S.B. SINHA
Interpretation of various clauses of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004 (The Regulations) as amended from time to time arise for consideration in these petitions.
2. We may, at the outset, notice the factual matrix of these matters.
The petitioner is a Multi Service Operator within the meaning of the provisions of the Regulations, which has a Pan India presence. It intended to launch its services in the towns of Kanpur, Lucknow, Gorakhpur and Jaunpur in the State of U.P. For the aforementioned purpose, it made requests to the respondent herein for supply of signals on or about 24.9.2008, stating :
“Based on our discussion in last few meetings, you are kindly requested to finalize the terms and conditions on which you will provide us IRDs for Kanpur in the State of U.P.”
3. A reminder thereto was sent on 10.11.2008, along with which the following documents were annexed :
“(i) Memorandum and Articles of Association;
(ii) Certificate of incorporation;
(iii) Registration certificate under cable network regulation Act;
(iv) Registration certificate issued by customs and excise authorities for service tax;
(v) List of proposed cable operators and subscribers connected;
(vi) Address proof of the control room/head end;
(vii) Copy of our earlier letter dated 24.09.2008”
4. The respondent vide letter dated 14.11.2008 inter-alia contended :
“6. We note that since you have still not furnished complete details/documents in terms of TRAI’s Interconnection Regulations and have also not filled up the Application Form therefore, we request you to please let us have the following information/documents so as to establish whether or not you are a similarly distributor of TV channels qua the current Multi System Operator (“MSO”).
(a) Postal Registration Certificate
(b) Details of direct connections/details of subscribers, Subscriber Line Report (SLR) and in case there is no SLR then please provide evidence to corroborate your subscriber base (including local survey).
(c) List of cable operators who are/will be getting signals from your network along with their subscriber base.
(d) Copy of the latest monthly invoice showing the dues, if any, from the presently affiliated MSO, or from any agent/any other intermediary to show that no payments are due.
(e) Your exact area of operation clearly depicted on a printed map.
(f) Entertainment tax registration and returns filed with entertainment tax authorities.
7. We are also enclosing herewith an ‘Application Form’. May we request you to kindly complete the enclosed form and return it to us (together with relevant documents) in order to enable us to process and forward your request to the concerned Department(s).
8. In this regard, we would also like to inform you that we already have affiliates (existing MSOs) who are providing signals of our channels in Kanpur city. Please let us know your willingness to take the feed from one of the existing MSOs. If you are interested in taking the signals, we would be willing to instruct the existing MSO to provide you the feed of our channels.
10. By way of abundant caution, we state that your letter dated 24.9.2008 cannot be deemed to be a ‘request’ in terms of Clause 3.5 of TRAI’s Regulations in the absence of information/documents contemplated in TRAI’s Interconnect Regulations. We further state that should you choose to insist that your letter dated 24.9.2008 should be deemed to be a ‘request’ then please treat the present communication as our decision declining signals to you for ‘deliberately’ and intentionally not supplying details as contemplated in TRAI’s Regulations. We also take this opportunity to convey our displeasure on the conduct of a national level operator in concealing information/documents knowing fully well that it is obligatory for an operator to supply all details while making a ‘request’. We state that your cryptic letter dated 24.9.2008 and conduct as highlighted above speaks volumes about your intentions.”
Along with the said letter, a copy of the application form was also annexed.
The petitioner by its letter dated 02.02.2009, while contending that it has already furnished sufficient informations, however, did so again stating :
“We further provide the relevant information as per TRAI’s Interconnect Regulation :
1. Herewith find attached the Postal Registration Certificate
2. We have no direct points, so question of providing direct connections does not arise;
3. We are willing to take over Star Satellite Services and are in process and, the subscriber base for the same provided by them are 900 till date;
4. We are entering the area now and have never given our feed in the city of Kanpur; so, question of providing the invoice of any MSO whom we are affiliate does not arise;
5. As far as area of operation is concerned we are willing to cater whole city of Kanpur;
6. No question of Entertainment tax registration as, we don’t have direct points.
We want STAR DEN’s IRD’s separately, and run our business in the city of Kanpur and do not want to affiliate to any other MSO in the city.
Be as it may be, we hereby state that all the formalities was done and documents were provided to you earlier. Further, as per your requirement we are annexing the local Post Office Registration for the City of Kanpur.
Further, as far as the list of operators is concerned, we are willing to take over Star Satellite Services, Kanpur and in the process of negotiating the same with them. Till date we have not taken over the said network.”
5. A filled up application form was also sent, which according to the petitioner, was not statutorily required. The respondent, however, by a letter dated 03.02.2009 contended that the Service Line Records were required to be furnished in terms of Clause 9.1 of the Regulations. Although initially denied, it now stands admitted that the parties had met on or about 09.02.2009. According to the petitioner, the parties had agreed on the terms mentioned in its letter dated 10.02.2009, which are as under :-
“1. The both the parties had conducted this meeting for negotiating the terms and conditions on which the STAR DEN will be providing signals to DIGICABLE for the city of Kanpur.
1. During the course of the meeting DIGICABLE again brought to the notice of STAR DEN that it had installed the complete infrastructure required for retransmission of channels.
1. During the course of the meeting it was clarified on behalf of DIGICABLE that it had presently no LCO’s/direct connections and any other franchisee in the city of Kanpur in the city of Kanpur. However that DIGICABLE has a proposal to pay a sum of Rs.5,00,000/- (Rupees Five Laks) as minimum guarantee, without prejudice to their rights and contentions, which shall be adjusted subsequently against its future growth.
1. During the meeting it was discussed that DIGI Cable will give its true and complete list of MSO’s, franchisee’s and subscribers connected with their cable network along with their names, address and telephone number when it initiates business in the city of Kanpur, so that a verification of the subscribers can be done by STAR DEN.
1. On the request of STAR DEN, we once again provide you the scanned copy of Post Office Registration, which was earlier provided to STAR DEN with our application form sent to you on 02.02.2009.”
6. The respondent denied and disputed the terms of the said MOM, contending it to be as under :
“1. The both the parties had conducted this meeting for negotiating the terms and conditions on which the STAR DEN will be providing signals to DIGICABLE for the city of Kanpur.
2. During the course of the meeting DIGICABLE again brought to the notice of STAR DEN that it had installed the complete infrastructure required for retransmission of channels. STAR informed DigiCable that no Equipment can be issued to DigiCable unless and until it starts its operations since then on many occasions it has been found that Operators execute Subscription Agreement for a particular area and then misuse them to retransmit signals (in some cases) in some other District/State, STAR DEN informed DigiCable that as per its information, DigiCable had no infrastructure of its own in Kanpur and the same could be verified as soon as DigiCable furnishes its headend details.
3. During the course of the meeting it was clarified on behalf of DIGICABLE that it had presently no LCO’s/direct connections and any other franchisee in the city of Kanpur. That DIGICABLE is for the first time entering the business in the city of Kanpur. This was denied by STAR DEN since DigiCable has already entered into collaboration with Vishal Cable Network and Star Satellite. However that DIGICABLE has a proposal to pay a sum of Rs.5,00,000/- (Rupees Five lakhs) as minimum guarantee, without prejudice to their rights and contentions, which shall be adjusted subsequently against its future growth. We state that DigiCable had previously proposed payment of Rs.15,00,000/- per month as minimum amount to operate in the territory. The words “without prejudice to their rights and contentions, which shall be adjusted subsequently against its future growth” is nothing but an afterthought and were never said during the meeting. These words are also self-contradictory. After hearing the revised proposal of Rs.5,00,000/- instead of Rs.15,00,000/- for operating in Kanpur city, STAR DEN informed that DigiCable that this was unacceptable since STAR DEN has had very bad experience with DigiCable who has huge outstanding in almost all areas where it starts operations. It was informed that barring STAR DEN, payments are being made regularly to all other Broadcasters, STAR DEN informed DigiCable that considering the fact that there is rampant under-declaration in the city of Kanpur, it was willing to execute standard subscription agreement for subscription all STAR DEN channels against payment of monthly subscription fees of Rs.31,00,000/-. However, in such a situation DigiCable shall have to keep STAR DEN informed of operators taking signals from it in terms of TRAI’s Regulations, so as to take ensure that other MSOs are not wiped out from the market and also to effectuate provisions of Clause 10.2 of TRAI’s Regulations, DigiCable stated that it shall have to discuss the issue of subscription fees and stated that this issue can be discussed in the course of next meeting.
4. During the meeting it was discussed that DIGI Cable will give its true and complete list of MSO’s, franchisee’s and subscribers connected with their cable network along with their names, address and telephone number when it initiates business in the city of Kanpur, so that a verification of the subscribers can be done by STAR DEN. STAR DEN had sought information this information from DigiCable to ensure that DigiCable complies with Clause 12 of TRAI’s Regulations and also to ensure compliance of Clause 10.2.
5. On the request of STAR DEN, we once again provide you the scanned copy of Post Office Registration, which was earlier provided to STAR DEN with our application form sent to you on 02.02.2009. This time again copy of Postal Registration Certificate has not been provided by DigiCable.
6. DigiCable was informed that another meeting can be held on 17.02.2009 or 18.02.2009 on way forward on above issues, subject to availability of senior officials of both companies. DigiCable was also requested to also clear its dues so that it no longer remains a defaulter.”
7. In the meanwhile, the petitioner by a letter dated 11.02.2009 addressed to the respondent accused it of creating a false impression by fabricating a document that it has been adopting a dilatory tactics.
8. So far as minutes of the meeting sent by the respondent is concerned, the petitioner responded thereto by a letter dated 24.02.2009, inter-alia, stating :-
“We fail to understand your tactics of writing letters either on 11th Hour or “back dated” letter. We further fail to understand as to why you delay in process. It is further disheartening to state that you are intentionally not willing to give signals in the said area and trying to wipe out other MSOs in the area. You had in the meanwhile also disconnected Him Mohini, all these steps of your are to support your sister concern “DEN”. DIGICALBE categorically reply to the minutes of meeting given by STAR DEN on 18.02.2009 by Email, here below :
1. In reply to para 2, we state that we have already provided you with the address of our head-end as also the channels that we are in a position to retransmit as on date. Further, we welcome you for any inspection that you may like to do, however, we must clarify that this is not required under the Regulations and also that you do not insist on the same for other MSOs. You are denying from giving Decoders, inter alia, till we start our operations in the said area. This is also impermissible under the Regulations. No Regulation provides that an MSO, in spite of having full infrastructure, can be denied pay channels until he first starts his operation. It would an “egg and chicken story”. It is reiterated that we are a big MSO and do not wish to provide incomplete signals to the area as this would hamper our reputation and endeavour to acquire new subscribers. As per the said Regulation we were to furnish you operator’s details and headed address, which has been provided to you. Perhaps you are not aware that the infrastructure is ready.
2. We vehemently deny that we have entered into any collaboration with Vishal Cable and Star Satellite. The same we also earlier informed to you. It is disheartening to state that you are again and again relying on it and trying to take the matter to other direction, inter alia, by delaying the process. We had also informed you that we are in process of negotiation with Star Satellite Service, and have not yet taken over. Further, we had given a proposal of Rs.5,00,000/- (Rupees Five Lakhs only) towards your bouquet I and II; we reiterate para 4, of our minutes of meeting sent by us.”
9. The respondent by a letter dated 07.3.2009 while annexing a tabulated chart of the respective contentions of the parties with regard to the minutes of meeting dated 09.02.2009 inter-alia asked for a sum of Rs.31 lacs from the petitioner on the premise that the other MSOs, who are operating in the town of Kanpur have been paying the subscription fees of more than a sum of Rs.30 lacs. The petitioner by a letter dated 16.3.2009 complained that supply of signals has not been effected despite the fact that a period of six months had elapsed.
10. The petitioner filed this petition on or about 22.5.2009 praying inter-alia for the following reliefs :
“(a) Direct the Respondent to herewith issue decoders/IRD boxes to the Petitioner;
(b) Direct the Respondent to enter into a subscription agreement with the Petitioner on such terms and conditions as may be found reasonable and non-discriminatory by this Hon’ble Tribunal.”
11. The respondent filed its reply only on 02.12.2009 wherein it inter-alia has raised the following pleas :
(i) The petitioner is a defaulter in respect of its other network and, thus, is not entitled to any supply of signal, to which the amount of outstanding is Rs.15,99,76,390/-;
(ii) The petitioner has failed to supply the SLR despite the fact that in terms of Clause 9, it is mandatorily required to provide the details of direct connections/ details of subscribers and list of cable operators, who are/will be getting signal on it’s network along with subscriber base; and
(iii) Copy of the latest monthly invoice issued to seeker of signal showing their views, if any, from multi service operators or from any agent/any other intermediary, from whom the signals were being taken previously.
12. It was also averred that in the website of the petitioner, it was advertised that Vishal Network operating in the town of Kanpur has been taken over by it, although even the subscriber base of the said operator had not been disclosed.
13. The petitioner has filed a rejoinder to the said reply, inter-alia contending, it is ready and willing to pay a sum of Rs.8 lacs by way of minimum guarantee towards the subscription charges for supply of signal for the municipal limits of city of Kanpur.
14. In view of the aforementioned rival contentions of the parties, the following issues were framed :
“1. Whether the petitioner is entitled to supply of signals under Clause 3.2 of the Interconnection Regulations, and if so, on what terms?
2. Whether the petitioner is bound to comply with Clause 9.2 of the Regulations in their entirety before supply of signals can be granted despite the fact that the petitioner did not have any subscriber base as on dates of filing of the request dated 24.9.2008 and 10.11.2008?”
15. The petitioner intends to commence its services in four of the towns in the State of U.P. namely Kanpur, Lucknow, Gorakhpur and Jaunpur. As agreed to by the learned counsel for the parties, however, we have taken the Petition No. 121 (c) of 2009 as the lead case.
16. The questions of law, which arise for consideration principally is as to whether it is obligatory on the part of the petitioner herein to supply the Subscriber Line Report (SLR) to the respondent broadcasters although it had not yet started supply of any signal to any local cable operator or a subscriber directly.
17. Before, however, we advert to the said question, it would be necessary to notice certain statutory provisions.
18. TRAI has framed 2004 Regulations purported to be in exercise of its power conferred upon it under sub-clauses (ii), (iii) and (iv) of Clause (b) of Sub-Section 1 of Section 11 of TRAI Act, 1997 (Regulations).
19. Regulation 2 contains the interpretation clause.
20. ‘Cable Service’ has been defined in Clause 2(h) to mean transmission by cable programs including re-transmission by cables of any broadcaster’s television signals.
21. Clause 2 (j) defines ‘distributor of TV channels’ in the following terms :
“(j) “distributor of TV channels” means any person including an individual, group of persons, public or body corporate, firm or any organization or body re-transmitting TV channels through electromagnetic waves through cable or through space intended to be received by general public directly or indirectly. The person may include, but is not limited to a cable operator, direct to home operator, multi system operator, head ends in the sky operator.”
22. Multi System Opeator (MSO) has been defined in Regulation 2 (m) to mean :
“(m)“multi system operator(MSO)” means a cable operator who receives a programming service from a broadcaster or his authorized agencies and retransmits the same or transmits his own programming service for simultaneous reception either by multiple subscribers directly or through one or more cable operators, and includes his authorized distribution agencies by whatever name called;”
23. TRAI is an independent regulator. It has to perform its statutory duties. In exercise of its said jurisdiction, it has framed the said Regulations inter-alia providing for a right in a distributior of T.V. channels to obtain signals from another Multi Service Opeator or a broadcaster.
24. Clause 3.2 provide for a ‘must provide’ clause.
25. Indisputably it should receive strict construction.
26. This Tribunal, however, recently in Shreedevi Enterprise Vs. Channel Plus (Petition No. 156 (C) of 2010 disposed of on 29.9.2010) held that whereas the proviso appended to Clause 3.2 and Clause 9 are required to be mandatorily complied with, in a given case other and further conditions proposed by the broadcaster, have to be taken into consideration inter-alia, for obviating an issue as to whether the terms are reasonable or not so as to constitute the same to be a refusal on the part of the broadcaster. Such proposed terms on the part of the broadcaster to supply signal of the channels are also required to be considered for the purpose of considering as to whether the offer made by it would constitute ‘non-discriminatory terms’ therefor.
27. It has not been denied or disputed that the Proviso appended to Clause 3.2 of the Regulations, if attracted in a given case, will debar a ‘Distributor of the TV channel’ from invoking the same before this Tribunal. We intend to deal with the said question a litter later.
28. We may, however, notice Regulations 9.1 and 9.2.
The said provisions read as under :-
“First agreement between Multi System Operator and Cable Operator
9.1 In non-addressable systems, while executing an interconnection agreement for the first time between a multi system operator and a cable operator, the parties to the agreement shall take into account the subscriber base of the cable operator on the basis of the Subscriber Line Report (SLR) where such SLR exists. Where such SLR does not exist, this shall be negotiated on the basis of the evidence provided by the two parties on the subscriber base, including the subscriber base of similarly placed cable operators and local survey.
Explanation
The Subscriber Line Report (SLR) is only an indicative basis for arriving at the
subscriber base and the subscriber base as mutually agreed by the two parties couldbe more than or less than the number indicated by the SLR.
First agreement between Multi System Operator and Broadcaster
9.2 In non-addressable systems, while executing an interconnection agreement for the first time between a multi system operator and a broadcaster, the multi system operator shall furnish a list of the cable operators who will be getting signals from its network along with their subscriber base. The parties to the agreement shall take into account the subscriber base of cable operators connected to the multi system operator while negotiating the subscriber base of the multi system operator. For the consumers proposed to be directly served by the multi system operator, the procedure as laid down in sub-clause 9.1 of this regulation shall be followed.”
29. Recently, in Wire and Wireless India Ltd. Vs. MSM Discovery Pvt. Ltd., whereupon strong reliance has been placed by Mr. Maninder Singh, it has been held as under :-
“As per the Regulation 3.1 the distributor of the TV channel is prevented to engage in any practice or activity or understanding or arrangement to give exclusivity in its contracts with any distributor or TV channels which prevents any other distributor to obtain such channels for distribution. Exclusivity has not been permitted as a feature of India’s fragmented cable TV market by regulation. Exclusivity creates an inherent defect of being an agent of the broadcaster as an MSO who will not permit any other MSO to compete with it, thereby eliminating the competition at all.”
30. It was furthermore held :
“Taking cognizance of this regulation and from the proceedings between the petitioner and the respondent, it is evident that imposing a minimum guaranteed sum on the petitioner by the respondent in the event of deactivation/discontinuation of signals to other MSOs exactly from the date of the event, is as good as giving exclusivity of the contract and eliminate the process of competition amongst various other TV channel distributors, if any, as MSOs/LCOs in the impugned area.
It has been contended by the respondent that the petitioner has tried to pose as a fresh player in the market and is attempting to take a back door entry by bringing to our notice the letters dated 01.6.2006 and 12.6.2006 regarding the change of name of Shrinathji Cable Prikvate Limited to Shrinathji Distributor (P) Ltd. The operator’s code has also been brought to our notice as N-12587 in the request form for upgradation dated 19.7.2006 and the validation form dated 01.6.2006, which also include the IRD and Viewing Card details as submitted by M/s. Shrinathji Distributor Pvt. Ltd. The petitioner has clarified these points during arguments and also in its pleadings at the time of submission of the rejoinder. The petitioner has pleaded that for the purpose of providing cable TV service in the city of Varanasi the erstwhile Siti Cable Network Limited (predecessor in interest of WWIL the petitioner) along with one Shri Alok Parikh of Varanasi incorporated a company, namely, M/s. Shrinathji Cable (P) Ltd. The petitioner had 51% share in this company at the time of incorporation i.e. on 28.12.1995 and the relevant proof of certificate of incorporation have been submitted along with the rejoinder.”
31. It appears from the said decision that although a direction was issued keeping in view the offer made by the petitioner therein at Rs.3 lacs per month, which was considered to be sufficient for 2729 subscribers as also readiness or willingness on the part of it to pay a monthly subscription amount on any increase beyond the said number of subscribers on account of the increase of the subscriber base by virtue of migration/addition in the affiliate cable operators, it appears, the counsel for the parties were remiss in bringing to this Tribunal’s notice the provisions of Clause 9.2 of the Regulations.
32. Clause 9.2 indisputably is one of the conditions precedent for invoking Clause 3.2. On a plain reading of the said provision, it would be evident that even for entering into an interconnection agreement for the first time, the Multi System Operator is required to furnish a list of cable operators “who will be getting signals from its network along with their subscriber base”. So far as the proposal of the ‘Distributor of TV channel’ to make available the signals by way of retransmission is concerned, we are of the opinion that SLRs, as laid down in sub-clause 9.1 of the Regulations, are required to be furnished. As at present advised, no case has been made out for reading down the said provision. It has not been stated that for a new comer to the field, it is imposible to comply with the said provision.
33. It is, therefore, difficult for us to accept the contention raised on behalf of the petitioner that in a case, where the seeker of the channels is a first time operator, the Subscriber Line Report is not required to be furnished.
34. Clause 9.2 indisputably is one of the conditions precedent for invoking Clause 3.2. On a plain reading of the said provision, it would be evident that even for entering into an interconnection agreement for the first time, the Multi System Operator is required to furnish a list of cable operators who will be getting signals from its network along with their subscriber base.
35. There is another aspect of the matter, which cannot also be lost sight off. The petitioner made a request for supply of signal on or about 24.9.2008. The respondent in its response dated 03.02.2009 stated :-
“2. We state that in terms of Clause 9 of the TRAI’s Interconnect Regulations dated 04.09.2006 it is obligatory for the MSO seeking signals from the Broadcaster to furnish a list of cable operators who will be getting signals from its network along with their subscriber base. We further state that till date you have neither furnished any list of franchisees and sub-link operators nor any list of direct connections.
3. We state that along with our letter dated 14.11.2008 we had sought some additional information/documents which would be required for processing your request for supply of signals. We show our inability to process your application form in the absence of the required documents.
4. We state that you are deliberately not furnishing complete details so as to put the blame for delay on us. Be that as it may, we take this opportunity and once again request you to furnish the necessary documents and information as sought vide our letter dated 14.11.2008 so that your application could be processed accordingly.”
36. The contention of Mr. Maninder Singh is that reference to Clause 9 would amount to a refusal on the part of the respondent. We do not agree with the aforementioned contention. Indisputably, the parties have met. Although the versions as regards terms of the said minutes of meeting dated 09.02.2009
are different, the parties hereto, started blaming each other for causing unnecessary delay in making the supply of signal.
37. It is, however, of some importance to note that, whereas in the first request being dated 24.9.2008, evidently no document was annexed, the same was done by the petitioner only with its letter on 10.11.2008. The said letter reads thus :
“Please find enclosed herewith the relevant documents required as per Regulations and details relating to our establishment and business operations for your consideration which was even earlier provided to you, and should you have any further clarification or require any more details or information in this regard, you may feel free to write to us on the address mentioned hereinbelow:”
It was furthermore stated :
“Please acknowledge the receipt of this letter and let us know when the boxes can be made available to us. We are ready to provide you the SLR if you can provide us the SLR of the other MSO in the city of Kanpur so that we can negotiate the subscriber base accordingly.”
38. If the petitioner was ready and willing to comply with the provisions of Clause 9.2 of the Regulations, why was it at all not done has not been explained. However, from the list of documents enclosed with the letter of request, it appears that whereas according to the petitioner, the list of cable operators and subscribers directly connected to it was also enclosed, the respondent contends that the same was, in fact, not done. We are of the view that the contention of the respondent is correct.
39. In the aforementioned context, we may notice the evidence adduced by the parties hereto.
40. In Petition No. 181 (c) of 2009, i.e. in respect of the Gorakhpur area, Mr. Ajit Pratap Singh, PW-1 stated as under :
“It is correct that the respondent informed us by its letter dated 3.4.2009 the application which was sent to them by the petitioner along with this letter dt. 24.3.209 is unsigned and requisite information and documents have not been supplied.
It is incorrect to suggest that even along with letter dated 6.4.2009 requisite documents and information were not supplied to the respondent by the petitioner.
It is correct that the signed application was sent with letter dated 6.4.2009.”
41. In Petition No. 121 (c) of 2009, Mr. A. P. Singh stated :
“It is correct that in the area of Jounpur, Gorakhpur and Lucknow we have already entered into the subscription agreement with ESPN, Zee Turner, UTV, Neo Sports and we are transmitting their signals. In so far as MSM Discovery is concerned, the same is with us in Lucknow and Jounpur. Again said, most probably ESPN is not with us in area of Jounpur but still I am not sure.”
42. However, in the said Petition, Mr. Satinder Singh Sidhu, RW-1 stated :
“I have had negotiations with the petitioner company for the Kanpur City.
These negotiations were held in February, 2009 and later as well.
The negotiations were held even during the pendency of the petition.”
43. It is, therefore, admitted that in the areas of Jaunpur, Gorakhpur and Lucknow, the petitioner has entered into the subscription agreement with ESPN, Zee Turner, Zee TV, New Sports etc. So far as Lucknow and Jaunpur are concerned, re-transmission of signals had taken place. It may, therefore, not be correct to contend that in none of the four areas, the Subscriber Line Reports were available. If the petitioner had been receiving supply of signals from other broadcasters, it is expected that it would be receiving the invoices, wherefor also the number of subscribers, to whom such re-transmission of signals of the respective broadcasters has been given, would be known.
44. We may notice some decisions rendered by this Tribunal in this regard.
In M/s. Star Satellite Services Vs. Star Den Media – Petition No. 196 (c) of 2008 disposed of on 30th April, 2009, this Tribunal held :
“The petitioner’s claim is that even currently, it is receiving signals from another MSO – M/s. Him Mohini and is supplying the same to other cable operators. There is no proof of such activity. Even on specific questions of invoice made and payments received, the counsel for Petitioner was not in a position to furnish any evidence to support its contentions. In the light of this, we have to conclude that the petitioner is not carrying on any activity at present and that it is not an MSO. It has also not produced any agreement even to consider the contention that it was illegally disconnected signals by the Respondent in May, 2007. The Petitioner has not been able to produce any agreement or invoices or payments to indicate the presence of any cable operators. We have therefore to conclude that this is a petition filed without bona fide intentions. We do not, however, wish to go into the contention of the Respondent that the reason for this Petition is because M/s. Digi Cable wants to enter the area on the basis of Petitioner’s dealings with Respondent.”
45. In Hathway Cable Datacom Vs. Star Den Media Services Ltd. – Petition No.26 (c) of 2010 disposed of on 21.5.2010, this Tribunal has held that the exception, which has been provided in the said Regulations as also the Explanatory Memorandum appended thereto, must be given effect to.
46. In M/s. Friends Cable Vs. Star Den Media Services Ltd. – Petition No. 129 (c) of 2009 disposed of on 24.12.2009, this Tribunal held :
“13. Be that as it may, the petitioner indisputably has been requesting the respondent to grant direct connection. It is possible that, it in the meanwhile, have been obtaining signals from another MSO, namely, M/s Akash Cable. The respondent, in law, however, cannot refuse to grant direct signals to an MSO asking for the same for more than one reason:
(a) Because it is the mandate of the regulations;
(b) The Supreme Court of India in Star TV (P) Ltd. Vs. Sea TV Network Ltd. – 2007(4) SCC held as under:-
“15.3 The difficulty arises when the broadcaster as in the present case appoints or enters into an agreement with a distributor, who in turn is an MSO and who in turn has his own business because in such a case such an agent-cum-distributor is also a competitor of the MSO who seeks signals from the broadcaster. We are living in a competitive world today. If under the Interconnection Regulations an MSO is entitled to receive signals directly from a broadcaster, if directed to approach his competitor MSO then, discrimination comes in. The reason is obvious. The exclusive agent of a broadcaster has his own subscriber base. His base is different from another MSO in the same territory. If that another MSO has to depend on the Feed to be provided by the exclusive agent of the broadcaster then the very object of the Interconnection Regulation stands defeated.”;
(c) This Tribunal in Ortel Communications Ltd. Vs. Yashoda Enterprises (Petition No.141(C) of 2008) in its order dated 21.10.2008 held as under:-
“10. During the course of arguments, the counsel for Respondents raised the issue whether the interpretation sought to be given by the Petitioner would not result in a situation where every local cable operator would seek signals directly from the broadcasters. It should be pointed out that this situation already exists. Not only do some local cable operators seek signals directly from the broadcasters but more importantly, this is what is done by the DTH operators and Head ends in the sky (HITS) operators. These entities receive signals directly from the broadcasters and retransmit the same to the consumers directly. They are covered under the term ‘distributor of TV channels’. What is important is their ability to receive signals directly from the broadcaster and retransmit the same. DTH and HITS systems operate in an addressable mode. On the other hand, in a non-addressable system, if most local cable operators do not receive signals directly from the broadcasters but from an MSO, it is not because of any restriction in the Regulations or even technology but because of the investment involved in being able to receive signals directly from a broadcaster in digital mode and converting them into analogue mode for retransmission to consumers. It is because of this inability to invest that most cable operators receive the signals from an intermediary viz., MSO in an analogue mode. It is evidently the reason why the term ' local cable operator', which is widely used commercially, does not find a place in the definitions. A practice, albeit common, necessitated by commercial considerations, need not and should not, in our view, become a legal requirement. We accordingly do not agree with the view that a multi system operator is one who receives signals from the broadcaster and retransmits the same to one or more local cable operators. What is important is the ability to receive signals of TV channels from the broadcaster and retransmit the same to the consumers directly or indirectly, including through local cable operators.”
47. It was furthermore held -
“11. The counsel for Petitioner drew our attention to the recommendation said to have been made by the Telecom Regulatory Authority of India (TRAI) on 15.7.2008 to redefine the term multi-system operator (MSO) to mean any person who manages and operates a multisystem cable television network to provide cable television service to one/multiple local cable TV operator (s) or to any other distribution platform permitted and licensed by the government. Admittedly, this is only a recommendation supposed to have been made by TRAI and needless to say, requires examination and decision by the competent authority. Even as on today, let alone on the date of application of the Petitioner to the Respondent or even on the date of filing this petition, the definitions cited in para 6 above hold ground and only they can be the basis for consideration and decision in this case. We therefore hold that this contention of the Respondent is inadmissible. Outside the framework of this case, it appears to us that the proposal to redefine the term ‘multi system operator’, if true, would warrant a careful examination by the appropriate authority as it has the potential of mandating a hierarchy and bringing in rigidity in a scenario of evolving technology, and possibly adding to the costs.”
The judgment of this Tribunal was upheld by the Supreme Court of India.
48. In Sikka Star Satellites vs. Hathway Cable and Datacom Pvt. Ltd. – Petition No. 94 (c) of 2010, it has been held :
“16. The petitioner has not only failed and/or neglected to file any proof to show as to what was its real subscriber base, but also failed to file any SLR as is mandatorily required under Regulation 9 of The Telecommunications (Broadcasting and Cable Services) Interconnection Regulation 2004, as amended from time to time.
The petitioner, therefore, in our opinion has not complied with the statutory requirements.”
49. Mr. Maninder Singh, learned Senior Counsel, however, urged that in a case of this nature and keeping in view the decision of this Tribunal, which has been relied upon by Mr. Jain being related to a dispute regarding subscriber base, the decisions are not applicable. It may be so, but we do not find any reason not to opine that Clause 9.2 must be given effect to.
50. It is now a well settled principle of law that a statute should, unless there exists any anomaly and/or leads to any absurdity, should be given a plain and literal meaning. A statute should be construed also in the text and context thereof. If an exception has been created to main provision, there is absolutely no reason as to why it should not be given its full effect.
Each case, therefore, must be decided on its own facts but the basic principle of law is required to be followed.
51. Mr. Maninder Singh has also placed strong reliance on a decision of this Tribunal in M/s. Nirman Associates Pvt. Ltd. Vs. Star Den Media Services Pvt. Ltd. – Petition No. 157 (c) of 2009 disposed of on 30.4.2010, wherein the subscriber base disclosed by the MSO being 1800 was enhanced to 3000. It was observed :-
“We have arrived at the aforementioned figure as it is not possible for us to do so with the mathematical exactitude. The interim order passed by us was provisional in nature. It would, in our opinion, meet the ends of justice if we direct that the interim order should be made absolute subject to the condition that the number of subscribers shall stand substituted by 3000 subscribers. This order, however, shall be of course subject to any other or further negotiated figure that the parties may arrive at on mutual basis and/or if an agreement is entered into by and between parties, and/or if any occasion arises subsequently.
Clause 3.2 of the Regulations stipulate a ‘must provide’ clause. In terms of the said Regulations, the broadcasters and/or their distributors are obligated to provide signals and/or cause the same to be provided on a non-discriminatory basis. The terms and conditions must, therefore, also be reasonable. Keeping in view the reasonableness aspect of the matter, we were required to determine the number of subscribers and we have resorted to the aforementioned exercise only with that end in view.”
Such an exercise in a case of this nature is not necessary.
52. Reliance has also been placed on M/s. Variety Entertainment Pvt. Ltd. Vs. Star Den Media Services Pvt. Ltd. – Petition No. 177 (c) of 2009, wherein it was held :
“It is necessary also to place on record that Mr. Gopal Jain, the learned counsel appearing for the respondent himself suggested that the interim order may be passed directing the petitioner to deposit a sum of Rs.10 lakhs.
Keeping in view the facts and circumstances of the case, I am of the opinion that the interest of justice would be subserved if the respondent is directed to supply signals to the petitioner as an interim measure subject to the following conditions :-
i) The petitioner shall pay a sum of Rs.7 lakhs to the respondent. On receipt of such amount the signals may be supplied within 24 hours thereafter.
ii) The subscriber base for the future for the purpose of calculation of the amount of subscription fee shall be based on 4000. The subscriber base shall be subject to reconciliation and the same would be without prejudice to the rights and contentions of the parties in any future proceedings including this proceeding.
iii) For arriving at a correct subscriber base, if the parties so desire, may conduct a joint survey. It may be open to the respondent to make inspection of the office of the petitioner at Hyderabad with prior notice of 24 hours.
53. We, however, do not see as to how the said decisions are applicable in the fact of the present case.
54. So far as the question of default is concerned, it is not denied or disputed that the ‘Proviso’ appended to Clause 3.2 of the Regulation is imperative in character. It is furthermore not in controversy that the petitioner has a Pan India presence. It has entered into a large number of agreements with the respondent. Mr. Jain contended that the petitioner being a juristic person, if it is found that it has a track record of default, the respondent would be at liberty to deny him the grant of signal.
55. So far as the said question is concerned, we may notice a subsequent fact. The petitioner had filed the Petition No. 180 (c) of 2009 in regard to Varanasi. A settlement has been arrived at in relation to the said matter in March 2010.
56. It is also not much in controversy that RW-2 in para 3 of his evidence stated that a sum of Rs.15,99,70,328/-was due as on 30.11.2009, but on 8.10.2009 the amount due was Rs.6,32,20,730/-. In para 5, the said witness has spoken about a settlement and thereafter no statement has been made as to whether the petitioner is in default or not. Our attention has been drawn to the fact that some channels are not being carried by the respondent from March 2010. We are not very sure about the correctness or otherwise of the contention of Mr. Maninder Singh i.e. they have stopped issuing invoices thereafter. However, it appears that in September, 2010 notices had been sent to the petitioner by the respondent only on the ground of not signing of agreement and not on the ground of default. A settlement had taken place in October, 2010 by and between the parties hereto.
57. Finally, such an allegation has been leveled that the petitioner is a chronic defaulter. We fail to understand as to how it can be a defaulter, as the same has not been established to our satisfaction.
58. Mr. Ajay Gupta in his evidence stated, which appears at page 196-B of Petition No. 121 (c) of 2009, that he was not aware that a settlement had been reached between the parties for the other areas on 8.10.2010. He deposed on 25.10.2010. He is the Senior Vice President of the Company. It is, therefore, difficult to agree that he would be ignorant about the settlement entered into by the parties in regard to other areas and in particular, Delhi and U.P. Another interesting feature also deserves our attention. According to the petitioner, the respondent is acting malafide as Den Network Ltd. has almost a monopoly in Kanpur.
59. Mr. Ajay Gupta in his evidence although has accepted that he has been looking after the accounts of Kanpur area for the respondent, it is difficult to comprehend as to how he was not sure that the said operator had been operating in Kanpur and has an agreement with the respondent as he used the words “most probably”. He, although agreed to produce records in regard to the subscription fees paid by WWIL and Den Network, but eventually did not. He even expressed his ignorance about the ownership of the distributor concern of the area of Kanpur, namely Jai Mata Di Enterprises. He has not even heard of Sanjit Dixit, who is running the said Jai Mata Di Enterprises although he had been looking after the accounts of the respondent Company. It is difficult to believe the said witness. The witnesses of the respondent could not have made endeavours to suppress facts.
60. The petitioner has initially offered a sum of Rs.5 lacs per month. It enhanced the said amount to Rs.8 lacs. According to the respondent, however, it should supply signals of its channels on a monthly subscription fee of Rs.31 lacs. The petitioner contends that the total amount of subscription fee paid by other MSOs in the city of Kanpur collectively is Rs.30 lacs. RW-2, Mr. Satinder Singh, however, in his cross examination stated :
“There were three MSOs, not five. The amount paid by them collectively was more than30lakhs. I do not remember the exact amount. I do not even remember the range of payment made by them.”
61. Mr. Jain would contend that the total amount of subscription collected by the respondent is more than Rs.30 lacs. He has handed over to us, in a sealed cover, the agreements entered into by and between the respondent with Zee Turner, Neo Sports, UTV for the entire State of U.P. The first one only for the area of Jaunpur and Lucknow. No document, however, has been handed over to us to show as to whether the contention of Mr. Jain that respondent has been getting much more amount from the other MSOs i.e. above Rs.30 lacs, is correct. In a situation of this nature, we think that approach of the respondent is not correct.
62. A Multi Service Operator may commence its operation in a town in a small way. It is not for the broadcaster to say, as has been contended before us, that in such an event for the purpose of maintaining a level playing field, it is incumbent on the part of a MSO to start its operation with another MSO with a small area and increase its activities from stage to stage. How a business activity is to be carried out by an MSO is not the concern of the ‘Broadcaster’ or the ‘Content Aggregator’. It is merely concerned with the subscription fees which would have a bearing with the subscriber base and the area vis-Ã -vis the viewership of the channels.
63. There is no such requirement under the Regulations, in our opinion. It is one thing to say that a broadcaster keeping in view the SLRs and/or the subscriber base is to start with a figure, so that the parties can enter into a negotiation, but in a situation of this nature, it would be wholly inequitable as also unreasonable to ask the petitioner to enter into an agreement with a minimum guarantee of Rs.31 lacs. It goes to show that the respondent intend to deny the request of the petitioner unjustly. The proposed term being wholly unreasonable, the same would amount to a refusal.
64. Although the request of the petitioner was for the compliance of the Regulations in its letter and spirit, but then it would not be a case where the same can out rightly be rejected as not bonafide. The sum of Rs.8 lakhs per month cannot be said to be a paltry one. It has also not been shown before us as to how the same would cause financial loss to the respondent. The capability of the petitioner having regard to its Pan India presence, cannot be held to be unknown to the respondent. If it was a defaulter, it should not have entered into a settlement with it but having entered into a settlement, it cannot be said that the petitioner intends to start an experiment in four of the towns of U.P.
We are not unmindful of the fact that the ‘area of operation’ is significant keeping in view the statements made in the Explanatory Memorandum by TRAI and in particular, para 10 and 11 thereof.
65. We, therefore, are of the opinion that interest of justice would be sub served if a direction is issued that the petitioner shall furnish, in terms of Clause 9.2, a list of the cable operators who will be getting signals from its network along with their subscriber base of each of the towns, for which it intend to obtain supply of signals from the respondent namely Kanpur, Lucknow, Gorakhpur and Jaunpur. On receipt of compliance in terms of the aforementioned direction, the parties shall enter into negotiations without any reservation, whatsoever.
We are sure that keeping in view the fact that the respondent has a reputation to keep, only because it has appointed a distributor in the town of Kanpur, the same should not come on its way of holding free and frank negotiations.
66. Before parting, however, we may observe that the findings `aforementioned that the settlement has been arrived at by and between the parties, would not mean that even in the areas where the petitioner is a defaulter, the respondent would not be entitled to enforce its claim. It is entitled to do so.
67. We must furthermore place on record that keeping in view the peculiar facts and circumstances of this case, we, as at present advised, need not go into the question as to whether a Multi System Operator having a Pan India presence like the petitioner, if becomes a defaulter in one part of the country, would attract the ‘Proviso’ appended to Clause 3.2 of the Regulations on the premise that it being a juristic person, the parties are entitled to raise such a contention.
68. This petition is disposed of with the aforementioned observations and directions. In the facts and circumstances of this case, however, there shall be no order as to costs.