On Friday, the Andhra Pradesh High Court stayed the online sale of cinema tickets on government platforms and restrained the State government from going ahead with the sale of cinema tickets through an exclusive portal which it planned to launch, till July 27.
A Division Bench of Chief Justice Prashant Kumar Mishra and Justice D.V.S.S. Somayajulu issued an interim order in favour of the petitioners-ticket aggregators including BookMyShow.
"This Court is of the opinion that the existing state of things must be preserved as it is. Hence, there shall be an interim order as prayed for and the respondents are restrained from giving effect to and operating the online ticketing solution for ticketing for the cinema theatres and cine-goers in Andhra Pradesh under online system as enacted under the impugned Act, Rules or under the impugned provisions."
While staying the sale of online tickets, the court further said that comparatively the mischief is higher for the petitioners.
"After weighing the competing submissions, this Court opines for now that the comparative mischief is higher for the petitioners. The loss in this case is also irreparable and as mentioned in the previous paragraphs, ongoing contracts will be disturbed, licences are likely to be cancelled etc." the court said
The court was hearing two plea(s) moved by Bigtree Entertainment Private Limited (the petitioners) seeking a declaration that Section 5A of the Andhra Pradesh Cinemas (Regulation) Act, 1955 as arbitrary, unconstitutional, to declare all further actions taken pursuant thereto against private online ticket booking platforms as arbitrary, unconstitutional etc.. Secondly, the petitioners also sought to declare Rule 17A and 17B of the Andhra Pradesh Cinemas (Regulation) Rules as arbitrary, illegal.
The counsel for petitioner, Senior Advocate Abhishek Manu Singhvi, submitted that the Government of Andhra Pradesh had introduced Section 5A in the Act by which every licensee is obligated to sell the cinema tickets through an online ticket platform of the Government Company only on such terms and conditions as may be prescribed.
He submitted that the petitioners are charging their own service charges for providing services to the consumer / cine-goer. An additional service charge upto 2% has to be paid on the ticket/ rate of admission to the 3rd and 5th respondents. On the other hand, the 5th respondent, who is also permitted to sell tickets online, will only be selling tickets at the fixed price and a service charge upto 2%.
Thus it was his contention that while the State can enter into this business, it cannot be both the facilitator and competitor. Further, he argued that that the existing ticket aggregators can only continue their business through the Nodal Agency and the gateway provided by the Nodal Agency (3rd respondent).
"They also have to pay the service charge of 2% on the 5 rate of admission. On the other hand, the Nodal Agency, and its service provider i.e., the 3rd and 5th respondents, can also directly sell the tickets to the cinema going public," he added.
He also submitted that there is no rational basis for the enactment of the law and it amounts to direct curtailment of the petitioners' right to carry 2 AIR 1952 SC 115 8 on their business and trade.
On behalf of the government, the Advocate General submitted that Rule 17A of the Rules is not a single integrated whole, but it should be understood as providing sub rules for controlling the black marketing, evasion of taxes and other issues.
He further submitted that if the State completely prohibits the petitioners from carrying on their business, they may have grievance, but in the case on hand, he submits that the petitioners are permitted to continue their line of business and the State is only providing integration so that the ultimate consumer i.e., the cine-goer is not subjected to arbitrary/high ticket rates etc.
After hearing the submissions of the parties, the court noted that the issues like whether the State under the AP Cinema Regulation Act, 1955 has the power to regulate the incidental services being rendered to the cine-goers by third party aggregators, and whether petitioners can be asked to sell tickets only through the gateway provided by the AP State Film, Television and Theatre Development Corporation, needs to be discussed in length on the next hearing.
Accordingly, the court was of the view that prima facie a case was made out for interim relief and stayed the sale of tickets.
"Therefore, this Court is of the opinion that the petitioners have made out more than a prima facie case. Coming to the issue of balance of convenience, this Court is of the opinion as of now that greater harm will be caused to the petitioners if the interim order is not granted at this stage. The petitioners will have the risk of their agreements with third parties running into deeper difficulties," the court held
Now the matter will be heard on July 27.
Case Title : Bigtree Entertainment Private Limited v. State of Andhra Pradesh