Central Circuit Cine Association v. Reliance Big Entertainment Pvt. Ltd.

PER MR. JUSTICE V.S. SIRPURKAR, CHAIRMAN This judgment will govern Appeal Nos.69, 70, 71, 73, 96, 97, 102, 78, 66, 67 of 2012. All these appeals were disposed of by the Competition Commission of India (CCI hereinafter) by a common order. All the appellants, therefore, have come up by way of the present appeals under Section 53-B of the Competition Act, 202 (in short the Act). By the impugned order, the CCI found all the appellants guilty of the contravention of section 3(3)(b) read with Section 3(1) of the Act and various penalties were inflicted against all the appellants. Initially on the basis of the information led before it by Reliance Big Entertainment P. Ltd., Case No.25 of 2010 was registered before the CCI against the 12 parties in all. So also the information was led before the CCI by UTV Software Communication Ltd., in Case No.41 of 2010. Similarly along-with these cases, Case Nos.45, 47, 48, 50, 58 and 69 of 2010 were also registered on behalf of the information led before the CCI. All these cases were disposed of by the CCI, by the impugned order, holding the opposite parties in those cases guilty of the contraventions as have been stated above. All these cases were consolidated by the CCI as the basic issue raised by the Informants were common and identical. Basically, it was stated in the information led before the CCI that the appellants were the representative bodies of the distributors and exhibitors of the cinema-films and they had involved in various anti-competitive activities in violation of the provisions of Sections 3 and 4 of the Act generally. In particular, it was stated that by their rules, these Associations were compelling the producers and distributors of cinema-films to compulsorily register their films with them, forcing them to abide by their unfair and discriminatory rules. It was stated that these Associations directed their members not to deal with non-members as also putting restrictions such as limiting of number of cinema theatres for exhibition of films. They were also practicing discrimination between non- regional films against regional films. They were also imposing undue long hold back period for exploitation of satellite, video, DTH and other rights in respect of the exhibition of the film. They were also imposing bans, penalties and giving call of boycott against those, who violated these unreasonable rules and regulations of the Associations.

2. After the information was received, the CCI got the same investigated by the Director General (in short the DG), who after investigation firstly recommended that the appellants Association could not be said to be an enterprise within the meaning of Section 2(h) of the Act, nor did they constitute a group within the meaning of Section 4 read with Section 5 of the Act and as such, they could not be held guilty for contravention of Section 4. The DG, however, held that the appellants were guilty of the contravention of section 3(3)(b) of the Act. The DG found number of contraventions of individual nature against the appellants and held them guilty of violating of provisions of Section 3(1), 3(3)(b) and 3(4) of the Act on account of the bylaws, rules and regulations and the activities. In his report, the DG has neatly listed the individual contraventions by each of the appellants.

3. The DGs report was served on the appellants, who filed their objections before the CCI. They were heard individually by the CCI. The CCI framed four issues, they were as under :- Issue 1 : Whether KFCC and other associations are enterprise within the meaning of Section 2(h) of the Act and if the answer to his is in affirmative, can their acts and conduct be said to be violative of provisions of Section 4 of the Act as has been alleged by the informant? Issue 2 : Whether the rules and regulations, acts and conduct of associations are subject matter of examination under Section 3 of the Act? Issue 3 : Whether various acts and conducts of associations are anti-competitive as alleged in the information in terms of Section 3(3) read with Section 3(1) of the Act? Issue 4 : Has the action of KFCC and other associations caused Appreciable Adverse Effect on Competition in the market? Has the action of KFCC and other associations caused Appreciable Adverse Effect on Competition in the market?

4. In so far as the first Issue is concerned, the CCI absolved all the parties, since the CCI agreed with the DG that the appellants Association could not be held to be an enterprise within the meaning of Section 2(h) and as such could not be found guilty for contravention of Section 4 of the Act. However, on Issue No.2, 3 and 4, the CCI found these against the appellants and proceeded to inflict the penalties under Section 27(b) of the Act, which is in challenge before us.

5. In fact, the majority passed two orders one covering Case Nos.25, 41, 45, 47, 48, 50, 58 and 69 of 2010 and other covering Case Nos.52 and

56 taking the same view.

6. We must at this juncture point out that this was the majority order of the CCI. However, one of the learned Member Mr. R. Prasad differed with the majority, mostly on the finding on the question of applicability of Section 3(3). Shri Prasad also has passed a separate dissenting order in respect of Case Nos.52 and 56.

7. On the question of contravention of Section 3(3), however, the learned Member took a view that these associations could not be booked for the contravention of Section 3(3). This view was taken by the learned Member in view of his interpretation of Section 3(3). The learned Member firstly considered the language of Section 3(3) and came to the conclusion that for contravention of Section 3(3) the agreement, practice or decision must have been taken by the associations engaged in identical or similar trade of goods or services. The learned Member then considered the definitions of term agreement in Section 2(b) and practice in Section 2(m). The learned Member then held that there could be no agreement spellet out in the present case, much less agreement in terms of Section 3(3). The learned Member also held that as there was only one entity in area, the application of Section 3 had to be ruled out. However, finding the associations guilty for contravention of Section 4, the learned Member directed the penalty of 2% of the turnover of each associations.

8. The CCI while passing the order under Section 27, considered the overall income of the appellants association and directed the penalty to be at 10% of the average of the three years receipts/ income. The CCI also passed the cease and desist order against all the appellants and restrained them from following the practices. The appellants were also directed to take suitable measures to modify their tainted rules from their articles of association, rules and regulations on the basis of the discussions in the order. The following directions were also given by the CCI, they were :-

a) The associations should not compel any producer, distributor or exhibitor to become its members as a pre-condition for exhibition of their films in the territories under their control and modify their rules accordingly.

b) The associations should not keep any clause in rules and regulations which makes any discrimination between regional and non-regional films and impose conditions which are discriminatory against non-regional films.

c) The rules of restrictions on the number of screens on the basis of language or the manner in which a particular film is to be exhibited should be done away with.

d) Associations should not put any condition regarding hold back period for release of films through other media like, CD , satellite etc. These decisions should be left to the concerned parties.

e) The condition of compulsory registration of films as a pre- condition for release of any film and existing rules of association as discussed in the preceding paras of this order on the issue should be dispensed with. Three months time was given for this.

9. We must point out here that against the finding of exonerating the appellants of the contravention of Section 4, no appeal has been filed against majority orders and, therefore, we would not be required to take into consideration the finding on Issue No.1 by the majority.

10. The CCI in its majority order while giving the history of the cinema industry, pointed out that for the assignment of film distribution rights, territory of entire India presently was broadly divided into 12 circuits and each of these circuits associations of film distributors and exhibitors are formed either under Section 25 of the Companies Act, 1956 or under the Societies Registration Act, 1860. These associations regulate the business of film distribution and exhibition in their area of control in accordance with their rules formulated in Memorandum and Articles of Association. It is also pointed out by the CCI that these associations mainly consist of the members and persons engaged in the business of film distribution and exhibition, however, in some of the associations, the producers are also the member. In both the orders, the CCI has neatly given the profile of the appellants. In the order dated 16.02.2012, the CCI has given the short profiles of (1) Karnataka Film Chamber of Commerce (KFCC); (2) Eastern India Motion Picture Association (EIMPA); (3) Central Circuit Cine Association (CCCA); (4) Telangana Film Chamber of Commerce (TFCC); (5) Northern India Motion Pictures Association (NIMPA); (6) Motion Pictures Association, Delhi (MPA); (7) Indian Motion Pictures Distributors Association (IMPDA); (8) Bihar and Jharkhand Motion Pictures Association (BJMPA); (9) Chennai Kanchipuram Thiruvallur District Film Distributors Association (CKTDFDA); and lastly (10) Orissa Films Distributors Syndicate (OFDS).

11. In another order of the same date, also while considering the Case Nos.52 and 56, the profile of some of the appellants has been mentioned, wherein the CCI has pointed out the area in which these associations were operating exhaustively. In its first order, the CCI has also given the profiles of the Informant that is Reliance Big Entertainment Limited, a company incorporated under the Companies Act and active in the business of film production, distribution and exhibition. Similarly, the profile of another Informant Reliance Media Works, which is another member of the Reliance Big Entertainment Limited. So also the another Informant M/s UTV Software Communications Limited are considered and the CCI has given their area and other activities. There can be no dispute that the Informants have taken cognizance on behalf of all the producers of the Hindi films. In short this is a fuel between the producers on one side and distributors and exhibitors on another.

12. The CCI has also pointed out that by way of information, these Informants and more particularly in Case No.25 the Reliance Big Entertainment Limited by its complaint-cum-information dated 14.06.2010 submitted that most of the appellant associations, which were named as opposite parties made it compulsory for every film distributor to become their member or register his film with them, otherwise he was not allowed to distribute his films in the territories which are regulated by the appellants. It is also pointed out that similarly the exhibitors were also threatened and penalized for exhibiting films of such a distributor who is not a member of any of the opposite parties or whose film is not registered with the appellants associations. It was suggested that cinema exhibitors do not take the risk of exhibiting the film of a distributor who is not a member of these associations or whose film is not registered with such associations. Some specific complaints have been referred to, which is of no consequence here. It is also informed that in some states cinemas are regulated through local enactments, as for example, in Karnataka where it is regulated by the Karnataka Cinemas (Regulation) Act. However, according to the Informant, the appellant associations enjoyed the position of strength in their territory of operations and by virtue of such position of strength, they are able to influence the cinema exhibitors in their area. It was pleaded by the Informants that the associations also have the power of boycotting a particular distributor who refuses to become their member or by not registering his film with such associations. It is also pointed out that the other members of the associations of distributors or exhibitors are directed to boycott such a distributor and also any film sponsored by it. The order further provides about the attitude of the KFCC in issuing a directive to the effect that a non-Kannada film can be released only in 21 cinemas that is 17 in Bangalore city and 4 in district headquarters, while as per their directive, a Kannada film can be released in 200 cinemas in Karnataka. Alternatively a non-Kannada film can be released in all the cinema in Karnataka provided it is released two weeks after its release in other film territories. According to the information the KFCC have also imposed restriction on number of prints in relation to non-Kannada films. Similar complaint was made against the FDA Kerala in respect of the films in other language than Malayalam. Specific example given in respect of the film Kites. According to the Informants they are forced to comply with the directives of KFCC and was able to screen its film only in 24 theatres in Karnataka. The Informants also complained of a large adverse impact on the revenues arising from exploitation of the film Kites in Karnataka and pointed out that Informants has to suffer a loss to the extent of Rs.2.30 crores. It was pointed out that though KFCC was requested by Film and Television Producers of Guild of India Ltd. to revoke such decision, it was of no consequence.

13. The Informants had also stated that the associations impose unfair hold back restrictions for exploitation of satellite, video, DTH and other rights of a film for a certain period from the date of theatrical release of the film. That these associations compel a distributor to accept the holdback restrictions by executing an undertaking to this effect as a condition to the membership. An example was given as regards CCCA, Bhusawal, which has inflicted a condition that a film distributor would not exhibit or exploit his film through the medium of video, cable TV, satellite or any other network through VCD, DVD or any other form for a period of one year from the date of theatrical release in India and in the event the distributor breach this condition, he would be compelled to distribute amongst the distributors, 50% of the income/ realizations on the basis of prevalent realizable ratio in accordance with the agreement between AIFPC Mumbai, FMC Mumbai and CCCA Bhusawal dated 16th June, 2010. The Informants also had circulated a letter dated 21.06.2000 regarding these arrangements between the above mentioned associations. According to the Informants, these restrictions created a terrible situation for the producers as also the other distributors who were not the members of these associations, who were desirous of exhibiting their films in the territories controlled by these associations. Some specific examples given in respect of some Hindi films and Telugu films. The complaint also related to the contravention of Section 4(2)(a) and 4(2)(e). However, we need not go to that aspect in view of what we have observed above. Some other complaints were also made, more particularly against KFCC in respect of a particular film called Raavan. In respect of that, it was complained that KFCC had banned film Raavan and Raavanan which were in fact two films and directed all the exhibitors not to distribute these films. Some interim orders were also sought in this information against KFCC. The CCI has proceeded to consider all the information placed in Case No.45 of 2010 by Reliance Media Works Ltd.; in Case No.47 of 2010 by Reliance Big Entertainment Ltd.; in Case No.41 filed by UTV Software Communications Limited. The information in Case No.48 of 2010 filed by FICCI Multiplex Association of India referring to the preferential treatment directed to be given to Kannada films in multiplex cinema and their compulsory exhibitions. They have also referred to the specific information in Case No.50 of 2010 filed by Eros International Media Ltd. by giving specific example of the regionalism practiced by the association BJMPA as also in Case No.58 filed by UTV Software Communication Limited against BJMPA. The CCI has in detail referred to the allegations made. It seems that some interim orders were passed in Case No.25, 45, 41, 47, 48, 50, 58 and 69. We are however, not concerned with those interim orders for the purpose of this judgment.

14. The CCI then referred the matter to DG for investigation, which it had ordered against all the appellants in these cases as well as in other case for which a separate judgment has been passed by the CCI. After referring to the investigation by the DG, who has carried out an exhaustive investigation against all the appellants by calling them and by recording the statements etc., the CCI has referred to the findings by the DG to the effect that KFCC was contravening the provisions of section 3(3)(b) by prohibiting its members to deal with the non-members; by forcing the provision of mandatory registration of each film in its territory; by enforcing the restrictions on the number of cinema halls; by enforcing number of multiplexes, by enforcing restriction of 5 maximum shows daily; by not allowing dubbing in Kannada language of other language movies; by imposing ban/boycott against the producers, distributors and exhibitors; by issuing letters to the theatres to withhold the share amounts of the producers and distributors. Similar findings have been noted against the other associations like EIMPA, BJMPA, MPA Delhi, CCCA, NIMPA Jalandhar and IMPDA.

15. The CCI then referred to the replies by all these associations in detail and more particularly to the main defence that these associations were acting as a regulatory body and justifying the preference for the films in a particular language in a particular territory. They had taken a stand that the membership of these associations are not compulsory nor had the members any obligation to continue as their member. However, so long as the Informant remains a member, it is contractually and morally bound to abide by all its decisions, rules and regulations. A stand was taken that no Informant while continuing as a member of the society or association can complain of contravention of any of the provisions of the Act. It was urged that the right to form associations is a constitutional and legal right cannot be subservient to the provisions of the Competition Act. The CCI has also noted that the membership of these associations was always voluntary and there was no compulsory element in it. In short all the associations seem to have justified their action, their rules and regulations and actions to safeguard the interest of the cinema industry in general and distributors and exhibitors in particular. The associations also pointed out the benefits and the advantages that the distributors reap from membership of such associations. The associations also denied that they could be booked under any of the Section/ sub-Section 4 of the Act. The DGs report was also criticized by the associations on some other grounds. Some associations denied that they imposed any financial penalties or had boycotted any film. One major defence by the associations was that they were not in business activity or trade, particularly in picture or film or cinema. The CCCA also pointed out that it deal with the inter-se disputes as regards the payments of dues between its members namely distributors and exhibitors and that there were rules providing for arbitration and thus helping the distributors and producers, whose interest was safeguarded under those arbitration rules. In short all the associations justified their rules and tried to suggest that they were in fact working for the welfare of the distributor and the exhibitors.

16. The CCI also dealt with the replies filed by the Informants to these objections and it thereafter went on to formulate the issues, which we have already referred to earlier.

17. Lengthy arguments were advanced on behalf of the appellants individually. The learned counsel appearing on behalf of the appellants took us through the Memorandum of Articles of Association and the rules of all these associations at great length. It was tried to be argued that these associations in fact were doing yeoman services to the cinema industry in as much as the associations were providing a platform to the distributors and exhibitors for redressal of their grievances. It was also urged by most of the learned counsel that these associations were in fact solving the dispute inter-se between distributors and in fact reducing the risk of the distributor members by at times pressurizing producers to pay the legal dues of the distributors. It was also suggested that years back, the leaders in this industry had formulated organizations and these organizations had passed resolution particularly to save cine industry from the menace of piracy. It was argued that with the advent of television and the video parlours, the existence of the cinema industry was in peril and therefore, the representative organizations had passed resolution to the effect that there would have to be a certain period commencing from the first exhibition of the film for which there would be no selling of the video tapes, the compact disks, the television rights or the satellite rights. It is pointed out that initially this period was for five years or 10 years and ultimately it came to be reduced. The learned counsel urged that it was in view of those resolutions that all these associations had formulated the rules whereby the distributors were barred from selling the rights regarding the movie for a particular period and it was also provided that if they breach this rule and issue the rights to the TV, satellite or by way of creating compact disks, 50% of the money earned, would have to be paid/ distributed to the other distributors, who are the members of the appellants association. In short, it was urged that this could not amount to boycotting of the movies or restricting their entry into the market. It is also urged that the member distributors or exhibitors as the case may be, had voluntarily joined the organization and had resolved as per the rules of the associations that they would not deal with the non-member distributors in the sense that the exhibitor member of a particular association in a particular area would not exhibit the films of non-member distributor and if they do so, they would be liable for a penal action by the associations. It was also tried to be urged that any distributor committing breach of the rules of the association, could be expelled by way of a penal action and the other members of the association could not deal with such distributor. The arguments went on to suggest that all this was extremely necessary in the interest of the industry and more particularly in the interest of the distributors. We were taken through the rules and regulations of almost all the appellants associations, which have almost identical or common provisions. For the sake of convenience, we will take up for consideration those common features, but even before that we must state the nature of this industry, so as to properly understand the role of these associations.

18. All these associations have actually been constituted years back when the cinema industry and more particularly the Hindi cinema industry was in its infancy, that is in the early 50s. The cinema industry being an all India industry, the whole country was divided into some circuits. Presently there are 12 such circuits. These circuits have drawn a certain territory and each association controls that particular territory in the sense it regulates the business of film distribution and exhibition in their area of control in accordance with their rules formulated in Memorandum and Articles of Association. We are concerned with 10 such associations, whom we have dealt with earlier. We may state here that there was a body called Film Distributors Council (FDC) which was an apex body of all India film distributors. It had few members like Motion Pictures Association, Delhi; The Indian Motion Picture Distributors Association, Bombay; The Northern India Motion Pictures Association, Jalandhar; the Central Circuit Cine Association, Bhusawal; The Bihar Motion Pictures Association, Patna; Motion Pictures Association, Calcutta etc. All these came together under the banner of Film Distributors Council. They entered into an agreement dated 10.06.1994 with an apex body called Film Makers Combine. Film Makers Combine had its members like Indian Motion Picture Producers Association, Bombay; The Western India Film Producers Association, Bombay; Association of Motion Pictures and T.V. Programme Programme Producers, Bombay; and Film Producers Guild of India Ltd., Bombay claiming themselves to be the representatives of Distributors on one side and producers on another. The FDC and FMC came out with an agreement under which an Executive Committee formed out of the members of the FMC, which empowered and authorised six members namely Shri Shakti Samanta, Shri G.P. Sippy, Shri G.P. Shirke, Shri Pahlaj Nihalani, Shri Shree Ram Bohra and Shri K.D. Shorey to negotiate/ sign the present agreement for and on behalf of the FMC. It was expressed that with the passage of time video cassettes and cable TV came in circulation and Doordarshan and satellite channels were getting popularity and as a result it had affected the business of cinematograhic films at the box office and therefore, to save the industry, they came together. It was stated in this agreement that these factors were causing problems and given birth to the disputes between the production sector and the distribution sector. The representative members of the association, that is FMC and FDC held meetings and tried to find out the solution, which cropped up in the film trade. It was then suggested that since the two bodies namely FDC and FMC representing the distributors on one hand and the producers on other, sort out their differences, under which they had agreed on the following :-

1) The FMC had agreed to direct all its affiliated members associations that none of the producers shall deliver or cause to be delivered the video cassettes-delivery to the distributors for home-viewing video rights for a minimum period of two weeks from the theatrical release of the film in India.

2) That the FMC would direct its members not to sell and or dispose of in any manner directly or indirectly the cable TV rights of their films for telecast in India and Nepal for a minimum period of six months from the premier theatrical release of the film in India.

4) The producer would first offer the cable TV rights after six months period to the distributors holding the theatrical rights of the film. In case the said distributors decline such rights, it could be sold to any other entity.

5) It was also agreed that FDC and FMC would cooperate with each other to stop any illegal and unauthorized showing of their films by cable TV operators in any part of the country.

6) It was then agreed that FMC will direct its producers not to deliver their pictures to any channel or Doordarshan or satellite TV directly or indirectly before expiry of five years from the first theatrical release and that they shall not be entitled to charge any dupe charges from the distributors at the time of delivering the prints of any cinematograph films for its first release.

7. It was agreed that all agreements between producers and distributors in respect of distribution, exhibition and exploitation rights of Hindi feature film would be for a minimum period of ten years, except where the rights are acquired on advance or commission basis. All these were to be applicable to the films for which shooting commenced on or after 01.01.1994. Some other clauses for violation etc. were also the part of this agreement.

19. A fresh agreement came to be drawn in pursuance of that agreement and a Circular was issued dated 21.06.2000 incorporating the following Clauses : -

a) In case of M.G. Royalty or Out-right agreement, if the amount exceeds Rs.25 lakhs, for a major territory no producer of any constituent of AIFPC/FMC shall screen and or exploit in any manner whatsoever directly or indirectly the video rights & cable TV rights as well as the Television and/or Satellite rights or any other formats of his film anywhere in India for a minimum period of twelve (12) months from the premier theatrical release of his film in India.

b) In the event for whatever reasons any producer decides to supply the film before the said period of twelve (12) months for telecasting whether through any channel of Doordarshan, any Satellite Channel for telecasting or for showing through any video or cable network, 50% of the amount received by the producer for assigning the aforesaid rights shall be retained by the producer concerned and the balance 50% shall be divided proportionately among the distributors circuitwise all over India.

c) In case of any agreement other than M.G. Royalty or Out-Right basis or not exceeding Rs.25 lakhs for a major territory or if the producer decides to release the film himself, he shall be free to dispose of all the rights as mentioned in the foregoing paragraphs any time after six months of its premier theatrical release.

d) All theatrical rights or public exhibition in all formats without any exception shall belong to distributors.

e) A joint committee comprising of five representatives each from AIFPC, FMC & CCCA will be set up immediately to ensure the implementation or the arrangements herein contained.

f) Subject to the above, the producer and the distributor shall be free to decide all other terms of agreement and the same will not be subject to any guidelines/ directives of the respective associations and they will not be required to sign any declaration contrary to the terms and conditions of the Agreement between them. All differences and the disputes arising between the producer and the distributor relating to the terms of agreement shall be referred to the JT. Committee of AIFPC, FMC & CCCA and the decision of such JT. Committee in the matter shall be final and binding.

20. A look at these clauses would suggest that the period of five years embargo was curtailed to one year. It was also provided that where the producers decides to supply the film before the period of one year, for telecast through any channel on Television or any satellite channel, then 50% of the amount received by the producer for assigning the aforesaid rights, shall be retained by the producer concerned and the balance shall be divided proportionately amongst the distributors circuitwise all over India. It was also decided that a joint committee of AIFPC, FMC & CCCA would be formulated for resolving the disputes. It is commonly argued that the rules particularly regarding the distribution rights and the embargo of period of one year for the exhibition of the film on TV and satellite etc. are based on these resolutions and as such these associations were justified in formulating such rules regarding the hold back period. Of course, we may state here that the hold back period though have a common feature in rules of all the associations, differs in some cases that is in some associations it is of six months instead of one year. However, the common feature of all the rules is that there shall be a hold back period.

21. It must be stated here at this juncture that in the film industry, the producer while arranging the finances for production of the film have to see the arrangement with the distributors, who may acquire the exclusive distribution rights in a particular territory in lieu of the finances offered by him to the producer. The distributor may also have a different kind of contract like minimum guarantee of finances to the producer. The distributor may also take the film for the distribution on the commission basis wherein all the revenue collected by the movie with film theaters would go to the producer and only commission would be given to the distributor. In the minimum guarantee agreement, the distributors agreed to provide minimum guarantee to the producers and if there was an over- flow, the over-flow was to be shared by the producers, the distributors and the exhibitors in different proportions. Thus, the distributors and the producers depend on each other for successful running of the film, while the producer produce the film by arranging the finances, the distributor was responsible for the distribution of the same and its exhibition in a particular territory. These rights were purchased for a particular territory depending upon the capacity of the distributor. At times, the distributor even purchase the film outright for all the territories in India. So a common feature in all these associations is they became exclusive in-charge of their own territory and the whole business of distribution and exhibition was controlled by these associations, at least in respect of their own territory.

22. It is also an admitted fact and a common feature that no association interferes in the territory of any other association. There appears to be an agreement in between all the associations, not to interfere in the territory of any other association. We must also observe here that there is no sanction by the Government to these carved out territories. It is not as if the territories come by way of the sanctioned of particular State, thus there appears to be a tacit agreement in between all these associations who are admittedly the members of FDC, which is an apex body and which had entered into the agreement dated 19.06.2000 with FMC a representative body of the producers. After their formation, they formulated the by-laws, rules etc. and also worked as dispute resolution agencies for the disputes between the exhibitors, between the producers and the distributors and between the distributors on one hand and the exhibitors on the other.

23. Another common feature in all these rules appears to be the compulsory registration of the film. If the distributor wanted to distribute and exhibit the film of which he had distribution rights, he had to register his film with a particular association controlling that particular territory in which he wanted to exhibit his film. Of course, there were charges which he had to dole out to the associations for this purpose. The other common feature of these rules was that these associations provided for the arbitration and the office bearers of these associations were to act as the arbitrators for this purpose. While registering the film with a particular association, the registration form had to bear the signatures of even the producer along with the distributor, so that he becomes amenable to the arbitration proceedings, in case something went wrong in between the producers and the distributors.

24. Still another common feature in the rules of all these associations is their power of boycott and to inflict the punishment. The rules of all these associations commonly provide that where they find any member distributor guilty of breaching the rules, the associations will have the power to expel such member. Ordinarily, there appears to be nothing wrong with this rule, but the matter do not stop here, and it is further provided almost commonly in the rules of all the associations that in case of any expelled member distributor, the other member distributors or the other exhibitors in that particular territory will not deal with them in any way with that particular expelled member distributor. With the result that there is total boycott ordered under the rules. Not only this, but in case any existing member distributor deals with such expelled member distributor, the associations have the power under the rules to expel such a member distributor also.

25. Another common feature in the rules of all the associations appears to be that the associations will deal with and allow the distribution of the films of the member distributors only, that too in the theaters hold by the exhibitors in their territory. No exhibitor in that territory who is a member of the association can exhibit the film of the distributor, who is not a member of this particular association. So also of the expelled member distributor and in case that happens, the association can proceed and expel such member exhibitors which will deprive him of the opportunity to exhibit the films of the other members distributors also.

26. It is also a common feature in this respect that every member distributor, who desires of exhibiting his film in the territory controlled by the association has to register his film with the association for which he pays the association. Thereafter, he is bound by the conditions in the registration form, which essentially include that the registration form must have also been signed by the purchaser of the film along with the member distributor. The matter do not stop here, but there is a clause in all the registration form for almost all the appellants' associations that the producer would have to agree to the arbitration clause provided therein, whereby he cannot insist on any other independent arbitrators, but has to essentially depend upon the arbitral tribunal selected by the association, which arbitral tribunal invariably includes the office bearers of that particular association only.

27. We must point out at this juncture that all the learned counsel tried to argue that their dealings were extremely fair with the member distributors and the learned counsel of some of the appellants also suggested that they had never taken any action either of inflicting the penalties or boycotting the member distributors and therefore, such clauses remained only in the books, without being acted upon. It was pointed out by some of the appellants that they had now altogether removed the clause regarding holding back.

28. After perusing Section 3 in its entirety and after considering the nature of the rules, Commission held that though the associations themselves did not engage in any activity, enabling them to be termed as an enterprise, but since they were taking decisions relating to the production or distribution or exhibition for safeguarding the interest of the members engaged in similar or identical business of production or distribution or exhibition of the films, the practices carried on under the rules or the decisions taken by them as association of enterprises are covered within the scope of Section 3(3). The Commission, however, held that there were no vertical agreement between the associations and any of the Informants in terms of Section 3(4). Accordingly, it was held by the Commission that there could be no case against these associations for the contravention of Section 3(4). The CCI also held that the market for which such anti-competitive activities would be examined was the market of distribution and exhibition of films in the areas under the control of the associations in India to find out whether any appreciable adverse competition had been caused in such a market.

29. On the basis of the evidence brought before it and after considering the rules and regulations of number of appellants associations, the Commission came to the conclusion that these associations clearly provided in their rules that there would be restrictions in terms of dealing with the non-members. In that Commission also considered that the members were not permitted under the rules to deal with the non-members. The Commission also referred to certain rules and the findings of the DG that the rules as well as the conduct of some of appellants like CCCA, BJMPA, EIMPA, NIMPA and MPA as also KFCC established that these associations prohibited their members from dealing with the non-members. It was also found by the Commission that it was impossible for any producer, distributor or exhibitor to conduct his business in the territories under the control of the associations, unless they become members of the respective associations and after becoming such members, if they deal with non-members, they face the suspension penalty and get boycotted. The Commission also noted that though it was not compulsory to become a member of association, which was also the argument of the associations, yet the restrictive provision and the rules of not permitting their members to deal with non-members made it mandatory for every distributor or exhibitor to take their membership and further register the film with that particular association. The Commission also referred to in this behalf the statements of Basant Kumar Patil, President KFCC, Bijan Bose of PVR Pictures, Dharampal Arora of NIMPA, Arun Mehra, proprietor of Aum Movies, Rajiv Khanna a theater owner, that if a film is exhibited, the distributor of which is not a member, a penalty would be levied on all the exhibitors screening the film released by a non-member. The exhibitors may also face the action of blacklisting and therefore, it was impossible to carry on any business of distribution unless the distributor obtains the membership. Ultimately, on the basis of these restrictive practices, which was sanctioned by the rules of the associations, the CCI came to the conclusion that the rules and regulations of mpa, empa, nmpa, ccca, bjmpa reflecting the collective behaviour of all the members comprising of producers, distributors and exhibitors prohibited dealing with non-members who were the competitors in their business of production, distribution and exhibition and thus the non- members even being a competitor were prevented from competing effectively in the market. The CCI also observed that this collective intent and behaviour found reflection in the rules and regulations of the associations and the decision of the association as well as those rules in a way amounted to an agreement at horizontal level of the nature provided in Section 3(3) of the Act and therefore, the decision not to deal with non- members in effect limited the supplies and distribution of the films in the territory under the control of the appellants' associations, which was violative of section 3(3)(b). Thus on this count, the associations were found guilty. It was not argued before us that the references to the evidence of various persons or the rules relied upon by the CCI were in any manner incorrect. In fact no learned counsel questioned the evidence and the documents relied upon or the rules in any manner. The CCI then took for consideration the common feature of compulsory registration of the films imposed by the association relying on the oral evidence and the specific complaints.

30. The CCI also referred to the members being forced to accept the conditions at the time of registration of the film. It also referred to the argument to the effect that it was only in the interest of the member distributor and to protect their interest that such rules were being operated upon. The Commission rejected this argument by observing that the associations were keeping a complete control over the business affairs of the producers, distributors and exhibitors, both members and non- members. On this count also the appellants were found guilty of contravening the provisions of section 3(3)(b).

31. The Commission then considered the third aspect of restriction imposed on the number of screens for exhibition of non-regional films in a particular territory. This was mostly in case of KFCC, whose appeal is already dismissed by us for non-compliance of the order. Nobody argued on their behalf. However, on the basis of the evidence and the facts which were revealed before the CCI in the evidence and through the report of the DG, the CCI came to the conclusion that the KFCC was guilty of section 3(3)(b) because of restricting of the exhibition of non-Kannada film and limiting the exhibition of such films in the area of Karnataka. KFCC was, therefore, found guilty of violation of section 3(3)(b). However, that would not detain us because that question was not argued before us.

32. Fourthly, the Commission considered the clauses regarding the unfair hold back period for exhibition of satellite, television, video, DTH and other types. The CCI has thoroughly discussed the investigation report of the DG, which reveal that MPA, CCCA, NIMPA, BJMPA and IMPDA were forcing the producers to accept the terms and conditions relating to the release of the films on satellite, television and video before registration of the film in their respective territories. The CCI has considered the specific evidence in this behalf, taking the specific examples. It has also taken the stock of rules that in case of breach of the hold back period, the producer or the distribution as the case may be would be compelled to distribute amongst the distributors, 50% of the income realized on the basis of the prevalent realizable ratio. The CCI has also taken into consideration the aforementioned resolution between AIFPC, FMC and CCCA dated 19.06.2000 and the circular which we have already referred to in the earlier portion of this judgment. The CCI has referred to number of specific instances in case of film called Raavan, Kites etc. We again reiterate that these specific instances were not controverted by any of the learned counsel before us. In short the CCI has found six associations of contravening of section 3(3)(b) on this count also.

33. Lastly, the CCI in detail took into consideration the power of these associations in imposing penalties, in banning the films, in issuing of call of boycott and withholding the share of the distributors. After a detailed discussion, the CCI noted that the rules had the potential to punish the members who did not abide by the directions of the association and wanted to compete in the market with their films and deal with non-members. All these rules were, therefore, held as restrictive in nature and thus anti- competitive. Again the Commission took into account the specific examples in respect of films Kites and the restriction on its exhibition in the State of Karnataka by KFCC. It was observed that these adversely impacted the market as also the producers and distributors, who were to distribute their films in such territories as Karnataka. The CCI also referred to some correspondence of KFCC regarding some specific films in respect of the films Peepli Live and The Expendables and other correspondence of KFCC in respect of films like Lafangey Parindey was also referred to. As regards CCCA, it found that its rules 5(a), 23 and 24 had the potential of disciplining the members in order to enforce its restrictive and anti-competitive conduct. So also the rules of MPA, EIMPA as also BJMPA were considered wherein the power of these associations to punish the so called erring members were considered and the CCI as a matter of fact found the hefty penalties inflicted against UTV Software Communication, Eros Multi-media, Eros International Media Ltd., Filmkraft Production, Shri Ashtavinayak Cine Vision and Dharma Production etc. for various films which according to the association were released in breach of the rules of BJMPA. On that count also the rule 22 of IMPDA was found to be anti-competitive. Ultimately, it was held by the Commission in para 6.89 that such acts and conducts of enforcing their norms only help such associations in maintaining their market power of the members and denies the non-members or the deviant members, the opportunity to compete.

34. Lastly, on Issue No.5, after considering the provisions of Section 19(3), the CCI came to the conclusion that by these actions and the rules discussed resulted in appreciable adverse effect of competition. This finding in our opinion was not necessary as there is a presumption in favour of the appreciable adverse effect of competition, once the appellants are held guilty for contravention of section 3(3)(b) and then it was up to the associations to say that they did not have any appreciable adverse effect on competition. We do not see any attempt on the part of the appellants association to discharge that burden. The CCI also exonerated some other associations against whom no evidence was found. In short, this is how the Commission has proceeded to found the appellants guilty.

35. We will now consider the individual arguments by various learned counsel.

36. Mr. Dhruv Mehta appearing in Appeal No.70 of 2012 firstly argued that there was no locus-standi to the Informant in his case to lodge complaint. According to the learned counsel, the association (CCCA) was the association of the distributor or exhibitors, who were the members and the prohibition was also only against members. A person who was the producer and was not a member, was not governed by the rules of the association. He invited our attention to the definition of 'member' in clause 2(d) as also to Regulation 4(a), which according to him operated only against the member. The learned counsel therefore, tried to argue that since the association did not deal with non-members, it could not lodge any information or any information by such non-members should not have been acted upon by the CCI as it did. The learned counsel took us through various articles of association as also the rules for registration, more particularly inviting our attention to the rules 4 and 5. Our attention was also invited to the form, which the member distributor had to fill as also the agreement, which he was required to enter into on account of registering of the film with the association. Our attention was also invited to the arbitration rules. Shri Mehta also took us through agreement dated 19.06.2000, which we have already referred to in the earlier part of the judgment.

37. Considering the overall argument, we are of the clear opinion that the Informant in this case did not lack any locus-standi merely because the rules of its association were binding only on the members. It must be remembered that the CCI has the suo-moto power also and therefore, anybody could have activated and invited the attention of the CCI to the anti-competitive agreements or actions or rules, as the case may be. Further, it cannot be denied that the interest of the Informant was involved in the matter and the Informant was feeling the heat of the rules because of which the appellant association was wielding asphyxiating control over the member distributors and exhibitors. We cannot forget that for registering any film with the association, a form has to be signed by the distributor as also the producer, even if that producer is not a member of the association. Thus, the association would be controlling the producers also. The CCI has already given clear cut examples of the kind of control that the association wielded on the member distributors and exhibitors. We do not think that the argument regarding the locus-standi is correct and proceed to reject the same.

38. The other argument of Shri Mehta was that in order to come under mischief of Section 3, there has to be an agreement between the entities engaged in identical or similar business and this not being the case here, there could be no breach of Section 3. In our opinion, the argument is clearly incorrect. There can be no dispute that the rules of this association which followed the practices of boycotting of the non-members and the further rules of compelling the members, not to deal with the non-members, as also other practices discussed by the CCI in detail, would amount to an agreement between the members and the associations. There can be no doubt that the rules and the practices limited and controlled the production, supply etc. of the films and thereby directly coming within the mischief of section 3(3)(b). The association may not have been held to be an 'enterprise' (we have our own reservation for that finding, however, we cannot go into that finding in view of their being no appeal in respect of the contravention of Section 4), but only on that basis, it cannot be said that there is no agreement. The CCI has given good reasons to support its finding regarding the contravention of section 3(3)(b) to the effect that this association was a representative association of its members, who themselves were acting as per the anti-competitive rules and engaging themselves into anti-competitive practices. In our opinion, therefore, the finding regarding the contravention of section 3(3)(b) is a correct finding. The learned counsel also tried to urged that article 4(a) of the articles of association, prohibiting from dealing with the non-members, was merely in the nature of self-regulation. It was also tried to be urged that the non- member distributors and exhibitors were surviving on piracy. It was also tried to be urged that this regulation was for the benefit of the members and members of the appellant association themselves had agreed to curtail their power by agreeing to become a member of the association, which is a corporate entity and therefore, no fault can be found with this decision of the distributors member in agreeing to bind themselves to a particular code of conduct, whereby they required the producer and non-member producer also to respect the code of conduct by agreeing to sign the declaration. The argument is clearly incorrect. It is not that everybody was happy with the rules and in fact, the Informant has shown that they were not happy with the rules at all, but were compelled to follow the rules of the associations. In that view, this argument that the members are benefited would be of no consequence.

39. It was then urged that the rules and regulations of CCCA are an internal agreement amongst members, not to deal with non-members and the same did not attract section 3(3)(b) of the Competition Act and particularly because the conditions therein were not fulfilled. We do not agree. The decision taken by the association were certainly decision by the 'association of enterprise' or 'association of persons'. Secondly, these persons were certainly in the trade of identical 'goods' or 'services' and lastly their action certainly resulted or had the effect of restricting or limiting the supply. The decision of the CCI is absolutely correct in this case. It was then urged that there was no evidence that there has been restricting/ limiting the supply of the films because of the rules of the associations. The learned counsel urged that there had to be some material to show that there has been limiting of supply of films or that the competition had been effected. In this behalf, it was suggested that some evidence should have been brought. We have also referred to the common evidence, which is fully applicable in case of the present association and the CCI has also referred to the present association. The learned counsel did not deny any of the facts, which had been held/ proved by the CCI on the basis of the oral evidence examined before the DG. The learned counsel also did not questioned the findings regarding some films, the examples of which were given by the CCI. If the rules are capable of committing the mischief, which the Act wanted to restrict, then even if there is no such tangible evidence available, the rule would still be invalid. The Hon'ble Supreme Court has unanimously on this point taken a stand that if a provision is even capable of creating the mischief or discrimination, such provision has to be held constitutionally invalid. Similar is the decision in the present matter where the rules can be per-se held anti-competitive, being capable of restricting the market and effecting the competition. The learned counsel tried to rely on section 3(5)(i), which is as under :- 3(5) Nothing contained in this section shall restrict

(I) the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under (a) the Copyright Act, 1957 (14 of 1957); (b), (c), (d), (e) and (f) are not relevant.

40. It is suggested that in order to save themselves from piracy of the film, the provisions in the rules like hold back period and other provisions were necessary. It was also tried to be urged that rationale behind the compulsory registration is the efficient running of industry and that it resulted in discouraging piracy, prevented multiple sales, protected copyrights and facilitated ultimate resolution of disputes to avoid litigation. We have nothing against these provisions and it may be that such results may be flowing out of the registration, however, the fact of the matter is that the matter do not stop there, the compulsory registration also brings along with it the compulsions in the rules regarding the boycotting of the non- members as also the direction, not to deal with those who have breached the rules. The rules also result into area restriction in as much as the member distributor cannot operate outside the territory of the association. When all these rules are considered with each other, the strong hold of the association becomes all the more pronounced. We, therefore, reject this argument based on Section 3(5)(i).

41. It was then urged by learned counsel that the effect of the agreement between FDC and FMC in the year 1994 and 2000 was not considered by the CCI. These were after all the apex bodies of producers, distributors and exhibitors. We have already taken into account the effects of those agreements, however, those agreements were prior to the Act came into force. They have not fallen the consideration of the CCI, nor are they before us. At any rate, these agreements could not give a colour of legality to the rules, which are otherwise anti-competitive in nature as per the present Act. It was urged in this behalf that there was a gate way for the producer by sharing 50% of his profit. In our opinion, such condition was wholly anti-competitive, apart from being restrictive. The element of compulsion in the rules of the association makes the things worse. It was urged by the learned counsel that there was no undertaking was extracted by the producers by way of force and that the clauses in form 3A had been arrived at mutually. We are not impressed by this argument at all in as much as the producer, who is even a non-member is totally made powerless to release his film to the satellite or TV or video, because of the rules providing hold back, if he has to survive in the market and sell his film. It clearly amounts to the restraint of trade. The learned counsel tried to rely on some observations of the Honble Supreme Court in Mahindra and Mahindra v. Union of India & Anr. In (1979) 2 SCC 529. In the wake of various instances given by the CCI in its order on the basis of the oral evidence examined before the DG, it cannot be stated that there was no material to suggest that associations were acting innocuously. This is apart from the fact that law laid down in Mahindra and Mahindra v. Union of India and Anr. is entirely in different sphere and enactment, in which the factual circumstances were entirely different. The observations in paragraphs 14 and 15 of the judgment relied upon by the learned counsel do not take this case any further.

42. Almost desperate arguments were advanced that this was a clear example of approbate and reprobate by the producers. For this purpose, letters dated 06.03.2012 and 18.03.2013 by Eros International and Reliance Big Entertainment were relied upon. They both are the Informants in these matters. They may have written those letter and may have taken the help of the association for redressing their grievance. They may also be the members of CCCA in the capacity of distributors and may for that purpose submit to the rules of CCCA, but that does not mean that the association may go ahead with its rules, which were inherently anti- competitive. We, therefore, do not find any merit in this appeal and proceed to dismiss the same.

43. Mrs. Mala Goel, appearing in Appeal Nos.69, 71, 73, 97, 96 and 102 of 2012 also reiterated almost same arguments. She pointed out that the evidence of Informant was not recorded and that was, according to her, fatal. She also pointed out that one of the association had already removed the provision of hold back period. We have nothing to say about that because that is admittedly the post judgment development. The counsel tried to rely on the investigation report of the DG, wherein the DG had exonerated such associations. In our opinion, that is also of no consequence in view of the supplementary report by the DG, wherein the DG found certain articles of association as anti-competitive. She pointed out that at least in case of Motion Pictures Association, there was no rule regarding the regional and non-regional films. There was also no rule regarding the restriction of number of screens on the basis of language in which the movie could be exhibited. She further pointed out that the clause regarding the hold back period was already dropped in the new form, through which the film is registered with the association. The learned counsel argued that in the case of Motion Pictures Association, the memorandum of articles were approved by the Delhi High Court in Company Petition No.58 of 1979. She also urged that there was no evidence about any losses suffered due to any act of Motion Pictures association. Our attention was invited to the nature of this business, which we have already alluded to in the earlier part of our judgment. She also urged that there were 200 other exhibitors, who were not the members of the MPA, but were running their business in the territory. A list of such exhibitors was filed before us by way of written submission. The learned counsel urged that it was a laudable object of saving the industry from piracy and safeguarding the interests of the member distributor that the association was working. The whole working pattern of the association was explained to us. The learned counsel also urged that association was taking no decision regarding the production and the association comes into the picture only when the distributor has acquired the rights for distribution from producer. In short, the contention raised was that the association was in the best interest of the distributors and its activities, rules and the practices could not be viewed as anti-competitive. We have already considered all these contentions raised by Mr. Mehta earlier. Relying on the oral statements of ten persons, who were examined by the DG, the learned counsel pointed out that the MPA had almost no role and that there were no complaints against the MPA. It was pointed out that one of the Informant was himself a member of the MPA and that he had concealed his membership. In our opinion, all these arguments would be of no consequence, particularly in view of the clear cut reasoning given by the CCI. It was urged that the allegations in the information were not proved. We have already considered the contention in that behalf. The learned counsel contended that she had filed an application under Section 53(o) of the Act praying for statement on oath of the Informant. We do not think that would be in any manner relevant in the present issue in view of the admitted position of existence of anti-competitive rules of the associations. The learned counsel pointed out that even if there were restrictions, they were reasonable restrictions. We do not think so, in view of the gagging power of the association on its members, which resulted into the restrictions being brought on against them. We do not see any merits in the arguments of the appellant and would chose to dismiss the same as also the appeal.

44. Mr. Ramji Srinivasan addressed us on behalf of Indian Motion Pictures Distributions Association (IMPDA) in Appeal No.66 of 2012. Even this association requires compulsory registration of the film by the member distributor and they also have the hold back period of six months. Curiously, it is stated that the association was not called for any hearing before the Commission at any stage, prior to the passing of the impugned order. However, that does not appear to be correct, in view of the admitted position that the notice to the office bearers of the appellants was issued on 21st October, 2011 requiring them to file their reply/objections to the DGs report and also to file profit and loss account and annual balance sheet for three years. The learned counsel argued that this association did not have any provision for compulsory membership, nor did it disallow a member to deal with non-member. However, the two other conditions, which have been found as contravening Section 3, are the compulsory registration of the film, as also providing the hold back period. According to the learned counsel, compulsory registration was not an issue as stated by the Informant in his information. We do not think that such argument can prevail for the simple reason that condition of compulsory registration of the film exclusively with the association, as also providing hold back period for six months would clearly come under the mischief of Section 3. According to the learned counsel, since the membership was voluntary and the rules were in the nature of self-regulatory rules, there would be no question of contravention of Section 3. It was argued that the appellant was not the only association of distributors and there were several other distributors were operating in the territory, who were not the members of the appellants association. Much has been said about the voluntary nature of the rules and that only a person who chooses to be a member is bound by the rules. It was suggested that only 35% of the films released in the Mumbai area are registered with the appellant. The CCI has already correctly held that the compulsory registration would by itself amounts to an anti-competitive practice because thereby the association controls both the distribution of the film as also the distributor and even the producer who is required to put his signature on the registration form.

45. It was suggested by the learned counsel that the rule regarding the hold back period was only advisory in nature and that appellant has never imposed such condition or implemented it. It was also suggested that unlike the other association, the appellant did not have any provision for collecting any amount from its members or from producers with respect to the hold back period for distribution among distributor or otherwise and no such amount has ever been collected and that the rule was incorporated on the basis of the earlier agreement in 2000 between FMC and FDC, which is referred to as master agreement. We do not think that the argument is correct. Once there is rule of hold back period, even if the association has not chosen to act upon it, the necessary damage is done. The learned counsel also complained against the procedure and urged that the CCI should not have adopted a general attitude against all the associations and should have separately treated each association. The argument does not impress us, as adequate care seems to have been taken by the DG in recording the evidence of the persons relating to the industry. We, therefore, do not find any merit in this appeal also and dismiss the same.

46. Almost similar are the arguments in Appeal No.78 of 2012. Mr. Manas Kumar Chaudhuri pointed out that the period before 20th of May, 2009 could not be calculated in the matter of penalty. We do not think that the contention is correct. A clear language in Section 27 permits that. It is urged by Mr. Chaudhuri that the penalty inflicted is very heavy and we do not agree. However, his reliance on the Guidelines of European Union, on quantum of penalty cannot be taken into consideration, as there is nothing on record to suggest that the penalty as inflicted would irretrievably jeopardize the economic viability of the undertaking like Eastern India Motion Picture Association. There is no evidence to support that position. The learned counsel also submitted that there was no evidence about the agreements between the various associations under Section 3 and that the similarity in the rules/ by laws was due to the historic nature of the association and that there was no evidentiary proof adduced by the Informant. It is also submitted that the constituent members of the appellant association did not have horizontal relationship with each other. This contention is also incorrect as all the persons, who were having their business of distributors, were competitors to each other. All these distributors would be bound by the rules and practices of the appellant association which by itself amounts to the agreement contemplated under Section 3. It was urged that the members had dissimilar business and therefore, there could be no question of contravention of Section 3(3). We have already explained this aspect. All the members of the association had the similar business. The association was also day-in and day-out dealing with that business only. The association has rightly been held by the CCI to be representative. We, therefore, do not find any merit in this appeal and dismiss the same.

47. Identical contentions were raised by Ms. Sangeeta Kumar in Appeal No.67 of 2012 on behalf of BJMPA, which we have already discussed. Hence, this appeal is also dismissed.

48. Mr. A.N. Haksar, appearing for the respondent-Eros in Appeal No.70 of 2012 tried to urged before us, relying on Section 36 of the Companies Act, that the rules of the individual association would amount to the agreement between the association and members as also between inter-se members. For this he relies on a judgment of Honble Supreme Court in Naresh Chandra Sanyal vs. Calcutta Stock Exchange Association Ltd. reported in (1971) 1 SCC 50 and more particularly para-14 thereof. We have absolutely no doubt that the rules and also the practices would amount to an agreement, as has been described by the learned counsel. We hold this particularly in view of the broad definition of the word agreement in the Act. However, the other contention of Mr. Haksar is not acceptable to us. The learned counsel urged that though all these associations have been exonerated of the contraventions of Section 4, he could still urge the contravention of Section 4 before us. For this, the learned counsel pointed out that there are Honble Supreme Court decisions which suggest that the respondent can support the judgment on offer ground also and can also assail the finding, which has been recorded against him. We have no quarrel with the proposition, but here the situation will be slightly different. In a civil matter such finding is possible, however, here there were two specific issues, one, the contravention of Section 3; and the other the contravention of Section 4. The majority judgment has exonerated the appellants from contravention of Section 4, that is totally a separate issue distinct from the issue of contravention of Section 3 and in reality while supporting the finding of contravention of Section 3, it cannot be said that the CCI had erred in exonerating the appellants of Section 4. There is no nexus between the two. They are separate and distinct contraventions. Therefore, in the garb of supporting Section 3 contraventions, the respondent cannot fall back upon the contravention of Section 4 and urge that we at the appellate stage should also book the appellants for contravention of Section 4, particularly when there is no appeal against such finding of exoneration of contravention of Section 4. We would not therefore go into that question.

49. Ms. Anupam Sanghi, appearing for CCI supported the majority orders in all these appeals and urged that those orders cannot be faulted. She also supported the findings on the contravention of section 3(3)(b) on account of the obvious anti-competitive nature of the rules and practices which were almost common in case of all appellant associations Our attention was also invited to the minority orders by Shri Prasad. In view of the earlier discussion in this judgment we are unable to agree with him at least on his interpretation of Section 3 and the consequent finding. We need not consider the finding of contravention of Section 4 in view of the fact that there is no appeal before us by informant on that issue.

50. Much has been said about the penalty. However, considering the stakes and the finances involved in the Film making business and the overall circumstances, in our opinion the penalties are insignificant. Needless to mention that in all appeals, appellants have already paid the penalties as per our directions. It is true that the CCI should have given some reasons, as to why it has determined 10% of the average income of the associations as the penalty, but considering the nature of activity and stakes involved, we feel that the penalties inflicted are actually insignificant. We will not therefore go into that question. Similar is the case with the directions issued by CCI. In our opinion all the directions are well justified. All the appeals are ordered to be dismissed without any costs. Pronounced in open Court on 17th day of May, 2013. (V.S. Sirpurkar) Chairman (Rahul Sarin) Member (Pravin Tripathi) Member

section 3(3)(b).