NCLAT dismisses appeal to investigate PVR-INOX merger

Industry:    2023-08-11

The National Company Law Appellate Tribunal on Thursday dismissed the appeal filed by Consumer Unity and Trust Society, a think tank, asking the Competition Commission of India to investigate the PVR-INOX merger.

The senior counsel for CUTS had argued that given the merged entity controls over half of the screens in the country, the merger could have an appreciable adverse effect on competition (AAEC), which could be detrimental to consumers.

On the other hand, the senior counsel representing the merged entity, also made a party to the case, had contended that the mere existence of a dominant position could not be the basis of alleging abuse of the dominant position.

CUTS had pointed out that the Competition Commission, in an earlier case, had not allowed PVR to acquire DT Cinemas in specific locations earlier, as it would have led to a monopoly in those regions. It had demanded a similar relief, contending that the PVR-INOX merger hampers competition in 46 markets nationwide.

The counsel for CUTS relied on European jurisprudence to argue that investigation could take place in matters of dominant positions regardless of threshold. The counsel cited examples from France and Belgium.

The PVR-INOX merger was under the threshold limit of CCI to probe such transactions owing to depressed revenue from Covid.

In September 2022, CCI passed orders rejecting the CUTS application, stating that apprehension of the likelihood of anti-competitive practices by an entity cannot be the subject of a probe.

PVR and INOX Leisure announced their merger on March 27, 2022. The combined entity controls over 1,600 of the 3,200 screens across the country.

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