Section 41 of CA, 2002 : Section 41: Director General To Investigate Contravention

Explanation using Example

Imagine a scenario where the Competition Commission of India (CCI) suspects that two major smartphone manufacturers have entered into an anti-competitive agreement to fix prices for their latest models to avoid undercutting each other. This agreement could potentially harm consumers and other competitors, as it may lead to artificially high prices and a lack of genuine price competition in the market.

The CCI, under its powers, directs the Director General (DG) to investigate these allegations. Following the direction, the DG exercises their powers, similar to those of the CCI, to gather evidence. This may involve summoning the key executives of the smartphone companies, inspecting documents, and calling for information that can prove or disprove the allegations of price-fixing.

In conducting the investigation, the DG applies certain provisions from the Companies Act, 1956, that deal with the powers of inspectors, adapting them to the context of the investigation. For instance, references to the "Central Government" in the Companies Act would be understood as references to the "CCI" for the purpose of the investigation. Similarly, any requirement to report to a "Magistrate" under the Companies Act would instead mean reporting to the "Chief Metropolitan Magistrate, Delhi" in this context.

This investigation by the DG is crucial in determining whether the smartphone manufacturers have indeed violated the Competition Act, 2002, and if so, the CCI can take appropriate actions against the companies to ensure fair competition in the market.