Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Regulation of Combinations

Zenith Motors Ltd, an Indian company, gives notice of a combination under the Competition Act, 2002 after it is already completed and it had no valid notice earlier. The Competition Commission finds that the notice was due under sub-section (2) of section 6 and was not given. Which statement about the maximum penalty it may impose under section 43A is correct?

The Commission may impose a penalty extending to one per cent of the total turnover, assets or the value of transaction referred to in section 5(d), whichever is higher, of the combination. The base is the highest of the three, not turnover alone.

  1. AUp to one per cent of the total turnover or assets or the value of transaction referred to in clause (d) of section 5, whichever is higher, of the combinationCorrect
  2. BUp to ten per cent of the average turnover of the last three years of Zenith Motors Ltd
  3. CA fixed amount of one crore rupees irrespective of the size of the combination
  4. DUp to one per cent of only the total turnover of the combination, even if assets or deal value are higher

Explanation

Section 43A lets the Commission penalise failure to give notice under section 6(2) up to one per cent of the total turnover or assets or the value of transaction under section 5(d), whichever is higher. The option limiting the base to turnover alone ignores the 'whichever is higher' wording. The ten per cent and fixed-sum options are not in this provision.

Did you get it right without looking?

One question tells you little. A timed set on Regulation of Combinations shows your real accuracy, how long you take and where you lose marks.

Practise Regulation of CombinationsFree diagnostic mock

More Regulation of Combinations questions