Andhra HC (Pre-Telangana)
Citizens Welfare Society vs Union Of India, Rep., By Its Secretary, ... on 1 June, 2017
Author: Ramesh Ranganathan
Bench: Ramesh Ranganathan
HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN AND HONBLEDr. JUSTICE SHAMEEM AKTHER
WP.PIL 6 OF 2017
01-06-2017
Citizens Welfare Society.Petitioner
Union of India, rep., by its Secretary, Ministry of Information and Broadcasting, Shastry Bhavan, New Delhi and two others
Counsel for the petitioner:Sri C. Ramachandra Raju
Counsel for respondents: Sri B. Narayana Reddy, learned Assistant Solicitor General, Sri S. Niranjan Reddy, learned Senior C
<GIST:
> HEAD NOTE:
? Citations:
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60) (1961) 2 SCR 679 at page 702: (AIR 1961 SC 751
THE HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN
AND
THE HONBLE DR JUSTICE SHAMEEM AKTHER
WRIT PETITION (PIL) NO.6 OF 2017
ORDER:{Per the Honble the Acting Chief Justice Ramesh Ranganathan} This Writ Petition is filed in public interest by the Citizens Welfare Society, Durgabai Deshmukh Colony, Bagh Amberpet, Hyderabad, represented by its General Secretary, to declare the action of the respondents, in compelling Cable T.V. subscribers to purchase set top boxes (STB for short) and in threatening cable operators not to carry on the existing analog form of transmission with effect from the dates mentioned in the notification, as unlawful and in violation of Articles 14, 19 and 21 of the Constitution of India; and to consequently direct the respondents not to stop transmission of T.V. channel signals in analog form, and to implement the digital addressable system transmission along with analog form.
Facts, to the extent necessary, are that hitherto broadcasters of TV channels were transmitting their programmes in analog form i.e. a natural form of signals; subsequently, an artificial mode of transmission of TV signals called the digital addressable system (DAS for short) was introduced; under the DAS method, signals of T.V. channels are transmitted in an encrypted form (defaced form) which is then decrypted by the STB attached to the T.V. sets at the subscribers residence since the signals, transmitted through DAS, cannot be received directly by the Television sets. While transmission of signals in an analog form does not require an STB, signals transmitted through DAS require an STB for the signals to reach the T.V. sets. STB is required only by those subscribers with cable connections who seek to view a larger number of channels under DAS. A set top box is not required for cable subscribers who are satisfied with the limited number of T.V. channels made available to them by local cable T.V. operators through the analog form of signals. The object of DAS is to facilitate transmission of a larger number of channels, within a lesser band width, to overcome the shortcomings in the analog form of signals. Parliament introduced DAS which enables subscribers to receive hundreds of T.V. channels unlike in the analog form. The Cable Television Networks (Regulation) Act, 1995 (the 1995 Act for short), was amended by Act 21 of 2011 with effect from 25.10.2011. The Central Government issued notification dated 11.11.2011 directing all cable operators to introduce DAS within a specified time frame, which period was extended from time to time. Under Phase-III, the time limit was extended upto 31.01.2017 and, under Phase-IV upto 31.03.2017.
It is the case of the petitioner that, consequent on amendment of Section 4A of the 1995 Act, every cable operator is obligated to adopt the DAS method along with the existing transmission system in an analog form; while maintaining transmission through DAS is obligatory, Section 4-A of the 1995 Act does not disable Cable T.V. Operators from transmitting signals in an analog form, in addition to transmission of signals through DAS; this amendment of Section 4-A is intended to facilitate both analog and DAS subscribers; while the areas, within the limits of the Hyderabad Municipal Corporation, fall under Phase-II, the areas located beyond the erstwhile Hyderabad Municipal Corporation limits, but which are now brought within the limits of the Greater Hyderabad Municipal Corporation, fall under Phase-III; while matters stood thus, a notice was issued by the first respondent on 22.12.2016 informing all Chief Secretaries that, on account of the on going Court proceedings, it was decided that broadcasters, Multi-System Operators (MSOs for short), Local Cable Operators (LSOs for short) would be allowed further time upto 31.01.2017, after which no analog signal shall be carried in Phase-III areas, and no further extension shall be given. It is this notice dated 22.12.2016 which is subjected to challenge in this Writ Petition.
When the matter came up before us on 24.01.2017, Sri B. Narayana Reddy, Learned Assistant Solicitor General, sought time to obtain instructions. When the matter was listed thereafter on 31.01.2017, a counter-affidavit was filed by the Under Secretary, Ministry of Information & Broadcasting, Government of India, New Delhi, on behalf of the first respondent. In the said counter affidavit, it is stated that, in the exercise of the powers conferred under Section 4-A of the 1995 Act as amended by the 2011 Act, the Central Government issued gazette notification dated 11.11.2011 notifying that it is obligatory for every cable operator to transmit or re-transmit programmes of any channel in an encrypted form through DAS in such city, town or area as specified in the said notification with effect from the dates mentioned in the notification; the time schedule, to implement DAS across the country in a phased manner, was modified from time to time in public interest; due to Court cases, the time period to switch over to DAS in Phase-III areas was extended till 31.01.2017, and the cut off date for Phase IV was extended till 31.03.2017; the validity of the notification dated 11.09.2014, whereby the cut-off date for Phase-III of Cable TV digitalisation was fixed as 31.12.2015 and that of Phase-IV was fixed as 31.12.2016, was challenged before different High Courts by some associations of MSOs, Associations of Cable Operators, companies and individuals engaged in the business of providing Cable TV network; the relief sought for was to declare the notification dated 11.09.2014 as unenforceable and prejudicial to pubic interest, to direct the Union of India to maintain status quo regarding switch over from the existing analog system of Cable TV Transmission to DAS until full implementation of DAS which was subject to availability of STBs for all existing consumers of Cable TV services, extension of the cut off date stipulated in the notification dated 11.09.2014 for implementation of DAS in Phase-III areas till sufficient STBs were made available in the local market, not to take any coercive measures against the petitioners for non-compliance of the notification dated 11.09.2014, and to declare that the respondents are bound to ensure availability of STBs in the local market before enforcing DAS. It is further stated that, in view of multiple Writ Petitions being filed before various High Courts involving similar legal questions, and as different orders were being passed by various Courts staying the sunset date of implementation of Phase-III of DAS, a Transfer Petition was filed before the Supreme Court by the Union of India seeking transfer, of all the Writ Petitions pending before different High Courts, either to the Supreme Court or to the Delhi High Court; the said Transfer Petition was allowed by the Supreme Court by its order dated 01.04.2016 withdrawing all cases pending before different High Courts, and transferring them to the Delhi High Court; the Supreme Court further observed that, in future, if any case on the same legal question was filed before the High Courts, such cases should also be transferred to the Delhi High Court; accordingly, all the Writ Petitions were transferred to the Delhi High Court for further hearing; all these cases, except three, have been subsequently disposed of by the Delhi High Court; and even in the pending cases, no interim orders are subsisting, and the cases are listed for hearing.
On the merits of the petitioners claim, it is stated in the counter-affidavit that the decision to implement the new telecast system i.e. DAS is a policy decision taken by the Government of India on the basis of the recommendations of the Telecom Regulatory Authority of India (TRAI for short), which is an expert body; all the stakeholders are duly consulted by TRAI; policy decisions are the outcome of deliberations of technical experts in the field; Courts are not well-equipped in these areas, and would leave such matters to the discretion of the executive; and it is only if the policy decision is contrary to any statutory provision or is discriminatory/arbitrary or is based on irrelevant considerations would interference be justified. Reliance is placed on Centre for Public Interest Litigation v. Union of India in this regard.
The counter affidavit then proceeds to highlight the drawbacks in the existing regime of analog cable television. It is the case of the Union of India that analog cable television was afflicted with inherent drawbacks; as against the existing 800 permitted satellite TV channels, the analog system is able to carry only 70 to 80 channels; this severely restricts the subscribers choice, and denies them a large canvas of channels available in the broadcasting universe; the limited carrying capacity of the analog system brings about a distortion in the business of television distribution, as the broadcaster is forced to incentivise cable operators to carry their channels by paying a huge amount of carriage fee or placement fee etc; analog cable does not have the technological features of facilitating a-la-carte (individual) selection of channels; this compels the customer to go in for the bouquet of channels devised by the cable operator on his own accord, restricting the say of customers in the selection of channels; the analog regime is not customer friendly; the analog services lack transparency as subscribers base is not accurately maintained and reported; this has led to under reporting of subscription revenue, and the consequent concealment of tax revenues; a limited carrying capacities and lack of transparency distorts the business model for the broadcasters; increases their dependence on advertisement revenues, and restricts the scope for subscription revenues (65:35); for higher TRP ratings, the channels often sensationalize content on television; the quality of picture on analog cable depends on whether a channel is carried in the Prime Band or in the non- Prime Band; Prime Band can only accommodate a few channels; cable operators are facing severe competition from Direct to Home (DTH) and Internet Protocol Television (IPTV) services which are in a position to provide high quality content and value added services; unless the cable service providers upgrade their services, they will lose their business to new platforms; and an effective Consumer Grievance Redressal Mechanism does not exist.
On the need for reform, the counter affidavit states that the drawbacks in the existing analog regime necessitated a transparent system being ushered in to cater to the interests of the consumers; this reform is what DAS aims at; addressability means that the signals of cable operators will be encrypted and can only be received through an STB after due authorization from the service provider; this would enable identification and maintenance of a data base for each subscriber; and this would also bring in transparency and prevent piracy while also enabling better revenue realisation.
The counter affidavit details the key advantages of DAS to various stakeholders. The consumers would be empowered to exercise a-la-carte selection to allow individual channel selection; it would make available improved quality of content, and access to various value added and interactive services like Electronic Programme Guide, Movie-on-Demand, Video-on-Demand, Personal Video recorders enabling recording and viewing at convenience, Gaming and enhanced viewing experience; this would enable cable operators to compete effectively with DTH services; transparency in subscriber base would result in realistic generation of subscription revenue, and address the issues of tax evasion; in the digitalisation of Cable TV, it is mandatory for every MSO and his cable operator to have a grievance redressal mechanism wherein a toll free number, web based system for logging and tracking the status of complaints, and notification of nodal officers are mandated; no such system existed in the analog regime; complaints can thus be addressed effectively in the digital system; a time line for redressal of grievances of consumers in a time-bound fashion has been specified by TRAI; and Broadband penetration in India will also increase through digitalisation of cable TV services, as Broadband can also be provided to consumers by MSOs/LCOs, on the digitalisation of the digital Cable Network, after obtaining the requisite license from the concerned authorities. Reliance is placed on the judgment of the Supreme Court in Lalit Kumar v. Union of India to contend that the decision to implement DAS, and phasing out the traditional analog regime, are policy decisions taken by the Central Government after consulting all stakeholders and by following due process.
Reference is thereafter made, in the counter-affidavit, to several cases filed challenging Phase-II of cable TV digitalisation, and it is stated that Phase-I of digitalisation was completed by 31.10.2012 and, out of the four metro cities planned to be digitalised, digitalisation has been completed in Delhi, Mumbai and Kolkata; it could not be completed in Chennai because of a few pending Court cases; Phase-II was concluded by 31.03.2013 in 38 cities spanning across 14 States and one Union Territory; and, out of the 38 cities, the switch over is complete in all cities except in Coimbatore because of pending Court cases.
The counter affidavit then details the initiatives taken by the Ministry for implementation of Phase-III and Phase-IV of Cable TV digitalisation, and refers to a Task Force having been constituted comprising representatives from various stakeholders including TRAI, Broadcasters, MSOs, LCOs, Nodal Officers from the States, consumer organizations, STBs manufacturers and DTH Operators etc., to oversee and monitor the digitalisation process in Phase-III. Reference is also made to the publicity campaign initiated in electronic, print and social media, and by SMS, to apprise consumers of the benefits of digitalisation, and about the cut-off date; all the State/UT Governments were requested to nominate State Level and District Level Nodal Officers; and four workshops of State Level Nodal Officers were held in different cities.
The counter affidavit, thereafter, states that sufficient time was allowed for digitalisation of Phase-III; the estimated requirement for Phase-III areas, as per the seeding date provided by the registered MSOs, DTH and HITS Operators, have been fully met; the revenues of the State Governments has increased; cable TV digitalisation has brought in greater transparency; entertainment tax collection from eleven states indicate that ET collection increased from Rs.184 crores in 2012-13 to Rs.448 crores in 2015-16; there are reports of security threats due to TV contents which can incite communal and terrorist violence; this is because of carriage of unapproved Satellite Channels by MSOs and LCOs; in the digital system all channels are encrypted before transmission on to the cable network; the encryption is carried out by MSOs, and the LCOs cannot insert any channel; it is practically impossible to transmit unapproved channels on the cable network in the digital system; the inter-connect agreements have been finalised by giving sufficient time to all stakeholders to be prepared for digitalisation, and any postponement at this juncture or allowing the petitioner to continue transmitting analog signals would derail the whole exercise, and defeat the very purpose of Mission Digitalisation; the cut-off date of digitalisation cannot be deferred as it may dampen the momentum built so far; this would also severely affect the overall growth of the sector, and would be against the public interest at large; it would also dis-incentivise the stakeholders who have invested a huge sum of capital for diligently implementing the digitisation programme of the Government; and it is for this reason that the Delhi High Court had dismissed all the Writ Petitions.
The counter affidavit further states that, in view of the recommendations of TRAI, the Union Cabinet, in its meeting held on 13.10.2010, approved the Ministrys proposal for mandatory introduction of DAS in the cable TV services which, inter alia, covers a time-frame and a road map for implementation of digitalisation with addressability on a pan India basis in cable TV services leading to a complete switch off of analog TV services by 31.12.2014; the Cabinet also approved certain amendments to the 1995 Act by the 2011 Amendment Act; the encrypted signal can only be received through a Set Top Box (STB) after due authorization from the service provider; this would enable identification and maintenance of a data base for each subscriber, bring in transparency, and prevent piracy, while enabling better revenue realisation; therefore, the set top boxes are essential for digitisation of Cable TV services; DAS is being implemented as per the amended provisions of the 1995 Act; the decision to implement DAS is a policy decision taken by the Government of India on the recommendations of TRAI which is an expert body; all the stakeholders have been duly consulted by TRAI before making recommendations; the matter has also been examined by various High Courts and the Supreme Court, and no lacuna has been found in the notified policy to digitise Cable TV networks; and the decision, on implementation of DAS in cable services, has been taken in larger public interest.
The counter affidavit thereafter lists in detail the problems and difficulties which analog form of transmission suffers from which includes limited number of channels being made available, and restraint on choice of the subscriber denying him a large canvas of channels available in the broadcasting universe; the limited carrying capacity of the analog system brings about a distortion in the business of television distribution, as the broadcaster is forced to incentivise cable operators for carrying their channels by paying carriage fees or placement fee etc; analog cables do not have the technological features of facilitating a-la- carte (individual) selection of channels compelling the customers to go by the bouquet of channels made available by the cable operator on his own accord, restricting the say of customer in selection of channels; lack of transparency as the subscriber base is not accurately maintained and reported, which leads to under reporting of subscription revenue, and consequent concealment of tax revenues; limited carrying capacity of the analog system, and lack of transparency distorts the business model for the broadcasters; it increases their dependence on advertisement revenues, and restricts the scope for increased generation of subscription revenues (65:35); channels often sensationalize the content on television for higher TRP ratings; lack of an effective Consumer Grievance Redressal Mechanism; and inability to provide high quality content, value added services and internet connection service.
After narrating the difficulties in the analog system, it is stated in the counter-affidavit that the first respondent introduced DAS in cable TV services in 2007 which was implemented in a phased manner; Phases I to III have already been completed; instructions have been issued by the Ministry to all the stakeholders i.e., Broadcasters, MSOs and LCOs, and consumers have been given sufficient time in this regard; as per the amended Rule 13(2) of the Cable Television Network Rules, 1994 (the Rules for short), STBs are to be procured, supplied and installed by MSOs; TRAI has mandated that every MSO/LCO has to offer the scheme of outright purchase, rental or instalment basis for providing STBs; it is mandatory for all operators to stop transmission of analog signals after the cut-off date, failing which the authorized officer would seize the equipment in terms of Section 11 of the 1995 Act; TRAI had issued regulations to enable subscribers to subscribe only to those channel which he or she wants to see; and the object of DAS is only to facilitate transmission of more number of channels, within a lesser band width, to overcome shortcomings in the analog form of signals, including bringing transparency which is missing in the analog system.
The counter affidavit concludes with a prayer that the Writ Petition be transferred to the Delhi High Court as per the order of the Supreme Court in Transfer Petition No.430-444/2016 dated 01.04.2016, or that it be heard along with the three pending Writ Petitions wherein the validity of Section 4-A of the 1995 Act are under challenge, or to dismiss the Writ Petition.
While several applications have been filed, on behalf of the Broadcasters by Star India Private Limited, the Association of Indian Broadcasting Foundation and Association of Broadcasting, the All India Digital Federation (an Association of Multi-system Operators) and a local cable operator, to implead them as respondents in the Writ Petition, Sri C. Ramachandra Raju, learned counsel for the petitioner, has objected to these implead applications being ordered, contending that the proposed respondents are merely meddlesome interlopers, and should not therefore be heard. He also sought time to file a counter affidavit in all these implead applications.
While we have not ordered the implead applications as Sri C. Ramachandra Raju, learned counsel for the petitioner, sought time to file counter affidavits thereto, we heard Sri B. Narayana Reddy, learned Assistant Solicitor General, Sri S. Niranjan Reddy, learned Senior Counsel appearing on behalf of Star India Private Ltd, Sri Abhishek Malhotra, Sri Rijul Taneja and Sri S. Rahul for the Association of Broadcasters, Sri A. Tulsiraj Gokul, learned counsel appearing on behalf of the MSOs and Sri M. Govind Reddy, learned counsel appearing on behalf of the LCOs, as the issues raised in this Writ Petition are of considerable public importance. The elaborate submissions put forth by Learned Senior counsel and Learned Counsel on either side shall, for convenience sake, be examined under different heads.
I. SHOULD THIS WRIT PETITION BE TRANSFERRED TO THE DELHI HIGH COURT Sri B. Narayana Reddy, Learned Assistant Solicitor General appearing on behalf of the first respondent, would submit that the petitioner has, in effect, challenged the notifications issued by the Government of India; while the prayer may have been couched in a slightly different form, it is in effect not to implement the notifications; the relief sought for in the Writ Petition squarely falls within the order of the Supreme Court; and this Writ Petition should also be transferred to the Delhi High Court.
Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that the petitioner has not questioned either the validity of the amended Section 4-A of the 1995 Act or the notifications issued by the Government of India dated 11.11.2011, 11.09.2014 etc directing Broadcasters, MSOs and LCOs to carry encrypted signals in Phase-III areas; neither Section 4-A(1) of the 1995 Act, nor the notifications issued by the Government of India thereunder, prohibit transmission of signals in the analog mode; the notice dated 22.12.2016, which prohibits such transmission, is contrary both to Section 4-A(1) of the 1995 Act, and to the notifications issued by the Government of India in this regard; the grievance of the petitioner is only that both the Union and the State executive are doing something impermissible under the law; they are seeking to prohibit something, which has not been prohibited by Parliament, as Section 4-A only obligates all cable operators to introduce DAS, and does not prohibit transmission of analog signals along with DAS; the present Writ Petition was instituted more than a couple of years after the order of the Supreme Court; the question raised in the present Writ Petition was not raised in any of the earlier Writ Petitions, which were transferred to the Delhi High Court by the Supreme Court; while directing that, even future cases should be transferred to the Delhi High Court, the Supreme Court made it clear that it is only cases in which similar legal issues arise for consideration which should be transferred; the Supreme Court subsequently clarified on 24.10.2016 that its order for transfer of cases to the Delhi High Court pertained only to the notifications dated 11.11.2011 and 11.09.2014 under the 1995 Act as amended by the 2011 Act; what is under challenge in this Writ Petition is the notice issued by the Government of India on 22.12.2016; it is not as if every case filed anywhere in India was transferred to the Delhi High Court; the counter-affidavit, filed by the first respondent, itself discloses that certain cases, pending in the Madras High Court, have not been transferred to the Delhi High Court; the Writ Petitions before the Delhi High Court were dismissed mainly on the ground that these were all matters of policy; in a few cases, time was granted in view of non-availability of set top boxes; and the question whether Section 4-A(1) prohibited analog transmission, in addition to transmission through the digital addressable system, was not in issue before the Delhi High Court. He would refer to the letter of the Ministry of Information and Broad casting dated 01.02.2007, which refers to the cases pending before the Madras High Court in this regard.
The object of introduction of DAS, and the obligation of a subscriber to have a set top box to view channels transmitted in an encrypted form, fell for consideration in Chalasani Narendra Varaprasad v. Union of India ), and a Division bench of this Court held:-
The High Court of Bombay while considering WP.No.2610 of 2012, by the judgment of the Division Bench dated 31.10.2012, rejected the challenge to the notification dated 21.06.2012 made at the instance of the MSO. It was held that the Union Government has provided sufficient time for compliance to ensure that no hardship is caused to any consumer as sufficient quantity of STBs were made available. It was also observed that A certain degree of inconvenience is inevitable in the enforcement of any deadline. The new regime, which has been put into place by the Union Government is with a view to provide quality service to consumers. The individual business hardship that is faced by a business operator must necessarily give way to public interest Similarly, the Karnataka High Court while disposing of WP.Nos.14946 14954/2013 and batch dated 16.04.2013 held at para 38 as under: 38. It is also clear from the materials on record that respondent Nos.1 to 3 have periodically issued several directions, guidelines and frameworks to effectively implement digitalization. Respondent Nos.1 to 3 have framed Regulations to govern the tariff regime by specifically stating the price and the formula for sharing the same between the MSO and LCO. The broad terms of the interconnect link agreements have also been specified and the MSO and the LCOI are mandated to abide by it. It is to be noticed here that these writ petitions are not filed by the viewing public. In so far as STBs are concerned, it has to vary in accordance with the quality, features and the make. The MSOs do not have any control over the prices and the same is determined by the market forces. The respondents have placed materials before the Court to show that adequate number of STBs are available with the MSOs. As held by the Bombay High court in the decision referred to above, a certain degree of inconvenience is inevitable in the enforcement of any deadline. The new regime, which has been put into place by the Union Government is with a view to provide quality service to consumers. The individual business hardship that is faced by a business operator must necessarily give way to public interest in ensuring that services of a stipulated quality are available to the members of the viewing public.. (emphasis supplied).
The question whether a cable operator could continue to transmit signals in the analog form, even after Section 4-A(1) of the 1995 Act was substituted by Act 21 of 2011, did not fall for consideration in the said judgment.
On the question, whether this Writ Petition should be transferred to the Delhi High Court and whether the petitioners, in effect, have questioned the notifications issued by the Government of India which were under challenge in the Writ Petitions hitherto transferred to the Delhi High Court, it is necessary to refer to the contents of the Government of India notification dated 11.11.2011. In the exercise of the powers conferred by Section 4-A(1) of the 1995 Act, as amended by the 2011 Act, the Central Government, having been satisfied that it is necessary in the public interest so to do, notified, by notification dated 11.11.2011, that it shall be obligatory for every cable operator to transmit or retransmit programmes of any channel in an encrypted form through a digital addressable system in such city, town or area, as specified in column 2 of the table in respect of the corresponding State or Union Territory, as specified in column 3, with effect from such date, as specified in column 4. Phase II included the cities of Hyderabad and Visakhapatnam, and the date specified in column 4 was 31.03.2013. Phase III, which included all other urban areas, was to be completed by 30.09.2014 and Phase IV, for the rest of India, by 31.12.2014. The time stipulated in the notification was periodically extended thereafter.
While the notification dated 11.11.2011 obligated every cable operator to transmit or re-transmit programmes of any channel in an encrypted form, through a digital addressable system, it does not explicitly prohibit the cable operator from transmitting signals in the analog form in addition to transmission of signals in an encrypted form. It is only in the impugned notice dated 22.12.2016 has the Government of India conveyed its decision that all broadcasters, MSOs & LOCs would not be allowed, after 31.01.2017, to carry on analog signals in Phase III areas.
In its order, in Transfer Petition (Civil) Nos.430-444 of 2016 dated 11.03.2016, the Supreme Court, while issuing notice returnable on 01.04.2016, directed that a final decision shall not be rendered by the High Court, where the Writ Petitions were filed which were sought to be transferred by this Transfer Petition, until further orders. Thereafter, by order in Transfer Petition No.430- 437 of 2016 and 439-444 of 2016 dated 01.04.2016, the Supreme Court directed that having regard to similar legal questions involved in all the Writ Petitions that were raised before different High Courts, with a view to avoid conflicting decisions by different High Courts, and at the request made on behalf of the Union of India seeking to transfer all the Transfer petitions pending before the different High Courts, it was just and proper to withdraw all those cases pending in different High Courts, and the transfer petitions, to the Delhi High Court. The Supreme Court directed that, in future, if any case on the same legal question is filed before the High Court(s), such case(s) shall also be transferred to the Delhi High Court.
The present Writ Petition filed in the year 2017 is evidently not among the Writ Petitions which were pending before different High Courts, for which transfer petitions were filed before the Supreme Court in the year 2016. The question which necessitates examination is whether, in terms of the directions of the Supreme Court, this Writ Petition filed thereafter before this High Court should also be transferred to the Delhi High Court. The directions of the Supreme Court in this regard is that, if any case on the same legal questions is filed before the High Court, such case should also be transferred to the Delhi High Court.
With a view to ascertain whether the legal questions which arise for consideration in the present Writ Petition were also in issue in the Writ Petitions filed before different High Courts which were the subject matter of Transfer Petition Nos.430-444 of 2016, we examined a few such cases, and found that the questions raised herein were not raised before the other High Courts, wherein the legal questions related mainly to the constitutional validity of the amended Section 4-A, and the timeline prescribed for implementation of DAS even though adequate number of set off boxes were not available in the market. We have been saved the trouble of examining all the Writ Petitions as Sri S. Niranjan Reddy, Learned Senior Counsel appearing on behalf of Star India, fairly stated that the question raised in the present Writ Petition were not raised in the Writ Petitions filed before different High Courts which were part of Transfer Petition No.430-444 of 2016.
Even otherwise the Supreme Court has subsequently, in its order in I.A. No.1-15 of 2016 in Transfer Petition (Civil). No.430- 444 of 2016, clarified that the controversy, which was ordered to be transferred for hearing to the Delhi High Court, pertained only to the notification dated 11.11.2011 and 11.09.2014 under the 1995 Act as amended by the 2011 Ordinance. As neither of the notifications dated 11.11.2011 and 11.09.2014 are under challenge in the present Writ Petition, the clarificatory order of the Supreme Court dated 25.10.2016 would not require us to transfer the present case to the Delhi High Court, but to adjudicate the same on its merits.
It is also evident from the counter-affidavit filed on behalf of Government of India that, while Phase I of digitilisation was completed in Delhi, Mumbai and Kolkata, it could not be completed in Chennai because of pending Court cases. It is thus evident that the cases pending in Chennai Courts are being contested thereat, and have not been transferred to the Delhi High Court. In view of the clarificatory order of the Supreme Court dated 25.10.2016, we see no justification in refusing examine the questions raised in the present Writ Petition on its merits. The contention, urged on behalf of the respondent in this regard, necessitates rejection.
II. RECOMMENDATIONS OF TRAI ARE THEY RELEVANT IN UNDERSTANDING THE SCOPE OF SECTION 4-A(1) Sri C. Ramachandra Raju, Learned Counsel for the petitioners, would submit that the provisions of the 1995 Act, as amended by the 2011 Act, cannot be understood in the light of the recommendations of TRAI; Section 4-A does not suffer from any ambiguity, and therefore no reliance can be placed on the TRAI recommendations; it is not obligatory for Parliament to accept the recommendations of TRAI; it is evident that, by amending Section 4-A, Parliament did not intend to accept TRAI recommendations in its entirety; the 2005 TRAI report recommends that a change over, from analog to DAS, should be voluntary, and not compulsory; public interest would not be defeated if the analog system is continued; and the analog mode of transmission of signals is not prohibited either by the pre-amended, or by the amended, Section 4-A. It is contended, on behalf of the respondents, that the recommendations in the 2010 TRAI report show that the intention is to stop analog transmission, and effect transmission only through the digital addressable system; not only would such transmission bring about transparency, but it would also ensure enhanced revenue generation, and effective recovery of taxes; it is evident from the several recommendations in the 2010 TRAI report that the 1995 Act was amended in 2011 only to bring an end to the analog system of transmission, and to provide for transmission of signals only through the digital addressable system; the TRAI recommendations, when read in the light of the provisions of the 1995 Act and the Rules, make it clear that both Parliament and the rule making authority intended that, after the date stipulated in the notifications, transmission should be effected only in an encrypted form, and not in an analog form; TRAI regulates both the service and the service providers; the obligation to transmit signals in an encrypted form extends to each and every Multi-System Operator; in terms of the Government of India notification dated 09.01.2004, broad-casting and cable services are telecom services, and fall under the purview of TRAI; the TRAI regulations are binding on all these service providers; the TRAI recommendations are, therefore, of great relevance; and the 2011 Act was introduced only to comply with the recommendations of the TRAI, to bring the existing analog system to an end, and to convert transmission only in an encrypted form, making it compulsory for all subscribers to have a set top box to receive signals in an encrypted form.
A statute is best understood if we know the reason for it. The reason for a statute is the safest guide to its interpretation. The words of a statute take their colour from its reason. There are external and internal aids. The external aids are the Statement of Objects and Reasons when the Bill is presented to Parliament, the reports of committees which preceded the Bill, and the reports of Parliamentary Committees. Occasional excursions into the debates of Parliament are permitted. Internal aids are the Preamble, the scheme and the provisions of the Act. Having discovered the reason for the statute, the interpreter may proceed ahead. No provision in the statute and no word of the statute may be construed in isolation. (Utkal Contractors and Joinery (P) Ltd. v. State of Orissa ; A. Manjula Bhashini v. A.P. Womens Coop. Finance Corpn. Ltd., ). Interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. (K.P. Varghese v. ITO ). In interpreting a statute the court has to ascertain the will and policy of the legislature as discernible from the object and scheme of the enactment and the language used therein. (Chern Taong Shang v. Commander S.D. Baijal ). The fairest and most rational method to interpret the will of the legislator is by exploring his intention at the time when the law was made, by signs most natural and probable. And these signs are the words, the context, the subject matter, the effect and consequence, or the spirit and reason of the law. (Blackstone Commentaries on the Laws of England (Facsimile of 1st edn. 1765, University of Chicago Press 1979 Vol. 1 at 59; Doypack Systems (P) Ltd. v. Union of India ).
The Telecom Regulatory Authority of India is a body corporate established under Section 3(1) of the Telecom Regulatory Authority of India Act, 1997 to exercise the powers conferred under, and discharge the functions prescribed by, the said Act. By notification in S.O. 44(E) dated 09.01.2004, the Government of India, in the exercise of the powers conferred by the proviso to clause (k) of sub-section (1) of Section 2 of the Telecom Regulatory Authority of India Act, 1997, notified broadcasting services and cable services to be telecommunication service. By the notification in S.O.45(E) dated 09.01.2004 and, in the exercise of the powers conferred by clause (d) of sub-section (1) of Section 11 of the Telecom Regulatory Authority Act, the Central Government entrusted certain additional functions to the TRAI, established under sub-section (1) of Section 3 of the Act, in respect of broadcasting services and cable services. The TRAI was entrusted with the functioning of making recommendations regarding the terms and conditions on which the addressable system should be provided to customers. In terms of the notification dated 09.01.2004, the TRAI has been entrusted with the functions of making recommendations regarding the terms and conditions on which the addressable system should be provided to customers. It is therefore useful to refer to the recommendations of the TRAI in this regard.
Further, as interpretation of Section 4-A would require us to ascertain its meaning, and everything which is logically relevant must be taken into consideration, we are satisfied that the contents of the TRAI reports should be taken note of. While Sri C. Ramachandra Raju, Learned Counsel for the petitioners would rely on certain portions of the TRAI report dated 14.09.2005, the Learned Counsel for the respondents would rely on certain portions of the subsequent TRAI report dated 05.08.2010. It is necessary for us, therefore, to briefly refer to the contents of both the reports, more so as the Statement of objects and reasons for the 2011 amendment bill, whereby Section 4-A was substituted, specifically refers to the TRAI report dated 05.08.2010.
The TRAI made certain recommendations on Digitalization of Cable Television in its report dated 14.09.2005. It is useful to note the relevant portions of these recommendations. Para. 1.4 thereof relates to Facilitation of Policy of Digitalisation Objectives of TRAI and, thereunder, it is stated that in developing the policy to facilitate digitisation of cable networks the Authority has primarily been guided by the need to keep the process completely voluntary; cable operators, MSOs, broadcasters and consumers should adopt the new technology only when they see the merits of such a shift; what this means is that analog and digital transmission shall continue side by side; consumers will only go for the digital platform once they are convinced that it is advantageous to them; in case, at a later date, they find that it is better to get out of the digital service they would be free to do so; apart from this primary consideration, the authority has been guided by the following objectives i.e., (i) cable services should benefit from the technological advances to the fullest possible extent, and enabled to provide competition to other digital platforms; (ii) there should be smooth transition from analog to digital transmission recognising that analog services will continue along with digital services for several years; (iii) the policy should promote competition at all levels; (iv) the digitalisation policy should provide guidelines to broadcasters, MSOs, Cable Operators and consumers for adoption of new technology.
Para. 2.2 of these recommendations relate to International experience and, thereunder, after stating that details of international experience have been provided in the Consultation Paper, reference is made to the important factors to be borne in mind from this experience. They are (a) there is a cost attached to moving to the digital platform; the biggest obstacle has been consumer premises equipment consumers have not been very enthusiastic about investing in digital set top boxes or digital televisions; (b) most countries have provided a launch date as well as a sunset date; (c) the sunset date fixed earlier in USA had to be extended because of poor progress, and in other countries also there is a provision to postpone the sunset date in case of poor response; and (d) the only city in the world which has switched off analog transmission is Berlin; and extensive subscriber education and a subsidy scheme have been held to be crucial to this success.
Para 2.4 details the recommendations of the Authority, and Para.2.4.1 relates to launch, time frame and plan. While detailing the rationale for promoting digitalisation, the TRAI observed that this does involve a cost especially for consumers who will have to invest in a set top box or decoder to transform the digital signals into analog and, therefore, the plan would have to be voluntary in all steps, and would have to provide for simultaneous provision of analog and digital service.
Chapter 6 of the TRAI report dated 14.09.2005 contains the summary of recommendations. Para. 6.1.1 stipulates that there should be a national plan for digitalisation from 1st April, 2006 till 31st March, 2010; and this plan would be indicative and would not be mandatory in any form. Para 6.1.2 stipulates that the essential components of this plan would be: (i) Introduction of digital service in all cities/urban agglomerations with a population of one million plus by 2010; and in all these cities/urban agglomerations the existing analog service will continue simultaneously; (ii) licensing for new entrants and automatic licensing for existing operators; (iii) rationalisation of import and domestic duties by April 1, 2006; and
(iv) use of Entertainment tax for a consumer education programme during these four years. (2006-2010). Para 6.3 relates to up- gradation of network and technical choices and it is stated, thereunder, that, while digitalisation of cable TV should be promoted, the choice of analog CAS or Digital CAS should be left to the Cable operators as per their business plans.
Five years thereafter, the TRAI submitted another report dated 05.08.2010 which contained its recommendations on the implementation of Digital Addressable Cable TV Systems in India. The recommendations of TRAI contained the framework of implementation of digitisation with addressability in India by December, 2013, and several measures were suggested such as fiscal incentives, right of way etc, to enable this process. The TRAI report dated 05.08.2010 contains four chapters with four annexures. Chapter-I relates to broadcasting sector nature and limitations and, thereunder, the evolution of the broadcasting sector are detailed, and it is noted that in 2009 the revenue size of the Indian television industry was estimated at Rs.25,700 Crores; of this Rs.16,900 Crores (66%) was attributed to subscription revenue generated from consumers, and the balance Rs.8,800 Crores (34%) came from the advertising market; the last five years had changed the dynamics of the market significantly; and from a scenario where 100% of the cable and satellite (C&S) population was dependent on analog cable services, DTH commanded around 20% market share by the end of 2009; uptake of digital services was increasing and choice was becoming possible at the consumer end; and the cable services value chain comprised four main supply side entities i.e., the broadcaster, MSO, LCO and the end consumer. The role of the broadcaster, MSO and LCO are detailed in the report.
On the nature and characteristics of the Cable TV market, the report dated 05.08.2010 states that the cable TV systems can be analog, hybrid or digital; the stakeholders, in the analog cable TV system, are the broadcasters, MSOs, LCOs and the consumers; the broadcaster supplies the content, mostly in the form of bouquets of channels, to MSOs; the MSO collects the content (channels) from different broadcasters and, after repackaging, gives it to the LCO for onward distribution to the consumer; the signal an LCO gets is a single bouquet of analog channels belonging to different broadcasters; the composition of the bouquet that reaches the consumer is determined by the MSO; it reflects the MSOs perception of what the consumers in the LCOs domain want to watch; an MSO supplies signals to many LCOs; and though it is technically possible for an MSO to offer different feeds for different LCOs, there are practical limitations on the number of such feeds.
Para 1.51 states that, even if a feed is customised for a particular LCO, the bouquet of channels carried by this LCO cannot fully match the choice of TV channels of each subscriber; at best, a typical consumer can expect to watch a choice of channels broadly corresponding to the socio-cultural background of the LCO domain in which he is residing; however, he cannot make specific choices to suit his age, education, profession, language or interests; in fact, the choice of channels would vary from subscriber to subscriber; and, as a result, any particular subscriber in the analog system may be paying for channels that he does not watch, and may also be denied the viewing of specific channels of his choice.
In para 1.52 it is stated that the signal compiled by the MSO/LCO reaches the consumers TV receiver set where different channels are selected by the tuner of the TV set; the tuner of a TV set has a limited capacity of channel selection; this ultimately limits the number of TV channels a viewer can watch through his TV; and the design of the TV tuner matches the TV standard adopted by a country. Para 1.53 records that in all 101 channels can be accommodated; taking into consideration terrestrial FM Radio and TV transmission as well, theoretically, the analog cable system can have a capacity of 95-96 channels; however, given the quality and type of the cables, modulators, RF amplifiers etc deployed in the network, the channel carrying capacity of the analog cable system practically gets limited to around 85-90 channels only.
Para 1.54 records that, in many parts of India, a hybrid model is employed; in this model, some channels are carried in analog form and the remaining capacity is used to carry digitally modulated channels; and the combined signal is sent on the same cable. Para 1.55 states that, in digital TV, compression techniques are employed for storage and distribution/transmission of content; these techniques capitalise on the redundancy of information in intra and inter-picture frames, the movement predictions of picture elements/objects, and the limitations of the human eye and ear to compress the channels bandwidth requirement; this achieves the dual objective of a near-normal viewing experience to the consumer, and a remarkably reduced bandwidth (spectrum) requirement; the bandwidth requirement of a digital channel depends upon the complexity of content of the channel; greater movement and finer visual details require more bandwidth; and, as a rough estimate, 4 to 12 digital channels can be accommodated in the bandwidth of a single analog channel, depending upon the modulation technique employed and the nature of content.
On the Digital Addressable Cable TV System, the TRAI report dated 05.08.2010 records, in para: 1.59, that, in this model, all the channels, whether FTA or Pay, are delivered in the addressable- digital form only; this is akin to the DTH model; not only is the content carried in digital form, all content, whether pay or FTA, is also encrypted; the subscriber necessarily requires a Set Top Box (STB), duly authorised by the service provider (MSO), to view the TV channels; and the same STB can also be used for reception of other value added services and interactive services such as broadband. Para 1.60 states that this model further enhances the channel carrying capacity of the system over the hybrid model; in this model, all FTA channels are also carried in digital format making room for more channels; and the decoded content from the STB can be viewed through the Audio/Video port of the TV receiver set.
Chapter II of the TRAI report dated 05.08.2010 relates to issues in digitization with addressability. Under this head, the report examines the need for digitization with addressability, including the issue whether complete digitization with addressability (a box in every household) is the way forward. On an analysis the TRAI report states, in para 2.7, that, in the present cable TV system, service seekers (consumers) as well as service providers (Broadcasters, MSOs and LCOs) are at a disadvantage; the consumer has a limited choice of channels and he is also compelled to pay for channels which are not of his choice; due to non-transparent business transactions, broadcasters, MSOs and LCOs are constantly involved in expensive litigation, which has come to characterise the very nature of business in this segment of the TV and entertainment industry. Para 2.8 states that the limitations of analog cable TV transmission had given rise to non- transparent business transactions based on negotiated non- verifiable subscriber bases, differential pricing for the same content and incidence of carriage and placement fee on account of demand- supply mismatch arising out of capacity constraints, and the advertisement-centric market strategy of broadcasters; these factors had resulted in a lack of collaboration amongst various stakeholders and, as business models came into conflict, litigation had become more common. In para 2.9, it is stated that almost all stakeholders recognize that the single most effective step that can be taken to resolve the problems of the industry would be the implementation of digitization of the cable TV system with addressability; and this consensus had emerged from the written comments of the stakeholders as well as from the views expressed by the stakeholders. Para 2.10 states that digitization would solve the problem of capacity constraint, and would enable incorporation of value added services (viz. Pay per View, Time Shifted Video, Personal Video Recorder, Near Video on Demand, Radio services, Broadband etc.) in the offerings to the customer, which would enhance the range of choice for the customer, and improve the financial viability of operations for the service provider; addressability would ensure choice of channels to the consumer and transparency in business transactions; it would build stakeholder confidence in the sector; and it would also effectively address the issue of piracy.
The TRAI report dated 10.08.2010 also deals with regulatory issues and the need to amend the 1995 Act. Para 2.43 states that, in order to facilitate complete digitalisation of cable television networks in India, it may also be necessary to have a re-look at the provisions of Section 4-A of the Cable Television Networks (Regulation) Act, 1995, and carry out necessary amendments therein. Para 2.4 records that Section 4-A of the 1995 Act clearly mandates that the basic service tier of free-to-air channels should be available to subscribers without any addressable system attached to their TV sets in any manner; in other words, these provisions imply that, in CAS areas, the programmes of the basic service tier should be available in the analog mode; the present recommendations of the Authority contemplate that, after the proposed sunset date, both FTA and pay channels should be available to subscribers only through set top boxes helping in determining subscriber base with transparency; the continuance of the existing provisions of Section 4-A would result in the continuance of the analog cable network along with digital network in CAS notified areas, thus preventing the total analog sunset as contemplated in these recommendations; further, if pay channels are offered in digital form, and FTA channels are allowed to continue in analog form without set top boxes, there is always the possibility that pay channels will be offered as FTA channels, resulting in piracy. Para 2.45 records that, in order to make cable television systems fully digital (with hundred per cent addressability), it would be necessary for each subscriber to acquire a set top box, irrespective of whether such subscriber desires to watch pay channels or not; having regard to the above, the Authority was of the view that, in order to pave the way for a complete analog switch off, the relevant provisions of Section 4-A of the 1995 Act be amended suitably.
Chapter III of the TRAI report dated 05.08.2010 relates to the roadmap for digitization with addressability. It is stated in para 3.6 that, internationally, concerted efforts are being made for up- gradation to a fully digitized system; stakeholders in India have different views on the issue of an appropriate date for analog switch off; considering the fact that the subscribers of TV channels in India belonged to a range of socio-economic backgrounds from the very poor to the very affluent, a phased approach to transition from the analog system to the addressable digital system would seem to be most appropriate; the approach of phased implementation was also supported by all the stakeholders; as the use of set top boxes increased, set top boxes would be available at more affordable prices; there arose the question as to whether the date for migration to digital should be the same for pay and FTA channels, or whether they should be different; if pay channels were offered in digital form, and FTA channels continued in analog form without STB, there was always the possibility that the pay channels would be offered as FTA, resulting in piracy; additionally, if both pay and FTA channels were received through STB, it would help in determining the subscriber base with transparency; and the Authority was of view that effective implementation would not be possible if the date of migration was different for pay and FTA channels.
The report then details the advantages of digitization with addressability to various stakeholders. It is stated, in para 2.15, that digitization with addressability would result in a number of advantages to Consumers, Broadcasters, MSOs, LCOs and Government. Para 2.16 records that, for the consumer, there would be a choice of channels, enabling him to budget his bill as per his choice and affordability; thus, he would pay only for what he wants to watch; in addition, he would have a choice of interactive services like Video on Demand (VoD), Personal Video Recording (PVR), video gaming, teleshopping, with additional features such as Electronic Program Guide (EPG) and broadband; and he would derive value for his money with enhanced quality of service through competition among operators/platforms. It is stated, in para 2.17, that broadcasters would be able to carry on their business transactions on auditable and verifiable subscriber bases instead of negotiated basis; the digital dividend would ensure availability of channel choice and spectrum, and hence allow viable business planning for existing broadcasters and new entrants; regional channels would be encouraged; thus, broadcasters would get value for their content, commensurate to quality, and content would be protected against piracy; and the increased capacity would also enable broadcasters to offer niche channels and HDTV channels. Para 2.18 records that MSOs would be benefited as they would be able to choose their channels on a-la-carte basis; they would be able to market pay channels based on demographics and socio-economic conditions in their markets; and MSOs would be able to generate more revenue through broadband, value added and interactive services like VOD, PVR, video gaming, music and tele-shopping etc. Para 2.19 states that, for local cable operators, business transactions would be based on auditable subscriber base; if the subscriber base declined, he would get commensurate financial relief for the same; besides FTA subscription, he would get a share of revenue from all pay channels, broadband services and other value added services; cable operators would also be better equipped to meet customer requirements in terms of choice of channels and services, and in terms of quality of service. Para 2.20 records that, as far as the Government was concerned, tax collection would match the market size; and the Government would also earn increased service tax revenue through enhanced deployment of broadband and other value added services. It is stated, in para 2.21, that, lastly, greater transparency in business transactions would greatly reduce litigation amongst service providers, and reduce the need for regulatory intervention; this would result in better collaboration among service providers, and overall growth of the sector; and the Authority was of the view that digitization with addressability was the way forward for the cable TV industry in Non-CAS areas. In para 2.22, the Authority recommended that digitization with addressability be implemented on priority for Cable TV services in Non-CAS areas. In para 3.11, the Authority recommended that migration to a digital addressable cable TV system be implemented with a sunset date for Analog Cable TV Services as 31st Dec 2013, in four phases as follows:-
Phase I: In four Metros Delhi, Mumbai, Kolkata and Chennai, by 31st March 2011.
Phase II: In all cities having a population of over one million, by 31st December 2011.
Phase III: In all other urban areas (municipal
corporations/municipalities), by 31st
December 2012.
Phase IV: In the rest of India, by 31st December 2013.
The recommendations of the TRAI, in its earlier report dated 14.09.2005, were that, while digitilisation of cable TV should be promoted, the choice of analog conditional access system or digital conditional access system should be left to the cable operators as per their business plans. In its subsequent report dated 05.08.2010, the TRAI has recommended that digitisation with addressability be implemented on priority for cable TV services; and migration to a digital addressable cable TV system should be implemented with a sunset date for analog cable TV services in 4 phases. While the four metros were placed in Phase I with the sunset date for analog cable TV services as 31.03.2011, the sunset date in Phase II areas was recommended to be 31.12.2011, in Phase III areas as 31st December, 2012, and in Phase IV by 31st December, 2013. By the impugned notice dated 22.12.2016, the last date for sunset of the analog system has been prescribed as 31.01.2017 for phase III areas. The recommendations of the TRAI, in its report dated 05.08.2010 is to ensure that, after the sunset date, transmission of signals is only through DAS and the earlier mode of transmission of signals in an analog form is completely disbanded.
While the impugned notice dated 22.12.2016 accords with the TRAI recommendations in its report dated 05.08.2010, the contention of Sri C. Ramachandra Raju, Learned Counsel for the petitioner, is that Parliament, while enacting Act 21 of 2011 whereby Section 4(A) was substituted, did not accept the recommendations of TRAI in its report dated 05.08.2010 in its entirety and, while making it obligatory for cable TV operators to send signals in an encrypted form, it has not prohibited them from simultaneously sending signals also in the analog form. Before examining this issue, it is useful to note the contents of the Statement of Objects and Reasons for introduction of the Bill which resulted in enactment of Act 21 of 2011 whereby Section 4-A was substituted.
III. STATEMENT OF OBJECTS AND REASONS : ITS RELEVANCE IN INTERPRETING SECTION 4-A(1):
Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that the Statement of Objects and Reasons for the bill are distinct from the Statement of Objects and Reasons of the 2011 amendment Act; Parliament, by not including the Statement of Objects and Reasons in the 1995 Act itself, must be deemed to have rejected the bill; no aid can be taken of the Statement of Objects and Reasons, placed before Parliament, by the Executive; and such a Statement of Objects and Reasons is not even an external aid to construction.
It is contended, on behalf of the respondents, that the very object of the amendment is to switch over from the analog system to the digital system of transmission of signals in an encrypted form; not only is the object of the amendment to provide more number of channels to the subscriber in a lesser band width, but also to plug leakage of revenues of the State, which cable T.V. operators are resorting to by the use of the analog system of transmission; and digitization with addressability is stipulated in the Statement of Objects and Reasons.
The Statement of Objects and Reasons need to be looked into, though not by itself a necessary aid, as an aid to construction only if necessary. To assess the intent of the legislature in the event of there being any confusion, the Statement of Objects and Reasons may be looked into, and no exception can be taken thereto this is not an indispensable requirement but when faced with an imperative need to appreciate the proper intent of the legislature, the Statement may be looked into but not otherwise. (Gurudevdatta VKSSS Maryadit v. State of Maharashtra ; A. Manjula Bhashini5).
The Statement of Objects and Reasons, and the preamble of an Act, open the minds of the makers in enacting the law. It cannot altogether be eschewed from consideration of the relevant provisions of the Act. (S.S. Bola v. B.D. Sardana ). Although the Statement of Objects and Reasons contained in the Bill, leading to enactment of the particular Act, cannot be made the sole basis for construing the provisions contained therein, the same can be referred to for understanding the background, the antecedent state of affairs and the mischief sought to be remedied by the statute. The Statement of Objects and Reasons can also be looked into as an external aid for appreciating the true intent of the legislature and/or the object sought to be achieved by enactment of the particular Act. (A. Manjula Bhashini5; Gurudevdatta VKSSS Maryadit9; Narain Khamman v. Parduman Kumar Jain ; Bhaiji v. SDO ; Principles of Statutory Interpretation by Justice G.P. Singh, 8th Edn., 2001, pp. 206-09).
The Statement of Objects and Reasons seeks only to explain what reasons induced the mover to introduce the Bill in the House, and what objects he sought to achieve (Aswini Kumar Ghose v. Arabinda Bose ). The Statement of Objects and Reasons accompanying a Bill, when introduced in Parliament, cannot be used except for the limited purpose of understanding the background and the antecedent state of affairs leading up to the legislation. (State of W.B. v. Union of India ). The Statement of Objects and Reasons might be admissible not for construing the Act but for ascertaining the conditions which prevailed when the legislation was enacted. (State of West Bengal v. Subodh Gopal Bose ; M.K. Ranganathan v. Government of Madras ; A. Thangal Kunju Musaliar v. M. Venkitachalam Potti ; CIT v. Sodra Devi ; and Jai Lal v. Delhi Admn., ).
Although in Aswini Kumar Ghose13 it was held that the Statement of Objects and Reasons contained in the Bill cannot be used or relied upon for the purpose of construction of the statute, this rule has not been strictly followed in subsequent judgments. In A. Thangal Kunju Musaliar17, the Statement of Objects and Reasons was used for judging the reasonableness of the classification made in an enactment to see if it infringed or was contrary to the Constitution. In Central Bank of India v. Workmen it was held that the Statement of Objects and Reasons can be used for the limited purpose of understanding the background and antecedent state of affairs leading up to the legislation. The same view was reiterated in a large number of other judgments including Bhaiji12 in which the Supreme Court referred to the Principles of Statutory Interpretation by Justice G.P. Singh, 8th Edn., 2001, and observed that a reference to the Statement of Objects and Reasons is permissible for understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the statute, and the evil which the statute sought to remedy. (A. Manjula Bhashini5).
The Statement of Objects and Reasons for the amendment bill (for Act 21 of 2011, whereby Section 4-A was substituted) refers to the fact that the Telecom Regulatory Authority of India (TRAI), in its recommendation dated 05.08.2010 on Implementation of the Digital Addressable Cable Systems in India, had, inter alia, recommended that digitalization with addressability be implemented on priority in cable TV services in non-CAS areas; they had accordingly recommended a time frame comprising four phases for switch over from analog system to the digital addressable system (DAS) in the cable TV sector; in view of the said recommendations of TRAI, the Central Government had decided to introduce digitalization with addressability in the cable TV services in a phased time bound manner on a pan-India basis, leading to complete switch off of analog TV services by 31.12.2014; for implementation of DAS, certain amendments were required to be made in the 1995 Act mandating all cable operators to provide programmes of all channels including free to Air (FTA) channels, in encrypted form through DAS in a phased manner at the specified areas from the specified dates to be notified by the Central Government; it was mandatory that any such notification should give atleast six months time to the cable operators to install the necessary digital equipment for migration, and to educate the subscribers in this area; in order to protect the interest of consumers, it was proposed to empower TRAI to specify a package of free to air channels, called basic service tier, which shall be offered by every cable operator to the consumer; and it is also necessary that every cable operator should offer channels in the basic service tier on a la carte (individual) basis to the consumer at a tariff fixed by TRAI.
The Statement of Objects and Reasons refer to the TRAI report dated 05.08.2010 recommending a time frame for switch over from the analog system to the digital addressable system in the cable TV sector; to the Central Government having decided to introduce digitisation with addressability in a phased time bound manner leading to a complete switch off of analog TGV services by 31.12.2014; and that, for implementation of DAS, certain amendments were required to be made in the 1995 Act mandating that all cable operators provide programmes of all channels, including free to air channels, in an encrypted form through DAS in a phased manner. It is evident, therefore, that the Statement of Objects and Reasons also show that the analog system is required to be disbanded, and to be completely discontinued in a phased manner.
The Statement of Objects and Reasons accompanies the bill introduced in the legislature, and should not be confused with the preamble to an enactment. The preamble of a Statute, like the long title, is a part of the Act and is an admissible internal aid to construction. Although not an enacting part, the preamble is expected to express the scope, object and purpose of the Act more comprehensively than the long title. It may recite the ground and cause of making of the statute, the evils sought to be remedied or the doubts which may be intended to be settled. It is to the preamble more specially that we are to look for the reason or spirit of every statute, rehearsing this, as it ordinarily does, the evils sought to be remedied, or the doubts purported to be removed by the statute, and so evidencing, in the best and most satisfactory manner, the object or intention of the Legislature in making or passing the statute itself. (Brett v. Brett ; Principles of Statutory Interpretation 13th Edition 2012 by Justice G.P. Singh). The preamble is a key to open the minds of the makers of the Act, and the mischiefs which they intended to redress. The preamble being a part of the statute can be read along with other portions of the Act to find out the meaning of the words in the enacting provisions as also to decide whether they are clear or ambiguous. (Union of India v. Elphinstone Spinning & Weaving Co. Ltd ; Stowel v. Lord Zouch ; A.G. v. HRH Prince Ernest Augustus ).
While the preamble of an enactment is an internal aid, unlike the Statement of Objects and Reasons which is an external aid to the interpretation of statutes, the submission of Sri C. Ramachandra Raju, Learned Counsel for the petitioner, is that resort to external or internal aids of interpretation is permissible only where the statutory provision suffers from some ambiguity and, as Section 4(A) is clear and unambiguous, it is unnecessary to take the aid of any other mode of construction of statutes. It is necessary, therefore, for us to examine the scope of Section 4-A of the 1995 Act as amended by Act 21 of 2011. Before doing so, it is necessary to briefly note the distinction between analog and DAS mode of transmission of signals.
IV. DISTINCTION BETWEEN ANALOG AND DAS:
Sri C. Ramachandra Raju, learned counsel for the petitioner, would submit that the analog system of transmission did not come into existence with the permission of the statute; it is a natural form of transmission; it dates back to transmission of signals itself; the digital addressable system (DAS) encrypts analog signals and sends them to the Television sets in a digitised form; Television sets are incapable of receiving encrypted signals directly, and require a set top box (STB) to do so; the STB receives encrypted signals, and decrypts them; after decryption, the signals received by the TV is only in analog form; both DAS and analog transmission can be effected through a single cable, albeit in different frequencies; both the conditional access system (CAS) and the subscriber management system (SMS) are embedded in the set top box; no set top box can function merely with either one of them; a combination of CAS and SMS constitutes the STB; the function of the conditional access system (CAS) is to decode/decrypt the encrypted signal, and it is only then would the T.V. Set receive these signals; comparison of the merits and demerits of analog or DAS is in the legislative realm; an addressable system also converts analog signal into an encrypted signal, and is sent by the Multi System Operator (MSO) to the subscriber; the STB with the subscriber decrypts the signal sent to it, converts it into analog form, and sends the analog signal to the television set; and, while every cable operator is obligated to introduce an addressable system, the analog mode of transmission of signals can also be continued along with the encrypted system i.e. DAS.
It is submitted, on behalf of the respondents, that unlike an analog form of transmission, the encrypted form is digitized; it occupies far less band width as compared to the analog form of transmission; an analog form of transmission is incapable of encryption; and the band width allocation, in an analog form of transmission, is far higher than in a digitized/encrypted form of transmission.
The question which necessitates examination is whether the impugned notice dated 22.12.2016, whereby local cable operators were prohibited after 31.01.2017 from transmitting analog signals in Phase-III areas, falls foul of Section 4-A of the 1995 Act. It is only if Section 4-A is held as enabling the local cable operator to transmit signals in an analog form, in addition to transmission of signals in an encrypted form, would the impugned notice dated 22.12.2016 be liable to be struck down as having been passed in contravention of Section 4-A of the 1995 Act as amended by Act 21 of 2011.
It is necessary therefore to refer, albeit in brief, to the relevant provisions of the 1995 Act and the rules made thereunder. Section 2(aii) of the 1995 Act defines Broadcaster to mean a person or a group of persons, or a body corporate, or any organization or body providing programming services, and to include his or its authorised distribution agencies. Section 2(aiii) defines cable operator to mean any person who provides cable service through a cable television network or otherwise controls or is responsible for the management and operation of a cable television network and fulfils the prescribed eligibility criteria and conditions. Section 2(b) defines cable service to mean the transmission by cables of programmes including re-transmission by cables of any broadcast television signals. Section 2(c) defines cable television network to mean any system consisting of a set of closed transmission paths and associated signal generation, control and distribution equipment, designed to provide cable service for reception by multiple subscribers. Section 2(i) defines subscriber to mean any individual, or association of individuals, or a company, or any other organization or body who receives the signals of cable television network at a place indicated by him or it to the cable operator, without further transmitting it to any other person.
Chapter II of the 1995 Act relates to regulation of cable television network. Section 3 stipulates that no person shall operate a cable television network unless he is registered as a cable operator under the 1995 Act. Section 4 relates to registration as cable operators and, under sub-section (1) thereof, any person who is desirous of operating or is operating a cable television network may apply for registration or renewal of registration, as a cable operator, to the registering authority. Under sub-section (3) thereof, on and from the date of issue of a notification under Section 4-A, no new registration in a State, City, town or area notified under that Section shall be granted to any cable operator who does not undertake to transmit or re-transmit channels in an encrypted form through a digital addressable system.
Section 4-A of the 1995 Act was substituted by Act 21 of 2011 with effect from 25.10.2011. Section 4-A(1), after its substitution, stipulates that, where the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, make it obligatory for every cable operator to transmit or re-transmit programmes of any channel in an encrypted form through a digital addressable system with effect from such date as may be specified in the notification, and different dates may be specified for different States, Cities, towns or areas, as the case may be. Under the proviso thereto, the dates specified in the notification shall not be earlier than six months from the date of issue of such notification to enable the cable operators, in different States, Cities, towns or areas, to install the equipment required for the purposes of Section 4-A(1). Section 4-A(3) provides that, if the Central Government is satisfied that it is necessary in the public interest so to do and if not otherwise specified by the Authority, it may direct the Authority to specify, by notification in the Official Gazette, one or more free-to-air channels to be included in the package of channels forming the basic service tier, and any one or more such channels may be specified, in the notifications, genre-wise for providing a programme mix of entertainment, information, education and such other programmes, and fix the tariff for basic service tier which shall be offered by the cable operators to the consumers, and the consumer shall have the option to subscribe to any such tier. Under the proviso thereto, the cable operator shall also offer the channels in the basic service tier on a la carte basis to the subscriber at a tariff specified under Section 4-A(3). Section 4-A(6) stipulates that the cable operator shall not require any subscriber to have a receiver set of a particular type to receive signals of cable television network. Under the proviso thereto, the subscriber shall use a digital addressable system to be attached to his receiver set for receiving programmes transmitted on any channel.
Explanation (a) to Section 4-A stipulates that, for the purposes of Section 4-A, addressable system means an electronic device (which includes hardware and its associated software) or more than one electronic device put in an integrated system through which signals of cable television network can be sent in encrypted form, which can be decoded by the device or devices, having an activated Conditional Access System at the premises of the subscriber within the limits of authorisation made, through the Conditional Access System and the subscriber management system, on the explicit choice and request of such subscriber, by the cable operator to the subscriber. Explanation (b) defines basic service tier to mean a package of free-to-air channels to be offered by a cable operator to a subscriber with an option to subscribe for a single price, to subscribers of the area in which his cable television network is providing service. Explanation (c) defines encrypted, in respect of a signal of cable television network, to mean the changing of such signal in a systematic way so that the signal would be unintelligible without the use of an addressable system, and the expression "unencrypted" shall be construed accordingly. Explanation (d) defines free-to-air channel, in respect of a cable television network, to mean a channel for which no subscription fee is to be paid by the cable operator to the broadcaster for its re- transmission on cable. Explanation (e) defines pay channel, in respect of a cable television network, to mean a channel for which subscription fees is to be paid to the broadcaster by the cable operator and due authorisation needs to be taken from the broadcaster for its re-transmission on cable. Explanation (f) defines subscriber management system to mean a system or device which stores the subscriber records and details with respect to name, address and other information regarding the hardware being utilised by the subscriber, channels or bouquets of channels subscribed to by the subscriber, price of such channels or bouquets of channels as defined in the system, the activation or deactivation dates and time for any channel or bouquets of channels, a log of all actions performed on a subscribers record, invoices raised on each subscriber and the amounts paid or discount allowed to the subscriber for each billing period.
Chapter III of the 1995 Act relates to seizure and confiscation of certain equipment. Section 11 relates to the power to seize equipment used for operating cable television network and, thereunder, if any authorised officer has reason to believe that, among others, the provisions of Section 3 and Section 4-A have been or are being contravened by any cable operator, he may seize the equipment being used by such cable operator for operating the cable television network. Chapter IV of the 1995 Act relates to offences and penalties. Section 16 prescribes the punishment for contravention of the provisions of the 1995 Act and, thereunder, whoever contravenes any of the provisions of the 1995 Act shall be punishable (a) for the first offence, with imprisonment for a term which may extend to two years or with fine which may extend to one thousand rupees or with both; and (b) for every subsequent offence, with imprisonment for a term which may extend to five years and with fine which may extend to five thousand rupees. Section 17 relates to offences by companies and, under sub-section (1) thereof, where an offence under the Act has been committed by a Company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
The Cable Television Networks Rules, 1994 (hereinafter called the Rules) came into force on its publication in the Official Gazette on 29.09.1994. Rule 2(c) defines Multi-System Operator to mean a cable operator who has been granted registration under Rule 11-C to receive programming service from a broadcaster or its authorized agencies and re-transmit the same or transmit his own programming service for simultaneous reception either by multiple subscribers directly or through one or more local cable operators, and includes his authorized distribution agencies, by whatever name called. Rule 2(d) defines notified area to mean the area in respect of which the date has been notified by the Central Government under sub-section (1) of Section 4- of the Act.
Rule 3 relates to application for registration as a cable television network in India, Rule 5 to the Registration of cable operator, and Rule 5-A to the terms and conditions for registration. Rule 5-B relates to deemed registration for transmission in encrypted form in certain cases and thereunder where, in respect of an area, a cable operator has already been registered and such registration is valid as on the date when such area was notified under 4-A(1), he shall be deemed to have been registered in respect of such area for the remaining period of its validity. Under the proviso thereto, such cable operator shall (i) transmit or re-transmit programmes of any channels in an encrypted form through a digital addressable system for the remaining period of the validity of registration in such areas. Under the second proviso thereto where such cable operator fails to do so, the registration, which is so deemed to have been valid, shall stand cancelled with effect from the date when such area is notified. Rule 11 relates to the grant of permission to multi-system operators to provide cable services with addressable systems in the notified area and, under sub-rule (1) thereof, no multi-system operator shall provide cable television network services with addressable systems in any one or more notified areas without a valid permission from the Central Government under Rule 11(3). Rule 11(5) stipulates that no multi- system operator shall continue to provide any cable television network services in the notified areas after the date notified therein, without obtaining prior permission from the Central Government. Rule 11-F relates to deemed registration of multi-system operators in certain cases and, thereunder, no multi-system operator, providing cable television network services in areas as on the date when such areas are notified under Section 4A(1), shall, with effect from the date specified in that notification, continue to provide such services in such areas unless the operator is granted registration under Section 11-C. Under the second proviso thereto, the multi-system operator is required to furnish an undertaking to the registering authority, at least thirty days prior to the notified date of operation of the digital addressable system, namely that (a) such operator shall transmit or re-transmit channels only in an encrypted form through a digital addressable system in the notified areas. Under the third proviso thereto, where such operator fails to do so, the permission which is deemed to have been valid, shall, with effect from the date when such area is notified, stand cancelled. Rule 12 relates to public awareness, information channels, price of channels, quality standards and grievance redressal and, under sub-section (1) thereof, every broadcaster, multi-system operator and cable operator shall create public awareness among, and provide information to, the subscribers in the notified areas from a period at least thirty days prior to the date such areas are notified, either through advertisements in the print and electronic media or through such other means including leaflets, printing on the reverse of the receipts, personal visits, group meetings with subscribers or consumer groups, cable service and website, containing salient features of the digital addressable cable system as approved by the Authority namely (a) a-la-carte subscription rates and the periodic intervals at which such subscriptions are payable for receiving the various channels; (b) the refundable security deposit and the daily or monthly rental payable for the set-top box and its detailed specifications such as the make, model, technical specifications, user manuals and maintenance centres; (c) the number and names of free-to-air channels that the multi-system operator shall provide to the subscribers; (d) the monthly service charge to be paid by each subscriber for receiving the basic service tier fixed by the Authority and the number of additional free-to-air channels, if any, offered by the Multi-System Operator; (e) the Quality of Service Standards specified by the Authority and the arrangements made by the multi-system operator to comply with these standards; (f) the Subscriber Management System established by the multi-system operator to demonstrate the functioning of the set-top boxes, and to interact with the subscribers to explain the various financial, logistic and technical aspects of the system for its smooth implementation. Rule 13 relates to supply and installation of set-top-boxes and, under sub-Rule (1), every subscriber in the notified areas, who is desirous of receiving one or more channels, may approach any one of the multi-system operators who has been registered under Rule 11-C, either directly or through any of his linked local cable operators, for the supply and installation of one or more set-top boxes in his premises and deliver the requisite channels through the same. Under the proviso thereto, every subscriber shall be free to buy a set-top box of approved quality from the open market, if available, which is technically compatible with the system of the multi-system operator, and the multi-system operator or the cable operator shall not force any subscriber to buy or to take on rent the set-top box from him alone. Bearing the aforesaid provisions of the 1995 Act and the Rules in mind, let us now examine whether Section 4-A(1) of the 1995 Act, as amended by Act 21 of 2011, prohibits transmission of signals in an analog form after 31.01.2017 in Phase III areas, or whether the local cable operator is still entitled, notwithstanding the substitution of Section 4-A, to transmit signals in an analog form so long as he also transmits signals in an encrypted form.
V. DOES SECTION 4-A PROHIBIT TRANSMISSION OF ANALOG SIGNALS:
Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that Section 4-A of the 1995 Act, as amended by Act 21 of 2011, does not prohibit transmission of analog signals; while Section 4-A(1) makes it obligatory for every cable operator to transmit signals through DAS, it does not bar such an operator from, in addition, transmitting signals in an analog form; the word only is missing in Section 4-A(1); absence of the word only in Section 4A(1) of the 1995 Act makes it evident that, while a cable operator is obligated to transmit signals through DAS, it is open to him, if he so chooses, to also transmit signals in an analog form; as Section 4-A is clear and unambiguous, a literal construction should alone be adopted, and there is no need to take the aid of any other rule of interpretation of statutes; Parliament could have, if it intended to prohibit analog mode of transmission, expressed its intention by stating that all cable T.V. operators should transmit signals only in DAS; and, as Section 4-A does not explicitly prohibit analog transmission, the impugned notice dated 22.12.1016 is illegal.
It is submitted, on behalf of the respondents, that Section 4- A(1) makes it obligatory for signals to be transmitted only through the digital addressable system giving a go-bye to the earlier analog system; the provisions of the 1995 Act, as amended by the 2011 Act, must be read as a whole; a few words in Section 4-A(1), or in explanation (a) thereto, cannot be read out of context to contend that signals can be transmitted in an analog form in addition to transmission through the digital addressable system; Section 4- A(1) does not explicitly provide for transmission of signals in the analog form; reference in explanation (a) to Section 4-A is to the addressable system, and not to the mode of transmission; the choice of the subscriber is only in terms of the addressable system i.e within the set top box; the sun set clauses, in the Act and the Rules, make it clear that, after the cut off date, analog form of transmission should be brought to an end, and thereafter signals can only be permitted to be sent in an encrypted form; the provisions of the 1995 Act, when read as a whole, make it clear that the analog system is required to be brought to an end; it is evident from the proviso to Section 4-A(6) that, while a subscriber can have a set top box of his choice, he has necessarily to use a set top box attached to his receiver for receiving programmes transmitted on any channel; it is compulsory for all subscribers to have a set top box, and thereby receive signals only in an encrypted form; the proviso to Section 4-A(6) is mandatory; Rule 5-B, which relates to deemed registration, also makes it clear that, after the licence period of one year, the local cable operator is obligated to switch over to the digital addressable system, and to transmit signals only in an encrypted form; different provisions of the 1995 Act cast an obligation on each of the service providers, (which includes the Multi-System Operators, the local cable operators), and the recipient of the services i.e. the subscriber; the obligation is to transmit signals, for every channel, in an encrypted form by the digital addressable system; the word obligate is another expression for mandatory; and, as the Statute requires transmission to be effected in an encrypted form, absence of the word only will not change its meaning.
Section 4-A(1), as substituted by Act 21 of 2011, confers power on the Central Government (a) if it is satisfied that it is necessary in the public interest so to do, and (b) by notification in the official gazette, to make it obligatory for every cable operator, from a specified date, to transmit or retransmit programmes of any channel in an encrypted form, through a digital addressable system. While Section 4-A mandates transmission of programmes of any channel in an encrypted form, the submission of Sri C. Ramachandra Raju, Learned Counsel for the petitioner, is that Section 4-A(1) does not use the word only; it is therefore open to a cable operator to transmit programmes of any channel in an analog form also, so long as he transmits programmes in an encrypted form; and it would then be open to a subscriber to choose whether he wishes to receive programmes in an analog form or in an encrypted form.
Every statutory provision and every word used therein must be looked at generally before any provision or word is attempted to be construed. The setting and the pattern are important. It is again important to remember that Parliament does not waste its breath unnecessarily. Just as Parliament is not expected to use unnecessary expressions, Parliament is also not expected to express itself unnecessarily. Even as Parliament does not use any word without meaning something, Parliament does not legislate where no legislation is called for. Parliament cannot be assumed to legislate for the sake of legislation; nor can it be assumed to make pointless legislation. Parliament does not indulge in legislation merely to state what it is unnecessary to state or to do what is already validly done. Parliament may not be assumed to legislate unnecessarily. (Utkal Contractors and Joinery (P) Ltd.4; A. Manjula Bhashini5).
The legislative intent, in enacting Section 4-A(1), can be ascertained not merely by construing the words used in the said provision, but on a reading of relevant provisions of the 1995 Act as a whole, the context and the subject mater of the provisions, and its effect and consequences. A statute must be interpreted having regard to the purport and object of the Act. The court must place itself in the chair of a reasonable legislator. In so doing, it would not be permissible for the court to construe the provisions in such a manner which would destroy the very purpose for which the same was enacted. (Krishna Kumar Birla v. Rajendra Singh Lodha ). It is a cardinal principle of construction that the courts must adopt a construction which would suppress the mischief and advance the remedy. (A-One Granites v. State of U.P., ). It is the duty of the court to further Parliament's aim of providing a remedy for the mischief against which the enactment is directed, and the court should prefer a construction which advances this object rather than one which attempts to find some way of circumventing it. (Francis Bennion on Statutory Interpretation, 2nd Edn., p. 711; Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd., ). While Section 4-A(1) requires every cable operator to transmit any channel in an encrypted form through a digital addressable system, it does not explicitly permit or prohibit analog transmission.
Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would commend a literal construction of Section 4-A(1), and for the said provision to be interpreted independent of explanation (a) thereto. We must express our inability to agree as Section 4-A(1) uses the word digital addressable system and explanation (a) thereto defines an addressable system. Further while there is no explicit prohibition, Section 4-A(1) does not also explicitly permit transmission of signals in an analog form. As Section 4-A(1) is not clear and unambiguous, a literal construction thereof is of no avail, and we must necessarily, resort to other aids of statutory interpretation. Whether or not it can be inferred from Section 4-A(1) that a cable operator can still continue to transmit signals in an analog form, would require us to ascertain the legislative intent, the purpose and object for which Section 4-A(1) was substituted by Act 21 of 2011, and the mischief which was sought to be remedied thereby.
Purpose is a subjective concept, and the interpreter should imagine himself or herself in the legislator's shoes. There are, however, two elements of objectivity: First, the interpreter should assume that the legislature is composed of reasonable people seeking to achieve reasonable goals in a reasonable manner; and second, the interpreter should accept the non-rebuttable presumption that members of the legislative body sought to fulfil their constitutional duties in good faith. This formulation allows the interpreter to inquire not into the subjective intent of the author, but rather the intent the author would have had, had he or she acted reasonably. (Aharon Barak, Purposive Interpretation in Law, (2007) at p. 87; New India Assurance Company Ltd. v. Nusli Neville Wadia ; UCO Bank v. Rajinder Lal Capoor ; Union of India v. Ranbaxy Laboratories Limited ; D. Purushotama Reddy v. K. Sateesh ; Mahalakshmi Sugar Mills Company Limited v. Union of India ).
The rule of purposive construction should be resorted to which would require the construction of the Act in such a manner so as to see that the object of the Act is fulfilled. (Ashoka Marketing Ltd. v. Punjab National Bank ; Nusli Neville Wadia28; Rajinder Lal Capoor29; Ranbaxy Laboratories Limited30; D. Purushotama Reddy31; Mahalakshmi Sugar Mills Company Limited32). The courts should, where possible, identify the mischief which existed before the passing of the statute and then, if more than one construction is possible, favour that which will eliminate the mischief so identified. (Anderton v. Ryan ). The Court must adopt that construction which, suppresses the mischief and advances the remedy (Pawan Kumar v. State of Haryana ).
The intention of the legislature must be found by reading the statute as a whole. The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs. The rule is of general application as even the plainest terms may be controlled by the context. The expressions used in a statute should, ordinarily, be understood in a sense in which they best harmonize with the object of the statute, and which effectuate the object of the legislature. (Mor Modern Cooperative Transport Society Ltd. v. Financial Commissioner & Secretary to Govt. of Haryana ).
The Court must look at the statute as a whole and consider the appropriateness of the meaning in a particular context avoiding absurdity and inconsistencies or unreasonableness which may render the statute unconstitutional. Where there exists some ambiguity in the language or the same is capable of two interpretations, the interpretation which serves the object and purport of the Act must be given effect to. In such a case the doctrine of purposive construction should be adopted. (Swedish Match AB v. Securities & Exchange Board of India ; Nathi Devi v. Radha Devi Gupta ). We shall, therefore, examine Section 4- A(1) in the context of the other provisions of the 1995 Act, as also the mischief which Act 21 of 2011 sought to remedy. As Section 4- A(1) refers to addressable system which is defined in explanation (a), it is useful to note the meaning of the words addressable system therein.
VI. SCOPE OF EXPLANATION (a) TO SECTION 4-A:
Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that explanation (a) to Section 4-A gives a choice to the subscriber whether to receive transmission in an analog form or in the DAS form; on the subscriber exercising his choice, it is open to such of those cable operators, who are willing to send signals in both DAS and analog forms, to provide signals of the choice of the subscriber; the set top boxes contain both a conditional access system and a subscriber management system; this system is linked to the local cable operator and the multi- system operator; the conditional access system unencrypts encrypted signals; the subscriber management system deals with the choice of the consumer regarding channels; both CAS & SMS are integrated; the expression addressable system in Explanation (a) defines not only an STB but also the transmission of DAS; a combination of both CAS and SMS is called the STB; the function of CAS is to decode encrypted signals, and provide subscribers access to channels according to their choice through SMS; both CAS and SMS are integrated and inseparable; the choice of the subscriber is either to have an STB or not to have an STB; whosoever choose DAS is required to have an STB, and whoever chooses not to have DAS, and exercises his choice only for the conventional analog system, need not have an STB; it is the choice of the subscriber to have DAS or analog; as the analog system does not require set top boxes, the subscriber can avoid incurring needless expenditure in purchasing them, if he is satisfied with a limited number of channels being made available through analog transmission; the choice of the subscriber, under explanation (a) to Section 4-A(1) of the 1995 Act, is a choice of the manner in which signals should be transmitted i.e. either in analog form or through DAS; the choice is not with respect to TV channels; there is no reference either in Section 4-A(1) of the 1995 Act, or in explanation
(a) thereto, to TV channels; independent of Explanation (a), Section 4-A does not prohibit transmission through the analog system;
Explanation (a) only strengthens the construction placed on Section 4-A; Section 4-A does not suffer from any deficiency; the intention of Parliament, which is explicit in Section 4-A, is reiterated in Explanation (a); the counter-affidavit is silent regarding the choice available to the subscriber in terms of the Explanation; as the contentions urged are mixed question of fact and law, the counter-affidavit ought to have dealt with them; and even if it is understood in the context of Explanation (a) thereto, as Section 4-A(1) does not prohibit analog transmission, no specific permission is required under the statute to transmit signals in the analog form.
It is submitted, on behalf of the respondents, that Section 4- A(1) should be construed in terms of explanation (a) thereto; while in exceptional situations, an Explanation can be construed independently, it is ordinarily construed only in terms of the main provision; when Section 4-A(1) is read in the context of explanation
(a), it is evident that the transmission, required to be effected after the 2011 amendment to the 1995 Act, and from the date notified by the Central Government, is only in an encrypted form, and not through the analog form of transmission of signals.
An addressable system is an electronic device, or more than one electronic device, in an integrated system through which signals of cable network can be sent in an encrypted form. The encrypted signals would be decoded by the device (set top box), having an activated conditional access system, at the premises of the subscriber. Decoding of the encrypted signal by the device (STB) is within the limits of authorisation made through the conditional access system and the subscriber management system, on the explicit choice and request of such subscribers. The words on the explicit choice and request of such subscriber is used in the definition of an addressable system in explanation (a) to Section 4-A. The choice which the subscriber can exercise is only within the addressable system itself, and not beyond. Since an addressable system is an electronic device whereby signals are sent in an encrypted form, the explicit choice and request of the subscriber is not whether he should receive signals in an encrypted form or in an analog form, as transmission of signals in the analog form falls outside the addressable system. As explanation (a), whereby an addressable system is defined, does not give a choice to the subscriber, to choose between an analog form of transmission or the encrypted form, the obligation cast on every cable operator by Section 4-A(1) is only to transmit programmes of any channel in an encrypted form through a digital addressable system (set top box). When Section 4-A(1) is read along with explanation (a) thereto, it is evident that the subscriber no longer has a choice to receive signals in an analog form, but can receive signals only in an encrypted form through a digital addressable system i.e. the set top box.
The submission that Section 4-A(1) must be read independent of explanation (a) does not merit acceptance. An Explanation, added to a statutory provision, is not a substantive provision in any sense of the term but, as the plain meaning of the word itself shows, it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision. The object of an Explanation is to understand the provision in the light of the explanation. It does not ordinarily enlarge the scope of the original section which it explains, but only makes the meaning clear beyond dispute. (S. Sundaram Pillai v. V.R. Pattabiraman ; Sarathi in Interpretation of Statutes).
The object, of an Explanation to a statutory provision, is (a) to explain the meaning and intendment of the Act itself; (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve; (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful; (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act, it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming a hindrance in the interpretation of the same. (S. Sundaram Pillai39; Hiralal Rattanlal v. State of U.P. ).
Sometimes an Explanation is appended to stress upon a particular thing which, ordinarily, would not appear clearly from the provisions of the Section. The proper function of an Explanation is to make plain or elucidate what is enacted in the substantive provision, and not to add or subtract from it. Thus an Explanation does not either restrict or extend the enacting part; it does not enlarge or narrow down the scope of the original Section that it is supposed to explain. The Explanation must be interpreted according to its own tenor, that it is meant to explain and not vice versa. (S. Sundaram Pillai39; Swarup in Legislation and Interpretation). It is with a view to explain the term addressable system in Section 4-A(1), has the said term been defined in explanation (a) thereto. Section 4-A(1) must necessarily be understood in the light of explanation (a). When Section 4-A(1) and explanation (a) are read together, it is evident that, after the specified date, the cable operator is obligated to send signals only in an encrypted form which a subscriber can receive only through a digital addressable system (set top box).
The construction to be placed on Section 4-A(1) and explanation (a) thereto is a pure question of law and not a mixed question of fact and law. While the meaning of an ordinary word of the English language is not a question of law, the proper construction of the Statute is. (Revenue and Customs v. Premier Foods Ltd. ). The question of what a word means in its context within the Act is a question of legal interpretation and, therefore, of law. The Court is required to arrive at the legal meaning of the term. (Premier Foods Ltd.41; Benyon on Statutory Interpretation, 3rd Edition, page 945 to 956; Brutus v. Cozens ). The mere fact that the counter-affidavit does not refer to the scope and ambit of Section 4-A(1) and explanation (a) thereto, would not preclude us from examining its scope.
VII. DISTINCTION BETWEEN THE PRE-AMENDED AND AMENDED SECTION 4-A AND THE DEFINITIONS IN THE EXPLANATION THERETO:
Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that the difference between the pre- amended and the amended Section 4-A is only digitisation and nothing else; the old Section 4-A also gave a choice to the subscriber; both analog and DAS signals can co-exist; analog and encrypted signals can be sent in the same cable, but in different frequencies; and it is technically feasible to send both form of signals in one single cable.
It is contended, on behalf of the respondents, that the difference in language between Section 4-A, prior to its amendment and after its amendment by the 2011 Act, makes it clear that the requirement of sending signals in an encrypted form, which was earlier limited only to pay channels, has now been extended to all channels; while explanation (a) to the unamended Section 4-A uses both the words encrypted and unencrypted form, the amended explanation (a) only uses the word encrypted form; Parliament intended to remedy the mischief which existed in the pre-amended Section 4-A; in deleting the words unencrypted form from the explanation, the legislative intent is evident; and it is to the effect that signals should be transmitted only in an encrypted form.
The legislation is primarily directed to the problems before the legislature based on information derived from past and present experience. The legislative intention, i.e. the true or legal meaning of an enactment, is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed. (Ameer Trading Corpn. Ltd. v. Shapoorji Data Processing Ltd., ; District Mining Officer v. Tata Iron & Steel Co. ). Parliament intends that an enactment shall remedy a particular mischief and it is therefore presumed that Parliament intends that the Court, when considering, in relation to the facts of the instant case, which of the opposing constructions of the enactment corresponds to its legal meaning, should find a construction which applies the remedy provided by it in such a way as to suppress that mischief. (Ameer Trading Corpn. Ltd.43; Halsbury's Laws of England, Vol. 44(1), 4th Reissue, para 1474, pp. 906-07). Parliament is presumed to have enacted a reasonable statute. (Breyer, Stephen (2005): Active Liberty: Interpreting Our Democratic Constitution, Knopf (Chapter on Statutory Interpretation, p. 99 Reasonable Legislator Presumption; Bharat Petroleum Corpn. Ltd. v. Maddula Ratnavalli ; Rajinder Lal Capoor29).
When two interpretations are feasible, the Court will prefer that which advances the remedy and suppresses the mischief as the legislature envisioned. (Mor Modern Cooperative Transport Society Ltd.36). Four things are to be discerned and considered:
(1). What was the common law before the making of the Act., (2).
What was the mischief and defect for which the common law did not provide., (3). What remedy the Parliament hath resolved and appointed to cure the disease; and (4). the true reason of the remedy. Judges should always make such a construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bona publico. (Bengal Immunity Co. Ltd. v. State of Bihar ; Parayankandiyal Eravath Kanapravan Kalliani Amma (Smt) v. K. Devi ; K.P. Varghese6; Goodyear India Ltd. v. State of Haryana ; Pawan Kumar35). It is not only legitimate, but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy. (Eastman Photographic Material Company Ltd. v. Comptroller General of Patents, Designs and Trade Marks ; In re Mayfair Property Company ; Bengal Immunity Co. Ltd.46; Parayankandiyal Eravath Kanapravan Kalliani Amma (Smt)47).
It is useful therefore to read Section 4-A, explanation (a) thereto, and the definition of the words, basic services tier, encrypted, free to air channel, and pay channel in the explanation both before, and after, its amendment by Act 21 of 2011 in juxtaposition with each other.
Before amendment After amendment Section 4-A. Transmission of programmes through addressable system, etc. (1) Where the Central Government is satisfied that it is necessary in the public interest to do so, it may, by notification in the Official Gazette, make it obligatory for every cable operator to transmit or retransmit programme of any pay channel through an addressable system with effect from such date as may be specified in the notification and different dates may be specified for different States, cities, towns or areas, as the case may be.
Explanation.For the purposes of this section,
(a) "addressable system" means an electronic device or more than one electronic devices put in an integrated system through which signals of cable television network can be sent in encrypted or unencrypted form, which can be decoded by the device or devices at the premises of the subscriber within the limits of authorisation made, on the choice and request of such subscriber, by the cable operator to the subscriber;
(b) "basic service tier" means a package of free-to-air channels provided by a cable operator, for a single price to the subscribers of the area in which his cable television network is providing service and such channels are receivable for viewing by the subscribers on the receiver set of a type existing immediately before the commencement of the Cable Television Networks (Regulation) Amendment Act, 2002 without any addressable system attached to such receiver set in any manner;
(d) "encrypted", in respect of a signal of cable television network, means the changing of such signal in a systematic way so that the signal would be unintelligible without a suitable receiving equipment and the expression "unencrypted" shall be construed accordingly;
(e) "free-to-air-channel", in respect of a cable television network, means a channel, the reception of which would not require the use of any addressable system to be attached with the receiver set of a subscriber;
(f) "pay channel", in respect of a cable television network, means a channel the reception of which by the subscriber would require the use of an addressable system to be attached to his receiver set.] Section 4-A. Transmission of programmes through digital addressable systems, etc.-
(1) Where the Central Government is satisfied that is necessary in the public interest so to do, it may, by notification in the Official Gazette, make it obligatory for every cable operator to transmit or re-transmit programmes of any channel in an encrypted form through a digital addressable system with effect from such date as may be specified in the notification and different dates may be specified for different States, cities, towns or areas, as the case may be:
Explanation For the purposes of this section,-
(a) addressable system means an electronic device (which includes hardware and its associated software) or more than one electronic device put in an integrated system through which signals of cable television network can be sent in encrypted form, which can be decoded by the device or devices, having an activated Conditional Access System at the premises of the subscriber within the limits of authorisation made, through the Conditional Access System and the subscriber management system, on the explicit choice and request of such subscriber, by the cable operator to the subscriber;
(b) basic service tier means a package of free-to-air channels to be offered by a cable operator to a subscriber with an option to subscriber, for a single price to subscribers of the area in which his cable television network is providing service;
(c) encrypted, in respectof a single of cable television network, means the changing of such signal in a systematic way so that the signal would be unintelligible without use of an addressable system and the expression unencrypted shall be construed accordingly;
(d) free-to-air channel, in respect of a cable television network, means a channel for which no subscription fee is to be paid by the cable operator to the broadcaster for its re-transmission on cable;
(e) pay channel, in respect of a cable television network, means a channel for which subscription fees is to be paid to the broadcaster by the cable operator and due authorisation needs to be taken from the broadcaster for its retransmission on cable.
If the legislative intention was not to distinguish, and while stating can be sent in an encrypted form in explanation (a), as amended by Act 21 of 2011, it was intended to convey the idea that the signals of cable television network can be sent in encrypted or unencrypted form, there would have been no necessity of expressing the position differently. When the situation has been differently expressed the legislature must be taken to have intended to express a different intention. (CIT v. East West Import and Export (P) Ltd., ).
The setting and context in which the words can be sent in encrypted or uncrypted form and can be sent in encrypted form are used in explanation (a) to the pre-amended and amended Section 4-A(1) respectively would require the words can be sent in encrypted or unencrypted form in pre-amended explanation (a) not to be understood as can be sent in encrypted form in the amended explanation (a) (Ahmedabad (P) Primary Teachers Assn. v. Administrative Officer ) for, if both the expressions were to mean the same, it would have sufficed to repeat the earlier expression and not to delete the words or unencrypted in the amended explanation (a). It is not a sound principle of construction to add words in a statute, if they can have no appropriate application in circumstances conceivable within the contemplation of the Statute. (Aswini Kumar Ghose13).
In explanation (b) to Section 4-A, which defines a basic service tier, the words, and such channels are receivable for viewing by the subscribers on the receiver set of a type existing before the commencement of the Cable TV net work (regulation) amendment Act without any addressable system attached to such receiver set in any manner, are deleted in the said definition after its substitution by the 2011 amendment. While the pre-amended definition of a basic service tier expressly provided for channels to be received in a receiver set without an addressable system attached to it, (meaning thereby receipt of signals in an analog form), deletion of these words in explanation (b), after the 2011 amendment, shows that this choice is no longer available to a subscriber. Similarly the change in the language of the definition encrypted (which was defined under explanation (c) prior to its amendment, and in explanation (d) after its amendment by the 2011 Act) is significant. While the pre-amended definition of encrypted used the words so that the signal would be unintelligible without a suitable receiving equipment, the said definition, after its substitution by the 2011 Act, has replaced the aforesaid words with the words so that the signal would be unintelligible without use of an addressable system. While the pre-amended definition refers to a suitable receiving equipment, the amended definition refers only to an addressable system, which can only mean an addressable system as defined in explanation (a).
Likewise, the definition of free to air channel in explanation (e) to Section 4-A of the pre-amended 1995 Act has been substituted by explanation (d) pursuant to the 2011 amendment. The words the reception of which would not require the use of any addressable system to be attached with the receiver set of a subscriber has been deleted in the definition of free to add channel in the amended explanation (d) and, instead, it stipulates that no subscription fee is to be paid for such transmission of channels by the cable operator to the broadcaster. While the definition of a free to air channel before the 2011 amendment specifically stipulated that the use of an addressable system, to be attached with the receiver set of a subscriber, was not required, the deletion of these words in the definition, after its amendment by Act 21 of 2011, shows that an addressable system (set top box) is required even to view free to air channels. However, no subscription fee need be paid for its re-transmission. The change in the definition of a pay channel (under explanation (f) of Section 4-A before the 2011 amendment, and explanation (e) thereafter) is also significant. While the pre-amended definition of a pay channel was a channel, reception of which, a subscriber would require the use of an addressable system to be attached to his receiver set, this requirement is deleted in the definition after the 2011 amendment, evidently because an addressable system, attached to the subscribers receiver set, is now required for all channels both free to air and pay channels.
Different use of words in two provisions of a statute is for a purpose. If the field of the two provisions were to be the same, the same words would have been used. (Kailash Nath Agarwal v. Pradeshiya Industrial & Investment Corpn. of U.P. Ltd., ; B.R. Enterprises v. State of U.P., ). When two words of different import are used in a statute, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the two expressions have different connotations. (Member, Board of Revenue v. Arthur Paul Benthall ). When the legislature has taken care of using different phrases in different Sections, normally different meaning is required to be assigned to the language used by the legislature. If, in relation to the same subject-matter, words of different import are used, there is a presumption that they are not used in the same sense. (Arthur Paul Benthall55; Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala ).
Applying the mischief rule it is clear that the substituted Section 4(A) and its explanation now require all signals to be transmitted only in an encrypted form through a digital addressable system, and transmission of signals in an analog form is no longer permissible.
VIII. PENAL PROVISIONS OF THE 1995 ACT AND RULE 11-F OF THE RULES : ITS EFFECT:
Sri C. Ramachandra Raju, Learned Counsel for the petitioners, would submit that second proviso (a) to Rule 11-F need not be referred to, as the notifications issued by the Central Government refer only to Section 4-A, and not to Rule 11-F; and the penal provisions of the Act are attracted only to such cable TV network operators who send analog signals alone, without also sending encrypted signals under DAS.
It is submitted, on behalf of the respondents, that second proviso (a) to Rule 11-F makes it clear that the operator is required to transmit channels only in an encrypted form, through the digital addressable system, in a notified area; the provisions of the 1995 Act, when read harmoniously with the Rules, make it clear that signals can only be transmitted in a digital form, and not in the analog form, after expiry of the date stipulated in the notification issued by the Government of India; Sections 11, 16 (1) and 17 provide for the consequences of violation of Section 4-A; and if Section 4-A is to be read as permitting transmission through the analog form, besides transmission in an encrypted form, it would render these penal provisions redundant and nugatory.
For the purpose of interpreting Section 4-A, it is permissible to read the Rules as if it were a part of the 1995 Act. The complex demands on modern legislation necessitates the plenary legislating body to discharge its legislative function by laying down broad guidelines and standards, to lead and guide as it were, leaving it to the subordinate legislating body to fill up the details by making necessary rules and to amend the rules from time to time to meet unforeseen and unpredictable situations, and within the framework of the power entrusted to it by the plenary legislating body. (State of T.N. v. M/s. Hind Stone etc. ). Rules framed, under the provisions of a statute, form part of the statute. But before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely, (1) it must conform to the provisions of the statute under which it is framed; and (2) it must also come within the scope and purview of the rule making power of the authority framing the rule. (General Officer Commanding- in-Chief v. Subhash Chandra Yadav ; Judgment in The Prudential Cooperative Bank Ltd. v. The A.P. Cooperative Tribunal at MJ Market, Nampally, Hyderabad ).
A statutory rule, while ever subordinate to the parent statute, is otherwise to be treated as part of the statute and as effective.
"Rules made under the Statute must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act and are to be judicially noticed for all purposes of construction or obligation (State of U.P. v. Babu Ram Upadhya ; Maxwell: Interpretation of Statutes, 11th Edition page 49-50; Hind Stone57).
As the provisions of the Act and the Rules are required to be read harmoniously, it is necessary to also refer to the relevant rules to consider whether the amendment brought to the 1995 Act by Act 21 of 2011, and the Rules, prohibit transmission of signals in an analog form. It is evident, from a reading of Rule 11(2) of the Rules, that only a multi-system operator, who desires to provide cable television network services with addressable system, is entitled to apply for registration to the Central Government. Cable network services with an addressable system can be provided only in an encrypted form, and not by the analog form of transmission of signals. The second proviso to Rule 11-F requires the multi- system operator to furnish an undertaking to the registering authority, among others, that he shall transmit or retransmit channels only in an encrypted form through a digital addressable system in the notified areas. The said undertaking would require the multi-system operator to transmit signals only in an encrypted form, to decript which a subscriber is required to have a set top box. The word only in the second proviso (a) to Rule 11F clearly rules out the multi-system operator being permitted to transmit signals in an analog form, in addition to transmission of signals in the encrypted/digitised form. The requirement of public awareness being created regarding the salient features of the digitised addressable cable system in Rule 12(1), and the requirement of Rule 13(1) for every subscriber in the notified areas, who is desirous of receiving one or more channels, to approach the multi- system operators for supply and installation of one or more set top boxes in his premises, make it clear that all channels, whether free to air or pay channels can now be viewed by a subscriber only through a set top box, and not directly from the local cable operator through the analog mode of transmission or signals.
The aforesaid Rules show that, after the sun set date of 31.01.2017, transmission of signals in Phase III areas can only made in an encrypted/digitised form of transmission of signals, and not in the analog form. The power to seize equipment under Section 11 of the 1995 Act, and the penal provisions in Section 16 and 17, when read in conjunction with Section 4-A(1) and explanation (a) thereto, make it amply clear that failure to transmit signals in the encrypted/digitised form through the digital addressable system, after the sunset date of 31.01.2017, would render cable operators, in Phase III areas, liable for penal action under Section 16 and 17 or for their equipment to be seized under Section 11 of the 1995 Act.
IX. DO SECTION 4-A(1) AND EXPLANATION (a) THERETO RELATE ONLY TO THE CHOICE OF CHANNELS Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that there is no reference, in Explanation
(a) to Section 4-A, to channels; the choice of channels is dealt with separately in Section 4-A(3), 4-A(4) and 4-A(5); and Section 4-A(6) and its proviso apply only to those subscribers who use DAS, and not to those subscribers who choose analog form of transmission.
It is contended, on behalf of the respondents, that the words choice and request of such subscriber in explanation (a) to Section 4-A relate only to the choice of channels by the subscriber, and not to the form of transmission of signals or to receipt of signals either in an encrypted form or in an analog form; Section 4-A(3) and its proviso shows that the option available to a consumer is whether to have a tier of channel or a la carte; if digital addressable system was not to be made compulsory, the requirement of Rule 12(1) would become unnecessary; the choice of channels, available to a subscriber, is regulated through the subscriber management system which is available with the Multi-System Operators, and is integrated into the set top box; and the choice of the subscriber relates only to the channels sent in an encrypted form.
As noted hereinabove, the explicit choice and request of the subscriber is referred to in the definition of an addressable system, which can only mean that the choice or request, which the subscriber can make, must be within the limits of the addressable system, and not outside it. Section 4(3) stipulates that, on a notification being issued under Section 4-A, no new registration shall be granted to any cable operator who does not undertake to transmit or re-transmit channels in an encrypted form through a digital addressable system. The proviso to Section 4-A(6) obligates the subscriber to use the digitable addressable system, to be attached to the receiver set, for receiving programme transmitted on any channel which can only mean both the free to air channel and the pay channel. This rules out the subscriber exercising his choice regarding receipt of signals through the analog form of transmission. Section 4-A(4) confers power on the Central Government to specify the number of free to air channels to be included in the package of channels forming the basic service tier which, in terms of explanation (b), means the package of free to air channels to be offered to the subscriber for the exercise of his option to subscribe for a single price. As both free to air channels and pay channels are now required to be transmitted only through a digitable addressable system, and such transmission requires the subscriber to have a set top box attached to his Television set, it is evident that the choice, which a subscriber can exercise, is only with regards channels within the limits of the addressable system, and not a choice regarding the mode of transmission of signals i.e., either in the analog or the encrypted form. The mere fact that explanation (a) does not specifically refer to channels does not necessitate the conclusion that the choice which a subscriber is entitled to exercise is regarding the mode of transmission of signals in an analog form or a digitised form, as the analog form of transmission of signals is outside the addressable system and not within it.
X. CONCLUSION:
Viewed from any angle, the impugned notice issued by the Government of India dated 22.12.2016, prohibiting transmission of signals in an analog form in phase III areas beyond the sunset date of 31.01.2017, does not fall foul of Section 4-A(1) of the 1995 Act as amended by Act 21 of 2011. The challenge, to the validity of the said notice dated 22.12.2016, must therefore fail. The Writ Petition is, accordingly, dismissed. However, in the circumstances, without costs. The miscellaneous petitions pending, if any, shall also stand dismissed.
________________________________ (RAMESH RANGANATHAN, ACJ) _____________________________ (DR. SHAMEEM AKTHER, J) Date: 01.06.2017