Bombay High Court struck down directives issued by the Maharashtra government that banned cinema operators and digital platforms from charging convenience fees for online ticket bookings on Thursday. The HC bench, comprising Justices M S Sonak and Jitendra Jain, said that the government's directive issued between 2013 and 2014 violated the constitutional right to carry on business under Article 19 and lacked statutory backing. The development is a big relief for BookMyShow and PVR Cinemas, who had jointly moved to court, challenging the government’s order.
“The government’s orders prohibiting the collection of convenience fees on online bookings have no basis in the Maharashtra Entertainment Duty Act,” the Bombay HC’s bench said, according to Financial Express. “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,” the court observed.
What Did the Court Say?
The directive was issued by the government under the Maharashtra Entertainment Duty (MED) Act.
The cinema operator and digital platform argued that the directive hindered their business and negatively impacted their online innovation in consumer ticketing. In a petition, they argued that convenience fees cover the costs for a broad range of services, including digital infrastructure, payment gateway charges, and customer support. The fee is a voluntary commercial transaction between private parties, the petitioners added.
The court in its ruling said that no provisions under the MED Act gives the Maharashtra government an authority to regulate such commercial arrangements.
“If a customer finds it convenient to book online and pay a nominal fee, the state cannot restrain platforms from offering that option,” the Bench said, the FE reported.
The Bombay HC’s ruling will now serve as a precedent for other digital platforms across events, travel, and F&B that operate on convenience-fee-based models. Additionally, the ruling highlights a broader shift wherein the court’s are favouring businesses that are employing various digital-first approaches to improve consumer experiences.
