INSIDE THIS ISSUE

MDP HIGHLIGHTS 1

EXCHANGE CONTROL LAWS

3

SECURITIES LAWS 5

PHARMA 11

COMPETITION LAWS

12

LANDMARK JUDGEMENTS

12

January, 2013

LEGAL UPDATES

MDP & Partners advised Mswipe in raising Series A funding from Matrix and Axis Bank

Mswipe Technologies engaged in the business of mobile

enabled POS service, raised Series A funding with investments

from Matrix Capital Partners. MDP & Partners’ team led by Mr.

Amit Sirsikar, Partner and assisted by Mr. Devang Kanakia,

Associate, advised Mswipe Technologies in respect of the

private equity transaction and facilitated completion of the

funding round.

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MDP HIGHLIGHTS

*Private Circulation Only

MDP represented Tata Motors Limited, Indian Wind Power Association Maharashtra State Council and Serum Institute of India Limited before the Maharashtra Electricity Regulatory Commission to challenge Commercial Circulars issued by Maharashtra State Electricity Distribution Co. Ltd. The State Distribution Company viz; Maharashtra State Electricity

Distribution Co. Ltd. (“MSEDCL”) issued two Commercial Circulars

Nos. 147 and 155 dated September 30, 2011 and January 23,

2012, respectively. The Commercial Circulars contained certain

provisions pertaining to the tariff terms and conditions including

billing, levy of charges, providing generation credit to

nonconventional energy sources etc., contrary to the Electricity

Act, 2003, Regulations which had far-reaching consequences not

in line with the present regulatory regime.

Some of the Wind Turbine Generators (“WTGs”) including Tata Motors Limited (“TML”), Indian Wind Power Association Maharashtra State Council (“IWPA MSC”), and Serum Institute of India Limited (“Serum”), Enercon India Limited and Ushdev International Limited aggrieved by such Commercial Circulars filed a petition before the State Regulatory Body viz; Maharashtra Electricity Regulatory Commission (“MERC”) to set aside the Commercial

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Legal Updates

Circulars. At direction of MERC, Maharashtra Electricity Development Agency was also

impleaded as party being the apex body in the State for harnessing clean and renewable

energy.

WTGs incurred huge losses due to delay in issuance of credit reports and open access

permissions by the State Discom. Pursuant to issuance of Commercial Circulars, State Discom

also issued bills withdrawing incentives granted to WTGs. Reduction in contract demand in

respect of some of the open access consumers also led to termination of power procurement

contracts between open access consumers and WTGs. MERC had granted interim orders in

the petitions directing status quo ante prior to issuance of Commercial Circulars to avoid the

chaos created by Commercial Circulars.

MERC pronounced Final Order on January 3, 2013 granting reliefs to the petitioners. The

State Discom has been directed to modify various clauses of the Commercial Circulars which

were not in consonance with the existing provisions of the Electricity Act, 2003 and Open

Access Regulations framed by MERC. MERC confirms that State Discom is not relieved from

its Universal Service Obligation to supply electricity in respect of open access consumers.

This order has given the necessary reliefs to WTGs to encourage harnessing green energy

and may help in regaining Maharashtra’s position in development of clean energy which has

slipped in recent past. Dipali Sheth, Partner of MDP & Partners along with Dhwani Mehta,

Senior Associate appeared on behalf of Serum. MDP & Partners also represented TML with

Counsel Mr. M.G. Ramachandran and Ms. Swapna Seshadri and IWPA MSC with Counsel Mr.

Harinder Toor.

MDP represented Konkola Copper Mines PLC (Zambia) in arbitration proceedings before International Chamber of Commerce

Konkola Copper Mines PLC (Zambia) filed arbitration

proceedings before International Chamber of Commerce

(ICC) relating to the disputes with M/s Stewarts and Lloyds

of India Limited, a Company based in Kolkata. The dispute

relates to the supply of defective Pipes by Stewarts and

Lloyds to Konkola Copper Mines. The Sole Arbitrator

appointed under the ICC Rules Mr. Alan J. Thambiayah

passed an award on 9th January, 2013 awarding an amount

of USD 3.4 Million in favour of the Konkola Copper Mines

PLC (Zambia). Mr. Nishit Dhruva, Managing Partner and Ms.

Jaisry Mani, Associate of MDP & Partners, represented

Konkola Copper Mines PLC (Zambia).

MDP & Partners

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Legal Updates

Sterlite Industries (India) Ltd filed a suit against its employee Mr. Joy

Cherookaren for embezzlement and siphoning off funds for

injunction to restrain the employee from transferring or creating any

third party rights in respect of the shares and other assets of the

company. The City Civil Court Dindoshi passed an order on 27th

December, 2012 to restrain the said Mr. Joy Cherookaren from

transferring the said assets.

MDP represented Sterlite Industries (India) Ltd. Ltd in a suit filed against their employee

EXCHANGE CONTROL LAWS

External Commercial Borrowings (ECB) Policy – Non-Banking Financial Company – Infrastructure Finance Companies (NBFC-IFCs)

Foreign Direct Investment (FDI) in India - No issue of equity shares against import of second hand machines

As per circular number RBI/2010-11/586 A. P. (DIR Series) Circular

No.74 dated June 30, 2011, it had been decided to permit issue of

equity shares / preference shares under the Government route of

the FDI scheme for certain categories of transactions one of

which is import of capital goods/ machineries / equipments

(including second-hand machineries). This category has been

amended to exclude second-hand machineries.

Circular No. RBI/ 2012-13 /367 A.P.

(DIR Series) Circular No. 69

January 7, 2013

The ECB limit for NBFC-IFCs under the automatic route has been

enhanced from 50 % of their owned funds to 75 % of their owned

funds, including the outstanding ECBs. NBFC-IFCs desirous of

availing ECBs beyond 75 % of their owned funds would require the

prior approval of the Reserve Bank and will be considered under

the approval route. The hedging requirement for currency risk has

been reduced from 100 per cent of their exposure to 75 per cent

of their exposure.

RBI/2012-13/375 A. P. (DIR Series) Circular No.74 January 10, 2013

MDP & Partners

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Guidelines for Issue of Commercial Paper (CP)

RBI 2012-13/358 IDMD.PCD.

07 /14.01.02/2012-13

January 01, 2013

The Reserve Bank of India has set out guidelines for the issue of

Commercial Paper (“CP”). The salient features of the guidelines

are:

Companies, primary dealers and financial institutions are

permitted to raise short term resources through CP within the

umbrella limits specified in this circular.

CP shall be issued as a ‘stand alone’ product.

Banks and financial institutions may choose to provide stand-

by assistance/credit, back-stop facility etc. by way of credit

enhancement for a CP issue.

Non-bank entities (including corporates) may provide

unconditional and irrevocable guarantee for credit

enhancement for CP issue.

The aggregate amount of CP that can be issued by an issuer shall at all times be within the

limit as approved by its Board of Directors or the quantum indicated by a Credit Rating

Agency (“CRA”) for the specified rating, whichever is lower.

Individuals, banks, other corporate bodies (registered or incorporated in India) and

unincorporated bodies, Non-Resident Indians and Foreign Institutional Investors (FIIs) shall

be eligible to invest in CP.

CP shall be issued in the form of a promissory note and held in physical form or in a

dematerialized form through any of the depositories approved by and registered with SEBI.

All RBI regulated entities can deal in and hold CP only in dematerialised form through such

depositories.

CP shall be issued in denominations of Rs. 5 lakh and multiples thereof. The amount

invested by a single investor should not be less than Rs. 5 lakh (face value).

CP shall be issued for maturities between a minimum of 7 days and a maximum of up to one

year from the date of issue.

Every issuer must appoint an Issuing and Paying Agent (“IPA”) for issuance of CP.

Issuers may buyback the CP issued by them to the investors before maturity.

MDP & Partners

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External Commercial Borrowings (ECB) Policy – Repayment of Rupee loans and/or fresh Rupee capital expenditure – USD 10 billion scheme - Indian companies in the hotel sector included

SECURITIES LAWS

RBI/2012-13/387 A.P. (DIR Series) Circular No.78 January 21, 2013

Regulation 10(1)(a)(ii) of the Takeover Regulations, 2011 exempts certain types of

acquisitions from the obligation of making an open offer under regulation 3 and regulation

4, one of them being “persons named as promoters in the shareholding pattern filed by the

target company in terms of the listing agreement or [the takeover] regulations for not less

than three years prior to the proposed acquisition.”

SEBI clarified stating that even though one of the transferees had not satisfied the 3-year

holding period requirement, the exemption had been made available to it as the condition

of 3 years shareholding by the transferees prior to the proposed acquisition would be

deemed to be fulfilled in case all the transferees collectively hold shares for a period of 3

years prior to the proposed acquisition provided the other conditions for availing the

exemption are fulfilled.

CFD/ PC/ IG/ CB/ 23756/12, October 25, 2012

As per the extant guidelines, Indian companies in the

manufacturing and infrastructure sector (as defined under the

extant ECB policy), which are consistent foreign exchange

earners, are allowed to avail of ECBs for repayment of

outstanding Rupee loan(s) availed of from the domestic banking

system and / or for fresh Rupee capital expenditure. On a review,

it has been decided to include Indian companies in the hotel

sector (with a total project cost of INR 250 crore or more),

irrespective of geographical location as eligible borrowers under

this scheme.

Informal Guidance to M/s Weizmann Forex Limited The informal guidance issued to Weizmann Forex Ltd. by SEBI

was related to the question whether the proposed transfer of

shares among promoters was exempt from the mandatory open

offer requirements under Regulation 10(1)(a)(ii) of the SEBI

(Substantial Acquisition of Shares and Takeovers) Regulations,

2011, (“Takeover Regulations, 2011”). Weizmann Forex Ltd.

was the target company which was previously unlisted bearing

the name Chanakya Holdings Ltd. Overall restructuring of the

Weizmann group was carried out whereby in the process of

restructuring Weizmann Forex Ltd.’s shares were listed on the

stock exchanges. The promoters of Weizmann Forex desired to

transfer certain shares of Weizmann Forex Ltd. among

themselves and hence approached SEBI for informal guidance.

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MDP & Partners Legal Updates

CIR/IMD/FIIC/1/2013

January 01, 2013

Debt Allocation Mechanism for FII

Pursuant to this circular with immediate effect, in order to

provide operational flexibility to the FIIs/ sub-accounts which

did not hold any debt investment limits as on January 03,

2012 and purchased debt investment limits after January 03,

2012, a cumulative re-investment facility to the extent of 50%

of their maximum debt holding at any time during the year

2013 has been permitted. In terms of the SEBI circular dated

January 03, 2012 the re-investment facility for the FIIs/ sub-

accounts having debt limit prior to January 03, 2012, will be

available till December 31, 2013. The FIIs which do not hold

any debt investments as on December 31 of the previous

calendar year, are now entitled to avail the re-investment

facility during each calendar year. Further, from January 01, 2014 the re-investment facility

as indicated in the SEBI circular CIR/IMD/FIIC/22/2012 dated November 07, 2012 would be

available during each calendar year to the FIIs holding debt investments as on December 31

of the previous calendar year. The re-investment period as set out earlier, i.e. 5 working

days for Government Debt and 15 working days for Corporate Debt continues to be

applicable.

CIR/CFD/DIL/2/2013,

January 02, 2013

Clarification on Clause 36 of the Equity Listing Agreement

Clause 36 of the Listing Agreement of the stock exchanges

states that:

“The Issuer will intimate to the Stock Exchanges, where the

company is listed immediately of events such as strikes,

lock outs, closure on account of power cuts, etc. and all

events which will have a bearing on the performance /

operations of the company as well as price sensitive

information both at the time of occurrence of the event

and subsequently after the cessation of the event in order

to enable the security holders and the public to appraise

the position of the Issuer and to avoid the establishment of

a false market in its securities. In addition, the Issuer will

furnish to Exchange on request such information

concerning the Issuer as the Exchange may reasonably

require”.

It has been clarified by SEBI that all the events or material information which will have a

bearing on the performance / operations of the company as well as price sensitive

information shall be first disseminated to the stock exchanges as required under Clause 36

of the Listing Agreement.

MDP & Partners

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Amendments to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement To prohibit the entities from framing any employee benefit

schemes dealing in its own securities with the object of

inflating or causing fluctuation in the price of the securities by

engaging in fraudulent and unfair trade practices, SEBI has

specified certain listing conditions by inserting Clause 35C in

the Equity Listing Agreement which states as follows:

“35C. (i) The issuer agrees that all the employee benefit

schemes involving the securities of the company shall be in

compliance with SEBI (Employee Stock Option Schemes and

Employee Stock Purchase Schemes) Guidelines, 1999 and

any other guidelines, regulations etc. framed by SEBI in this

regard.

(ii) The issuer further agrees that all the employee benefit schemes already framed and

implemented by the company involving dealing in the securities of the company, before the

insertion of this clause shall be aligned with and made to conform to SEBI (Employee Stock

Option Schemes and Employee Stock Purchase Schemes) Guidelines, 1999 by June 30, 2013.”

Further, all references to “Companies (Passing of the Resolution by Postal Ballot) Rules 2001”

in clause 35B of the Listing Agreement have to be replaced with “Companies (Passing of the

Resolution by Postal Ballot) Rules 2011”.

In respect of those companies, which have already framed and implemented before the date

of this circular any employee benefit schemes involving dealing in the securities of the

company, which are not in accordance with SEBI (ESOS and ESPS) Guidelines, such companies

are required to:

1. give the details of their schemes to the Stock Exchanges within 30 days from date of this

circular, in the format provided with the circular; and

2. align any existing employee benefit schemes with SEBI (ESOS and ESPS) Guidelines on or

before June 30, 2013.

In view of the above, a new clause 22B has been inserted in SEBI (ESOS and ESPS) Guidelines

1999 with immediate effect and states that:

“No ESOS/ESPS shall involve acquisition of securities from the secondary market."

CIR/CFD/DIL/3/2013,

January 17, 2013

MDP & Partners

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SEBI (Investment Advisers) Regulations, 2013

i) Persons giving general comments in good faith in regard to trends in the financial

or securities market or the economic situation provided such comments do not

specify any particular securities or investment product.

ii) Persons providing advice exclusively in areas like insurance and pension products

provided they are regulated by sectoral regulators.

iii) Professionals such as lawyers, Chartered Accountants etc., providing advice

incidental to their professional services.

iv) Stock Brokers, Sub-brokers, Portfolio Managers and Merchant Bankers registered

with SEBI providing investment advice incidental to their primary activity. Such

Intermediaries under SEBI are however required to comply with obligations under

these Regulations such as acting in fiduciary responsibility, risk profiling etc.

v) AMFI registered distributors providing investment advice incidental to their

primary activity.

vi) The Fund Manager of a Mutual Fund or Alternative Investment Fund.

The banks or body corporates which also offer distribution, execution or referral services

will be required to offer investment advisory services through a subsidiary or a Separately

Identifiable Department or Division (SIDD). Such a SIDD will be required to be clearly

segregated from other activities.

The investment advisor shall not obtain any remuneration or compensation from any

person other than from the client being advised. However, for a bank or body corporate

having a distribution, referral or execution business, it would be necessary to keep the

investment advisory services segregated from such activities and to make disclosures to

the clients being advised about any remuneration or compensation received by it and any

of its associates for the distribution, referral or execution services.

SEBI has notified the SEBI (Investment Advisers) Regulations,

2013 (“Investment Advisers Regulations”) thereby providing a

framework for registration and regulation of Investment

Advisors. The salient features of the Investors Advisers

Regulations are:

All individuals, body corporate and partnership firms engaged

in the business of providing investment advice to investors for

consideration, including financial planners are required to be

registered and regulated under these Regulations. Any person

who holds himself as an investment advisor shall also fall

under the purview of these Regulations save and except the

following persons who have been exempted:

LAD-NRO/GN/2012-13/31/1778

January 21, 2013

MDP & Partners

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The regulations provide for code of conduct, fiduciary duties, record keeping, risk

profiling of the clients and also deal with the issue of suitability and appropriateness of

the advice.

Requirements relating to experience, qualification, certification and net worth/ net

assets have been prescribed for a person to act as an investment advisor. Initially, SEBI

will directly register and regulate the Investment Advisors.

Guidelines on Identification of Beneficial Ownership

He who exercises control through ownership or who has a controlling ownership

interest.

Controlling ownership interest means ownership of/entitlement to:

i. more than 25% of shares or capital or profits of the juridical person, where the

juridical person is a company;

ii. more than 15% of the capital or profits of the juridical person, where the juridical

person is a partnership; or

iii. more than 15% of the property or capital or profits of the juridical person, where

the juridical person is an unincorporated association or body of individuals.

The identity of a person where control is exercised through voting rights, agreement,

arrangements or in any other manner.

The person holding the position of senior managing official where no natural person is

identified.

B. For client which is a trust:

Where the client is a trust, the intermediary is required to identify and verify the identity of

such persons, through the identity of the settler of the trust, the trustee, the protector, the

beneficiaries having 15% or more interest in the trust and any other natural person

exercising ultimate control through a chain of control or ownership.

C. Exemption in case of listed companies:

It is not necessary to identify and verify the identity of any shareholder or beneficial owner

of companies that are listed on stock exchange or is a majority-owned subsidiary of such a

company.

CIR/MIRSD/2/2013, January 24, 2013

SEBI has set out guidelines on identification of beneficial

ownership, which are to be followed by intermediaries and are

as below:

A. For clients other than individuals or trusts:

Where the client is a company, partnership or unincorporated

association/body of individuals, reasonable measures have to

be taken by the intermediary to verify the identity of such

persons, through the following information:

MDP & Partners

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D. Applicability for foreign investors:

Intermediaries dealing with Foreign Investors, Foreign Institutional Investors, Sub Accounts

and Qualified Foreign Investors, may be guided by the clarifications issued vide SEBI

circular CIR/MIRSD/11/2012 dated September 5, 2012 for the identification of beneficial

ownership of the client.

E. Implementation:

Intermediaries have to review their Know Your Client (KYC) and Anti- Money Laundering

(AML) policies as per the contents of this circular.

Comprehensive guidelines on Offer for Sale (OFS) of Shares by Promoters through the Stock Exchange Mechanism In order to make the OFS framework more economical, efficient

and transparent the guidelines on Offer for Sale (OFS) of Shares

by Promoters through the Stock Exchange Mechanism issued

previously have been revised as follows:

Sub-para (b)(ii) laying down the eligibility criteria has been

replaced with: “All promoters/promoter group entities of top

100 companies by market capitalisation in any of the last four

completed quarters, market capitalisation being calculated as

average market capitalisation in a quarter.”

Definition of ‘Indicative Price’ has been revised to mean the

volume weighted average price of all the valid bids.

CIR/MRD/DP/04/2013, January 25, 2013

Henceforth, only orders shall be placed during trading hours and para 5(d)(iii) has been

omitted.

Para 5(e)(i) which provides for order placement has been replaced. Now onwards the

orders which shall be valid in the OFS window, separately created are:

(i) Orders with 100% of margin paid upfront by institutional investors and non-

institutional investors.

(ii) Orders without paying upfront margin by institutional investors only. Such orders

can only be modified by making upward revision

Cumulative bid quantity will now be made available online to the market throughout

the trading session at specific intervals in respect of orders with 100% upfront margin

and separately in respect of orders placed without any upfront margin. Indicative price

will now be disclosed to market throughout the trading session. The indicative price

shall be calculated based on all valid bids/orders.

MDP & Partners

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PHARMA

Para 6(a) which provides for risk management has been replaced. Clearing Corporation will

be collecting 100% margin in cash from non-institutional investors. In case of institutional

investors who place orders/bids with 100% of margin upfront, custodian confirmation shall

be done within trading hours. In case of institutional investors who place orders without

upfront margin, custodian confirmation shall be done as per the existing rules for

secondary market transactions. The funds collected shall neither be utilized against any

other obligation of the trading member nor co-mingled with other segments.

Para 6(b) has also been revised to now state that ‘in case of order/bid modification or

cancellation, such funds shall be released/ collected on a real time basis by the clearing

corporation’.

Para 8(i)(b) has also been revised and replaced. Henceforth, settlement for institutional

orders/bids and for institutional orders with 100% upfront margin shall take place on T+1

day. In case of orders/bids of institutional investors with no margin, settlement shall be as

per the existing rules for secondary market.

Para 8(ii)(a) which deals with handling of default pay-in has been replaced with: ‘In case of

default in pay-in by any investor, 10% of the order value shall be charged as penalty from

the investor and collected from the broker and shall be credited to the Investor Protection

Fund.’

All other conditions for sale of shares through OFS framework shall be as per SEBI circular

dated July 18, 2012

Cancellation of permission/ license in case an applicant/ manufacturer who fails to launch their product for marketing in the country within a period of six months from obtaining the permission / license from CDSCO.

F.No.12-01/12-DC Pt-127 January 10, 2013

Rule 122A of the Drugs and Cosmetics Rules, 1945 makes it

mandatory for the approval of the licensing authority to be

obtained in order to manufacture a new drug. Schedule Y to the

Drugs and Cosmetics Rules, 1945, requires periodic safety update

reports (PSURs) of new drugs to be submitted every six months for

the first two years after approval of the drug is granted and also

requires the drug to be marketed. The above stated requirements

are not being complied with by the manufacturers. Therefore, in

order to ensure complete assessment of safety and efficacy of the

new drug and keeping in mind the interest of the public, it has now

been made mandatory for the applicant/manufacturer to launch

the product for marketing in the country within a period of 6

months from obtaining the permission/license from CDSCO. Failure

to do so will lead to cancellation of the permission/license.

MDP & Partners

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COMPETITION LAW

M/s. Shri Ashtavinayak Cine Vision Limited v/s PVR Pictures Limited & 17 others.

January 10, 2013

Specified Banking Companies exempted from application of provisions of sections 5 & 6 of the Competition Act, 2002 for 5 years In exercise of the powers conferred by clause (a) of section 54 of

the Competition Act, 2002 (12 of 2003) (“Competition Act”), the

Central Government has exempted banking companies in respect

of which the Central Government has issued a notification under

section 45 of the Banking Regulation Act, 1949 (10 of 1949), from

the application of the provisions of sections 5 and 6 of the

Competition Act in public interest for a period of five years from

the date of publication of this notification in the Official Gazette.

Notification No. SO 93(E) [F.NO.5/63/2011-CS] January 8, 2013

The Informant has alleged that a distributor who refuses to become a member of the

association and/ or refuses to register his film with the association is not allowed to distribute

and exhibit its film in the territory which is regulated by such association. Consequently, the

cinema exhibitors are unwilling to take the risk of exhibiting the film of a distributor who is not

a member of the association or whose film is not registered with the Association.

The consequence of the impugned action of the Opposite Parties (excluding PVR) is denial of

market access to the Informant under section 4 (2) (c) of the Competition Act by denying

registration of the film in the respective territories of the Opposite Parties No. 2 to 17. The

Informant has also alleged that the Opposite Party Nos. 2 to 17 have also contravened section

3 by entering into an anti-competitive agreement with members with a view to limit or control

the production, supply, market or provision of services.

The Competition Commission of India (“Commission”) has held that as the informant did not

provided any evidence against these associations, it is held that Opposite Party Nos. 3 to 18

have not imposed any restriction on the release of the film and, as such, their conduct need

not attract the attention of the Commission.

LANDMARK JUDGEMENTS

This information was filed by Ashtavinayak Cine Vision Limited

(“Informant”) u/s 19 (1) (a) of the Competition Act, 2002

(“Competition Act”) against M/s. PVR Pictures Limited (“PVR”) and

17 others (PVR and such 17 others are collectively referred to as the

“Opposite Parties”) alleging inter alia contravention of the

provisions of sections 3 and 4 of the Competition Act by PVR and

the others. The practice prevalent in the film-industry is for a

distributor to register a film through the distributors’ association for

the territory in which the distributor is carrying on business. The

distributor is allowed to book theatres for release of the feature

films only after such registration.

MDP & Partners

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M/s Cinergy Independent Film Services Pvt. Ltd vs Telangana Telugu Film Distribution Association & 4 others

January 10, 2013

The present information has been filed under section 19 (1) (a) of the

Competition Act by M/s. Cinergy Independent Film Services Private

Limited (“Informant”) against M/s. Telangana Telugu Film Distributors

Association and 4 others (“Opposite Parties”) alleging inter alia

contravention of the provisions of sections 3 and 4 of the Competition

Act.

The Informant alleges that the Opposite Parties make it compulsory for

every film distributor to become their member and/or register his/its

film with them before the exhibition of such film. On account of the

above, the cinema exhibitors are unwilling to undertake the risk of

exhibiting the film of a distributor who is not a member of the Opposite

Parties or whose film is not registered with them.

The Commission has held that the compulsory registration of the film with the concerned trade

associations is anti – competitive in terms of the provisions of section 3 of the Competition Act.

The Commission observed that the acts and conduct of the association have caused

appreciable adverse effect on competition and the Commission further directed the association

to cease and desist from the practices of pressurizing the distributors to settle the monetary

disputes with its members.

It is alleged that the Opposite Parties acted malafidely and arbitrarily in boycotting the film

‘Mausam’ with an effort to secure a claim of their member. The Informant has alleged that the

actions of the Opposite Parties have contravened the provisions of section 3 and section 4 of

the Competition Act. Upon hearing the Opposite Parties and considering the DG’s report, the

Commission held that the Opposite Parties No. 1, 2 and 4 have contravened the provisions of

section 3 (1) read with section 3 (3) of the Competition Act. The Commission directed the

Opposite Parties Nos. 1, 2 and 4 to cease and desist from the practices of pressurizing the

distributors to settle the monetary disputes with its members.

*This legal update is not intended to be a form of solicitation or advertising. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate thereafter. No person should act on such information without appropriate professional advice based on the circumstances of a particular situation. This update is intended for private circulation only.

MDP & Partners Advocates & Solicitors

1st floor, Udyog Bhavan, 29, Walchand Hirachand Marg, Ballard Estate, Mumbai 400001 Tel: +91 22 6686 8900 I Fax: + 91 22 6686 8989

Email:- newsflash@mdppartners.com I Website: www.mdppartners.com