Streamlining Penalty Recovery: An Analysis Of The CCI’s 2025 Regulations

The Competition Commission of India (CCI) has notified the Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2025, from the date of publication in the Official Gazette on February 25^th, 2025.[1] These new regulations, which supersede the 2011 regulation, specify the methods of recovery of monetary penalties ordered under the Competition Act, 2002.

Issuance of Demand Notice

When the CCI issues a monetary penalty, the regulation provides for the issuance of a demand notice (Form I) to the enterprise or individual concerned by the Secretary. A copy of the order issued by the CCI and a notice are required to be communicated to their last known address and also to a copy forwarded to the recovery officer. Most importantly, the demand notice allows at least 60 days from the date of receipt of the order for the penalized organization to pay the amount. The payment must be made through challan (Form II) in favour of the Pay & Accounts Officer (PAO), Ministry of Corporate Affairs, under a particular Head of Account. The penalized party is then obligated to file a copy of the challan with the recovery officer within seven days from payment, who will then enter the transaction in the penalty recovery register. The rules also permit the Commission to correct any clerical or arithmetical mistakes in the demand notice.

Extension Of Time and Instalment Facility

To acknowledge potential cash flow problems with early payment, the rules have a process for businesses or individuals to request time extension or payment in instalments. The request must be made prior to the end of the initial deadline stated in the demand notice. The discretion to grant such requests remains with the Commission, subject to terms it considers reasonable. But non-compliance with the extended period or any instalment plan will lead to the entity being termed an ‘enterprise in default’ or a ‘person in default’ for the whole outstanding penalty.

Interest on Penalty

To provide for compliance in a timely manner, the rules provide for charging simple interest at the rate of one percent per month (or part thereof) on any amount of penalty outstanding after the period specified in the notice of demand. The interest is to be charged from the day after the date of expiry of the period to the date of actual payment. Importantly, the Commission also has the discretion to lower or remit interest if it is convinced that the delay was due to factors outside the control of the entity being penalized. Moreover, in instances where appellate tribunals lower the amount of penalty, interest will also be lowered proportionately, with the amount of excess interest paid being refunded.

Issuance of Recovery Certificate and Functions of Recovery Officer

In the event that an enterprise or individual is in default, the Commission, acting through the Secretary, will issue a recovery certificate (Form III) to be signed by the recovery officer. This certificate will identify the amount of penalty outstanding together with any accrued interest and enumerate the modes of recovery available and give a further 15 days for payment. The Commission also has the authority to correct mistakes in the recovery certificate or to vary the payment schedule contained therein.

The rules duly empower officers of the Commission to act as recovery officers. They are entrusted with the duties of verifying proper service of the demand notices, reporting non-service or payment to the Secretary, triggering issue of recovery certificates on default, enforcing these certificates, and proceeding with the modes of recovery indicated after the 15-day period stated in the certificate.

Modes of Recovery

The rules stipulate a number of ways through which the recovery officer can pursue the due penalty from a defaulting enterprise or individual. They are:

• Attachment of Funds: Directing any individual or enterprise having money on behalf of the defaulter, or legal heirs of a deceased defaulter, to pay the overdue penalty to the Commission. Refusal to do so can make the third party liable as a defaulter.
• Joint Accounts and Legal Heirs: Provisions cover recovery from joint accounts (assuming equal shares) and from legal heirs of deceased persons (to the extent of the estate inherited). Binding Compliance: Requiring compliance by any person to whom a recovery certificate is issued, overriding internal rules or requirements about furnishing documents.
• Void Transfers: Making any charge incurred or asset transfer made by the defaulter subsequent to the date of the demand notice void against the claim of penalty, except in case of transfer for sufficient consideration without notice of proceedings or with prior permission of the Commission.
• Court Intervention: Authorizing the recovery officer to approach a court having funds belonging to the defaulter for payment of the penalty.
• International Recovery: Facilitating the Commission to recommend recovery measures to countries with which India has arrangements for such an endeavor.

Other Recovery Modes and Reference to Income-Tax Authorities

Besides the above means, the regulations also provide that the recovery officer can proceed in parallel with recovery by attachment and sale of movable and immovable property of the defaulter, as per the provisions given in the Second Schedule of the Income-tax Act, 1961.

In addition, the Commission has the option of referring cases to the relevant Income-tax authority for recovery of penalty as ‘tax due’ under the Income-tax Act, 1961, if it finds that this would be a quicker method. If such a reference is made, any recovery proceedings by the Commission will be stayed.

Monitoring and Refund of Excess Penalty

The rules prescribe a framework for tracking the recovery process. Regular updation of the register of recovery of penalties and furnishing monthly reports of recovery progress to the Commission, along with details of steps taken and references made to the Income-tax authority, is mandated for the Secretary.

Last, the rules also provide for the situation where an appellate authority orders that no penalty is payable or where the amount payable is lower than what is originally demanded. The demand notice or recovery certificate shall be withdrawn or amended in these situations and the excess paid penalty refunded by the Secretary after passing a refund order.

Conclusion

The Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2025, are complete and up-to-date regulations enabling effective recovery of penalties under the Competition Act, 2002. By appropriately defining procedures regarding issue of demand notices, management of defaults, specifying modes of recovery, as well as having monitoring mechanisms, these regulations can improve the power of the CCI to effect its orders as well as command compliance with the Act. The provision for instalments and extensions as well as refunds showing a balanced approach, together with the facility to engage income-tax authorities also ensures an added force of enforcement. These provisions are a major step forward for enhancing the competition law regime in India.

[1] https://www.cci.gov.in/images/whatsnew/en/gazette-notification17406542541740655036.pdf.

King Stubb & Kasiva,
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