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TMI Blog2020 (3) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... (Opposite Party No. 6/ OP-6); and FEFKA Production Executive s Union (Opposite Party No. 7/ OP-7) and their office bearers were found to be liable under Section 48 of the anti-competitive conduct. Conclusion - The trade unions are not exempt from the Competition Act and that anti-competitive agreements need not be formalized to be actionable. Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... f 'Malayalam Artists and Cine Technicians Association' (MACTA) Federation, supported this idea of having an agreement/contract in place to safeguard the rights of both sides. Purportedly, 'Association of Malayalam Movie Artists' (OP-1), 'Shri Mammooty' (OP-3), 'Shri Mohanlal' (OP-4) and 'Shri Dileep' (OP-5) were agitated with the Informant due to this. 5. In the year 2007, the Informant headed an initiative called 'Cinema Forum' which envisaged collaboration between film makers and distributors to make low budget movies with new actors. It was alleged 'Shri Mammooty' (OP-3), 'Shri Mohanlal' (OP-4) and 'Shri Dileep' (OP-5) felt insecure about their film career due to this new initiative and began influencing people to scuttle it. 6. In the year 2008, 'Shri Dileep' (OP-5) accepted advance and signed an agreement with Ullatil Films but later insisted that he would do this film only when the director, Shri Thulasidas, is removed. This, as per the Informant, amounted to violation of the agreement. The Informant advised all the actors to abide by the terms of the agreement they signed with the directors. It was alleged that due to these incidents, 'Association of Malayalam Movie Artist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 10. After conducting the detailed investigation, the DG submitted its investigation report dated 16th November, 2015. The statements of Informant and witnesses were also recorded on oath. The DG relied upon various evidence to reach a finding with regard to involvement of OP-1 in the alleged anti-competitive activities. On the basis of the minutes of the Executive Committee Meeting of OP-1 held on 5th April, 2010, the DG noted that Late Shri Thilakan, a renowned actor, was removed from a film (Christian Brothers), on the instructions of OP-2, as he acted in Informant's film. Based on the minutes of General Meeting held on 27th June, 2010, the DG observed that the General Secretary of OP-1 invited Captain Raju, an actor, for explaining why he had violated the instructions of OP-2 and acted in the film directed by the Informant. This, as per the DG, shows that OP-1 was endorsing the instructions given by OP-2. Further, the DG has also relied on these minutes to show that OP-1 and OP-2 are closely linked and have been, at times, acting in concert. 11. Further, Shri Kannan Perumudiyoor, a producer, also stated that he advanced a sum of Rs. 50,000 to Informant (as a director) for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he members of OP-1 had a tacit understanding not to work with the Informant. Members of OP-1 also exerted pressure on non-members not to work with the Informant. The DG opined that this tacit understanding amongst the members of OP-1 is likely to limit or control the provision of services in the market, thereby violating of the provisions of Section 3(1) read with Section 3(3)(b) of the Act. 18. To examine the conduct and involvement of OP-2 in the alleged contravention, the DG took into account the minutes of its meetings, circulars issued by OP-2, letters exchanged between OP-2 and other associations and the statements of various witnesses. They are briefly discussed herein below. 19. On the basis of the minutes of General Council meeting held on 28th November, 2012 and Circular dated 19th April, 2014, the DG noted that a disciplinary action was taken against Shri Salu K. George and Actress Ms. Meghna Raj. Further, minutes of the General Council meeting held on 17th February, 2010 and Circulars dated 27th February, 2010 and 9th April, 2011, were relied upon by the DG to conclude that OP-2 had asked its members not to cooperate with the films in which Late Shri Thilakan is actin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers dissuaded him from working with the Informant, pursuant to which he dissociated with the Informant. In its response to the DG, OP-2 admitted having met Shri Madhu along with other representatives of various organizations to invite him to a function. However, OP-2 claimed that Shri Madhu himself enquired about the issues with the Informant and expressed his willingness to return Informant's advance. OP-2 also stated that later, when Shri Madhu decided to act in Informant's films, none of its members approached him asking him not to do so. Though OP-2 denied the assertions of Shri Madhu, it did not cross examine him, citing his seniority. Based on the aforesaid, the investigation concluded that the statement of Shri Madhu supported the allegations levelled by the Informant. 23. Further, Shri Salu K. George, an art director, deposed before the DG and revealed that he was working in a movie 'Dracula' of the Informant in the year 2012 because of which OP-2 issued a circular directing all its members not to work with him. He also got a call from Shri B. Unnikrishnan, General Secretary of OP-2, informing the ban on him imposed by OP-2. Though OP-2 denied the statement of Shri Salu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has admittedly produced/ directed 12 films since 2004. Out of the 12 Films, two films "Dracula" and "Little Superman" have been big budget films. Therefore, there has been no appreciable adverse effect on competition and on the Respondent No. 2. 30. Almost all the statements of the witnesses have confirmed that the cause of the alleged boycott is union politics as FEFKA is a breakaway of the MACTA (which was headed by the Respondent No. 2). Therefore, in order to get back at the office bearers of the FEFKA, FEFKADU and FEFKAPE, Respondent No. 2 has filed false information before the Respondent No. l. 31. According to the learned counsel for the Appellant(s) the "key players" relied by the DG and the Commission Statements are interested parties and their statements have the following commonalities: - They have not produced a movie for a long time, in some cases not after 1993. However, all the said producers suddenly presented a desire to produce movies with the Respondent No. 2 in the year 2013 and 2014, after a long gap; - all such producers made the 'so-called' advance payment to Respondent No. 2 in cash, without a memo or cash receipt evidencing such advance payment; - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the office bearers that they had not indulged in anti-competitive action and brushed aside their all arguments by adverting to the bald allegations contained in the information filed by Respondent No. 2 and the affidavit filed by Shri Rajesh Arora." 34. Further, in the Impugned Order, the Commission has admitted that it has only relied on the evidence annexed by the DG in its report. Therefore, it is clear that the Commission has not considered the exculpatory evidence in favour of FEFKA, FEFKADU and FEFKAPE. 35. Learned counsel for the Appellant(s) also submitted that the Regulation 20(4) of the General Regulations, 2009 not adhered to by the DG Office as Regulation 20(4) requires that all documents and evidences should be considered during investigation; and also violates the COMPAT order in "Air Cargo Agents Association of India v CCI" in Appeal No. 98 0f 2015. 36. Learned counsel for the Appellant also submitted that certain evidences are not part of the DG's report without assigning reason to the same - including: a. Reply of Appellant No. 1 providing detailed explanation of working of Appellant No. l; b. Statement on oath of General Secretary of Appellant No. l; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... union acting by itself carrying out its legitimate trade activities (acting on behalf of its members and not carrying out economic activity) would not amount to 'enterprise' or 'association of persons' as per the said judgment of the Supreme Court. - Agreements or decisions of Appellant No. 1 do not amount to any economic activity; and is a registered trade union. The order of the Commission is thus liable to be set aside for ignoring settled principles of competition law. - The Commission in the impugned Order has held that the association must be proven to have transgressed their legal contours i.e., its legal powers bestowed by the bye-laws and the Trade Unions Act. Pertinently, the impugned order is silent on the fact that whether FEFKA, FEFKADU and FEFKAPE have actually transgressed any of their powers mentioned in the their statutorily approved constitution. On the contrary, Rule 25 of the Constitution of FEFKA allows it to take disciplinary action against its members for not abiding by its decisions. 40. Learned counsel for the Appellant(s) also submitted that there is no 'Appreciable Adverse Effect' on competition. While the Commission notes the objections of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilm Employees Federation of Kerala (FEEKA) is a registered trade union and a federation of 17 unions of different types of technicians / workers employed in Malayalam film making. It was formed in the year 2008 and got affiliated to All India Film Employees Confederation ('AIFEC') in 2011. It is a self-regulatory body having 17 separate unions for different technicians under it. The 17 constituent unions are as follows. 1. FEFKA Directors Union 2. FEFKA Writers Union 3. Production Executives Union 4. FEFKA Editors Union 5. FEFKA Cinematographers Union of Malayalam Cinema 6. FEFKA Art Directors Union 7. FEFKA Publicity Designers & Pros Union 8. FEFKA Cine Outdoor Unit Workers Union 9. All Kerala Make-up Artists & Hair Stylists Union 10. FEFKA Production Assistants Union 11.FEFKA Still Photographers Union 12. FEFKA Union for Dubbing Artists 13. FEFKA Dancers Union 14. Kerala Cine Drivers Union 15.All Kerala Cine Costume Designers Union 16. Cine Audiographers Association of Kerala 17. FEFKA Music Directors Union OP3: Sh. Mammooty (hereinafter 0P3) Sh. Mammooty is a famous film personality and also General Secretary of AMMA (0P1). OP4: Sh. Mohanl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: (i) The Appellant was supplied these pieces of evidence by the DG and was able to raise its objections to the DG's report before the Commission under Section 26 of the Act. (ii) The point was also urged before the CCI during the course of arguments and recorded by the Commission. 48. There is no need to establish 'Appreciable Adverse Effect' on the Competition [AAEC] in view of the clarification made by the Hon'ble Supreme Court dated 07.05.2018. As stated in the said Order, as long as there is evidence to suggest the existence of anti-competitive Agreement, there is a presumption of 'Appreciable Adverse Effect on Competition' as explicitly stated in Section 3(3)(d) of the Competition Act, 2002. 49. To appreciate the case, some of the evidences considered by the Commission, as noticed below: A. ESTABLISHING A NEXUS/ASSOCIATION BETWEEN AMMA AND FEFKA a. The Executive Committee meeting dated 05.04.2010 & the General Body Meeting dated 27.06.2010 of AMMA dated 27.06.2010. These minutes establish that there were instructions in place by FEFKA which imposed a ban on anyone working with the informant. b. Statement of Sh. P.A. Haris (Producer) and his letter dated 03.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the President of AMMA had threatened him with dire consequences if he acted in any movie directed by the informant. Further the affidavit of Sh. Anil states that on 25.06.2011, during the GBM of AMMA, Sh. Mohanlal, Shri Mammooty and Sh. Dileep asked him not to work with the informant. i. Interview of Late Sh. Thilakan At the AMMA meeting dated 05.04.2010, Sh. Thilakan was condemned for having worked with the informant. This was his stance in the TV interview conducted on 01.02.2010 as well. j. Nexus between AMMA and FEFKA Circular dated 27.12.2013 AMMA refers to FEFKA as its sister organisation. This when read in conjunction with the EC Meeting of AMMA dated 05.04.2010, highlights that both entities were active and aware of each other's activities. B. SPECIFIC EVIDENCE COLLECTED AGAINST FEFKA a. FEFKA's GCM dated 28.11.2012 and Circular dated 09.04.2013 The circular issued by FEFKA states that disciplinary proceedings were initiated against Sh. Salu K. George. Sh. George testified before the DG that this was due to him working with the informant. It is trite to submit that despite being given an opportunity, he was not cross-examined by the Appellants. b. Minutes of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Akbar also stated that the participation of the informant in the pooja ceremony of his film was not wrong. It is trite to submit that due to this Sh. Akbar was suspended from the membership of the Union. c. Circular dated 05.07.2012 Ban against Sh. Salu K. George was communicated to the members of FEFKA Director's Union. D. SPECIFIC EVIDENCES AGAINST FEFKA PRODUCTION EXECUTIVES UNION. a. Minutes of the Meeting of FEFKA Production Executives Union on 11.10.2012& the Letter dated 11.10.2012 sent to Sh. Philip The minutes deliberated upon seeking an explanation from Sh. Rajan Philip, who had worked with the informant. The minutes outline that Sh. Philip who was not a member of FEFKA or any other union affiliated to AIFEC had worked with the informant. The show cause notice dated 11.10.2012 sent to Sh. Philip also highlights the same fact. b. Statement of Sh. K. Mohanan, General Secretary of FEFKA Production Executives Union recorded before the DG & the Statement of Sh. Philip recorded before the DG. Sh. Mohanan, stated that FEFKA members could work only with other FEFKA members. He admitted that Sh. Philip was questioned for working with the informant who was not a FEFKA membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate with Sh. Vinayan. They said that if I do not comply with their decision it will be a big blow to them." 52. Statement of Shri Rajan Philip also shows that the Appellants' Association collectively decided to ban one or other artists or technicians including the Informant as is apparent from the following question and answer: Question 3. In how many movie you have assisted Sh. Vinayan and why you have decided not to assist Sh. Vinayan in future? Ans. I have assisted about 25 movies directed by Sh. Vinayan. However, after receiving a show cause notice dated 11.10.2012 from FEFKA Production Executive Union, I decided not to assist Sh. Vinayan in future. Even in recent past Sh. Vinayan asked me to assist him in his new film Little Superman but I refused to assist him because of the show cause notice already issued to me by FEFKA. Question 4. What are the other association apart from FEFK who has imposed such ban not to cooperate with Sh. Vinayan? Ans. As per my information only FEFKA Production Executive Union have issued show-cause notice to the their technicians not to work with Sh. Vinayan. Question 6. What according to you is the cause for the industry to boycott ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dispute of MACTA with Sh. Dileep. Question 9. Is the ban imposed by FEFKA, AMMA etc. affecting the work of technicians who want to work with Sh. Vinayan? Ans. It is true that art directors have suffered both financially as well as of having new assignments of Sh. Vinayan. Further Sh. Vinayan has suffered financially and also his choice is restricted, as he has to bring technicians from outside. Cross Examination of Shri Anil Kumbazha by Shri Mohammed Siyad Q.16. As you say you have worked with Sh. Vinayan as well as other directors after 2008, then where is the ban? Ans. 16. Due to ban I was removed from three films namely 'bodyguard', 'kanchipurathekalayalanam' and 'sarkar colony'. In the first movie I was sent off from the location. In the other two movies I was told by the producer that I would be working as art director but before the shooting, I was removed." 54. There are large number of evidences which have been relied upon by the DG and also by the Commission to come to a definite conclusion about the Appellant(s) indulged in anti-competitive conduct in violation of the provision of Section 3 of the Act. Accordingly, the Appellants - 'Association of Malayala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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