Tamil Nadu Film Exhibitors Association v.

Competition
Commission Of India
Madras High Court
March 27, 2015
[Competition Act, 2002]

Case No.: Writ appeal nos. 1806 and 1807 of 2013

Judges: V. Ramasubramanian
P.R Shivkumar, JJ.

Facts:
These Writ Appeals arise out of the dismissal of two writ petitions filed by the appellant herein,
one challenging an order of the Competition Commission of India directing an investigation to
be initiated and the other seeking a direction to the local police, to act on a complaint lodged by
the appellant.

We have heard Mr. Nithyesh Nataraj, learned counsel for the appellant, Mr.G. Masilamani,
learned Senior Counsel appearing for the Competition Commission of India, Mr. Rahul Balaji,
learned counsel for the second respondent and Mr.R.Ravichandran, learned Additional
Government Pleader appearing for the State.

The appellant herein is the Tamil Nadu Film Exhibitors Association. It is registered as a society
under the Tamil Nadu Societies Registration Act. The second respondent herein is a producer
of feature films. On 8.1.2013, the second respondent filed a complaint before the Competition
Commission of India (which is the first respondent herein), alleging that by a resolution dated
20.12.2012, the Tamil Nadu Theatre Owners Association decided to ban the screening of films
which are released via DTH. It was claimed by the second respondent herein that the resolution
would be tantamount to an anti-competitive practice, violating Section 3(3)(b) of the
Competition Act, 2002.

After examining the said complaint, the Competition Commission of India, passed an order on
16.01.2013 in terms of Section 26(1) of the Competition Act, 2002, holding that there existed a
prima facie case requiring an investigation by the Director General of the Competition
Commission.

In the meantime, the second respondent also faced opposition from a small group of intolerant
people, who managed to force the Commissioner of Police, Chennai to issue an order on
23.1.2013 under Section 144 of the Code of Criminal Procedure, prohibiting the exhibition of
the feature film "Viswaroopam" for public view. However, after a series of dramatic twists and
turns that were more interesting than even the film itself, the Commissioner of Police passed an
order on 3.2.2013 under Section 144(5) of the Code of Criminal Procedure, revoking the earlier
ban order. Therefore, the film got released in the theatres.
Issue:
Whether the Competition Commission has the power to accent a settlement or compromise
between parties and impose penalties in cases of alleged contravention of provisions dealing with
Ant1-Competitive practices and abuse of dominant position.

Rule:
The Competition Commission has residuary powers and its powers to pass orders are wide in
amplitude, and therefore has the power to accept a settlement or compromise between parties.
In cases where the parties agree not to continue with the agreement or agree not to abuse the
dominant position. the only question that would be left for the Commission to deal with is the
question of imposition of penalty. Despite the fact that the orders of the Competition
Commission are subject to the Appellate jurisdiction of the Competition Appellate Tribunal
and the orders of the Appellate Tribunal are subject to a statutory appeal under Section 53-T of
the Act, the jurisdiction of this Court under Article 226 will not stand ousted. The Director
General of the Competition Commission of India has already completed the investigation and
filed a report. The writ appeals are disposed of with the above directions. Consequently,
connected miscellaneous petitions are closed.

Analysis:
The Competition Act. 2002 1s a law that addresses Anti-Trust issues in India. Section 18 imposes
upon the Competition Commission certain duties, and to enable the Commission to perform
the duties imposed upon it under section 18, the Commission is invested with the power under
section 12 to make an inquiry into the alleged contravention of the provisions dealing with Anti-
Competitive practices and abuse of dominant position. Section 26 of the Act indicates the
procedure for inquiry under Section l9. The Competition Commission has powers even to issue
interim orders, and Section 36 of the Act empowers the Commission to regulate its own
procedure. Settlement is permitted in the case or cartels both in the European Union and the
United States, and is a choice of the Commission, neither a right nor an obligation for the
companies.

Conclusion:
The Competition Commission has the power to accept a settlement or compromise between
parties and impose penalties in case of alleged contraventions of provisions dealing with Anti-
Competitive practices and abuse of dominant position. The jurisdiction of this court under
Article 226 will not stand ousted. The writ appeals are disposed of with the above directions.
Consequently, connected malleolus petitions are closed.
 G. Vasu. V. Syed Yaseen Sifuddin Quadri
Andhra Pradesh High Court
December 8, 1986
[Negotiable Instrument Act, 1881]

Case No.: C.C.C.A No. 90 of 1977

Judges: Ramanujulu Naidu
T.L.N Reddy
Jagannadha Rao JJ.

Facts:
The reference to a Full Bench has been made to the conflict between Division Bench judgments,
viz. Janaka Lakshmi v. Madhava Rao, AIR 1973 Andh Pra 103 and Maddam Lingaiah v. Hasan
CCCA Nos. 95 and 96 of 1969 dt. 22-9-1972 rendered by M. Krishna Rao J. and M.

Ramchandra Raju J. respectively, and Ponna Satyavathi v. Pamu Surya Rao L.A 158 of 1977 dt.
26-12-1978 rendered by Kuppuswami J. and P.A Choudary J. respectively.

The conflict arises in the context of the presumption under S. 118 of the Negotiable Instruments
Act, 1881, where the Court disbelieved the defendant's plea as to the circumstances under which
the promissory note was executed without consideration and the Court also disbelieved the
plaintiffs story. The Court relied upon a judgment of the Bombay High Court in Tar Mahamed
v. Tyed Embrahim, AIR 1949 Bom 257 and referred to two earlier decisions of the Madras High
Court in Narasamma v. Veeraju, AIR 1935 Mad 769 and Narayana Rao v. Venkatappayya, AIR
1937 Mad 182.

The plaintiff pleaded that the defendant borrowed a sum of Rs. 10,000 under one promissory
note dt. 1-8-1972 and Rs. 5,000/- under another on the same day. The defence argued that no
amounts were borrowed, and that the plaintiff was a pauper and had no means to lend the
amounts. The plaintiff admitted in his evidence that Exs. A-1 and A-3 were not supported by
cash consideration but were renewals of earlier notes.

The trial Court rejected the plaintiff's case of cash consideration for Exs. A-1 and A-3 and also
rejected the defendant's plea and Ex. A-9 and A-7 notes. However, the counsel for defendant-
respondent Sri V.R Mohan Rao argued that the suit is still liable to be decreed on the basis of
the presumption under S. 118. Sri E.V Bhagiratha Rao contended that the view taken in Janaka
Lakshmi's case is not correct and commended the view in Maddam Lingaiah's case.

Issues:
– Whether the defendant can prove the non-existence of consideration by a preponderance
of probabilities by referring to the particular circumstances of the case?
– Whether the burden of proof shifts by presumptions of law or fact?
– Whether the presumption under S. 118 of the Negotiable Instruments Act steps into the
witness box and acts as a substitute for the plaintiff's evidence?
– Whether the burden of proof loses all importance when both parties have led evidence?
– Whether the plaintiff has discharged the legal burden?
Rule:
The defendant can prove the non-existence of consideration by a preponderance of probabilities
by referring to the particular circumstances of the case. The burden of proof shifts by
presumptions of law or fact. The presumption under S. 118 of the Negotiable Instruments Act
steps into the witness box and acts as a substitute for the plaintiff's evidence. The burden of proof
loses all importance when both parties have led evidence. The plaintiff has not discharged the
legal burden.

Analysis:
Presumptions are of two kinds, presumptions of fact and of law. A rebuttable presumption of
law is a legal rule to be applied by the court in the absence of conflicting evidence. The provisions
of S. 118 of the Negotiable Instruments Act direct that the court shall presume 'until the contrary
is proved'. The words 'Not proved' are defined as a fact that is said not to be proved when it is
neither proved nor disproved. It is permissible to establish the fact by a preponderance of
probabilities and the entire circumstances of the particular case. The defendant can rebut the
presumption raised by S. 118 of the Negotiable Instruments Act. The burden of proof may shift
by presumptions of law or fact. The presumption under S. 118 raised by the statute initially in
favour of the plaintiff steps into the witness box and acts as a substitute for the plaintiff's
evidence. When both parties have led evidence, the burden of proof loses all importance and
becomes purely academic. The presumption under S. 118 does not again come to the plaintiff's
rescue if the plaintiff has not discharged the legal burden.

Conclusion:
The decision of the High Court in M. Janaka Lakshmi v. Madhava Rao, (AIR 1973 Andh Pra
103) is overruled. The appeal is allowed, and the suit is dismissed without costs.