Madras High Court
Consumer Right Protection Council vs The Secretary on 6 March, 2008
Author: A. Kulasekaran
Bench: A. Kulasekaran, P. Murgesen
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 06/03/2008 CORAM THE HONOURABLE MR. JUSTICE A. KULASEKARAN and THE HONOURABLE MR. JUSTICE P. MURGESEN W.P. (MD) No. 132 of 2008 -o- Consumer Right Protection Council rep. by its Secretary No.6, Thamukkam Shopping Complex Thallakulam Madurai - 625 002 .. Petitioner Versus 1.The Secretary Ministry of Information and Broadcasting Shastri Bhavan New Delhi - 110 001 2.The Secretary Ministry of Communication Sanchar Bhavan No.20, Ashoka Road New Delhi - 110 001 3.The Sun Direct TV Private Limited rep. by its Director Kalanithi Maran 367/369, Anna Salai Teynampet Chennai - 600 018 4.Kalanithi Maran No.4, Second Avenue Boat Club Road Chennai - 600 028 5.South Asia Entertainment Holdings Limited All Asia Broadcast Centre Technology Park, Malaysia Lebuharaya Puchong Sg Basi Bukit Jatil 57000 Kualalampur Malaysia 6.Sun TV Network Limited rep. by its Director Kalanidhi Maran 367/369, Anna Salai Teynampet Chennai - 600 018 7.Kal Cables Private Limited rep. by its Director Kalanidhi Maran No.367/369, Anna Salai Teynampet Chennai - 600 018 .. Respondents Petition under Article 226 of The Constitution of India praying for a Writ of Declaration as stated therein. !For Petitioner ... Mr. T.V. Ramanujun, Senior Counsel for Mr. S. Thamizharasan ^For Respondents ... Mr. D. Sivaraman Central Government Counsel for RR1 & 2 Mr. P.S. Raman, Senior Counsel for Mr. Karthikeyan for R3 Mr. Vijaynarayanan, Senior Counsel for Ms. J. Gayathri for R4 No appearance for R5 Mr. AL. Somayaji, Senior Counsel for Mr. A. Srinivas for RR6 & 7 :ORDER
A. KULASEKARAN, J The petitioner has come forward with this writ petition praying for a Writ of Declaration declaring that the guidelines issued by the second respondent i.e., "Broadcasting Companies and/or cable network companies shall not be eligible to collectively own more than 20% of the total equity of the applicant company at any time during the license period. Similarly the applicant company not to have more than 20% equity share in a Broadcasting Companies and/or cable network company" has been violated by the third respondent and consequently issue a direction directing the first and second respondent to initiate steps in accordance with law to revoke/suspend the license granted to the third respondent in establishing DTH platform.
2. The learned senior counsel Mr. T.V. Ramanujun appearing for the petitioner submitted that the first and second respondents have decided to permit Direct-to-Home, hereinafter referred to as "DTH" Television service in KU Band in India. DTH broadcasting service, refers to distribution of multi channel TV programme in KU band by using satellite systems by providing TV signals direct to subscribers premises without passing through an intermediary such as cable operators. One who avail the reception and distribution of the said DTH television service in the KU band shall obtain a licence under Section 4 of the Indian Telegraph Act. The respondents 1 and 2 prescribed certain guidelines for issuing the same. The said guidelines contain eligibility criteria in which clause 6 stipulates that broadcasting companies and/or cable network companies shall not be eligible to collectively own more than 20% of the total equity of applicant company at any time during the licence period. Similarly, the applicant company not to have more than 20% equity share in a broadcasting and/or cable networking company. The third respondent applied for the said licence. The fourth respondent is having majority controlling interest in the third respondent company and also sixth respondent i.e., Sun TV Limited, a company doing business in broadcasting and seventh respondent i.e., Kal Cables Private Limited, a company doing business of cable i.e., receiving signals from broadcasting companies and transmitting the same to the cable operators. It is admitted by the respondents 1 and 2 that the object behind fixing ceiling of 20% shareholding by a broadcasting company into a DTH company is to prevent vertical monopoly between the broadcaster and the distribution platform. Similarly, restraining shareholding of a Cable TV company into a DTH company is to prevent horizontal monopoly over distribution platform. If such restriction is not imposed, there is every possibility that a DTH service provider, which is controlled by a broadcasting company, may not provide its platform to the channels of other broadcasters. Similarly, if the distribution platform like DTH and cable are allowed to be controlled by the same entities, unreasonable terms and conditions will be demanded not only from the broadcasters for carrying out the content, but also it will lead to exploitation of the subscribers for lack of competition in the market. It is also admitted by the respondents 1 and 2 that clause 3 and its sub-clauses of Interconnect regulations are meant to ensure that the content of the broadcasters is available to various distribution platforms on a non-discriminatory basis. This clause further supplements and complements the provisions contained in the DTH guidelines and the restrictions of 20% imposed in shareholding therefore are meant to ensure the interest of the broadcasters. In this case, according to the Red-Herring prospectus, the fourth respondent is holding 96.67%, 89.9% and 75% share respectively in the respondents 3, 6 and 7. Without lifting the corporate veil of the third respondent, the first and second respondents have issued licence to it in violation of clause 6 of the guidelines mentioned above thereby allowed the third respondent to have monopoly in the reception and distribution of TV signals, which affected the public interest, hence, the licence issued to the third respondent is liable to be revoked. To protect the interest of the public, the writ petition is filed, hence, it is maintainable. When corporate entity is used to defeat public convenience, to justify wrong, protect fraud or defend crime, to perpetuate monopoly, the corporate veil of the company can be pierced. In support of his contention, the learned senior counsel for the petitioner relied on the below mentioned decisions:-
i) (Delhi Development Authority v. Skipper Construction Co. (P) Ltd., and another) AIR 1996 Supreme Court 2005 wherein in Para-28, it was held thus:-
28. The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned. The fact that Tejwant Singh and members of his family have created several corporate bodies does not prevent this Court from treating all of them as one entity belonging to and controlled by Tejwant Singh and family if it is found that these corporate bodies are merely cloaks behind which lurks Tejwant Singh and/or members of his family and that the device of incorporation was really a ploy adopted for committing illegalities and/or to defraud people."
ii) (I.T. Commissioner, Madras vs. Meenakshi Mills, Madurai) AIR 1967 Supreme Court Page No.819 wherein in Para No.8, the Hon'ble Supreme Court held thus:-
8..... Thyagaraja Chettiar who was the moving figure both in the Bank and in each of the assessee-companies had knowledge of this arrangement. It is well established that in a matter of this description, the Income-tax authorities are entitled to pierce the veil of corporate entity and to look at the reality of the transaction. It is true that from the juristic point of view the company is a legal personality entirely distinct from its members and the company is capable of enjoying rights and being subjected to duties which are not the same as those enjoyed or borne by its members. But, in certain exceptional cases the Court is entitled to life the veil of corporate entity and to pay regard to the economic realities behind the legal facade. For example, the Court has to power to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation...."
iii) (New Horizons Ltd. v. Union of India) 1995 1 SCC 478, wherein in Para 27, it was held thus:-
27. The conclusion would not be different even if the matter is approached purely from the legal standpoint. It cannot be disputed that, in law, a company is a legal entity distinct from its members. It was so laid down by the House of Lords in 1897 in the leading case of Salomon v. Salomon & Co. Ever since this decision has been followed by the courts in England as well as in this country. But there have been inroads in the doctrine of corporate personality propounded in the said decision by statutory provisions as well as by judicial pronouncements. By the process, commonly described as "lifting the veil", the law either goes behind the corporate personality to the individual members or ignores the separate personality of each company in favour of the economic entity constituted by a group of associated companies. This course is adopted when it is found that the principle of corporate personality is too flagrantly opposed to justice, convenience or the interest of the Revenue. (See:
Gower's Principles of Modern Company Law, 4th Edn., p. 112.) This concept, which is described as "piercing the veil" in the United States, has been thus put by Sanborn, J. in US v. Milwaukee Refrigerator Transit Co.
It is further submitted by the learned senior counsel for the petitioner that earlier W.P. No. 33468 of 2007 was filed by a Member of Parliament pending consideration of the third respondent's application for license wherein the issue raised in the present writ petition that the fourth respondent is holding more than 20% share in the third respondent company was not at all considered on merits, hence the present writ petition is filed. The petitioner is collecting materials about other licencees like the third respondent and after obtaining the same, necessary writ petition will be filed.
3. The learned counsel appearing for the respondents 1 and 2 adopted and reiterated the contents of the counter filed in W.P. NO. 8073 of 2007 and submitted that the averment that the fourth respondent is holding more than 20% equity shares in the third respondent company was examined by the first and second respondents before granting licence to the third respondent and found that there is no cross-holding of the third respondent and vice-versa. Holding of shares by an individual in a broadcasting company or in a DTH company would not be hit by the aforesaid provisions in the guidelines. The first respondent is merely providing alternate option to the consumers in the form of DTH service and consumers have the right to have an option to choose his/her choice. The petitioner has misconstrued the guidelines for DTH service and filed the present writ petition and prayed for dismissal of the writ petition.
4. The learned senior counsel Mr. P.S. Raman appearing for the third respondent submitted that the writ petition is not maintainable as the same is filed with ulterior motive. The only ground on which the writ petition is filed is that the fourth respondent is holding more than 20% share of the third respondent company, which is factually incorrect. No subscriber has come forward to complain about the quality of service provided by the third respondent or their rights are affected in any manner. There are more than three companies granted license to provide DTH service along with the third respondent and they are (1) Zee Entertainment Enterprises (2) Zee News Limited. Later, Star India Limited (4) SET Discovery Limited (5) ASC Enterprises and (6) Space TV, a joint Venture of TATAs and Star etc., were given similar licences, however, the petitioner has chosen to challenge the licence granted in favour of the third respondent alone. Public interest litigations can be entertained by the High Court to foster and develop sympathy to the poor, ignorant, oppressed and needy, whose fundamental rights are infringed and violated and whose grievances went unnoticed, unrepresented and unheard. The Court has to satisfy about the credentials of the applicant and prima facie correctness. In any event, the Court cannot be liberal in cases where parties indulge in wild and reckless allegations. In cases of public interest litigations, the Court cannot encroach upon the spheres reserved by the Constitution to Executive and Legislature. At the time when the first and second respondents considering the application of the third respondent, a Member of Parliament, representing a particular political party has filed W.P. No. 17034 of 2005 in the nature of public interest litigation against the third respondent to issue a Writ of Mandamus to reject its application but the same was dismissed by the Division Bench of this Court by an order dated 30.05.2005 on the ground that the petitioner has no locus standi to file Public Interest Litigation, as he has not spoken on behalf of the downtrodden people or people who cannot speak for themselves. As against the said order, SLP No. 12845 of 2005 was filed before the Honourable Supreme Court which was also dismissed on 15.07.2005. In the said judgment, the identical averment that 20% ceiling of equity share stipulated in the guideline was made, which was rejected on the ground that the first and second respondents have considered and found it incorrect. Thereafter, one V.M. Ramachandran filed W.P. NO. 8073 of 2007 in which, when the question of maintainability was raised, the same was withdrawn by him with the permission of the Court. The petitioner herein just copied the entire affidavit of the said W.P. No. 8073 of 2007 and filed the present writ petition. This writ petition is a private interest litigation and the entire litigation is sponsored by certain vested interests or business rivals of the third respondent with a malafide intention. Lifting of corporate veil would apply only in cases of tax evasion, fraud and misrepresentation. In any event, lifting the corporate veil will not apply to the individuals. In view of the fact that WP NO. 17034 of 2005 was dismissed and the Special Leave Petition filed as against the same was also dismissed by the Honourable Supreme Court, the relief sought for in this writ petition need not be granted and prayed for dismissal of this writ petition. In support of his contention, the learned senior counsel for the third respondent relied on the below mentioned decisions:-
i) (Guruvayoor Devaswom Managing Committee v. C.K. Rajan)(2003) 7 SCC 546 wherein in Para No. 50, it was held thus:-
50. The principles evolved by this Court in this behalf may be suitably summarized as under:
(i) The Court in exercise of powers under Article 32 and Article 226 of the Constitution of India can entertain a petition filed by any interested person in the welfare of the people who is in a disadvantaged position and, thus, not in a position to knock the doors of the Court.
The Court is constitutionally bound to protect the fundamental rights of such disadvantaged people so as to direct the State to fulfil its constitutional promises. (See S.P. Gupta v. Union of India, People's Union for Democratic Rights v. Union of India, Bandhua Mukti Morcha v. Union of India and Janata Dal v. H.S. Chowdhary.)
(ii) Issues of public importance, enforcement of fundamental rights of a large number of the public vis-?vis the constitutional duties and functions of the State, if raised, the Court treats a letter or a telegram as a public interest litigation upon relaxing procedural laws as also the law relating to pleadings. (See Charles Sobraj v. Supdt., Central Jail and Hussainara Khatoon (I) v. Home Secy., State of Bihar.)
(iii) Whenever injustice is meted out to a large number of people, the Court will not hesitate in stepping in. Articles 14 and 21 of the Constitution of India as well as the International Conventions on Human Rights provide for reasonable and fair trial.
(iv) The common rule of locus standi is relaxed so as to enable the Court to look into the grievances complained on behalf of the poor, the depraved (sic), the illiterate and the disabled who cannot vindicate the legal wrong or legal injury caused to them for any violation of any constitutional or legal right. [See Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, S.P. Gupta, People's Union for Democratic Rights, D.C. Wadhwa (Dr) v. State of Bihar and BALCO Employees' Union (Regd.) v. Union of India.]
(v) When the Court is prima facie satisfied about variation of any constitutional right of a group of people belonging to the disadvantaged category, it may not allow the State or the Government from raising the question as to the maintainability of the petition. (See Bandhua Mukti Morcha.)
(vi) Although procedural laws apply to PIL cases but the question as to whether the principles of res judicata or principles analogous thereto would apply depends on the nature of the petition as also facts and circumstances of the case. [See Rural Litigation and Entitlement Kendra v. State of U.P. and Forward Construction Co. v. Prabhat Mandal (Regd.).]
(vii) The dispute between two warring groups purely in the realm of private law would not be allowed to be agitated as a public interest litigation. (See Ramsharan Autyanuprasi v. Union of India.)
(viii) However, in an appropriate case, although the petitioner might have moved a court in his private interest and for redressal of personal grievances, the Court in furtherance of the public interest may treat it necessary to enquire into the state of affairs of the subject of litigation in the interest of justice. (See Shivajirao Nilangekar Patil v. Dr Mahesh Madhav Gosavi.)
(ix) The Court in special situations may appoint a Commission, or other bodies for the purpose of investigating into the allegations and finding out facts. It may also direct management of a public institution taken over by such Committee. (See Bandhua Mukti Morcha3, Rakesh Chandra Narayan v. State of Bihar and A.P. Pollution Control Board v. Prof. M.V. Nayudu.)
(x) The Court would ordinarily not step out of the known areas of judicial review. The High Courts although may pass an order for doing complete justice to the parties, they do not have a power akin to Article 142 of the Constitution of India.
(xi) Ordinarily, the High Court should not entertain a writ petition by way of public interest litigation questioning the constitutionality or validity of a statute or a statutory rule.
ii) (The Perundurai Citizens Welfare Society, rep. by its President, K.P. Paramasivam, Erode vs. The Tamil Nadu Pollution Control Board, rep. by its Member Secretary, Anna Salai, Chennai and others) 2005 (1) CTC 721 wherein a Division Bench of this Court in Para No.25 held thus:-
"25. As already stated above, these days "public interest litigation' has become largely 'private interest litigation' for ulterior motives, or is misused by business rivals, or persons who sponsor such litigation from behind with mala fide intentions. We cannot appreciate these tactics. The docket of the Court is already overful with arrears. The Court should discourage this kind of motivated litigation, which only adds to its burden."
iii) (Ashok Kumar Pandey v. State of W.B., (2004) 3 SCC 349 wherein in Para No.11, the Honourable Supreme Court held thus:-
11. It is depressing to note that on account of such trumpery proceedings initiated before the courts, innumerable days are wasted, which time otherwise could have been spent for the disposal of cases of genuine litigants. Though we spare no efforts in fostering and developing the laudable concept of PIL and extending our long arm of sympathy to the poor, the ignorant, the oppressed and the needy whose fundamental rights are infringed and violated and whose grievances go unnoticed, unrepresented and unheard; yet we cannot avoid but express our opinion that while genuine litigants with legitimate grievances relating to civil matters involving properties worth hundreds of millions of rupees and criminal cases in which persons sentenced to death and facing the gallows under untold agony, persons sentenced to life imprisonment and kept in incarceration for long years, persons suffering from undue delay in service matters - government or private, persons awaiting the disposal of cases wherein huge amounts of public revenue or unauthorized collection of tax amounts are locked up, detenus expecting their release from the detention orders etc. etc. are all standing in a long serpentine queue for years with the fond hope of getting into the courts and having their grievances redressed, the busybodies, meddlesome interlopers, wayfarers or officious interveners having absolutely no public interest except for personal gain or private profit either of themselves or as a proxy of others or for any other extraneous motivation or for the glare of publicity break the queue muffling their faces by wearing the mask of public interest litigation and get into the courts by filing vexatious and frivolous petitions and thus criminally waste the valuable time of the courts and as a result of which the queue standing outside the doors of the court never moves, which piquant situation creates frustration in the minds of genuine litigants and resultantly, they lose faith in the administration of our judicial system."
iv) (BALCO Employees' Union (Regd.) v. Union of India) (2002) 2 SCC 333 wherein in Para Nos. 78 and 80, it was held thus:-
78. While PIL initially was invoked mostly in cases connected with the relief to the people and the weaker sections of the society and in areas where there was violation of human rights under Article 21, but with the passage of time, petitions have been entertained in other spheres. Prof. S.B. Sathe has summarised the extent of the jurisdiction which has now been exercised in the following words:
"PIL may, therefore, be described as satisfying one or more of the following parameters. These are not exclusive but merely descriptive:
- Where the concerns underlying a petition are not individualist but are shared widely by a large number of people (bonded labour, undertrial prisoners, prison inmates).
- Where the affected persons belong to the disadvantaged sections of society (women, children, bonded labour, unorganised labour etc.).
- Where judicial law making is necessary to avoid exploitation (inter-country adoption, the education of the children of the prostitutes).
- Where judicial intervention is necessary for the protection of the sanctity of democratic institutions (independence of the judiciary, existence of grievances redressal forums).
- Where administrative decisions related to development are harmful to the environment and jeopardize people's right to natural resources such as air or water."
80. PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public-spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. There have been, in recent times, increasingly instances of abuse of PIL. Therefore, there is a need to re-emphasize the parameters within which PIL can be resorted to by a petitioner and entertained by the court. This aspect has come up for consideration before this Court and all we need to do is to recapitulate and re- emphasize the same.
v) (Holicow Pictures Pvt Ltd., vs. Prem Chandra Mishra) 2008 (1) CTC 711 wherein the Honourable Supreme Court in Para-10 held thus:-
"10. When there is material to show that a petition styled as a public interest litigation is nothing but a camouflage to foster personal disputes, the said petition is to be thrown out. Before we grapple with the issue involved in the present case, we feel it necessary to consider the issue regarding public interest aspect. Public interest litigation which has now come to occupy an important field in the administration of law, should not be 'publicity interest litigation' or 'private interest litigation' or 'politics interest litigation' or the latest trend 'paise interest litigation'. If not properly regulated and abuse averted, it become also a tool in unscrupulous hands to release vendetta and wreck vengeance, as well. There must be real and genuine public interest involved in the litigation and not merely an adventure of knight errant borne out of wishful thinking. It cannot also be invoked by a person or a body of persons to further his or their personal causes or satisfy his or their personal grudge and enmity. Courts of justice should not be allowed to be polluted by unscrupulous litigants by resorting to the extraordinary jurisdiction. A person acting bona fide and having sufficient interest in the proceeding of public interest litigation will alone have a locus standi and can approach the Court to wipe out violation of fundamental rights and genuine infraction of statutory provisions, but not for personal gain or private profit or political motive or any oblique consideration. These aspects were highlighted by this Court in The Janta Dal vs. H.S. Chowdhary, 1992 (4) SCC 305 and Kazi Lhendup Dorji vs. Central Bureau of Investigation, 1994 Supp (2) SCC 116. A writ petition who comes to the Court for relief in public interest must come not only with clean hands like any other petitioner but also with a clean heart, clear mind and clean objective...."
5. The learned senior counsel Mr. Vijay Narayan, appearing for the fourth respondent submitted that the petitioner has made malicious statements only to malign the reputation of the fourth respondent. The fourth respondent is not holding more than 20% share in the third respondent company. The details of share holding pointed out by the petitioner at the time of going for public issue and now the entire situation has changed. In view of this single fact, the writ petition is liable to be dismissed. Lifting the corporate veil will not apply to the individuals. If the veil of the petitioner is lifted, it will be crystal clear that a particular person, who is against this respondent is responsible for filing this public interest litigation and also the earlier public interest litigation which was dismissed by this Court. The Union of India has decided to permit DTH TV service in KU band soon after the prohibition on the reception and distribution of television signal in KU band has been withdrawn by the Government of India vide notification dated 09.01.2001 of the department of Telecommunications. The guidelines relied on by the petitioner has come into force on 15.01.2001 and at that time there is no statutory provision was in force in granting licence for providing DTH broadcasting service in India. The said guidelines are only administrative instructions which has no statutory force. The Telecom Regulatory Authority of India Act, 1997, hereinafter referred to as TRAI Act, as it stand, not cover broadcasting services like DTH and cable. Hence, the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004, hereinafter referred to as Regulations, were issued in exercise of powers under Section 36 and Paras (ii),
(iii) and (iv) of clause (b) of sub-section (1) of Section 11 of TRAI Act read with notification dated 09.01.2004, which came into force with effect from 10.12.2004. The said regulations are at present governs the arrangements among service providers for inter-connection and revenue share for all telecommunications (Broadcasting and Cable Services) through out the territory of India. Section 11 a (ii) of TRAI Act relates to terms and conditions of license to a service provider and also the functions of the authority under TRAI Act. Similarly, Section 11 (b) (ii) (iii) and (iv) of TRAI Act empowers the said authority to discharge the functions namely (ii) notwithstanding anything contained in the terms and conditions of the licence granted before the commencement of the Telecom Regulatory Authority of India (Amendment) Act,2000, fix the terms and conditions of inter-connectivity between the service providers; (iii) ensure technical compatibility and effective inter-connection between different service providers; (iv) regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services. In addition to the said functions, it is clear in the Regulations 2
(k) that "direct to home operator" means an operator licensed by the Central Government to distribute multi-channel TV programmes in KU band by using a satellite system directly to subscriber's premises without passing through intermediary such as cable operator or any other distributor of TV channels. Clause 3 of the said Regulations is relating to general provisions touching the non-discrimination in Interconnect Agreements thereby it impose that every broadcaster shall provide on request signals of its TV channels on non- discriminatory terms to all distributors of TV channels, which may include, but be not limited to a cable operator, direct to home operator, multi-system operator, head ends in sky operator, Multi-system operators shall also on request re-transmit signals received from a broadcaster, on a non-discriminatory basis to cable operators; provided that this provision shall not apply in the case of a distributor of TV channels having defaulted in payment; provided further that any imposition of terms which are unreasonable shall be deemed to constitute a denial of request. Thus, it imposes conditions of non- discrimination and non-discretionary in interconnect agreements, with the result, consumers can have all the channels of their choice. Clause 14 of the Regulations gives Explanatory Memorandum wherein it is stated that in certain circumstances, to reduce any restriction of vertical integration leads to a situation where DTH rollout could be affected. However, the rollout of DTH platform has brought the question of exclusivity and whether it is anti- competitive to the forefront. Star India Limited and SET Discovery Limited do not have commercial agreements to share their contents with ASC Enterprises on its DTH platform and at present exclusively available on the cable TV platforms. ASC enterprises claims that the future growth will remain impacted by the denial of these popular contents. Space TV, a joint venture of TATA and Star is also planning to launch its digital DTH Platform, which was considered and licence was granted now. The DTH services have to compete with cable TV. If a popular content is available on cable TV and not on the DTH platform, then it would not be able to effectively give competition to the cable networks. The said explanatory memorandum make it clear that vertical integration is warranted. The said Interconnection regulations are having statutory force, which cannot co-exist with the guidelines dated 15.10.2001, which are executive instructions and do not have statutory force. Any inconsistency between the statutory interconnection regulations and the guidelines, the former prevails the latter. It is also not in dispute that after the guidelines came into force, the application of the third respondent were considered and the licence impugned was issued. In view of the fact that statutory regulations are introduced as early as 2004, it is deemed the guidelines are superseded. Even the stand taken by the respondents 1 and 2 are supplementary and complementary to the regulations are exfacie untenable. The DTH licence were granted by Union of India to other companies namely Dish TV, whose group companies like Zee Entertainment Enterprise Limited and Zee News Limited are also in the business of Television Broadcasting. The same group also own a company by name Wire and Wireless Network Limited, which is in the business of cable Networking. All the four companies also have same individuals as their shareholders including DTH companies and Mr. Subash Chandra is the Promoter of all the four companies. The petitioner has not challenged the licence granted to the said companies and prayed for dismissal of the writ petition. In support of this contention, the learned senior counsel for the fourth respondent relied on the decision of the Division Bench of this Court reported in (P.G. Narayanan vs. The Union of India, rep. by Secretary, Ministry of Information & Broadcasting, Sastri Bhavan, New Delhi and others) 2005 (3) CTC 582 wherein in Para No.13, it was held thus:-
"13. We are satisfied that none of the tests laid down by the Supreme Court for entertaining a Public Interest Litigation has been satisfied in the present case. In fact, it is clear from the counter filed by the first respondent that the application of the sixth respondent is still under consideration and it is not as if the license has already been granted to the sixth respondent. The petitioner is not speaking on behalf of the downtrodden people or people who cannot speak for themselves. No case of public injury has been made out and we do not see how the petitioner has the locus standi to raise this issue. Therefore, on the ground of maintainability alone, this writ petition deserves to be dismissed."
6. Mr. AL. Somayaji, learned senior counsel appearing for the sixth and seventh respondents pointed out the counter filed by the respondents 1 and 2 in WP NO. 8072 of 2007 and submitted that the government examined the issue relating to ceiling of 20% equity in the third respondent company before granting licence and it has found that there is no cross-holding of the sixth and seventh respondent in the third respondent company and vice-versa. Holding of shares by an individual in a broadcasting/cable network company or in a DTH company would not be hit by the aforesaid guidelines, hence, the averment that there was violation of guidelines of DTH service by the first respondent is false. The third respondent is merely providing an alternate option to the consumers in the platform of DTH services and consumers have the right to have an option to choose the platform of his/her choice, which cannot be construed as monopoly. The alleged guidelines have no statutory force at all, indeed, after introduction of the Regulations in 2004, the guidelines issued in the 2001 were superseded. The writ petition is tainted with malafide, hence, the same is liable to be dismissed. In support of this contention, the learned senior counsel for the sixth and seventh respondents relied on the decision of the Honourable Supreme Court reported in (P.C. Agarwala vs. Payment of Wages Inspector, M.P. and others) (2005) 8 SCC 104 wherein in Paragraph No. 22, the Honourable Supreme Court held thus:
22. The doctrine of lifting of the veil has been applied, in the words of Palmer, in five categories of cases; where companies are in relationship of holding and subsidiary (or sub-subsidiary) companies; where a shareholder has lost the privilege of limited liability and has become directly liable to certain creditors of the company on the ground that, with his knowledge, the company continued to carry on business six months after the number of its members was reduced below the legal minimum; in certain matters pertaining to the law of taxes, death duty and stamps, particularly where the question of the 'controlling interest' is in issue; in the law relating to exchange control, and in the law relating to trading with the enemy where the test of control is adopted (Palmer's Company Law, 20th Edn., p.136, now p.215, 24th Edn. 1987).
In some of these cases judicial decisions have no doubt lifted the veil and considered the substance of the matter."
ii) Kapila Hingorani v. State of Bihar,(2003) 6 SCC 1, wherein in Para NO.27, it was held thus:-
27. The corporate veil indisputably can be pierced when the corporate personality is found to be opposed to justice, convenience and interest of the revenue or workman or against public interest. (See CIT v. Sri Meenakshi Mills Ltd., Workmen v. Associated Rubber Industry Ltd. New Horizons Ltd. v. Union of India, State of U.P. v. Renusagar Power Co., Hussainbhai v. Alath Factory Thezhilali Union and Secy., H.S.E.B. v. Suresh.)"
7. This Court carefully considered the argument of the counsel on either side and perused the material records placed. This pro bono publico is filed seeking direction to the respondents 1 and 2 to revoke the DTH licence granted to the third respondent in contravention of Clause vi of eligibility criteria, which can be ascertained by lifting the corporate veil. The prayer in this writ petition is to issue a "Writ of Declaration declaring that the guidelines issued by the second respondent i.e., "Broadcasting Companies and/or cable network companies shall not be eligible to collectively own more than 20% of the total equity of the applicant company at any time during the license period. Similarly the applicant company not to have more than 20% equity share in a Broadcasting Companies and/or cable network company" has been violated by the third respondent and consequently issue a direction directing the first and second respondent to initiate steps in accordance with law to revoke/suspend the license granted to the third respondent in establishing DTH platform". It is evident the prayer is not properly worded. The learned senior counsel appearing for the petitioner admitted the same and submitted that the petitioner has bodily lifted the said clause 6 and incorporated the same in the prayer, however, DTH licence was granted in favour of the third respondent in violation of the said clause vi, hence, the same has to be revoked. The learned senior counsel appearing for the respondents submitted that the prayer itself is ambiguous, such being the position, no relief can be granted. Any how, on such technical ground that the writ prayer is not happily or properly worded, this Court need not say the writ petition cannot be entertainable since the power to mould the relief is available with the High Court under Article 226 of the Constitution of India so as to meet the requirements of a case.
8. The averment of the petitioner that Clause VI in eligibility criteria of the guidelines to issue licence for providing DTH broadcasting service in India is deliberately over looked. The third, sixth and seventh respondents company denied the said averment and pointed out the stand taken by the respondents 1 and 2 that before granting licence, they have examined and found there is no cross-holding in the third respondent company and vice-versa. Similarly, the fourth respondent has also denied the said averments that he has more than 20% share in respondents 3, 6 and 7 companies. It is stated by the petitioner that the said statement of the respondents 3, 4, 6 and 7 are incorrect, hence, lifting the corporate veil of the third respondent is warranted as the said respondents have used the corporate entity to perpetuate monopoly. The respondents 1, 2, 3, 4, 6 and 7 submitted that the grant of DTH licence is an exercise of sovereign function by the respondents 1 and 2, which was issued after considering the eligibility of the third respondent; that there is no genuine and real public interest involved in this litigation but only for personal causes or to satisfy personal grudge and enmity of the person behind the petitioner, it was filed and there is no element of sympathy to the poor, ignorant, oppressed and needy whose fundamental rights are infringed and violated and whose grievances remains unnoticed, un-represented and unheard. The lifting of corporate veil is permitted only when the legislative provisions justifies the adoption of such a course or when it is too flagrantly opposed to justice or the interest of the revenue is affected, but in this case, no such element is present and in any event, the regulations 2004 framed under the TRAI Act have equal force of law which promotes vertical integration and it cautions that if the vertical integration is not allowed, it will impede investments and in the long run adversely affect competition and lead to a situation where the DTH rollout could be affected.
9. This writ petition under Article 226 of the Constitution of India has been filed purportedly in public interest. The respondents questioned the locus standi of the petitioner in maintaining this writ petition as a public interest litigation, hence, we are constrained to take the said issue as a first issue before examining other issues.
10. Public Interest Litigation means there must be real and genuine public interest involved in the litigation and not merely an adventure of knight errant borne out of wishful thinking. It cannot also be invoked by a person or a body of persons to further his or their personal causes or satisfy his or their personal grudge and enmity. Public interest litigation is a weapon which has to be used with great care and circumspection and the judiciary has to be extremely careful to see that behind the beautiful veils of public interest, an ugly private malice vested interest and/or publicity seeking is not lurking. It is to be used as an effective weapon in the armory of law for delivering social justice to the citizen. It should be aimed at redressal of genuine public wrong or public injury and not publicity oriented. The Court has to be satisfied (a) about the credentials of the applicant (b) the prima facie correctness or nature of information given by him. Followed (Kushum Lata vs. Union of India and others) 2006 (6) scc 180.
11. In (BALCO Employees' Union (Regd.) v. Union of India) (2002) 2 SCC 333, it was held that while PIL initially was invoked mostly in cases connected with the relief to the people and the weaker sections of the society and in areas where there was violation of human rights under Article 21, but with the passage of time, petitions have been entertained in other spheres. ...PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public-spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. There have been, in recent times, increasingly instances of abuse of PIL. Therefore, there is a need to re-emphasize the parameters within which PIL can be resorted to by a petitioner and entertained by the court. This aspect has come up for consideration before this Court and all we need to do is to recapitulate and re- emphasize the same.
12. In (Guruvayoor Devaswom Managing Committee v. C.K. Rajan)(2003) 7 SCC 546 in Para No. 50, it was held that the principles evolved in this behalf may be suitably summarized: (i) The Court in exercise of powers under Article 32 and Article 226 of the Constitution of India can entertain a petition filed by any interested person in the welfare of the people who is in a disadvantaged position and, thus, not in a position to knock the doors of the Court; issues of public importance, enforcement of fundamental rights of a large number of the public vis-?vis the constitutional duties and functions of the State; whenever injustice is meted out to a large number; the common rule of locus standi is relaxed so as to enable the Court to look into the grievances complained on behalf of the poor, the deprived (sic), the illiterate and the disabled who cannot vindicate the legal wrong or legal injury caused to them for any violation of any constitutional or legal right; when the Court is prima facie satisfied about variation of any constitutional right of a group of people belonging to the disadvantaged category; although procedural laws apply to PIL cases but the question as to whether the principles of res judicata or principles analogous thereto would apply depends on the nature of the petition; the dispute between two warring groups purely in the realm of private law would not be allowed.
13. In (Ashok Kumar Pandey v. State of W.B., (2004) 3 SCC 349, the Honourable Supreme Court held in Para No.11 held that "it is depressing to note that on account of such trumpery proceedings initiated before the courts, innumerable days are wasted, which time otherwise could have been spent for the disposal of cases of genuine litigants. Though we spare no efforts in fostering and developing the laudable concept of PIL and extending our long arm of sympathy to the poor, the ignorant, the oppressed and the needy whose fundamental rights are infringed and violated and whose grievances go unnoticed, unrepresented and unheard; yet we cannot avoid but express our opinion that while genuine litigants with legitimate grievances relating to civil matters involving properties worth hundreds of millions of rupees and criminal cases in which persons sentenced to death and facing the gallows under untold agony, persons sentenced to life imprisonment and kept in incarceration for long years, persons suffering from undue delay in service matters - government or private, persons awaiting the disposal of cases wherein huge amounts of public revenue or unauthorized collection of tax amounts are locked up, detenus expecting their release from the detention orders etc. etc. are all standing in a long serpentine queue for years with the fond hope of getting into the courts and having their grievances redressed, the busybodies, meddlesome interlopers, wayfarers or officious interveners having absolutely no public interest except for personal gain or private profit either of themselves or as a proxy of others or for any other extraneous motivation or for the glare of publicity break the queue muffling their faces by wearing the mask of public interest litigation and get into the courts by filing vexatious and frivolous petitions and thus criminally waste the valuable time of the courts and as a result of which the queue standing outside the doors of the court never moves, which piquant situation creates frustration in the minds of genuine litigants and resultantly, they lose faith in the administration of our judicial system.
14. In (K.K. Srinivas vs. R.M. Premchand) 1994 6 SCC 620, in Para No.7, it was held by their lordships that it cannot be forgotten that a writ petitioner who comes to the Court for relief in public interest must come not only with clean hands, like any other writ petitioner, but must further come with a clean heart, clean mind and a clear objective.
15. Applying the above said ratios laid down by the Honourable Supreme Court in various cases summarised above, though it is difficult to draw a straight line of demarcation as to which matters and to what extent a public interest litigation should be entertained, the instant case is not one maintainable as a public interest litigation as the petitioner has no locus standi nor he satisfied the guidelines laid down by the Honourable Supreme Court relating to public interest litigation summarised above.
16. In addition, similar writ petition in W.P. No. 17034 of 2005 filed by one P.G. Narayanan when the application of the third respondent for grant of licence was pending consideration by the respondents 1 and 2, which was dismissed by the Division Bench of this Court on 30.05.2005 on several grounds, including the ground that no final order has been passed in the application and the petitioner therein has no locus standi to file such a public interest litigation as he was not speaking on behalf of the downtrodden people or people who cannot speak for themselves and none of the tests laid down by the Supreme Court for entertaining public interest litigation has been satisfied. Against the said order, SLP (Civil) No. 12845 of 2005 was filed, which was dismissed by the Honourable Supreme Court on 15.07.2005, hence, so far that finding that none of the tests laid down by the Supreme Court for entertaining a public interest litigation has been satisfied is concerned, it reached a finality. Thereafter, one M. Ranjani filed W.P. NO. 33458 of 2007 after DTH licence was granted to the third respondent and the same was dismissed by the first Division Bench of this Court on 25.10.2007 stating that "in our opinion, this is not a fit case for invoking the jurisdiction under Article 226 of The Constitution of India". One another writ petition in W.P. No. 8073 of 2007 was filed by one V.M. Ravichandran of Thirumangalam, Madurai District before this Madurai Bench of Madras High Court and the same was dismissed as withdrawn. The petitioner herein just copied the said affidavit and prayer in W.P. No. 8073 of 2007 and filed the present writ petition, without taking any efforts to file an independent affidavit of his own for the reasons well known to him, as pro bono publico purportedly for the enforcement of public interest, which shows the extent of credentials of the petitioner as well as his involvement in public cause. In (Holicow Pictures Pvt Ltd., vs. Prem Chandra Mishra) 2008 (1) CTC 711, the Honourable Supreme Court held that in the absence of genuine and real public interest involved in the litigation, the Court has to act ruthlessly while dealing with busybodies, meddlesome interlopers, wayfarers or officious interveners impersonating as public spirited holy-men.
17. For the said reasons, it is not difficult to hold that the case on hand did not fall in any of the categories where a public interest litigation can be entertained nor the petitioner acting bonafide and having sufficient interest in the proceedings of public interest litigation, hence, he has no locus standi to approach this Court.
18. The entire case revolves on the averments that the respondents 1 and 2 failed to take note of the fact that while granting DTH licence, Clause vi of the guidelines have been violated. It is specifically denied by the respondents, 3, 6 and 7 that ceiling limit of 20% fixed is not exceeded either by the third respondent in the sixth and seventh respondent company or vice- versa. The first and second respondents have also denied it stating that "the government has examined the issue before granting licence and it has been found there is no cross-holding of M/s. Sun TV private limited in the third respondent company and vice-versa. Holding of shares by an individual in a broadcasting/cable company or in a DTH company would not be hit by the aforesaid provisions in the DTH services. Hence, there was no violation of any guidelines of DTH service by the first respondent while granting licence to the third respondent. However, it may be mentioned that the respondent No.3 is merely providing an alternate option to the consumers in the form of DTH service and consumers have right to have an option to choose platform of his/her own choice.
"In view of the said stand taken by the respondents 1 and 2 consistently in this writ petition as well as in the earlier three writ petitions, which were filed on the said grounds mentioned supra, and also the fact that the third respondent alone is not a sole licencee but one among several others and his licence was to provide an alternate option to the consumers in the form of DTH service to enable the consumers have an option to choose platform of their choice, the averment that the said licence perpetuate monopoly in DTH service is incorrect. Moreover, the issuing of licence is an exercise of sovereign function of the respondents 1 and 2 and The Competition Act, 2002 specifically excludes the activities of the government, which are related to the sovereign functions of the Government and that the respondents 1 and 2 also examined and found there is no cross-holding, as alleged by the petitioner and holding of share by the fourth respondent/individual in broadcasting/cable company or in a DTH company would not be hit by the provisions of DTH service, this Court hardly finds any reason to interfere.
19. In view of the findings mentioned above, the plea of the petitioner to pierce the veil of the corporate body need not be gone into, moreover, the said course can be adopted when it is found that the principle of corporate personality is too flagrantly opposed to justice or the interest of the revenue or when the legislative provision justifies a cracking open of the corporate shell. Followed (New Horizons Ltd. v. Union of India) (1995) 1 SCC 478; (P.C. Agarwala vs. Payment of Wages Inspector, M.P. and others) (2005) 8 SCC 104 and Kapila Hingorani v. State of Bihar,(2003) 6 SCC 1. For the said reasons, the said plea of the petitioner is also rejected.
20. In so far as the arguments advanced by the learned senior counsel for the fourth respondent that Regulation 2004 alone has statutory force, entertain vertical integration, the guidelines, which is only an executive instruction cannot co-exist or prevails over the said Regulation, this Court not express any view as the same is unwarranted in view of the findings made in other issues, mentioned above.
21. For the said reasons, the writ petition is dismissed as devoid of merits. No costs.
rsh To
1.The Secretary Ministry of Information and Broadcasting Shastri Bhavan New Delhi ?110 001
2.The Secretary Ministry of Communication Sanchar Bhavan No.20, Ashoka Road New Delhi ?110 001