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Widened Powers of the DG: An Ill-Considered Proposal in Competition (Amendment) Bill, 2022?

The authors are Priyanshi Bhageria & Shubhendra Mishra, third year students at Dr. Ram Manohar Lohiya National Law University.


The Competition (Amendment) Bill, 2022 (hereinafter, ‘The Bill’) was introduced before the lower house of Parliament in August 2022, proposing significant changes to India's competition law regime. The Bill (which is expected to be debated further by the Standing Committee on Finance during the winter session of Parliament) aims to provide India's competition regulator, the Competition Commission of India (hereinafter, ‘CCI’), with the necessary tools to address new age markets, combinations, and cartels. One of the key amendments that the bill proposes is to widen the scope of the powers of the Director General (hereinafter ‘DG’). This article aims to analyse the various aspects of the widened powers of DG in the present scenario with regard to the change in nature of the DG, contradicting interpretation of the powers of the DG, the hasty drafting of the amendment bill and thereby suggesting a way forward to the current situation.

Powers of DG: Then vs Now

Article 41(2) of the Competitions Act, 2002 (hereinafter, ‘2002 Act’) enumerates the powers of the DG, which are almost at par with that of the CCI. The only difference lies in the fact that the DG cannot initiate an investigation without the order of the CCI. The DG derives most of its powers from Section 41 read with Section 36(2) of the 2002 Act. In the 2002 Act, any aggrieved person could make a request to the CCI to conduct an investigation. If the CCI finds a prima facie case, it can issue a Prima facie order under Section 26(2) to the DG for conducting the Investigation.

Although a wide array and scope of powers was present with the DG since the 2002 Act, the Bill does not deviate from its previous stance, rather it aims to bolster it by widening the scope of powers of the DG to an even greater extent, such as inclusion of power to question even the third parties in the course of investigation including agents, whose definition now includes bankers and legal advisors who may be required to divulge confidential client information.

Furthermore, the DG used to exercise the power of conducting search and seizure informally since the inception of the 2002 Act, such powers are now extensively codified in the Bill. This means that the actions which could have been challenged by virtue of them not having any statutory basis, are now completely valid. Moreover, the Bill also aggravates the penal provisions of the 2002 Act . This leads to the obvious conclusion that there existed a scope of blatant abuse of powers by DG and the 2022 amendment embraces the scope wholeheartedly.

Provisions Governing DG’s Powers: A Product of Hasty Drafting?

A plain reading of the Bill will give the readers an impression that the same is a more descriptive version of the powers of the DG, however, a deeper reading will tell us that there is more to what meets the eye. For example, initially Section 43(b) of the 2002 Act penalises non-compliance with the directions of the CCI or the DG with a fine which may extend upto 1 lakh rupees for a day. Now, the Bill proposes to include term imprisonment for non-compliance coupled with fine which is currently present. Non-compliances which are comparatively meagre in nature such as not being able to answer the questions posed by the DG would include a term imprisonment of 6 months or a fine of upto 1 crore rupees or both. Such a provision demonstrates the potential of unruly arbitrariness of the powers given to the DG. Furthermore, there is no clarity over how the CCI or the DG will determine the culpability in such cases and impose a penalty where it has already been directed by the Competitions Appellate Tribunal (hereinafter ‘COMPAT’) to comply principles of natural justice and maintain procedural fairness in the case of Coal India Limited v. CCI and Schott Glass India.

Secondly, certain provisions of the Bill are incompatible with the existing legislations like the Indian Evidence Act, 1872 and the Companies Act, 2013. The bill proposes to give DG the power to summon and question the legal advisors of the entities and persons involved. However, Section 126 of the Evidence Act and Section 227 of the Companies Act impose a restriction on the legal advisors to not divulge confidential client information, which can be a possibility during the investigation process conducted by the DG.

Thirdly, the Bill fails to provide clarity over a persistent issue. Although the Supreme Court settled in the case of Excel Crop Care Ltd. v. Competition Commission of India that the DG is within its powers to start investigation of additional facts which it may have discovered during the course of investigation, the Bill fails to demarcate the scope of this power. For instance, the DG does not have the power to initiate any investigation suo moto but possesses the power to investigate any new fact which has arisen out of the investigation it was pursuing on the approval of the CCI. So, the Bill could have provided clarity over when an investigation would be considered suo moto and when it would be considered an investigation on discovery of an additional fact.

Lastly, in terms of summoning witnesses and examining people under oath, section 41(2) of the 2002 Act gives DG the powers of a Civil Court in these matters, and a penalty can be imposed if this provision is not followed. However, the specification of these powers in the Bill under section 41(3) of the Act (which are in addition to the current powers under section 41(2) of the Act) complicates the investigation procedure where two sets of powers are involved (one general and another specific is provided). For example, the Bill requires the DG to obtain prior approval from the CCI before questioning anyone other than an officer, other employee, or agent of a party under investigation. On the other hand, by virtue of clause (2), the DG already has wide authority to summon and enforce the attendance of any person. To make matters even more complicated, while the general power is backed by the sanction of a penalty under Section 43 of the Act, the specific powers provided by the Bill do not. As a result, it is unclear whether the DG will summon people and question them under oath under section 41(2) or 41(3).


With the current aggrandisement of powers of the DG, there is a need to reconsider especially this aspect of the Bill. It needs to be understood that the DG is the investigative wing of the CCI and not the adjudicating authority. Such wide powers and discretion afforded to the DG can lead to unfairness and arbitrariness in the entire procedure. Hence, there is a need to incorporate a proper system of checks and balances with regard to the powers of the DG. The same can be done by affixing accountability or issuing comprehensive guidelines for the exercise of such powers.

Furthermore, the Bill should have provided more clarity on the abovementioned problems such as clearly defining the ambit of the powers of the DG with regard to initiating suo moto investigation and investigation on an additional fact. Moreover, it could have specifically provided for circumstances wherein the legal advisor is expected to divulge confidential information. The powers of the DG, as enumerated in the Bill, have the potential to turn arbitrary and defeat the entire purpose of its principal act.

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