Supreme Court Upholds CCI’s 2015 Penalty on Kerala Film Exhibitors Federation
The Supreme Court has revived the Competition Commission of India’s (CCI) 2015 order that penalised the Kerala Film Exhibitors Federation (KFEF) and two of its office bearers, P.V. Basheer Ahmed and M.C. Bobby, for indulging in anti-competitive practices.
The dispute began when cinema associations and Crown Theatres complained that KFEF was blocking the release of Tamil and Malayalam films in certain theatres. Following investigation, the CCI in 2012 and 2014 found KFEF guilty of violating Section 3 of the Competition Act, 2002.
In the first case, a penalty of 7% of the office bearers’ earnings was imposed. In the second, the CCI not only penalised them but also barred KFEF from associating with Basheer and Bobby for two years.
The National Company Law Appellate Tribunal (NCLAT) upheld the penalties but set aside the ban, saying that no show-cause notice was issued to the office bearers. The CCI then appealed.
A bench of Justices Manoj Misra and KV Viswanathan ruled in favour of the CCI, observing that the Director General’s report and subsequent notices were sufficient compliance with law. The Court said that under Section 48 of the Act, office bearers responsible for the contravention are deemed guilty and can be penalised.
The Court further noted that since earlier monetary penalties did not deter the Federation or its leaders, behavioural remedies such as disassociation were necessary to protect consumers. It restored the CCI’s entire 2015 order and asked for a compliance report.
Case Reference: Competition Commission of India & Ors. v. Kerala Film Exhibitors Federation & Ors., Civil Appeal No. 9726/2016
