RIGHT TO INFORMATION ACT, 2004

RIGHT TO INFORMATION ACT, 2004
A Bill to operationalise the right to information by setting out the practical regime for people
to secure access to information under the control of public authorities, consistent with public
interest, in order to promote openness, transparency and accountability and in relation to
matters connected therewith or incidental thereto.
1. INTRODUCTION
(1) This Act may be called the Right to Information Act 2004
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force within 120 days of it being enacted.
(4) Where State legislation exists dealing with the right to access information; a person will
have the right to seek information under the State law as well as under this Act, if the
information pertains to a subject under the State List in Schedule 7 of the Constitution
of India.
(5) Objectives of the Act:
The objectives of the Act are to—
(i) Give effect to the Fundamental Right to Information, which will contribute to
strengthening democracy, improving governance, increasing public participation,
promoting transparency and accountability and reducing corruption
(ii) Establish voluntary and mandatory mechanisms or procedures to give effect to
right to information in a manner which enables persons to obtain access to records
of public authorities in a swift, effective, inexpensive and reasonable manner.
(iii) Promote transparency, accountability and effective governance of all public authorities
by, including but not limited to, empowering and educating all persons to:
- Understand their rights in terms of this Act in order to exercise their rights in relation to
public authorities;
- Understand the functions and operation of public authorities; and effectively participating
in decision making by public authorities that affects their rights.
2. In This Act, unless the context otherwise requires:
(a) “Appropriate Government” means in relation to a public authority established,
constituted, owned, substantially financed by funds provided directly of indirectly
or controlled-
(i) By the Union Government, the Union Government;
(ii) By the State Government, The State Government;
(iii) By the Union territory, The Union Government;
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(b) “competent authority” means-
(i) The Speaker in the case of the House of the People or the Legislative Assembly and
the Chairman in the case of the Council of States or the Legislative Council:
(ii) The Chief Justice of India in the case of the Supreme Court;
(iii) The Chief Justice of the High Court in the case of a High Court;
(iv) The President or the Governor, as the case may be, in case of other authorities
created by or under the Constitution;
(v) The administrator appointed under article 239 of the Constitution,
(c) “Chief Information Commissioner” and “Information Commissioner” and “State
Information Commissioner” means the Authorities so appointed under this Act;
(d) “right to information” means the right to access information held by, legally accessible
by or under the control of any Public Authority and includes:
(i) Inspection of works, documents, records;
(ii) Taking notes and extracts and obtaining certified copies of documents or records;
(iii) Taking certified samples of material;
(iv) Obtaining information in the form of diskettes, floppies, tapes, video cassettes or in
any other electronic mode or through printouts where such information is stored in
a computer or in any other device;
(e) “information” means any material in any form, including records, documents, file
notings, memos, emails, opinions, advices, press releases, circulars, orders, logbooks,
contracts, reports, papers, samples, models, data, material held in any electronic
form and any information relating to a private body which can be accessed
by a Public Authority under any law;
(f) “prescribed” means prescribed by rules made under this Act by the appropriate
Government or the Competent Authority, as the case may be;
(g) “public authority” means any authority or body established or constituted,-
(i) By or under the Constitution;
(ii) By any law made by the appropriate Government, and includes any other body
owned or controlled by the appropriate Government and includes panchayati raj
institutions and other community bodies, like district councils, and village or locality
durbars, performing public functions in areas notified under schedule 5 and 6
of the constitution.
(h) “Public Information Officer” means the Public Information Officer appointed under
sub-section (I and/or 1a of section 5;
(i) “record” includesCOMMERCIAL
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(i) any document, manuscript and file;
(ii) any microfilm, microfiche and facsimile copy of a document;
(iii) any reproduction of image or images embodied in such microfilm (whether enlarged
or not): and
(iv) any other material produced by a computer or by any other device.
(j) “third party” means a person other than the person making a request for information
and includes a public authority.
FREEDOM OF INFORMATION AND OBLIGATIONS OF PUBLIC AUTHORITIES
3. Subject to the provision of this Act, all persons shall have the right to information.
4. Every Public Authority shall—
(a) maintain all its records, duly catalogued and indexed, in a manner and form
which facilitates the right to information as provided for in this Act, including
ensuring that all records, covered by the Act that are appropriate to computerise,
are within a reasonable time and subject to availability of resources, computerised
and connected through a network all over the country on different system so that
authorised access to such records is facilitated.
(b) publish within 6 months of this Act coming into force and thereafter update at
least every 12 months—
(i) The particulars of its organisation, functions and duties,
(ii) The powers and duties of its officers and employees,
(iii) Procedures followed during the decision making process, including chains of supervision
and accountability,
(iv) The norms set by the Public Authority for the discharge of its functions,
(v) Rules, regulations, instructions, manual and records held by or under its control
used by its employees for discharging its functions,
(vi) A statement of the categories of documents that are held by or under the control
of the Public Authority.
(vii) Particulars of any arrangement that exists for consultation with, or representation
by, members of the public in relation to the formulation of policy in, or in the
administration of, the Public Authority,
(viii) A statement listing all boards, councils, committees and other bodies constituted
by two or more persons, that are part of, or that have been established for the
purpose of advising, the public authority, and whose meetings are open to the
public, or the minutes of whose meetings are available for public inspection;
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(ix) A directory of their public servants, from the level of the head of the department
or his/her equivalent and below;
(x) The monthly remuneration received for each position, including the system of
compensation as established in regulations;
(xi) Information concerning the budget assigned to each agency, including all plans,
proposed expenditures and reports on disbursement,
(xii) The design and execution of subsidy programs, including the amounts allocated
to them, criteria for access, implementation details and beneficiaries;
(xiii) All concessions, permits or authorisations granted, with their recipients specified;
(xiv) All information available to the Public Authority in electronic form or capable of
being reduced to electronic form which is not exempt under this Act, subject to
availability of resources;
(xv) the details of facilities available to citizens for obtaining information, including if
the Public Authority maintains a library or reading room that is available for
public use, a statement of that fact including details of the address and hours of
opening of the library or reading room; and
(xvi) the name, designation and other particulars of the Public Information Officer;
(xvii) such other information as prescribed by the appropriate Government or Information
Commissioner from time to time which would promote transparency across
Public Authorities or in specific Public Authorities, as appropriate; on the basis
that it shall be a constant endeavor of Public Authorities to take steps to provide
as much information to the public suo moto at regular intervals through various
means of communication so that the public have minimum resort to the use of this
Act to obtain information;
(c) publish all relevant facts concerning important decisions and policies that affect the
public while formulating and announcing such decisions and policies;
(d) give reasons for its decisions, whether administrative or quasi-judicial to those
affected by such decisions;
(e) before initiating any project, or formulating any policy, scheme, programme or law,
publish or communicate to the public generally or to the persons affected or likely
to be affected by these in particular, the facts available to it or to which it has
reasonable access which in its opinion should be known to them in the best interests
of natural justice and promotion of democratic principles.
(f) For the purpose of this section, information should be disseminated widely and in
a form and manner which is easily accessible and comprehensible to the public.
“Disseminated” shall mean appropriately making known to the public the information
to be communicated through notice boards, newspapers, public announcements,
media broadcasts, the internet or other such means and shall include inspecCOMMERCIAL
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tion at all of the bodies offices. All materials shall be disseminated keeping in mind
cost effectiveness, the local language and the most effective method of communication
in that local area. Such information should be in easily accessible, with the
Public Information Officer, where possible in electronic format, which shall be
available free or at the cost of the medium, or in print at cost price.
5 (1)Every Public Authority shall for the purposes of this Act, designate as many officers as
Public Information Officers, in all administrative units and offices under such
Authority, as are necessary to render the public Body as accessible as reasonably possible
for requesters of information, within one month of this Act coming into force.
(a) An officer at each sub-divisional level or other appropriate sub-district level, shall
be designated a Public Information Officer, within three months of this act coming
into force, for the purposes of this Act. He/she shall receive all requests for information,
and appeals, both under the State and the Central Acts, and pass them on
to a designated Authority for onward transmission to the relevant department/
agency,
(b) Where applications/appeals are handed over at the sub divisional or sub-district
level, an additional period of five days would be added to the time of response
specified under this act, in order to enable the request/appeal to be communicated
to the relevant Authority,
(2) Every Public Information Officer shall deal with requests for information and shall
render reasonable assistance to any person seeking such information,
(3) The Public Information Officer may seek the assistance of any other officer as he considers
necessary for the proper discharge of his duties,
(4) Any officer whose assistance has been sought under sub-section (3), shall render all
assistance to the Public Information Officer seeking his/her assistance and be treated as
a Public Information Officer for the purposes of the penalties provisions in this Act.
6(1) A person desirous of obtaining information shall make a request in writing or through
electronic means in English or in the official language of the area in which the application
is being submitted, to:
(a) The Public Information Officer of the relevant Public Authority;
(b) Other designated Public Information Officers, as specified in 5 (1a ) specifying the
particulars of the information sought by him/her:
Provided that where such request cannot be made in writing the Public Information Officer
shall render all reasonable assistance to the person making the request orally to reduce it in
writing,
6(2) An applicant for access to information shall not be required to give any reason for
requesting access to that information or any other personal details except those necessary
for contacting the applicant,
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6(3) (1) Where an application is made to a Public Authority for information:
(a) which is held by another Public Authority; or
(b) The subject matter of which is more closely connected with the functions of another
Public Authority, the first mentioned Public Authority shall transfer the application
or such part of it as may be appropriate to that other Public Authority and shall
inform the applicant immediately of the transfer,
(2) A transfer of an application pursuant to subsection (1) shall be made as soon as practicable
but not later than 5 days after the date of receipt of the application.
7(1) Subject to section 5, sub section (1b) above and section 7, sub-section (3)(a) below, on
receipt of a request under section 6, the Public Information Officer shall as expeditiously
as possible and in any case within fifteen days of the receipt of the request, either
provide the information requested on payment of such fee as may be prescribed or
reject the request for any of the reasons specified in sections 8 and 9:
Provided that where the information sought for concerns the life and liberty of a person, the
same should be provided within forty-eight hours of the receipt of the request;
7(2) If a Public Information Officer fails to give the decision on a request for access to the
requestor concerned within the period contemplated in s.7(1), the Public Information
Officer would, for the purposes of this Act, be regarded as having refused the request,
7(3) Where it is decided to provide the information on payment of any further fee representing
the cost of providing the information, the Public Information Officer shall send an
intimation to the person making the request, giving:
(a) the details of such fees as determined by him, showing the calculations as per the
act, at prescribed rates, requesting him to deposit the fees, and the period intervening
between the dispatch of the said intimation and payment of fees shall be excluded
for the purpose of calculating the period of fifteen days referred to above;
(b) information concerning his/her rights with respect to review the decision as to the
amount of fees charged and/or the form of access provided, including the contact
details of the appellate body, time limits, process and any relevant forms;
7(4) Where access to a record or a part thereof is to be given under this Act and the person
to whom access is to be given has a sensory disability, the Public Authority will provide
assistance to enable access to the information, including providing assistance with inspection
as appropriate;
7(5) (a) Subject to sub-sections (b) and (c) below, where access to information is to be given
in the form of printed copies, or copies in some other form, such as on tape, disk, film
or other material, the applicant shall pay the prescribed fee;
(b) Any fees payable by the applicant shall be reasonable, and shall in no case exceed the
actual cost of copying the information or in the case of samples of materials the cost of
obtaining the sample, and shall be set via regulations at a maximum limit taking acCOMMERCIAL
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count of the general principle that fees should not be set so high that they undermine
the objectives of this Act in practice;
(c) Notwithstanding subsection (a), where a Public Authority fails to comply with the time
limits specified in section 7, any access to information to which the applicant is entitled
pursuant to his request shall be provided free of charge;
7(6) Before taking any decision under sub-section (1), the Public Information Officer shall
take into consideration the representation made by a third party under section 11;
7(7) Where a request is rejected under sub-section (6), the Public Information Officer shall
communicate to the person making request :
(i) The reasons for such rejection;
(ii) The period within which an appeal against such rejections may be preferred;
(iii) The particulars of the appellate authority.
7(8) Information shall ordinarily be provided in the form in which it is sought unless it
would disproportionately divert the resources of the public authority or would be detrimental
to the safety or preservation of the record in question;
8(1) Notwithstanding anything contained in this Act, there shall be no obligation to give any
person:
(a) information, disclosure of which would prejudicially affect the sovereignty and
integrity of India, the security, strategic, scientific or economic interests of the State,
relation with foreign State or lead to incitement of an offence;
(b) information which has been expressly forbidden to be published by any court of
law or tribunal or the disclosure of which may constitute contempt of court ;
(c) information, ‘the disclosure of which would cause a breach of privilege of Parliament
or the State Legislature ;
(d) information including commercial confidence, trade secrets or intellectual property,
the disclosure of which would harm the competitive position of a third party,
unless the Competent Authority is satisfied that larger public interest warrants the
disclosure of such information ;
(e) information available to a person in his fiduciary relationship, unless the Competent
Authority is satisfied that the larger public interest warrants the disclosure of
such information ;
(f) information received in confidence from foreign government;
(g) information, the disclosure of which would endanger the life or physical safety of
any person or identify the source of information or assistance given in confidence
for law enforcement or security purposes ;
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(h) information which would impede the process of investigation or apprehension or
prosecution of offenders ;
(i) cabinet papers including records of deliberations of the Council of Ministers, Secretaries
and other officers, provided that the decisions of Council of Ministers, the
reasons thereof, and the material on the basis of which the decisions were taken
shall be made public after the decision has been taken, and the matter is complete,
or over; provided further that those matters which come under the exemptions
listed in Section 8 shall not be disclosed,
(j) information which relates to personal information the disclosure of which has no
relationship to any public activity or interest, or which would cause unwarranted
invasion of the privacy of the individual unless the Information Officer or the
apellate authority, as the case might be, is satisfied that the larger public interest
justifies the disclosure of such information:
Provided that the information, which cannot be denied to the Parliament or a State Legislature,
shall not be denied to any person.
Notwithstanding anything in the Official Secrets Act 1923 nor any of the exemptions permissible
in accordance with section 8 (1), a public authority may not refuse to allow access to
information, unless the harm to the protected interest outweighs the public interest in disclosure.
(2) Subject to the provisions of clause (a) and (i) of sub section I of section 8, any information
relating to any occurrence, event or matter which has taken place, occurred or
happened ten years before the date on which any request is made under section 6 shall
be provided to any person making a request under that section:
Provided that the matters covered by Sub-Section 8(a) and Sub-Section 8(i) may be
disclosed after twenty-five years. Provided that where any question arises as to the date
from which the said period of ten years or twenty-five has to be computed, the decision
of the Union Government shall be final, subject to the usual appeals provided for in this
act.
9. Without prejudice to the provisions of section 8, a Public Information Officer may reject
a request for information where such a request for providing access would involve an
infringement of copyright subsisting in a person other than the State.
10(1) If a request for access to information is rejected on the ground that it is in relation to
information which is exempted from disclosure, then notwithstanding anything contained
in this Act, access may be given to that part of the record which does not obtain
any information that is exempted from disclosure under this Act and which can reasonably
be severed from any part that contains exempted information.
10(2) Where access is granted to a part of the record in accordance with sub-section (1), the
Public Information Officer shall send a notice to the applicant, advising:
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(a) that only part of the record requested, after severance of the record containing
information which is exempted from disclosure, is being furnished; and
(a) The reasons for the decision; including any findings on any material questions of
fact, referring to the material on which those findings were based;
(b) The name and designation of the person giving the decision; and
(c) Details of the fees determined by him/her and requesting the applicant to deposit
the fees;
(d) Information concerning his/her rights with respect to review of the decision regarding
non-disclosure of part of the information, the amount of fees charged and/
or the form of access provided, including the contact details of the appellate body,
time limits, process and any relevant forms;
11(1) Where a Public Authority intends to disclose any information or record, or part thereof,
on a request made under this Act which relates to, or has been supplied by a third party
and has been treated as confidential by that third party, the Public Information Officer
shall, within five days from the receipt of a request, give written notice to such third
party of the request and of the fact that the Public Authority intends to disclose the
information or record, or part thereof and invite the third party to make a submission,
in writing or orally, regarding whether the information should be disclosed, which
submission shall be taken into account when determining whether to disclose the information
:
Provided that except in the case of trade or commercial secrets protected by law, disclosure
may be allowed if the public interest in disclosure outweights in importance any possible
harm or injury to the interests of such party,
(2) where a notice is given by the Public Information Officer under sub-section (1) to a third
party in respect of any information or record or part thereof, the third party shall,
within ten days from the date of issuance of notice, be given the opportunity to make
representation against the proposed disclosure;
(3) Notwithstanding anything contained in section 7, the Public Information Officer shall,
within twenty days after receipt of the request under section 6, if the third party has
been given an opportunity to make representation under sub-section (2), make a decision
as to whether or not to disclose the information or record or part thereof and give
in writing the notice of his decision to the third party,
(4) A notice given under sub-section (3) shall include a statement that the third party to
whom the notice is given is entitled to prefer an appeal against the decision under
section 12(2).
12(1): (i)(a) The President shall appoint or designate a Chief Information Commissioner for
all matters pertaining to the Union. Such appointment shall be made on the basis of a
recommendation made by an Appointing Committee presided by the Prime Minister,
with the Leader of Opposition in the Lok Sabha and the Chief Justice of India as
members,
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(i)(b) The Governor shall appoint or designate a State Information Commissioner for all
matters pertaining to the State. Such appointment shall be made on the basis of recommendation
made by an Appointing Committee presided by the Chief Minister, with the
Leader of Opposition in the Legislative Assembly and the Chief Justice of the High
Court as members,
(ii) Information Commissioners may be appointed by the President or the Governor, as the
case may be, in consultation with the appropriate Appointing Committee and the Chief
Information Commissioner or State Information Commissioners, as the case may be,
(iii) Every Chief Information Commissioner, State Information Commissioners and the commissioners
shall be persons with wide knowledge and experience of administration and
governance,
(iv) The Chief Information Commissioners and any Information Commissioners shall not be
members of Parliament or members of the Legislative of any State or Union Territory
and shall not hold any other office of profit and shall not be connected with any
political party or be carrying on any business or practice any profession;
(v) The requisite budgetary allocations for the emoluments and expenses, including office
expenses, of the Chief Information Commissioner and of other Information Commissioners
will be provided by the Government of India through special budgetary provisions
made available to the respective states out of the Union Government Budget,
(vi) The Chief Information Commissioner and of other Information Commissioners shall
function autonomously without being subjected to directions by any other authority
and would be under the administrative control of the Government of India, Ministry of
Personnel, Administrative Reforms and Public Grievances,
(vii) Every person appointed as a Chief Information Commissioner or an Information Commissioner
shall hold office for a term of five years from the date on which he enters
upon his office. He/she will not be eligible for reappointment,
12 (2) (i) Any person who does not receive a decision or is aggrieved by a decision of the
Public information officer may, within thirty days of receipt of such a decision, or of the
expiry of the time allowed for responding, prefer an appeal to an appellate authority
prescribed for the purpose in each department and senior in rank to the Public Information
Officer :
Provided that such authority may entertain the appeal after the expiry of the said period
of thirty days if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal in time,
(ii) A second appeal against the decision under sub-section (1) shall lie within 90 days from
the time by which the decision should have been made or receipt of a decision, prefer
an appeal to the relevant Information Commissioner :
Provided that the relevant Information Commissioner may entertain appeal after the
expiry of the said period of ninety days if it is satisfied that the appellant was prevented
by sufficient cause from filing the appeal in time,
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(iii) Where an appeal is being preferred against an order made by the Public Information
Officer under Section 11 to disclose “third party” information , the appeal by the concerned
third party must be made within thirty days of the order,
(iv) If the decision of the Public Information Officer against which the appeal is preferred
relates to information of a third party, the relevant Information Commissioner shall give
a reasonable opportunity of being heard to that third party,
(v) In any appeal proceedings, the onus to prove that a denial of a request was justified will
be on the public authority that denied the request,
(vi) Appeals to any Information Commissioner shall be disposed of within thirty days of the
receipt of the appeals, or within such extended period, not exceeding a total of forty five
days from the date of filing of appeal, for reasons to be recorded in writing,
(vii) The decision of the Information Commissioner shall be binding,
(viii) In his/her decision, the relevant Information Commissioner has the power to:
(a) require the public authority to take any such steps as may be necessary to bring it
into compliance with the Act, including by;
(i) providing access to information, including in a particular form;
(ii) appointing an information officer;
(iii) publishing certain information and/or categories of information;
(iv) making certain changes to its practices in relation to the keeping, management and
destruction of records;
(v) enhancing the provision of training on the right to information for its officials;
(vi) providing him or her with an annual report, in compliance with section 4(b);
(b) Require the public body to compensate the complainant for any loss or other detriment
suffered;
(c) Impose any of the penalties available under this Act;
(d) Reject the application.
(i) The Information Commissioner shall serve notice of his/her decision, including any
rights of appeal, on both the complainant and the public authority.
(ii) A decision of the Information Commissioner may be appealed to the High Court or
the Supreme Court, on any point of fact and law,
12.(3) Powers of the Chief Information Commissioner/State Information Commissioners/
Information Commissioners.
(1) Subject to this Act, the Chief Information Commissioners /State Information
Commissioners/Information Commissioners shall receive and investigate complaints
from persons:
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(a) who have been unable to submit a request to a Public Information Officer, either
because none has been appointed as required under the Act or because the Public
Information Officer has refused to accept their application;
(b) who have been refused access to information requested under this Act;
(c) who have not been given access to information within the time limits required
under this Act;
(d) who have been required to pay an amount under the fees provisions that they
consider unreasonable, including a person whose wishes to appeal a decision in
relation to their application for a fee reduction or waiver;
(e) who believe that they have been given incomplete, misleading or false information
under this act;
(f) in respect of any other matter relating to requesting or obtaining access to records
under this Act.
(2) Where a Chief Information Commissioner/State Information Commissioners/Information
Commissioners are satisfied that there are reasonable grounds to investigate a
matter relating to requesting or obtaining access to records under this Act, the Chief
Information Commissioner may initiate a complaint in respect thereof.
(3) The Chief Information Commissioners/State Information Commissioners/Information
Commissioners have, in relation to the carrying out of the investigation of any complaint
under this Act, power:
(a) To summon and enforce the appearance of persons and compel them to give oral
or written evidence on oath and to produce such documents and things as the
Commissioner deems requisite to the full investigation and consideration of the
complaint, in the same manner and to the same extent as a superior court of record;
(b) To administer oaths;
(c) To receive and accept such evidence and other information, whether on oath or by
affidavit or otherwise, as the relevant Information Commissioner sees fit, whether
or not the evidence or information is or would be admissible in a court of law;
(d) To enter any premises occupied by any Government institution on satisfying any
security requirements of the institution relating to the premises;
(e) To converse in private with any person in any premises entered pursuant to paragraph
(d) and otherwise carry out therein such inquiries within the authority of the
Chief Information Commissioner under this Act as the Commissioner sees fit; and
(f) To examine or obtain copies of or extracts from books or other records found in any
premises entered pursuant to paragraph (d) containing any matter relevant to the
investigation,
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(g) Shall impose the penalties prescribed under this act, after giving due opportunity
to the concerned official of being heard,
(4) Notwithstanding any other Act of Parliament or any privilege under the law of evidence,
an Chief Information Commissioner /State Information Commissioners/Information
Commissioners may, during the investigation of any complaint under this Act,
examine any record to which this Act applies that is under the control of a government
institution, and no such record may be withheld from any Commissioner on any grounds,
(5) All the powers of the Chief Information Commissioner would also be enjoyed by the
State Information Commissioners and other Information Commissioners,
12.(4) Penalties
(1) Subject to sub-section (3), where any Public Information Officer has, without any reasonable
cause, failed to supply the information sought, within the period specified
under section 7(1), the relevant Information Commissioner shall, on appeal, impose a
penalty of rupees two hundred fifty, which amount must be increased by regulation at
least once every five years, for each day’s delay in furnishing the information, after
giving such Public Information Officer a reasonable opportunity of being heard.
(2) Subject to sub-section (3), where it is found in appeal that any Public Information
Officer has—
(i) Refused to receive an application for information;
(ii) Mala fide denied a request for information;
(iii) Knowingly given incorrect or misleading information,
(iv) Knowingly given wrong or incomplete information, or
(v) Destroyed information subject to a request;
(vi) Obstructed the activities of a Public Information Officer, any Information Commission
or the courts;
commits an offence and will be liable upon summary conviction to a fine of not less than
rupees two thousand and imprisonment of up to five years, or both.
(3) An officer whose assistance has been sought by the Public Information Officer for the
performance of his/her duties under this Act shall be liable for penalty as prescribed
in sub-sections (1) and (2) jointly with the Public Information Officer or severally as
may be decided by the relevant Information Commissioner.
(4) Any fines imposed under sub-sections (1), (2) and (3) shall be recoverable from the
salary of the concerned officer, including the Public Information Officer, or if no salary
is drawn, as an arrears of land revenue, recoverable within a maximum of six months
of the order imposing the fine.
(5) The Public Information Officer or any other officer on whom the penalty under subOTHER
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sections (1), (2) and (3) is imposed shall also be liable to appropriate disciplinary action
under the service rules applicable to him. Provided that in cases where the officer is
proved guilty of deliberate denial of information or misinformation, the punishment
imposed shall be a major penalty, i.e., dismissal or removal or reduction in rank.
MISCELLANEOUS
13. No suit, prosecution or other legal proceeding shall lie against any person for anything
which is in good faith done or intended to be done under this Act or any rule made
thereunder.
14. The provisions of this Act shall have effect not withstanding anything inconsistent
therewith contained in the Official Secrets Act, 1923, and any other law for the time
being in force or in any instrument having effect by virtue of any law other than this
Act.
15. No court shall entertain any suit, application or other proceeding in respect of any order
made under this Act and no such order shall be called in question otherwise than by
way of an appeal under this Act.
16.(1) Nothing contained in this Act shall apply to the intelligence and security organisations,
specified in the Schedule being organisations established by the Union Government or
any information furnished by such organisations to that Government :
Provided that information pertaining to alleged violations of human rights, to the life and
liberty of human beings and to the allegations od corruption will not be excluded under this
clause.
(2) The Union Government may, by notification in the official Gazette, amend the Schedule
by including therein any other intelligence or security organisation established by that
government or omitting therefrom any organisation already specified therein and on
the publication of such notification, such organisation shall be deemed to be included
in or, as the case may be omitted from the Schedule.
(3) Every notification issued under sub-section (2) shall be laid before each house of parliament.
(4) Nothing contained in this Act shall apply to such intelligence and security organisations
which may be specified, by a notification in the official gazette, by a state Government
from time to time. Provided that information pertaining to alleged violations of human
rights, to the life and liberty of human beings and to the allegations of corruption will
not be excluded under this clause
(5) Every notification issued under sub section (4), shall be laid before the state legislature.
16A Monitoring and Reporting
(1) The Chief Information Commissioners/State Information Commissioners/Information
Commissioners shall, as soon as practicable after the end of each year, prepare a report
COMMERCIAL & INDUSTRIAL LAWS A 351
on the implementation of this Act during that year and cause a copy of the report to be
laid before the legislatures of the concerned state and each House of the Parliament.
(2) Each responsible department/ministry shall, in relation to the public authorities within
their jurisdiction, collect and provide such information to the Chief Information Commissioners
as is required to prepare the report under this section, and shall comply with
any prescribed requirements concerning the furnishing of that information and the
keeping of records for the purposes of this section.
(3) Each report shall, at a minimum, state in respect of the year to which the report relates:
(a) The number of requests made to each Public Authority;
(b) The number of decisions that an applicant was not entitled to access to a document
pursuant to a request, the provisions of this Act under which these decisions were
made and the number of times each provision was invoked;
(c) The number of appeals sent to the Information Commissioners for review, the nature
of the complaints and the outcome of the appeals;.
(d) Particulars of any disciplinary action taken against any officer in respect of the
administration of this Act;
(e) The amount of charges collected by each Public Authority under this Act;
(f) Any facts which indicate an effort by Public Authorities to administer and implement
the spirit and intention of this Act;
(g) Recommendations for reform, including recommendations in respect of particular
Public Authorities, for the development, improvement, modernisation, reform or
amendment of this Act or other legislation or common law or any other matter
relevant to operationalise the right to access information, as appropriate.
(4) The Union Government Ministry responsible for the administration of this Act, as
soon as practicable after the end of each year, prepare a summary report on the
implementation of this Act during that year and cause a copy of the report to be laid
before the concerned state legislatures and each House of the Parliament, drawing on
the information provided in the reports of the Chief Information Commissioners for
each State.
(5) If it appears to any Chief Information Commissioner that the practice of a public authority
in relation to the exercise of its functions under this Act does not conform with
provisions or spirit of the Act , s/he may give to the authority a recommendation
specifying the steps which ought in his/her opinion to be taken for promoting such
conformity.
16B(1) The Government must, to the extent that financial and other resources are available:
(a) Develop and conduct educational programmes to advance the understanding of the
public, in particular of disadvantaged communities, of this Notification and of how
to exercise the rights contemplated in this Act;
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(b) Encourage Public Authorities to participate in the development and conduct of
programmes referred to in paragraph (a) and to undertake such programmes themselves;
and
(c) Promote timely and effective dissemination of accurate information by public authorities
about their activities.
(d) Train information officers of public authorities and/or produce relevant training
materials for use by authorities themselves.
(2) The Government must, within 18 months, compile in each official language a guide
containing such information, in an easily comprehensible form and manner, as may
reasonably be required by a person who wishes to exercise any right contemplated in
this Act.
(3) The Government must, if necessary, update and publish the guide at regular intervals
The guide must, without limiting the generality of subsection (2), include a description
of—
(a) the objects of this Act;
(b) the postal and street address, phone and fax number and, if available, electronic
mail address of the Public Information Officer of every Public Authority as appointed
under sub section (1) of section 5
(c) the manner and form of a request for access to a information of a Public Authority;
(d) the assistance available from and the duties of Public Information Officers of a
Public Authority in terms of this Act;
(e) the assistance available from the Information Commissioners in terms of this Act;
(f) all remedies in law available regarding an act or failure to act in respect of a right
or duty conferred or imposed by this Act, including the manner of lodging an
appeal with the Chief Information Commissioner and a court against a decision by
the Public Information Officer of a Public Authority;
(g) the provisions providing for the voluntary disclosure of categories of records in
accordance with section 4;
(h) the notices regarding fees to be paid in relation to requests for access; and
(i) any additional regulations or circulars relevant to obtaining access to information
in accordance with this Act.
(4) The Government must, if necessary, update and publish the guide at regular intervals.
17.(1) The Union Government may, by notification in the Official Gazette, make rules to
carry out the provisions of this Act.
(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—
COMMERCIAL & INDUSTRIAL LAWS A 353
(a) Intervals at which matters referred to in sub-clauses (i) to (vi) of clause (b) of section
4, shall be published.
(b) The fee payable under sub-section (1) of section 7;
(c) The Authority before whom an appeal may be preferred under sub-section (2) of
section 12;
(d) any other matter which is required to be, or may be, prescribed.
18.(1) The State Government may, by notification in the Official Gazette, make rules to carry
out the provisions of the Act.
(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 fee payable under sub-section (1) of section 7;
(b) the Authority before whom an appeal may be preferred under sub-section (2) of
section 12;
(c) any other matter which is required to be, or may be prescribed:
Provided that initially the rules shall be made by the Union Government by notification
in the official gazette.
19.(1) The competent Authority may, by notification in the official gazette, make rules to
carry out the provisions of this Act.
(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 fee payable under sub-section (1) of section 7;
(b) the authority before whom an appeal may be preferred under sub-section (2) of
section 12,
(c) any other matter which is required to be, or may be, prescribed.
20.(1) Every rule made by the Union Government 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 rule or both houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified from 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 rule.
(2) Every rule made under this Act by a State Government shall be laid, as soon as may be
after it is notified, before the State Legislature.
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4.3. THE COMPETITION ACT, 2002.
The Competition Commission of India was established in October 2003 under the Competition
Act, 2002. It was, however, mired in litigation as the provisions governing its functions were
challenged in a writ petition before the Supreme Court.
The apex court in January 2005 addressed the writ petition with certain directions to the
government. Consequent to this, the Competition (Amendment) Bill, 2006 was introduced in
March 2006, and was referred for examination to the parliamentary standing committee.
Following the recommendations of the committee, the Competition (Amendment) Bill, 2007
was introduced and passed in August 2007.
The backdrop
To achieve its objective of not permitting an ‘appreciable adverse effect on competition in
India’, the Competition Act, 2002 deals with three situations—prohibition of anti-competitive
agreements and abuse of dominant position, and regulation of combinations (covered
acquisitions, mergers and amalgamations).
The focus of this article is the recent amendments dealing with two aspects of the third situation,
which merit special attention—a change in threshold limits to meet the criteria for intimating
the Competitiony Commission, and making such reporting mandatory.
Domestic nexus
An acquisition or merger or amalgamation would be governed under the third situation, if it
constitutes a ‘combination’ by exceeding certain prescribed threshold limits. The limits
determine the trigger for reporting the proposed combination to the commission.
The amendment focuses on the provision of a domestic nexus (a nexus with assets and operations
in India) in connection with the limits applicable to acquisitions in which a foreign entity and
an Indian entity are involved. This would narrow down the scope for an acquisition being
covered under ‘combinations’ to be regulated by the commission. Thus, if the acquirer is a
foreign company without any Indian presence, the Competition Act trigger will not apply due
to the provision of the India nexus.
Incidentally, the original limits continue to apply under the Competition Act to acquisitions of
enterprises dealing in similar goods, and to mergers and amalgamations.
A corresponding amendment in the limits has not been made for those cases. The rationale for
this is not very clear because it would have been better to restrict the applicability to all cases of
combinations.
Intimation mandatory
A very crucial aspect of the original provisions was that it was voluntary for an enterprise
proposing to enter into a combination to intimate the Competition Commission.
Now, once the new law comes into force, such intimation of the combination to the commission
COMMERCIAL & INDUSTRIAL LAWS A 355
would be mandatory and, in fact, such a coupling shall not take effect until 210 days from the
date of notification or approval from the commission, whichever is earlier.
This is likely to result in a long gestation period of about seven to eight months from the date
of approval of the proposal.
This has some critical dimensions to be considered. Any uncertainty in a merger/ acquisition
could have a serious and destabilizing impact on the businesses of the parties involved. In
most cases, unlike an acquisition, a merger is dependent on the high court’s approval (or, in
the case of certain specified industries, any other regulatory body, such as the Reserve Bank of
India in the case of banks).
The introduction of this new dimension of keeping the merger/acquisition pending until the
approval of the commission will also (albeit for a different purpose) add a significant element
of uncertainty, and can be a serious drag on ‘big-ticket’ M&A activities in India.
The uncertainty has several implications, including the following:
● Perception among customers
● Uncertainty as regards the ‘identity’ of the enterprise could create reluctance among
customers, who could choose to shift to a more ‘stable’ competitor.
● Inability to make strategic and operational decisions: Strategic and operational business
issues could remain in ‘limbo’.
● Human resources: In any acquisition or merger, the human resources element is crucial.
This has dimensions relating to alignment of titles, roles and responsibilities. A long
period of uncertainty could seriously dent morale and heighten attrition.
● Enterprise value(s): As a result of the uncertainty, including the above factors, the
market value of both enterprises could be severely dented due to the long period of
uncertainty.
Interestingly, while such reference to a regulatory body is mandatory in a number of countries,
the time limit prescribed by most of them is much shorter, ranging from 25-35 days for an
initial investigation.
When the initial investigation results in serious doubts regarding its effect on competition, the
next level investigation triggers the time limit, which is generally 90-180 days. For example, in
the US and the European Union, the time limit for initial investigation is 30 days and 25 days,
and for detailed investigation, an additional 30 days and 90 days, respectively.
Summing up
While the objective of the Competition Act, 2002, as stated in its preamble, is undoubtedly
laudable, the timing issue needs to be addressed. In addition, it is very important to have
detailed guidelines and a framework within which the approval would be given by the
Competition Commission. This could help mitigate the likely element of uncertainty by an
upfront evaluation of the parameters contained in the guidelines in connection with the planned
combination. One hopes the government will take such issues seriously and take steps to address
them.
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THE COMPETITION ACT, 2002
No. 12 OF 2003
The following Act of Parliament received the assent of the President on the 13lh January, 2003:
An Act to provide, keeping in view of the economic development of the country, for the
establishment of a Commission to prevent practices having adverse effect on competition,
To promote and sustain competition in markets, to protect the interests of consumers and to
ensure freedom of trade carried on by other participants in markets, in India, and for matters
connected therewith or incidental thereto.
EXTENT
(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 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.
BASIC CONCEPTS
2. In this Act, unless the context otherwise requires,—
(a) “acquisition” means, directly or indirectly, acquiring or agreeing to acquire—
(i) shares, voting rights or assets of any enterprise; or
(ii) control over management or control over assets of any enterprise;
(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;
(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;
(d) “Chairperson” means the Chairperson of the Commission appointed under sub-section
(1) of section 8;
(e) “Commission” means the Competition Commission of India established under subsection
(1) of section 7;
COMMERCIAL & INDUSTRIAL LAWS A 357
(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 app roval of
the first-mentioned person whether such hiring or availing of services is for any
commercial purpose or for personal use;
(g) “Director General” means the Director General appointed under sub-section (1) of section
16 and includes any Additional, Joint, Deputy or Assistant Directors General appointed
under that section;
(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.
Explanation—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;
(ii) any branch or office established for the provision of any service;
(i) “goods” means goods as defined in the Sale of Goods Act, 1930 (8 of 1930) and includes—
CIA-24
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(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;
(j) “Member” means a Member of the Commission appointed under sub-section (/) of section8
and includes the Chairperson;
(k) “notification” means a notification published in the Official Gazette;
(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) any body 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 juridical person, not falling within any of the preceding subclauses;
(m) “practice” includes any practice relating to the carrying on of any trade by a person or an
enterprise;
(n) “prescribed” means prescribed by rules made under this Act;
(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;
(p) “public financial institution” means a public financial institution specified under section
COMMERCIAL & INDUSTRIAL LAWS A 359
4A of the Companies Act, 1956 (1 of 1956) and includes a State Financial, Industrial or
Investment Corporation;
(q) “regulations” means the regulations made by the Commission under section 64;
(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;
(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;
(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;
(u) “service” means service of any description which is made available to potential users and
includes the provision of services in connection with 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;
(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;
(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;
(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;
(y) “turnover” includes value of sale of goods or services;
(z) words and expressions used but not defined in this Act and defined in the Companies
Act, 1956 (1 of 1956) shall have the same meanings respectively assigned to them in that
Act.
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PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF DOMINANT
POSITION AND REGULATION OF COMBINATIONS
Prohibition of agreements
Anti competitive agreements
(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.
(2) Any agreement entered into in contravention of the provisions contained in subsection
(1) shall be void.
(3) Any agreement entered into between enterprises or associations of enterprises or persons
or associations of persons or between 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 geographical area of market, or type of goods or services, or number of customers
in the market or any other similar way;
(d) 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
(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;
COMMERCIAL & INDUSTRIAL LAWS A 361
(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 acondition
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.
(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
(d) The Geographical Indications of Goods (Registration and Protection) Act, 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.
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Prohibition of abuse of dominant position
Abuse of dominant position
4. (1) No enterprise shall abuse its dominant position.
(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise.—
(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 therefore; 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; 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.
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—
(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;
(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.
Regulation of combinations :
COMMERCIAL & INDUSTRIAL LAWS A 363
Combination
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
(B) in India or outside India, in aggregate, the assets of the value of more than 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 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 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 crores or
turnover more than rupees twelve thousand crores; or
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(B) in India or outside India, in aggregate, the assets of the value of more than two billion
US dollars or turnover more than six billion US dollars; 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 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 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 crores or
turnover more than rupees twelve thousand crores; or
(B) in I ndia 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
(ii) appoint more than fifty percent, 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.
COMMERCIAL & INDUSTRIAL LAWS A 365
Regulation of combinations
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.
(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 (h) of that section.
(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.
(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.
(5) The public financial institution, foreign institutional investor, bank or venture capital fund,
referred to in sub-section (4\ shall, within seven 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);
COMPETITION COMMISSION OF INDIA ( CCI )
Establishment of Commission
7.(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”.
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(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,
(3) The head office of the Commission shall be at such place as the Central Government may
decide from time to time.
(4) The Commission may establish offices at other places in India.
Composition of Commission
8. (1) The Commission shall consist of a Chairperson and not less than two and not more than
ten other Members to be appointed by the Central Government:
Provided that the Central Government shall appoint the Chairperson and a Member during
the first year of the establishment of the Commission.
(2) The Chairperson and every other Member shall be a person of ability, integrity and standing
and who, has been, or is qualified to be, a judge of a High Court; or, has special knowledge
of, and professional experience of not less than fifteen years in international trade,
economics, business, commerce, law, finance, accountancy, management, industry, public
affairs, administration or in any other matter which, in the opinion of the Central
Government, may be useful to the Commission.
(3) The Chairperson and other Members shall be whole-time Members.
Selection of Chairperson and other Members
9. The Chairperson and other Members shall be selected in the manner as may be prescribed.
Term of office of Chairperson and other Members
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 reappointment:
Provided that no Chairperson or other Member shall hold office as such after he has
attained,—
(a) In the case of the Chairperson, the age of sixty-seven years;
(b) In the case of any other Member, the age of sixty-five years.
(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.
(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.
COMMERCIAL & INDUSTRIAL LAWS A 367
(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.
(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.
Resignation, removal and suspension of Chairperson and other members
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 expiryof his term of office, whichever is
the earliest.
(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.
(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 subsection 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
12. The Chairperson and other Members shall not, for a period of one year from the ‘ date on
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which they cease to hold office, accept any employment in, or connected with the
management or administration of, any enterprise which has been a party to a proceeding
before the Commission under this Act:
Provided 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 (1 of 1956).
Financial and administrative powers of Member Administration
13. The Central Government shall designate any Member as Member Administration who
shall exercise such financial and administrative powers as may be vested in him under the
rules made by the Central Government:
Provided that the Member Administration shall have authority to delegate such of his financial
and administrative powers as he may think fit to any other officer of the Commission subject
to the condition that such officer shall, while exercising such delegated powers continue to act
under the direction, superintendence and control of the Member Administration.
Salary and allowances and other terms and conditions of service of Chairperson and other
Members
14. (1) 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.
(2) 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.
Vacancy, etc. not to invalidate proceedings of Commission
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.
16.(1) The Central Government may, by notification, appoint a Director General and as many
Additional, Joint, Deputy or Assistant Directors General or such other advisers, consultants
or officers, as it may think fit, for the purposes of assisting the Commission in conducting
inquiry into contravention of any of the provisions of this Act and for the conduct of cases
before the Commission and for performing such other functions as are, or may be, provided
by or under this Act.
COMMERCIAL & INDUSTRIAL LAWS A 369
(2) Every Additional, Joint, Deputy and Assistant Directors General or such other advisers,
consultants and officers, shall exercise his powers, and discharge his functions, subject to
the general control, supervision and direction of the Director General.
(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 other advisers,
consultants or officers, shall be such as may be prescribed.
(4) The Director General and Additional, Joint, Deputy and Assistant Directors General or
such other advisers, consultants or officers 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.
Registrar and officers and other employees of Commission
17.(1) The Commission may appoint a Registrar and such officers and other employees as it
considers necessary for the efficient performance of its functions under this Act.
(2) The salaries and allowances payable to and other terms and conditions of service of the
Registrar and officers and other employees of the Commission and the number of such
officers and other employees shall be such as may be prescribed.
DUTIES, POWERS AND FUNCTIONS OF COMMISSION
Duties of Commission
18. Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate
practices having adverse effect on competition, promote and sustain competition, protect
the interests of consumers and ensure freedom of trade carried on by other participants, in
markets in India: Provided 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
19. (1) The Commission may inquire into any alleged contravention of the provisions contained
in subsection (1) of section 3 or sub-section (1) of section 4 either on its own motion or
on—
(a) Receipt of a complaint, accompanied by such fee as may be determined by regulations,
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 a statutory
authority.
(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).
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(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 distribution of goods or provision of services.
(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 being a Government company or a public sector undertaking or otherwise;
(h) 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;
(i) countervailing buying power;
(j) market structure and size of market;
(k) social obligations and social costs;
(l) 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;
(m) Any other factor which the Commission may consider relevant for the inquiry.
(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”.
COMMERCIAL & INDUSTRIAL LAWS A 371
(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.
(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.
Inquiry into combination by Commission
20.(1) The Commission may, upon its own knowledge or information relating to acquisition
referred to in clause (a) of section 5 or acquiring of control referred to in clause (b) of
section 5 or merger or amalgamation referred to in clause (c) of that section, 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.
(2) The Commission shall, on receipt of a notice under sub-section (2) of section 6 or upon
receipt of a reference under sub-section (1) of section 21, 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.
(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,
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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.
(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;
(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.
Reference by Statutory Authority
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.
(2) On receipt of a reference under sub-section (1), the Commission shall, after hearing the
parties to the proceedings, give its opinion to such statutory authority which shall thereafter
pass such order on the issues referred to in that sub-section as it deems fit: Provided that
the Commission shall give its opinion under this section within sixty days of receipt of
such reference.
COMMERCIAL & INDUSTRIAL LAWS A 373
Benches of Commission
22. (1) The jurisdiction, powers and authority of the Commission may be exercised by Benches
thereof.
(2) The Benches shall be constituted by the Chairperson and each Bench shall consist of not
less than two Members.
(3) Every Bench shall consist of at least one Judicial Member.
Explanation.—For the purposes of this sub-section, “Judicial Member” means a Member who
is, or has been, or is qualified to be, a Judge of a High Court.
(4) The Bench over which the Chairperson presides shall be the Principal Bench and the other
Benches shall be known as the Additional Benches.
(5) There shall be constituted by the Chairperson one or more Benches to be called the Mergers
Bench or Mergers Benches, as the case may be, exclusively to deal with matters referred to
in sections 5 and 6.
(6) The places at which the Principal Bench, other Additional Bench or Mergers Bench shall
ordinarily sit,shall be such as the Central Government may, by notification, specify.
Distribution of business of Commission amongst Benches
23.(1) Where any Benches are constituted, the Chairperson may, from time to time, by order,
make provisions as to the distribution of the business of the Commission amongst the
Benches and specify the matters, which may be dealt with by each Bench.
(2) If any question arises as to whether any matter falls within the purview of the business
allocated to a Bench, the decision of the Chairperson thereon shall be final.
(3) The Chairperson may—
(i) transfer a Member from one Bench to another Bench; or
(ii) authorise the Members of one Bench to discharge also the functions of the Members
of other Bench: Provided that the Chairperson shall transfer, with the prior approval
of the Central Government, a Member from one Bench situated in one city to another
Bench situated in another city.
(4) The Chairperson may, for the purpose of securing that any case or matter which, having
regard to the nature of the questions involved, requires or is required in his opinion or
under the rules made by the Central Government in this behalf, to be decided by a Bench
composed of more than two Members, issue such general or special orders as he may
deem fit.
Procedure for deciding a case where Members of a Bench differ in opinion
24. If the Members of a Bench differ in opinion on any point, they shall state the point or
points on which they differ, and make a reference to the Chairperson who shall either
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hear the point or points himself or refer the case for hearing on such point or points by one
or more of the other Members and such point or points shall be decided according to the
opinion of the majority of the Members who have heard the case, including those who
first heard it.
Jurisdiction of Bench
25. An inquiry shall be initiated or a complaint be instituted or a reference be made under this
Act before a Bench within the local limits of whose jurisdiction—
(a) The respondent, or each of the respondents, where there are more than one, at the
time of the initiation of inquiry or institution of the complaint or making of reference,
as the case may be, actually and voluntarily resides, or carries on business, or personally
works for gain; or
(b) Any of the respondents, where there are more than one, at the time of the initiation of
the inquiry or institution of complaint or making of reference, as the case may be,
actually and voluntarily resides or carries on business or personally works for gain
provided that in such case either the leave of the Bench is given, or the respondents
who do not reside, or carry on business, or personally work for gain, as aforesaid,
acquiesce in such institution; or
(c) The cause of action, wholly or in part, arises.
Explanation.—A respondent, being a person referred to in sub-clause (iii) or sub-clause (vi) or
sub-clause (vii) or sub-clause (viii) of clause (l) of section 2, shall be deemed to carry on business
at its sole or principal place of business in India or at its registered office in India or where it
has also a subordinate office at such place.
Procedure for inquiry on complaints under Section 19
26.(1) On receipt of a complaint or a reference from the Central Government or a State
Government or a statutory authority or on its own knowledge or information, under section
19, if the Commission is of the opinion that there exists a prima facie case, it shall direct
the Director General to cause an investigation to be made into the matter.
(2) The Director General shall, on receipt of direction under sub-section (1), submit a report
on his findings within such period as may be specified by the Commission.
(3) Where on receipt of a complaint under clause (a) of sub-section (1) of section 19, the
Commission is of the opinion that there exists no prima facie case, it shall dismiss the
complaint and may pass such orders as it deems fit, including imposition of costs, if
necessary.
(4) The Commission shall forward a copy of the report referred to in sub-section (2) to the
parties concerned or to the Central Government or the State Government or the statutory
authority, as the case may be.
(5) If the report of the Director General relates on a complaint and such report recommends
COMMERCIAL & INDUSTRIAL LAWS A 375
that there is no contravention of any of the provisions of this Act, the complainant shall
be given an opportunity to rebut the findings of the Director General.
(6) If, after hearing the complainant, the Commission agrees with the recommendation of
the Director General, it shall dismiss the complaint.
(7) If, after hearing the complainant, the Commission is of the opinion that further inquiry is
called for, it shall direct the complainant to proceed with the complaint.
(8) If the report of the Director General relates on a reference made under sub-section (/)
and such report recommends that there is no contravention of the pro visions of this Act,
the Commission shall invite comments of the Central Government or the State
Government or the statutory authority, as the case may be, on such report and on receipt
of such comments, the Commission shall return the reference if there is no prima facie
case or proceed with the reference as a complaint if there is a prima facie case.
(9) If the report of the Director General referred to in sub-section (2) recommends that there
is contravention of any of the provisions of this Act, and the 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.
Orders by Commission after inquiry into agreements or abuse of dominant position
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) 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, t’o
discontinue and not to re-enter such agreement or discontinue such abuse of dominant
position, as the case may be;
(b) impose such penalty, as it may deem fit which shall be not more than ten per cent. 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:
Provided that in case any agreement referred to in section 3 has been entered into by
any cartel, the Commission shall impose upon each producer, seller, distributor, trader
or service provider included in that cartel, a penalty equivalent to three times of the
amount of profits made out of such agreement by the cartel or ten per cent. of the
average of the turnover of the cartel for the last preceding three financial years,
whichever is higher;
(c) award compensation to parties in accordance with the provisions contained in section
34;
(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;
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(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) recommend to the Central Government for the division of an enterprise enjoying
dominant position;
(g) pass such oilier order as it may deem fit.
Division of enterprise enjoying dominant position
28(1) The Central Government, on recommendation under clause (f) of section 27, 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.
(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:—
(a) the transfer or vesting of property, rights, liabilities or obligations;
(b) the adjustment of contracts either by discharge or reduction of any liability or obligation
or otherwise;
(c) the creation, allotment, surrender or cancellation of any shares, stocks or securities;
(d) The payment of compensation to any person who suffered any loss due to dominant
position of such enterprise;
(e) The formation or winding up of an enterprise or the amendment of the memorandum
of association or articles of association or any other instruments regulating the business
of any enterprise;
(f) The extent to which, and the circumstances in which, provisions of the order affecting
an enterprise may be altered by the enterprise and the registration thereof;
(g) any other matter which may be necessary to give effect to the division of the enterprise.
(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
29.(1) Where the Commission is of the 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.
COMMERCIAL & INDUSTRIAL LAWS A 377
(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, 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.
(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).
(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.
(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).
(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.
Inquiry into disclosures under sub-section (2) of section 6
30. Where any person or enterprise has given a notice under sub-section (2) of section 6. 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.
Orders of Commission on certain combinations
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
sub-section (2) of section 6.
(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.
(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.
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(4) The parties, who accept the modification proposed by the Commission under subsection
(3), shall carry out such modification within the period specified by the Commission.
(5) If the parties to the combination, who have accepted the modification under subsection
(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.
(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 of the
modification proposed by the Commission, submit amendment to the modification
proposed by the Commission under that sub-section.
(7) If the Commission agrees with the amendment submitted by the parties under subsection
(6), it shall, by order, approve the combination.
(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 under sub-section (3).
(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.
(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 clause (a) of section 5; or
(b) the acquiring of control referred to in clause (b) of section 5; or
(c) the merger or amalgamation referred to in clause (c) of section 5, shall not be given
effect to: Provided that the Commission may, if it considers appropriate, frame a scheme
to implement its order under this sub-section.
(11) If the Commission does not, on the expiry of a period of ninety working days from the
date of publication referred to in sub-section (2) of section 29, pass an order or issue direction
in accordance with the provisions of sub-section (1) or sub-section (2) or subsection
(7), the combination shall be deemed to have been approved by the Commission.
Explanation.—For the purposes of determining the period of ninety working days specified in
this subsection, the period of thirty working days specified in sub-section (6) and a further
period of thirty working days specified in sub-section (8) shall be excluded.
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(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.
(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.
(14) Nothing contained in this Chapter 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
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
(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 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.
Power to grant interim relief
33.(1) Where during an inquiry before the Commission, it is proved to the satisfaction of the
Commission, by affidavit or otherwise, that an act in contravention of sub-section (1) of
section 3 or sub-section (1) of section 4 or section 6 has been committed and continues to
be committed or that such act is about to be committed, the Commission may, by order,
grant a temporary injunction restraining any party from carrying on such act until the
conclusion of such inquiry or until further orders, without giving notice to the opposite
party, where it deems it necessary.
(2) Where during the inquiry before the Commission it is proved to the satisfaction of the
Commission by affidavit or otherwise that import of any goods is likely to contravene
sub-section (1) of section 3 or subsection (1) of section 4 or section 6, it may, by order, grant
a temporary injunction restraining any party from importing such goods until the
conclusion of such inquiry or until further orders, without giving notice to the opposite
party, where it deems it necessary and a copy of such order granting temporary injunction
shall be sent to the concerned Authorities.
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(3) The provisions of rules 2A to 5 (both inclusive) of Order XXXIX of the First Schedule to the
Code of Civil Procedure, 1908 (5 of 1908) shall, as far as may be, apply to a temporary
injunction issued by the Commission under this Act, as they apply to a temporary injunction
issued by a civil court, and any reference in any such rule to a suit shall be construed as a
reference to any inquiry before the Commission.
Power to award compensation
34.(1) Without prejudice to any other provisions contained in this Act, any person may make
an application to the Commission 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 any contravention of the provisions of Chapter II, having been committed by such
enterprise.
(2) The Commission 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.
(3) 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
Commission, 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 (5 of 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 Commission and the order of the Commission
thereon.
Appearance before Commission
35. A complainant or defendant or the Director General may either appear in person or
authorise one or more chartered accountants or company secretaries or cost accountants
or legal practitioners or any of his or its officers to present his or its case before the
Commission.
Explanation.—For the purposes of this section,—
(a) “chartered accountant” means a chartered accountant as defined in clause (b) of sub-section
(1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained
a certificate of practice under sub-section (1) of section 6 of that Act;
(b) “company secretary” means a company secretary as defined in clause (c) of sub-section
(1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a
certificate of practice under sub-section (1) of section 6 of that Act;
(c) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of
section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained
a certificate of practice under sub-section (1) of section 6 of that Act;
COMMERCIAL & INDUSTRIAL LAWS A 381
(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes
a pleader in practice.
Power of Commission to regulate its own procedure
36.(1) The Commission shall not be bound by the procedure laid down by the Code of Civil
Procedure, 1908 (5 of 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 Commission shall have powers to regulate its own procedure including the places at
which they shall have their sittings, duration of oral hearings when granted, and times of
its inquiry.
(2) The Commission shall have, for the purposes of discharging its functions umder 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 affidavits;
(d) issuing commissions for the examination of witnesses or documents;
(e) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of
1872), requisitioning any public record or document or copy of such record or document
from any office;
(f) dismissing an application in default or deciding it ex parte;
(g) any other matter which may be prescribed.
(3) Every proceeding before the Commission shall be deemed to be a judicial proceeding
within the meaning of sections 193 and 228 and for the purposes of section 196 of the
Indian Penal Code (45 of 1860) and the Commission shall be deemed to be a civil court for
the purposes of section 195 (2 of 1974) and Chapter XXVI of the Code of Criminal Procedure,
1973.
(4) 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 or proceeding before it.
(5) The Commission may direct any person—
(a) to produce before the Director General or the Registrar or an officer authorised by it,
such,books, accounts 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;
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(b) to furnish to the Director General or the Registrar or any 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.
(6) If the Commission is of the opinion that any agreement referred to in section 3 or “abuse
of dominant position referred to in section 4 or the combination referred to in section 5 has
caused or is likely to cause an appreciable adverse effect on competition in the relevant
market in India and it is necessary to protect, without further delay, the interests of
consumers and other market participants in India, it may conduct an inquiry or adjudicate
upon any matter under this Act after giving a reasonable oral hearing to the parties
concerned.
Review of orders of Commission
37. Any person aggrieved by an order of the Commission from which an appeal is allowed by
this Act but no appeal has been preferred, may, within thirty days from the date of the
order, apply to the Commission for review of its order and the Commission may make
such order thereon as it thinks fit:
Provided that the Commission may entertain a review application after the expiry of the
said period of thirty days, if it is satisfied that the applicant was prevented by sufficient
cause from preferring the application in time: Provided further that no order shall be
modified or set aside without giving an opportunity of being heard to the person in whose
favour the order is given and the Director General where he was a party to the proceedings.
Rectification of orders
38.(1) With a view to rectifying any mistake apparent from the record, the Commission may
amend any order passed by it under the provisions of this Act.
(2) Subject to the other provisions of this Act, the Commission may make—
(a) an amendment under sub-section (1) of its own motion;
(b) an amendment for rectifying any such mistake which has been brought to its notice
by any party to the order.
Explanation.— For the removal of doubts, it is hereby declared that the Commission shall not,
while rectifying any mistake apparent from record, amend substantive part of its order passed
under the provisions of this Act.
Execution of orders of Commission
39. Every order passed by the Commission under this Act shall be enforced by
the Commission in the same manner as if it were a decree or order made by a High Court
or the principal civil court in a suit pending therein and it shall be lawful for the Commission
to send, in the event of its inability to execute it, such order to the High Court or the
principal civil court, as the case may be, within the local limits of whose jurisdiction,—
COMMERCIAL & INDUSTRIAL LAWS A 383
(a) in the case of an order against a person referred to in sub-clause (iii) or sub-clause (vi)
or subclause (vii) of clause (l) of section 2, the registered office or the sole or principal
place of business of the person in India or where the person has also a subordinate
office, that subordinate office, is situated;
(b) in the case of an order against any other person, the place, where the person concerned
voluntarily resides or carries on business or personally works for gain, is situated,
and thereupon the court to which the order is so sent shall execute the order as if it
were a decree or order sent to it for execution.
Appeal
40 Any person aggrieved by any decision or order of the Commission may file an appeal to
the Supreme Court within sixty days from the date of communication of the decision or
order of the Commission to him on one or more of the grounds specified in section 100 of
the Code of Civil Procedure, 1908 (5 of 1908):
Provided that the Supreme Court may, if it is satisfied that the appellant was prevented
by sufficient cause from filing the appeal within the said period, allow it to be filed within
a further period not exceeding sixty days:
Provided further that no appeal shall lie against any decision or order of the Commission
made with the consent of the parties.
DUTIES OF DIRECTOR GENERAL
Director General to investigate contravention
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.
(2) The Director General shall have all the powers as are conferred upon the Commission
under subsection (2) of section 36.
(3) Without prejudice to the provisions of sub-section (2), sections 240 and 240A of the
Companies Act, 1956 (1 of 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.
PENALTIES
Contravention of orders of Commission
42.(1) Without prejudice to the provisions of this Act, if any person contravenes, without any
reasonable ground, any order of the Commission, 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 fails to pay the penalty imposed under
this Act, he shall be liable to be detained in civil prison for a term which may extend to one
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year, unless in the meantime the Commission directs his release and he shall also be liable
to a penalty not exceeding rupees ten lakhs.
(2) The Commission may, while making an order under this Act, issue such directions to any
person or authority, not inconsistent with this Act, as it thinks necessary or desirable, for
the proper implementation or execution of the order, and any person who commits breach
of. or fails to comply with, any obligation imposed on him under such direction, may be
ordered by the Commission to be detained in civil prison for a term not exceeding one
year unless in the meantime the Commission directs his release and he shall also be liable
to a penalty not exceeding rupees ten lakhs.
Penalty for failure to comply with directions of Commission and Director General
43. If any person fails to comply with a direction given by—
(a) the Commission under sub-section (5) of section 36; or
(b) the Director General while exercising powers referred to in sub-section (2) of section
41, the Commission shall impose on such person a penalty of rupees one lakh for each
day during which such failure continues.
Penalty for making false statement or omission to furnish material information
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
45.(1) Without prejudice to the provisions of section 44, if any 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 21
(c) wilfully alters, suppresses or destroys any document which is required to be furnished
as aforesaid, the Commission shall impose on such person a penalty which may extend
to rupees ten lakhs.
(2) Without prejudice to the provisions of sub-section (1), the Commission may also pass
such other order as it deems fit.
COMMERCIAL & INDUSTRIAL LAWS A 385
Power to impose lesser penalty
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, 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 proceedings
for the violation of any of the provisions of this Act or the rules or the regulations have
been instituted or any investigation has been directed to be made under section 26 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
first made the full, true and vital disclosures under this section:
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.
Crediting sums realised by way of penalties to Consolidated Fund of India
47. All sums realised by way of penalties under this Act shall be credited to the Consolidated
Fund of India.
Contravention by companies
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 lo
any punishment if he proves that the contravention was committed without his knowledge
or that he had exercised all due diligence to prevent the commission of such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of
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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.
Explanation.—For the purposes of this section,—
(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.
COMPETITION ADVOCACY
Competition advocacy
49. (1) In formulating a policy on competition (including review of laws related to competition),
the Central Government may make a reference to the Commission for its opinion on
possible effect of such policy on competition and on receipt of such a reference, the
Commission shall, within sixty days of making such reference, give its opinion to the
Central Government, which may thereafter formulate the policy as it deems fit.
(2) The opinion given by the Commission under sub-section (1) shall not be binding upon the
Central Government in formulating such policy.
(3) The Commission shall take suitable measures, as may be prescribed, for the promotion of
competition advocacy, creating awareness and imparting training about competition issues.
FINANCE, ACCOUNTS AND AUDIT
Grants by Central Government
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
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) The monies received as costs from parties to proceedings before the Commission;
(c) The fees received under this Act;
(d) The interest accrued on the amounts referred to in clauses (a) to (c).
(2) The Fund shall be applied for meeting—
COMMERCIAL & INDUSTRIAL LAWS A 387
(a) the salaries and allowances payable to the Chairperson and other Members and 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;
(b) The other expenses of the Commission in connection with the discharge of its functions
and for the purposes of this Act.
(3) The Fund shall be administered by a committee of such Members of the Commission as
may be determined by the Chairperson.
(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.
Accounts and Audit
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 by the Central
Government in consultation with the Comptroller and Auditor-General of India.
(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 Supreme Court, shall not be subject to audit
under this section.
(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 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.
(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
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.
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(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.
(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.
MISCELLANEOUS
Power to exempt
54. The Central Government may, by notification, exempt from the application of this Act, or
any provision thereof, and for such period as it may specify in such notification—
(a) any class of enterprises if such exemption is necessary in the interest of security of the
State or public interest;
(b) any practice or agreement arising out of and in accordance with any obligation assumed
by India under any treaty, agreement or convention with any other country or countries;
(c) any enterprise which performs a sovereign function on behalf of the Central
Government or a State Government:
Provided that in case an enterprise is engaged in any activity including the activity
relatable to the sovereign functions of the Government, the Central Government may
grant exemption only in respect of activity relatable to the sovereign functions.
Power of Central Government to issue directions
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.
(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
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
COMMERCIAL & INDUSTRIAL LAWS A 389
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 epresentations,
if any, of the Commission.
(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
their 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.
(3) On or before the expiration of the period of supersession specified in the notification issued
under subsection (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 clause (a)
of sub-section (2) shall not be deemed to be disqualified for re-appointment.
(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.
Restriction on disclosure of information
57. No information relating to any enterprise, being an information which has been obtained
by or on behalf of the Commission 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.
Members, Director General, Registrar, officers and other employees, etc. of Commission to
be public servants
58. The Chairperson and other Members and the Director General, Additional, Joint, Deputy
or Assistant Directors General and Registrar and officers and other employees of the
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Commission 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 (45 of 1860).
Protection of action taken in good faith
59. No suit, prosecution or other legal proceedings shall lie against the Central Government or
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
Rcgistrar or officers or other employees of the Commission 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
60. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force.
Exclusion of jurisdiction of civil courts
61. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any
matter which the Commission 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
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
63.(1) The Central Government may, by notification, make rules to carry out the
provisions of this Act.
(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 manner in which the Chairperson and other Members shall be selected under
section 9;
(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 sub-section (3) of section
10;
(c) the financial and administrative powers which may be vested in the Member
Administration under section 13;
(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 sub-section (1) of section 14;
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(e) The salary, allowances and other terms and conditions of service of the Director
General, Additional, Joint, Deputy or Assistant Directors General or such other
advisers, consultants or officers under sub-section (3) of section 16;
(f) The qualifications for appointment of the Director General, Additional, Joint, Deputy
or Assistant Directors General or such other advisers, consultants or officers under
sub-section (4) of section 16;
(g) The salaries and allowances and other terms and conditions of service of the Registrar
and officers and other employees payable, and the number of such officers and
employees under sub-section (2) of section 17;
(h) For securing any case or matter which requires to be decided by a Bench composed of
more than two Members under sub-section (4) of section 23;
(i) Any other matter in respect of which the Commission shall have power under clause
(g) of subsection (2) of section 36;
(j) The promotion of competition advocacy, creating awareness and imparting training
about competition issues under sub-section (3) of section 49;
(k) The form in which the annual statement of accounts shall be prepared under subsection
(1) of section 52;
(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
sub-section (1) of section 53;
(m) The form in which and the time within which the annual report shall be prepared
under sub-section (2) of section 53;
(n) The manner in which the monies transferred to the Central Government shall be dealt
with by that Government 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.
(3) Every notification issued under sub-section (3) of section 20 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.
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OTHER LAWS
Power to make regulations
64.(1) The Commission may, by notification, make regulations consistent with tills Act and the
rules made thereunder to carry out the purposes of this Act.
(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
sub-section (2) of section 6;
(c) The form in which details of the acquisition shall be filed under subsection (5) of
Section 6;
(d) The fee which may be determined under clause (a) of sub-section (1) of section 19;
(e) Any other matter in respect of which provision is to be, or may be, made by regulations.
(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.
Power to remove difficulties
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.
(2) Every order made under this section shall be laid, as soon as may be after it is made,
before each House of Parliament.