TaxTMI 
TaxTMI 
2020 (3) TMI 1482
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....ri T. G. Vinaykumar' moved an application under Section 19(1)(a) of the Competition Act, 2002 ('the Act', for short) against the Appellants - 'Association of Malayalam Movie Artists' (hereinafter, 'AMMA'/'Opposite Party No. 1'/ 'OP-1'); 'Film Employees Federation of Kerala' (hereinafter, 'FEFKA'/'Opposite Party No. 2'/ 'OP-2'); 'Shri Mammooty' (hereinafter, 'Opposite Party No. 3'/ 'OP-3'); 'Shri Mohanlal' (hereinafter, 'Opposite Party No. 4'/ 'OP-4'), 'Shri Dileep' (hereinafter, 'Opposite Party No. 5'/ 'OP- 5'); 'FEFKA Director's Union' (hereinafter, 'Opposite Party No. 6'/'OP-6'); and 'FEFKA Production Executive's Union' (hereinafter, 'Opposite Party No. 7'/ 'OP-7') alleging contravention of the provisions of Sections 3 and 4 of the Act. 2. The Competition Commission of India ('the Commission', for short) after investigation through its Director General (the DG) by impugned order dated 24th March, 2017 held: "8. Considering the findings elucidated in the earlier part of this order, the Commission finds that OP-1, OP-2, OP-6 and OP-7 have indulged in anticompetitive conduct in violation of the provisions of Section 3 of the Act. Further, their office bearers, namely, Sh....
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.... 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 Artists' (OP-1) and its prominent members/actors bore a grudge against the Informant and used their clout to reduce the strength of MACTA Federation and forced its members to split and form an alternative association by the name 'Film Employees Federation of Kerala' (FEFKA) i.e. OP-2. 7. Subsequently, on different occasions, the Opposite Parties tried to force various actors, technicians, producers, financers, not to work or associate with the Informant in any of his project. For achieving that purpose, the Opposite Parties allegedly imposed a ban on actors, technicians, producers, etc., who worked with the Informant, by issuing circulars and show cause notices. As per the information, many artists, technicians, producers and financiers withdrew from the Informant's projects and even the new actors (who came forward to work with the Informant) were threatened by Opposite Parties. Such conduct of the Opposite Parties, as per the Informant, has affected fair c....
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....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 film in the year 2014. However, the project was cancelled pursuant to the call he received from Shri Unnikrishanan and Shri Sibi Malayil of OP-2 and Shri Edavela Babu of OP-1. The advance amount was also taken back from the Informant. This witness also deposed that OP-1 and OP-2 have dictated their members not to work with the Informant and have even boycotted those who have not complied with such diktats. 12. Shri Sudheer CV, another producer, submitted that he advanced a sum of Rs. 100,000/- to Informant for a film. However, the project was cancelled on account of the pressure exerted by OP-1 (through its Secretary, Shri Edavela Babu) and OP-2 (through its General Secretary, Shri Unnikrishanan). He submitted that he was told by these office bearers of OP-1 and OP-2 that if he does not obey their directions, he will not get any experienced artists and technicians for his film. This witness further submitted that it is only because of the ba....
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.... 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 acting, until he withdraws his statements against OP-2 through media and tender apology. The DG has opined that although these minutes and contents of the circulars appear to be a result of the statements made by Late Shri Thilakan in the print and visual media, the investigation has sufficiently revealed that the main issue between Late Shri Thilakan and OP-2 started when OP-2 and other associations enforced a boycott against Late Shri Thilakan for having worked in the Informant's film 'Yakshiyum Njanum'. 20. The DG has relied upon a letter dated 3rd December, 2009 which was signed by Shri Sibi Malayil, President and Shri B. Unnikrishnan, General Secretary of OP-2 and sent to the General Secretary of All India Film Employees Confederation (AIFEC). In the said letter, OP-2 requested AIFEC to ensure that the cinematographer, Shri Rajaratnam, who was working with the Informant during that time, dissociate himself with the Informant's....
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....n 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 K. George, it did not seek his cross examination, despite being offered by the DG. The DG relied upon the statement of Shri Salu K. George, along with the minutes of the OP-2's General Council meeting held on 28th November, 2012 and Circular dated 19th April, 2013 issued by OP-2 to conclude that OP-2 initiated disciplinary action against Shri Salu K. George for having worked with the Informant. Thus, based on these, the DG concluded the statement of Shri Salu K. George supports the allegation of the Informant against OP-2. There are other evidences also which was relied upon by the DG. 24. The other instances of violation of Section 3 were also noticed by the DG who also took into consideration of bye-laws and circulars of OP-7. 25. The parties including the Appellant-herein raised objection to the investigation report. The Informant primarily endorsed the findings of the DG and prayed that the same be accepted with....
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....aid 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; - no producer announced and/ or registered the movie he intended to produce with the Respondent No. 2 as the director, which is usually the norm in the film industry; - despite receiving alleged threats from the office bearers, no producer complained against these alleged threats with their respective associations, thereby raising questions over the genuineness of the statements of the producers; - not a single producer produced any evidence or material to substantiate the threat of the "threatening calls". Moreover, witnesses undertook to produce the said call data records from their respective operators. However, nothing has been produced till date; and - Sh. P.A. Haris, Sh. Kannan and Sh. Sudheer formed a part of the poll panel with the Respondent No. 2 (Informant) which contested and lost the elections for the Kerala Film Producers' Association. In fact, Sh....
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....ppeal 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; c. Statements of individuals not supporting allegations of Respondent 2; and d. Statement of General Secretary of FEFKA Directors' Union that there is no ban on members of Appellant No.1 to work with Respondent No. 2. 37. Learned counsel for the Appellant alleged that only truncated evidence has been relied on by the Commission. It is also submitted that the DG has annexed only a selective portion of the FEFKA General Council Meeting on 28.11.2012 to hold that FEFKA banned Sh. Salu K. George for acting in the movie directed by the Respondent No. 2 (Informant). However, a bare perusal of the complete minutes of the FEFKA General Council Meeting on 28.11.2012 reveals that the reason for the ban on Sh. Salu K. George was totally different and unconnected i.e. his vehicle was driven by members of BMS, a political organ....
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....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 Appellants qua the 'appreciable adverse effect' on competition, however, the Impugned Order fails to analyze the same. Learned counsel further submits that there is no 'Appreciable Adverse Effect' on competition as: a) There has been no analysis of whether the effect on competition, if any, is appreciable. b) A case under Section 3(3) cannot be made out where the aim of the activity is not to distort or prevent competition or to reap anti- competitive gains. c) The conduct as described in Section 3(3) raises only a presumption and not a declaration of violation of Section 3(3). d) Respondent No. 1 has ignored the factors as laid down in Section 19(3): i) No barriers to new entrants in the market has been created - flurry of cinematic activities in Malayalam ....
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....KA 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. Mohanlal is a famous film personality and also Vice President of AMMA (0P1). OP5: Sh. Dileep is a famous actor of Malayalam cinema and also treasurer of AMMA (0P1). OP6: FEEKA Directors' Union (OP-6) is a union of film directors in the Malayalam cinema. Its secretary is Sh. Kamaluddin (known as Kamal in the industry). OP7: FEEKA Production Executives' Union ('OP-7') is a union of production executives working in the Malayalam film industry. Its secretary is Sh. K. Mohanan (known as Seven Arts Mohan in the industry). 43. Thus, for all practical p....
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....e 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 03.04.2013. Sh. P.A. Haris had sought to produce a movie with the informant in 2011. His Financier, Sh. Jackson however informed him, after receiving instructions from PC George [Member of AMMA] not to work with the informant. In lieu of this, Sh. Haris took back his advance. Other producers/directors also compelled, Sh. Haris not to be associated with the informant. His letter dated 03.04.2013, adds corroborative Evidence to justify the return of money to be influenced by the ban alone. c. Statement and C....
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....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 FEFKA's GCM dated 17.02.2011 and Circulars dated 27.02.2010 & 09.04.2011 The perusal of these documents reveal that FEFKA had barred its members from working with Late Shri Thilakan. Furthermore, Sh. Thilakan had categorically stated that the ban was enforced subsequent to him working with the informant. c. Letter dated 03.12.2009 sent by FEFKA to AIFEC This letter categorically highlights that no member of FEFKA was working in a film that the informant had started to ma....
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....es 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 member. Sh. Philip had in the past, prior to receiving the Show Cause Notice dated 11.10.2012. worked with the informant in 25 movies. He further stated that he had refused to participate in the movie of the informant, titled 'Little Superman' due to this Show Cause Notice. This highlights that the FEFKA Production Executives Union followed the decision taken by FEFKA and influenced its members as well as its non- members not to work with the....
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....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 Sh. Vinayan? Ans. I think there is ego clash between Sh. Vinayan and other leaders of the association. I think it has started from the formation of FEFKA as a breakway of MACTA which was then headed by Sh. Vinayan. So it is also related to union politics. Another cause was the dispute of MACTA with Sh. Dileep. Question 8. Is the ban imposed by FEFKA....