2022 (10) TMI 704 - AT - Companies Law

Anti-competitive practices in violation of Section 3(1) and 3(3)(b) of Competition Act, 2002 - sub-section (1) and (2) of Section 53B of the Competition Act, 2002 - Levy of penalty - HELD THAT - The 1st Respondent herein, find evidence against the Appellant and the 6th Respondent and observed that it has played a significant role in the organization of the press meet and the participation of the 6th Respondent cannot be said to be in his personal capacity and observed that he was the President of the Appellant during the relevant period of time. The commission also takes note the contents in the press meet held on 01.03.2017, wherein the opposite parties participated and actively advocated the cause of condemning dubbed Kannada Films. Further, the commission observed that the press meet was used as a platform to give coverage to the protest by the opposite parties. One of the contentions of the Appellant is that the cause of the Appellant is to promote Kannada literature and to ensure livelihood of artists in Kannada film industries and not otherwise. However, from the sequence of events and from the evidences on the record that the conduct of the Appellant and the opposite parties is anti-competitive thus, resulted in limiting production and supply of dubbed movies and their screening within the State of Karnataka which directly hits the provisions of Section 3(1) read with Section 3(3)(b) of the Act. This Tribunal is of the view that the order passed by the 1st Respondent dealt all the issues including the evidences led by the Director General and other evidence by the Commission itself. Having dealt the issues meticulously on the basis of the evidence on record, this Tribunal find that there is ample evidence to suggest the existence of anti-competitive conduct by the Appellant and the Opposite Parties. Accordingly, this Tribunal prima-facie holds that the DG and the Commission relied upon the material evidence and comes to a definite conclusion that the Appellant and the Opposite Parties indulge in anti-competitive conduct in violations of the provisions of Section 3 of the Act. This Tribunal finds and affirms the findings and the reasons/inference drawn against the Appellant and the Opposite Parties by the 1st Respondent/Commission and the same is ratified by holding the acts of the Appellant and the Opposite Parties is anti-competitive conduct which resulted in limiting production and supply of dubbed movies into Kannada language and their screening within the State of Karnataka, which directly hits the provisions of Section 3(1) read with Section 3(3)(b) of the Competition Act, 2002 - this Tribunal comes to an inescapable and irresistible conclusion that the order passed by the 1st Respondent is in accordance with law and does not warrant any interference by this Tribunal. Appeal dismissed.

Summary

Issues Involved:
1. Alleged anti-competitive practices by the Appellant.
2. Evidence of concerted or collusive acts.
3. Consideration of relevant turnover for penalty.
4. Appellant's role in organizing press meets and issuing threats.
5. Impact on the market for dubbed films in Karnataka.
6. Abuse of process of law by the Informant.

Detailed Analysis:

1. Alleged Anti-Competitive Practices by the Appellant:
The appeal was filed under Section 53B of the Competition Act, 2002, challenging the order dated 30.08.2018 by the Competition Commission of India (CCI), which found the Appellant guilty of anti-competitive practices in violation of Sections 3(1) and 3(3)(b) of the Act. The CCI imposed a penalty of Rs. 9,72,943 on the Appellant. The Appellant, a society registered to promote the film industry in Karnataka, was accused by the Informant of creating hindrances and roadblocks in the dubbing and release of a Tamil film dubbed into Kannada.

2. Evidence of Concerted or Collusive Acts:
The CCI's order was based on the Director General's (DG) investigation, which found that the Appellant and other Respondents acted in concert to prevent the release of dubbed movies in Karnataka. The DG's report included evidence such as press meets, tweets, and public statements by the Respondents that created a threatening atmosphere for the exhibition of dubbed movies. The Appellant argued that there was no appreciable adverse effect on competition and no evidence of concerted or collusive acts.

3. Consideration of Relevant Turnover for Penalty:
The Appellant contended that the CCI ignored the relevant turnover and considered the total turnover, contrary to the Supreme Court's judgment in Excel Crop. Care Limited V. Competition Commission of India and Ors. The Appellant argued that its activities were aimed at the welfare of its members and not profit-making, and the penalty would force it to terminate employees and possibly shut down.

4. Appellant's Role in Organizing Press Meets and Issuing Threats:
The DG's investigation found that the Appellant and Respondents organized a press meet on 01.03.2017, where threats were issued against the release of dubbed movies. The 4th Respondent's tweets and the 5th Respondent's statements during the press meet were cited as evidence of instigating public sentiments against dubbed movies. The CCI concluded that the press meet and subsequent actions were aimed at preventing the release of dubbed movies, thereby limiting competition.

5. Impact on the Market for Dubbed Films in Karnataka:
The CCI observed that the actions of the Appellant and other Respondents resulted in limiting the production and supply of dubbed movies in Karnataka, which adversely affected competition. The CCI noted that the anti-competitive conduct was aimed at ensuring that dubbed movies did not compete with Kannada movies, thereby protecting the local film industry at the expense of competition.

6. Abuse of Process of Law by the Informant:
The Appellant argued that the Informant's complaint was a gross abuse of the process of law, motivated by personal grudge and ego disputes. The Appellant claimed that the Informant had already filed civil suits against it and was attempting to convert a private dispute into a public law issue. The CCI, however, found sufficient evidence of anti-competitive conduct and dismissed the Appellant's arguments.

Conclusion:
The Tribunal affirmed the CCI's findings and held that the Appellant and other Respondents engaged in anti-competitive conduct, limiting the production and supply of dubbed movies in Karnataka. The Tribunal found ample evidence of concerted actions aimed at preventing the release of dubbed movies, which violated Sections 3(1) and 3(3)(b) of the Competition Act. The appeal was dismissed, and the interim order dated 12.12.2018 was vacated.