The CCI found sustained and actively enforced price-fixing. It found liability against an industry association, three member trustees and individuals. Yet no monetary penalty was imposed.
The Competition Commission of India’s order dated 2 September 2026 in Muthoot Finance Ltd. v. Trustees Association of India & Ors. presents perhaps the most provocative question in this three-part series:
What is the deterrent value of a cartel finding if the cartel attracts no monetary penalty?
The case concerned the collective fixation of minimum fees by debenture trustees under the aegis of the Trustees’ Association of India (“TAI”). The CCI found that TAI and three member trustees contravened Sections 3(3)(a) and 3(3)(b) read with Section 3(1) of the Competition Act, 2002.
The finding of liability appears, on the factual record discussed in the order, to rest on unusually direct documentary evidence. The controversy lies elsewhere.
1. The evidence was unusually direct
Muthoot Finance had engaged one of the trustee entities for approximately a decade. In August 2021, when Muthoot sought a fee quotation for a proposed private placement, it was offered a substantially higher fee.The explanation was revealing: the revised pricing had been determined by the industry association, and deviation could have adverse consequences for the trustee.
The DG investigation subsequently uncovered minutes of a 23 March 2021 meeting recording agreement upon a “Benchmark Pricing” structure.
Members were not to quote below the prescribed floor, subject to a permitted 20% discretionary variance.The minutes also contemplated action against members who breached the benchmark. And the evidence did not begin in 2021. Earlier meetings in 2018 and 2019 had considered minimum pricing. At the 2019 meeting, members expressly considered whether coordinated pricing could constitute cartelisation under the Competition Act — and nevertheless proceeded with the arrangement.
2. This was not merely a pricing recommendation
The investigation also uncovered evidence that the association sought to enforce the benchmark against non-member trustees. In one instance, MITCON was directed to withdraw a lower bid submitted to a prospective client and submit a revised, higher bid. That is significant. It suggests that the arrangement was not simply an industry discussion or a recommendation. It even had an enforcement mechanism. The conduct was operational.
3. “But SEBI knew about it”
The principal defence was regulatory. The parties contended that the Benchmark Pricing was developed in the context of a SEBI circular requiring debenture trustees to disclose minimum fee structures.
The CCI rejected that defence.
The distinction is important:
SEBI required disclosure of an individual trustee’s own minimum fee. It did not require competing trustees to collectively determine a minimum fee through an industry association.
(SEBI itself had not approved the Benchmark Pricing.)
There was also a telling factual circumstance: adherence to the Benchmark Pricing ceased after March 2022, even though the underlying regulatory obligation remained unchanged.
The broader principle is clear:
Regulation does not automatically immunise conduct which goes beyond what the regulation requires.
4. Corporate restructuring cannot erase competition liability
The CCI also rejected an attempt to separate the successor association, “New TAI”, from the conduct of the earlier association. New TAI retained six of the ten erstwhile members and substantially continued the functions previously performed by TAI. The Commission consequently treated New TAI as successor-in-interest.
This is an important anti-evasion principle. Corporate or associational restructuring cannot become a mechanism for simply leaving competition-law liabilities behind.
5. And then comes the difficult part — the penalty
Having found a sustained price-fixing arrangement spanning approximately three years, the CCI imposed no monetary penalty. This is where the I see a problem .
The principal difficulty is not the finding of liability.
It is the disconnect between the seriousness of the conduct established and the financial consequence ultimately imposed.
The fact that TAI had no income during the relevant period may potentially be relevant to the penalty attributable to the association.
But that does not readily explain why the commercial entities that participated in the arrangement should also escape monetary consequences.
The association need not itself profit from a cartel in order to facilitate one.
6. The “competition benefit” paradox
The order records that the trustees charged fees below the Benchmark Pricing in many cases during FY 2022–23. But that was after the period during which the benchmark was actively observed and enforced. Indeed, the DG calculated a quantifiable “competition benefit” to issuers arising from instances of non-adherence in the subsequent financial year. That produces an interesting economic inference.
If non-adherence generated a measurable benefit to customers, adherence during the earlier period could logically have produced a corresponding overcharge relative to a competitive counterfactual.
And that is precisely the type of economic harm which monetary penalties under Section 27 are designed, at least in part, to deter.
7. The cartel was not merely theoretical
The order records evidence of:
- surveillance of member and non-member pricing;
- threatened reporting to SEBI;
- enforcement of the benchmark; and
- intervention in competing bids.
This was therefore not simply an agreement that existed on paper.
It was a sustained and operationally enforced pricing arrangement.
The CCI also referred to the relevant-turnover methodology recognised in Excel Crop Care, a methodology particularly relevant to service-sector cartels. Yet ultimately, no monetary penalty was imposed ?
8. Can cease-and-desist alone provide deterrence?
This is the central policy question. A cease-and-desist direction is undoubtedly a legitimate competition-law remedy. But where the impugned conduct has already substantially ceased, the incremental deterrent effect of simply directing parties not to continue may be limited.
The more difficult question is the signal this may send to other industry associations.
If an association can coordinate minimum pricing for several years, actively enforce the arrangement, and ultimately face no financial consequence, does the expected cost of cartelisation become too low?
This is the concern at the heart of my critique.
9. Liability and deterrence
The Muthoot Finance order is, in many respects, a strong competition-law decision.
The CCI:
✓ identified the collective price-fixing arrangement;
✓ rejected the regulatory-compliance defence;
✓ refused to permit restructuring to defeat liability;
✓ recognised individual responsibility under Section 48; and
✓ found evidence of an actively enforced arrangement.
The difficulty is that these findings ultimately culminated in no monetary penalty.
That creates a potential disconnect between liability and deterrence.
My takeaway
The question raised by Muthoot Finance extends beyond debenture trustees. Competition law is not only about declaring conduct unlawful.It is also about altering the incentives that shape future commercial behaviour. Where cartelisation has been established, the absence of any financial consequence may, in an appropriate case, risk making the cost of detection appear lower than the cost of compliance.
The Muthoot Finance order , therefore, deserves attention not merely for its finding of price-fixing, but for the larger question it raises:
Can a cartel finding without a monetary sanction adequately serve the deterrent architecture of Indian competition law?
That is, perhaps, the most important competition-law debate emerging from this order.
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