2013 (7) TMI 250 - Tri - Companies Law

Much ado about nothing - nature and substance of the restrictive trade practices complained against the Film Makers Combine (FMC), Indian Motion Picture Producers Association (IMPPA) and Film Distributors Council (FDC)- Held that - In sofar as the specific instances of the abuse of agreement in question are concerned, it is obvious that there has been a settlement between the original complainant and the respondents. Because the complainant does not have any more complaint/grievance of any boycott or the compulsory undertakings which he is to give under the authority of either FMC or FDC so that question will clearly be foreign to the present enquiry. Also on going through the agreement no scope for any abuse in that agreement found. Nothing has been shown in the agreement which would empower the FDC to order the boycott or to make a producer or distributor to sign an undertaking which would be restrictive to any competition. As the parties have lost interest in the matter no need to continue with this enquiry. As respondent No. 3, Ms. Goel, however assured us that there shall be no abuse of the powers of FDC and, in fact, according to Ms. Goel, the amended complaint has got nothing to do with the FDC at all. There is nothing on record, at least, to suggest that FDC is actually an associate or affiliate of FMC.

Issues Involved:
1. Allegations of restrictive trade practices by Film Makers Combine (FMC), Indian Motion Picture Producers Association (IMPPA), and Film Distributors Council (FDC).
2. Legitimacy and impact of the agreement dated 10.06.1994 between FMC and FDC.
3. Withdrawal of the original complaint by Time Magnetic (India) Limited and subsequent actions by the Director General (DG).
4. Examination of public interest in continuing the enquiry.
5. Examination of specific instances of abuse of the agreement in question.
6. Evaluation of whether the agreement dated 10.06.1994 restricts competition under Section 10(a)(i) of the Monopolies and Restrictive Trade Practices Act, 1969.
7. Determination of whether the agreement falls under the provisions of Section 33 of the Act.
8. Discharge of Notice of Enquiry (NOE) against the respondents.

Detailed Analysis:

1. Allegations of Restrictive Trade Practices:
The complaint alleged that the respondents were engaging in restrictive trade practices. Specific allegations included the requirement for producers to seek permission from FMC before commencing film production, coercion of members not to cooperate with the complainants, expulsion of the complainant from membership, and issuance of circulars to prevent cooperation with the complainants. These activities were claimed to infringe on the complainants' right to conduct business.

2. Legitimacy and Impact of the Agreement Dated 10.06.1994:
The agreement between FMC and FDC was central to the complaint. It was alleged that FMC had arrogated the right to control film production and distribution, requiring producers to seek permission and give undertakings, which appeared to be restrictive trade practices. The agreement was scrutinized to determine if it empowered FMC or FDC to enforce boycotts or restrictive undertakings.

3. Withdrawal of the Original Complaint and Actions by the DG:
The original complainant expressed disinterest in pursuing the complaint, leading the DG to continue the enquiry on grounds of public interest. The Tribunal noted the lack of clarity on the public interest involved, as the DG's letter did not specify the nature of the public interest. The DG's persistence in continuing the enquiry despite the complainant's withdrawal was a significant point of contention.

4. Examination of Public Interest:
The Tribunal questioned the DG's assertion of public interest, noting the absence of specific details justifying the continuation of the enquiry. The Tribunal found it challenging to identify the public interest that warranted further proceedings.

5. Specific Instances of Abuse:
The Tribunal observed that there was a settlement between the original complainant and the respondents, indicating no ongoing grievances. The Tribunal emphasized that the enquiry should focus on whether the agreement itself facilitated restrictive practices rather than specific instances of abuse.

6. Evaluation of the Agreement Under Section 10(a)(i):
The Tribunal examined whether the agreement dated 10.06.1994 restricted competition under Section 10(a)(i) of the Act. The Tribunal found no evidence in the agreement that empowered FMC or FDC to enforce boycotts or restrictive undertakings. The agreement did not appear to restrict competition in the manner alleged.

7. Determination Under Section 33:
The DG suggested that the agreement might fall under the provisions of Section 33 of the Act, which deals with restrictive trade practices. However, the Tribunal found no instances of abuse or evidence that the agreement was being acted upon in a manner that restricted competition.

8. Discharge of Notice of Enquiry (NOE):
Given the lack of interest from the original complainant and the absence of evidence of restrictive practices, the Tribunal decided to discharge the NOE. The Tribunal noted assurances from the respondents that there would be no abuse of powers and found no basis to continue the enquiry. Consequently, the NOE was discharged against all respondents, effectively closing the matter.

Conclusion:
The Tribunal concluded that the allegations of restrictive trade practices were not substantiated by evidence. The agreement dated 10.06.1994 did not appear to restrict competition, and no public interest justified continuing the enquiry. The original complainant's withdrawal and lack of interest from other parties led to the discharge of the NOE and closure of the enquiry.

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