An appeal has been filed by the nonprofit organisation CUTS against the decision of the fair trade regulator CCI to disprove its complaint about the planned merger of the cinema companies PVR and INOX Leisure.

Consumer Unity and Trust Society (CUTS) has cited PVR and INOX as parties in its plea to the National Company Law Appellate Tribunal (NCLAT).

The subject was scheduled for trial before a two-member bench on Wednesday but was postponed at the plea of the parties until 9 February, 2023.

In September of this year, the Competition Commission of India (CCI) dismissed a suit against the proposed merger of multiplex companies PVR and INOX Leisure. CUTS has appealed this decision, stating that suspicion of potential anti-competitive behaviour by an entity cannot be the focus of the investigation.

The NCLAT also serves as the appellate tribunal for any order, decision, or direction given by the CCI.

PVR and INOX Leisure declared their merger on 27 March. As the deal was below the regulator's permissible level, the businesses did not need to request CCI permission.

Deals that exceed specific thresholds must receive regulator approval under the competition statute.  

Asserting that the proposed merger deal would have anti-competitive implications on the film exhibition sector, CUTS had appealed to CCI and asked for a thorough investigation of the two parties.   

The regulator made it very clear while releasing the order that any post-facto allegations of abusive behaviour might be investigated in accordance with the Act's provisions.

Considering claims that PVR-INOX Leisure will eventually become a dominant business and concerns about potential abuses of dominance, as per CCI, the proposed deal hasn't even been completed to grant the new entity legal status.

With a chain of more than 1,500 screens, the planned merger would establish the biggest multiplex chain in the nation.

The owners and creditors of the two corporations have already accepted the merger. The  NSE and BSE approved the combination of PVR and Inox Leisure in June of this year.

The Competition Act forbids agreements that "cause" or are "likely to produce" considerable harmful effects on competition in India, according to a statement from CUTS.

It further said that the requirements to invoke either of these terms should not be the same because they are both employed knowingly and independently.In the complaint it presented against PVR and Inox, CUTS contested the CCI's decision, claiming that the merger deal between PVR and Inox would likely have a significant negative impact on Indian competition.