JUDGMENT
A.N. Varma, J. (Chairman)
1. This complaint submitted under Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969, along with an application for interim injunction under Section 12A of the same Act is directed against a trade practice stated to be indulged in by respondents Nos. 1 to 6 who are engaged in the business of buying films and processing and making videogram cassettes, discs, tapes in relation to feature films for sale and/or private and public exhibition on video playback equipment, commonly referred to as VCRs.
2. Put in a nutshell the complaint is that these respondents are representing that the cassettes marketed by them to the public and to the consumers are an exact copy of the original censored celluloid film of the same title. The respondents’ are affixing on video cassettes a declaration that the film is an exact copy of the film approved by the Central Board of Film Certification. Implicit in the representation is a further claim that the video cassette of the film does not have any alterations, additions or excision or any other alteration when in fact the practice prevailing is that the films are not an exact copy of the original film but the shortened or distorted version thereof. The allegation is that these respondents are engaging extensively in the practice of inserting or superimposing advertisements on the video cassettes both across the width of the film as well as lengthwise so as to accommodate the advertisements interspersed throughout the length of the cassette. The obvious motive attributed is that guided entirely by commercial instincts the respondents are engaging in such practice of inserting advertisements on the film without regard to its authenticity and total effect. Such a trade practice, the complainant urge, plainly attracts the provisions of Clauses (i), (iv) and (v) of Section 36A(1) of the Monopolies and Restrictive Trade Practices Act. The trade practice is also stated to be prejudicial to public interest in that it misleads the public and the consumers into believing that the video cassettes are an exact production of the film.
3. Along with the complaint, and in support thereof, several video cassettes produced by the various respondents Nos. 1 to 6 were submitted by them. In the course of preliminary hearing these cassettes were also played on VCR to demonstrate the points briefly outlined hereinabove.
4. The respondents put in appearance through their learned counsel in response to the notice denying the charge that they were indulging in any unfair trade practice. The contention was that the authenticity of the film is not in any way compromised as a result of the advertisements which according to them do not either block any part of the movie nor curtail its length or width. It is also the case of the respondents that for determining the question whether any provisions of the Cinematograph Act have been violated or not the appropriate forum would be the authority created under that Act and not this Commission. The respondents further contend that they are holders of copyrights of pictures marketed by them by virtue of licence granted to them by the copyright holders and consequently no exception could be taken to the exercise of that right by them. Even if it be assumed that there has been some breach of the right of the copyright holders, this Commission shall not be the competent authority to examine the same.
5. Having heard learned counsel for the parties and having perused the material placed on record by the parties we are fully satisfied that respondents Nos. 1 to 6 are indulging in unfair trade practices covered by Clauses (i), (iv) and (v) of Section 36A(1) of the Monopolies and Restrictive Trade Practices Act. In order to satisfy ourselves whether there was any merit in the complaint we had the video cassettes played on the VCR several times over. As a result, we are more than convinced that the advertisement superimposed by the respondents on the film interspersed throughout the length of the video cassettes not only blocked fair portions of the film, but in their anxiety to pack as many advertisements as they could, the respondents had deleted and excised some of the scenes altogether from the movie. We saw both the original film on the VCR as well as the copy thereof prepared by the respondents with the advertisements superimposed on it, which clearly proved the charge that in their anxiety to accommodate the maximum amount of advertisements, the respondents have been resorting even to the expedient of deleting portions of the film altogether.
6. That being so, the representation made by the respondents both expressly as well as through the use of the certificate granted by the Central Board of Film Certification that the video cassette is an exact reproduction of the original film as approved by the said Board is rendered false and misleading attracting immediately the provisions of Clause (i) of Section 36A(1) which provides that the practice of making any statement, whether orally or in writing or by visual representation which falsely represents that the goods are of a particular standard, or quality or grade etc. when in fact they are not so, would be deemed to be an unfair trade practice within the meaning of Section 36A(1) of the Monopolies and Restrictive Trade Practices Act. The impugned trade practice also falls within the mischief of Clauses (iv) and (v) of Section 36A(1) of the said Act in that the respondents are falsely claiming the approval of the said Board,
7. Rule 33 of the Cinematograph (Certification) Rules, 1983, mandates that when a film is altered by excision, addition, colouring or otherwise after it has been certified under these rules, it shall not be exhibited unless the portion or portions excised, added or otherwise altered have been reported to the Board in the prescribed form and the Board has endorsed the particulars of the alteration or alterations in the certificate. Admittedly, the respondents have not complied with this provision. They use the certificate issued by the Board of Censors, thereby making a false representation that the video cassette is an exact copy of the original which it is not after being altered.
8. That being so, the impugned trade practice furnishes a clear instance of unfair trade practice under Section 36A(1) of the Monopolies and Restrictive Trade Practices Act. The trade practice is also obviously prejudicial to the public interest inasmuch as many an unwary buyer of the video cassettes produced by the respondents is misled into believing that they are bargaining for an exact copy of the film, when in fact, it is not so. What the respondents are trading in is a mutilated version of it.
9. This, therefore, is a pre-eminently fit case for ordering an enquiry against respondents Nos. 1 to 6 under the aforesaid provisions of Section 36A(1) read with Section 36D of the Monopolies and Restrictive Trade Practices Act, IMPPA, the seventh respondent, is also as an umbrella organisation of the film producers and is for the same reason liable to be proceeded against under the said provisions.
10. Next the application under Section 12A. We have already found that there is a prima facie case for proceeding against respondents Nos. 1 to 6 under Section 36A(1) read with Section 36D. While this is so, we are not satisfied that the balance of convenience warrants issue of any ad interim injunction against the said respondents prohibiting them, even while the enquiry has yet to begin, from marketing the video cassettes during the pendency of the enquiry. Having given the matter our careful and anxious consideration it seems to us that the issue of injunction would work great injustice against even those parties who are not before us. Shri A.N. Haksar and Shri O.P. Dua, learned counsel representing the respondents, strenuously argued that the impugned practice has been in vogue for a considerable length of time during which the respondents have entered into agreements with numerous parties in regard to the advertisements being shown by them. Huge amounts have been paid by those parties for getting their advertisements inserted in the video cassette without being fully aware of the Implications of the provisions of the Monopolies and Restrictive Trade Practices Act. Many contracts have been concluded with the advertisers too and money has also passed hands in the process. The contractees and the advertisers alike have entered into the business apart from the respondents. They would, therefore, also be hit by any ad interim injunction prayed for by the complainant. That being so, it would not be just and proper to issue any injunction. We would, however, endeavour to conclude this enquiry expeditiously in public interest subject, of course, to the parties extending their full co-operation, not seeking any adjournments unless for reasons entirely unforeseen or beyond their control.
11. But while we are refraining from issuing any injunction, we do expect and hope that the respondents should take note of our tentative view and ensure that in regard at least to future productions, the advertisements do not result in the deletions or excision of any portion or portions of the film, and further that the advertisements, if inserted, do not block out of the view any part of the film.
12. In the premises, a notice of enquiry shall issue to respondents Nos. 1 to 7 under Section 36A(1)(i), (iv) and (v) read with Section 36D of the Monopolies and Restrictive Trade Practices Act returnable on February 24, 1995. The ad interim injunction is, however, subject to the observations made above, refused.