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4. Results: Answers
Cartels
6.
Penalties and sanctions
6.1
What penalties may be imposed in criminal proceedings on companies? What penalties may be imposed on individuals?
India

Answer ... The Competition Act does not provide for criminal sanctions for cartelisation, either for companies or for individuals.

However, in case of non-compliance with its orders, the Competition Commission has the power to initiate criminal proceedings with the chief metropolitan magistrate of Delhi, who may impose a punishment of imprisonment for up to three years, a fine of up to INR 250 million or both.

The National Company Law Appellate Tribunal may also file a criminal complaint with the chief metropolitan magistrate of Delhi for contravention of its orders. The chief metropolitan magistrate of Delhi may impose a punishment of imprisonment for up to three years, a fine of up to INR 10 million or both.

For more information about this answer please contact: Vivek Agarwal from DMD® ADVOCATES
6.2
What penalties may be imposed in civil proceedings on companies? What penalties may be imposed on individuals?
India

Answer ... Each company involved in a cartel can be penalised up to three times its profits or 10% of its turnover, whichever is higher, for each year of the continuance of the cartel.

Although the Competition Act does not prescribe the maximum penalty for individuals, the Competition Commission generally imposes a penalty of up to 10% of the individual’s income for each year of the continuance of the cartel.

For more information about this answer please contact: Vivek Agarwal from DMD® ADVOCATES
6.3
How are penalties in cartel cases determined? In deciding on the applicable penalties, will the enforcement authorities consider penalties imposed in other jurisdictions?
India

Answer ... There are no guidelines to determine penalties in cartel cases. However, based on its practice, the Competition Commission will consider certain aggravating and mitigating factors when determining the quantum of penalty. In Excel Crop Care Ltd v Competition Commission of India (Civil Appeal 2480/2014), the Supreme Court set out an illustrative list of aggravating and mitigating factors which the commission could use to determine the quantum of penalty. Such factors include:

  • the nature, gravity and extent of the contravention;
  • the role played (ringleader or follower);
  • the duration of the participation;
  • loss or damage due to the contravention;
  • market circumstances;
  • the bona fides of the company; and
  • the profits derived from the contravention.

In the same case, the Supreme Court also held that in case of cartelisation, companies will be penalised only based on the relevant turnover arising from the products or services which were a part of the cartel, and not their entire turnover or profits, as that would render the penalty unjust and unfair.

The commission does not take into account the penalties imposed on entities in other jurisdictions.

For more information about this answer please contact: Vivek Agarwal from DMD® ADVOCATES
6.4
Can a defendant company pay the legal costs incurred by and/or penalties imposed on its employees?
India

Answer ... Yes. There is no provision in the Competition Act barring a company from paying legal costs incurred by and/or penalties imposed on its employees.

For more information about this answer please contact: Vivek Agarwal from DMD® ADVOCATES
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Cartels