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TMI Blog2023 (8) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises . It is apparent that both PVR and Inox have now become a single entity after merger and the effect of a combination as defined under Section 5 of the Act which is regulated by Section 6 of the Act has nothing to do with Section 3(1) of the Act which deals with the anti-competitive agreements in which both the entities retain their separate identities even after the agreement is entered into unlike the merger of two entities which takes effect of a combination in terms of Section 5 of the Act. It has come in the order itself that since the merger of PVR and Inox was not falling within definition of Section 5 because of the issue of threshold, therefore, the information under Section 19(1)(a) has been filed by the Appellant alleging the contravention of Section 3(1) of the Act despite knowing that both entities have become one and do not fall within the definition of Section 3(1) of the Act. Thus, in view of this matter, the application by itself is not in accordance with law for the purpose of initiating action under Section 19(1)(a) of the Act. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany engaged in the business of operating and managing multiplexes and cinema theatres in India. 3. According to the Informant, both PVR and Inox have entered into an anti-competitive agreement which is likely to cause an appreciable adverse effect on competition (AAEC) in the relevant market for the exhibition of films in multiplex theatres and high-end single screen theatres in different cities in India. At the time, when the information was filed by the Informant, the Informant had the information that both PVR and Inox are going to be merged as a combined entity and is going to be called PVR INOX Ltd. . 4. However, on 16.02.2023, during the pendency of this appeal, the Respondents informed this Tribunal that by order of the NCLT, Mumbai Bench, PVR and Inox have already been merged, therefore, this Court directed that this fact should be brought on record by filing an appropriate affidavit. Accordingly, an affidavit dated 23.02.2023, on behalf of the PVR, was filed alongwith the order dated 12.01.2023 of the NCLT, Mumbai Bench, Court-III passed in C.P. (CAA)/207/MB/2022 with C.A. (CAA)/201/MB/2022 by which the scheme of merger by absorption of the Inox with PVR was sancti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two or more parties and the agreement should be of the nature which may result in an AAEC or a likelihood thereof but no case was found to be made out merely on an apprehension that the agreement may give rise to a conduct in the future which would thereafter cause AAEC in the market. It also noticed that the Informant has not specifically alleged contravention of Section 4 of the Act rather the information contains averments that after PVR and Inox become a single entity then it would be dominant entity in future. It was observed that not only entity has not come into being because at by that time the merger was in offing but also dominance per se is not found to be anti-competitive and only conduct would fall under Section 4 of the Act. Therefore, the Commission did not agree with the contention of the Appellant observing that this kind of assessment is ex-ante which can be undertaken by the Commission in appropriate cases when legal requirement for such examination would attract and it further observed that the conduct of an anti-competitive nature is missing in the case for an analysis from the standpoint of provisions of Section 3 or 4 of the Act. However, it also observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 19(3) of the Act lays down the criteria for violation of Section 3, whereas Section 20(4) lays down the same for Section 6 of the Act. It is also submitted that there are different inquiry procedure provided in the Act as for the purpose of examining violations of Section 3, the procedure in Section 26 which is initiated either by a complaint from a third party, government body or suo motu by the CCI, but does not impose any positive obligation on the parties to the agreement to give prior intimation to the Commission in any manner and the matter is thereafter investigated by the DG. On the other hand, the procedure for merger is provided in Section 6 and 29 which is different from the procedure laid down for inquiry to be made for breach of Section 3 because Section 6(2) contemplates a mandatory prior notification procedure by the parties to the proposed combination within a specified period. It further prescribes certain statutory forms to be submitted by the parties to notifiable combinations and even prescribes a Green Channel procedure for expedited approvals for certain categories of combinations which is conspicuous by its absence in Section 3 of the Act. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme is fixed mutually as 1st January, 2023 . 16. It is apparent that both PVR and Inox have now become a single entity after merger and the effect of a combination as defined under Section 5 of the Act which is regulated by Section 6 of the Act has nothing to do with Section 3(1) of the Act which deals with the anti-competitive agreements in which both the entities retain their separate identities even after the agreement is entered into unlike the merger of two entities which takes effect of a combination in terms of Section 5 of the Act. It has come in the order itself that since the merger of PVR and Inox was not falling within definition of Section 5 because of the issue of threshold, therefore, the information under Section 19(1)(a) has been filed by the Appellant alleging the contravention of Section 3(1) of the Act despite knowing that both entities have become one and do not fall within the definition of Section 3(1) of the Act. Thus, in view of this matter, the application by itself is not in accordance with law for the purpose of initiating action under Section 19(1)(a) of the Act. 17. In so far as, the arguments of the Appellant that the word used in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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