New Delhi, September 27, 2025 - In a ruling that could echo through India’s entertainment sector, the Supreme Court has reinstated penalties on the Kerala Film Exhibitors Federation (KFEF) for blocking film releases at a rival theatre. The bench led by Justice K.V. Viswanathan held that the Competition Commission of India (CCI) followed proper procedure when it fined the trade body and two of its key office bearers.
Background
The dispute began when Crown Theatre in Kozhikode accused KFEF of threatening distributors who supplied films to the theatre. According to the complaint, the federation’s president P.V. Basheer Ahamed and general secretary M.C. Bobby allegedly told distributors that any film shown at Crown would be boycotted across member cinemas.
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An investigation by the CCI’s Director General unearthed statements and phone records pointing to a coordinated boycott. The CCI concluded that this collective action violated Section 3 of the Competition Act, which bars agreements that restrict fair trade.
Court’s Observations
The justices focused on whether KFEF’s leaders were given adequate notice before being penalised. Their counsel argued that a separate “show cause” notice about the penalty was required.
Rejecting this plea, the Court noted that the 2015 notice from the CCI clearly named both individuals, attached the investigation report, and asked for income details and an oral hearing date. “The notice dated 10 June 2015 fulfilled the legal requirement and gave a clear chance to respond,” the bench observed.
The judgment stressed that the Competition Act aims to deter anti-competitive behaviour at its root, unlike the older MRTP law that offered only cease-and-desist orders. “A single hearing covering both liability and penalty is enough under the unamended Act,” the Court clarified.
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Decision
Allowing the CCI’s appeal, the Supreme Court restored monetary fines of 10% of average income on the federation and its two leaders, along with a two-year bar preventing them from managing the body’s affairs. The order requires payment within 60 days of receipt.
With this, the earlier decision of the Competition Appellate Tribunal-which had waived penalties on the individuals-stands set aside. The ruling sends a sharp signal to trade associations across India: collective boycotts that choke competition will invite swift and personal consequences.
Case: Competition Commission of India vs. Kerala Film Exhibitors Federation & Others
Citation: 2025 INSC 1167
Judgment Date: 27 September 2025