KFCC plea against competition panel probe dismissed

The Karnataka High Court on Thursday dismissed the Karnataka Film Chamber of Commerce (KFCC) petition challenging the investigation ordered by the Competition Commission of India (CCI) against it for indulging in unfair practices in violation of the Competition Act, 2002.

Hearing a petition by KFCC, which had challenged the investigation ordered against it for violation of the Act by preventing dubbing of films and tele-serials, Justice A N Venugopala Gowda directed the KFCC to seek relief before the commission appointed to probe into the complaint.

The petitioners had contended that the order of inquiry by the CCI was arbitrary in nature, as they had no locus standi to probe the matter. The petitioners said the allegations made against them were vague and baseless and sought to set aside the order of investigation.

Justice Gowda dismissed the petition and observed, “the Commission has found a prima facie case of violating the Act.”

The CCI on October 18, 2012, ordered an inquiry against the KFCC, Karnataka Television Association, Karnataka Film Directors Association, Karnataka Film Producers Association and others. The inquiry was initiated based on a complaint made by  Karnataka Grahakara Sangha and Ganesh Chethan, a resident of the City, alleging several unfair competition under Section 26 (1) of Competition Act, 2002.

The complainants alleged that due to this unfair practice, many producers, makers and remakers of films and tele-serials have been affected. The Commission entrusted the matter to be probed by a Director General, CCI. The KFCC challenged the matter before the high court, which stayed the investigations. However, the DG Investigation, went ahead with the probe and submitted a report to the CCI.

The report observed that there existed a prima facie case that the association and other organisations were violating the Competition Act and indulging in anti-competitive practices. The report says that the KFCC has also abused its dominant position and recommended remedial action against all those concerned.

When the matter came up for hearing, the KFCC termed the investigation and directions to probe as arbitrary as the CCI was not authorised to conduct an inquiry. Krishna Dixit, Assistant Solicitor General submitted that the CCI being an expert body of high order, its members are selected by a committee headed by the Chief Justice of India and the Act provides them with wide powers to decide whether there is a prima facie case which merits investigations by another expert body like a Director General.

Justice Gowda, accepting the submission, dismissed the petition and directed the KFCC to take up all its contentions before the investigating authority to silence the findings of the DGI report and recommendations.