Back
2025 Supreme(SC) 1759
SUPREME COURT OF INDIA
MANOJ MISRA, K.V. VISWANATHAN, JJ.
Competition Commission Of India – Appellant
Versus
Kerala Film Exhibitors Federation & Ors. – Respondents
Civil Appeal No. 9726 of 2016
Decided on : 26-09-2025
For the Appellant(s) : Mr. Arjun Krishnan, AOR
For the Respondent(s): Mr. Harshad V. Hameed, AOR Mr. Dileep Poolakkot, Adv. Mrs. Ashly Harshad, Adv. Mr. Mahabir Singh, Adv. Mr. Anshul Saharan, Adv.
The principles of natural justice and statutory compliance permit a single notice regarding contraventions, while penalties must align proportionally to ensure deterrence against anti-competitive conduct.
Headnote:(A) Competition Act, 2002 - Sections 3(1), 3(3)(b), and 48 - Appeal against the Competition Appellate Tribunal's findings - The tribunal upheld contraventions by the Kerala Film Exhibitors Federation but set aside penalties against individual office bearers for lack of notice - Findings support that the office bearers engaged in anti-competitive conduct and were liable per section 48. (Paras 1, 66)
(B) Natural Justice - The principle affirms that a notice regarding contraventions suffices, without a second notice for penalties - An act of imposing penalties must adhere to proportionality as a principle of justice, ensuring it aligns with statutory provisions. (Paras 57, 68)
(C) Compliance with Statutory Procedures - The Commission provided fair notice and opportunity for parties to address alleged contraventions before imposing penalties, thus fulfilling statutory requirements. (Paras 38, 41, 61)
Facts of the case:
The case originated from allegations against the Kerala Film Exhibitors Federation for threatening film distributors not to screen films at competing theaters, leading to a Commission investigation affirming contraventions of anti-competitive practices.
Findings of Court:
The appellant successfully showed anti-competitive actions violated the Act. Penalties were reinstated for individual respondents who contributed to these violations.
Issues: Determining the sufficiency of notice provisions regarding penalties and whether the imposed penalties were proportional and justified.
Ratio Decidendi: The court held that the prior notice of contraventions suffices per the Act, negating the need for a second notice on proposed penalties, emphasizing the Commission's duty to ensure penalties align proportionally with violations.
Result: The appeal was allowed, and the penalties previously set aside were restored.
| Table of Content |
|---|
| 1. interpretation of competition act provisions. (Para 1 , 2) |
| 2. allegations of anti-competitive behavior. (Para 3 , 4 , 5) |
| 3. details of procedural notices to parties. (Para 6 , 7) |
| 4. commission's findings on violations. (Para 8 , 9) |
| 5. arguments presented by parties. (Para 10 , 11 , 12 , 13 , 14) |
| 6. sufficient notice and opportunity of hearing. (Para 15) |
| 7. purpose and framework of the competition act. (Para 16 , 17 , 19 , 20) |
| 8. nature of penalties under the act. (Para 24 , 36) |
| 9. details of notice issued under the act. (Para 39 , 40) |
| 10. analysis of penalties and their proportionality. (Para 44 , 50) |
| 11. requirement for explanation of charges, not penalties. (Para 60 , 61) |
| 12. final conclusion and order by the court. (Para 68) |
JUDGMENT :
K.V. Viswanathan, J.
| A. BRIEF FACTS |
| B. REPORT OF THE DIRECTOR GENERAL |
| C. NOTICE TO PARTIES BY THE COMMISSION |
| D. PROCEEDINGS BEFORE COMMISSION AND ORDER |
| E. APPELLATE PROCEEDINGS |
| F. CONTENTIONS OF LEARNED COUNSEL |
| G. QUESTION FOR CONSIDERATION |
| H. ANALYSIS AND REASONS |
| i. SURVEY OF THE RELEVANT PROVISIONS OF THE STATUTE |
| ii. ANALYSIS OF THE PROVISIONS |
| iii. COMMISSION CAN DIFFER WITH THE DG |
| iv. NOTICE DATED 10.06.2015 |
| v. CONTRAST OF THE ACT WITH THE MRTP ACT, 1969 |
| a. BEHAVIOURAL REMEDIES |
| b. STRUCTURAL REMEDIES |
| vi. PRINCIPLE OF PROPORTIONALITY IN PENALTY IMPOSITION |
| vii. NO SECOND NOTICE CONTEMPLATED UNDER THE STATUTE |
| viii. REPORT OF THE ‘REVIEW COMMITTEE’ |
| ix. TIME IS OF ESSENCE – NO NOTICE NEEDED OF PROPOSED PENALTY |
| x. NOTICE IS TO ANSWER THE CONTRAVENTION – NOT THE PROPOSED PENALTY |
| xi. PENALTY ON FACTS - PROPORTIONATE |
| i. CONCLUSION |
1. An important question involving the interpretation of certain provisions of the COMPETITION ACT , 2002, (for short “the Act”) arises for consideration in this case.
2. The present statutory appeal, under Section 53T of the Act, has been filed against the judgment and order dated 19.04.2016 passed by the Competition Appellate Tribunal (for short the “COMPAT”). By the said judgment, the findings of the Competition Commission of India (for short the “Commission”) that Respondent No.1-Kerala Film Exhibitors Federation (for short the “KFEF”) acted in contravention of Section 3(1) read with Section 3(3)(b) of the Act and the penalty imposed on Respondent No.1 was upheld. The COMPAT set aside the penalty imposed on Respondent Nos.2 and 3 and also the directions which were in the nature of behavioural remedies, contained in clause (d) and (e) of para 9 of the order of the Commission. Aggrieved against that portion of the order of the COMPAT, the Commission is before us in appeal.
BRIEF FACTS: -
3. An information was filed by Respondent No.4-M/s Crown Theatre before the Commission alleging anti-competitive activities by Respondent No.1-KFEF and its office-bearers –Mr. P.V. Basheer Ahamed, President (Respondent No. 2), and Mr. M.C. Bobby, General Secretary (Respondent No. 3). The information was registered vide Case No.16 of 2014 and the gravamen of the allegation was that film distributors were threatened that their films would not be screened at the cinema halls belonging to members of Respondent No.1, if those distributors offered their films for exhibition at Crown Theatre-Informant (Respondent No.4). It was further alleged that KFEF (Respondent No.1) and Mr. Basheer Ahamed (Respondent No.2) took steps to ensure that whenever new Tamil and Malayalam movies were released, it would not be screened at Crown Theatre. KFEF (Respondent No.1) called for a strike/ban on exhibition of films by its members in their cinema halls. Respondent No.4-Crown Theatre even resigned from the membership of KFEF. In accordance with the provisions of the Act, vide order dated 08.05.2014, the Commission directed the Director General (DG) to investigate the matter. Specific direction was given to investigate the role of the persons who were in charge of KFEF for their conduct with respect to the affairs of the
