Case No. 23/2010. Case: Durga City Cable Network Informant Vs In2 Cable (India) Ltd. and Ors.. Competition Commision of India
| Case Number | Case No. 23/2010 |
| Judges | Ashok Chawla (Chairman), R. Prasad, Geeta Gouri, Anurag Goel and M.L. Tayal, Members |
| Issue | Competition Act, 2002 - Section - 19 |
| Judgement Date | August 10, 2011 |
| Court | Competition Commision of India |
Order:
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The instant case before the Commission relates to an information filed on 24.05.2010 under Section 19 of the Competition Act, 2002 (the Act) by Shri Vijay Kumar Gumme, the Proprietor of Durga City Cable Network (hereinafter referred to as the Informant) against In2Cable (India) Limited and seven others (hereinafter referred to as Opposite Parties 1 to 7 respectively).
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Before the facts and allegations are discussed, profile of different parties is brought out in brief in order to appreciate the issues involved in the present matter.
2.1 As per informant, it is operating as a Multi System Operator (MSO) in the District of Bidar, Karnataka since 2005. It is authorized under the relevant provisions to run and operate cable services in the District of Bidar and is providing free to air and also various pay channels to its customers in its area of operations.
2.2 In2Cable (India) Ltd (the Opposite Party No. 1) is a wholly owned subsidiary of Hinduja TMT Limited and is a "Category A" Licence holder. It offers its broadband services under an exclusive arrangement with its group company Induslnd Media and Communications Limited (IMCL) using their existing cable network across India. IMCL commenced its operations in 1995 and as per information it has now built up India's largest cable television (CATV) network, providing multi-channel transmission services to approximately 4 million subscribers under the brand name IN Cablenet and is one of the leading cable TV operators in the world in terms of number of subscribers. In2cable (OP-1) has amalgamated with IMCL w.e.f 09.02.2007 and is now functioning as its division.
2.3 Shri Nagesh N Chhabaria (OP-2) is the Chief Operating Officer (COO) of IMCL. Earlier he was President (Operations) of the company. OP-3, OP-4 and OP-5 are the Area President, Vice President and CEO respectively of Aerolex Cablenet. The firm, Areolex Cablenet, is involved in managing business of IMCL in Bangalore and Mysore, State of Karnataka. The OP-8, sole proprietor of OP-7 (Surabhi City Cable Network), is also operating in Bidar District like the Informant.
2.4 It has been stated by the Informant that in the cable market in the District of Bidar, the Informant and the OP-7 are operating as the competitors. During the month of May 2009, OP-1 to OP-6 approached the Informant and inspected its premises and control room. Thereafter, OP-5 orally promised the Informant that the services of Incable Digital Network of OP-1 will be supplied through the OP-6 and an agreement to that effect will be signed in due course of time. OP-5 made a promise to digitalise the network of the Informant and in turn, the informant was to use the logo/symbol of OP-1 as supplied by OP-6 to advertise OP-1 as the supplier of the services provided by the informant. OP-5 had also promised that OP-1 would ensure that the Informant might receive uninterrupted signals from various broadcasters. OP-1 was supposed to execute a proper agreement to make use of the control room of the Informant as its head-end.
2.5 As per the Informant, it was also a pre-condition in the aforesaid arrangement that 51% of the amount collected from the cable business shall go to OP-1 and the remaining 49% shall remain with the Informant. The Informant vide letter dated 04.06.2009, informed the OP-3 that the arrangement is acceptable on the condition that OP-1 telecasts all digital signals to Bidar and any expenditure incurred in the process, will be borne by the informant to an extent of 49% only, remaining to be borne by the OP-1. The informant was also ready to sign an agreement on these conditions. The OP-6 in agreement with the proposals of the informant supplied the symbol/logo of InCable by post.
2.6 The informant has further submitted that after receiving the symbol, it started providing its cable services to the consumers using the symbol of OP-1 along with its own symbol. The agents of OP-1 began to collect 51% of the amount earned out of the business from the Informant, which amounted to Rs. 3 lakh per month. All these payments were made in cash for which the OP-1 refused to provide any receipt A proper agreement was also not executed by the OP-1. Further, even though, the informant spent a large amount of money for digitalising the control room, no assistance was provided for the same as orally agreed earlier by the agents of the OP-1.
2.7 According to the Informant, after about 10 months during which advertisement was carried out as per the aforesaid arrangement, OP-1 signed an exclusive agreement with (OP-7), a competitor of the Informant to carry and advertise its logo for similar services as provided by the Informant to the consumers of Bidar District. As per the Informant, the logo which has been provided to it and its competitor, OP-7 are deceptively similar, for providing the similar service of free to air and pay channels to the consumers in the District of Bidar.
2.8 The informant has alleged that OP-1 in collusion with OP-7 is taking all steps to ensure that it is ousted from the market and OP-7 captures the entire market by using the brand name of OP-1.
2.9 The informant has also submitted that upon receiving no response from the Opposite Parties, it filed a Civil Suit before the Civil Court and also a complaint before the Court of First Judicial Magistrate, First Class-II, Bidar. Upon receipt of the complaint, the Judicial Magistrate has also directed investigation in the matter under Section 156(3) of Cr. PC and on the basis of preliminary investigation, an FIR has also been registered against OP-2 and OP-5.
2.10 The informant has further submitted that in the District of Bidar, there are approximately 20,000 cable connections. When OP-1 to OP-6 approached the Informant, it had a total of 8000 connections out of which it used to earn an income of Rs. 96 lakh annually from its consumers. After the agreement of OP-1 with OP-7, it is left with only 5000 connections, and its earnings have now...
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