Is Andhra Pradesh’s New Cinema Law Constitutional?

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The Andhra Pradesh Cinemas (Regulation) (Amendment) Act, 2021, by requiring cinemas in Andhra Pradesh to sell tickets only through a government website, fails the proportionality test by unreasonably restricting the right to liberty trade and commerce, written SRI HARSHA KANDUKURI.

THE The Andhra Pradesh (AP) legislature adopted a amendment bill to the AP Cinemas Act, 1955 (regulation) during its winter session which has just ended. This amending law, which replaces a previously enacted ordinance, requires all state theaters to sell movie tickets only “through the state corporation’s online booking platform.” The state’s Information and Public Relations Minister, who piloted the bill in both houses of the Legislature, said the government would create a website similar to Indian Railway Catering and Tourism (IRCTC). Corporation) or APSRTC (Andhra Pradesh State Road Transport Corporation) for the online sale of movie tickets.

Unreasonable restriction

The newly inserted provision that says theaters can only sell movie tickets through a government website places an unreasonable restriction on the freedom of trade and commerce guaranteed by the Constitution of India. Every citizen of this country is free to choose how to conduct their business. The state cannot compel any citizen to carry out its activities, whether online or offline. This right to conduct business by any means of one’s choice was recognized by the Supreme Court in the Internet shutdown case in Jammu and Kashmir last year, in which the petitioners argued that they had the right to engage in online business activities.

Contractual freedom is also affected by this new provision. The freedom to list or not to list their rooms on a government website or other websites is removed by this amendment. Why shouldn’t a private company choose its own mode of operation as long as it meets the price and tax requirements? The state cannot assume that the conventional (offline) mode of doing business is always illegal or unethical.

In addition, there does not appear to be a link between the current regulation and the objectives pursued. The explanatory memorandum of the bill claims that it “strengthens[s] cinematographic experience ”by offering an online movie reservation system. It should be noted that this bill is not a pioneer in creating an online movie reservation system and that many theaters in the state already allow online reservations through private merchants like Bookmyshow or Paytm. The Explanatory Memorandum also ambitiously asserts that the bill “reduces pollution and traffic problems”, which seems far-fetched and unrelated.

Every citizen of this country is free to choose how to conduct their business. The state cannot compel any citizen to carry out its activities, whether online or offline.

The minister, while piloting the bill, indicated that the provision was inserted to control the arbitrary prices imposed by the rooms which are higher than the maximum tariffs fixed by the law. While it cannot be denied that booking online helps fight arbitrary prices, we cannot assume that the government website is the only way to achieve this. The AP Cinemas (Regulation) Act, 1955 already prohibits the sale of movie tickets at a price higher than the maximum price set by the state. The problem of higher prices should be solved through better enforcement and regular inspections.

Tax evasion is another reason given for the government to want to introduce this system online. In an online system, every sale of movie tickets is recorded, and it is impossible to escape the tax regime. However, the potential for high prices and tax evasion is also present in other service industries. For example, most players in the hospitality industry increase their prices during the holiday season based on increased demand, and there are opportunities for tax evasion as well. The state cannot ask the hotel industry to make sales only through a government website for better tax compliance. If sales transparency is what the government wants, this can also be achieved through private traders. What is needed are tougher penalties and frequent government inspections to tackle tax evasion.

Read also : Why the proposed changes to the cinematograph law infringe the right to free expression

Equally restrictive previous government order overturned by High Court

The PA government, through a government decree of April 8, 2021 has set the entrance ceilings in cinemas according to the geographic location of the room (panchayat, municipality or metropolitan corporation) and the type of room (Multiplex, air-conditioned and non-air conditioned). The government decree prescribed a maximum price of Rs 15 for a premium class ticket in a non-air conditioned theater in a gram panchayat area, while the maximum price set for a premium class ticket in a multiplex in a municipal area is Rs. 250.

Why shouldn’t a private company choose its own mode of operation as long as it meets the price and tax requirements? The state cannot assume that the conventional (offline) mode of doing business is always illegal or unethical.

Some film producers have challenged the order in the PA High Court on the grounds that it violates free trade and commerce under Article 19(1) (g) of the Constitution, and the classification made on the basis of geographic locations is arbitrary. The petitioners argued that film prices should be set on the basis of facilities (type of projector, sound system, seats, etc.) rather than geographic location, especially when costs for maintenance, distribution, etc. labor and electricity are almost the same everywhere. An AC theater in a village could provide the same facilities as another AC theater in a metropolitan area. However, according to the government decree, the former may charge a lower price (even taking into account the difference in infrastructure costs) than the latter.

The PA High Court had, in the case of Thirumala Theater, Khammam against the PA government (2012) overturned a similar government decree that set tariffs based on geographic location, declaring it an unreasonable classification. Unfortunately, the challenged government ordinance does not remedy this flaw.

The High Court at the beginning of the month suspended the government decree after referring to the shutdown of the Thirumala theater.

Recently, the Telangana state government has also amended the minimum and maximum prices for cinema tickets. Unlike AP, however, the classification is not based on location and even the prices are not unreasonably low.

Why the IRCTC / APSRTC analogy is incorrect

Using the analogy of IRCTC and APSRTC to justify this new online reservation system is problematic. First, IRCTC and APSRTC are government services provided on government platforms. Whereas, through the bill, the government obliges private companies to register exclusively on its website and prohibits other methods of selling tickets.

Second, IRCTC and APSRTC are also listed on other private websites. We don’t know if the same arrangement would be available for theaters as well, since the new Section 5A says theaters can only “sell or authorize sale through the government company’s online booking platform.”

The State Theaters (Regulations) Act 1955 already prohibits the sale of movie tickets at a price higher than the maximum price set by the state. The problem of higher prices should be solved through better enforcement and regular inspections.

There is no doubt that the government has a legitimate interest in controlling arbitrarily higher movie ticket prices and movie theater tax evasion, but not to the detriment of the freedom of business, trade or commerce of movie theaters. Current restrictions on the film screening industry do not survive the proportionality test under article 19, paragraph 6. The same objectives can be achieved by other means such as better law enforcement, wide publicity of the maximum rates prescribed by law and firm action against offenders.

(Sri Harsha Kandukuri is Assistant Professor of Law at CMR University Bengaluru. The opinions expressed are personal.)


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