Multiplex Association Of India vs The State Of Andhra Pradesh
2022 Latest Caselaw 1888 AP

         HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU



                             I.A.No.1 of 2022
                                     in
                           W.P.No.7094 of 2022

ORDER :

The writ petition is filed questioning the G.O.Ms.No.13

dated 07.03.2022. The interlocutory application is filed to stay

all further proceedings in G.O.Ms.No.13, but when the

arguments were advanced, Sri P.Veera Reddy, learned senior

counsel for the petitioner urged that the petitioners are

essentially questioning the last part of para 3, wherein the

respondent-Government has included the service charges for

online booking in the overall rate. The prayer is therefore

limited to the inclusion of the service charges for online booking

in the cinema theatres in the overall price for admission.

Sri Veera Reddy, learned senior counsel appeared for the

petitioner, who are the Multiplex Association of India. The

petitioner's claim to represent the owners of Multiplexes in

India. The authorized signatory and the deponent is the

Manager of PVR Cinemas in Vijayawada. It is their contention

on various grounds that the inclusion of service charges for

online booking of tickets is contrary to law. It is opposed to the

provisions of the A.P.Cinemas Act, devoid of reasonable

classification and amounts to reasonable restriction. According

to the learned counsel, it is also a case of Executive

overreach and is totally opposed to law. He submits that with a

mere GO the rates are sought to be regulated and controlled.

Learned senior counsel submits that it is not known on what

basis respondents came to the conclusions. He points out that

there were a series of litigations / writ petitions which were filed

challenging the earlier Government Orders on the subject. An

interim order granted by a learned single Judge is also filed and

relied upon. Learned senior counsel submits that the impugned

Government Order states that a committee was constituted on

17.02.2022, pursuant to the orders of the high Court in Writ

Appeal Nos.831 and 832 of 2021. It is alleged at more than once

place that the respondents have not filed copies of the minutes

dated 17.03.2022 and that the impugned G.O. was formulated

on the basis of closed door discussions. It is also asserted that

the petitioners were never consulted or kept abreast of this

entire process prior to the fixation of the rates or the

recommendations of the said committee. Issues about the

meeting are asserted both in the writ affidavit and in the

rejoinder. It is also asserted that members of the petitioners-

association were not invited for discussion nor were they

consulted in this matter.

Learned senior counsel also argued that the online ticket

booking facility that the theatres are providing is a service given

to the audience. If the public or a cinegoer audience wishes to

avoid the crowd or standing in the queue etc., they could book

their tickets online. He submits that this is an extra service that

is being provided for the customer like parking and other

services and it cannot be called as the "rate for admission" into

the cinema theatre. He also questions the manner in which

executive instructions were given to circumvent the provisions of

the Act. It is argued that there is no legal basis for the

restriction of the amount of service charges. The learned senior

counsel also relies upon a judgement of the Bombay High Court

in the case of Big Tree Entertainment Pvt., Limited v. State

of Maharashtra (W.P.No.1755 of 2013) also, wherein on the

basis of a resolution, service charges were levied on online

bookings. The Division Bench of the Bombay High Court passed

an interim order. Learned counsel submits that the same

applies to this case also. He also relies upon the documents

annexed to its writ petition which show that Air lines, cab

services, Hotels etc., are also charging a similar fee for online

services. Therefore, learned senior counsel prays for an interim

order pertaining to this aspect.

In reply, learned Advocate General argues the matter at

length. He relies upon a compendium of case laws in support of

his submissions. According to the learned Advocate General,

the regulation of admission fee is wholly within the State's

competence. He submits that the G.O.Ms.No.69 dated

06.07.2021 which amended Rule 11 (B)(3)(a) of the Andhra

Pradesh Cinema (Regulation) Rules, 1970, clearly authorizes the

State to regulate the rates of admission. It is submitted that a

reading of the existing Rule and the amended Rule makes this

very clear. According to the learned Advocate General, Rules

and Regulations are "law" within the meaning of Article 13 and

therefore, the learned Advocate General argues that the issue is

squarely within the State's competence. He points out that the

order of the Bombay High Court is passed in a case where

service charges were included based on a resolution unlike the

present case. Learned Advocate General submits that all the

charges which were being levied relate to admission only and

they are added to the price of the ticket. Therefore, he submits

that the impugned Government Order is correct. He also

questions the locus of the petitioner-Association and argues that

list of members are not filed. Coming to the decision proper,

learned Advocate General submits that after the orders were

passed in the writ Appeals, the Government dealt with

the exhibitors as a class and after looking at their inputs

suggestions the order was passed. He submits that the

Government did not separately deal with the Multiplex owners,

single screen owners etc., since all of them, who exhibit films are

-Exhibitors. Relying upon the case law submitted, learned

Advocate General argues that time and again the highest Courts

of the land including the A.P.High Court had clearly held that

the respondents have the authority to regulate the rate of

admission.

This Court is of the opinion that the Cinematograph Act,

1952 and the Rules framed thereunder make it clear that the

respondent-State has the Authority to fix the "rates of

admission". The question is about the exercise of this power;

the manner in which the power was actually exercised and if the

"service charge" for online booking is included in the "rate of

admission".

In G.O.Ms.No.35 dated 08.04.2021, Government directed

the Theatre Managements to make a provision for online

booking. Thereafter, the exhibitors filed a batch of writ petitions

in W.P.No.27268 of 2021. A Learned single Judge permitted the

theatre owners/petitioners to run their theatres as per the

prevalent rates prior to the passing of the impugned

G.O.Ms.No.35 of 2021 in consultation with the Joint Collector.

This was challenged in Writ Appeal Nos.831 and 832 of 2021.

The Division Bench also directed the theatres to comply with the

interim orders passed by the learned single Judge, by consulting

the concerned Joint Collector.

After this, a committee was supposedly constituted by

G.O.Ms.No.144 dated 27.12.2021. Both in the writ affidavit and

in the counter affidavit, the petitioners have argued that they

were not part and parcel of this consultation. They also urged

that the minutes of the meeting of this committee are not before

this Court. It is clearly stated that the petitioners were not

consulted before the new rates were fixed. Learned Advocate

General argued that the Government has dealt with the

exhibitors as a class and did not distinguish between the

Multiplex theatres and single screen owners. A perusal of the

G.O.M.s.No.144 by which the committee was constituted shows

that the membership of the committee is described in para 6.

Many of the members are from the Government and are key

Officers of the Government. Respondent No.8 is an exhibitor of

Sri Krishna theatre, Machilipatnam. Respondent No.9 is a

distributor. Respondent No.10 is Vice President of Telugu Film

Chamber of Commerce and cine goers are represented by 3

people. They were entrusted with the job of classification of

theatres for fixing of rates such as Multiplexes, A.C. Cinema

Halls, Non-A.C Cinema Halls with due regard to locations and

the amenities required to be provided. As rightly pointed out by

the learned senior counsel for the petitioner, Multiplex owners

are not part and parcel of this committee or its deliberations. No

document is filed to show that they were consulted or if any

objections were invited from them. Multiplex theaters are a

class by themselves. The theatres are bigger, the system;

facilities and amenities are larger when compared to a single

screen owner. Unless and until they are consulted, in the

opinion of the Court, the respondents cannot come to a

conclusion about the amenities and the facilities that are offered

or the service charge being levied. Online booking of tickets is

an amenity that is given by a theatre owner/exhibitor. A person

in Visakhapatnam can book a ticket for the next day's show in

Vijayawada and start his journey or make a booking for his

friends and family. A family can book all its tickets from their

home instead of standing in the line and buying the tickets.

Other online portals BookMyShow etc., are still in existence.

They are booking cinema tickets. They are also levying service

charges, Air tickets, train tickets can be booked from home.

Meals can be ordered from home. The provision of this facility

will necessarily need investment in the form of hardware,

software, staff to man the machines etc. Whether these factors

were taken into account or not is not clear. A reading of the

counter also does not disclose that the inclusion of this charge

is done due to any public outcry etc. These factors make a

difference. In the opinion of this Court, the petitioners'-

Association should have been consulted or at least

representatives of the petitioners should have been involved in

the deliberations and their inputs sought before a final decision

is taken. It is not clear from the documents filed as to what

were the factors that were considered by the said committee or

what were its recommendations on this issue. There is no

material available as on date to show why / how the

Government decided to includ "online service charges" in the

rate of admission. The rational or reasons are not clear or

discernable.

Apart from this, the issue raised is about the competence

and the matter of the power in the Government to pass the

impugned G.O. or to fix the impugned rates. Learned Advocate

General relied upon G.O.Ms.No.69 dated 06.07.2021 to argue

that the respondent-State has the authority and the power to

decide the rates of admission. Whether online service charges

being collected by the petitioners would form part and parcel of

the admission charges is an issue to be decided after further

hearing and considering the cost break ups etc. For the purpose

of the interim order, this Court is of the prima-facie opinion that

such service charges which are levied on a cinegoer for the

purpose of an amenity like online booking cannot be included in

the "rate of admission". The rate of admission would mean the

"actual ticket cost" payable or is actually necessary for the entry

into the auditorium. This is a prima facie opinion which is being

expressed. Rest of the charges for utilization of the online

booking facility from their home /office or elsewhere etc., cannot

be called the "rate of admission" in the strict sense of the term.

Even otherwise, this Court notices that the power under

G.O.Ms.No.69 is given to the "Licensing Authority" to fix the

rates of admission and not to the Government. A learned single

Judge of this Court in WP.No.4430 of 2011 and batch has taken

a view on this while dealing with section 52 of the A.P. Cinemas

(Regulation) Act, 1955 as it existed. In that case also, the

learned Judge held that the Licensing Authority was subject to

the "control" of the State Government. The words subject to

control were interpreted to mean control by the State

Government of/over the Licensing Authority and his activities

and not control of the licence holders. The learned Judge held

that the rule would not empower the State Government to

exercise original jurisdiction by itself. G.O.Ms.No.69 relied upon

by the learned Advocate General in this case directs the

licensing authority to fix the rates for admission "as per the

orders" issued by the Government from time to time.

In the opinion of this Court, the judgment of the learned

single Judge referred to above and its ratio would prima facie

apply to this - whether the Government can step into the shoes

of the licensing authority and decide the rates by itself and

direct him to follow the government order or is the discretion left

to the licensing authority is also an debatable issue. Prima

facie, this Court is of the opinion that the Government can at

best convey its opinion to the licensing authority and the

ultimate decision must be of the licensing authority only. This

decision can also be taken by the licensing authority while

granting a licence or renewing the licence. This issue is also to

be looked into in greater depth and decided. For the present the

prima facie opinion is that the Government cannot be the

authority by itself to fix the rates and the charges.

In addition, it is also submitted that the mere fact that the

respondents are charging online service charges will not lead to

any diversion of funds etc., as the whole process is online and is

recorded is also not really in doubt. The charges are fixed. The

data is available. Therefore, there is no apparent risk in

misappropriation or diversion.

This Court holds for all the above mentioned reasons that

the petitioners have made out a case for interference at this

stage. Since detailed submissions were made, this order had to

be pronounced.

The interim application is allowed and there shall be an

interim direction as prayed for.

It is made clear that from the date of this order, the

petitioners are at liberty to revert back to the existing system of

providing online booking and also to levy the existing service

charge for the provision of the facility to the cinegoer, who

wishes to book tickets online.

For counters, list on 15.06.2022.

________________________ D.V.S.S.SOMAYAJULU,J

Date : 20.04.2022 KLP