V.S. SIRPURKAR, CHAIRMAN:
1. In this Appeal, the majority order passed by the Competition Commission of India (in short the "CCI") is in challenge. The operative order passed by the CCI is as under
"8.4 The Commission also directs the OP-1 and OP-2 to 'cease and desist' from the following practices and take suitable measures to modify or remove them from their articles of association, rules and regulations;
i) The existing rules of Eastern India Motion Picture Association, OP-1 on dubbing must be dispensed with and there should be no bar or prohibition on exhibition of dubbed films or serials produced in any language in the areas under its control.
ii) The Co-ordination Committee of Artist and Technicians of West Bengal Film and Television Industry should not impose any restrictions in any manner on distribution and exhibition of the Films or TV serials in the areas under its control."
2. The said order was passed by the CCI, having found the original OP-1 and OP-2 guilty of breach of section 3(3)(b) of the Competition Act, 2002 (in short the "Act"). In addition to this, the CCI also decided to take up separate proceedings against the members of original OP-2. The CCI, however, refused to inflict any separate penalty against OP-1, as it had already imposed penalty on OP-1. A separate judgment was written by one of the learned Member Justice Dhingra. He, however, took the view that neither OP-1 nor OP-2 breached any provision, much less of section 3 and 4, and exonerated both the Opponents.
3. One Shri Sajjan Khaitan, Proprietor, M/s. Hart Video was the Informant, while Eastern India Motion Picture Association (hereinafter 'EIMPA') was the Opponent No.1 (OP-1). The Opponent No.2 (OP-2) was the General Secretary, Co-ordination Committee of Artist and Technicians of West Bengal Film and Television Industry (in short 'Co-ordination Committee'). It is this Co-ordination Committee, which has filed an Appeal before us. The other two Opponents were individuals, namely - Shri Kunal Ghosh and Shri Sanjoy Das, who were not awarded any penalty, since a view was taken by the majority order that they could not be held to have contravened any of the provisions of the Act. Since EIMPA has not challenged the order, we are concerned only with appellant-Co-ordination Committee in this Appeal.
4. By way of an Information, i t was brought to the notice of CCI, that the Informant was in the business of distributing video cinematographic TV serials and telecasting regional serials in the States of Eastern India. It was pointed out that EIMPA was a regional association of film producers, distributors and exhibitors, having its office at Kolkata. The Co-ordination Committee was a joint platform of Federation of Cine Technicians and Workers of Eastern India and West Bengal Motion Pictures Artists Forum and its task was to coordinate amongst various stake holders including producers' associations and affiliated bodies. It was pointed out that original OP-3, Shri Kunal Ghosh ran a channel called Channel-10, which was a 24-hour news-cum-entertainment channel in Bangla and it was owned by M/s. Bengal Media Pvt. Ltd. The original OP-4, Shri Sanjoy Das, ran a channel called CTVN Plus, which is owned by M/s. Calcutta Television Network Pvt. Ltd., Kolkata.
5. It was alleged that one M/s. B.R. TV, Mumbai was a producer of the TV serial 'Mahabharata' and had entrusted the sole and exclusive rights to M/s. Magnum TV Serials to dub the Hindi version of the said serial in Bangla and for exploiting its Satellite, Pay TV, DTH, IPTV, Video, Cable TV and Internet Rights till September 2016. The Informant was appointed sub-assignor by M/s. Magnum TV Serials and the said serial Mahabharata was dubbed in Bangla language by the Informant.
6. It was further alleged that an agreement came to be executed for the time slot on revenue sharing basis for the telecast of the aforesaid dubbed serial with M/s. Bengal Media Pvt. Ltd., Kolkata (owner of 'Channel 10') and Calcutta Television Network Private Ltd., Kolkata (owner of 'CTVN Plus' channel). These two channels were given hard disks of four episodes of the said serial on 02.02.2011 and 12.02.2011 and thereafter an advertisement was placed in daily newspaper on 19.02.2011 that the serial would be shown on Channel-10 at 10:00 A.M. in the morning and on CTVN Plus at 10:00 P.M. every Sunday.
7. It was further informed that on 18.02.2011, OP-4, Shri Sanjoy Das received a letter from OP-2, CTVN (the 'Appellant') to stop the telecast of the above serial. A letter was also received from EIMPA dated 01.03.2011. In these letters, OP-4 was directed/ requested to withdraw/ stop the telecast of the serial. Similar letters were received by original OP-3, M/s. Channel-10 and OP-4, CTVN Plus from EIMPA as well as Co-ordination Committee. Still another letter was received by OP-4, CTVN Plus from Co-ordination Committee. These letters represented that the OP-3 and OP-4 should stop the telecast of Mahabharata serial in the interest of healthy growth of film and television industry in West Bengal. It was allegedly pointed out that for last 13 years, there was a convention prevailing of restricting the telecast of National programmes dubbed in Bangla. It was also pointed out to OP-4, M/s. CTVN Plus that if the telecast is not stopped, its channel will face non-cooperation.
8. Information further revealed that since EIMPA and Co¬ordination Committee had decided to stop the telecast on and from 17.04.2011, unless the Informant took reasonable suitable steps, it would have no other option, but to stop the telecast of the said serial. Based upon these facts, the Informant alleged contravention of the provisions of Competition Act. An interim relief was also sought in the nature of direction from CCI vis-a-vis OP-3 and OP-4 not to succumb to the threats of EIMPA and Co-ordination Committee and restart the telecast of the serial stopped since 17.04.2011.
9. The CCI formed a prima-facie opinion and sent the matter for investigation to the Director General (in short the 'DG'). The DG found that Mahabharata serial was produced and telecast in late eighties, and the license holders of this serial M/s. Magnum Films had granted rights to the Informant vide agreement dated 02.03.2009, to telecast the dubbed version of the serial in Bangla language on the satellite channel (except Doordarshan), and after getting the rights, the Informant prepared the dubbed versions of episodes of the serial and entered into an agreement with OP-3, Channel-10 and OP-4, CTVN Plus. It was also found by the DG that the present Appellant, Co-ordination Committee comprised of West Bengal Motion Picture Artists' Forum, Federation of Cine Technicians and Workers of Eastern India, Welfare Association of Television Producers in West Bengal, Association of Television Affiliates and Eastern India Motion Picture Association (EIMPA). The objective of the Co-ordination Committee was to coordinate the activities of organisations of West Bengal Film and TV industry and resolve disputes relating to various issues.
10. The DG found the relevant market to be the 'Film and Television industry of West Bengal'. The DG found that the persons or the Association of persons, who are part of Co-ordination Committee were dealing with identical market of film making and any agreement of joint action taken by the co- constituents, being in the nature of horizontal agreement, could be examined under the provisions of section 3(3) of the Act. The DG found that the Co-ordination Committee and EIMPA had objected to the telecast of the serial and threatened non- cooperation in case exploitation of the serial was not stopped. There was a demonstration held on 07.04.2011 and a one day strike was also organised. The DG found that OP-3, Channel-10 had actually stopped the telecast of the serial, while the OP-4, CTVN Plus continued to telecast the aforementioned serial. According to the DG, EIMPA as well as Co-ordination Committee had restricted the telecast of dubbed version and thereby restricted its commercial exploitation. Before the DG, the Co-ordination Committee had taken a defence that they had tried to agitate on grievances of their members and they had legitimately objected to the telecast. The Co-ordination Committee also raised defence that they had the right to raise the concerns to protect regional language serials. The Co-ordination Committee also argued that allowing the telecast of dubbed serials in Bangla language, Film and TV industry would be affected, which would result in joblessness of local artists. All these arguments were refuted by the DG. The DG further found that there was a huge potential of local film artists, and the industry was not likely to suffer on account of the dubbed channels. The DG found the industry of the television channels in Bangla to be growing and therefore, found that the argument by the Co-ordination Committee was not based on facts. On all these counts, the DG found the action on the part of the Co-ordination Committee to be unjustified. In short the DG found the following conduct of the Co-ordination Committee in contravention of the provisions of the Act :-
a. Act of the Co-ordination Committee writing a letter on 18.02.2011 to CTVN Plus Channel asking it to stop the telecasting of Mahabharata serial.
b. Further, act of the Co-ordination Committee writing a letter on 01.03.2011 to Channel 10 and letters on 11.03.2011, 12.03.2011 and 14.03.2011 to CTVN Plus Channel asking them to stop the telecast of Mahabharata serial.
c. Observance of one-day work stoppage on 07.04.2011 against telecast of the Mahabharata serial by the members of all the constituents of Co-ordination Committee and demonstration on the same day from 11:00 A.M. to 02:00 P.M. at Rani Rasmoni Road in Kolkata.
d. The Co-ordination Committee approached Shri Mithun Chakraborty, the leading actor of Indian Film Industry and the Chief Advisor of Channel 10 and finally succeeded in getting the telecast of Mahabharata stopped by Channel 10.
11. The DG also considered the conduct of EIMPA objectionable. However, we need not go into that aspect, since EIMPA is not in appeal against the judgment, nor has it appeared before us. The DG ultimately found that the action on the part of Co-ordination Committee had resulted in foreclosure of competition by hindering entry into the market. The DG also held that by not allowing the dubbed version of the serial, the Co-ordination Committee foreclosed the business opportunities for the businessmen engaged in the production, distribution, and exhibition/ telecast of such programmes. The DG therefore, concluded that the actions on the part of EIMPA and the Co-ordination Committee were in violation of provisions of Section 3(3)(b) of the Act, since they restricted and controlled the market and supply of dubbed versions of serials on the Television Channels through collective intent of all the constituents/ associations coming together on one platform. This report was objected to by EIMPA and by the Co-ordination Committee on various grounds. We are not concerned herein with the replies of EIMPA as the EIMPA has not come before us, nor has it filed any appeal.
12. The reply of the Co-ordination Committee was to the effect that the it comprised of artists and technicians of West Bengal Film and Television Industry and consists of West Bengal Motion Picture Artists' Forum and Federation of Cine Technicians and Workers of Eastern India only. The other members like WATP, ATA and EIMPA were not in the Co-ordination Committee at all. It was further pleaded that the artists and technicians had formed a union under the Trade Union Act and as such they are not an enterprise. The Co-ordination Committee pointed out that it was not in a position to control production, programming, marketing and uplinking of any serial in the satellite channel. It was pointed out that even Doordarshan had defended the regional Bangla industry by stopping the telecast of Hindi programmes dubbed in Bangla in Kolkata Doordarshan, vide their letter dated 19.06.1997 and such action could not be said to be anti-competitive in nature. It was pleaded that as a Trade Union, it was the duty of the Co-ordination Committee to take up the activities to safeguard interest of their members. It was further pointed out that Co-ordination Committee had no connection with any sort of business, and it had no authority to hinder the entry into the market of any business activity in the production, distribution, exhibition and telecast of such programmes. It was pointed out that barring the member of the Co-ordination Committee that is Federation of Cine Technicians and Workers of Eastern India and West Bengal Motion Picture Artists' Forum, all the other organisations were not concerned with the Co-ordination Committee and they were registered under the Societies Registration Act. In short, it was pleaded that the Co¬ordination Committee could not be held guilty of any anti-competitive practices, much less covered under section 3(3)(b) of the Act.
13. The CCI formulated two issues. They were as under :-
Issue 1 : Whether EIMPA and Co-ordination Committee imposed/ attempted to impose restrictions on the telecast of dubbed serial "Mahabharata"?
Issue 2 : Whether the act and conduct of imposing restrictions on telecast of the said serial is in violation of provisions of the Act?
14. The CCI on the basis of the facts, came to the conclusion that both the issues were proved. For this, they relied on a letter dated 18.02.2011, which was signed by the office bearers of all the five organisations, including the Co-ordination Committee. The CCI also came to the conclusion that it was because of the threats in the various letters and the agitation and demonstration held by the Co-ordination Committee and EIMPA that the OP-3, Channel-10 stopped the telecast of serial on their channel. The CCI also found that while OP-4, CTVN had continued to telecast the serial, there were number of other letters sent to it by EIMPA as well as by the Co-ordination Committee. The CCI came to the conclusion that the Co-ordination Committee and EIMPA had exerted pressure on both OP-3 and OP-4 for not to telecast the dubbed serial.
15. While considering the second issue, the CCI held that since the Co-ordination Committee was not an 'enterprise', there was no question of breach of Section 4. The CCI, however, held that though the two organisations, who were the members of Co-ordination Committee, were Trade Unions, they were not exempted from the purview of the Competition Act. The other members like WATP, ATA and EIMPA, who were not the members of the Co-ordination Committee, the CCI took the view that since the Co-ordination Committee takes the measures in consultation with these organisations, therefore, the Co-ordination Committee must be deemed to have comprised of all the five members.
16. However, it was held by the CCI on account of the letters written and the actions on the part of EIMPA and Co-ordination Committee, that harm was caused to the consumers, as they were deprived of watching the dubbed TV serial on a TV channel for a brief period and this action had hindered the competition in the market by barring the dubbed TV serials from exploitation on TV channels. The CCI also held that this conduct created barriers to entry of a new content in form of a dubbed TV serial. On these counts, the CCI held the contravention of section 3(3)(b) against the EIMPA and the Co-ordination Committee.
17. We must at this stage also take stock of the minority order penned by Justice Dhingra. After stating the facts, the minority order suggests that the DG had not identified the relevant market correctly. According to the minority order, the relevant market as found by the DG was 'Film and TV Industry of West Bengal', which was highly vague and inappropriate. The learned Member found that the Film and TV Industry of West Bengal had no co- relation with the case in hand. The learned Member held that the identification of product/ service market had to be very specific in order to arrive at a right conclusion. The learned Member, therefore, held that relevant market was 'broadcast of TV serials'. While returning this finding, the learned Member noted that broadcast of TV serials could take place either by way of Direct to Home Service or through Cable and therefore, broadcasting service is altogether a separate market, different from production, exhibition and distribution of films. The learned Member also took note of the statistics given in the DG's report, to the fact that there were about 60,000 local cable operators, 6,000 multi-system operators and 6 private subscribers based DTH operators and there were more than 25 Bangla language channels telecast in West Bengal. It was noted that the two channels CTVN Plus and Channel-10 were in the market for telecasting programmes for the viewers of the DTH category or Cable TV category and these channels were not in production, distribution or exhibition of dubbed films. From all this, as has already been stated, the learned Member came to the conclusion that the 'relevant market' was 'broadcast of TV serials dubbed in Bangla language'. The learned Member then went on to hold that no opposite party was active in the relevant market of broadcast of dubbed TV serials. The learned Member, therefore, further went on to hold that there was no question of any agreement between EIMPA and Co-ordination Committee or among the different unions. The learned Member then analyzed section 3 and came to the conclusion that section 3 did not take into its fold, coercive actions taken by the workers' unions affecting the various facets of products or service market, affecting production, distribution and supply of goods or services. The learned Member then noted that the Co-ordination Committee had undoubtedly protested against the broadcasting of serial Mahabharata and had adopted pressure tactics to pressurize the channels from broadcasting the serial Mahabharata. However, this could not be an economic pressure. According to the learned Member, the pressure was kind of a Trade Union pressure, whereby they resorted to boycott strike, non-cooperation etc. The learned Member, therefore, held that it was not an agreement amongst the enterprises, active in the same relevant market, due to which the Informant was stopped from telecasting of dubbed serial. The learned Member held that Informant had already purchased the rights to telecast Mahabharata and TV channels were at full liberty to ignore such coercive threats and in fact one channel had ignored the threats and continued to telecast the serial and therefore, merely, if someone under the threat or boycott did not telecast some programme on his channel for which he has all the legal rights, that could not be covered under section 3. The learned Member then went on to held as under :-
"Section 3 would have been attracted only, if under some agreement, the Informant had not been allowed the telecasting of the programme on TV channels.
Since the Informant already had secured the rights of the telecasting of the programme, it was at liberty to telecast the programme and nobody could have stopped the viewers from viewing the programme. A threat of demonstration or dharna or strike, if ignored, would not have affected the telecasting even by Channel 10. I think this kind of threat or action is not covered under section 3 and this case would not fall within the ambit of section 3."
18. The learned Member also further went on to hold that the perception of the Co-ordination Committee may be wrong, however, simply because the perception was wrong, about the affect of broadcasting such serials, their right of expression guaranteed under Article 19 (1) (a) of the Constitution, could not be taken away by the Competition Act and unless and until, it is shown that the Opposite Parties were involved in economic activities in the same relevant market and they had entered into an agreement, which finds foul with the provisions of section 3, the provisions of section 3 could not be invoked.
19. The learned counsel for the Appellant heavily relied on minority order and pointed out, all that Co-ordination Committee had sought for, was to raise its voice against all the other language channels to telecast the dubbed Bangla version of Mahabharata serial. The learned counsel for the Co-ordination Committee pointed out that as a Trade Union it had every right to raise its contentions to safeguard the interests of the members. He further pointed out that Channel-10 or CTVN Plus had not even gone before the CCI and it was only the Informant, who was in the business of distributing video cinematographic TV serials and telecasting, had chosen to go before the CCI. The learned counsel pointed out that the relevant market was completely misunderstood and was too broadly stated by the CCI. The learned counsel further argued that the whole 'Film and TV world of West Bengal' could not be the relevant market and in fact the minority judgment correctly recognised the relevant market to be 'broadcasting of dubbed serials on television'.
20. The learned counsel also further argued that the import of section 3(3)(b) was completely misunderstood by the majority order and merely because some protests were made or some letters were written, requesting the channel owners, not to show the dubbed serial, it could not be said that there was any restriction or entry barrier created for such dubbed serials. As against this Ms. Anju Jain, appearing on behalf of CCI, supported the order.
21. We shall first consider the 'relevant market'. We have no doubt that the relevant market as held by majority order is too broad to be accepted. Nature of the Information does not show anything, which could even be distinctly connected with the whole 'Film and Television Industry in the State of West Bengal'. The Information is only against showing the dubbed serials on the television. It has no relation, whatsoever, with production, distribution etc of any film or any other material on the TV channels. The controversy is very specific. While some channels were actually showing the other language serials, dubbed in Bangla, that precisely was being opposed. The relevant market is, therefore, the 'telecasting of the dubbed serials on the television in West Bengal'. In this behalf, the finding by the minority order appears to be more appropriate, as compared to the majority order. We hold accordingly.
22. Now coming to the interpretation of scope of section 3(3)(b). The section is in following terms
"3(3) Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which--
(a) Not relevant;
(b) limits or controls production, supply, markets, technical development, investment or provision of services;
(c) and (d) Not relevant.
23. What is important therefore, is "any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services".
Here, there is no question of trading of any goods, or provision of any services, much less by the persons engaged in identical or similar trades or provision of services. These were protests raised by the Co-ordination Committee of which there were few members, who were either technicians or artists and all that they were doing, was protesting against the showing of the dubbed films/ TV serials. Now there had to be some evidence available to show that any such action, limited or controlled the production, supply, markets, technical development and investment or provision of services. There is no such evidence available. In fact, because of the strikes or demonstration, as the case may be, the OP-4, CTVN Plus did not even stop showing the 'Mahabharata' serial on its channel. Further, OP-3, Channel-10 stopped showing the said serial on its channel on account of advise by leading actor Shri Mithun Chakraborty. Essentially, section 3(3)(b) applies to the competitors. The action as contemplated in section 3 should, therefore, result in limiting or controlling the production, supply by the competitors or should at least limit or control the market or the technical development, or investment or provision of services. In so far as the competitors are concerned, nothing of that sort has happened. In our opinion, the decision by the majority order that the viewers were deprived of seeing dubbed Mahabharata serial on a TV channel is also faulty, since OP-4, CTVN Plus never gave-in to the protests by the members of the Co-ordination Committee. The Co-ordination Committee was legitimately protesting and voicing their grievance for the benefit of their members. They may be under the wrong impression that showing of the dubbed TV serial would affect their prospects of getting further work, but that by itself does not raise a competition issue. This is not a case, where the production of the television serials or supply thereof has been affected. If at all, the complaint could have been made only by a competitor. In our opinion, therefore, the CCI has committed an error in holding the Co-ordination Committee guilty of contravention of section 3(3)(b). In our opinion, the minority order is a correct order and we approve of that order. In short, Appeal succeeds. Majority order is set aside and minority order of the learned Member is confirmed.