New Delhi: India’s competition watchdog has cleared stricter penalty recovery rules to prevent erring parties from delaying payments by filing frivolous appeals, according to two people aware of the development.
The Competition Commission of India (CCI) has approved an overhaul of its norms to allow issuing a demand notice to the erring enterprise to recover the penalty alongside the adjudication order holding them guilty, the people said on the condition of anonymity as details are not public yet.
This is a departure from the current practice of issuing demand notice after the period specified in the CCI order to pay the penalty ends.
That gave the erring parties a widow to side-step the CCI orders by resorting to delaying tactics, the people said.
CCI chairperson Ravneet Kaur and three other members have approved the new regulations, said the people. These—likely to be called CCI (Manner of Recovery of Monetary Penalty) Regulations, 2025—will be notified soon, they said.
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Queries emailed to the CCI on Friday seeking comments for the story remained unanswered at the time of publishing.
In FY22, the CCI realized about 13% of the ₹1,336 crore penalty it imposed, followed by half of the ₹2,672 crore in FY23 and 84% of the ₹2.5 crore it imposed in FY24, according to its annual report for 2023-24.
Challenges under existing rules
The CCI has noticed that the existing rules allow the accused parties to move the Competition Appellate Tribunal and the courts to secure a stay on the penalty. That prevents the watchdog from issuing a demand notice, which if not complied with, gives rise to interest liability on the penalty.
The interest liability on the outstanding penalty will now kick in immediately after the time given in the demand notice to pay up ends, said the first of the two people quoted above.
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“Businesses tend to mount legal challenges to penalty and it sometimes takes years to serve the demand notice. The proposed regulations seek to address this as it would warrant businesses to carefully evaluate their case and the potential for interest on penalty kicking in early,” said this person.
In a case against battery maker Geep Industries (India) Pvt. Ltd., the CCI sought to levy interest on penalty from 2018 onwards after the National Company Law Appellate Tribunal (NCALT) upheld the competition watchdog’s findings in the case in 2023. But the Delhi High Court in 2024 disallowed that, citing the existing penalty regulations.
A regulator’s effectiveness is tested based on whether it can recover penalty and enforce adjudicatory orders, said Amol Kulkarni, director of research at CUTS International, a non-profit working on public interest issues.
Even in the Geep Industries case, he said issuing a demand notice alongside the adjudicatory order “may not be of great help” as it could also be challenged in appellate forums. “Stay orders on penalty imposition secured by parties could also extend to demand notices.”
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He said the commitment and settlement mechanism could be seen as a solution for an early market correction and imposing a financial cost on the erring company through a settlement.
The new rules introduced last year allow companies to either commit to changing their market behaviour before an investigation is complete or settle the case by paying an amount before CCI issues its adjudication order.
