The Supreme Court’s 2025 judgment in Competition Commission of India v. Kerala Film Exhibitors Federation (“KFEF”) is a landmark ruling that reaffirmed the scope of personal liability under the Competition Act, 2002 (“the Act”). The decision clarified the accountability of office bearers of trade associations for anti-competitive conduct and strengthened the Competition Commission of India’s (“CCI”) authority to impose both monetary and behavioural remedies. It also resolved an important procedural issue concerning the necessity of issuing separate show-cause notices to individuals implicated through their roles in associations.
Brief Facts
The brief facts of the case are that M/s Crown Theatre filed an information before the CCI alleging anti-competitive activities by Kerala Film Exhibitors Federation, and its office-bearers, Mr. P.V. Basheer Ahamed and Mr. M.C. Bobby. It was alleged that film distributors were threatened that their films would not be screened in cinema halls owned by KFEF members if they allowed exhibition at Crown Theatre. Further, KFEF and its President allegedly ensured that new Tamil and Malayalam films were not screened at Crown Theatre and even called for a strike/ban on film exhibitions by its members. Consequently, Crown Theatre resigned from KFEF’s membership. By order dated 08.05.2014, the CCI directed the Director General to investigate the matter, including the role of persons managing KFEF in relation to these activities.
In its report, the Director General found KFEF and its office-bearers to be in contravention of Section 3(3) of the Act and found them to be involved in anti-competitive practices causing appreciable adverse effect on competition. In its final order dated 08.09.2015, the CCI held that KFEF had contravened Section 3(3)(b) of the Act, and Mr. P.V. Basheer Ahamed and Mr. M.C. Bobby were responsible for its affairs and accordingly liable under Section 48.
Thereafter, an appeal was filed before the erstwhile Competition Appellate Tribunal (“COMPAT”). In this appeal, the CCI’s findings were upheld on merits but the penalty was set aside. Thus, under Section 53T of the Act, a statutory appeal was filed before the Supreme Court against the order of the COMPAT wherein it was found that KFEF had violated Section 3(1) read with Section 3(3)(b) of the Act and the penalty imposed on KFEF was affirmed. However, the penalties imposed on the office-bearers of KFEF as well as the CCI’s directions that were in the nature of behavioural remedies was set aside.
Analysis
The Supreme Court allowed CCI’s appeal and restored the CCI order holding that KFEF violated Section 3(1) read with Section 3(3)(b) and that penalties and behavioural remedies imposed by CCI were lawful. It was also clarified that CCI is empowered to impose monetary penalties as well as behavioural remedies under Section 27 where they are proportionate and justified by the infringement.
The judgment reinforces the ability of the CCI to impose not only fines but also behavioural and structural remedies, expanding its remedial toolbox. It was also held that the COMPAT erred in demanding a separate notice when the individuals had already been informed of the allegations and allowed to respond. It emphasized that procedural technicalities cannot override substantive justice in regulatory proceedings.
The Court relied on Section 48 of the Act, which establishes the personal liability of officers in charge of a company or association engaged in anti-competitive conduct. It observed that statutory liability attaches automatically to those responsible for decision-making within such organizations. The Court further noted that the continuation of similar conduct by KFEF’s leaders even after the initial findings justified behavioural remedies such as temporary disassociation to prevent recurrence.
This ruling is significant on several fronts. First, it clarifies the procedural standard in competition proceedings: a single composite notice that identifies responsible individuals satisfies natural justice; multiple notices are not mandatory. Second, it strengthens the enforcement powers of the CCI by affirming its authority to impose both monetary and behavioural penalties on individuals as well as associations. Third, it highlights the importance of Section 48 liability, which ensures that corporate or association leaders cannot escape responsibility by hiding behind institutional structures.
The decision also carries a strong deterrent message for trade associations that use collective dominance to restrict market access. By upholding CCI’s remedial directions, the Supreme Court has underscored that competition law in India aims not only to punish violations but also to reform market behaviour and ensure consumer welfare.
This judgment marks an important development in Indian competition jurisprudence. The Supreme Court’s approach, balancing natural justice with regulatory efficiency, sets a precedent for future cases involving the personal liability of company or association officers. The decision also strengthens the institutional framework of competition law enforcement in India and promotes fair market practices in the entertainment sector and beyond.
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