Unit 5 Competition Act, 2002- Overview :

a. Object of The Act, Scheme, Salient Features

b. Establishment of Competition Commission of India
c. Competition Advocacy
d. Competition Fund

THE COMPETITION ACT, 2002

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. BE it enacted by Parliament in the Fifty-third Year
of the Republic of India as follows:—

COMPETITION COMMISSION OF INDIA

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”.
(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 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
six other Members to be appointed by the Central Government.
(2) The Chairperson and every other Member shall be a person of ability, integrity and
standing and who has special knowledge of, and such professional experience of not less than
fifteen years in, international trade, economics, business, commerce, law, finance,
accountancy, management, industry, public affairs or competition matters, including
competition law and policy, 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.
(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.

Selection Committee for Chairperson and Members of Commission

9. (1) The Chairperson and other Members of the Commission shall be appointed by the
Central Government from a panel of names recommended by a Selection Committee
consisting of –
a) the Chief Justice of India or his nominee - Chairperson
b) the Secretary in the Ministry of Corporate Affairs - Member
c) the Secretary in the Ministry of Law and Justice - Member
d) two experts of repute who have special knowledge of, and professional experience in
international trade, economics, business, commerce, law, finance, accountancy, management,
industry, public affairs or competition matters including competition law and policy
(2) The term of the Selection Committee and the manner of selection of panel of names shall
be such 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 re-
appointment:
Provided that the Chairperson or other Members shall not hold office as such after he has
attained 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 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.
(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 seniormost 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 expiry of his term of office, whichever is the
earliest.
(2) Not with standing 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) Not with standing 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 2 [two years] from the date
on 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).

Administrative powers of Chairperson

13. The Chairperson shall have the powers of general superintendence, direction and control
in respect of all administrative matters of the Commission:
Provided that the Chairperson may delegate such of his powers relating to administrative
matters of the Commission, as he may think fit, to any other Member or officer of the
Commission.”

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, houserent allowance and conveyance facilities,
sumptuary allowance andmedical facilities shall be such as may be prescribed.
(2) The salary, allowances and other terms and conditions of serviceof 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 for the
purposes of assisting the Commission in conducting inquiry into contravention of any of the
provisions of this Act and for performing such other functions as are, or may be, provided by
or under this Act.
(1A) The number of other Additional, Joint, Deputy or Assistant Directors General or such
officers or other employees in the office of Director General and the manner of appointment
of such Additional, Joint, Deputy or Assistant Directors General or such officers or other
employees shall be such as may be prescribed.
(2) Every Additional, Joint, Deputy and Assistant Directors General or such officers or other
employees, 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, 25 [such officers or other
employees,] shall be such as may be prescribed.
(4) The Director General and Additional, Joint, Deputy and Assistant Directors General or
such officers or other employees, 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.

Appointment of Secretary, experts, professionals and officers and other employees of

Commission
17. (1) The Commission may appoint a Secretary 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
Secretary and officers and other employees of the Commission and the number of such
officers and other employees shall be such as may be prescribed.
(3) The Commission may engage, in accordance with the procedure specified by regulations,
such number of experts and professionals of integrity and outstanding ability, who have
special knowledge of, and experience in, economics, law, business or such other disciplines
related to competition, as it deems necessary to assist the Commission in the discharge of its
functions under this Act.