Bombay HC Quashes Govt Orders Banning ‘Convenience Fee’ On Online Movie Tickets, Terms Them Unconstitutional

Mumbai: The Bombay High Court on Thursday struck down two government orders issued by the Maharashtra Revenue and Forest Department that prohibited cinema theatres and online platforms from charging “convenience fees” for online ticket bookings. Declaring them “unconstitutional,” the court held that such restrictions violated the fundamental right to carry on business under Article 19(1)(g) of the Constitution.

A bench of Justices MS Sonak and Jitendra Jain quashed clause 3(d) of the Government Order (GO) dated April 4, 2013, and clause (a) of the GO dated March 18, 2014. These clauses had barred cinema exhibitors and agents from charging additional fees for computerised online ticket bookings.

The petitions were filed by PVR Limited, FICCI-Multiplex Association of India, and Big Tree Entertainment Pvt. Ltd. (which operates BookMyShow). The petitioners argued that the orders imposed unreasonable restrictions on their right to conduct legitimate business.

Advocates Naresh Thacker and Rohan Rajadhyakshas, representing the petitioners, contended that the government had no statutory authority under the Maharashtra Entertainment Duty (ED) Act, 1923 to issue such prohibitory orders. “Without a law, no restrictions can be imposed on legitimate business,” they submitted, adding that the orders also failed to cite any valid source of power.

The court concurred, observing: “Admittedly, we have not been shown any statute or law which empowers the State to interfere with the charge of the consideration for undertaking this business.”

The court emphasised that the ED Act did not provide the State with any power to regulate or prohibit the collection of convenience fees. It noted that while the amount charged as convenience fees could be included in the “payment for admission” for the purpose of calculating entertainment duty, there was no provision barring such charges altogether.

“The impugned prohibition is directly contrary to Article 19(1)(g) of the Constitution of India,” the bench said. “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.”

Highlighting that customers had the choice of purchasing tickets directly at the theatre or opting for online booking by paying an additional fee, the court said, “Suppose the customer feels it convenient to book the tickets online… in that case, the Respondents cannot restrain the Petitioners from collecting the convenience fees since for providing this facility… the theatre owners have to invest in the technology.”

The court clarified that it had not examined the validity of the 2014 amendment to the ED Act but only addressed the legality of the government orders issued prior to that date. The interim relief granted in 2014 was made absolute, with no order as to costs.