Sections 42 and 42A 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 42 of the Competition Act, 2002 deals with a person who does not comply with an order or direction of the Competition Commission of India. It lets the Commission inquire into compliance, imposes a daily penalty with a ceiling, and adds a criminal route before the Chief Metropolitan Magistrate, Delhi. Section 42A lets a person who has suffered loss because an enterprise violated the Commission's directions ask the Appellate Tribunal for compensation.
If a person, without reasonable clause, does not comply with a Commission order or direction under the listed sections, the penalty may go up to rupees one lakh for each day of non-compliance, subject to a maximum of rupees ten crore. Continued non-compliance, or failure to pay that penalty, can lead to imprisonment up to three years, or a fine up to rupees twenty-five crore, or both, decided by the Chief Metropolitan Magistrate, Delhi, but only on a complaint filed by the Commission or an officer it authorises. Separately, Section 42A allows an application to the Appellate Tribunal for recovery of compensation.
How this article reads the Act
This article follows 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. Every change below applies the amending clause to the printed text. The 2023 change applies from the date notified for that provision; the notification is not in the sources consulted and should be checked. This article gives no commencement date. If a Commission order is already in your hands, our legal dispute resolution team can help you read it.
Section 42(1): the Commission may inquire into compliance
Section 42(1) of the Competition Act, 2002 reads: "The Commission may cause an inquiry to be made into compliance of its orders or directions made in exercise of its powers under the Act." The sub-section is not touched by the 2023 Act. It is a power, not a duty: the Commission decides whether and when to look into whether its own orders, for example a cease and desist order or a modification of a combination, have been obeyed. For the orders themselves, see the articles on Section 27 orders and penalty and on combination orders.
Section 42(2): the daily penalty
As printed in the consolidated text, Section 42(2) says that if any person, without reasonable clause, fails to comply with the orders or directions of the Commission issued under sections 27, 28, 31, 32, 33, 42A and 43A of the Act, he shall be punishable with fine which may extend to rupees one lakh for each day during which such non-compliance occurs, subject to a maximum of rupees ten crore, as the Commission may determine. The printed text says "reasonable clause"; this looks like a slip for "reasonable cause" and is flagged here rather than corrected.
Clause 27(a) of the Competition (Amendment) Act, 2023 substitutes, for the words "sections 27, 28, 31, 32, 33, 42A and 43A of the Act, he shall be punishable with fine", the words "sections 6, 27, 28, 31, 32, 33, 42A, 43, 43A, 44 and 45 of the Act, he shall be liable to a penalty". The words being replaced match the printed text exactly, so the clause fits the base text. After the amendment, Section 42(2) therefore reads, in the relevant part: "... fails to comply with the orders or directions of the Commission issued under sections 6, 27, 28, 31, 32, 33, 42A, 43, 43A, 44 and 45 of the Act, he shall be liable to a penalty which may extend to rupees one lakh for each day during which such non-compliance occurs, subject to a maximum of rupees ten crore, as the Commission may determine."
Two things follow. The daily amount and the ceiling are unchanged. The list of sections whose orders attract the penalty is longer, and it now includes orders connected with notice of combinations (Section 6) and the penalty sections themselves (Sections 43, 44 and 45).
Section 42(3): imprisonment or a larger fine
Section 42(3) as printed says that if any person does not comply with the orders or directions issued, or fails to pay the fine imposed under sub-section (2), he shall, without prejudice to any proceeding under Section 39, be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to rupees twenty-five crore, or with both, as the Chief Metropolitan Magistrate, Delhi may deem fit. The proviso says that the Chief Metropolitan Magistrate, Delhi shall not take cognizance of any offence under this section save on a complaint filed by the Commission or any of its officers authorised by it.
Clause 27(b) of the Competition (Amendment) Act, 2023 replaces the words "pay the fine imposed under sub-section (2)" with "pay the penalty imposed under sub-section (2)". Everything else in the sub-section stays as printed, including the three years, the rupees twenty-five crore and the proviso. The reference to Section 39 is to the recovery provision, covered in our article on Sections 38 and 39.
What the 2023 Amendment Act changed
| Provision | Before (consolidated text) | After (as amended by the Competition (Amendment) Act, 2023) |
|---|---|---|
| Section 42(2), sections listed | 27, 28, 31, 32, 33, 42A and 43A | 6, 27, 28, 31, 32, 33, 42A, 43, 43A, 44 and 45 |
| Section 42(2), consequence | "punishable with fine" | "liable to a penalty" |
| Section 42(3) | "fails to pay the fine imposed under sub-section (2)" | "fails to pay the penalty imposed under sub-section (2)" |
| Daily amount and ceiling | Rupees one lakh a day, maximum rupees ten crore | Same |
| Imprisonment and fine | Up to three years, or fine up to rupees twenty-five crore, or both | Same |
Section 42A: compensation for contravention of Commission orders
The marginal heading is "Compensation in case of contravention of orders of Commission". As printed, Section 42A says that, without prejudice to the provisions of the Act, any person may make an application to the Appellate Tribunal for an order for the recovery of compensation from any enterprise for any loss or damage shown to have been suffered by such person as a result of the enterprise violating directions issued by the Commission, or contravening, without any reasonable ground, any decision or order of the Commission issued under sections 27, 28, 31, 32 and 33, or any condition or restriction subject to which any approval, sanction, direction or exemption has been accorded, given, made or granted under the Act, or delaying in carrying out such orders or directions.
Clause 28 of the Competition (Amendment) Act, 2023 substitutes, for the words and figures "under sections 27", the words and figures "under sections 6, 27". So the list in Section 42A becomes sections 6, 27, 28, 31, 32 and 33. The text of the clause fits the printed words with no gap. The Appellate Tribunal's procedure for compensation claims is in Section 53N, which is explained in our article on compensation claims before the Appellate Tribunal.
Practical example
Aryan Packaging Pvt Ltd (an invented name) is directed by the Commission to modify a distribution practice within a stated period. It does nothing, and the Commission decides that there was no reasonable clause for the delay. The Commission may determine a penalty of up to rupees one lakh for each day of non-compliance, up to rupees ten crore in all. If Aryan Packaging neither complies nor pays, the Commission, or an officer authorised by it, may file a complaint before the Chief Metropolitan Magistrate, Delhi. Meanwhile a dealer who lost business because of the continuing violation may apply to the Appellate Tribunal under Section 42A for compensation.
What the source does not say
The sources do not give the manner of recovery of a penalty, the Commission's inquiry procedure or any forms. The Act itself speaks of imprisonment decided by a Chief Metropolitan Magistrate; check the current law on criminal procedure for how such a complaint is handled.
Need help with an order of the Commission?
If you have received a direction or an order from the Commission and are unsure how to comply, or you want to contest a penalty, our team can review the order and the available steps. See our legal dispute resolution service, and for a wider picture read the Commission's powers and procedure. Acting before a deadline passes keeps the daily penalty from building up.
Key takeaways
- Section 42(1) lets the Commission inquire into compliance with its own orders.
- The daily penalty is up to rupees one lakh for each day, with a maximum of rupees ten crore, as printed and unchanged in 2023.
- After the 2023 amendment the penalty covers orders under sections 6, 27, 28, 31, 32, 33, 42A, 43, 43A, 44 and 45, and the wording is "liable to a penalty".
- Imprisonment up to three years, or a fine up to rupees twenty-five crore, or both, is decided by the Chief Metropolitan Magistrate, Delhi, only on a complaint by the Commission or its authorised officer.
- Section 42A allows an application to the Appellate Tribunal for compensation for loss or damage.
Read next
- Sections 43, 44 and 45 of the Competition Act, 2002: penalties for non-compliance and false information
- Section 43A of the Competition Act, 2002: penalty for not notifying a combination
- Penalties under the Competition Act for cartels and abuse
- What changed in the 2023 amendment
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.