CCI wants to reform fine collection rules; Wants feedback from the public. peppermint

New Delhi: Noting low recovery of penalties imposed on corporations for anti-competitive activities, the Competition Commission of India (CCI) has sought to improve its recovery processes.

The regulator has sought public feedback on a set of amendments to the over a decade-old penalty recovery regime prescribed in the CCI (Manner of Recovery of Monetary Penalty) Regulations, 2011.

CCI said in a background note on the proposed changes that comments would be accepted till June 6.

“Based on the experience gained during the implementation of these rules over the years and in order to streamline the process of recovery, certain amendments are considered appropriate to be incorporated in the said rules,” the CCI said. There have been minor changes in these rules twice before – once in 2014 and again in 2021.

Along with the draft of the revised rules, CCI also put out a revised demand notice for public feedback. The proposed amendments make it clear that penalties can be imposed not only on the enterprise but also on the ‘individual’ who has violated the law. As per the proposed amendments, the legal heirs of the defaulting person are liable to pay the penalty.

liability of legal heir

The draft of the amended regulation states that the liability of the legal heir will be limited to the extent to which the property of the deceased has been passed on to such a legal heir who is capable of meeting the liability.

The regulator imposed fines in FY22 and FY23, CCI said in its annual report for FY23 1,336 crore more 2,672 crore, but only 13% and less than 1% of them could be recovered respectively. peppermint Reported on 20 October. peppermint It was then also reported that the regulator set up a three-member internal committee to recommend measures to further strengthen the recovery process.

Experts said the proposed amendments are aimed at plugging existing loopholes and ensuring speedy and effective enforcement against anti-competitive practices.

“Historically low recovery rates likely indicate systemic flaws, making it easier for corporations to avoid penalties or delay payments without facing significant consequences. With these amendments, CCI aims to create a more rigorous and streamlined recovery process, which will ultimately strengthen its deterrent power,” said Sonam Chandwani, managing partner, law firm KS Legal & Associates.

“By introducing structured demand notices, compound interest on delayed payments and asset attachment provisions, CCI is creating a robust framework that prioritizes accountability. These new measures also allow cooperation with income tax authorities, treating penalties as tax dues, which significantly strengthens recovery efforts,” Chandwani said.

penal interest

The rate of interest will be 1% on “the outstanding amount for each month or part of the month” until the penalty is paid after the due date of payment.

Chandwani said, with these changes, CCI is not only enhancing its deterrent power but also sending a clear message that non-compliance will result in substantial financial and reputational consequences, thus encouraging corporations to adhere to fair competition standards. Will be encouraged to do so.

Chandwani said, this reform in recovery rules is a necessary step for the CCI to close the enforcement gap, enhance its authority and ensure that penalties are effective in its role of preventing anti-competitive behavior and promoting a fair market environment. Fulfills the intended purpose.

A former CCI official told peppermint Although penalty recovery may be slow, CCI has been effective in achieving market reforms with its enforcement action.