Looking to recover thousands of crores worth penalties imposed on erring entities, fair trade watchdog CCI will now specifically demand a penal interest amount applicable to delayed fines in its demand notices.
The Competition Commission of India (CCI) is mandated to keep a tab on unfair business practices across sectors and is authorised to impose fines on those found to have engaged in anti-acompetitive activities.
To help CCI recover penalties from defaulters in a more effective manner, the Government has amended the Competition Commission of India (Manner of Recovery of Monetary Penalty) Amendment Regulations.
While these regulations provide for the CCI to levy a simple interest on the unpaid penalty amount, the details of the same were not explicitly mentioned in demand notices so far.
Pursuant to the latest amendment, notified on July 30, the demand notice issued to defaulters would now specifically mention that any default in payment of the penalty would attract a penal interest of 1.5 per cent per month.
“In case you fail to deposit the penalty amount... within the aforesaid period, you shall be liable to pay simple interest at the rate of 1.5 per cent for every month or part of a month comprised in the period commencing from the date immediately after the expiry of the period mentioned in this demand notice and ending with the date on which the demand is paid,” as per a new paragraph to be inserted in demand notices.
As per the amendment, the demand notice would further state, "Further, the Commission shall also take necessary steps for recovery of the sum due besides initiating action for non-compliance of the order(s) of the Commission".
The latest amendment brings more clarity on actions that could be taken in case there is a default in payment of penalties imposed by the CCI.
Though the fair trade watchdog has slapped hefty penalties for various violations across sectors, the actual recovery of monies is low. Going by estimates, thousands of crores worth fines are yet to be recovered as many rulings are in litigation.
In December last year, the Government had said that CCI recovered only nearly Rs 20 crore as against penalties worth more than Rs 8,000 crore imposed on 154 entities.