Vande Mataram Cable TV Network Vs Union of India: CCI Dismisses Allegations

Vande Mataram Cable TV Network Vs Union of India (Competition Commission of India)

The Competition Commission of India (CCI) recently dismissed a case filed by M/s Vande Mataram Cable TV Network and Jaipal Singh Gulati under Sections 3 and 4 of the Competition Act, 2002. The case, filed against the Union of India and various other parties, alleged monopolistic practices, unlawful seizures, and the misuse of political influence to coerce and disrupt local cable TV network operators in Chhattisgarh. The CCI, after reviewing the facts and allegations, concluded that no violation of competition laws had occurred.

Background of the Case

The Informants, Vande Mataram Cable TV Network and Jaipal Singh Gulati, accused several entities, including the Union of India, the State of Chhattisgarh, and various individuals and companies, of violating Sections 3 and 4 of the Competition Act, 2002. The core of their complaint revolved around allegations of monopolistic practices, coercion, and wrongful seizure of cable TV networks in Chhattisgarh.

The Informants alleged that Taranjeet Singh Hora and Gurucharan Singh Hora, the owners of Grand Vision Television Network (a Multi-System Operator or MSO), used their political influence and connections to wrongfully seize control of local cable networks. This was purportedly done through fraudulent agreements and malicious criminal complaints, which forced smaller cable operators to cede their businesses.

Specific Allegations by the Informants

1. Misuse of Power and Political Influence: According to the Informants, Taranjeet Singh Hora and Gurucharan Singh Hora, with the help of their political connections, filed false criminal complaints against local cable operators in order to intimidate them. This resulted in the forced transfer of cable network rights and monopolization of the market.
2. Seizure of Financial Assets: The Informants also alleged that, in 2020, a fraudulent scheme was employed to seize approximately Rs. 2 crores from Vande Mataram Cable TV Network, using underhanded financial tactics. This included diverting revenue and evading tax obligations.
3. Influence Over Broadcasters: The Informants further alleged that the Horas had influenced major broadcasters like Star Television and Zee Television to disrupt the cable signals of smaller operators. This, they claimed, resulted in significant financial losses for their businesses.
4. Market Monopolization: The Informants argued that due to coercion by the Horas, the number of independent MSOs in Chhattisgarh had drastically reduced. They claimed that 30 of the 39 MSOs in the state were now operating under Grand Vision Television Network, effectively eliminating competition in the market.
5. Financial Misappropriation: The Informants accused the Horas of misappropriating more than Rs. 50 crores through tax evasion and money laundering schemes related to the cable network business.

The Commission’s Observations

After considering the evidence and the arguments presented by both parties, the CCI came to several key conclusions:

1. No Contravention of Section 3: Section 3 of the Competition Act prohibits anti-competitive agreements. The Commission noted that this provision applies when two or more enterprises engaged in identical or similar trades form an agreement that negatively affects competition. The CCI determined that no such agreement existed among the Opposite Parties in this case. Thus, no violation of Section 3 was found.
2. No Contravention of Section 4: Section 4 of the Competition Act deals with the abuse of a dominant position in the market. While the Informants alleged dominance by Grand Vision Television Network, the Commission found that there was no clear evidence of abuse of a dominant position. Additionally, the Commission observed that the Act does not provide for inquiry into cases of joint or collective dominance. Therefore, the allegations under Section 4 were also dismissed.
3. Irrelevance of Market Definition: The Commission considered whether it was necessary to define the relevant market in this case to assess dominance. However, based on the allegations, it decided that defining a precise market was not essential to the outcome.
4. Not the Appropriate Forum for Dispute Resolution: The Commission also emphasized that while the Informants’ grievances might raise valid concerns, these issues were not related to competition law. As a result, the CCI was not the appropriate forum for resolving the dispute.

Conclusion and Final Order

The Competition Commission of India, after thoroughly reviewing the case, concluded that no contravention of the Competition Act had occurred. The CCI noted that the allegations raised by the Informants did not meet the necessary criteria for violations under Sections 3 and 4.

Consequently, the CCI directed the immediate closure of the case in accordance with Section 26(2) of the Competition Act. Additionally, the Commission rejected the Informants’ request for interim relief under Section 33, which sought to prevent the Opposite Parties from interfering with their business operations.

The CCI’s decision highlights the importance of distinguishing between business disputes and genuine violations of competition law. While the grievances presented in this case may warrant attention, the appropriate legal channels must be pursued to address them.

The case serves as a reminder that not all disputes involving business competition fall within the purview of the Competition Act. For claims related to political influence, criminal complaints, and financial misappropriation, affected parties may need to seek recourse through other legal frameworks.

Communication of the Decision

The Secretary of the CCI was directed to inform the Informants about the decision. As per the order, the information filed against the Opposite Parties has been closed, and no further actions or reliefs will be granted by the Commission.

FULL TEXT OF THE ORDER OF COMPETITION COMMISSION OF INDIA

1. The Information in this matter has been filed by M/s Vande Mataram Cable TV Network (“Informant No. 1”) and Jaipal Singh Gulati (“Informant No. 2”) under Section 19(1)(a) of the Competition Act, 2002 (“Act”) against the Union of India through the Secretary, Information & Broadcasting (“OP-1”); the State of Chhattisgarh through its Principal Secretary, Home Department (“OP-2”); the Principal Commissioner, Central GST and Central Excise Commissionerate (“OP-3”); the Commissioner, Commercial Tax GST, Government of Chhattisgarh (“OP-4”); Taranjeet Singh Hora (“OP-5”); Gurucharan Singh Hora (“OP-6”); M/s Grand Vision Television Network (“OP-7”); M/s Star Television (“OP-8”); and M/s Zee Television (“OP-9”) (hereinafter OP-1 to OP-9 are collectively referred to as the “Opposite Parties/OPs”), alleging, inter alia, contravention of the provisions of Sections 3 and 4 of the Act.

2. Informant No. 1 is stated to be a close partnership firm and a registered Multi System Operator (MSO) by the Ministry of Information & Broadcasting and Informant No. 2 is the owner of M/s Korba Cable TV Network which is a registered Local Cable Operator (LCO).

3. It has been stated in the Information that M/s Grand Vision Cable TV Network (OP-7) of Raipur is under the sole proprietorship of Taranjeet Singh Hora (OP-5) who is the son of Gurucharan Singh Hora (OP-6), the actual promoter of the Grand Vision Cable TV Net­work (OP-7).

4. It has been submitted by the Informants that OP-5 and OP-6 along with their associates and friends who are influential politicians and officers in Chhattisgarh have frequently misused the police to intimidate the Cable TV network operators/ inputters in the state by filing malicious and false Criminal Complaints (FIRs) at various police stations to force­fully grab their cable TV networks and monopolize the business.

5. Further, it has been averred that OP-5 and OP-6 got many Cable TV inputters arrested and forced them and their other associates/ employees to transfer their rights to OP-5, OP-6, and OP-7 through void agreements contrary to the provisions of the Competition Act, 2002. It is also submitted that in the year 2018, OP-5 and OP-6 got Informant-2 (Jaipal Singh Gulati) and other network operators/ inputters arrested based on a false police com­plaint.

6. Additionally, it has been stated in the Information that in the year 2020, a similar method was used to unlawfully and coercively seize the shares of Informant-1’s partners, resulting in the expropriation of nearly Rs. Two crore from M/s Vande Mataram Cable TV Network through fraudulent financial practices. This was achieved by diverting all revenue to per­sonal business accounts while deliberately evading GST and other tax obligations.

7. The Informants have further alleged that OP-5 and OP-6 have also influenced OP-8 and OP-9 to disrupt the signal supply and withhold the pending carriage charges to the Cable TV MSO like Vande Mataram Cable TV Network (Informant-1) & Paynet Broad Band Services. As a result, these operators are suffering a severe financial crisis and may soon face bankruptcy due to a lack of funds.

8. The Informants have also averred that as of September 2021, Chhattisgarh had approxi­mately 39 MSOs, but due to coercion from the police and OP-5 and OP-6, 30 MSOs are now operating under OP-7. Moreover, OP-8 and OP-9, influenced by OP-5 and OP-6, are pressuring the financially vulnerable MSOs to eliminate competition and gain control over the Cable TV Network market in Chhattisgarh.

9. The Informants have also alleged that the OP-5 and OP-6 have misappropriated and seized over Rs. 50 crores from the cable network business in Chhattisgarh through Goods and Sales Tax & Income Tax evasion, as well as money laundering.

10. Based on the above, the Informants have alleged contravention of Sections 3 and 4 of the Act by the OPs and have prayed to the Commission to prevent OP-5 & OP-7 from acquir­ing other Cable TV Networks in the State of Chhattisgarh and from operating as LCO or MSO in any districts other than Raipur in the state of Chhattisgarh.

11. The Informants have also sought interim relief under Section 33 of the Act, including a direction to restrain Opposite Parties (OP-5, OP-6, and OP-7) from interfering with the business operations of Informant No. 1. Additionally, they requested the Commission to direct OP-8 and OP-9 to refrain from disrupting TV signal inputs and to settle the outstanding carriage charges owed to Informant No. 1. Furthermore, they sought to restrain the remaining Opposite Parties from disrupting the informant’s cable TV Multi-System Operations business in the Korba District, State of Chhattisgarh, in any manner.

12. The Commission considered the material available on record in its ordinary meeting held on 04.09.2024 and decided to pass an appropriate order in due course.

13. Having considered the averments and allegations made in the Information, the Commission observes that the core issue raised by the Informants arises from the purported unlawful seizure of shares and the monopolization of the cable TV network business in Chhattisgarh by the Opposite Parties (OP-5, OP-6, and OP-7), as detailed hereinabove.

14. As stated in the information, the Commission notes that Informant-1 is registered as a Multi System Operator by the Ministry of Information & Broadcasting, Government of India having its Cable TV Network in Korba, Chhattisgarh, and Informant-2 is the owner of the Korba Cable TV Network, Chhattisgarh which is a registered Local Cable Operator. Further, OP-5 (Taranjeet Singh Hora) and OP-6 (Gurucharan Singh Hora) are owners of OP-7 (Grand Vision Television Network, MSO) and OP-8 and OP-9 are broadcasters. The Commission observes that there is a distinction in the roles, as OP-8 and OP-9 serve as content creators and broadcasters, producing original programming and distributing it via their network of channels, while the MSOs and LCOs function as part of the distribution chain, responsible for delivering this content to viewers. As regards contravention of Section 3 of the Act, the Commission notes that the provisions of Section 3(1) of the Act read with Section 3(3) thereof have no manner of application in the factual matrix of the present case as Section 3(3) of the Act requires two or more enterprises engaged in identical or similar trade of goods or provision of services and even if they are not engaged in identical trade, they must be presumed to be part of an agreement if they participate or intend to participate in furthering such an agreement. Looking at the relationship among OPs and the facts and circumstances of the case, as detailed above, it is evident that provisions of Section 3(3) of the Act are not applicable.

15. Further, the Commission is of the view that, for the applicability of Section 4 of the Act and the examination of contravention thereof, it may be axiomatic to define a relevant market and assess the dominance of the entity alleged to be abusing its dominant position in such market. However, considering the facts and circumstances of the case and having regard to the abuses as alleged, the Commission does not find it imperative to define a precise relevant market in the instant matter. Furthermore, the Commission notes that the Informants have alleged violation of Section 4 of the Act against all the OPs. The Commission observes that it is a settled position that the provisions of the Act do not provide for inquiry into the cases of joint/collective dominance. Accordingly, no case of contravention under Section 4 of the Act has been established.

16. The Commission notes that for the aforesaid reasons, it is unnecessary to delve deeper into the allegations. While the grievances raised by the Informant may give rise to a dispute, however, the Commission is not the right forum for adjudication of the same.

17. Resultantly, the Commission is of the opinion, prima facie, no case of contravention of provisions of Section 3 and Section 4 of the Act is made out and accordingly, the Information filed against OPs is directed to be closed forthwith in terms of the provisions of Section 26(2) of the Act. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises and the prayer for the same is also rejected.

18.  The Secretary is directed to communicate to the Informants, accordingly.