2009
 CCI (Number of additional, Joint, Deputy or Assistant Director-General, other officers and
employees, their manner of appointment, qualification, salary, allowances and other terms
and conditions of service) Rules, 2009
 CCI ( DG Recruitment Rules 2009
 CCI (Salary, allowances, others terms and conditions of service of the secretary and
officers and other employees of the commission and the number of such officers and other
employees) Rules, 2009
Rules to be laid before the Parliament – Section 63(3)

Every notification issued under section 20(3) and section 54 and every rule made under this Act
by the Central Government shall be laid, as soon as may be after it is made, before each House
of Parliament, while it is in session, for a total period of thirty days which may be comprised in
one session, or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the notification or rule, or both Houses agree that the notification
should not be issued or rule should not be made, the notification or rule shall thereafter have
effect only in such modified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validity of anything previously
done under that notification or rule, as the case may be.

Notes
 Students are advised to refer to the rules from https://www.cci.gov.in/rules
The form and manner in which and the authority before whom the oath of office and of secrecy shall be made and
subscribed to under sub-section (3) of section 10
The salary and the other terms and conditions of service including travelling expenses, house rent allowance and
conveyance facilities, sumptuary allowance and medical facilities to be provided to the Chairperson and other Members
under sub-section (1) of section 14
The number of Additional, Joint, Deputy or Assistant Directors General or such officers or other employees in the office
of Director General and the manner in which such Additional, Joint, Deputy or Assistant Directors General or such
officers or other employees may be appointed under sub-section (1A) of section 16
The salary, allowances and other terms and conditions of service of the Director General, Additional, Joint, Deputy or
Assistant Directors General or such officers or other employees under sub-section (3) of section 16
The qualifications for appointment of the Directors-General, Additional, Joint, Deputy or Assistant Directors-General
or such officers or other employees under sub-section (4) of section 16
The salaries and allowances and other terms and conditions of service of the Secretary and officers and other
employees payable, and the number of such officers and employees under sub-section (2) of section 17
The form in which the annual statement of accounts shall be prepared under sub-section (1) of section 52
The time within which and the form and manner in which the Commission may furnish returns, statements and such
particulars as the Central Government may require under sub-section (1) of section 53
The form in which and the time within which the annual report shall be prepared under sub-section (2) of section 53
The form in which an appeal may be filed before the Appellate Tribunal under sub-section (2) of section 53B and the fees
payable in respect of such appeal
The term of the Selection Committee and the manner of selection of panel of names under sub-section (2) of section 53E
The salaries and allowances and other terms and conditions of service of the Chairperson and other Members of the
Appellate Tribunal under sub-section (1) of section 53G
The salaries and allowances and other conditions of service of the officers and other employees of the Appellate Tribunal
under sub-section (3) of section 53M
The manner in which the monies transferred to the Competition Commission of India or the Appellate Tribunal shall
be dealt with by the Commission or the Appellate Tribunal, as the case may be, under the fourth proviso to sub-section
(2) of section 66
Any other matter which is to be, or may be, prescribed, or in respect of which provision is to be, or may be, made by
rules

1.106 ECONOMIC LAWS
Power to make regulations [Section 64]

CCI may make Regulations -Section 64(1)
The Commission may, by notification, make regulations consistent with this Act and the rules
made thereunder to carry out the purposes of this Act.
Subject matter of Regulations – Section 64(2)
In particular, and without prejudice to the generality of the foregoing provisions, such regulations
may provide for all or any of the following matters, namely:—
(a) the cost of production to be determined under clause (b) of the Explanation to section 4;
(b) the form of notice as may be specified and the fee which may be determined under section
6(2);
(c) the form in which details of the acquisition shall be filed under section 6(5);
(d) the procedures to be followed for engaging the experts and professionals under section
17(3);
(e) the fee which may be determined under section 19(1)(a);
(f) the rules of procedure in regard to the transaction of business at the meetings of the
(g) Commission under section 22(1);
(h) the manner in which penalty shall be recovered under section 39(1);
(i) any other matter in respect of which provision is to be, or may be, made by regulations.
Regulations to be laid before the Parliament – Section 64(3)
Every regulation made under this Act shall be laid, as soon as may be after it is made, before
each House of Parliament, while it is in session, for a total period of thirty days which may
be comprised in one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the regulation, or both Houses agree that the
regulation should not be made, the regulation shall thereafter have effect only in such modified
form or be of no effect, as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously done under that
regulation.
The CCI have made the following Regulations:
 CCI (Procedure of Engagement of Experts and Professionals) Regulations, 2009
 CCI (General) Regulations, 2009

 CCI (Meeting for transaction of Business) Regulations, 2009

 CCI (Lesser Penalty) Regulations, 2009
 CCI (Determination of Cost of Production) Regulations, 2009
 CCI (Manner of Recovery of Monetary Penalty) Regulations, 2011

 CCI (Procedure in regard to the transaction of Business relating to Combinations) Regulations,
2011
 Students are advised to refer the regulations from https://www.cci.gov.in/Regulation
The cost of The form of notice The form in which The procedures to
production to be as may be specified details of the be followed for
determined under and the fee which acquisition shall be engaging the experts
clause (b) of the may be determined filed under sub- and professionals
Explanation to under sub-section section (5) of under sub-section
section 4 (2) of section 6 Section 6 (3) of section 17
The rules of
procedure in regard
The fee which may The manner in which Any other matter in
to the transaction of
be determined under penalty shall be respect of which
business at the
clause (a) of sub- recovered under provision is to be, or
meetings of the
section (1) of section sub-section (1) of may be, made by
Commission under
19 section 39 regulations.
sub-section (1) of
section 22
Power to remove difficulties [Section 65]

Power of Central Government to Remove Difficulties (RoD) - Section 65(1)
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may,
by order published in the Official Gazette, make such provisions, not inconsistent with the
provisions of this Act as may appear to it to be necessary for removing the difficulty:
Provided that no such order shall be made under this section after the expiry of a period
of two years from the commencement of this Act.
RoD to be laid before the Parliament - Section 65(2)
Every order made under this section shall be laid, as soon as may be after it is made, before
each House of Parliament.
Note
In terms of proviso to sub-section (1) this section is not relevant now, since the RoD cannot be
issued after the expiry of a period of two years from the commencement of this Act.

1.108 ECONOMIC LAWS
Repeal and saving [Section 66]

Repeal of MRTC Act & MRTP Commission - Section 66(1)
The Monopolies and Restrictive Trade Practices Act, 1969 is hereby repealed and the
Monopolies and Restrictive Trade Practices Commission established under section 5(1) of the
said Act (hereafter referred to as the repealed Act) shall stand dissolved.
No Effect of Certain Provisions by Repeal of MRTP - Section 66(1A)
The repeal of the Monopolies and Restrictive Trade Practices Act, 1969 shall, however, not
affect,—
(a) the previous operation of the Act so repealed or anything duly done or suffered
thereunder; or
(b) any right, privilege, obligation or liability acquired, accrued or incurred under the Act so
repealed; or
(c) any penalty, confiscation or punishment incurred in respect of any contravention under
the Act so repealed; or
(d) any proceeding or remedy in respect of any such right, privilege, obligation, liability,
penalty, confiscation or punishment as aforesaid, and any such proceeding or remedy
may be instituted, continued or enforced, and any such penalty, confiscation or
punishment may be imposed or made as if that Act had not been repealed.
Employees MRTP Commission - Section 66(2)
On the dissolution of the Monopolies and Restrictive Trade Practices Commission, the person
appointed as the Chairman of the Monopolies and Restrictive Trade Practices Commission and
every other person appointed as Member and Director General of Investigation and Registration,
Additional, Joint, Deputy, or Assistant Directors General of Investigation and Registration and
any officer and other employee of that Commission and holding office as such immediately
before such dissolution shall vacate their respective offices and such Chairman and other
Members shall be entitled to claim compensation not exceeding three months’ pay and
allowances for the premature termination of term of their office or of any contract of service:
Employees on Deputation under MRTP Commission
Provided that the Director General of Investigation and Registration, Additional, Joint, Deputy
or Assistant Directors General of Investigation and Registration or any officer or other employee
who has been, immediately before the dissolution of the Monopolies and Restrictive Trade
Practices Commission appointed on deputation basis to the Monopolies and Restrictive
Trade Practices Commission, shall, on such dissolution, stand reverted to his parent cadre,
Ministry or Department, as the case may be:

Certain Categories of Employees of MRTC Commission shall become employees of

CCI/ Appellate Tribunal
Provided further that the Director General of Investigation and Registration, Additional, Joint,
Deputy or Assistant Directors General of Investigation and Registration or any officer or other
employee who has been, immediately before the dissolution of the Monopolies and
Restrictive Trade Practices Commission employed on regular basis by the Monopolies
and Restrictive Trade Practices Commission, shall become, on and from such dissolution,
the officer and employee, respectively, of the Competition Commission of India or the
Appellate Tribunal, in such manner as may be specified by the Central Government, with the
same rights and privileges as to pension, gratuity and other like matters as would have been
admissible to him if the rights in relation to such Monopolies and Restrictive Trade Practices
Commission had not been transferred to, and vested in, the Competition Commission of India
or the Appellate Tribunal, as the case may be, and shall continue to do so unless and until his
employment in the Competition Commission of India or the Appellate Tribunal, as the case may
be, is duly terminated or until his remuneration, terms and conditions of employment are duly
altered by the Competition Commission of India or the Appellate Tribunal, as the case may be.
No Compensation on transfer of services
Provided also that notwithstanding anything contained in the Industrial Disputes Act, 1947, or
in any other law for the time being in force, the transfer of the services of any Director General
of Investigation and Registration, Additional, Joint, Deputy or Assistant Directors General of
Investigation and Registration or any officer or other employee, employed in the Monopolies
and Restrictive Trade Practices Commission, to the Competition Commission of India or the
Appellate Tribunal, as the case may be, shall not entitle such Director General of Investigation
and Registration, Additional, Joint, Deputy or Assistant Directors General of Investigation and
Registration or any officer or other employee any compensation under this Act or any other
law for the time being in force and no such claim shall be entertained by any court, tribunal or
other authority.
Terminal Benefits of the Certain Employees of MRTP Commission shall vest with CCI
Provided also that where the Monopolies and Restrictive Trade Practices Commission has
established a provident fund, superannuation, welfare or other fund for the benefit of the
Director General of Investigation and Registration, Additional, Joint, Deputy or Assistant
Directors General of Investigation and Registration or the officers and other employees
employed in the Monopolies and Restrictive Trade Practices Commission, the monies relatable
to the officers and other employees whose services have been transferred by or under this Act
to the Competition Commission of India or the Appellate Tribunal, as the case may be, shall,
out of the monies standing, on the dissolution of the Monopolies and Restrictive Trade Practices
Commission to the credit of such provident fund, superannuation, welfare or other fund,
stand transferred to, and vest in, the Competition Commission of India or the Appellate

1.110 ECONOMIC LAWS
Tribunal, as the case may be, and such monies which stand so transferred shall be dealt with
by the said Commission or the Tribunal, as the case may be, in such manner as may be
prescribed.
Transfer of case to Appellate Tribunal - Section 66(3)
All cases pertaining to monopolistic trade practices or restrictive trade practices pending
(including such cases, in which any unfair trade practice has also been alleged), before the
Monopolies and Restrictive Trade Practices Commission shall, on the commencement of the
Competition Amendment Act, 2009 stand transferred to the Appellate Tribunal and shall
be adjudicated by the Appellate Tribunal in accordance with the provisions of the repealed Act
as if that Act had not been repealed.
Explanation.—For the removal of doubts, it is hereby declared that all cases referred to in this
sub-section, sub-section (4) and sub-section (5) shall be deemed to include all applications
made for the losses or damages under section 12B of the Monopolies and Restrictive Trade
Practices Act,1969 (54 of 1969) as it stood before its repeal.
Transfer of Certain cases to National Commission - Section 66(4)
Subject to the provisions of sub-section (3), all cases pertaining to unfair trade practices other
than those referred to in section 36A(1)(x) of the Monopolies and Restrictive Trade Practices
Act, 1969 and pending before the Monopolies and Restrictive Trade Practices Commission
immediately before the commencement of the Competition (Amendment) Act, 2009, shall, on
such commencement, stand transferred to the National Commission constituted under the
Consumer Protection Act, 1986 and the National Commission shall dispose of such cases as if
they were cases filed under that Act:
Provided that the National Commission may, if it considers appropriate, transfer any case
transferred to it under this sub-section, to the concerned State Commission established under
section 9 of the Consumer Protection Act, 1986 (68 of 1986) and that State Commission shall
dispose of such case as if it was filed under that Act:
Provided further that all the cases relating to the unfair trade practices pending, before the
National Commission under this sub-section, on or before the date on which the Competition
(Amendment) Bill, 2009 receives the assent of the President, shall, on and from that date, stand
transferred to the Appellate Tribunal and be adjudicated by the Appellate Tribunal in accordance
with the provisions of the repealed Act as if that Act had not been repealed.
Transfer of case to Appellate Tribunal - Section 66(5)
All cases pertaining to unfair trade practices referred to in section 36A(1)(x) of the Monopolies
and Restrictive Trade Practices Act, 1969 and pending before the Monopolies and Restrictive
Trade Practices Commission shall, on the commencement of the Competition (Amendment) Act,
2009, stand transferred to the Appellate Tribunal and the Appellate Tribunal shall dispose of
such cases as if they were cases filed under that Act.

Transfer of Investigations cases pending with DG to CCI - Section 66(6)

All investigations or proceedings, other than those relating to unfair trade practices, pending
before the Director General of Investigation and Registration on or before the commencement
of this Act shall, on such commencement, stand transferred to the Competition Commission of
India, and the Competition Commission of India may conduct or order for conduct of such
investigation or proceedings in the manner as it deems fit.
Transfer of Certain Investigations cases pending with DG to CCI - Section 66(7)
All investigations or proceedings, relating to unfair trade practices, other than those referred
to in section 36A(1)(x) of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of
1969) and pending before the Director General of Investigation and Registration on or before
the commencement of this Act shall, on such commencement, stand transferred to the National
Commission constituted under the Consumer Protection Act, 1986 and the National
Commission may conduct or order for conduct of such investigation or proceedings in the
manner as it deems fit:
Provided that all investigations or proceedings, relating to unfair trade practices pending before
the National Commission, on or before the date on which the Competition (Amendment) Bill,
2009 receives the assent of the President shall, on and from that date, stand transferred to the
Appellate Tribunal and the Appellate Tribunal may conduct or order for conduct of such
investigation or proceedings in the manner as it deems fit.
Transfer of Cases to CCI - Section 66(8)
All investigations or proceedings relating to unfair trade practices referred to in section
36A(1)(x) of the Monopolies and Restrictive Trade Practices Act, 1969, and pending before the
Director General of Investigation and Registration on or before the commencement of this Act
shall, on such commencement, stand transferred to the Competition Commission of India and
the Competition Commission of India may conduct or order for conduct of such investigation in
the manner as it deems fit.
Abatement of case – Section 66(9)
Save as otherwise provided under sub-sections (3) to (8), all cases or proceedings pending
before the Monopolies and Restrictive Trade Practices Commission shall abate.
Section 66(10)
The mention of the particular matters referred to in sub-sections (3) to (8) shall not be held to
prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with
regard to the effect of repeal.

1.112 ECONOMIC LAWS
Note
 Any such proceeding or remedy maybe instituted, continued, or enforced, and any such
penalty, confiscation or punishment may be imposed or made as if that Act had not been
repealed.
 The Monopolies and Restrictive Trade Practices Commission shall stand dissolved. On
the dissolution, the person appointed as the Chairman of Commission and every other
person (as Member and Director General of Investigation and Registration, Additional,
Joint, Deputy, or Assistant Directors General of Investigation and Registration and any
officer and other employee of that Commission) shall vacate their offices and shall be
entitled to claim compensation not exceeding three months' pay and allowances.
Whereas such every other person
Appointed to Commission Rights and entitlement after dissolution
On Deputation basis Stand reverted to his parent cadre, Ministry or
Department, as the case may be
On regular basis Shall become the officer and employee, respectively,
of the Competition Commission of India or the
Appellate Tribunal in such manner as may be specified
by the Central Government, with the same rights and
privileges
Notes
 Such every other person who transferred to Competition Commission of India or the
Appellate Tribunal shall not make any claim and no such claim shall be entertained by
any court, tribunal or other authority for time being in force (including the Industrial
Disputes Act, 1947 (14 of 1947)
 Established provident fund, superannuation, welfare or other funds for the benefit of such
every other person to extent relatable to those who transferred to Competition Commission
of India or the Appellate Tribunal stand also transferred and shall be dealt with by the
Competition Commission of India or the Tribunal, as the case may be, in such manner as
may be prescribed.
Description Transferred from Transferred to When

All cases pertaining to Monopolies and Appellate Tribunal On the
monopolistic trade Restrictive Trade Note – Such cases commencement
practices or restrictive Practices shall adjudicate in of the
trade practices (including Commission accordance with Competition
such cases, in which any the provisions of (Amendment)
unfair trade practice has the repealed Act Act, 2009
also been alleged)

All cases pertaining to Monopolies and National On the

unfair trade practices Restrictive Trade Commission* commencement
other than those referred Practices constituted under of the
to in clause (x) of sub- Commission the Consumer Competition
section (1) of section 36A Protection Act, (Amendment)
of the Monopolies and 1986 Act, 2009
Restrictive Trade
Practices Act, 1969
All cases pertaining to Monopolies and Appellate Tribunal On the
unfair trade practices Restrictive Trade Note – Such cases commencement
referred to in clause (x) Practices shall adjudicate in of the
of sub-section (1) of Commission accordance with Competition
section 36A of the the provisions of (Amendment)
Monopolies and this Act Act, 2009
Restrictive Trade
Practices Act, 1969
All investigations or Director General Competition On the
proceedings other than of Investigation Commission of commencement
those relating to unfair and Registration India of this Act
trade practice but
including where it relates
to unfair trade practices
referred to in clause (x)
of sub-section (1) of
section 36A of the
Monopolies and
Restrictive Trade
Practices Act, 1969
All investigations or Director General National On the
proceedings relating to of Investigation Commission* commencement
unfair trade practice and Registration constituted under of this Act
other than those referred the Consumer
to in clause (x) of sub- Protection Act,
section (1) of section 36A 1986
of the Monopolies and
Restrictive Trade
Practices Act, 1969

1.114 ECONOMIC LAWS
Notes
 National Commission may, if it considers appropriate, transfer any case transferred to it
under this sub-section, to the concerned State Commission established under section 9
of the Consumer Protection Act, 1986.
 All cases or proceedings pending before the Monopolies and Restrictive Trade Practices
Commission shall abate.
 Cases here deemed to include all applications made for the losses or damages under
section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 as it stood
before its repeal.
 All the cases and investigations or proceedings relating to the unfair trade practices
pending before the National Commission, on or before the date on which the Competition
(Amendment) Bill, 2009 receives the assent of the President, shall, on and from that date,
stand transferred to the Appellate Tribunal. Cases shall be adjudicated in accordance
with the provisions of the repealed Act whereas Appellate Tribunal may conduct or order
for the conduct of such investigation or proceedings in the manner as it deems fit.
 The transfer of cases and investigations or proceedings under this section shall not be
held to prejudice or affect the general application of section 6 of the General Clauses
Act, 1897 with regard to the effect of repeal.
Students may note that though they are not expected to know the details of all the
Rules/ Regulations/Clarifications/Notifications issued by various authorities from
time to time. However, they should familiarise with such Notifications and other
significant rules/regulations having a bearing on such provisions of the Act and
which are covered as part of the Study Material published from time to time.
Students may refer the detailed regulations which are covered in the study material by
visiting https://www.cci.gov.in/Regulation

Competition Act, 2002: After Reading This Chapter, You Will Be Able To Understand

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Competition Act, 2002: After Reading This Chapter, You Will Be Able To Understand

Uploaded by

Copyright:

Available Formats

1

COMPETITION ACT, 2002

After reading this chapter, you will be able to understand:

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

Role of Competition in Economic Development

© The Institute of Chartered Accountants of India

Evolution of Competition Law in India

© The Institute of Chartered Accountants of India

The Parliamentary Standing Committee on Home Affairs

© The Institute of Chartered Accountants of India

Arrangements of Chapters/Sections under

Chapter VII Chapter VIII Chapter VIIIA

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

(ii) Control over management or control over assets of any enterprise.

© The Institute of Chartered Accountants of India

Cartel [Section 2(c)]

2 Speech by Mario Monti on 11 September 2000, available at www.ec.europa.eu/comm/competition/ speeches

© The Institute of Chartered Accountants of India

sufficient evidence to mount a viable case against sometimes uncooperative defendants. c) In

© The Institute of Chartered Accountants of India

can isolate the cheating member.

© The Institute of Chartered Accountants of India

Mind it, the purpose is important; not

© The Institute of Chartered Accountants of India

a. The owners of oranges’ orchards from Nagpur, have

Chairperson [Section 2(d)]

Commission [Section 2(e)]

© The Institute of Chartered Accountants of India

Consumer [Section 2(f)]

© The Institute of Chartered Accountants of India

Director General [Section 2(g)]

Enterprise [Section 2(h)]

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

Member [Section 2(j)]

Notification [Section 2(k)]

© The Institute of Chartered Accountants of India

Practice [Section 2(m)]

Prescribed [Section 2(n)]

Price [Section 2(o)]

Public financial institution [Section 2(p)]

© The Institute of Chartered Accountants of India

 Institutions notified by the Central Government under sub-section (2) of section 4A

Regulations [Section 2(q)]

Relevant Market [Section 2(r)]

Relevant Geographic Market [Section 2(s)]

© The Institute of Chartered Accountants of India

Relevant Product Market [Section 2(t)]

Service [Section 2(u)]

© The Institute of Chartered Accountants of India

Shares [Section 2(v)]

Statutory Authority [Section 2(w)]

Trade [Section 2(x)]

Turnover [Section 2(y)]

© The Institute of Chartered Accountants of India

Words and Expressions [Section 2(z)]

CHAPTER II: PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF

3. PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF

© The Institute of Chartered Accountants of India

Anti-Competitive Agreements are Void Agreements – Section 3(2)