Monopolies and Restrictive Trade Practices Commission
Vinod Chopra vs Film Makers Combine on 3 July, 2001
ORDER
R.L. Sudhir, Member
1. This enquiry commenced with the filing of a complaint by Shri Vinod Chopra, Proprietor of M/s. Vinod Chopra Productions, Bombay under Section 10(a)(i) of the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act in brief). The complainant also filed an application for grant of interim injunction under Section 12-A of the MRTP Act.
2. For proper appreciation of rival contentions, we consider it necessary to briefly state the material facts of the case. The complainant firm is, inter alia, engaged in the business of production of firms including feature films. The respondent, M/s. Film Makers Combine (FMC), is a Company incorporated under Section 25 of the Companies Act, 1956. In pursuance of the objectives laid down in the Memorandum, the respondent Company is promoting and protecting trade and commerce in the field of Motion Picture Industry and other allied Industries, the respondent has the following subscriber members :
(1) Indian Motion Picture Producers' Association (IMPPA) (2) Film Producers' Guild of India (3) Western India Film Producers' Association (WIFPA) (4) Association of Motion Picture and TV Producers
3. The complainant is a member of Western India Film Producers' Assiciation (WIFPA) which is a subscriber member of the FMC. As per prevailing practice in the trade, the workers affiliated to the Federation of Western India Cine Employees (FWICE), Bombay are employed by the film producers at Bombay. Wage rates of the members affiliated to FWICE are revised from time to time and are fixed after negotiations between FWICE and FMC. A dispute arose between FMC and FWICE in October/ November, 1993 regarding the revision of wages of workers. No agreement having been reached between the two, the FWICE eventually decided to enforce the higher wage rates for the workers. As a sequel thereto, the FMC decided to suspend all production and post-production activities which included shooting, recording, dubbing, etc. w.e.f. 5.11.1993. The FMC also issued a Circular dated 2.11.1993 to all the associations connected with the firm industry and gave them the following directive :
"No member of the Affiliate of Film Makers Combine shall pay the increased wages as circulated or enforced by FWICE or any of the Affiliates, All production activities shall stop from Friday, the 5th November, 1993 for the unilateral hike. Violation shall be seriously dealt with."
In pursuance of the above directive various organisations/associations in the film industry accordingly, issued directions to their members.
4. It has been stated that at this stage, the complainant was in the midst of shooting a feature film "1942 - A Love Story" and had created a set worth Rs. 60 lakhs in the Film City for the shooting of the film. The complainant had also obtained dates for shooting from Mr. Brian Cover, a well known British actor. In such a situation, the complainant was not in a position to extend or postpone the pre-decided schedule for the shooting of the film. The call for indefinite strike by the FMC at this juncture, came as a bolt from the blue. The complainant, therefore, approached the FMC and the FWICE to seek their permission for shooting the film. While the FWICE permitted the complainant to go ahead with the shooting of the film on payment of wages at the old rates, the FMC declined to accommodate the request of the complainant. The FMC also issued a Circular dated 19.11.1993 in which all those associated with the industry were asked to suspend the membership of the complainant. The associations of distributors were asked not to register the film of the complainant and de-register the same if already registered. The FMC also wrote to the Film City and even to the individual artists working in the film to stop any kind of cooperation with the complainant with immediate effect.
5. In the compelling circumstances explained earlier, the complainant went ahead with the shooting of the film during the closure announced by the FMC. As a result of this, the FMC imposed a fine of Rs. 5 lakhs on the complainant and informed that all concerned in the industry including FWICE have been asked not to cooperate with the complainant in any manner whatsoever.
6. It has been alleged that the call for non-cooperation thus given by the respondent to all concerned in the film industry, amounts to a restrictive trade practice within the meaning of Section 33(1) read with Section 2(o) of the MRTP Act.
7. The Commission considered the complaint petition as well as the interim relief application and issued notices in respect thereof to the respondent. After hearing the submissions made regarding the interim relief sought by the complainant, the Commission granted ex-parte injunction on 9.5.1994 and suspended the operation of the impugned Circular dated 19.11.1993 in so far as the FMC's call was concerned.
8. In a subsequent order dated 2.12.1994, the Commission, inter alia, observed that the disputed Circular giving a boycott call to the entire film industry undoubtedly amounts to an instance of restrictive trade practices covered by Section 33(1)(a) of the MRTP Act. It is further stated in the order that good sense having prevailed to the respondent, it promptly withdrew the said Circular in May, 1994. It is also mentioned in the said order that the learned Counsel for the respondent sought time to file an affidavit of the respondent to give an undertaking to the effect that it shall not issue any such Circular in future, nor otherwise indulge in restrictive trade practices of the nature involved in the present case. The respondent was allowed three weeks' time for filing the said affidavit.
9. Thereafter, at the request of the learned Counsel for the respondent, several opportunities were given but the affidavit proposed to be filed by the respondent, presumably under Section 37(2) of the MRTP Act, never saw the light of the day. Finally, therefore, it was decided to proceed with the case on merit and a Notice of Enquiry (NOE) was ordered to be issued. When the respondent failed to file its reply to the NOE, despite several opportunities given, the proceedings were set ex-parte against the respondent and the following issues were framed :
(1) Whether the respondent has been indulging in restrictive trade practice as alleged in the NOE ?
(2) Whether these restrictive trade practices are not prejudicial to the public interest/interest of the complainant ?
10. The complainant filed the affidavit of evidence and also produced a witness, namely, Shri Veer Chopra, for cross-examination. As none appeared on behalf of the respondent to cross-examine the witness, the respondent's right to cross-examine the witness was closed. Thereafter, the respondent was given the liberty to file its evidence by way of affidavits, list of witnesses and list of reliance. No evidence was, however, filed despite several opportunities given. The respondent's evidence was, therefore, closed and the case was listed for arguments.
11. Ex-parte arguments were finally heard on 29.5.2001. We have carefully considered the submissions made by the learned Counsel for the complainant, Mr. R.D. Makheeja, and have also perused the pleadings as well as the rulings cited in support of the complainant's case. From the Commission's order dated 2.12.1994, it is evident that the respondent had admitted that the boycott call given by it was a restrictive trade practice within the meaning of Section 33(1) of the MRTP Act. The respondent had accordingly, withdrawn the impugned Circular dated 19.11.1993 and the learned Counsel for the respondent had even given an assurance to file an affidavit on behalf of the respondent to give an undertaking that the respondent shall not issue any such Circular in future, and that it will not indulge in any restrictive trade practice of the nature involved in the instant case in future.
12. In view of the position explained above, the respondent can be said to have admitted the charge of restrictive trade practices and, therefore, it is not necessary to go deeper into the facts of the case. All the same it may be emphasized that the boycott call given by the respondent through its Circular dated 19.11.1993 is undoubtedly a restrictive trade practice within the meaning of Section 33(1)(a) of the MRTP Act. The restrictive trade practices falling within the Sub-clauses (a) to (1) of Section 33(1) of the MRTP Act are deemed restrictive trade practices and they do not have to be tested on the touchstone of Section 2(o) of the MRTF Act. Such trade practices are also deemed to be prejudicial to public interest unless the gateways given in Section 38 are pleaded. We are supported on this point by a series of orders passed by the Commission, in such cases in the past. The following cases cited by the learned Counsel for the complainant are some of the examples of such cases :
(i) The Director General (Investigation and Registration) v. Central Circuit Cine Association, III (2000) CPJ 68 (MRTP)=RTPE 219/1995, dated 10.10.2000;
(ii) The Director General (Investigation and Registration) v. All India Organisation of Chemists and Druggists & Ors., reported in (1997) 5 CTJ 1 (MRTPC), dated 30.1.1996;
(iii) The Director General (Investigation and Registration) v. Bengal Chemists and Druggists Association & Ors., reported in (1996) 4 CTJ 97 (MRTPC), dated 16.11.1995;
(iv) The Director General (Investigation and Registration) v. The Chemists and Druggists Assocition & Ors., reported in (1993) 1 CTJ 562 (MRTPC), dated 25.6.1993; and
(v) Karak Bazar Sayaji Ganj Beopari Mandal v. The Chemists and Druggists Association & Ors., reported in (1994) 2 CTJ 15 (MRTPC), dated 20.12.1993.
13. In view of the aforesaid discussion, the respondent is admittedly guilty of adoption of restrictive trade practices within the meaning of Section 33(1)(a) and (i) of the MRTP Act and as such the issuance of a 'cease and desist' order is fully warranted. Since the disputed Circular has already been withdrawn, the impugned restrictive trade practice has ceased to exist. Therefore, it is not necessry to pass a 'cease' order, at this stage. But since the respondent has failed to give an undertaking as contemplated in Section 37(2) of the MRTP Act to desist from indulging in such trade practices in future, we direct the respondent to refrain from indulging in such trade practices in future.