Section 48 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 48 of the Competition Act, 2002 says who, besides the company itself, can be held to be in contravention when a company breaks the Act. It reaches every person in charge of, and responsible for, the conduct of the company's business, and also a director, manager, secretary or other officer whose consent, connivance or neglect is proved. The Competition (Amendment) Act, 2023 replaced the section: the consequence is now a penalty fixed by the Commission, not exceeding ten per cent. of the person's average income.
A person in charge of the company's business at the time is deemed to be in contravention, and the Commission may impose a penalty that shall not be more than ten per cent. of the average of the income for the last three preceding financial years. In a cartel under Section 3(3), the cap is ten per cent. of the income for each year of the continuance of the agreement. A person escapes if he proves the contravention was without his knowledge or that he exercised all due diligence.
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 48 was substituted by clause 35 of the amending Act, so the explanation below is from the substituted text. 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. If you sit on a board or run a business unit, our legal due diligence team can review how exposed your role is.
Section 48(1): everyone in charge, as well as the company
As substituted: "Where a person committing contravention of any of the provisions of this Act or of any rule, regulation, order made or direction issued thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be in contravention of this Act and unless otherwise provided in this Act, the Commission may impose such penalty on such persons, as it may deem fit which shall not be more than ten per cent. of the average of the income for the last three preceding financial years".
The deeming works for the company and for the people in charge. The test is the role at the time of the contravention: "in charge of, and responsible to the company for the conduct of the business". The penalty is discretionary ("may impose ... as it may deem fit") with a cap of ten per cent. of the average income of the last three preceding financial years.
Proviso (cartels). "Provided that in case any agreement referred to in sub-section (3) of section 3 has been entered into by a cartel, the Commission may unless otherwise provided in this Act, impose upon such persons referred to in sub-section (1), a penalty of up to ten per cent. of the income for each year of the continuance of such agreement." For the agreements themselves see our article on Section 3(1) to (3).
Section 48(2): the defence
"Nothing contained in sub-section (1) shall render any such person liable to any penalty if he proves that the contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such contravention." The burden is on the person ("if he proves"). In the consolidated text this defence was the proviso to sub-section (1); the 2023 Act makes it a separate sub-section (2).
Section 48(3): directors, managers, secretaries and other officers
"Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, regulation, order made or direction issued thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officers of the company, such director, manager, secretary or other officers shall also be deemed to be in contravention of the provisions of this Act and unless otherwise provided in this Act, the Commission may impose such penalty on such persons, as it may deem fit which shall not be more than ten per cent. of the average of the income for the last three preceding financial years".
The proviso repeats the cartel rule: the penalty "shall not exceed ten per cent. of the income for each year of the continuance of such agreement". Here liability depends on proof of consent, connivance or neglect.
The Explanation
(a) "company" means a body corporate and includes a firm or other association of individuals; (b) "director", in relation to a firm, means a partner in the firm; and (c) "income", in relation to a person, shall be determined in such manner as may be specified by regulations. Clause (c) is new; the 2024 Determination of Turnover or Income Regulations are described in our overview of the Turnover or Income Regulations.
What the 2023 Amendment Act changed
The consolidated text of Section 48 had sub-section (1) with a proviso and a sub-section (2), and an Explanation with two clauses. It said that persons in charge, as well as the company, "shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly".
| Feature | Before (consolidated text) | After (substituted by the Competition (Amendment) Act, 2023) |
|---|---|---|
| Deeming | "deemed to be guilty of the contravention" | "deemed to be in contravention of this Act" |
| Consequence | "liable to be proceeded against and punished accordingly" | Commission "may impose such penalty ... as it may deem fit" not above ten per cent. of average income of the last three preceding financial years |
| Cartel | Not printed | Proviso: up to ten per cent. of income for each year of the agreement |
| Defence | Proviso to (1) | Separate sub-section (2) ("shall render any such person liable to any penalty") |
| Officers | Sub-section (2) | Sub-section (3), with the same penalty cap and a cartel proviso |
| Explanation | (a) company, (b) director | (a) company, (b) director, (c) income as specified by regulations |
How the Commission fixes the percentage
The Commission's Determination of Monetary Penalty Guidelines, 2024 (notified on 6th March, 2024) devote paragraph 5 to persons liable under Section 48. Paragraph 5(1) repeats the cap of ten per cent. of average income for the last three preceding financial years, and paragraph 5(2) lists factors the Commission may have due regard to: the nature and gravity of the company's contravention, the person's role, extent and duration of involvement, cooperation, repeated contravention, cogent evidence of substantially limited involvement, and any other factor. For measuring income, paragraph 5(3) points to the gross total income in the person's returns filed under the Income Tax Act, 1961 and its rules, excluding house property and capital gains. Check the current income-tax law and see our income-tax guides for the corresponding provision. Later amendments to the guidelines should be checked. The full structure is in the overview of the Monetary Penalty Guidelines.
Practical example
Vihaan Agro Ltd (invented) is found to have joined a cartel on fertiliser pricing for four years. The managing director signed the arrangement; the company secretary only filed routine papers and had no knowledge of it. Under Section 48(1) the managing director, in charge of the business, is deemed in contravention, and the Commission may use the cartel proviso: up to ten per cent. of his income for each year of the agreement. The company secretary can use sub-section (2) if he proves he acted without knowledge or with all due diligence; the Commission could proceed against a director under sub-section (3) only on proof of consent, connivance or neglect.
Need help with exposure for directors and officers?
If a company is under inquiry, individual officers should know early whether their role falls within Section 48. Our legal due diligence team can map responsibilities, records of knowledge and compliance steps that go to the defence in sub-section (2).
Key takeaways
- After 2023, the Commission "may impose" a penalty on persons in charge, capped at ten per cent. of average income for the last three preceding financial years.
- In a cartel, the cap is ten per cent. of the income for each year of the continuance of the agreement.
- The defence is knowledge or due diligence, to be proved by the person.
- Directors, managers, secretaries and other officers are caught on proof of consent, connivance or neglect.
- "Income" is as specified by regulations: see the 2024 Turnover or Income Regulations.
Read next
- Section 27: orders and penalty after inquiry
- Section 46: lesser penalty for cartel disclosure
- Turnover and income under the CCI Determination of Turnover or Income Regulations, 2024
- Setting up a competition compliance programme in your business
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.