Delhi High Court Asks CCI To Expeditiously Hear Cinema Equipment Makers' Plea In Virtual Print Fee Probe Against PVR

The Delhi High Court on Thursday requested the Competition Commission of India (CCI) to expeditiously consider an application filed by the Association of Digital Cinema Technology seeking to be heard in the ongoing investigation against PVR Inox over the alleged abusive levy of the Virtual Print Fee (VPF).

The order was passed by a single bench of Justice Sachin Datta.

The association, which represents digital cinema equipment manufacturers, approached the court after the CCI on September 30 ordered a probe only against PVR Inox, even though the original information filed by the Film and Television Producers' Guild of India had also named two digital cinema service providers.

The Guild had complained that PVR Inox continued to charge VPF up to Rs 27,500 per film per screen even after the industry had fully shifted to digital projection by 2014. The Guild also alleged that the fee was being applied selectively, with large studios receiving favourable treatment while smaller producers continued to pay the full charge.

UFO Moviez and Qube Cinema, who were also named, were not investigated as the regulator noted that similar concerns against them were already being examined in another pending matter.

The association argued that it must be heard before the CCI because PVR Inox can now use Section 48B of the Competition Act to offer a commitment during the investigation but before the DG's report. Counsel said the multiplex chain could simply tell the CCI that it would stop levying any VPF, which would immediately dispose of the investigation.

“PVR can simply say, 'I will not insist on virtual print fee.' That may work for them because they have 1,500 screens and have already paid for their equipment. But that does not work for others, because independent exhibitors lease equipment from us and we recover costs through the print fee.”, the counsel submitted.

The petitioner said digital equipment manufacturers depend on VPF paid by producers in the single screen segment because those exhibitors cannot afford to buy equipment outright. Counsel said that if PVR Inox closes the case through a commitment, “people like us who are actually the digital cinema equipment manufacturers lose out.”

Appearing for the CCI, counsel told the court that the investigation today is only against PVR Inox and any commitment offered by PVR Inox will bind only that company. Counsel added that several such impleadment applications had recently been filed and termed this plea as an attempt to hinder the investgation. 

He said, “There are already nine such applications filed in the last ten days and four writ petitions, including this one.” He submitted that while the CCI did not oppose the application being considered, the request for immediate listing was not appropriate because “the CCI doesn't sit every day.”

Justice Datta, noting that the relief sought was limited and that the regulator did not oppose the request, directed that “the CCI is requested to expeditiously consider the aforesaid application under Regulation 26, preferably within a period of two weeks.”