NCLAT finds AMMA liable for the violation of the Anti-Competitive Conduct [Read Order]

In a recent judgment, the National Company Law Appellate Tribunal(NCLAT) dismissed the appeal filed by ‘Association of Malayalam Movie Artistes’ (AMMA), Film Employees Federation of Kerala’ (FEFKA), ‘FEFKA Director’s Union’ and ‘FEFKA Production Executive’s Union’ and their office bearers were found to be liable under Section 48 for anti-competitive conduct.

The appellants, AMMA and Others filed an appeal against the order of cease and desist from indulging in the practices by Competition Committee of India, which are found to be anti-competitive in terms of the provisions of Section 3 of the Anti Competition Act.

The AMMA had a dispute with the ‘Kerala Film Chamber’ in the year 2004 with regard to agreements entered into with the actors on various aspects, including remuneration, shooting time schedule, etc. The Informant, who was then the President of the ‘Malayalam Artists and Cine Technicians Association’ (MACTA) Federation, supported this idea of having an agreement/contract in place to safeguard the rights of both sides. Purportedly, ‘Association of Malayalam Movie Artistes’, Prominent Malayalam Film Actors Mammooty, Mohanlal and Dileep were agitated with the Informant due to this.

In the year 2007, the Informant headed an initiative called ‘Cinema Forum’ which envisaged collaboration between filmmakers and distributors to make low budget movies with new actors. It was alleged Mammooty, Mohanlal and Dileep felt insecure about their film career due to this new initiative and began influencing people to scuttle it. In the year 2008, Dileep accepted advance and signed an agreement with Ullatil Films but later insisted that he would do this film only when the director, Thulasidas, is removed. This, as per the Informant, amounted to a violation of the agreement. The Informant advised all the actors to abide by the terms of the agreement they signed with the directors. It was alleged that due to these incidents, ‘Association of Malayalam Movie Artistes’ and its prominent members/actors bore a grudge against the Informant and used their clout to reduce the strength of MACTA Federation and forced its members to split and form an alternative association by the name ‘Film Employees Federation of Kerala’ (FEFKA). The informant was later allegedly banned from making films in the Malayalam Film Industry.

Learned counsel appearing on behalf of the Appellants submitted that there was no written, formal/ informal ban imposed on Respondent No. 2 (Informant). None of the witnesses showed any written proof to the DG office regarding the alleged ban.

It was also submitted that the witnesses have claimed that they know about the alleged ban either through media reports (given mostly by the Informant himself) or through industry rumors. The learned counsel contended that there is no cogent proof regarding the ban on record.

It was further contended that the allegation of an informal ban falls flat as the Informant has admittedly produced/ directed 12 films since 2004. Out of the 12 Films, two films “Dracula” and “Little Superman” have been big-budget films. Therefore, there has been no appreciable adverse effect on competition and on the Informant. Learned counsel for the Appellant(s) also submitted that there is no ‘Appreciable Adverse Effect’ on the competition.

While dismissing the appeal, The panel comprising of Justice S J Mukhopadhaya as the Chairperson, Justice A I S Cheema as Judicial Member and Balvinder Singh as Technical Member rejected the argument raised by the learned appellant counsel that Trade Unions are exempt from the applicability of Competition Act in “Coordination Committee (2017)”. The identical argument was raised, considered and rejected by the Apex Court.