Animals grouping together is one of the most interesting phenomena in population dynamics and different functional responses as a result of prey–predator forming groups have been considered by many authors in their models. In the present paper we have considered a model for one prey and two competing predator populations with time lag and square root functional response on account of herd formation by prey. It is shown that due to the inclusion of another competing predator, the underlying system without delay becomes more stable and limit cycles do not occur naturally. However, after considering the effect of time lag in the basic system, limit cycles appear in the case of all equilibrium points when delay time crosses some critical value. From the numerical simulation, it is observed that the length of delay is minimum when only prey population survives and it is maximum when all the populations coexist.