29 September 2023

Evolving Gun Jumping Jurisprudence In India

Luthra and Luthra Law Offices India


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The term ‘gun jumping' originated in sports to refer to an athlete beginning the race before the starting gun is fired whereby the violator gains an advantage over its co-athletes.
India Antitrust/Competition Law
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The term 'gun jumping' originated in sports to refer to an athlete beginning the race before the starting gun is fired whereby the violator gains an advantage over its co-athletes. On the same analogy, gun jumping in competition law parlance refers to enterprises "jumping the gun", that is acting too soon or before the proper time in giving effect to a combination.

Under Section 43A of the Competition Act, 2002 ("Act"), gun jumping occurs when an enterprise either fails to notify the transaction to the Competition Commission of India ("CCI") prior to its consummation (procedural gun jumping), or when an enterprise violates the standstill obligations by prematurely giving effect to the transaction before CCI's approval (substantive gun jumping).

In the event of violation, the CCI may impose a penalty on the enterprise which may extend to one percent of the total turnover or assets of the combination, whichever is higher. Apart from monetary penalty, initiation of proceedings for gun jumping also raises significant reputational implications for the parties to the combination.

The merger control regime under the Act is ex-ante and mandatorily requires all combinations breaching the jurisdictional thresholds to be notified to the CCI, unless otherwise exempted.1 It is also suspensory in nature and requires the parties to "stand still" and not give effect to the combination prior to the CCI approval or until 210 days have elapsed from the filing of the notice.2 The Competition (Amendment) Act, 2023 envisages a shorter timeline of 150 days as a relief to enterprises waiting to give effect to the combination.3 However, this provision is yet to be enforced.

Recently, gun jumping has caught the limelight since the CCI passed a slew of orders penalising enterprises for gun jumping and the CCI also released the draft of the new Combination Regulations4 for public consultation which can have far-reaching implications, inter alia, for gun jumping inquiries.

Upholding the sanctity of the trust-based Green Channel route

In a landmark development, the CCI for the first time has imposed penalty on the Acquirers pursuant to a notice filed under the Green Channel route holding that the Green Channel facility is a trust-based mechanism based on self-assessment by the parties to the combination.

The CCI vide its order dated 18.08.2023 imposed a penalty on Platinum Jasmine A 2018 Trust ("Platinum Trust") acting through its Trustee Platinum Owl C 2018 RSC Limited ("Platinum Trustee"), and TPG Upswing Ltd. ("TPG Upswing") (collectively, Acquirers) under Section 43A and Section 44 of the Act.5 The combination pertained to the acquisition of stake in UPL Sustainable Agri Solutions Limited ("UPL SAS/Target") by the Acquirers through the Upswing Trust.

The CCI initiated proceedings based on overlaps between activities of Arysta India, an indirect subsidiary of Upswing Trust's portfolio company and the activities of the Target.

The Acquirers submitted that the overlapping entities belonged to the same group and the Transaction did not result in a change in the competition landscape with no likely Appreciable Adverse Effect on Competition ("AAEC") in India. Further, the consumer perception was that the overlapping entities/products are the same and sales to third parties were insignificant and declining.

The CCI while rejecting the Acquirer's submissions, held that the deemed approval facility under the Green Channel route does not envisage detailed assessment of AAEC that is otherwise undertaken for all other combinations. The test for applicability of the Green Channel provision is to check that the parties to the transaction, their respective group entities and/or any entity in which they, directly or indirectly, hold shares and/or control, must not exhibit horizontal overlap, vertical interface or complementarity, considering all plausible alternative market definitions. Since there were overlaps between the parties, they could not benefit from the Green Channel facility and were held liable under Section 43A of the Act for consummating the combination before CCI's assessment and approval, attracting a penalty of INR 5 Lakhs.

Further, the CCI imposed a penalty of INR 50 Lakhs on the Acquirers under Section 44 of the Act for false statements regarding no overlaps made in the Green Channel notice and declarations.

This order rings a warning bell for enterprises looking to benefit from the deemed approval facility under the Green Channel route as the CCI observed that going forward, any disregard to the pre-conditions for availing of Green Channel would be dealt with seriously with attendant consequences based on the specificities of the case. Parties must ensure that they undertake comprehensive overlap analysis such that their haste does not make waste by not only attracting proceedings and hefty penalties, but also rendering their notice void ab initio.

Rejecting NTPC's plea of exemption for Central Public Sector Enterprises in the Oil and Gas sectors

Another significant decision was taken by the CCI against NTPC Limited ("NTPC/Acquirer") for gun jumping by failing to notify the acquisition of shareholding in Ratnagiri Gas & Power Private Limited ("RGPPL/Target") from lenders of RGPPL.

Notably, the CCI rejected NTPC's submission that the transaction could avail of the benefit of the exemption given to combinations involving Central Public Sector Enterprises ("CPSEs") operating in the Oil and Gas sectors,6 as both NTPC and GAIL (India) Limited ("GAIL"), which jointly control RGPPL, are CPSEs and GAIL operates in the gas sector.7 The CCI vide its order dated 22.08.2023 imposed a penalty of INR 40 Lakhs on NTPC under Section 43A of the Act.

Laying down the methodology for computing turnover of mutual fund businesses

The CCI while imposing gun jumping penalty on Massachusetts Mutual Life Insurance Company ("MMLI/ Acquirer") for failing to notify the acquisition of approximately 16% shareholding in Invesco Limited ("Invesco/Target"),8 evolved jurisprudence for the calculation of value of turnover in combinations pertaining to mutual fund businesses.

The CCI observed that in combinations pertaining to mutual fund businesses, the value of turnover, as per Section 5 of the Act, is the aggregate of (i) turnover/revenue from operations of the Asset Management Company ("AMC") of the mutual fund, (ii) turnover/revenue from operations of the trustee of the mutual fund, if it is also subject to the acquisition, and (iii) turnover of the mutual funds. Further, turnover of mutual funds is the aggregate of: (i) gross value of sale and redemption of securities; and (ii) income such as dividend, interests, etc.

Accordingly, the CCI rejected MMLI's argument that the Target's turnover was less than 1000 crores, thereby holding that de minimis exemption was unavailable to the combination and imposed a penalty of INR 5 Lakhs for failure to notify.

Releasing draft of the Combination Regulations, 2023

Similar proactive approach has been shown by the CCI in releasing the draft of the CCI (Combinations) Regulations, 2023 ("Draft Combination Regulations, 2023") with an intent to repeal the existing CCI (Procedure in regard to the transactions of business relating to combinations) Regulations, 2011 ("Combination Regulations, 2011"). This marks another historic step in the ever evolving landscape of merger control in India. The provisions are expected to have significant implications for gun jumping decisional practice including the following:

  1. Exclusion of Schedule I Exemptions

The Draft Combinations Regulations, 2023 have omitted any mention of exemptions to correspond those available under Schedule I of the existing Combination Regulations, 2011. The exemptions presently carved out provide relief to parties from the notification requirement despite meeting the jurisdictional thresholds under the Act and also limit the number of combination filings for review by the CCI. The omission of the exemptions is unlikely to persist in the final version of the new Combination Regulations as in the absence of the Schedule I exemptions, the CCI will open the floodgates to filing of notices for transactions without any potential AAEC and make them liable for gun jumping in case there is a failure to notify and/or failure to adhere to the standstill obligations.

  1. Deletion of Explicit Reference to 'Green Channel' Route

The Draft Combination Regulations, 2023 have omitted Regulation 5A of the Combination Regulations, 2011, that provides for the Green Channel Route for granting deemed approval to transactions without any horizontal, vertical, or complementary overlaps. Such transactions can be consummated as soon as the notice is filed without observing the standstill obligations. The reference to the Green Channel facility has been, however, retained in the Form I provided under Schedule I of the Draft Combination Regulations, 2023.

Further, the Green Channel Route is popular for promoting 'ease of doing business' and prevents avoidable scrutiny of combinations without much effect on the competitive landscape. In the absence of the Green Channel facility, the CCI's review of combinations will become unnecessarily unwieldy, correspondingly giving a fillip to gun jumping proceedings.


The CCI's scrutiny of gun jumping violations is peaking at full flow with the CCI imposing heavy penalties and penalising parties for erroneous submissions made in the combination notices. The merger regime is constantly evolving with new jurisprudence coming to light amidst gun jumping proceedings, which is likely to deter parties from evading notification and/or not adhering to 'standstill mandate' prior to approval by the CCI.

With the significant changes introduced by the Competition (Amendment) Act, 2023 which inter-alia includes (a) introduction of deal value threshold; (b) reduction in overall timeline of merger review from 210 days to 150 days with intermediate timeline of 30 days for formation of prima facie opinion; (c) conditional relaxation in combinations involving open offer/purchase of securities from registered stock exchanges; and (d) introduction of revamped procedure for modification to the proposed combination, India is looking forward to an effective and efficient merger control regime wherein the CCI is likely to bring down a heavy hammer on enterprises found indulging in gun jumping.


1. Exemptions from filing notice for a combination before the CCI include inter alia the de minimis exemption, and a range of exemptions carved out in Schedule I of the Combination Regulations, 2011 such as intra group restructuring, solely as an investment or in ordinary course of business exemption and rights/bonus issue exemption etc.

2. Competition Act, 2002, s. 6 (2A).

3. Competition (Amendment) Act, 2023, s. 7(b).

4. CCI, Draft of 'The Competition Commission of India (Combinations) Regulations, 2023', draft-combinations-regulations1693891636.pdf (

5. In re: Proceedings against Platinum Jasmine A 2018 Trust, acting through its trustee Platinum Owl C 2018 RSC Limited, and TPG Upswing Ltd. under Sections 43A and 44 of the Competition Act, 2002, Combination Registration No. C-2022/12/995, order dated 18.08.2023, Competition Commission of India, Government of India (

6. Government of India Notification no. S.O. 3714(E) dated 22.11.2017.

7. In Proceedings against NTPC Limited, Ref. No. M&A/01/2021/03/CD, order dated 22.08.2023, Competition Commission of India, Government of India (

8. In re: Proceedings under Section 43A of the Competition Act, 2002 against Massachusetts Mutual Life Insurance Company, Ref. No. M&A – 2021/01/810, order dated 07.08.2023 Competition Commission of India, Government of India (

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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