Abstract
The ban on outside food and drinks in cinema halls is one of the longest running battle cases in India as a consumer dispute. For more than ten years consumer groups have campaigned against it as an “exploitative ‘captive audience’ device”, multiplex operators have argued it is just an exercise of the right to private property and freedom of contract. The Supreme Court of India has finally resolved this controversy on 3 January 2023 in K.C. Cinema (Now K.C. Theatre) v. State of Jammu and Kashmir & Ors., Civil Appeal No. 77 of 2023, (2023) 5 SCC 786 — which has been resolved in favour of cinema hall owners. A bench under the Chief Justice of India, Dr. D.Y. Chandrachud and Justice P.S. Narasimha said that the right of cinema owners under Article 19(1) (g) of the Constitution also encompassed their freedom to impose entry conditions like prohibition of outside food in the theatres. This article examines the trail from High Courts to the Apex Court, the constitutional and statutory provisions in relation to the issue, the exceptions left by the Court for the purpose of consumer protection and the relevance of the Legal Metrology Act, 2009 and Consumer Protection Act, 2019 in the context of pricing and standards of services in multiplexes.
Keywords: cinema hall outside food rules India, consumer rights cinema, Supreme Court 2023 judgment multiplex food policy, Legal Metrology Act packaged food rules
Introduction
From a single screen neighbourhood movie theatre, the Indian film industry has evolved into a huge multiplex with fancy food and beverage (“F&B”) stalls. This shift resulted in a structural shift in the economy: distributors take 50% or more of the box-office revenue, but with F&B concession sales, it is almost a pure profit centre for multiplex operators. According to PVR-INOX’s annual reports, the industry shares around 32-35% of its total revenue as F&B, and it is seen that the profit margin is around 45-50% which is significantly higher as compared to the profit margin in tickets.
This kind of economic structure gave operators an incentive to ban the sale of takeout food items, thereby effectively establishing a captive market of consumers. There were several reasons for the consumers’ complaints: the price of in-hall food was too high compared to market prices, there were no alternatives in terms of nutrition, and the arrangement was coercive. These grievances have led to public interest litigations in the number of High Courts, which necessitated the time of Supreme Court of India.
The legal issue raised in this controversy revolves around two rights: the basic right of the cinema hall owner under the ambit of Article 19(1)(g) of the Constitution to continue his trade or business with reasonable restrictions and the right of the consumers under the Consumer Protection Act, 2019 to be protected against unfair and restrictive trade practices. Superimposed on this, is the statutory price system under Legal Metrology Act of 2009 for the sale of packaged commodities at or below the Maximum Retail Price (“MRP”).
Judicial Evolution: From High Courts to the Apex Court
- Jammu and Kashmir High Court (2018) — Pro-Consumer Ruling
The case of Pro-Consumer Ruling was heard by the Jammu and Kashmir High Court in 2018.
It all began with a Public Interest Litigation filed by two practicing advocates before the Jammu and Kashmir High Court against cinema theatres in the state for barring movie-goers from carrying eatables inside cinema halls. The petitioners argued that there was a violation of the right to good health, as well as the right not to eat junk food (both of which were included in the ambit of Article 21), because of the prohibition, which meant that the viewers had to go out and buy food of a particular kind, which the cinema hall sold, at exorbitant prices, and there was no way that infants could be fed at periodic intervals.
The High Court ruled that the Jammu and Kashmir Cinemas (Regulation) Rules, 1975 do not ban cinema-goers from taking their own food articles and water bottles to multiplexes or cinema halls and therefore, directed the owners of cinema halls and multiplexes in J&K to not ban viewers from carrying their own food articles and water bottles to cinema halls.
That was a decision favourable to the concerns of consumers but not a constitutional decision as such, based on a reading of the Rules of 1975. This was challenged by the cinema hall owners while taking before Supreme Court.
- Bombay High Court — Pricing Concerns
The Bombay High Court in another PIL filed by Jain Social Group (PIL No. 71/2018) expressed its concern about the lack of price control of food and beverages in multiplexes to the Maharashtra government. The court referred to the selling rates of water and food which were disproportionately higher to the market rates. No final order banning outside food was given, but this case did spur the Maharashtra government to think about permitting some kind of outside food in cinema halls and it was also a sign of the discontent among judges regarding the pricing of outside food.
- The Supreme Court Judgment — K.C. Cinema (K.C. Theatre) v. State of J&K, (2023) 5 SCC 786
Issue
If the J&K High Court was right in exercising its writ jurisdiction under Article 226 of the Constitution to order cinema hall owners to allow movie-goers to bring food and drink outside the cinema hall, in the absence of a law compelling the cinema hall owners to allow such entry.
Rule
CJI D.Y. Chandrachud and Justice P.S. Narasimha were the two judges on the Supreme Court bench. The case had come up as a Civil Appeal No. 77 of 2023 (arising out of a Petition (Civil) No. 20784 of 2018) along with connected Civil Appeals Nos. From the High Courts of Delhi and Bombay, 78 and 79 of 2023 respectively.
The 1975 Rules failed to include a rule that says the owner of a cinema theatre must allow a movie-goer to bring food or drinks from off the grounds of the theatre. Likewise, the Cinematograph Act, 1952 and the Cinematograph (Certification) Rules, 1983, have no such provision.
Analysis and Ratio Decidendi
The Supreme Court set aside the High Court’s direction on three grounds:
First — Private Property and Contractual Freedom. The Court concluded that cinema halls are private properties and it was the right of the owner to impose whatever condition required for the use and entry of their property as long as the condition does not go against public interest, safety and welfare. The Court also noted that a moviegoer can refuse any food or drinks at the movie theatre and was not “compelled” to purchase the food.
Second — Article 19(1)(g). The Court ruled that the right of cinema owners to impose entry conditions is a part of the fundamental right to free exercise of the business, trade or profession which is protected under Article 19(1)(g) of the Constitution. The High Court in absence of any statutory mandate could not be justified in giving directions to the theatre owners to allow outside food.
Third — Jurisdictional Overreach under Article 226. While, the Supreme Court pointed out that the petitioners who had filed the original petition before the J&K High Court did not seek damages but had sought invocation of writ jurisdiction of the High Court under Article 226 of the Constitution. The Court noted that in the event anyone had been injured as a result of the prohibition or had not been informed of the conditions of entry, then the remedy would be a civil action for damages or refund, and not through a writ petition. The Court opined that the High Court had violated its writ jurisdiction by issuing such directions to private entities in absence of any public law duty or statutory violation.
On Consumer Protections: In the hearing, the legal representative of the cinema hall owners submitted that the water is provided free and as a practice, they do not object if the infant is accompanied by his/her parent, a reasonable amount of food is provided for the infant. The Court did accept these submissions and added them as standing expectations.
Conclusion of the Apex Court
In view of the above judgment, Supreme Court allowed the appeals, set aside the High Court’s direction and dismissed the Transferred Cases from the Delhi and Bombay High Courts. The ratio is as follows: Cinema Hall owners do have a right to not allow outside food, provided by Article 19(1)(g); this right is not extinguished by the absence of any rules of cinema regulation; this commercial freedom, however, has two mandatory exceptions: that of free drinking water, and that of reasonable infant food.
Constitutional Framework
Article 19(1)(g) — Right to Trade and Business
Article 19(1)(g) provides the right to practise any profession or to engage in any occupation, trade or business to all citizens. This right is only subject to reasonable restrictions by the State on grounds of public interest as provided in Article 19(6). The right of a cinema hall owner to impose conditions on entry to the cinema hall, including F&B, is a fundamental right. The Supreme Court in K.C. Theatre upheld the principle that if there is no explicit statute on conditions, then the owner’s commercial freedom prevails.
It should be noted, however, that Article 19(1)(g) is in relation to the action of the State. Petitioners before the J&K High Court had appealed to it invoking Article 21 (right to life, which includes the right to food and health) vis a vis private cinema owners. The Supreme Court did not consider Article 21 relevant in this context to impose positive duties on private multiplex operators to allow outside food.
Article 21 — Right to Life and Personal Liberty
The right to life and personal freedom is guaranteed by Article 21 of the Indian Constitution.
Petitioners before the J&K High Court contended that this ban on outsiders’ food violated Article 21 of the Constitution, which guarantees the right to food and health. The petitioner argued that forcing the viewers to buy junk food at a high price especially young, old and diabetic patients infringes on their right to choice of food, the right to abstain from eating junk food and right to good health guaranteed by Article 21. The Supreme Court has not directly adjudicated this constitutional issue but has decided the case on a narrow issue of the scope of Article 226 and lack of any statutory provision.
Statutory Framework
- Cinema Regulation Rules — State Subject
The regulation of the Cinemas comes under Entry 33 of the State List (List II) of the Constitution of India. There are various Cinema Regulation Rules in each State which are framed under the respective Cinematograph Act or State legislation. Some examples are the J&K Cinemas (Regulation) Rules, 1975; Maharashtra Cinemas (Regulation) Rules, 1966 and Delhi Cinematograph Rules, 2008. But there’s a few problems with these rules, which K.C. Theatre said in its opinion are silent on F&B policies, and in its absence, the owner’s contractual freedom trumps.
The Court also emphasized that the rule-making authority of the State in this area should be exercised with respect to the fundamental right of the cinema hall owner as guaranteed under Article 19(1)(g). Under the test of “reasonable restriction” under Article 19(6) of the Constitution, any State Rule banning F&B in cinema halls categorically would have to meet the test.
- The Legal Metrology Act, 2009 and Packaged Commodities Rules, 2011
Provide for the compulsory inspection of all packing cases and boxes that are used for measuring and trading.
The Supreme Court settled the issue of entry conditions in favour of the cinema owners, but there is a separate and no less important statutory regime for the pricing of food and beverages in the multiplexes.
The Dual MRP Ban. The Legal Metrology (Packaged Commodities) Amendment Rules, 2017, which have been effective from 1 January 2018, clearly specify that anybody declaring different MRP for the same pre-packaged commodity (dual MRP) will be prohibited. The Ministry of Consumer Affairs has introduced this amendment in the Legal Metrology Act, 2009. The implication is that MRP can’t be printed on a packaged water bottle or a sealed bag of chips made at one MRP and given a second higher MRP as “multiplex use”. The highest price at which the product can be traded in the market is MRP provided by the manufacturer on the package.
The Prepared Food Distinction. A material difference is a ‘critical carve out’ which works in favour of multiplexes, the Legal Metrology (Packaged Commodities) Rules, 2011 only apply to pre-packaged commodities – those sealed and packed in advance of sale. The MRP on such food and beverages, which are prepared or served at the multiplex counter such as a cold drink in a paper cup, freshly popped popcorn or a sandwich made to order, will not be factory printed and such food and beverages are not “packaged commodities” as per the Rules. These items are sold at multiplexes at the price set by multiplexes.
The FHRAI Precedent — Composite Service Transactions. There is an important Supreme Court precedent from which multiplexes can draw support even as regards goods that are sealed and packaged (e.g., bottled water with MRP). The Supreme Court in Federation of Hotel and Restaurant Associations of India (FHRAI) v. Union of India has ruled that hotels and restaurants do not come under the ambit of Legal Metrology Act, 2011 (Act) as they provide a package service involving the provision of food, water etc, because certain additional services are provided in conjunction with the supply of the commodity and therefore, the MRP on the package cannot be enforced in their case. This means that in case of the customer the customer does not go to the hotel or restaurant in order to buy a bottled product, and the ratio can be rationalized for any products sold with MRP under a composite contract by such a hospitality and entertainment business. It is this ratio which multiplexes have used to argue for selling sealed bottles of water at prices higher than MRP, although the Supreme Court has not specifically ruled on the applicability of the FHRAI ratio to multiplexes as opposed to hotels and restaurants.
Mandatory Consumer-Protective Exceptions
The Supreme Court’s decision does not give an “open license” to multiplex operators. Two binding mandates resist the judgement and these must be implemented by consumer forums:
- Free Drinking Water
The Supreme Court has given the assurance from cinema hall owners that they will provide drinking water free of cost for cinema goers. This is not just a volunteer effort – it’s been made part of the Court’s disposition and added to the judicial file. A multiplex which is charging for drinking water, denies water or does not provide functional drinking water systems is in violation of this judicial expectation and is liable on its own for “deficiency in service” as per Section 2(11) of Consumer Protection Act, 2019. A Consumer can seek relief at the appropriate District Consumer Disputes Redressal Commission.
- Infant and Baby Food
The Court also agreed that, when an infant or toddler accompanies a parent or guardian, cinema hall owners cannot – and do not – object to a reasonable amount of food to be carried for the infant. Parent carrying baby formula, milk bottle or soft food for infants is exercising an exception which has been implicit and recognised by the Apex Court itself.
- Medical Dietary Needs
The Supreme Court didn’t specifically discuss medical dietary needs in the operative order, but there is still a strong argument that someone with a chronic medical condition like Type 1 Diabetes or any other medical condition that necessitates a regulated diet cannot be denied entry with medically necessary food. This exception can be based on Article 21 and the overriding principle that conditions for entering into trade may not be enforced in a way that threatens life or health. The Rights of Persons with Disabilities Act, 2016 also provides for a ‘reasonable accommodation’ claim to benefit patrons with disabilities.
The Consumer Protection Act, 2019 — Remaining Scope for Consumer Redress
- Deficiency in Service
Section 2(11) of the Consumer Protection Act, 2019, states that the words “deficiency” shall mean “any fault, imperfection, shortcoming or inadequacy in the quality, nature or manner of performance of a service. Failure to supply free drinking water, as confirmed in front of Supreme Court, is an obvious deficiency of services and it would be maintainable with a consumer complaint in the District Consumer Disputes Redressal Commission.
- Unfair Trade Practices
Unfair trade practice’ as defined under Section 2(47) of the Consumer Protection Act, 2019 means a practice which adopts unfair methods or deceptive practices for the purpose of promoting the sale of goods or services. The issue whether the sale of packaged food items at prices that are vastly over the amount that the FHRAI composite transaction doctrine would allow is a matter which remains subject of adjudication, whether as an unfair trade practice under Section 2(47) or a restrictive trade practice under Section 2(41). The Supreme Court’s decision in K.C. Theatre was about the admission rules of the cinema halls, not to immunise all pricing properties in cinema halls from the scrutiny of the consumer law.
- Forum Access and Consumer Forum Precedents
The forum found a multiplex in Vijay Gopal v. INOX Leisure Ltd. (Consumer Forum, Hyderabad, 2019) to be guilty for charging a customer more than the MRP mentioned on a water bottle and not providing free drinking water. This was determined prior to the 2023 Supreme Court ruling and will continue to be pertinent as long as the MRP requirements of the Legal Metrology Act are applicable to truly packaged commodities which do not involve any composite service.
Practical Consumer Guidance
After K.C. Theatre (2023), the following are some practical takeaways from the law:
As a condition of entry, a cinema hall owner has a legal right to ban outside food and drinks. If the consumer does not wish to do so, he or she may not purchase a ticket; however, once a ticket is purchased on known terms, the condition will be binding.
Free drinking water to be provided without cost. Failure to pay for drinking water can be challenged and a complaint submitted to the District Consumer Disputes Redressal Commission.
Parents of infants are allowed to transport a “reasonable amount” of baby food and infant formula. If a security person denies, it may be brought to the multiplex management and if not, then to the consumer forum.
A consumer, while purchasing packaged, sealed products (chip packets sealed at the factory or printed MRP on bottles) should check the MRP on label. In case of packaged commodity which is not a composite service transaction, if the multiplex is charging more than this printed MRP then a complaint can be made to the Legal Metrology Controller of the concerned State under the Legal Metrology Act, 2009.
A consumer who has a medical certificate or prescription for food should be permitted to carry it for this purpose. This exception is not yet in the statute in the cinema context, but is legally persuasive, cognizant of Article 21 and the disability jurisprudence.
Conclusion
K.C. Cinema (K.C. Theatre) v State of Jammu and Kashmir (2023) 5 SCC 786 is a landmark Supreme Court decision that finally settled an ongoing legal dispute in a principled and firm manner. The Court has put in place a clear line of demarcation between private commercial regulation and public law intervention by grounding the decision on the right of the multiplex to prohibit outside food under Article 19(1)(g) and law of contract, and the violation of the writ jurisdiction by the High Court under Article 226 against a private party. But this decision isn’t a backsliding on consumer protection. The legal requirements for provision of free drinking water and infant food continue to be legally recognised. This MRP regime of the Legal Metrology Act is still applicable to genuine package commodities in an unabated fashion. The Consumer Protection Act, 2019 persists with remedies for failure of service and also for pricing practices, if it crosses over the line to the unfair trade area. This is the kind of individualised approach that consumer advocacy and consumers’ rights need to play a more significant part in the post-K.C. Theatre world, where consumer advocacy is not limited to demanding general right to take food outside, but also a more rigorous enforcement of the free water obligation, a more strict application of legal metrology rules to packaged food and water, and an evolving jurisprudence around medical and disability based exceptions. The commercial freedom of cinema halls is now resolved and the need now is to have a more active approach of the law towards dignity and essential protection that consumers seek in cinema halls.
References
Primary Legal Authorities
K.C. Cinema (K.C. Theatre) v. State of Jammu and Kashmir & Ors., Civil Appeal No. 77 of 2023, (2023) 5 SCC 786, 2023 SCC OnLine SC 22 (Supreme Court of India, 3 January 2023, CJI D.Y. Chandrachud and Justice P.S. Narasimha).
Federation of Hotel and Restaurant Associations of India (FHRAI) v. Union of India & Ors., (Supreme Court of India, 12 December 2017, Delhi High Court Division Bench — upheld the ratio that composite service transactions in hotels/restaurants are not governed by Legal Metrology MRP obligations for packaged commodities).
Constitution of India, 1950, Articles 19(1)(g), 19(6), 21.
Statutes
Consumer Protection Act, 2019, Sections 2(11), 2(41), 2(47).
Legal Metrology Act, 2009.
Legal Metrology (Packaged Commodities) Rules, 2011, as amended by the Legal Metrology (Packaged Commodities) Amendment Rules, 2017 (effective 1 January 2018).
Cinematograph Act, 1952.
Jammu and Kashmir Cinemas (Regulation) Rules, 1975.
Maharashtra Cinemas (Regulation) Rules, 1966.
Delhi Cinematograph Rules, 2008.
Rights of Persons with Disabilities Act, 2016.
Industry Data
PVR-INOX Annual Report FY 2022–23 (F&B revenue contribution data).
Author: Sangeeta Biswas
Law student and legal writer at Lawvaani. I explore the intersection of law and society through well-researched, reader-friendly articles.