In a major judgment impacting online ticketing and entertainment regulation, the Bombay High Court struck down two government orders issued by the State of Maharashtra that had prohibited cinema operators and agents from charging convenience or service fees on online ticket bookings.
A Division Bench of Justice M.S. Sonak and Justice Jitendra Jain held that Clause 3(d) of the Government Order dated April 4, 2013 and Clause (a) of the Government Order dated March 18, 2014 were ultra vires the Maharashtra Entertainment Duty Act, 1923, and violated Article 19(1)(g) of the Constitution.
The petitions were filed by PVR Ltd, FICCI-Multiplex Association of India, and Big Tree Entertainment Pvt. Ltd (BookMyShow), among others. It was argued that the orders imposed unconstitutional restrictions on their right to carry on business, lacked statutory backing, and arbitrarily interfered with the pricing of services between private parties.
The Court agreed, holding that:
The impugned GOs lacked any statutory authority under the Entertainment Duty Act, and could not be justified under Article 162 of the Constitution;
The collection of convenience fees did not fall within the scope of entertainment duty and was not prohibited by Section 3(3)(e) or any other provision of the Act;
The orders amounted to an unreasonable restriction on the right to carry on trade under Article 19(1)(g), especially in the absence of any law empowering such regulation.
The Court also noted that the 2014 amendment to the Act, which treated such convenience fees as part of “payment for admission” for duty purposes (subject to limits), further demonstrated the legislative intent to permit such charges contrary to the blanket ban imposed by the executive orders.
Appearances in the case:
Petitioners: Mr. Naresh Thacker a/w Ms. Shweta Rajan i/b. Economic Law Practice for the Petitioner in WP/497/2014.
Mr. Naresh Thacker a/w Mr. Chakrapani Misra, Mr. Sameer Bindra & Ms. Ananya Misra i/b. Khaitan & Co. for the Petitioners in WP/2221/2014.
Mr. Rohan Rajadhyaksha a/w Mr. Dhirajkumar Totala & Mr. Tejas Raghav i/b. AZB & Partners for the Petitioners in WP/1755/2013.
Respondents :Mr. Milind More, Addl. G.P.
