Tata Sky Ltd and Another Vs Espn Software India Pvt Ltd - Citation 941339 - Court Judgment

Judgment:

S.B. Sinha

Introduction

Validity and/or legality of several provisions of the Reference Interconnect Order issued by the respondent herein is in question in these petitions wherein the following prayers have been made :-

(a) Set aside the Impugned Communications 25.03.2010, purporting to amend the RIO,

(b) Set aside and quash the Deactivation Notice dated 14.05.2010 and Public Notices dated 18.05.2010

(c) Hold and declare that Clause E (V) (4), Clause E (V)(5), Clause E (V)(8), Clause G, Clause G (V) (1) (xii), Clause G(V) (1)(xiii), Clause G( V)(1)(xiv) of the RIO as are unfair, unreasonable and illegal;

(d) Pass any order(s) as the Hon'ble Tribunal may deem fit in justice, equity and good conscience.

Background Facts

The petitioners are DTH operators. The respondent is a Sports Broadcaster.

We may notice the basic facts of the matter from the case of Tata Sky.

The petitioner has filed this petition questioning a Reference Interconnect Order (RIO) issued by the respondent on or about 15.5.2008, on the premises that some of the provisions thereof are contrary to and/or inconsistent with the provisions of the Telecommunication (Broadcasting and Cable Services) Interconnection (4th Amendment) Regulations, 2007 issued on 3.9.2007 (hereinafter called and referred to for the sake of brevity as `the said Regulations), in terms whereof the petitioner has sought for a direction upon the respondent to provide its contents at a reasonable price.

This Tribunal passed an order of interim injunction on or about 24.7.2009 which reads as under :-

“The petitioner will be free to provide channels to its subscribers as per the Regulations. The petitioner will continue to pay for the channels availed of by the subscribers of the petitioner as per the applicable Regulations.

Learned counsel for Respondent No. 1 submits that the petitioner should pay for the two channels for the Months of June and July 2008. Petitioner's objection is only qua third channel regarding which the order has been made. In reply, learned counsel for petitioner submits that since the petitioner was relaying these channels under Orders of the High Court, the petitioner did not charge anything from its subscribers for these two channels and therefore is not liable to pay anything to the respondent. Let this aspect be also considered in course of 'negotiations'. Failing settlement, this aspect will be decided by this Tribunal.”

We may, however, notice that prior thereto this Tribunal in two matters; one filed by Dish TV and another by Tata Sky, inter alia having regard to so called underdeclaration of the subscriber base by the Operators operating on analogue mode opined that the rates charged by the broadcasters should be fixed at 50% of the non-CAS rates. The said order was, however, ad hoc in nature and by reason thereof, the TRAI was directed to fix an appropriate tariff.

By Press Note Nos.38 and 39 issued by the TRAI on 18.4.2008, purported to be on a broad consensus of the broadcasters, the same ceiling was directed to continue.

The respondent, however, did not agree therewith. According to it, the said press release was not applicable to its case as it has been supplying the signals as a sports Broadcaster on an add on package.

The TRAI, however, issued a direction upon the respondent to follow the said press release.

Aggrieved by and dissatisfied with the said directions, the respondent herein preferred an appeal thereagainst before this Tribunal which was marked as Appeal No.10 (C) of 2008.

By an order dated 13.5.2009, the said appeal was disposed of. With a view to appreciate the issues involved in the matter, we may notice the questions which were posed in the said Appeal by the

Tribunal for its determination :-

“A. Whether is it appropriate for 'TRAI to issue the impugned direction requiring implementation of TRAI's interpretation of the decisions of TDSAT and ask the Appellant to comply with the norm laid down by TDSAT in its order dated 14th July, 2006 passed in Petition no. 1 36 (C) of 2006 and judgment dated 31st March, 2007 in Petition no. 18(C) of 2006, when the Appellant was not a party in either of those two cases?

B. Whether there is any legal infirmity in the amended RIO issued by the Appellant on July 8, 2008?

We would notice the findings of this Tribunal on the relevant issues a little later.

The TRAI did not prefer any appeal thereagainst but the petitioner did. The Supreme Court of India vide order dated 6.7.2009 dismissed the said appeal, stating as under :-

“..Heard learned counsel for the parties.

Permission to file civil appeal is granted.

We do not find any ground to interfere with the impugned order. The civil appeal is, accordingly, dismissed.

Let Telecom Regulatory Authority of India decide the entire matter within a period of two months from the date of receipt/production of copy of this order without being influenced by any observation made in the impugned order.”

Extension of time was sought for and was granted by the Supreme Court of India by its orders dated 30.9.2009 and 19.2.2010 upto June 2010. The impugned RIO was issued by the respondent on or about 25.3.2010.

Indisputably, at the relevant point of time the interim order passed in the case of the petitioner was in force. The petitioner, by a letter dated 1.4.2010, called upon the respondent to withdraw its communication relating to fixation of price as contained in its letter dated 25.3.2010, stating as under:-

“In response to your letter dated March 25, 2010, whereby yon have unjustifiably, arbitrarily and unilaterally attempted to increase your prices, please note:

1. That our commercial relationship is governed by the various orders passed in Petition No. 104(c) of 2008 (Hereinafter the said Petition).

2. That since the said Petition is sub-judice, we call on you to exercise restraint, respect the sanctity of the court and not disturb the judicial process by such

communications.

3. That the rates that govern our commercial relationship continue to be guided and governed by the TRAI Press Note no. 38 and 39 dated April I8, 2008.

4. That till date TRAI has not made any changes in the Press-Note with regard to DTH content tariff and thus your unilateral price increase is illegal and arbitrary.”

The petitioner again by a letter dated 14.4.2010, contended as under :-

“That even during the last hearing of the said Petition in March when the TDSAT reserved its orders in the said Petition, you did not present arguments on commercial interconnection terms stating that the dispute is virtually infructuous since you had revised your RIO following the TRAI directions dated 24 June 2008. Thus you represented to the court that no dispute remains on the RIO commercial terms and the court need not dwell on the issues raised in the petition.

That it should be noted that you continued to raise invoices after the 24th July 2008 as per the accepted regulatory position and have continued to accept the payments made by us, without raising any issue. These payments were based on your accepted RIO price as per the applicable DTH tariff framework multiplied with the average subscriber base. This continued acceptance of the payments and your invoices were also represented before the TDSAT by you in the Said Petition to demonstrate that there were no outstanding disputes / issue between the parties in this regard. It was represented that the only issue that needs adjudication is the issue of retrospective payments for the June 2008- September 2008 period.”

The respondent, however, served a disconnection notice on or about 14.5.2010 relying on or on the basis of the order of this Tribunal, stating as under :-

“……Thereafter, the controversy that gave rise to Tata Sky filing the petition against ESPN was resolved in Appeal No.10/2008 filed by ESPN against TRAI by Order dated May 13, 2009 passed by the Hon’ble TDSAT, which order was challenged by you before the Hon’ble Supreme Court after seeking leave. The Hon’ble Supreme Court granted you permission to appeal against the order dated May 13, 2009 passed by the TDSAT and dismissed your appeal by its order dated July 6, 2009 passed in Civil Appeal D.No.15117 of 2009.

The Hon’ble TDSAT by Order dated May 13, 2009 had rejected the contention of TRAI that ESPN was liable to provide its services at 50% of its non-CAS rates even if its channels were offered by DTH platforms as an “add-on pack”. The Hon’ble TDSAT was conscious of the fact that TRAI would take some time in undertaking the consultation process and therefore the Hon’ble TDSAT held “we leave the question of add on packages for negotiation between the respective parties but only till such time as TRAI issues a regulation in this regard”.

We requested you time and again to come forward for negotiations but you failed to come forward for meaningful negotiations though meetings did take place between our respective representatives. In these circumstances and in the absence of an agreement between us it will not be possible for us to continue to provide our services to you. Therefore, we are constrained to initiate steps to deactivate our services to your network.

Accordingly, on account of Non-Signing of the Agreement, please treat this letter as a 21 day’s notice as required under Clause 4.1 of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation 2004, as amended by the Telecommunication (Broadcasting and Cable Services) Interconnection (Third Amendment) Regulation, 2006.

We therefore once again call upon you in the interregnum to come forward to negotiate earnestly and sign an Agreement else we would be left with no other option but to deactivate your services……..

A public notice was also issued on or about 18.5.2010.

Order of the TRAI

Subject: Reference Interconnect Offers of broadcasters for Direct to Home (DTH) operators

New Delhi, 18th April, 2008 – The Telecom Regulatory Authority of India on the basis of interactive discussions with the broadcasters of pay channels in the context of rates and packaging of channels being offered by them for Direct To Home Platform has finalized the road map for speedy conclusion of interconnection agreement between the broadcasters and DTH licensees.

Provisions contained in sub-regulations 13.2A.1 and 13.2A.2 of regulation 13 of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation, 2004 (hereinafter “Interconnection Regulation”), as amended from time to time, require the broadcasters of pay channels to publish their Reference Interconnect Offers specifying the technical and commercial terms and conditions for interconnection for the Direct To Home Operators. The aforesaid regulation makes it compulsory for the broadcasters to offer their pay channels on a-la-carte basis, in addition to the bouquets, to the DTH operators.

During the course of the discussions referred to above with the broadcasters, a general consensus emerged on the composition of bouquets and pricing of a-la-carte channels and bouquets. The Broadcasters will offer the same bouquets to the DTH operators as are being offered by them for non-CAS cable distribution. In addition, they are free to offer additional bouquets. The rates of bouquets and a-la-carte rates of pay channels so offered to the DTH operators will broadly be in consonance with the TDSAT’s judgment dated 31st March, 2007 in petition no. 189(C) of 2006 and judgment dated 14th July, 2006 in petition no. 136(C) of 2006 wherein the rates were to be fifty per cent. of the rates at which these bouquets/ channels are being offered by them for non-CAS cable distribution i.e. non-addressable platform. All bouquet rates and the a-la-carte rates must satisfy the provisions of the afore-said Interconnection regulations.

The above will be without prejudice to the orders/ judgments of the Hon’ble TDSAT or any other court or competent judicial forum or subsisting proceedings, if any, before the Hon’ble TDSAT or subsisting proceedings, if any, before any other court or competent judicial forum.

The a-la-carte rates and bouquet rates of pay channels, as reported by the broadcasters for cable TV operations in non-CAS area have also been put up on the website of the Authority today. It is expected that the above will facilitate and expedite the conclusion of interconnection agreements among the broadcasters and DTH operators.

The objections of the petitioner with regard to the various

clauses of RIO are as under :-

Clauses of the RIO

Petitioner's Objection

Clause E (V) (4) – The current Subscription Fee Plan is as under : `DTH operators shall sell the Service to its subscribers for a minimum period of 1 year.’ The respondent cannot compel the petitioner to sell the service to the subscribers for a Minimum period of 1 year. The subscribers are monthly paying subscribers and they pay for what they watch. Its upto them to take or drop any channels at any time and the petitioner cannot exercise any control over the same and hence the clause is not acceptable.

Clause E (V) (5)- DTH Operator shall be liable to pay to the Company all amounts due and payable irrespective of whether the ESS Subscribers have actually paid such amounts to him or whether any such ESS Subscribers are active or have been deactivated by DTH Operator. The said clause is not acceptable to the petitioner as the petitioner cannot be held responsible if the subscribers of respondent's channels stop paying the concerned amount and especially when their services are deactivated. The petitioner will pay according to the license fee clause as enumerated in the TRAI Regulations. So in this light, this clause is redundant.

Clause E (V) (8) – 8. ln the event of any dispute regarding the number of ESS Subscribers declared by the DTH Operator the Company shall notify the DTH Operator vide a written notice and furnish all relevant details in this regard. In such an event the DTH Operator shall not later than 7(seven) days provide to the Company a detailed report containing correct conditional access log. SMS data and payment details of all subscribers reflecting transaction relating to the Services (ESS Channels), in particular such a report shall he authenticated by the agencies/ Vendors providing conditional access Software and Subscriber Management/ Billing System Software. The Company may also at its option, require a joint audit with the DTH Operator, in such an event the DTH Operator shall make available all relevant material, the systems and measures referred to hereinabove for verification, inspection and audit by the Company or its representatives, auditors designated by the Company on reasonable notice to the DTH Operator, during normal business hours. lf it is established that the numbers of ESS Subscribers who are receiving the Services are more than the ESS Subscribers declared by DTH Operator under the Subscriber Report, the DTH Operator undertakes to pay such increased Subscription Fee immediately thereupon without any delay or demur. Provided further that neither the Company's acceptance of any such information or payment, nor the Company's inspection or audit of the DTH Operator's records or accounts shall prevent the Company from later disputing the accuracy or completeness of the same based on material coming into its possession after such inspection or audit.

The clause should be removed as the respondent has the right to audit petitioner's system twice in the calendar year and the TRAI Audit clause stipulated by the The Telecommunication (Broadcasting and Cable Services) Interconnection (Fifth Amendment) Regulations, 2009 (Regulation 4) dated 17.3.Â¬2009 can be inserted without any additions or modifications and this will serve the objective of verifying the subscriber base and subscriber reports provided by the petitioner.

Clause G- Anti Piracy. The entire clause has been well elaborated in The Telecommunication (Broadcasting and Cable Services) Interconnection (Fifth Amendment) Regulations, 2009 (Regulation 4) dated 17-3-2009 and the same to be incorporated in this RIO without any further additions and modifications.

Clause G (V) (1) (xii) – Remote access (e.g. through dial up or otherwise) to Addressable System (information related to ESS Subscribers) of the DTH Operator shall be provided to the Company in order to permit the Company to verify the Subscriber numbers.

Granting of Remote access to the respon It is not acceptable to the petitioner. The provision of Remote access will pose a major security threat to the petitioner's addressable system. The main server is basically a closed system and cannot be used as an open system for the simple reason that the data which includes details of the subscribers, broadcasters will become prone to be accessed by anyone and everyone. Remote access also exposes .the petitioner to the cyber crime of hacking as well. as makes it easy for the main server of the petitioner to be affected by computer viruses, etc. The requirement of Remote access is .not provided in the Interconnect Agreement as has been attached as the standard agreement by TRAI (pertaining to CAS) in schedule I of The Telecommunication (Broadcasting and Cable Services) Interconnection (Second Amendment) Regulation 2006 (9. of 2006) dated 24th August 2006 or in any other TRAI Regulations. The technical Audit provision is well elaborated in The Telecommunication (Broadcasting and Cable Services) Interconnection. (Fifth - Amendment) Regulations, 2009 (Regulation 4) dated 17-3-2009 and the same provision fully satisfies the purpose behind the insistence of the inclusion of remote access provision by the respondent.

Clause G (V) (I) (xiii) – No change in the Channel numbering Plan is made without Company’s prior written approval.

The clause that there cannot be any change in the Channel numbering Plan without the prior written approval of the respondent is not acceptable to the petitioner as the same does not form part of any TRAI Regulations.

Clause G (V) (1) (x iv) – It shall provide the Company with 10 STBs/ CPEs authorized for every channel/ bouquet/ package distributed by the DTH Operator for anti-piracy monitoring; Petitioner agrees to provide the respondent with 10 STBS/CPEs authorized for every channel/ bouquet/ package distributed by the petitioner for anti-piracy monitoring provided the respondent pays for it and subsequent to which petitioner will authorize the respondent channels.

Response of the Respondent

The respondent in its reply stated as under :-

(i) The basis adopted by the respondent in relation to the RIO is neither perverse nor irrational. The `must provide’ obligations have no application in the instant case.

(ii) The channels in question are transmitted as an add-on package in terms of the choice of the viewer/ subscriber’ and if one is not interested in

the channels of the respondent, he would not subscribe the same in the first place.

(iii) This Tribunal by a judgment and order dated 13.5.2009 upheld its objection sofar as the direction of the TRAI is concerned and allowed the appeal preferred by it.

(iv) The respondent by a communication dated 25.3.2010 while sending a fresh RIO to the petitioner effective from 1.4.2010 informed it that apart form the commercial terms relating to add on packages, other terms and conditions would remain unchanged.

(v) The respondent was all along ready and willing to resolve the pricing issue by mutual discussions but the petitioner was adamant that it would provide its services @ 50% of its Non-CAS rates which was not acceptable to it.

Submissions

Mr.Aman Lekhi, the learned senior counsel appearing on behalf

of the appellant submitted:-

(i) It would not be correct to contend that the order of this Tribunal dated 13.5.2009 is binding on the parties and/or is otherwise conclusive in nature, as the same has not been rendered inter parties and in any event the decision rendered therein was in the nature of obiter dicta and/or otherwise should be held to have been rendered sub-silentio.

(ii) As on 13.5.2009, the order of this Tribunal passed in Petition No.104/2008 dated 24.7.2008 was in force, whereby, the petitioner could have been asked to pay 50% of the rate for its non CAS-area by the respondent; the impugned RIO dated 10.4.2010, could not have been issued.

(iii) The impugned RIO having been issued in violation of the order of injunction, is a nullity.

Strong reliance in this behalf has been placed on a decision of Chancery Division Clarke vs. Chandburn and others reported in 1985 (1) All E.R. 211.

(iv) In any event the respondent could not have taken benefit of its own wrong as has been held by the Supreme Court of India in Mrutunjay Pani and Anr. vs. Narmada Bala Sasmal and Anr. AIR 1961 SC 1353.

(v) The Press Note Nos.38 and 39 being in the nature of regulations and/or otherwise binding on the respondent, the impugned amendments in the RIO must be held to be bad in law.

(vi) The respondent should have in all fairness waited for the framing of tariff by the TRAI having regard to the fact that the matter was pending in the Supreme Court of India.

(vii) The respondent in any view of the matter having not applied for any modification and/or variation of the interim

order dated 24.7.2008, the respondent herein could not have relied on the order dated 13.5.2009, passed by this Tribunal in issuing the RIO, as it prevailed thereover.

(viii) The Act contemplates a complete regulatory regime which would include not only the regulations which may be made but also the directions which are issued as well as the settlement of disputes between two litigating parties and, thus, in the event this Tribunal finds that no regulation operates in the field, the gap may have to be filled up. It is from that angle only the order of this Tribunal in the case of ASC Enterprises and Tata Sky, directing payment of 50% of the rates fixed by the broadcasters in a non-addressable system applicable to the case of the DTH operators must be viewed.

(ix) The TRAI having followed the direction issued by this Tribunal and having issued the press notes on or about 18.4.2008, the same was binding on the respondent.

(x) The press notes having been issued by the TRAI having regard to its power conferred on it by sub-clause (iv) of clause (a) and sub-clauses (ii) and (iv) of clause `b’ of Sub-Section 1 of Section 11 of the Act, the same had statutory flavour, whereagainst an appeal lay before this Tribunal in terms of Section 14 of the Act, which having not been done attained finality.

(xi) The respondent might not have been a party to the general consensus arrived at by the broadcaster but there cannot be any doubt or dispute that the order of this Tribunal was unexceptional and which would attract the principle of Contermoranea Exposito. In support of the said contention, reliance has been placed on Ajay Gandhi and Anr. vs. Bhim Singh and Ors (2004) 2 SCC 120.

II On the question of reasonableness of the RIO, it was urged :-

(i) It is perverse;

(ii) It was against the settled law

(iii) It is against the choice of the viewers

(iv) Its impact on the petitioner would be that transmission of the signals of the respondent by it would be unviable.

(v) The RIO having been issued in undue haste, must be held to be mala fide in nature.

(vi) The Respondent should not have issued the RIO after a long time.

Mr.Ganapathi, learned counsel appearing on behalf of the respondent, on the other hand, urged :-

(i) The TRAI failed to see that the Respondent was not a party to the so called consensus purported to have been arrived at by and between the broadcasters.

(ii) TRAI could not have insisted on the respondent to supply signals of its channels @ 50% of the rates applicable to non-addressable system.

(iii) The Press Note no.39, having been issued before the judgment was delivered and the ESPN being not a party to the purported consensus, the same was beyond the jurisdiction of the TRAI.

(iv) When the notice dated 14.5.2010 was issued, no case being pending, the respondent did not violate any order passed by this Tribunal as by that date even the petition of Tata Sky was disposed of.

(v) From a bare perusal of the order dated 24.7.2008, it would appear that by reason thereof this Tribunal opined that negotiations between the parties would take place, in pursuance whereof the respondent called upon the petitioner to negotiate as regards various clauses of the RIOs.

(vi) Press Note No.39 dated 18.4.2008 must be held to have been modified by the order of this Tribunal dated 13.5.2009.

(vii) The order of the TRAI being without jurisdiction which was based on the aforementioned Press Note dated 13.4.2008, must be held to be wholly illegal and without jurisdiction.

(viii) This Tribunal in Appeal No.10 (C) of 2008 considered merely the legality/propriety of the directions issued by the TRAI but not its jurisdiction, wherein the fact that it was required to undertake the process of issuing a tariff order and not a press note was completely lost sight of.

(ix) Section 11 (1) (a) (iv) or Section 11 (1) (b) (ii) and (iv) of the Act could not have been invoked for the purpose of issuance of the Press Note as would appear from the proviso appended to Section 13 of the Act.

(x) The TRAI itself by a notification dated 31.8.2006 having fixed the rate at Rs.5 per channel and directed distribution of share of revenue by and between the broadcasters and the distributors of TV channels @ 45% and 55% respectively, could not have issued any direction in regard to the individual bouquet or add on packages.

(xi) Any direction, if issued by the TRAI was required to undergo the consultation process as is evident from Sub-section 4 of Section 11 of the Act and, thus, no order could have been issued by it without due application of mind.

(xii) Respondent had been holding their hands for a long time and issued the modified RIO only on 13.5.2009, the judgment in ASC (supra) and Tata Sky (supra) having been passed only in 2006-2007.

(xiii) In terms of the modified RIO dated 25.3.2010, a customer can have a choice of a channel but not the price thereof.

(xiv) The discount granted by the respondent must be viewed having regard to Regulation 3.5 of the 2004 Regulations, in terms whereof the parties could have agreed to a rate which was to be fixed mutually between them, particularly, in view of the fact that as it turns out now, it was valid for a limited period pending the decision of the TRAI.

(xv) An add on package cannot be compared with a bouquet nor a rate fixed for a non-CAS system can be compared with a CAS system.

(xvi) The discounts given by a broadcaster cannot be treated to be a benefit under the DTH package.

(xvii) Keeping in view the diverse economic interest of the parties, this Tribunal is required to strike a balance.

(xviii) If the DTH operators think that all channels are not viewed by everyone, it can work out a system where all the popular channels are viewed by the people of a particular region or generally.

(xix) In the event it is found that the viewship of the channels of the broadcasters is limited, it would be its responsibility to issue advertisements and see that their viewership is expanded; whereas in a converse case the DTH operators should take upon themselves the burden of issuing advertisements.

(xx) While issuing its orders, this Tribunal did not consider the eventuality of failure when it directed the parties to hold negotiations.

(xxi) On the merit of the impugned provisions of the RIO, it was urged :-

(i) Clause E (v) (4) wherein a minimum period of one year has been prescribed, a period of three months may be provided;

(ii) in the case of clause E (v) (5) also a similar period may be read;

(iii) Sofar as clause E (v) (8) is concerned, the standard clause recommended by TRAI by its order dated 17.3.2009 may be adopted.

(iv) So far as anti piracy clause contained in clause G is concerned, keeping in view the provisions contained in the third schedule appended to the order of the TRAI dated 17.3.2009, the broadcasters having been given liberty to amend the clause suitably, no illegality can be said to have been committed in asking for more stringent measures to be taken for anti piracy.

(v) Clause G (5) (1) (XII) relate to the accounting system by which the petitioner has been asked only to provide a code as bankers have been doing or in any event alternatively they could provide a code to the Respondent as the said clause has been inserted only to give effect to the principle of transparency.

(vi) So far as Clause (G) (V) (1) (xiii) is concerned, the Tribunal may direct that in stead and in place of written approval, a written notice may be given by the DTH operators to the broadcaster.

(vii) So far as clause (G) (V) (i) (xxi b) is concerned, the respondent would pay the charges for the STBs.

Violation of Injunction-Issue

There cannot be any quarrel with the proposition of law that a party to a lis must necessarily obey an order of injunction passed by a competent court of law. In the event, however, there has been a deliberate violation as a result whereof an advantage/ benefit has been obtained by a party who has committed a breach, the Court, apart from taking action as envisaged under Order 39 Rule 2A of the Code of Civil Procedure, 1908 in exercise of its inherent jurisdiction would be entitled to restore the parties to the same position as if the order of injunction was not violated.

There cannot furthermore be any doubt or dispute that a party cannot take advantage of its own wrong i.e by violating a lawful order of injunction passed by a court of law, it ordinarily should not be permitted to retain the benefit thereof.

We may notice that the Supreme Court of India in All Bengal Excise Licensees Association vs. Raghavendra Singh and Ors. reported in (2007) 11 SCC 374 upon noticing the decision Clarke

(supra), held as under:-

“18. The above principle has been applied even in the case of violation of orders of injunction issued by civil courts. In Clarke v. Chadburn20 Sir Robert Megarry V-C observed: (All ER p. 213h-j)

‘I need not cite authority for the proposition that it is of high importance that orders of the court should be obeyed. Wilful disobedience to an order of the court is punishable as a contempt of court, and I feel no doubt that such disobedience may properly be described as being illegal. If by such disobedience the persons enjoined claim that they have validly effected some change in the rights and liabilities of others, I cannot see why it should be said that although they are liable to penalties for contempt of court for doing what they did, nevertheless those acts were validly done. Of course, if an act is done, it is not undone merely by pointing out that it was done in breach of the law. If a meeting is held in breach of an injunction, it cannot be said that the meeting has not been held. But the legal consequences of what has been done in breach of the law may plainly be very much affected by the illegality. It seems to me on principle that those who defy a prohibition ought not to be able to claim that the fruits of their defiance are good, and not tainted by the illegality that produced them.’”

There is another well known proposition of law viz. that the party violating the order of injunction should not be heard in the proceedings unless he purges the contempt.

The rule was laid down in Hadkinson vs. Hadkinson 1952 (2) All England Law Report 567.

The said decision has also been considered by the Supreme Court of India in various judgments.

We may notice some of them :-

In the matter of Anil Panjwani in re: reported in (2003) 7 SCC 375, the Supreme Court of India has observed as under :-

"9. To our mind, the rule as to denying hearing or withholding right of participation in the proceedings to the contemner may briefly be summed up and so stated. It lies within the discretion of the court to tell the contemner charged with having committed contempt of court that he will not be heard and would not be allowed participation in the court proceedings unless the contempt is purged. This is a flexible rule of practice and not a rigid rule of law. The discretion shall be guided and governed by the facts and circumstances of a given case.”

In that case the appellant was heard, although the contempt was not purged.

The Supreme Court of India considered the said question again in Prestige Lights Ltd. vs. SBI reported in (2007) 8 SCC 449.

Noticing the decision in Hadkinson (supra) it was observed :-

26. That, however, does not mean that in each and every case in which a party has violated an interim order has no right to be heard at all. Nor will the court refuse to hear him in all circumstances. The normal rule is that an application by a party will not be entertained until he has purged himself of the contempt. There are, however, certain exceptions to this rule. One of such exceptions is that the party may appeal with a view to setting aside the order on which his alleged contempt is founded. A person against whom contempt is alleged must be heard in support of the submission that having regard to the meaning and intendment of the order which he is said to have disobeyed, his actions did not constitute a breach of it.

Application of the principle

Would the principle enunciated in Clarke (supra) or Hadkinson (supra) apply in this case?

The answer to the said question, in our opinion, must be rendered in the negative.

We would assume that the interim order of injunction passed by this Tribunal in the case of the petitioner was required to be complied with by the respondent. Let us consider as to what was the nature of the directions. It reads as under :-

“…..The petitioner will be free to provide channels to its subscribers as per the Regulations. The petitioner will continue to pay for the channels availed of by the subscribers of the petitioner as per the applicable Regulations.

Learned counsel for respondent no.1 submits that the petitioner should pay for the two channels for the months of June and July 2008. Petitioner’s objection is only qua third channel regarding which the order has been made. In reply, learned counsel for petitioner submits that since the petitioner was relaying these channels under Orders of the High Court, the petitioner did not charge anything from its subscribers for these two channels and therefore is not liable to pay anything to the respondent. Let this aspect be also considered in course of `negotiations’. Failing settlement, this aspect will be decided by this Tribunal…..”

It is not the case of the petitioner that the respondent during the pendency of the proceedings before this Tribunal or in fact before the High Court had coerced the petitioner to pay any amount higher than what was contemplated. This Tribunal merely said that the matter may be considered in course of negotiations and arrive at a settlement. Only one aspect of the matter has been decided by the Tribunal. It passed a final order on or about 10.5.2010 upon considering the question that no direction was issued in terms of the observations made by this Tribunal in its order dated 24.7.2008. The petitioner contends that there was no occasion therefor as the question which survived for consideration of this Tribunal was the payment required to be made by the petitioner for the months of June to September, 2008.

If that be so, it does not lie in the mouth of the petitioner now to contend that RIO issued by the respondent and as modified on 25.3.2010 is a nullity. It was in our opinion even otherwise not so.

Moreover, if the petitioner intended to invoke the principles laid down in Clarke (supra) or Hadkinson (supra) it should have raised that contention in the said proceedings itself. It having not done so, should not be permitted to raise the question in an independent proceedings while questioning the reasonableness or otherwise of the RIO issued by the respondent.

We are firmly of the opinion that the contention raised by the petitioner is wholly misconceived.

Similarly, the maxim “Commodum Ex Injuria Sua Nemo Habare Debet” as noticed by the Supreme Court in Mrutunjay Pani (supra) cannot also have any application as such a question cannot be, in our considered opinion, permitted to be raised co-laterally.

We may notice that the said maxim has been explained in great details in Broom’s Legal Maxim 10th Edn. @ Pg. 191. The principle behind the said maxim is that of equity and applies in various situations discussed therein. Almost to the said effect is the decision of the Supreme Court of India in Kusheshwar Prasad Singh vs. Union of India (2007) 11 SCC 447 451.

The respondent being a broadcaster having regard to the Regulations made by the TRAI was entitled to issue the RIO. It is one thing to say that the modified RIO is wholly illegal and no part of it can be given effect to but it is another thing to say that some part of it being unreasonable should be directed to be modified.

Respondent herein, being entitled in law to put the RIO for consideration of all the DTH operators, in our opinion, in absence of any clear order of injunction, could not have been prohibited from doing so. We have noticed herebefore the order of injunction passed by this Tribunal on 24.7.2008.

It did not prohibit the respondent in any manner to act in terms of the Regulations. It will bear repetition to state that even the purported violation of the interim order was not questioned by the petitioner at any stage of the proceedings.

In fact as it appears from the judgment passed in the said case, the petitioner itself was found liable to pay a huge amount to the respondent.

Status of the Press Release

Press Release No.39 dated 18.4.2008, is required to be considered having regard to the directions issued by this Tribunal in the case of ACS Enterprises (Supra) and Tata Sky (Supra).

In ACS (Supra) this Tribunal has held as under :-

“...We have seen in many other cases which have come before this Tribunal that under declaration is more or less a norm being followed in the cable industry. There are large number of cases where the petitioners come before us stating the negotiated figure which is not the actual number of subscribers and the MSOs and broadcasters have agreed to that lower figure in various agreements. In the discussion with the stakeholders as stated in the explanatory memorandum of the TRAI Regulation for interconnection, it was a point that the rates for DTH should be less than the cable platform. The relevant paras (ii) and (iii) as response to stakeholders comments at para 3.5 in this context is reproduced hereunder :

“It is necessary to retain these words as the intention is to allow volume based discrimination and also permit different terms and conditions of supply based on the different technologies being used. However, since in non-addressable systems, payment is normally made only for the number of subscribers negotiated and agreed upon while in an addressable system, payment is made for all the consumers it should normally be expected that price in an addressable system would be lower than in a similar non addressable system

In view of the above, there is logic in the statement of the petitioner that the rates laid down and being charged for the Cable TV platform cannot be made applicable to the DTH platform and we agree with this contention of the petitioner. We have no basis to lay down the actual rates per channel which we feel is the prerogative of the TRAI. However, to begin with we feel that 50 per cent of the rates being charged for cable platform be made applicable to DTH platform……..”

In the case of Tata Sky, the said ad-hocism on the part of this Tribunal continued.

Before, however, considering the effect of the press release, we may notice the decision of this Tribunal in the case of ESPN, the relevant parts whereof read as under:-

“We have carefully considered the arguments of both the learned counsels. As per clause 13.2A.11, it is mandatory on the part of the broadcaster to offer pay channels on a-la-carte basis to DTH operators and such offering- shall not prevent the broadcaster from offering such pay channels additionally in the form of bouquets. It is furtherprovided that the broadcaster shall directly or indirectly not compel any DTH operator to offer the entire bouquet or bouquets offered by the broadcaster to such operator in any package or scheme being offered by such DTH operator to its subscribers. This regulation does not appear to have been violated by the Appellant because there is no compulsion imposed by the Appellant to take the entire bouquet or bouquets. The fact that the RIO envisages the placement of all channels and services in the entry level tier because of attracting the viewership on the basis of the total subscriber base of the DTH operator and to offer a volume based discount as has been offered in the two cases decided by thisTribunal and referred to the directions issued by the Respondent. It is to be examined, whether the Clause 13.2A.11 envisages any 'embargo on placement of channels in a particular tier. The plea of the Appellant is that the 50% price envisaged in the Tata Sky and ASC Enterprises cases is for the viewership of the channels on being placed in the Basic Service Tier. The main thrust of 13.2A.I I is that once the pay channels are obtained on a-la-carte basis by the DTH operator, the broadcaster cannot prevent the offering of such pay channel in the form of bouquets. In case the broadcaster obtains all the channels of a bouquet by paying a-la-carte rate for each channel, protection has been offered in Clause 13.2A.13. This clause mentions that in case the DTH operators packages the channels comprised in such opted bouquet in a manner resulting in different subscriber base for different channels comprised in such opted bouquet, then, the payment, to the broadcaster for such entire opted bouquet by the DTH operator, shall be calculated on the basis of the subscriber base for the channel which has the higher subscriber base amongst the channels comprised in that bouquet. It is clear from this clause that the viewership is a very important consideration for tariff fixation for 'DTH operators. This was also decided by us in the case. of Sun Direct TV Pvt. Ltd. vs. MSM Discovery Pvt Ltd. (62(C) of 2008). The petitioner in this case was entitled to receive channel/channels of his choice from the Respondent and position them in the manner of his choice but at the same time it is obliged to pay to the broadcaster as per Clause 13.2A.13.”

It was also observed :

Having carefully considered various aspects, we must record our observation that the judgments in ASC case and Tata Sky case were issued in July, 2006 and March, 2007 respectively, i.e. more than 2-2Â½ years ago. The directions of this Tribunal in those orders were essentially meant to give a general indication as to how the tariff fixation should be approached. In the ASC Enterprises case, this Tribunal had clearly stated that this Tribunal had no basis to lay down the actual rates per channel, which is the prerogative of TRAI. It was only as an ad hoc measure that this Tribunal had indicated a broad figure of 50% in case of DTH platform. It was reasonable to expect that TRAI would thereupon fix the tariffs after due examination. We are informed that it was only recently that TRAI had initiated this exercise and circulated a consultation paper. We are further informed that the exercise is underway and a decision is likely to be taken by the Authority shortly. In this regard, we direct the Authority to take into consideration the situation arising in cases where the ‘add on packages’ are involved. It is clear that this Tribunal’s orders in the ASC Enterprise and Tata Sky Case had no relation to add on packages, which concept itself came up subsequently. We hold that the general principle of 50% tariff applies in the general situation and that too only as an interim measure, pending the determination by TRAI. We hold that this principle of 50% tariff should not be mutatis mutandis applied in the case of an ‘add on package’. We leave the exact formulation to TRAI since the exercise is already underway. We direct all interested parties including the Appellant to present its case to the Respondent as part of the consultation process and that the same shall be given due consideration.

There remains the question whether the impugned direction itself should be pursued. We did not find any impropriety or irregularity in the direction issued by the Respondent. It had done so in the bona fide exercise of its powers and keeping in view the two judgments in the ASC Enterprises and Tata sky cases. As observed by us above, the directions in those two cases were keeping the general situation in mind and also as an interim measure. Nevertheless, in the light of our observation that the entire question of tariff for ‘add on packages’ should be re-considered, we feel it appropriate to direct the Respondent not to proceed further with any action in pursuance of the impugned direction. We would also like to make it clear that this should not be read as our endorsement of that portion of the amended RIO dealing with ‘add on packages’. This is evidently a grey area. Considering that we have held that the 50% tariff is not necessarily applicable to the ‘add on packages’, we leave the question of ‘add on packages’ for negotiation between the respective parties but only till such time as TRAI issues a Regulation in this regard. Needless to state, we hope that the Authority will, having already initiated the exercise of fixing the DTH tariff, complete the same within the next 4 months.”

It was, thus, not held that the Press Release would apply also to `Add on Package’. The order, to say the least, was not clear and explicit.

The TRAI did not take any action immediately after the decisions of this Tribunal in ASC Enterprises (supra) and Tata Sky (supra) was rendered. The decision of the ASC Enterprises (supra) was rendered on 14.7.2006.

The press release was issued only on 18.4.2008. Before issuing the said press release, no consultation paper was floated. The procedures laid down under Sub Section 4 of Section 11 were, thus, not followed.

In the case of ESPN, it was conceded by the TRAI that no hearing was given to it. It was also conceded that it did not agree with the contention of the other broadcasters. It was not, therefore, a party to the consensus. If it is to be assumed that the said press release was issued in terms of Section 13 of the Act, a proper hearing was required to be given either separately to the respondent or the broadcasters generally. There is also nothing to show that any order or notification was issued.

How a press release can be the mode of issuance of a valid notification and/or direction and/or order is difficult to comprehend.

The press release was ad-hoc in nature. Admittedly, no interactive discussions took place. A purported general consensus was said to have emerged. The broadcasters, as per the said general consensus was to offer only bouquets to the DTH operators as has been offered by them for non-CAS cable distribution. They were given the liberty to offer additional bouquets. Yet again the rates of bouquet and a-la-carte rates of payments were to be broadly in consonance with TDAST’s judgment i.e. 50% of the rates at which those bouquets of which channels were being offered by them for non-CAS cable distribution that is non-addressable platform.

The matter in ESPN was pending at that point of time. The TRAI issued the said press release ‘without prejudice’ to any order or judgment that may be passed by this Tribunal.

The submissions of Mr.Lekhi that the said press release was in terms of the statutory functions of the TRAI under Section 11 is not correct. Clause (a) of sub-section 1 of Section 11 contains the power of recommendation of the TRAI. Any recommendation made by it are required to be approved by Government of India. Only the order passed by the TRAI in exercise of its powers under clause (b) of sub-section 1 of Section 11 of the Act would be binding on the parties. However, sub clause (ii) and sub clause (iv) of clause (b) of sub-section 1 of Section 11 have no application in a case of this nature.

Reference to Section 13 of the Act may also not be quite correct. The proviso appended to clause (b) of sub-section (1) of Section 11 reads as under:-

“Provided that the recommendations of the Authority specified in clause (a) of this sub-section shall not be binding upon the Central Government.”

Evidently, therefore, no direction can be issued in respect of the recommendatory power of TRAI. Unfortunately, this Tribunal while passing its judgment dated 13.5.2009, did not consider these aspects of the matter.

(i) Despite agreeing with the justifiability of the direction, it has quashed the directions in the sense that no criminal action was to be taken pursuant thereto. There appears to be some inconsistency in the said order. If the directions were legal the authority was free to take action in accordance with law. No via media was contemplated.

(ii) Be that as it may, the said order dated 13.5.2009, sofar as the present dispute is concerned is of not much relevance, inasmuch as the reasonableness of the RIO was not in question. This Tribunal has been called upon and in fact is enjoined with the duty to consider the entire matter afresh.

Estoppel Issue

Mr.Lekhi may also not be correct in contending that the respondent having accepted the rate, is estopped from issuing the RIO. It, so long as the interim order continued, was bound to give effect thereto. The matter has been disposed of only recently. An interim order merges with the final order. The respondent could not have however, waited indefinitely. It had sought to enter into negotiations with the petitioner, which did not fructify for one reason or the other. This Tribunal has directed the parties to hold negotiations. It, however, did not provide for any consequence in the event the negotiations failed. If the negotiations were to fail, naturally the regulatory regime vis-Ã -vis the contract between the parties will have to be given effect to.

Executive Construction

Mr.Lekhi is not correct to contend that the doctrine of `contemporania exposito’ would apply in the instant case. The Press Release was not in the nature of a subordinate legislation; it having been issued by the Regulator itself; the rule of Executive Construction, will have no application.

The view of the law maker has nothing to do with invocation of the doctrine of `executive interpretation’.

This aspect of the matter has recently been considered by this Tribunal in the case of Aircel Limited vs. Bharat Sanchar Nigam Ltd. (Petition No.57/2010, disposed of on 1.9.2010).

It was held :-

“59. The doctrine of ‘Executive Interpretation’ has been applied to for the purpose of Interpretation of Statute in Pepper Vs. Hart [1993 Appeal Cases page 593].

In RandB Falcon (A) Pvt Ltd v. CIT [2008(12)SCC466 at 479], it has been held as follows :-

“34. Rules of executive construction in a situation of this nature may also be applied. Where a representation is made by the maker of legislation at the time of introduction of the Bill or construction thereupon is put by the executive upon its coming into force, the same carries a great weight.

35. In this regard, we may refer to the decision of the House of Lords in R, (Westminster City Council) v. National Asylum Support Service and its interpretation of the decision in Pepper v. Hart on the question of “executive estoppels”. In the former decision, Lord Steyn stated : (WLR p. 2959, para 6):

6. If exceptionally there is found in the Explanatory Notes a clear assurance by the executive to parliament about the meaning of a clause, or the circumstances in which a power will or will not be used, that assurance may in principle be admitted against the executive in proceedings in which the executive places a contrary contention, before a court.”

36. A similar interpretation was rendered by Lord Hope of Craighead in Wilson v. First County Trust Ltd (No.2), wherein it was stated LWLR p. 600, para 113):

“113. ….As I understand it (Pepper v. Hart) it recognized a limited exception to the general rule that resort to Hansard was inadmissible. Its purpose is to prevent the executive seeking to place a meaning on words used in legislation which is different from that which ministers attributed to those words when promoting the legislation in Parliament.”

37. For a detailed analysis of the rule of executive estoppel useful reference may be to the article authored by Francis Bennion entitled “Executive Estoppel:Pepper v. Hart Revisited”, published in Public Law, Spring 2007, p. 1 which throws a new light on the subject matter.”

In Mahalakshmi Sugar Mills Co. Ltd. v. Union of India, (2009) 16 SCC569, at page 592, the Supreme Court of India referred to the said decision, stating:-

“62. Rules of executive construction in a situation of this nature may also be applied, where a representation is made by the maker of legislation at the time of introduction of the Bill or construction thereupon is put by the executive upon its coming into force, the same carries a great weight.

63. In this regard, we may refer to the decision of the House of Lords in R. (Westminster City Council) v. National Asylum Support Service and its interpretation of the decision in Pepper v. Hart on the question of “executive estoppels”. In the former decision, Lord Steyn stated :

“If exceptionally there is found in the Explanatory Notes a clear assurance by the executive to parliament about the meaning of a clause, or the circumstances in which a power will or will not be used, that assurance may in principle be admitted against the executive in proceedings in which the executive places a contrary contention, before a court.”

64. A similar interpretation was rendered by Lord Hope of Craighead in Wilson v. First County Trust Ltd (No.2), wherein it was stated:

“As I understand it (Pepper v. Hart) it recognized a limited exception to the general rule that resort to Hansard was inadmissible. Its purpose is to prevent the executive seeking to place a meaning on words used in legislation which is different from that which ministers attributed to those words when promoting the legislation in Parliament…..”

65. See for a detailed analysis of the rule of executive estoppels in a writing of Francis Bennion entitled “Executive Estoppel: Pepper v. Hart Revisited”, published in Public Law, Spring 2007, p. 1”.

60. It is also of some importance to notice that the noted commentator on Interpretation of Statute, Francis Bennion, in an Article published in 2007 Public Law, said that the said decision may have to be re-visited. So long, however, the same is not done, in our opinion, it is permissible to refer to the doctrine of ‘Executive Estoppel’ by the Courts of Law.”

Mr.Lekhi placed strong reliance upon a decision of the Supreme Court of India in Ajay Gandhi vs. Bhim Singh (2004) 2 SCC 120. Therein it was noticed as under :-

17. In Francis Bennion’s Statutory Interpretation, 4th Edn., the law is stated in the following terms at p. 596:

“Section 231

231. The basic rule.—In the period immediately following its enactment, the history of how an enactment is understood forms part of the contemporanea expositio, and may be held to throw light on the legislative intention. The later history may, under the doctrine that an ongoing Act is always speaking, indicate how the enactment is regarded in the light of developments from time to time.

COMMENT

On a superficial view, it may be thought that nothing that happens after an Act is passed can affect the legislative intention at the time it was passed. This overlooks the two factors stated in this section.

Contemporanea expositio.—The concept of legislative intention is a difficult one. Contemporary expositio helps to show what people thought the Act meant in the period immediately after it was passed. Official statements on its meaning are particularly important here, since every Act is supervised, and most were originally promoted, by a government department which may be assumed to know what the legislative intention was.”

How different parties have given different meanings to the order passed by this Tribunal was the subject matter of said discussions. ESPN did not agree thereto. It was not bound by the views of other broadcasters. In any event, the views of any other broadcaster will have no application on construction of a statue, which is within the exclusive jurisdiction of a Court of law.

RIO

We may now deal with the merit of the matter.

The revised RIO submitted by the respondent has inter alia been questioned on the following grounds :-

(i) perverse and irrational;

(ii) against the settled law;

(iii) limits viewers’ choice; and

(iv) undue haste

Besides the above general grounds reasonableness and/or validity some individual clauses have also been questioned which we will deal with separately.

Re-Perversity and Irrationality

We are not in a position to accept the submissions of Mr.Lekhi that the modified RIO is wholly perverse in law.

The respondent had three offers to make (i) to offer on a-la-carte basis for its ESPN Star Sports and Star Cricket (ii) offer a bouquet of ESPN and Star Sports; and (iii) Star Cricket separately.

The rates upon discount were to be as under :-

% of subscriber of total subscriber % of Non- CAS princes ESPN Star Sports Star Cricket Bouquet

50% 50% 17.72 17.72 14.98 23.64

40-50% 40% 21.26 21.26 17.98 28.37

30-40% 25% 26.58 26.58 22.47 35.46

30% Nil 35.45 35.45 29.96 47/28

Star Cricket was not to be a part of the bouquet as it was not possible to join a new channel in a bouquet.

The petitioner, therefore, might take either the bouquet or ESPN and Star Sports separately or in a bouquet. It would depend on the choice of the individual subscribers. By reason thereof, the respondent has offered the rate fixed by the TRAI. The rate was to depend upon the percentage of the volume of the subscribers. If the number of subscribers is less than 30%, then only the maximum rate was to apply. The petitioners could have chosen one of the three offers of the respondent.

In a situation of this nature it is possible for the subscriber to exercise his own choice. It does not put the customer in such a position that it may not be asked to offer any choice whatsoever. On the basis of the choice of the subscriber the petitioner may make its own offer.

However, there cannot be any doubt or dispute that the rate which would be more than the one provided on a-la-carte rate was not permissible. Moreover, we have been assured that rates would be subject to negotiations only.

Against the settled law

In view of the judgment passed by this Tribunal in the case of the respondent itself, some sort of anomaly has been created. The respondent, as noticed hereinbefore, had started its rates form 50% of the rates applicable to a non-CAS area. The TRAI was required to give a fresh look in the matter.

Keeping in view the fact that the respondent has offered an `add on package’ the rate fixed therefor per-se cannot be held to be applicable as directed by this Tribunal either in ASC Enterprises (Supra) or Tata Sky (supra). Sports channel occupy special position. They cannot be equated with general and other entertainment channels. Be that as it may, the question as to whether a separate rate for `add on package’ shall be fixed would be a matter which requires fresh consideration of the TRAI in the light of the decision of the Tribunal in Appeal No.3 (C)/2010 and connected appeals.

Limits viewers’ choice

Whereas the petitioners before us have commercial considerations, the same would not mean that the broadcasters would not have any. The respondent was bound to offer rate on a-la-carte basis. It is mandated in terms of Clause 13.A.11 of the Regulations. It is, therefore, not correct on the part of the petitioners to contend that by offering its rate, the respondent is forcing the DTH operators to take all its channels. When a subscriber has a choice, it should be ready and willing to pay the price therefor. The same, however, would be subject only to any regulations as may be framed by the TRAI. It is one thing to say that certain clauses are unreasonable keeping in view the provisions in clause 13.1 of the Regulations but it is another thing to say that it otherwise limits the viewers’ choice. In our opinion, the RIO of the respondent does not limit the viewers’ choice.

Impact on the Petitioner

On a query made by us, Mr.Lekhi accepted that reasonableness of an offer may not have anything to do with the hardship of a DTH operator. The DTH operator may have a choice of not offering a channel to its viewers. If a a-la-carte rate is fixed, the DTH operator must make it known to its viewers. Its viewers may accept the same or may not do so, while making its choice therefor. It is conceded that the DTH operators may make various packages for different types of consumers, wherefor only the provisions of the tariff orders are required to be complied with. Such packages are made having regard to the regional and popular demands. The DTH operators for the said purpose may, subject to the regulatory regime, charge a minimum amount from the customers. It, however, cannot say that whereas it would show a particular channel as add on packages only, it will have only one consideration in view, namely, its own commercial interest and not that of the broadcaster.

Undue Haste

We fail to see any reason as to how the action on the part of the respondent can be said to have been taken in undue haste. The respondent, in fact, has waited for a long time in issuing the modified rate. It could not have waited indefinitely for the TRAI to frame a tariff. This Tribunal had requested the TRAI to make a tariff or determine the rates as far back as in 2006. It failed to take any step in this behalf for a long time despite the order passed by the Supreme Court of India. Even two extensions of time had been taken from the Supreme Court of India.

We, therefore, are of the opinion that it cannot be said that only because the TRAI was in the process of fixing the tariff for CAS areas, the same would mean that the respondent should have awaited its decision indefinitely.

Merit of the Matter

We may now notice the clauses which are subject to challenge.

Clause (E) (V) (4) of the RIO reads as under :-

4- The current Subscription Fee Plan is as under:

“DTH operators shall sell the Services to its subscribers for a minimum period of 1 year’.

Mr.Ganpathy, however, would submit that keeping in view the fact that the viewers are required to subscribe to a channel at least for a period of three months, in our view, the term of one year may be substituted by three months. It is directed accordingly.

Clause (E) (V) (5) reads as under :-

5. DTH Operator shall be liable to pay to the Company all amounts due and payable irrespective of whether the ESS Subscribers have actually paid such amounts to him or whether any such ESS Subscribers are active or have been deactivated by DTH Operator.

For the aforementioned reason in the said clause also the period of three months should be substituted in stead and in place of one year.

Clause (E) (V) (8) reads as under:

8.-In the event of any dispute regarding the. number of ESS Subscribers declared by the DTH Operator the Company shall notify the DTH Operator vide a written notice. and furnish all relevant details in this regard. In such an event the DTH Operator shall not later than 7(seven) days provide to the Company a detailed report containing correct conditional access log. SMS data and payment details of all subscribers reflecting transaction relating to the Services (ESS Channels), in particular. Such a report shall be authenticated by the agencies/ Vendors providing conditional access Software and Subscriber Management/ Billing System Software. The Company may also at its option, require a joint audit with the DTH Operator, in such an event the DTH Operator shall make available all relevant material, the systems and measures referred to hereinabove for verification, inspection and audit by the Company or its representatives auditors designated by the Company on reasonable notice to the DTH Operator, during normal business hours. lf it is established that the numbers of ESS Subscribers who are receiving the Services are more than the ESS Subscribers declared by DTH Operator under the Subscriber Report. the DTH Operator undertakes to pay such increased Subscription Fee immediately thereupon without any delay or, demur. Provided further that neither the Company's acceptance of any such information or payment, nor the Company's inspection or audit of the DTH Operator's records or accounts shall prevent the Company from later disputing the accuracy or completeness of the same based on material coming into its possession after such inspection or audit.

Mr.Ganpathy, submits that the said clause would be substituted by the standard clause relating to audit as has been prescribed by the TRAI in its order dated 17.3.2009. In view of the said submission of the learned counsel no direction need be issued.

Anti Piracy Clause

G. Anti Piracy

I. In order to prevent theft, piracy, unauthorized retransmissions, redistribution or exhibition, copying or duplication of any Channel, in whole or in part, (hereinafter collectively referred to as “Piracy”), the DTH operator shall, prior to the commencement of the Term of the agreement and at all times during such Term, employ, maintain, and enforce fully effective conditional access delivery and content protection and security systems, and related physical security and operational procedures (hereinafter collectively referred to as the “Security Systems”) as may be specified (security specifications), in a non-discriminatory manner in writing, from time to time, by the company.

II To ensure the DTH operator’s ongoing compliance with the security requirements set out in the Agreement, Company may require technical audits (“Technical Audit(s)”) conducted by an independent security technology auditor (“Technical Auditor”), approved by Company in writing no more than twice per year during the Term, at Company ’s cost and expense. If the results of any Technical Audit are not found to be satisfactory by either the DTH operator or Company, then Company shall work with the DTH Operator in resolving this issue in the next fourteen (14) business days. If a solution is not reached at by then, Company may, in its sole discretion, suspend the DTH operator’s right to distribute the Channels or take other actions as provided under the Agreement, until such systems, procedures and security measures have been corrected to by the DTH operator to Company’s satisfaction.

III DTH operator shall deploy finger printing mechanisms to detect any piracy, violation of copyright and unauthorized viewing of the Channels, distributed / transmitted through its Platform at least every 10 minutes on 24 x 7 x 365(6) basis.

IV DTH operator shall not authorize, cause or suffer any portion of any of the Channels to be recorded, duplicated, cablecast, exhibited or otherwise used for any purpose other than for distribution by DTH operator at the time the Channels are made available. If DTH operator becomes aware that any unauthorized third party is recording, duplicating, cablecasting, exhibiting or otherwise using any or all of the Channels for any other purpose, DTH operator shall within ten minutes of so becoming aware of such recording, duplicating, cablecasting, exhibiting or otherwise using any or all of the Channels for any other purpose, notify the Company and the DTH operator shall also switch off the concerned Set Top Box to prevent such unauthorized use. However, use of a Set Top Box with Personal Video Recorder/ Digital Video Recorder facility which has been supplied by the DTH operator shall not be treated as unauthorized use, as long as such Set Top Box is used in accordance with the terms and conditions of the subscription agreement between the DTH operator and the subscriber.

V. If so instructed by Information (as defined below) by the Company, the DTH operator shall shut off or de-authorize the transmission to any unauthorized subscriber/ subscriber indulging in piracy, within ten minutes from the time it receives such instruction from the Company. Any communication under this clause shall be considered as valid Information only

(i) the information is sent through e mail in a format as mutually agreed by the parties and

(ii) the information is sent by a person(s) who is designated to send such information. However the “information” may even be provided by the Company representatives through other means of communications such as telephonic message, fax etc and the said “information” shall later be confirmed by the Company through e mail and the DTH operator shall be under obligation to act upon such information.

1. DTH Operators undertakes that the Services shall be distributed through an Addressable System only and shall ensure that :

(i) The Finger Printings (FP), both convert and overt and on-screen-display messages (‘OSD’) of the Company should be displayed by DTH Operator without any tempering with regard to time, location, duration, colour and frequency.”

The clause is an anti piracy clause by reason whereof the respondent has sought for additional protection apart from those offered in terms of the Regulation 8 dated 17.3.2009.

The broadcasters spend a lot of money on contents of their products and as such strict measures must be adopted to prevent piracy.

Clause (i) V at page 39 is similar to the standard clause.

We having heard the learned counsel for the parties are of the opinion that both the parties should be ready and agreeable for having an anti piracy clause.

The appellant herein would equally be benefited if there exists some anti piracy clause. Furthermore, the technical aspects of the matter can be considered by the technical personnel of both the parties and in any event, a terminal can be given to the broadcaster to the aforementioned effect. We are of the opinion that parties should work out on the aforementioned terms.

Clause G (v) (i) (xiv) reads as under :-

“It shall provide the company with 10 STBs/ CPEs authorized for every channel/ bouquet / package distributed by the DTH operator for anti-piracy monitoring”

The said provision merely postulates that no change would be effected in the remote access without any prior permission. We understand that it is one of the options of the operators but we are of the opinion that the parties hereto may interact as regards the reasonable basis for objecting thereto and in any event there can be advance intimations preferably a prior notice of two weeks as unless and until such informations are given, the same may cause inconvenience to the customers.

The petitions, keeping in view or findings aforementioned are disposed of in the above terms.

In the facts and circumstances of this case the parties shall pay and bear their own costs.

Court	Telecom Disputes Settlement and Appellate Tribunal TDSAT
Decided On	Apr-05-2011
Case Number	Petition Nos.159 (C) of 2010, 112 (C) of 2010
Judge	S.B. SINHA, CHAIRPERSON, THE HONOURABLE MR. G.D. GAIHA, MEMBER & THE HONOURABLE MR. P.K. RASTOGI, MEMBER
Appellant	Tata Sky Ltd. and Another
Respondent	Espn Software India Pvt. Ltd.
Advocates:	For Petitioner: Mr.Aman Lekhi, Sr.Advocate with Mr. Kuashik Mishra and Ms.Sngandha Somani, Advocates. For Respondent: Mr.N. Ganapathy, Advocate.

Tata Sky Ltd. and Another Vs. Espn Software India Pvt. Ltd. - Court Judgment