Star India Pvt. Ltd. Vs. Asianet Satellite Communications - Court Judgment

Vikramajit Sen, J.

W.P.(C) 7445/2006

1. Mindful of the fact that these proceedings do not partake of an appellate nature the facts require to be stated in brevity. Interference under Article 226 of the Constitution of India would be justified if the impugned Orders are shown to suffer from perversity, or have come to existence by an infraction of any of the principles of natural justice, or is unreasonable in the Wednesbury sense.

2. The parties had entered into an Agreement in the year 2003 on a monthly subscription fee of Rs. 83.40 lacs and a subscriber base of 2.78 lacs. Disputes arose in respect of that contract which were eventually came before the Telecom Disputes Settlement & Appellate Tribunal (TDSAT). Petition No. 39(C) of 2004 was decided by detailed Orders dated 3.3.2006. TDSAT declined to interfere in the contractual terms up to 31.12.2003. For subsequent periods it was found that no contract had been executed; that Asianet Satellite Communications Pvt. Ltd.(ASIANET) kept insisting on reduction of subscriber base and consequent reduction in the monthly subscription. TDSAT has also opined that there was enough material before it to indicate that the principle of parity has not been adhered to by Star India Pvt. Ltd. (STAR) in relation to ASIANET vis-a-vis other cable operators in Kerala. It had further concluded that on the basis of evidence adduced by the parties the Universe of STAR subscribers in the category of `other cable operators' could not be as lowest as 2.75 lacs. TDSAT also observed that they were of the prima facie view that the subscriber base should be around 62000 to 81000 instead of 2.78 lacs. It also held that the burden of determining the subscription amount payable lay on STAR and this had to be determined by STAR based on the principle of parity with other cable operators in Kerala. TDSAT directed the parties to reconcile the accounts for the period 1.1.2003 to 31.12.2003 as per the terms of the written agreement for that period, and on such reconciliation adjustments were to be carried out for subsequent periods also. The dispute between the parties had been considered in all its complexities by TDSAT for the period prior to 1.5.2006. It cannot possibly be reasonably argued that TDSAT should have ignored all its previous proceedings while passing an interim order for the current period.

3. It will also be relevant to mention that in those earlier proceedings interim Orders had been passed by TDSAT directing ASIANET to pay monthly subscription at the rate of 55 lacs, as an ad hoc arrangement.

4. Interim Orders were passed by the TDSAT on 26.4.2006 in Execution proceedings where STAR had claimed Rs. 8,58,20,295/- over a period of time. As against the declared subscriber base of 2.78 lacs, ASIANET has contended that the figure should be between 62,000 to 81,000. TDSAT had directed the parties to reconcile account for the period 1.1.2003 to 31.12.2003 within thirty days. These final Orders are dated 3.3.2006 and are stated by learned Senior counsel for STAR to be the subject matter of an Appeal to the Hon'ble Supreme Court.

5. It should also be noted that no discrimination can be carried by STAR viz.-a-viz. the rate charged by it to any person. The matter had quite obviously been discussed threadbare before TDSAT which would be fully knowledgeable and competent to pass interim orders, as and when these became necessary. The TDSAT has held that for the period 1.1.2003 to 31.12.2003 liability stands executed. In respect of the period 31.12.2003 onwards, directions have been issued to STAR under seven Heads. This information is relevant in order to come to a conclusion as to whether any amounts are due and payable from the Respondents to STAR. In these Orders dated 26.4.2006, so far as the current year is concerned ASIANET should enter into a fresh agreement for continuation of signals following the Judgment of TDSAT being Star India Pvt. Ltd. v. Indusind Media and Communication Ltd. The TDSAT had clarified that for the year 2006, till be end of April 2006, the amount finally payable would be based on the monthly subscriber base and rate that gets determined for the year 2005.

6. No perversity or unreasonableness can be seen in any aspect of these Orders. The TDSAT was fully alive to every aspect of the dispute between the parties. Interference under Article 226 is not called for.

7. The writ petition No. 7445 of 2006 is dismissed. All pending applications also stand dismissed accordingly.

8. An Agreement dated 30.4.2006 has been executed between the parties. Learned Senior counsel for the STAR has stressed on the point that each page of the Agreement has been signed by ASIANET and its seal/rubber stamp has been affixed thereon. The Agreement records the number of subscribers as 314140 and the rate per subscriber as Rs. 32.10 per month thereby aggregating a subscription fee of Rs. 10083894. The case of ASIANET is that it was coerced into signing this Agreement, copy of which was made available to it by STAR at the eleventh hour, and STAR had not permitted ASIANET to record any objection on the Agreement. It is submitted that if the Agreement was not executed, ASIANET would have been left with no recourse under the Telecom Regulatory Authority of India Act, 1997 (hereinafter referred to as `the TRAI Act') or in terms of the specific directions of the TDSAT. However, ASIANET had recorded its objections within minutes of the so-called execution of the Agreement. It had thereafter approached TDSAT with its grievances, which eventually led to the passing of the impugned Orders dated 5.5.2006.

9. Mr. Rajiv Nayyar, learned Senior counsel for the STAR, has forcefully contended that since the number of subscriber as well as the rate finds mention in the Agreement interim Orders substantially varying these terms could not have been passed. In my understanding it must not be forgotten that the complete freedom of contract no longer exists in view of the appointment of a Regulator such as TRAI. Precedents enunciating the absence of powers in a Court to rework or rewrite a contract cannot be logically extrapolated into the present scenario. The Preamble to the TRAI Act itself clarifies that its purpose is to protect the interests of the service providers and consumers of the telecom sector. The Statement of Objects and Reasons of the TRAI Act contemplates provisions of wide range of services to meet the customers demand on reasonable price. This Agreement, thereforee, does not correspond in letter and spirit to other commercial contracts. Mr. Nayyar has sought to rely on Orders passed by this Court on 16.12.2005 in W.P. (C) 23663 of 2005 titled Star India Private Limited v. Shanskardhani Cable Network. It is true that dictum in Union Territory of Pondicherry v. P.V. Suresh : (1994)2SCC70 and Orissa State Financial Corporation v. Narsingh Ch. Nayak : (2003)10SCC261 , that Court should abjure interference in contractual matters and ought not to alter or re-write terms thereof had been noted. However, in view of the purpose behind the Regulator these observations may not be fully applicable to the present case. The difference between December, 2005 and today is that TDSAT has passed detailed Order dated 3.3.2006 in which all the issues which have been raised before me have been considered in detail. In contrast, the Orders that had been challenged before me in the previous writ petition did not contain the reasons that had persuaded the TDSAT to arrive at the impugned conclusions.

10. The interim Orders that had been passed for the current year is that STAR should activate its signals to ASIANET on payment of a monthly subscription of Rs. 55 lacs, which is to be adjusted after the final hearing. As has been seen a final Order had been passed by the TDSAT which has been carried in Appeal before the Hon'ble Supreme Court, but no hearing has taken place till date. TDSAT has observed that the subscription rate of 1.08 crores is double the interim figure arrived at by the Tribunal, which was also confirmed by the Division Bench of this Court.

11. In the impugned Order the TDSAT has duly considered the existence of a prima facie case in favor of ASIANET. It has held that the balance of convenience is in favor of enabling ASIANET to receive signals during the pendency of the petition for distribution amongst subscribers. In this regard it has been submitted that ASIANET has undertaken to TDSAT and has also furnished a Bank Guarantee to make up any shortfall if, as and when so found by TDSAT. Mr.Nayyar has contended that it would have been more appropriate, keeping in view the execution of the Agreement dated 30.4.2006, to call upon STAR to record an undertaking and/or furnish a Bank Guarantee to repay excess amounts to ASIANET. The argument is no doubt attractive. However, if it is accepted it would render nugatory the whole purpose behind the TRAI Act viz. the Regulation of rates on which signals are received and disseminated.

12. The most expedient option before the Regulator was to maintain status-quo as was existing prior to the signing of the Agreement. Otherwise, exorbitant rates can be demanded which would be beyond the means or capacity of a party thereby frustrating the objectives of TRAI Act. The TDSAT has also looked into the aspect of which party would suffer irreparable loss.

13. Keeping all the circumstances of the case in view I find that it is not possible to accept the contention of the STAR that this Court ought to exercise its extraordinary powers under Article 226 of the Constitution since the interim Orders are not perverse or unreasonable in the Wednesbury sense. No principles of natural justice have been violated. Keeping the annals of litigation in view, and the fact that the TDSAT has already passed a final Order which has not been varied or modified by the Hon'ble Supreme Court in its Appellate jurisdiction, the impugned Orders do not call for any interference.

14. The writ petition No. 7788 of 2006 is also without merit and is dismissed. All pending applications also stand dismissed accordingly.