Writ Petition No. 358 of 2010, Writ Petition No. 526 of 2010. Case: 1. Aamir Khan Productions (P) Ltd., 2. Aamir Hussain Khan, 3. UTV Software Communications Ltd., 4. Ronnie Screwvala, 5. Siddharth Roy Kapur Vs 1. UOI, 2. Competition Commission of India and Ors.. High Court of Bombay (India)

Case NumberWrit Petition No. 358 of 2010, Writ Petition No. 526 of 2010
CounselFor Appellant: Arshad Hidayatullah, Sr. Adv., a/w Anand Desai and Vivek Shetty i/b DSK Legal and Janak Dwarkadas, Sr. Adv. with Chirag Mody i/b DSK Legal and For Respondents: D.J. Khambatta, Additional Solicitor General, with Gautam Ankhad, Joby Mathew and Deepak Dane, D.J. Khambatta, Additional Solicitor General, with Ashok Verma and Z.T. ...
JudgesMohit S. Shah, Chief Justice and S.C. Dharmadhikari, J.
IssueConstitution of India - Article 226; Competition Act, 2002 - Sections 3(3), 26(8); Copyright Act, 1957 - Section 31
Citation2010 (112) BomLR 3778, 2010 CompLR 105 (Bombay), (2010) 102 SCL 457 (Bom)
Judgement DateAugust 18, 2010
CourtHigh Court of Bombay (India)

Judgment:

Mohit S. Shah, Chief Justice and S.C. Dharmadhikari, J.

1. In both these petitions under Article 226 of the Constitution of India, the petitioners challenge the separate show cause notices dated 21st December 2009 issued by the Competition Commission of India, Respondent No. 2 herein, under Section 26(8) read with Section 3(3) of the Competition Act, 2002.

2. The petitioners in both these petitions have challenged the said show cause notices mainly on the ground that the Competition Commission established under the Competition Act, 2002 (hereinafter referred to as the "Competition Act") does not have any jurisdiction to initiate any such proceedings in respect of films for which the provisions of the Copyright Act, 1957 contain exhaustive provisions.

3. The facts leading to issuance of impugned show cause notices are already stated in the show cause notices themselves.

4. The show cause notice impugned in Writ Petition No. 526 of 2010 reads as under:-

"Competition Commission of India

(Secretariat)

By Speed Post

F.No. 1/1/2009-Sectt./23209 21st December, 2009

To,

SHRI SIDHARTH ROY KAPUR

M/S UTV SOFTWARE COMMUNICATIONS LTD.

1181-92, Solitaire Corporate Park,

Guru Hargobindji Marg, Chakala,

Andheri (East), MUMBAI 400 093.

Sub.:Case No. 1/2009-FICCI-Multiplex Association of India.

The FICCI-Multiplex Association of India has filed information before the CCI under section 19(1) of the Competition Act 2002 on 26.5.2009 through their authorized Advocates - Luthra and Luthra, Law Offices, New Delhi against the following enterprises:-

1. United Producers/Distributors Forum (UPDF)

2. Association of Motion Pictures and T.V. Programme Producers (AMPTPP)

3. The Film and Television Producers Guild of India Ltd. (FTPGI)

It has been stated in the information that the members of these organizations are perpetrating cartel like activity which is violative of provisions of Section 3(3) of Competition Act 2002. It has also been alleged that these Associations/Enterprises, who jointly control approximately 100% of the market share for production and distribution of Hindi Motion Pictures exhibited in Multiplexes, by organizing themselves under the umbrella of UPDF, took a collective decision not to release films to the Multiplexes from 4th April 2009 onwards with the objective to extract higher revenue sharing ratio from the members of the informant and this cartel like activity has appreciable adverse effect on competition in India.

The Commission took cognizance of the matter under Section 19 of the Act and on forming an opinion under Section 26(1) that there exists a prima facie case, it issued directions to Director General (DG) to investigate into the matter.

After conducting investigation, the DG submitted his report dated 24/9/09 and also a supplementary report dated 27/11/09 to the Commission.

As per the findings of the D.G. in these reports, the allegations made in the information have been found to be substantiated against you.

In these reports, the DG has concluded that you along with other persons named in the report of DG have acted in concert by forming a cartel with a view to extracting higher revenue sharing ratio for the supply of films to the Multiplexes and for achieving your object, you indulged in limiting/controlling supply of films in the market by refusing to release films to Multiplexes for exhibition and succeeded in achieving your objective by raising your revenue sharing ratio and have thus by your conduct and activities contravened the provisions of Section 3(3) of the Competition Act, 2002.

After considering the reports of DG, the Commission has decided to proceed further in the matter in accordance with the provisions of the Competition Act and the regulations framed thereunder.

In view of the above and in compliance to the directions of the Commission, the copies of reports of the DG are being furnished to you for inviting your replies/objections, if any.

You are, therefore, directed to submit your objections/replies within a period of 15 days from the date of receipt of this notice. If you wish, you may also make request for inspection of the relevant record and may also submit facts and material in support of your contentions. In case you wish to seek an opportunity of oral hearing then you have to make a separate prayer for that purpose. In case your reply/objections are not received within specified time it shall be presumed that you have nothing to say in the matter and the Commission shall proceed further in the matter as provided under the law.

Sd/-

(S.I. Buriker)

Secretary

Competition Commission of India

Encl.:

(1) Copy of report of DG dated 24.09.2009 with annexures (pages nos.169-329 - total 161 pages)

(2) Copy of supplementary report of DG dated 27.11.2009 with annexures (page nos. 1-223)"

5. Similar notice dated 21st December 2009 is issued to the petitioners in Writ Petition No. 358 of 2010.

6. The petitioners have challenged the jurisdiction of the Competent Commission to initiate any proceedings under the Competition Act against the petitioners on the following main grounds:-

(i) The exhibition of a feature film, which is a subject matter of copyright exploitation alone, is specifically excluded under Section 3(5) of the Competition Act and hence the proceedings initiated against the petitioners are without jurisdiction.

(ii) Issuance of notice dated December 21, 2009 to petitioner No. 2 in Writ Petition No. 358 of 2010 and of the notice to petitioner Nos.2 and 3 in Writ Petition No. 526 of 2010, who are not producers of a feature film in their individual capacity is also without jurisdiction and shows nonapplication of mind.

(iii) The petitioners did not delay or withhold releasing of any film from any multiplex nor did they take any action as alleged in the report. The petitioners had merely participated in certain meetings with other film producers to discuss the issue about disputes on revenue sharing, wrongful deductions by the multiplex owners before paying the producers/distributors, delays in payment and non payments by the multiplex owners to the producers/distributors and other matters which adversely affected the producers/distributors with multiplex owners who in fact were acting in concert against the producers/ distributors.

(iv) It is further contended that in the course of such negotiations, the name "United Producers/Distributors Forum (UPDF) was coined to describe the producers who were negotiating with the multiplex owners. However, this was not a registered body nor did it represent all the film producers.

(v) The disputes that had arisen between the multiplex owners and producers of Hindi feature films were resolved in or about June 2009 and thereafter agreements are being signed between each individual producer for its respective films with each individual multiplex and films are being released through multiplexes by Hindi film producers and hence the allegations and the impugned show cause notices have become academic and stale as no grievance remains to investigate.

(vi) The information received by the respondents from FICCIMultiplex Association of India, on the basis of which the case was...

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