Competition Appellate Tribunal (“COMPAT”)in its judgment dated October 14, 2015 set aside the penalty of INR 12.89 lacs imposed by CCI on Andhra Pradesh Film Chamber of Commerce (Appellant). In the case filed by Cinergy Independent Film Service Pvt. Ltd., CCI had held that the Appellant was restricting exhibition of film “Mausam” produced by the Informant, as the Informant had owed certain amounts to a member of Appellant. The Appellant forced its members to abide by its unfair rules and dictates. Certain rules as framed by Appellant were found in violation of Section 3 of the Act as they were limiting and restricting the rights of producers for a period of three years from the date of obtaining Censor Certificate to distribute movies to TV channels and electronic media to telecast.
However, the Hon’ble COMPAT while setting aside the penalty observed that , there was no evidence produced by the Respondents to prove that the Appellant had prevented or obstructed the release of film ‘Mausam’ on the scheduled date. In fact, the only evidence available to CCI was the letter dated 09.09.2011 sent by a member of Appellant to various parties including the Appellant complaining against the non-payment of outstanding dues in respect of another film(“Rann”). Appellant had forwarded the letter to various associations and Cinergy to settle the issue to avoid any inconvenience before the release of the film “Mausam”.
There was no evidence produced by Cinergy to prove that the Appellant had prevented or obstructed the release of film “Mausam”. COMPAT observed that CCI which was expected to objectively and independently analyse the facts and evidence collected by the DG during the course of investigation abdicated its duty and mechanically approved the findings recorded by the DG. COMPAT set aside the CCI order, which the COMPAT opined was based on assumptions and not on evidences. Further, COMPAT was of the view that the exercise undertaken by the DG to go into the validity of the said rules was per se without jurisdiction because the informant had not questioned the rules on the ground that the same are anti-competitive and thus ultra vires the provisions of the Act.