Andhra High Court rules in favour of BookMyShow

Andhra High Court rules in favour of BookMyShow

The Bench comprised of Chief Justice Prashant Kumar Mishra and Justice DVSS Somayajul

The Andhra Pradesh High Court recently issued an interim order in the case of Bigtree Entertainment Pvt Ltd v State of Andhra Pradesh stopping the state government from selling movie tickets through a government-run platform until 27 July.

The Petition was filed by Bigtree Entertainment Private Limited (BookMyShow), the Multiplex Association of India, and Vijayawada Exhibitors' Association challenging the launch of the government-run portal, arguing that the government platform would deny a level playing field to private ticket booking businesses.

The Court was of the opinion that significant harm would be caused to the Petitioners if an interim order is not issued at this stage, as third-party agreements with platforms like BookMyShow are at risk of being affected. Additionally, it was noted that theatre owners risk their licenses being canceled if they don't migrate to the government portal by July 2.

A Government Order issued on 2 June under Rule 17(a) of Andhra Pradesh Cinemas (Regulation) Rules 1970, stated that ticket aggregators and cinema theatres who were selling tickets through their respective online platforms would be allowed to continue such business only through the gateway created by the government's Andhra Pradesh State Film Television and Theatre Development Corporation (APSFTVTDC), at a service charge not exceeding 2% on the rate of admission. The last date for the same was 2 July 2022.

The Court noted that through the government run-portal, the customers would be required to pay 2% ticket cost and service charge.

The Petitioners made out a more than prima facie case. The Advocate General argued that the entire expertise is in the public interest and fixing the rates of admission is an integral part of the regularization of cinemas. However, it was observed by the court that the Government's power to regulate this area requires further perusal. The court in its order also noted whether the government has the power to regulate "incidental services which are being provided to the cine-goer by third-party aggregators and others" under the Andhra Pradesh Cinemas (Regulation) Act needs to be looked into.

The Government's step was in the direction of keeping a check on black marketing, tax evasion, and collection of GST and service taxes. However, this was opposed on the grounds that the Government has ample power to curb such practices. The counsel argued that the new law in the form of the Andhra Pradesh Cinemas (Regulation) (Amendment) Act 2021 and the rules issued in the form of a government order is a way to gain control over the online booking system by the state government.

In light of the observations made by the Court, an interim order was passed till 27 July 2022 when the final hearing of the case is scheduled.