TaxTMI 
TaxTMI 
2010 (8) TMI 176
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....respect of films for which the provisions of the Copyright Act, 1957 contain exhaustive provisions. 3. The facts leading to issuance of impugned show-cause notices are already stated in the show-cause notices themselves. 4. The show-cause notice impugned in Writ Petition No. 526 of 2010 reads as under :- "Competition Commission of India (Secretariat) By Speed Post F.No. 1/1/2009-Sectt./2320921st December, 2009 To, Shri Sidharth Roy Kapur M/s UTV Software Communications Ltd. 1181-92, Solitaire Corporate Park, Guru Hargobindji Marg, Chakala, Andheri (East), Mumbai - 400 093. Sub. : Case No. 1/2009-FICCI-Multiplex Association of India. The FICCI-Multiplex Association of India has filed information before the CCI under section 19(1) of the Competition Act, 2002 on 26-5-2009 through their authorized Advocates - Luthra & Luthra, Law Offices, New Delhi against the following enterprises :- 1.United Producers/Distributors Forum (UPDF). 2.Association of Motion Pictures & TV. Programme Producers (AMPTPP). 3.The Film & Television Producers Guild of India Ltd. (FTPGI). It has been stated in the information that the members of these organizat....
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....nd material in support of your contentions. In case you wish to seek an opportunity of oral hearing then you have to make a separate prayer for that purpose. In case your reply/objections are not received within specified time it shall be presumed that you have nothing to say in the matter and the Commission shall proceed further in the matter as provided under the law. Sd/- (S.I. Buriker) Secretary Competition Commission of India Encl: (1) Copy of report of DG dated 24-9-2009 with annexures (page Nos. 169-329 - total 161 pages) (2) Copy of supplementary report of DG dated 27-11-2009 with annexures (page Nos. 1-223)" 5. Similar notice dated 21-12-2009 is issued to the petitioners in Writ Petition No. 358 of 2010. 6. The petitioners have challenged the jurisdiction of the Competent Commission to initiate any proceedings under the Competition Act against the petitioners on the following main grounds :- (i)The exhibition of a feature film, which is a subject-matter of copyright exploitation alone, is specifically excluded under section 3(5) of the Competition Act and hence the proceedings initiated against the petitioners are without jurisdiction. (....
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....gned show-cause notices without considering various legal contentions including lack of jurisdiction of the Competition Commission, raised in the petitioners' replies. 7. At the hearing of these writ petitions, learned Senior Counsel Mr. Hidayatullah and Mr. Janak Dwarkadas have challenged the show-cause notices mainly on the ground of lack of jurisdiction and made the following submissions :- (a)Sub-section (1) of section 3 of the Competition Act prohibits an anti-competitive agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. The right to release a film can never be considered as goods or services and, therefore, the Competition Act, 2002 can never apply to a dispute regarding the distribution rights in relation to films. (b)Without prejudice to the above contention, it is submitted that sub-section (5)(i)( a) of section 3 specifically provides that nothing in section 3 shall restrict the right of any person to restrain an infringement of, or to impose reasonable conditions as may be necessary for protectin....
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....ard may determine. (d)Assuming, while denying, that the petitioners had insisted upon unreasonable terms for granting the right to exhibit the films in favour of the multiplex owners, the only remedy available to the multiplex owners was to approach the Copyright Board under section 31 of the Copyright Act, 1957. Anything done otherwise than in accordance with the aforesaid statutory scheme of the Copyright Act, will give the owner of the copyright the right to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights under the Copyright Act. It is, therefore, clear that the Competition Commission has no jurisdiction to initiate any proceedings which will interfere with the rights of the owner of the copyright in the cinematograph film under the Copyright Act. The impugned show-cause notices proceed on the assumption that the Competition Commission has such jurisdiction. The impugned show-cause notices are, therefore, issued without any jurisdiction and without any authority of law whatsoever. (e)The Competition Commission having already taken a particular stand even after the petitioners submitted their reply to th....
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....cences and that such right is subject only to right of others to obtain compulsory licence as also the terms on which such licence can be granted. The underlying philosophy of the Copyright Act is that the owner of the copyright is free to enter into voluntary agreement or licences on terms mutually acceptable to him and the licensee. The Act also expressly recognises the concept of the exclusive licence subject only to the grant of compulsory licence by the Copyright Board as also the terms on which such licence can be granted under section 31 of the Act. It is also contended that what is prohibited by the Competition Act is an agreement by an association of enterprises or by association of persons which cause or is likely to cause an appreciable adverse effect on competition within India but Copyright Act and particularly sections 33 and 34 thereof specifically provide for the registration of a copyright society and empowers the copyright society to accept from the owner exclusive authorisation to administer any rights in any work by issuance of licence or collection of licence fees or both. It is, therefore, submitted that in view of the specific exclusion clause provided in sub....
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.... In L. Chandra Kumar v. Union of India AIR 1987 SC 1125 (paras 90 and 93) and Special Director v. Mohd. Ghulam Ghouse AIR 2004 SC 1467^1 (para 5), the Apex Court has deprecated the practice of litigants raising constitutional issues to directly approach the High Court and thus subvert the jurisdiction of the Tribunals. The Tribunal can decide all such issues and even jurisdictional issues can also be decided by the Tribunal. The only exception is that the Tribunal cannot decide the constitutional validity of the statute under which the Tribunal is established. (b)It is premature to interfere with a show-cause notice and stop proceedings. No prejudice is caused by mere issuance of the show-cause notice. Even jurisdictional issues can be urged before and adjudicated upon by the Tribunal as held by this Court in Vodafone International Holdings BV v. Union of India 2009 (4) BCR 258^2 and confirmed by the Apex Court in Vodafone International Holdings B.V. case (supra). (c)In Kingfisher Airlines Ltd. v. Competition Commission of India Writ Petition No. 1785 of 2009, this Court has considered a premature challenge to proceedings under the Competition Act and has refused to interfere....
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....ion to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto", it is, submitted that the protection of interests of consumers is an important object for enactment of the Competition Act, 2002 and, therefore, if the Competition Act has provided for an additional forum for protection of consumers' rights in addition to the forum of Copyright Board provided under the Copyright Act, 1957, it cannot be said that the Competition Commission is acting without jurisdiction. [Emphasis supplied] 13. Having heard the learned counsel for the parties, we have given anxious consideration to the rival submissions. 14. It is vehemently contended on behalf of the petitioners that issuance of notices by the Competition Commission proceeds on the basis of incorrect assumption of certain facts and issues. It is, therefore, necessary to discuss the power of the Commission to determine jurisdictional facts. It is true that the jurisdictional fact is a fact which must exis....
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....ercise of its jurisdiction depends exists and (2) where the Legislature confers jurisdiction on such Tribunals to proceed in a case where a certain state of facts exists or is shown to exist. The difference is that in the former case the Tribunal has power to determine the facts giving it jurisdiction and in the latter case it has only to see that a certain state of facts exists." Whatever may be the debate about the scope of review by the Writ Court of the decision of a Tribunal on a jurisdictional fact, every Tribunal has the jurisdiction to determine the existence, or otherwise of the jurisdictional fact, unless the statute establishing the Tribunal provides otherwise. On a bare reading of the provisions of the Competition Act, 2002, it is clear that the Competition Commission has the jurisdiction to determine whether the preliminary state of facts (on which the further exercise of its jurisdiction depends) exists. There is nothing in the Competition Act, 2002 to indicate that the Competition Commission is not invested with the jurisdiction to determine such jurisdictional fact. 15. The question whether the Competition Commission has jurisdiction to initiate the proceed....
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.... case the final decision of the Competition Commission is adverse to the petitioners, the petitioners will have right to challenge the same in an appeal before the Competition Appellate Tribunal established under section 53A of the Competition Act and the said Appellate Tribunal is headed by a former Judge of the Supreme Court of India. It, therefore, appears to us that the decision of the Apex Court in Calcutta Discount Co. Ltd.'s case (supra), in which the challenge was to the show-cause notice issued by an Income-tax Officer for reassessment, cannot be applied to a case where a show-cause notice has been issued by the Competition Commissioner under the Competition Act. Against the decision of the Commission an appeal would lie before the Appellate Tribunal headed by a sitting or a former Judge of the Supreme Court of India or a Chief Justice of a High Court as provided in section 53D of the Competition Act. Sub-section (2) of section 53D of the Competition Act also provides that Members of the Appellate Tribunal shall be persons of ability, integrity and standing having special knowledge of and professional experience of at least twenty-five years in competition matters, includi....