COMPETITION COMMISSION OF INDIA (MANNER OF RECOVERY OF PENALTY) REGULATIONS, 2025

[DR.MARIAPPAN GOVINDARAJAN]

Penalties

Chapter VI of the Act provides penalties for contravention of the provisions of the Act as detailed below-

• Section 42 – Contravention of orders of Commission under Sections 27, 28, 31, 32, 33, 42A and 43A – penalty Rs.1 lakh for each day during the period of noncompliance subject to a maximum of Rs.10 crore.  If any person fails to pay the said penalty, he is to pay further penalty of subject to a maximum of Rs.25 crore.
• Section 43 – Penalty for failure to comply with the directions of Commission and Director General – penalty – Rs.1 lakh for each day subject to a maximum of Rs.1 crore.
• Section 43A – Penalty for non-furnishing of information on combinations – 1%  of the total turnover or assets or the value of transaction referred to in section 5(d), whichever is higher, of such a combination.
• Section 44 – Penalty for making false statement or omission to furnish material information – not less than Rs.50 lakhs but may extend to Rs.1 crore.
• Section 45 – Penalty for contraventions in relation to furnishing of information – up to Rs.1 crore.
• Section 48 – Contravention by companies – person responsible for the affairs of the company – up to 10% of the average income earned for the preceding 3 years.

Execution of orders of Commission

Section 39 of the Act provides the procedure for the recovery of the penalty imposed on any person.  For this purpose, the Commission made the ‘Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011 which came into effect from 08.02.2011.  These regulations were amended during 2014 and 2021.  

New Regulations

Based on the experience gained during implementation of these regulations over the years and to streamline the process of recovery, review of the Recovery Regulations was done and based upon such review, certain amendments were proposed to the same. The Commission proposed to bring a regulation in supersession of the 2011 regulations.  The Commission prepared draft regulation and put for the suggestions of the stakeholders.  On receipt of the suggestions/comments from the stakeholders the Competition Commission of India made the ‘Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2025 and notified the same vide Notification No. F.No. CCI/Reg.R-R/2024-25, dated 25.02.2025 which came into effect from 25.02.2025.

Recovery procedure

The recovery procedure is as detailed below-

• Issuance of demand notice;
• Issuance of recovery certificate;
• Recovery.

Issuance of demand notice

On receipt of the order of the Commission imposing penalty on any person or enterprise, the Secretary shall issue a demand notice in Form I to the person concerned along with a copy of the order of Commission imposing penalty to the last address known to the Commission.  A copy of the said notice shall be sent to the Recovery Officer.  The demand notice directs the recipient to pay the penalty within 60 days from the date of receipt of the notice. 

Payment

On receipt of the demand notice, the person concerned shall pay the penalty through Challan in Form II in favour of the Pay & Accounts Officer (PAO), Ministry of Corporate Affairs, Head No. 1475.00.105.05, [Sub-Head – 00] – ‘Penalties imposed by Competition Commission of India’.  On payment of the penalty the concerned person shall submit the copy of the challan to the Recovery Officer, who in turn, shall make entry in the ‘Penalty Recovery Register’ within 7 days from the date of receipt of challan. 

Extension of time

On an application made by the enterprise or the person concerned, before the expiry of the due date of the payment specified in the demand notice, the Commission may extend the time for payment subject to such conditions as the Commission may think fit to impose in the circumstances of the case.  If the enterprise or the person concerned fails to make the payment within the time so extended, the enterprise or the person concerned shall be deemed to be an enterprise in default or a person in default, as the case may be.

Grant of instalments

On an application made by the enterprise or the person concerned, before the expiry of the due date of the payment specified in the demand notice, the Commission may allow payment by instalments, subject to such conditions as the Commission may think fit to impose in the circumstances of the case.  If the the enterprise or the person concerned commits default in paying any one of the instalments within the time fixed, the enterprise or the person concerned shall be deemed to be enterprise in default or a person in default, as the case may be, as to the whole of the penalty then outstanding, and the other instalment or instalments shall also be deemed to have been due on the same date as the instalment actually in default.

Interest on penalty

If the penalty is not paid within the time specified by any person or enterprise, then they shall be liable to pay simple interest at 1%, on the amount outstanding, for every month or part of a month comprised in the period commencing from the day immediately after the expiry of the period mentioned in demand notice and ending with the day on which the penalty is paid.

The Commission may reduce or waive the amount of interest payable by the enterprise or the person concerned if it is satisfied that default in the payment of such amount was due to circumstances beyond the control of the enterprise or the person concerned, as the case may be.

Where as a result of an order of the National Company Law Appellate Tribunal or a High Court or the Supreme Court of India, as the case may be, the amount of penalty payable has been reduced, the interest shall be reduced accordingly.

Issuance of Recovery Certificate

If the penalty is not paid within the time stipulated or within the extended time,  by any person or enterprise,  the Commission shall issue recovery certificate through the Secretary to be executed by the recovery officer, as set out in Form III mentioning the amount of penalty and interest thereon along with modes of recovery therein, giving 15 days’ time to deposit the penalty.

Recovery Officer

The Commission may authorise any of its officers to function as the recovery officer for the purposes of these regulations, to recover the penalties.  The recovery officer shall ensure that the demand notice is duly served on the enterprise or the person concerned.  If the demand notice is not served the Recovery Officer shall inform the same to the Secretary.

The recovery officer shall bring the details of the payment of penalty to the notice of the Secretary.  In the case of default by the enterprise or the person concerned, the recovery officer shall intimate to the Secretary and ensure thereafter issuance of recovery certificate to such an enterprise in default or a person in default.  The recovery officer shall, after expiry of the period stipulated in the recovery certificate, proceed in accordance with the modes specified under these regulations for recovery of the penalty imposed.

The recovery officer shall maintain the penalty recovery register as set out in Form IV and update the same regularly. 

Modes of recovery

The Recovery Officer may require the enterprise or the person concerned, after the expiry of the period mentioned in the Recovery certificate to pay the penalty.  The Recovery Officer may require the third person who holds money on behalf of the enterprise or the legal heirs of the person concerned to pay the penalty amount.  If they fail to pay the same, they shall also be treated as person in default.  The liability of a legal heir under this regulation shall be limited to the extent to which the estate of the deceased bestowed upon such legal heir, is capable of meeting the liability. 

Every enterprise or person to whom a recovery certificate is issued shall be bound to comply with such certificate.  The recovery officer may apply, for payment of the amount sufficient to discharge the penalty due to enterprise in default or person in default, to the court in whose custody there is money belonging to such enterprise or person.  If any enterprise or any person, default in payment, creates charge on the property then such transaction shall not be valid. 

The recovery officer may also simultaneously proceed to recover the amount of penalty through the modes mentioned below-

• by attachment and sale of movable property of the enterprise or the person concerned; and
• by attachment and sale of immovable property of the enterprise or the person concerned.

The Commission shall make reference to the concerned Income-tax authority as set out in Form V for recovery of the penalty as ‘tax due’ under the Income-tax Act, 1961.  Where a reference is made to the Income Tax Department the recovery proceedings initiated by the Commission shall stand sine die deferred.  Whenever intimation has been received from the Income Tax Department about the recovery of the penalty then the Recovery Officer shall record the same in the concerned Register within 5 days from the date of receipt of the intimation.

Monitoring

The Secretary shall review and obtain a progress report, at least once in three months, from  the Tax Recovery Officer, of the progress made in the recovery of demands referred to the Tax Recovery Officer and shall place the progress of recovery of penalty before the Commission every month.

Refund of excess penalty

Where by any order of the National Company Law Appellate Tribunal or a High Court or the Supreme Court of India, as the case may be, it has been held that an enterprise or a person is not liable to pay any penalty or is liable to pay a penalty less than the amount mentioned in any order or notice of the Commission, the demand notice or the recovery certificate shall be withdrawn or modified, as the case may be, and the amount of any excess penalty, if paid, shall be refunded by means of a refund order duly signed by the Recovery Officer.