Justice M.S. Sonak, Justice Jitendra Jain, Bombay High Court
Infringes Legitimate Rights Of Theatre Owners: Bombay High Court Quashes Govt. Orders Prohibiting Collection Of Convenience Fee On Online Booking Of Cinema Tickets
|The Bombay High Court observed that the GO issued without fulfilling the mandatory provisions of Article 162 of the Constitution cannot be categorised as a decision by a State.
The Bombay High Court has quashed the Government Orders prohibiting the collection of service charges or convenience fees on booking of the computerized cinema tickets online.
The Court was deciding a batch of Writ Petitions preferred by PVR Limited and others, challenging the said Government Orders (GOs).
A Division Bench comprising Justice M.S. Sonak and Justice Jitendra Jain held, “We are, therefore, of the view that the impugned G.O. transgressed the fundamental rights under Article (19)(1)(g) granted to the Petitioners by prohibiting theatre owners and others from collecting the convenience fees from their customers. Absent a Statutory regulation which regulates the right to conduct the business of the Petitioner, the imposition of such a restraint would infringe the legitimate rights of theatre owners. The impugned prohibition is directly contrary to Article 19(1)(g) of the Constitution of India. If business owners are not permitted to determine the various facets of their business (in accordance with law), economic activity would come to a grinding halt. The choice of whether to book the ticket online or purchase it at the theatre is left to the customers.”
The Bench observed that the GO issued without fulfilling the mandatory provisions of Article 162 of the Constitution cannot be categorised as a decision by a State and, therefore, it cannot be said that the State is empowered to issue the GOs prohibiting collection of convenience fee.
Advocates Naresh Thacker and Rohan Rajadhyaksha appeared for the Petitioners while Additional Government Pleader (AGP) Milind More appeared for the Respondents.
Factual Background
In the lead Petition, the Petitioner (PVR Limited) was engaged in the business of operating and managing multiplex cinemas in India, including in the Maharashtra State. In April 2013, a Government Order was issued, ordering that no exhibitor, owner, or agent should charge or recover any additional amount from viewers for online computerised ticket sales. In March 2014, another GO was issued which was also impugned in this case.
Clause 3(d) of the G.O. and clause (a) of G.O., were challenged in this case. In December 2014, Section 2(b) of the Maharashtra Entertainment Duty Act, 1923 (earlier known as Bombay Entertainment Duty Act) which defines “payment for admission” was amended and a proviso was inserted which provided that service charges for providing facility of online ticket booking shall be included in the “payment for admission”. In the Petition before the High Court, the validity of the said two clauses of the GOs were to be decided.
Court’s Observations
The High Court after hearing the contentions of the counsel, noted, “The law is now well settled that any law which is made under clauses (2) to (6) of Article 19, to regulate the exercise of the right to the freedom guaranteed by Article 19(1) must be ‘a law’ having statutory force and not a mere executive or departmental instruction. Applying the said well settled principle to the facts of the present case, we have no doubt that the impugned G.O.s inasmuch as they prohibit the Petitioner from collecting the convenience fees does not have any statutory basis and, therefore, cannot form the foundation of any action aimed at denying fundamental right under Article 19(1)(g).”
The Court was of the view that the impugned GOs, to the extent that they prohibit collection of convenience fees on the tickets booked online, violates Article 19(1)(g) of the Constitution of India, and therefore, the impugned GOs to the extent challenged herein is required to be quashed and set aside.
“… in the absence of any Act regulating the private contract between the two parties, the Respondents would not be justified in taking the shelter of Article 162 of the Constitution of India to save the impugned G.O.s from being quashed and set aside”, it added.
The Court further remarked that the issue is not whether entertainment duty on convenience fees should be levied or not, but the issue is whether the Respondents, by issuing impugned GOs can prohibit the Petitioners from collecting the convenience fees.
“Suppose the customer feels it convenient to book the tickets online by not going to the theatre and paying the convenience fees. In that case, the Respondents cannot restrain the Petitioners from collecting the convenience fees since for providing this facility of online booking, the theatre Owners/Petitioners have to invest in the technology”, it said.
The Court also clarified that it is not deciding whether an entertainment duty is liable to be paid on such convenience fees.
“We make it clear that in the present petition, we have not examined the validity of the amendment made on 29 December 2014 to Section 2(b) of the ED Act but the present petition only concerns the period prior to 29 December 2014 and the empowerment of the Respondents for issuing G.O.’s to the extent of prohibition to collect convenience fees”, it added.
Accordingly, the High Court allowed the Petitions, declared the impugned clauses of GOs as unconstitutional to the extent it prohibits collection of convenience fees/service charges on online ticket booking, and quashed the GOs.
Cause Title- PVR Limited v. The State of Maharashtra & Ors. (Neutral Citation: 2025:BHC-OS:10482-DB)
Appearance:
Petitioners: Advocates Naresh Thacker, Rohan Rajadhyaksha, Shweta Rajan, Chakrapani Misra, Sameer Bindra, Ananya Misra, Dhirajkumar Totala, and Tejas Raghav.
Respondents: AGP Milind More