Section 46 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 46 of the Competition Act, 2002 is the Act's leniency provision for cartels. A producer, seller, distributor, trader or service provider in a cartel that has violated Section 3 can obtain a lesser penalty if it makes a full and true disclosure and the disclosure is vital. The Competition (Amendment) Act, 2023 substituted the whole section and added three sub-sections: withdrawal of the application, use of the evidence, and disclosure of a second cartel.
The Commission may impose a lesser penalty, "as may be specified by regulations", on a cartel member whose disclosure is full, true and vital. It is not available after the Director General's investigation report under Section 26 has been received, and it can be lost if the member stops cooperating, gives false evidence or fails the conditions. Sub-section (4) lets a member that discloses a second cartel get a lesser penalty in the first as well, without losing its lesser penalty on the second.
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. Section 46 was substituted by clause 33 of the amending Act, so the text below is the substituted text, with one line on what was printed before. The 2023 change applies from the date notified for that provision; the notification is not in the sources consulted and should be checked. No commencement date is given. A cartel member weighing a disclosure should take advice early; see our legal dispute resolution service.
Section 46(1): who may get a lesser penalty and on what condition
Section 46(1) as substituted reads: "The Commission may, if it is satisfied that any producer, seller, distributor, trader or service provider included in any cartel, which is alleged to have violated section 3, has made a full and true disclosure in respect of the alleged violations and such disclosure is vital, impose upon such producer, seller, distributor, trader or service provider a lesser penalty as may be specified by regulations, than leviable under this Act or the rules or the regulations made under this Act".
Three requirements sit inside this one sentence. The disclosure must be full, it must be true, and it must be vital. The Commission, not the applicant, decides whether it is satisfied. The scale of the reduction is left to regulations: the Commission's Lesser Penalty Regulations, 2024 are described in our overview of the Lesser Penalty Regulations.
The four provisos to sub-section (1)
- Timing. Lesser penalty "shall not be imposed by the Commission in cases where the report of investigation directed under section 26 has been received before making of such disclosure". The disclosure must therefore come before the Director General's report is received; see Section 26.
- Who benefits. Lesser penalty is imposed "only in respect of a producer, seller, distributor, trader or service provider included in the cartel, who has made the full, true and vital disclosures under this section".
- Continued cooperation. Lesser penalty is not imposed "if the person making the disclosure does not continue to co-operate with the Commission till the completion of the proceedings before the Commission".
- Loss of the benefit. The Commission may, if satisfied that the member, in the course of proceedings, (a) did not comply with the condition on which the lesser penalty was imposed, (b) gave false evidence, or (c) made a disclosure that is not vital, proceed so that the member "may be tried for the contravention with respect to which the lesser penalty was imposed and shall also be liable to the imposition of penalty to which such person has been liable, had lesser penalty not been imposed".
Section 46(2): withdrawal
"The Commission may allow a producer, seller, distributor, trader or service provider included in the cartel, to withdraw its application for lesser penalty under this section, in such manner and within such time as may be specified by regulations." The manner and time are in the regulations, not in the Act.
Section 46(3): the evidence stays usable
"Notwithstanding anything contained in sub-section (2), the Director General and the Commission shall be entitled to use for the purposes of this Act, any evidence submitted by a producer, seller, distributor, trader or service provider in its application for lesser penalty, except its admission." So withdrawal does not take the evidence back out of the case; only the admission is excepted.
Section 46(4): a second cartel
Where, during the investigation, a member that disclosed a cartel under sub-section (1) makes a full, true and vital disclosure under sub-section (1) about another cartel in which it is alleged to have violated Section 3, and this enables the Commission to form a prima facie opinion under Section 26(1) that another cartel exists, the Commission may impose on that member a lesser penalty as may be specified by regulations in respect of the cartel already being investigated. This is "without prejudice to" the member obtaining lesser penalty under sub-section (1) for the newly disclosed cartel. The regulations call this lesser penalty plus; the 2024 Regulations are explained in the overview linked above.
What the 2023 Amendment Act changed
The section was substituted. The consolidated text of Section 46 (printed with its own footnotes) had one paragraph and no sub-sections (2) to (4). One line of comparison:
| Feature | Before (consolidated text) | After (substituted by the Competition (Amendment) Act, 2023) |
|---|---|---|
| Amount | "a lesser penalty as it may deem fit" | "a lesser penalty as may be specified by regulations" |
| Penalties compared with | "this Act or the rules or the regulations" | "this Act or the rules or the regulations made under this Act" |
| Fourth proviso | "tried for the offence" | "tried for the contravention" |
| Withdrawal | Not printed | Sub-section (2) |
| Use of evidence | Not printed | Sub-section (3): except the admission |
| Second cartel | Not printed | Sub-section (4) |
The four provisos otherwise carry the same wording in both texts, apart from the footnote marks in the consolidated text. The printed consolidated text shows the first proviso in square brackets because it was itself substituted in 2007; we do not repeat what the 2007 text said.
Who this affects
Cartel members who consider coming forward, their advisers, and companies that run compliance checks and find a possible agreement on prices, output, supply or bid rigging under Section 3(3). Because lesser penalty cannot be sought once the Director General's report has been received, the order of events matters. The Commission's wider penalty powers are in Section 27; the existing guide on leniency under the Competition Act gives a short general introduction.
Practical example
Orion Cement Traders, Rapid Haulage and Metro Supply (all invented) discover that a rate-sharing arrangement among them is a Section 3 problem. Metro Supply gives the Commission a full and true disclosure, which the Commission accepts as vital, before any Director General report is received. It stays cooperative until the end. If it later also reveals a separate bid-rigging arrangement among other firms, which lets the Commission form a prima facie opinion on that second cartel, sub-section (4) allows a lesser penalty in the first cartel too, and sub-section (1) is still open for the second. If Metro Supply stops cooperating, the third proviso removes the benefit.
Need help with a cartel question or notice?
A disclosure is only available for a limited window, and the facts you hold may differ from what the Commission later finds. Our legal dispute resolution team can assess the position, document the disclosure and prepare you for the proceedings. For related reading, see anti-competitive agreements under Section 3.
Key takeaways
- Lesser penalty needs a full, true and vital disclosure; the scale is "as may be specified by regulations".
- It is not available if the Director General's report under Section 26 has been received before the disclosure.
- Continued cooperation is a condition; false evidence or a non-vital disclosure can lead to full liability.
- Sub-section (2) allows withdrawal; sub-section (3) keeps the evidence (but not the admission) usable; sub-section (4) rewards disclosure of a second cartel.
- Check which 2023 provisions have been notified.
Read next
- Lesser penalty and lesser penalty plus under the CCI Lesser Penalty Regulations, 2024
- Section 48A of the Competition Act, 2002: settlement of proceedings
- Section 27: orders and penalty after inquiry
- Penalties under the Competition Act for cartels and abuse
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.