Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6691 OF 2014

COMPETITION COMMISSION OF INDIA …APPELLANT

VERSUS

CO-ORDINATION COMMITTEE OF

ARTISTS AND TECHNICIANS OF W.B.

FILM AND TELEVISION AND ORS. ...RESPONDENTS

J U D G M E N T

A.K. SIKRI, J.

This appeal raises an interesting and important question of

law touching upon the width and scope of jurisdiction of the

Competition Commission of India (for short, the ‘CCI’) under

Section 3 of the Competition Act, 2002 (hereinafter referred to as

the 'Act'). Before we mention the nuances of the issue that has

arisen for consideration, it would be apposite to take stock of the

background facts under which the issue needs determination, as

the factual canvass would provide clarity of the situation that has

led to the dispute between the parties. Respondent No. 2 herein,

Civil Appeal No. 6691 of 2014 Page 1 of 41

Page 2 Mr. Sajjan Kumar Khaitan, is the proprietor of M/s. Hart Video

having his establishment in Kolkata. He is in the business of

distributing video cinematographic TV serials and telecasting

regional serials in the States of Eastern India, which includes the

State of West Bengal. M/s. BRTV, Mumbai, which is the producer

of T.V. programmes, had produced T.V. Serial named

'Mahabharat', original version whereof was in Hindi. The said

BRTV entrusted the sole and exclusive rights of ‘Mahabharat’ to

M/s. Magnum T.V. Serials to dub the Hindi version of the said

serial in Bangla with further rights to exploit its Satellite, Pay TV,

DTH, IPTV, Video, Cable TV and internet rights till September,

2016. Magnum TV, in turn, appointed Hart Video as the

sub-assigner to dub the said serial 'Mahabharat' in Bangla

language, which it did. Thereafter, for the purposes of telecasting

the said dubbed serial, an agreement was executed for the time

slot, on revenue sharing basis, with M/s. Bengal Media Pvt. Ltd.,

Kolkata, which is the owner of 'Channel 10', as well as with M/s.

Calcutta Television Network Private Ltd., Kolkata, which is the

owner of CTVN+ Channel. These two channels were given hard

disks of four episodes of the serial on 2

nd

February, 2011 and 12

th

February, 2011. An advertisement was placed in Daily

Newspapers on 19

th

February, 2011 informing the public at large

Civil Appeal No. 6691 of 2014 Page 2 of 41

Page 3 that serial 'Mahabharat' would be telecast in Bangla on Channel

10 at 10.00 a.m. in the morning and on CTVN+ at 10.00 p.m.

every Sunday.

2)Certain producers in Eastern India have formed an association

called Eastern India Motion Picture Association (for short,

'EIMPA'). Likewise, the artists and technicians of film and

television industry in West Bengal have formed an association

known as 'Committee of Artists and Technicians of West Bengal

Film and Television Investors (hereinafter referred to as the

'Coordination Committee').

3)Telecasting of serial ‘Mahabharat’ in Bangla after dubbing it in the

said language from the original produced Hindi language was not

palatable to EIMPA or the Coordination Committee. In their

perception, serials produced in other languages and shown on the

T.V. Channels after dubbing them in Bangla would affect the

producers of that origin and, in turn, would also adversely affect

the artists and technicians working in West Bengal. The

apprehension was that it may deter production of such serials in

Bangla because of the entry of serials produced in other

languages and shown to the public by dubbing the same in their

language. Because of this reason, on 18

th

February, 2011 CTVN+

Civil Appeal No. 6691 of 2014 Page 3 of 41

Page 4 received a letter from the Coordination Committee to stop the

telecast of the dubbed serial ‘Mahabharat’. Letter dated 1

st

March, 2011 to the similar effect was written by EIMPA to CTVN+.

Identical demands were made to this Channel by the Coordination

Committee as well. It was stated in this letter that such a step

was necessary in the interest of healthy growth of film and

television industry in West Bengal. It was also alleged that for the

last thirteen years there was a convention and practice adopted in

the said region not to dub any programme from other languages

in Bangla and telecast them in West Bengal. Threat was also

extended to CTVN+ as well as Channel 10 that in case the

telecast is not stopped, their channels would face

non-cooperation from these two bodies, i.e., EIMPA and the

Coordination Committee.

4)When Mr. Sajjan Khaitan (Respondent No. 2), Proprietor of M/s.

Hart Video, came to know of the aforesaid developments and the

threat extended to CTVN+ and Channel 10 and found that these

two television channels were going to succumb to those

pressures, he informed the CCI of the aforesaid details and

requested the CCI to take action in the matter, as according to

him, the aforesaid act on the part of EIMPA as well as the

Civil Appeal No. 6691 of 2014 Page 4 of 41

Page 5 Coordination Committee contravened the provisions of the Act.

Even an interim relief was sought in the nature of direction from

CCI to CTVN+ and Channel 10 not to yield to the threats of

EIMPA and Coordination Committee and restart the telecast of the

serial which was stopped since 17

th

April, 2011. Hereafter,

Respondent No. 2 shall be described as the ‘informant’.

5)The CCI, after receiving the aforesaid information from the

informant formed a prima facie opinion that acts on the part of

EIMPA and Coordination Committee were anti-competitive.

Accordingly, matter was assigned to the Director General (DG) for

detailed investigation as per the procedure prescribed in the Act.

On investigation, the DG found that the details contained in the

information supplied by the informant were factually correct. On

that basis, he examined the matter in the context of provisions

contained in the Act.

6)In order to understand with clarity the task undertaken and

accomplished by the DG, we deem it proper to refer to some of

the relevant provisions of the Act at this stage. Chapter II of the

Act deals with 'prohibition of certain agreements, abuse of

dominant position and regulation of combinations'. It comprises

of Sections 3 to 6. Section 3 deals with anti-competitive

Civil Appeal No. 6691 of 2014 Page 5 of 41

Page 6 agreements and Section 4 prohibits the abuse of dominant

position. Section 5, on the other hand, takes care of those

acquisitions and mergers which have the potential to become

anti-competitive or attain dominant position, with threat to abuse

the said position in order to control such acquisition and mergers.

Section 6 empowers the CCI to regulate those combinations

which are stipulated under Section 5. Thus, this Chapter deals

with three kinds of practices which may be anti-competitive, viz.,

agreements which may turn out to be anti-competitive; abusive

use of dominant position by those enterprises or groups which

enjoy such dominant position as defined in the Act; and

regulations of combination of enterprises by means of mergers or

amalgamations so that they do not become anti-competitive or

abuse the dominant position which they can attain.

7)The scheme of this Chapter, therefore, is to ensure fair

competition by prohibiting trade practices which cause

appreciable adverse effects in competition in markets within India.

This task of curbing negative aspects of competition is assigned

to CCI. In the present case, since we are concerned with the

issue as to whether EIMPA and/or Coordination Committee

resorted to any anti-competitive agreement, it will be apposite to

Civil Appeal No. 6691 of 2014 Page 6 of 41

Page 7 scan through Section 3 of the Act and other provisions which

revolve there around. Section 3 reads as under :

“ 3. Anti-competitive agreements : (1) No enterprise

or association of enterprises or person or

association of persons shall enter into any

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.

(2) Any agreement entered into in

contravention of the provisions contained in

subsection (1) shall be void.

(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) directly or indirectly determines purchase

or sale prices;

(b) limits or controls production, supply,

markets, technical development, investment or

provision of services;

(c) shares the market or source of production

or provision of services by way of allocation of

geographical area of market, or type of goods or

services, or number of customers in the market or

any other similar way;

(d) directly or indirectly results in bid rigging or

collusive bidding, shall be presumed to have an

appreciable adverse effect on competition:

Provided that nothing contained in this sub-section

shall apply to any agreement entered into by way

of joint ventures if such agreement increases

efficiency in production, supply, distribution,

Civil Appeal No. 6691 of 2014 Page 7 of 41

Page 8 storage, acquisition or control of goods or provision

of services.

Explanation.—For the purposes of this sub-section,

“bid rigging” means any agreement, between

enterprises or persons referred to in sub-section (3)

engaged in identical or similar production or trading

of goods or provision of services, which has the

effect of eliminating or reducing competition for bids

or adversely affecting or manipulating the process

for bidding

(4) Any agreement amongst enterprises or

persons at different stages or levels of the

production chain in different markets, in respect of

production, supply, distribution, storage, sale or

price of, or trade in goods or provision of services,

including—

(a)tie-in arrangement;

(b)exclusive supply agreement;

(c)exclusive distribution agreement;

(d)refusal to deal;

(e)resale price maintenance,

shall be an agreement in contravention of

sub-section (1) if such agreement causes or is

likely to cause an appreciable adverse effect on

competition in India.

Explanation.—For the purposes of this sub-section,

—

(a) “tie-in arrangement” includes any

agreement requiring a purchaser of goods, as a

condition of such purchase, to purchase some

other goods;

(b) “exclusive supply agreement” includes any

agreement restricting in any manner the purchaser

in the course of his trade from acquiring or

otherwise dealing in any goods other than those of

the seller or any other person;

(c) “exclusive distribution agreement” includes

any agreement to limit, restrict or withhold the

output or supply of any goods or allocate any area

Civil Appeal No. 6691 of 2014 Page 8 of 41

Page 9 or market for the disposal or sale of the goods;

(d) “refusal to deal” includes any agreement

which restricts, or is likely to restrict, by any method

the persons or classes of persons to whom goods

are sold or from whom goods are bought;

(e) “resale price maintenance” includes any

agreement to sell goods on condition that the

prices to be charged on the resale by the

purchaser shall be the prices stipulated by the

seller unless it is clearly stated that prices lower

than those prices may be charged.

(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) the Patents Act, 1970 (39 of 1970);

(c) the Trade and Merchandise Marks Act,

1958 (43 of 1958) or the Trade Marks Act, 1999

(47 of 1999);

(d) the Geographical Indications of Goods

(Registration and Protection) Act, 1999 (48 of

1999); (e) the Designs Act, 2000 (16 of 2000); \

(f) the Semi-conductor Integrated Circuits

Layout-Design Act, 2000 (37 of 2000);

(ii) the right of any person to export goods

from India to the extent to which the agreement

relates exclusively to the production, supply,

distribution or control of goods or provision of

services for such export. ”

8)As can be seen from the bare reading of the aforesaid provision,

sub-section (1) of Section 3 puts an embargo on an enterprise or

Civil Appeal No. 6691 of 2014 Page 9 of 41

Page 10 association of enterprises or person or association of persons

from entering into any agreement in respect of production, supply,

distribution, storage, acquisition or control of goods or provisions

of services which causes or is likely to cause an appreciable

adverse effect on competition within India. Thus, agreements in

respect of distribution or provisions of services, if they have

adverse effect on competition, are prohibited and treated as void

by virtue of sub-section (2). Sub-section (3), with which we are

directly concerned, stipulates four kinds of agreements which are

presumed to have appreciable adverse effect on competition.

Therefore, if a particular agreement comes in any of the said

categories, it is per se treated as adversely effecting the

competition to an appreciable extent and comes within the

mischief of sub-section (1). There is no further need to have

actual proof as to whether it has caused appreciable effect on

competition. Proviso thereto, however, exempts certain kinds of

agreements, meaning thereby if a particular case falls under the

proviso, then such a presumption would not be applicable.

9)We have already mentioned in brief the contents of letters which

were written by EIMPA and the Coordination Committee to the

Channel 10 and CTVN+. The DG was to investigate as to

Civil Appeal No. 6691 of 2014 Page 10 of 41

Page 11 whether this ‘agreement’ falls within the four corners of Section

3(3)(b) of the Act, namely, whether it limits or controls production,

supply, markets, technical development, investment or provisions

of services.

10)Section 2(b) defines 'agreement' and reads as under:

“2(b) “agreement” includes any arrangement or

understanding or action in concert,—

(i) whether or not, such arrangement,

understanding or action is formal or in writing; or

ii) whether or not such arrangement,

understanding or action is intended to be

enforceable by legal proceedings ;”

11)Definitions of certain other expressions and terms which are

required to be noted are as follows:

“2 (l)“person” includes—

(i) an individual;

(ii) a Hindu undivided family;

(iii) a company;

(iv) a firm;

(v) an association of persons or a body of

individuals, whether incorporated or not, in India or

outside India; or

(vi) any corporation established by or under

any Central, State or Provincial Act or a

Government company as defined in section 617 of

the Companies Act, 1956 (1 of 1956);

(vii) any body corporate incorporated by or

Civil Appeal No. 6691 of 2014 Page 11 of 41

Page 12 under the laws of a country outside India;

(viii) a co-operative society registered under any

law relating to cooperative societies;

(ix) a local authority;

(x) every artificial juridical person, not falling

within any of the preceding sub-clauses.”

xx xx xx

2(m)“practice” includes any practice relating to

the carrying on of any trade by a person or an

enterprise;

xx xx xx

2(r) “relevant market” means the market which

may be determined by the Commission with

reference to the relevant product market or the

relevant geographic market or with reference to

both the markets ;

2(s) “relevant geographic market” means a market

comprising the area in which the conditions of

competition for supply of goods or provision of

services or demand of goods or services are

distinctly homogenous and can be distinguished

from the conditions prevailing in the neighbouring

areas;

2(t) “relevant product market” means a market

comprising all those products or services which are

regarded as interchangeable or substitutable by the

consumer, by reason of characteristics of the

products or services, their prices and intended use;

2(u) “service” means service of any description

which is made available to potential users and

includes the provision of services in connection

with business of any industrial or commercial

matters such as banking, communication,

education, financing, insurance, chit funds, real

estate, transport, storage, material treatment,

processing, supply of electrical or other energy,

boarding, lodging, entertainment, amusement,

Civil Appeal No. 6691 of 2014 Page 12 of 41

Page 13 construction, repair, conveying of news or

information and advertising;

xx xx xx

2(x) “trade” means any trade, business, industry,

profession or occupation relating to the production,

supply, distribution, storage or control of goods and

includes the provision of any services; ”

12)At this stage, we would like to refer to Section 19 of the Act which

permits the CCI to conduct an enquiry into certain kinds of

agreements and dominant position of enterprise. Sub-section (1)

of Section 19 empowers the Commission to inquire into any

alleged contravention of the provisions contained in sub-section

(1) of Section 3 (i.e. anti-competitive agreements) or sub-section

(1) of Section 4 (i.e. abuse of dominant position). Sub-section (3)

deals with the factors which have to be kept in mind by the CCI

while undertaking an inquiry into anti-competitive agreements and

reads as under:

“19(3) The Commission shall, while determining

whether an agreement has an appreciable adverse

effect on competition under section 3, have due

regard to all or any of the following factors, namely:

(a) creation of barriers to new entrants in the

market;

(b) driving existing competitors out of the

market;

(c) foreclosure of competition by hindering

entry into the market;

Civil Appeal No. 6691 of 2014 Page 13 of 41

Page 14 (d) accrual of benefits to consumers;

(e) improvements in production or distribution

of services; of goods or provision

(f) promotion of technical, scientific and

economic development by means of production or

distribution of goods or provision of services.

13) Since the appreciable adverse effect on competition has to be

seen in the context of 'relevant market' as defined under Section

2(r) of the Act (already reproduced above), sub-section (5) of

Section 19 stipulates that in order to determine whether a market

constitutes a 'relevant market' for the purposes of this Act, CCI

shall have due regard to the 'relevant geographic market’, and

'relevant product market'. The factors which are to be taken into

account while determining relevant geographic market are

mentioned in sub-section (6) of Section 19. Likewise, the factors

which are to be taken into consideration while determining the

relevant product market are stipulated in sub-section (7) of

Section 19.

14)Having noticed the relevant provisions postulating the scheme

qua prohibited anti-competitive agreements, on the basis of which

investigation is to be made by the DG, the first aspect was to

determine as to what would be the 'relevant market'. The DG, in

Civil Appeal No. 6691 of 2014 Page 14 of 41

Page 15 his report submitted to the CCI, opined that in the instant case

'relevant market' would be the 'film and television industry of West

Bengal'. He further recorded that the Coordination Committee

consisted of persons or association of persons who were dealing

with identical market of film making. In his opinion any agreement

of joint action taken by the constituents, being in the nature of

horizontal agreement, could be examined under the provisions of

Section 3(3) of the Act. The impugned action of the Coordination

Committee and EIMPA threatening non-cooperation in case

telecast of the serials was not stopped and holding

demonstrations as well as organising strike, which resulted in

actually stopping the telecast of the serial by Channel 10 (though

CTVN+ continued to telecast), amounted to restricting its

commercial exploitation and was, therefore, unjustified. He found

that following conduct of the Coordination Committee specifically

contravened the provisions of the Act:

“a.Act of the Co-ordination Committee writing

a letter on 18.02.2011 to CCTVN 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

Civil Appeal No. 6691 of 2014 Page 15 of 41

Page 16 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 11.00AM to 02.00PM at Rani

Rasoni Road in Kolkata.

d. The Co-ordination Committee approached

Shri Mithun Chakraborty, the leading actor of Indian

Film Industry and the Chief Adviser of Channel 10

and finally succeeded in getting the telecast of

Mahabharata stopped by Channel 10.”

15)The DG concluded that the action on the part of Coordination

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 Coordination 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 Coordination Committee were in

violation of the 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.

16)Certain fundamental objections were taken by the Coordination

Committee as well as EIMPA touching upon the jurisdiction of the

DG to inquire into the matter as according to them the inquiry was

Civil Appeal No. 6691 of 2014 Page 16 of 41

Page 17 beyond the scope of the Act. In nutshell, it was argued:

(a)The Coordination Committee comprised of artists and

technicians of West Bengal Film and T.V. Industry and consisted

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 Coordination

Committee. It was, in fact, a trade union of the artisans and

technicians under the Trade Union Act. Therefore, the

Coordination Committee was not an 'enterprise'.

Likewise, it was not a ‘person or ‘association of persons’

who were in the business of production, supply and distribution or

providing services etc. Therefore, their act would not fall under

Section 3(1) of the Act.

(b)It was argued that the Coordination Committee was not in a

position to control production programming marketing and

uplinking of any serial in the satellite channel and, therefore,

provisions of the Act would not apply to it.

(c)According to the Coordination Committee, the action which

they had taken was in the form of an agitation against the telecast

of Hindi serial after dubbing the same into Bangla in order to

safeguard the interest of its members. It was their constitutional

right to lodge such protests under Article 19(1)(a) of the

Constitution of India.

Civil Appeal No. 6691 of 2014 Page 17 of 41

Page 18 17)The DG, however, did not get convinced with the aforesaid

defence put by the Coordination Committee and found that the

agitation of the Coordination Committee was uncalled for

inasmuch as there was a huge potential of local film artists, and

the industry was not likely to suffer on account of the dubbed

serials shown on the said channels. He also found the industry of

television channels in Bangla was growing by leaps and bounds

and, therefore, argument of the Coordination Committee was not

based on facts. Thus, their action was held to be unjustified, as it

had resulted in foreclosure on competition by entering into the

market as well as foreclosure of business opportunities for the

businessmen engaged in the production, distribution and

exhibition/telecast of such programmes. This, according to him,

came within the mischief of Section 3(3)(b) of the Act.

18)Against the aforesaid report of the DG, being adverse to the

Coordination Committee as well as EIMPA, both of them

preferred their objections before the CCI. These objections were

almost on the same lines which were taken before the DG and,

therefore, it is not necessary to repeat the same at this stage

inasmuch as we would be turning to the stand of the Coordination

Committee at the appropriate stage, in any case.

Civil Appeal No. 6691 of 2014 Page 18 of 41

Page 19 19)The CCI, after scanning through those objections, formulated two

questions which according to it fell for consideration. These are:

Issue 1

Whether EIMPA and Co-ordination Committee

imposed/attempted to impose restrictions on the telecast of

dubbed serial ‘Mahabharat’?

Issue 2

Whether the act and conduct of imposing restrictions

on telecast of the said serial is in violation of provisions of

the Act?

20)The CCI gave a fractured verdict on the aforesaid issues. As per

the majority, the complainant was able to give clinching evidence

thereby proving both the issues. The majority held that Channel

10 stopped the telecast of serial as a direct consequence of the

threats extended to it by EIMPA as well as Coordination

Committee through their various letters coupled with the

agitations and demonstration held by them. In this manner,

pressures were exerted on both Channel 10 and CTVN+ not to

telecast the dubbed serial, though as far as CTVN+ is concerned

it did not succumb to such a pressure. But Channel 10 gave in by

discontinuing the telecast of the serial. In this manner, first issue

was decided in the affirmative.

Civil Appeal No. 6691 of 2014 Page 19 of 41

Page 20 Taking up the second issue, the majority members held that

since the Coordination Committee was not an 'enterprise',

question of breach of Section 4 did not arise. However, the

activities of the Coordination Committee fell within the ambit of

Section 3 of the Act and violated that provision since it had

adverse effect on competition. It accepted that the Coordination

Committee (and for that matter even EIMPA) were trade unions.

Notwithstanding, they were not exempted from the purview of the

Act. Qua the Coordination Committee specifically, the CCI was

influenced by the fact that even when bodies like WATP, ATA and

EIMPA were not members of the Coordination Committee, still it

was found that the Coordination Committee takes the measures

in consultation with these associations and, therefore, the

Coordination Committee must be deemed to be comprised of all

the five members.

21)Judicial member in the CCI put discordant note as he differed

from the majority opinion. According to him, first mistake

committed by the DG was that he did not identify the 'relevant

market' correctly. According to him, 'relevant market' was

'broadcast of TV serial' and not 'Film and TV Industry of West

Bengal' as found by the DG. After identifying the relevant market

Civil Appeal No. 6691 of 2014 Page 20 of 41

Page 21 as broadcast of TV serials, learned member opined that

broadcast of TV serials took place either by way of Direct to

Home Services (DTH) or through Cable and, therefore,

broadcasting service is altogether a separate market, different

from production, exhibition and distribution of films. Insofar as the

two channels, namely, CTVN+ and Channel 10 are concerned,

they were in the market for telecasting programmes for the

viewers of the DTH category or Cable TV category and were not

in production, distribution or exhibition of dubbed films. According

to the minority view, since the offending parties, i,e., Coordination

Committee and EIMPA, were not active in the relevant market of

broadcast of dubbed TV serials, there was no question of any

violation of any provisions of the Act. It was further held that

Section 3 of the Act does not take into its fold coercive actions

taken by workers' union affecting the various facets or products or

service market, affecting production, distribution and supply of

goods or services. It was accepted that, as a matter of fact, the

Coordination Committee as well as EIMPA had put pressure on

these channels from broadcasting the dubbed TV serial in

question through various means. However, it could not be treated

as an economic pressure. It was an act of trade union putting

such pressures which was outside the domain of the Act and not

Civil Appeal No. 6691 of 2014 Page 21 of 41

Page 22 an 'agreement' amongst the enterprises, active in the same

relevant market, which resulted in discontinuing the telecast of

dubbed serials. Further, the TV channels were at liberty to ignore

such coercive facts. The minority opinion went to the extent of

expressing that right to hold dharnas, boycotts, strikes etc. was

fundamental right of any trade union guaranteed under Article

19(1)(a) of the Constitution which could not be taken away by the

Act, unless it is shown that the offending 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 of the Act.

22)Significantly, it is only the Coordination Committee which

preferred the appeal before the Competition Appellate Tribunal

(hereinafter referred to as the 'Tribunal'). EIMPA, by its conduct,

accepted the majority decision of the CCI. It is for this reason the

Tribunal did not go into the issue with reference to EIMPA. It

discussed the stand of the Coordination Committee and

deliberated itself confining to the activities of the Coordination

Committee to find out whether majority view of CCI was correct in

law. By the impugned judgment, it has held otherwise thereby

setting aside the majority view and accepting the minority opinion

Civil Appeal No. 6691 of 2014 Page 22 of 41

Page 23 of the CCI resulting into allowing the appeal of the Coordination

Committee and holding that there is no contravention of Section 3

of the Act which could not even be invoked on the facts of this

case. In the first place, the Tribunal has affirmed the opinion of

the dissenting member of the CCI on the question of 'relevant

market' by holding that it was not the ‘Film and Television Industry

in the State of West Bengal’, but the relevant market was the

‘telecasting of the dubbed serial on television in West Bengal’.

Thereafter, the Tribunal took note of the provisions of Section 3(3)

of the Act and concluded that the Coordination Committee was

not trading in any groups, or provisions of any services, much

less by the persons engaged in identical or similar trade or

provisions of services. Therefore, it could not be said that there

was any 'agreement' as envisaged in Section 3 entered into.

According to the Tribunal, Section 3(3)(b) of the Act applies to the

competitors who would be in the same line of commercial activity

and by their agreement tend to restrict the competition. No

evidence to this effect was available in the instant case. It was

merely a protest of the Coordination Committee voicing its

grievance for the benefit of its members and even if such a move

on the part of the Coordination Committee was wrong and even if

its agitation was influenced by foul play in projecting that

Civil Appeal No. 6691 of 2014 Page 23 of 41

Page 24 exhibiting dubbed TV serial would affect their prospects of getting

further work, that by itself would not become a competition issue

covered by the Act.

23)Challenging the aforesaid view of the Tribunal, Mr. Chandhiok,

learned senior advocate appearing for the CCI, referred to the

various provisions of the Act and also extensively read out from

the exercise undertaken by the DG and the majority view of the

CCI. His submission was that exercise undertaken by the DG

and approved by the CCI in its majority decision was correct in

law. He questioned the manner in which 'relevant market' has

been assigned limited sphere as, according to him, the matter

related to film and television industry of the State of West Bengal

and the concerted action of the Coordination Committee was to

obviously effect the competitiveness in the entire film and

television industry of the State of West Bengal. He also read out

various definitions from the Act, which we have already

reproduced above. His submission was that the definition of

'agreement' contained in Section 2(b) had a much wider

connotation and any such agreement which was anti-competitive

in nature between persons or association of persons was hit by

Section 3.

Civil Appeal No. 6691 of 2014 Page 24 of 41

Page 25 24)Learned counsel appearing for the Coordination Committee, on

the other hand, heavily relied upon the impugned judgment and

submitted that the conclusion drawn therein was correct in law as

the Coordination Committee, which was in the nature of a trade

union, and not in the business of production, supply, distribution,

storage, acquisition or control of goods or provision of services,

could not be covered within the scope of Section 3 of the Act. He

also submitted that the action on the part of the Coordination

Committee had nothing to do with the competition and it was the

fundamental right of the Coordination Committee, as a trade

union, to lodge legitimate protest. He submitted that even if in this

protest the Coordination Committee had exceeded the limits, that

may be an action actionable under any other law but would not

fall within the domain of Competition Law.

25)We have given our due consideration to the respective

submissions and have minutely gone through the orders passed

by various authorities, glimpse whereof is already reflected

above.

26)Two fundamental aspects which need determination are:

(i)What is the 'relevant market' for the purposes of inquiry into

Civil Appeal No. 6691 of 2014 Page 25 of 41

Page 26 the impugned activity of the Coordination Committee? and

(ii)Whether the action and conduct of the Coordination

Committee is covered by the provisions of Section 3 of the Act?

27)Before we discuss the aforesaid questions, it would be necessary

to clear the air on some of the fundamental aspects relating to the

Act.

28)The Competition Act of 2002, as amended in 2007 and 2009,

deals with anti-trust issues, viz. regulation of anti-competitive

agreements, abuse of dominant position and a combination or

acquisition falling within the provisions of the said Act. Since the

majority view of the CCI also accepted that the impugned

activities of the Coordination Committee did not amount to abuse

of dominant position, and it treated the same as anti-competitive

having appreciable adverse effect on competition, our discussion

would be focused only on anti-competitive agreements. Section 3

of the Act is the relevant section in this behalf. It is intended to

curb or prohibit certain agreements. Therefore, in the first

instance, it is to be found out that there existed an ‘agreement’

which was entered into by enterprise or association of enterprises

or person or association of persons. Thereafter, it needs to be

determined as to whether such an agreement is anti-competitive

Civil Appeal No. 6691 of 2014 Page 26 of 41

Page 27 agreement within the meaning of the Act. Once it is found to be

so, other provisions relating to the treatment that needs to be

given thereto get attracted.

29)While inquiring into any alleged contravention, whether by the

Commission or by the DG, and determining whether any

agreement has an appreciable adverse effect on competition

under Section 3, factors which are to be taken into consideration

are mentioned in sub-section (3) of Section 19, which are as

follows:

“19. Inquiry into certain agreements and

dominant position of enterprise. –

xx xx xx

(3) The Commission shall, while determining

whether an agreement has an appreciable adverse

effect on competition under section 3, have due

regard to all or any of the following factors,

namely:-

(a) creation of barriers to new entrants in the

market;

(b) driving existing competitors out of the

market;

(c) foreclosure of competition by hindering

entry into the market;

(d) accrual of benefits to consumers;

(e) improvements in production or distribution

of goods or provision of services;

(f) promotion of technical, scientific and

Civil Appeal No. 6691 of 2014 Page 27 of 41

Page 28 economic development by means of

production or distribution of goods or provision

of services.

xx xx xx”

30)The word 'market' used therein has reference to 'relevant market'.

As per sub-section (5) of Section 19, such relevant market can be

relevant geographic market or relevant product market. The

factors which are to be kept in mind while determining the

relevant geographic market are stipulated in sub-section (6) of

Section 19 and the factors which need to be considered while

determining the relevant product market are prescribed in

sub-section (7) of Section 19. These two sub-sections read as

under:

“(6) The Commission shall, while determining the

“relevant geographic market', have due regard to

all or any of the following factors, namely:-

(a) regulatory trade barriers;

(b) local specification requirements;

(c) national procurement policies;

(d) adequate distribution facilities;

(e) transport costs;

(f) language;

(g) consumer preferences;

(h) need for secure or regular supplies or

rapid after-sales services.

Civil Appeal No. 6691 of 2014 Page 28 of 41

Page 29 (7) The Commission shall, while determining the

“relevant product market”, have due regard to all or

any of the following factors, namely:-

(a) physical characteristics or end-use of

goods;

(b) price of goods or service;

(c) consumer preferences;

(d) exclusion of in-house production;

(e) existence of specialised producers;

(f) classification of industrial products.”

It is for this reason, the first and foremost aspect that needs

determination is: 'What is the relevant market in which

competition is effected?”

31)Market definition is a tool to identify and define the boundaries of

competition between firms. It serves to establish the framework

within which competition policy is applied by the Commission.

The main purpose of market definition is to identify in a

systematic way the competitive constraints that the undertakings

involved face. The objective of defining a market in both its

product and geographic dimension is to identify those actual

competitors of the undertakings involved that are capable of

constraining those undertakings behaviour and of preventing

Civil Appeal No. 6691 of 2014 Page 29 of 41

Page 30 them from behaving independently of effective competitive

pressure.

Therefore, the purpose of defining the 'relevant market' is to

assess with identifying in a systematic way the competitive

constraints that undertakings face when operating in a market.

This is the case in particular for determining if undertakings are

competitors or potential competitors and when assessing the

anti-competitive effects of conduct in a market. The concept of

relevant market implies that there could be an effective

competition between the products which form part of it and this

presupposes that there is a sufficient degree of interchangeability

between all the products forming part of the same market insofar

as specific use of such product is concerned.

32)While identifying the relevant market in a given case, the CCI is

required to look at evidence that is available and relevant to the

case at hand. The CCI has to define the boundaries of the

relevant market as precisely as required by the circumstances of

the case. Where appropriate, it may conduct its competition

assessment on the basis of alternative market definitions. Where

it is apparent that the investigated conduct is unlikely to have an

adverse effect on competition or that the undertaking under

Civil Appeal No. 6691 of 2014 Page 30 of 41

Page 31 investigation does not possess a substantial degree of market

power on the basis of any reasonable market definition, the

question of the most appropriate market definition can even be

left open.

33)The relevant market within which to analyse market power or

assess a given competition concern has both a product

dimension and a geographic dimension. In this context, the

relevant product market comprises all those products which are

considered interchangeable or substitutable by buyers because of

the products' characteristics, prices and intended use. The

relevant geographic market comprises all those regions or areas

where buyers would be able or willing to find substitutes for the

products in question. The relevant product and geographic

market for a particular product may vary depending on the nature

of the buyers and suppliers concerned by the conduct under

examination and their position in the supply chain. For example,

if the questionable conduct is concerned at the wholesale level,

the relevant market has to be defined from the perspective of the

wholesale buyers. On the other hand, if the concern is to

examine the conduct at the retail level, the relevant market needs

to be defined from the perspective of buyers of retail products.

Civil Appeal No. 6691 of 2014 Page 31 of 41

Page 32 34)It is to be borne in mind that the process of defining the relevant

market starts by looking into a relatively narrow potential product

market definition. The potential product market is then expanded

to include those substituted products to which buyers would turn

in the face of a price increase above the competitive price.

Likewise, the relevant geographic market can be defined using

the same general process as that used to define the relevant

product market.

35)Bearing in mind the aforesaid considerations, we concur with the

conclusion of the Tribunal. It is the notion of 'power over the

market' which is the key to analysing many competitive issues.

Therefore, it becomes necessary to understand what is meant by

the relevant market. This concept is an economic one.

36)In the instant case, the geographic market is the State of West

Bengal and to this extent there is no quarrel inasmuch as

activities of the Coordination Committee were limited to the said

State. The dispute is as to whether relevant market would cover

‘broadcast of TV serial’ or it would take within its sweep ‘film and

TV industry of the State of West Bengal’. TV serial in question

was produced in Hindi. It was thereafter dubbed in Bangla.

Civil Appeal No. 6691 of 2014 Page 32 of 41

Page 33 When the two channels, namely CTVN+ and Channel 10, decided

to broadcast this TV serial in dubbed form, i.e. in Bangla

language, this move was opposed by the Coordination Committee

and EIMPA. The Tribunal has upheld the minority view of CCI in

saying that 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 serial on the television and it

has no relation whatsoever with production, distribution, etc. of

any film or any other material on the TV channels.

We feel that this is a myopic view taken by the Tribunal

which ignores many other vital aspects of this case, most

important being the width of the effect of the aforesaid cause on

which the agitation was led by the Coordination Committee. The

effect is not limited to the telecast or broadcast of the television

serial. No doubt, the Coordination Committee was against the

‘broadcast of the television serial ‘Mahabharat’ on the aforesaid

two channels, in the dubbed form. However, even as per the

agitators, the said broadcast was going to adversely affect the TV

and Film Industry of West Bengal and the alleged purport behind

the threats was to save the entire TV and Film Industry. The

Coordination Committee itself mentioned so in its letter dated

Civil Appeal No. 6691 of 2014 Page 33 of 41

Page 34 February 18, 2012 as under:

“We came to know that you are publicizing in your

channel that Bengali dubbed version of

“Mahabharat” will be telecasted in your channel,

shortly this is for your kind information that the

whole TV and Film Industry had fought back

ruthlessly against telecast of Bengali dubbed

versions of Hindi serials in DD-1 slot in 1997 and

since that agitation DD National Network has

stopped telecasting any Bengali dubbed version of

Hindi programs. At the same time, it is to be noted

that the film industry was also successful in

debarring the release of Bengali dubbed version of

Hindi Movie “Luv Kush” produced by Mr. Dilip

Kankaria of Deluxe Films in the year 1997.

We have done this to stop withering away of the

prestigious and internationally acclaimed

Bengali Film and Television Industry, thereby

creating job for artistes, workers and allied

people associated with this industry.

Hence we would request you to stop telecast of

dubbed Bengali version of “Mahabharat” in your

channel.

(emphasis added)”

37)The relevant market was, therefore, not limited to the

broadcasting of the channel but entire film and television industry

of West Bengal. Whether it was the misgiving of the Coordination

Committee that telecast of dubbed version of ‘Mahabharat’ is

going to affect Bengali film and television industry or it was a

genuine concern, is not the relevant factor while defining the

‘relevant market’

1

. It is the sweep of the aforesaid action which is

1It may be observed that majority view of CCI has rejected the plea of the Coordination

Committee as well as EIMPA that allowing the dubbed film will take away jobs from Bengali

artistes according to CCI: “If the Bengali films and TV serials are preferred over the non-Bengali

content as a result of competitive process, ultimately the Bengali artists will get benefited. The

Civil Appeal No. 6691 of 2014 Page 34 of 41

Page 35 to be considered. Even in the perception of the Coordination

Committee, telecast of Bengali dubbed version of ‘Mahabharat’

was going to affect the whole Television and Film Industry. In

view thereof, it was hardly a matter of debate as to what would be

the relevant market.

38)With this we advert to the central issue that bogs the parties,

namely, whether the activities in which the Coordination

Committee indulged in can be treated as 'agreement' for the

purpose of Section 3 of the Act.

39)At the outset, it may be noticed that the entities which are roped

in, whose agreements can be offending, are enterprise or

association of enterprises or person or association of persons or

where the agreement is between any person and an enterprise.

The expression 'enterprise' may refer to any entity, regardless of

its legal status or the way in which it was financed and, therefore,

it may include natural as well as legal persons. This statement

gets further strengthened as the agreement entered into by a

'person' or 'association of persons' are also included and when it

is read with the definition of 'person' mentioned in Section 2(l) of

protectionist policies which are being followed will not come to the aid of Bengali artistes, if on

content they cannot compete. Such policies are anti-thesis of the principles of free market.”

Civil Appeal No. 6691 of 2014 Page 35 of 41

Page 36 the Act. Likewise, definition of 'agreement' under Section 2(b) is

also very widely worded. Not only it is inclusive, as the word

'includes' therein suggests that it is not exhaustive, but also any

arrangement or understanding or even action in concert is termed

as 'agreement'. It is irrespective of the fact that such

arrangement or understanding is formal or informal and the same

may be oral as well and it is not necessary that the same is

reduced in writing or whether it is intended to be enforceable by

legal proceedings or not. Therefore, the Coordination Committee

would be covered by the definition of ‘person’. However, what is

important is that such an ‘agreement’, referred to in Section 3 of

the Act has to relate to an economic activity which is central to the

concept of Competition Law. Economic activity, as is generally

understood, refers to any activity consisting of offering products in

a market regardless of whether the activities are intended to earn

a profit. Some examples may be given which would not be

covered by Section 3(3) of the Act. An individual acting as a final

consumer is not an enterprise or a person envisaged, as he is not

carrying on an economic activity. We may also mention that the

European Union Competition Law recognises that an entity

carrying on an activity that has an exclusively social function and

is based on the principle of solidarity is not likely to be treated as

Civil Appeal No. 6691 of 2014 Page 36 of 41

Page 37 carrying on an economic activity so as to qualify the expressions

used in Section 3. The reason is obvious. The 'agreement' or

'concerted practice' is the means through which enterprise or

association of enterprises or person or association of persons

restrict competition. These concepts translate the objective of

Competition Law to have economic operators determine their

commercial policy independently. Competition Law is aimed at

frowning upon the activities of those undertakings (whether

natural persons or legal entities) who, while undertaking their

economic activities, indulge in practices which effect the

competition adversely or take advantage of their dominant

position.

40)The notion of enterprise is a relative one. The functional

approach and the corresponding focus on the activity, rather than

the form of the entity may result in an entity being considered an

enterprise when it engages in some activities, but not when it

engages in others. The relativity of the concept is most evident

when considering activities carried out by non-profit-making

organisations or public bodies. These entities may at times

operate in their charitable or public capacity but may be

considered as undertakings when they engage in commercial

Civil Appeal No. 6691 of 2014 Page 37 of 41

Page 38 activities. The economic nature of an activity is often apparent

when the entities offer goods and services in the marketplace and

when the activity could, potentially, yield profits. Thus, any entity,

regardless of its form, constitutes an 'enterprise' within the

meaning of Section 3 of the Act when it engages in economic

activity. An economic activity includes any activity, whether or not

profit making, that involves economic trade.

41)In the instant case, admittedly the Coordination Committee, which

may be a ‘person’ as per the definition contained in Section 2(l) of

the Act, is not undertaking any economic activity by itself.

Therefore, if we were to look into the ‘agreement’ of such a

‘person’, i.e. Coordination Committee, it may not fall under

Section 3(1) of the Act as it is not in respect of any production,

supply, distribution, storage, acquisition or control of goods or

provision of services. The Coordination Committee, which is a

trade union acting by itself, and without conjunction with any

other, would not be treated as an ‘enterprise’ or the kind of

'association of persons' described in Section 3. A trade union

acts as on behalf of its members in collective bargaining and is

not engaged in economic activity. In such circumstances, had the

Coordination Committee acted only as trade unionists, things

Civil Appeal No. 6691 of 2014 Page 38 of 41

Page 39 would have been different. Then, perhaps, the view taken by the

Tribunal could be sustained. However, what is lost in translation

by the Tribunal i.e. in applying the aforesaid principle of the

activity of the trade union, is a very pertinent and significant fact,

which was taken note of by the DG as well as the CCI in its

majority opinion. It is this: The Coordination Committee (or for

that matter even EIMPA) are, in fact, association of enterprises

(constituent members) and these members are engaged in

production, distribution and exhibition of films. EIMPA is an

association of film producers, distributors and exhibitors,

operating mainly in the State of West Bengal. Likewise, the

Coordination Committee is the joint platform of Federation of

Senior Technician and Workers of Eastern India and West Bengal

Motion Pictures Artistes Forum. Both EIMPA as well as the

Coordination Committee acted in a concerted and coordinated

manner. They joined together in giving call of boycott of

competing members i.e. the informant in the instant case and,

therefore, matter cannot be viewed narrowly by treating

Coordination Committee as a trade union, ignoring the fact that it

is backing the cause of those which are ‘enterprises’. The

constituent members of these bodies take decision relating to

production or distribution or exhibition on behalf of the members

Civil Appeal No. 6691 of 2014 Page 39 of 41

Page 40 who are engaged in the similar or identical business of

production, distribution or exhibition of the films. Decision of

these two bodies reflected collective intent of the members.

When some of the members are found to be in the production,

distribution or exhibition line, the matter could not have been

brushed aside by merely giving it a cloak of trade unionism. For

this reason, the argument predicated on the right of trade union

under Article 19, as professed by the Coordination Committee, is

also not available.

42)When the lenses of the reasoning process are duly adjusted with

their focus on the picture, the picture gets sharpened and

haziness disappears. One can clearly view that prohibition on the

exhibition of dubbed serial on the television prevented the

competing parties in pursuing their commercial activities. Thus,

the CCI rightly observed that the protection in the name of the

language goes against the interest of the competition, depriving

the consumers of exercising their choice. Acts of Coordination

Committee definitely caused harm to consumers by depriving

them from watching the dubbed serial on TV channel; albeit for a

brief period. It also hindered competition in the market by barring

dubbed TV serials from exhibition on TV channels in the State of

Civil Appeal No. 6691 of 2014 Page 40 of 41

Page 41 West Bengal. It amounted to creating barriers to the entry of new

content in the said dubbed TV serial. Such act and conduct also

limited the supply of serial dubbed in Bangla, which amounts to

violation of the provision of Section 3(3)(b) of the Act.

43)Resultantly, the instant appeal of CCI stands allowed.

No costs.

.............................................J.

(A.K. SIKRI)

.............................................J.

(ABHAY MANOHAR SAPRE)

NEW DELHI;

MARCH 07, 2017.

Civil Appeal No. 6691 of 2014 Page 41 of 41