Section 28 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 28 of the Competition Act, 2002 gives the Commission a strong structural power: to direct, by order in writing, the division of an enterprise enjoying a dominant position so that it does not abuse that position. The section lists the matters such an order may deal with and says that an officer of a company who loses office because of the division cannot claim compensation. The Competition (Amendment) Act, 2023 does not amend Section 28.
As per the consolidated text of the Act published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023. The Commission may, notwithstanding any other law, by order in writing, direct division of an enterprise enjoying dominant position to ensure it does not abuse that position. The order may deal with transfer of property, adjustment of contracts, shares and securities, the winding up or formation of enterprises and more. An officer who ceases to hold office in consequence of the division has no claim for compensation for that cesser. The 2023 Act does not touch this section.
Section 28(1): the power to direct division
Section 28(1) reads: "The Commission may, notwithstanding anything contained in any other law for the time being in force, by order in writing, direct division of an enterprise enjoying dominant position to ensure that such enterprise does not abuse its dominant position."
Three things stand out from the printed words.
- The Commission makes the order. The footnote to the consolidated text records that the 2007 amendment put "Commission" in place of the words "Central Government, on recommendation under clause (f) of section 27". That is one line of history; the text to read is the one that names the Commission.
- The power overrides other laws. The opening words "notwithstanding anything contained in any other law for the time being in force" apply to the power in this sub-section.
- The purpose is stated. The division is directed "to ensure that such enterprise does not abuse its dominant position". The text does not say that dominance alone justifies the order. Dominant position and abuse are explained in our article on Section 4, and the factors for deciding dominance are in our article on Section 19(3) to (7).
The consolidated text prints the section number as "28 (1)" with no full stop after the number. We quote the sub-section by its meaning.
If a notice raises the possibility of structural orders against your group, a legal consultation is a sensible early step to establish how the order could affect your contracts, shares and officers.
Section 28(2): what the order may provide
Section 28(2) says: "In particular, and without prejudice to the generality of the foregoing powers, the order referred to in sub-section (1) may provide for all or any of the following matters, namely". The list is, as printed:
| Clause | Matter the order may provide for |
|---|---|
| (a) | The transfer or vesting of property, rights, liabilities or obligations |
| (b) | The adjustment of contracts either by discharge or reduction of any liability or obligation or otherwise |
| (c) | The creation, allotment, surrender or cancellation of any shares, stocks or securities |
| (d) | Printed as "Omitted by Competition (Amendment) Act, 2007" (not described here) |
| (e) | The formation or winding up of an enterprise or the amendment of the memorandum of association or articles of association or any other instruments regulating the business of any enterprise |
| (f) | The extent to which, and the circumstances in which, provisions of the order affecting an enterprise may be altered by the enterprise and the registration thereof |
| (g) | Any other matter which may be necessary to give effect to the division of the enterprise |
The words "all or any" show that the Commission need not use every item. The words "without prejudice to the generality of the foregoing powers" show that the list is illustrative of the power in sub-section (1), not a limit on it. Clause (g) adds to this by allowing any other matter necessary to give effect to the division.
Example. Gangotri Cement Ltd holds a dominant position in the cement market of a region, with a manufacturing unit and a distribution business under one roof. If the Commission, after an inquiry, directs division of the enterprise so that distribution is separated, the order may provide for the transfer of the distribution assets and liabilities (clause (a)), the adjustment of existing supply contracts (clause (b)), the allotment of shares in the new entity (clause (c)) and changes in the memorandum and articles (clause (e)). This is an invented illustration of the printed list and does not suggest that any order of this kind would be made on those facts.
Company-law references in the list (memorandum and articles, shares, winding up) are matters of company law; see our post on the Companies Act, 2013 introduction for the general framework. The text of Section 28 itself does not name any Companies Act section, so check the current company law for how such steps are carried out.
Section 28(3): officers and compensation
Section 28(3) provides: "Notwithstanding anything contained in any other law for the time being in force or in any contract or in any memorandum or articles of association, an officer of a company who ceases to hold office as such in consequence of the division of an enterprise shall not be entitled to claim any compensation for such cesser."
This sub-section overrides any contrary term in a law, a contract, or the memorandum or articles of association. It applies to "an officer of a company". Directors, key managerial personnel and others who hold office in an enterprise facing a division order should read their appointment terms with that in mind. The sub-section removes a claim for compensation for the cesser; it does not speak to other dues, and we add nothing about them.
How Section 28 fits with the other powers
Section 27 sets out the orders and penalty after an inquiry; see our article on Section 27. As the text now stands, Section 28 gives the Commission the power directly. An order under Section 28 may be appealed to the Appellate Tribunal because Section 53A(1)(a), as printed, lists section 28 among the sections under which an appeal lies; see our article on Section 53A. The practical overview of the Commission's powers is in the guide to CCI powers and the short guide on abuse of dominant position under Section 4.
What changed in 2023
| Provision | Before | After (2023 Act) |
|---|---|---|
| 28(1) | Commission may direct division | Not changed |
| 28(2) | List of matters, clause (d) omitted in 2007 | Not changed |
| 28(3) | No compensation for officer's cesser | Not changed |
Need help if a structural order is in view?
A division order touches property, contracts, shares, officers and the constitution of the enterprise. If you are advising a business that may face one, or one of its officers, our team can read the provision with you. Begin with a legal consultation and bring the notice or report.
Key takeaways
- The Commission, by order in writing, may direct division of an enterprise enjoying dominant position to ensure it does not abuse that position.
- The power applies notwithstanding any other law for the time being in force.
- The order may provide for transfer of property, adjustment of contracts, shares, formation or winding up, and other necessary matters.
- An officer of a company who ceases to hold office in consequence of the division has no claim to compensation for that cesser.
- The 2023 Act does not amend Section 28.
Read next
- Abuse of dominant position and predatory pricing
- Orders and penalty after inquiry under Section 27
- Procedure for investigation of combinations
- Appellate Tribunal and its jurisdiction
Disclaimer: Based on the consolidated text of the Competition Act, 2002 published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023, and on the regulations and guidelines of the Commission as notified in 2024, as consulted on 2 October 2026. Commencement notifications, notified thresholds, rules and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.