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CS Executive · Economic, Commercial and Intellectual Property Laws · Competition Law

The Commission concludes that a notified merger between Bharat Cements Ltd and Deccan Binders Ltd is likely to have an appreciable adverse effect on competition. Which direction does Section 31(2) require the Commission to give?

The Commission shall direct that the combination shall not take effect. Section 31(2) makes this the consequence where the combination has, or is likely to have, an appreciable adverse effect on competition. It is a mandatory direction, not an approval or deemed approval.

  1. AThat the combination shall not take effectCorrect
  2. BThat the combination be approved with a penalty
  3. CThat the parties re-notify after 150 days
  4. DThat the combination be treated as deemed approved

Explanation

Section 31(2) states that where the Commission is of the opinion that the combination has, or is likely to have, an appreciable adverse effect on competition, it shall direct that the combination shall not take effect. Deemed approval arises only from lapse of time or non-formation of a prima facie opinion, not from an adverse finding.

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