Delhi High Court
Star India P. Ltd. vs Life Style Communication P. Ltd. on 14 December, 2007
Equivalent citations: 146(2008)DLT230
Author: S. Ravindra Bhat
Bench: S. Ravindra Bhat
JUDGMENT S. Ravindra Bhat, J.
1. The Petitioner, in these writ proceedings, challenges an order of the Telecom Disputes Reddresal Settlement Tribunal (hereafter 'TDSAT') dated 6th December, 2007.
2. The petitioner engaged itself in the business of supplying signals of STAR bouquets of channels to the various cable operators based on subscription agreements. The Respondent is cable service provider called M/s. Life Style Communication Pvt. Ltd., it is a company incorporated under the Companies Act, 1956 having its office at Hyderabad. An agreement was executed between the Petitioner and Respondent for supply of signals, which was valid from 1st January 2006 to 31st December 2006. In terms of the agreement, the Respondent was required to pay the Petitioner Rs. 3, 82,537.50/- per month as subscription among for 9375 subscribers.
3. The Petitioner avers that it wrote to the Respondent on 16th February to renew the agreement for the year 2007, since the agreement for 2006 had lapsed. It is alleged that under the grace period of three months permissible under the Interconnect Regulations of the TRAI, the supply of signals was continued to the Respondent to complete negotiations. It was also clarified to the respondent that if a fresh agreement was not entered into then the latter's access to STAR signals shall be unauthorized and that signals would be liable to be disconnected. The petitioner continued to supply signals to the Respondent for another 3 months beyond the expiry of the agreement.
4. The signals to the respondent were finally disconnected in April 2007 since the petitioner failed to re-negotiate for a fresh agreement for the year 2007 and also failed to clear the outstanding amounts due towards the petitioner. The Petitioner also alleges that after the date of disconnection, the Respondent continued to indulge in piracy and had been supplying signals without being authorized to do by the petitioner. It is submitted that the petitioner was constrained to disconnect the signals of the petitioner on 2nd March 2007 on the grounds of under declaration, failure to execute a fresh agreement for 2007, failure to clear outstanding dues and failure to prevent piracy.
5. In response to the Petitioner's attempt to recover the outstanding dues, the Petitioner claims that the Respondent made ad hoc and irregular payments from time to time totaling about Rs. 10, 27, 559/- till July 2007, leaving a balance of Rs. 14, 50,844.71/- out of the total outstanding dues for the non return of the Decoders, and an additional amount of Rs. 32, 92,033.33/- for pirating signals from other sources. The Petitioner also alleges that the Respondent was sourcing unauthorized signals from other Cable operators, servicing its customers, collecting payments from them and retaining it illegally.
6. On 24th August 2007, the Respondent wrote to the petitioner claiming that he had settled dues with the Petitioner by making a payment of Rs. 11.50 lacs and demanded that the Respondent should be given a 'No dues Certificate'. In response to this, the Petitioner wrote to the Respondent and denied any such settlement and pointed out that an amount of Rs. 3, 00, 844.71/- was still outstanding from the Respondent apart from charges for the unauthorized use.
7. On 31st October 2007 the respondent filed petition No. 295c/2007 before the TDSAT seeking restoration of supply of signals. The petition itself disclosed admitted violations of even the expired agreement, by claiming operations beyond the permitted territories in breach of the agreement and the same was brought to the notice of the TDSAT. In response to the allegations of the Respondent, the Petitioner submitted before the TDSAT that there was a delay in filing the petition, that the former had defaulted in clearing the pending dues and that signal were being pilfered without the permission of the Petitioner. The Petitioner also argued that resumption of supply of signals could not be undertaken until the negotiation for a fresh contract was completed. Further, the Petitioner submitted that the TRAI Regulations prescribe the mode and methods of renewal of such agreements and that under these regulations, the Petitioner must fairly disclose the operators being served and the number of subscribers. The Petitioner relied on Clause 8, of the TRAI Regulations dated 4th September 2006.
8. The Petitioner avers that without taking any of these submissions into account the TDSAT passed the impugned order, asking the Petitioner to restore supply of signals since accounts maintained by the Petitioner were disputable. It is alleged that the effect of the impugned order is to create a contract between the parties, which cannot be done by a Court; that the grant of the interim relief would entitle the Respondent herein to supply signals to an unrestricted territory/area, which would permit the respondent to leak its signals to the Cable Operators being serviced by other multi system operators (MSOs) operating in the adjoining areas; that the impugned order will also affect the existing contract of the petitioner with other MSOs operating in the area and that the order further seeks to grant equitable relief to a party which has come before the Court with unclean hands
9. Mr. Dushyant Dave, learned senior counsel, submitted that the TDSAT acted in excess of its jurisdiction; its impugned order is liable to be set aside, because it has directed parties to enter into a contract. It was urged that the Petitioner, as was required under regulations, gave sufficient time to the respondent to comply with the terms, clear its dues, and arrive at a mutually agreed understanding for the subsequent period. Yet, the respondent did not care to take steps; the petitioner was constrained to disconnect the supply. The respondent did not take exception or feel aggrieved, and chose to approach the TDSAT only in October, 2007. It did not clear its dues, even after disconnection, and continued to make payments at its leisure. In these circumstances, the petitioner could hardly be faulted, since it gave sufficient time, as it was obliged to do, in terms of the regulations, to enable the respondent to re-negotiate fresh terms. These were vital considerations; instead of giving them due weight, the tribunal proceeded on the basis of its own understanding, that the respondent had entered into an understanding with the petitioner, and directed the resumption of connection, at an interim stage. This interim mandatory order was unwarranted in the circumstances.
10. Learned Counsel submitted that the agreement originally entered into between the parties disclosed that the area of the respondent's operation was restricted; yet it showed that the area was larger, in its application before TDSAT. This established, prima facie, that the respondent indulged in acts of piracy. Learned Counsel urged that under Regulation 8 of the Telecommunication (Broadcasting and Cable Services) Interconnection (Third Amendment) Regulation, 2006(hereafter 'the amended Regulations'), parties to an interconnection agreement for supply of TV channel signals should begin the process of negotiations for renewal of existing agreement at least two months before the due date of expiry of the existing agreement. Counsel submitted that the second proviso prescribed that that if the parties are unable to arrive at a mutually acceptable new agreement, the there can be disconnection of retransmission of TV channel signals, any time after the expiry of the original agreement after giving a three weeks notice in the manner. These stipulations had been complied with by the petitioner. In these circumstances, the TDSAT should not have issued the impugned directions.
11. Learned Counsel relied upon the orders of the TDSAT, in International Cable TV Network Stanley Edward Benjamin Pallana v. SET Discovery (P) Ltd. (Petition No. 37 of 2004, decided on 10-2-2006); Star India Ltd. v. Indus Ind Media and Communication Ltd. (Petition No. 44 of 2004, decided on 17-1-2006); the decision of the Supreme Court in Star India (P) Ltd. v. LGM Network (decided on 29-3-2006, in CA 4265-66/2003) and the judgment of this Court, in Star India (P) Ltd. v. Shankskardhani Cable Networld (WP No. 23663/2005, decided on 16th December, 2005), to say that the tribunal should not have disturbed the existing distribution system, and dictated an interim order assisted contract between the parties.
12. Mr. Naveen Chawla, learned Counsel submitted that the TDSAT's order would show that the respondent had made several attempts to clear the genuine dues of the petitioner. The latter was not interested in ending the controversy, and wanted to prolong the dispute about non-existent outstandings. Counsel contended that even as per the records placed on the file of TDSAT, the outstanding amount in July 2007 was only about Rs. 3 lakh; yet the petitioner did not want to accept them, and negotiate a new contract. Counsel relied upon the letter of the petitioner dated 5-10-2007 and submitted that a completely unwarranted demand for Rs. 28 lakhs had been made, whereas the account statement showed a much lower amount. The petitioner deliberately wanted to keep the controversy alive by making unwarranted allegations, so that the respondent had to comply with its demands.
13. Learned Counsel distinguished the decisions of the TDSAT and submitted that in the International Cable TV Network case, a direction to execute the agreement and supply signals had been made. He relied upon the decision in Star India case and submitted that the regulations were interpreted to mean that there is a 'must provide' obligation on the part of the broadcaster; he cannot withhold it on unreasonable grounds. Counsel relied on Regulation 3.2 of the Interconnection Regulations. It was urged that the decision of the Supreme Court was in the context of the pre-existing regulations, when broadcasting was not covered under the TRAI regime. It was lastly urged that all the relevant facts were with the TDSAT, when it decided as it did, to direct an interim measure; it did so within the bounds of its jurisdiction, and this Court should not interfere with such interim orders, made in exercise of discretion rightly vesting with an expert tribunal.
14. The relevant provisions of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation 2004, as amended on 4-9-2006, read as follows:
3. General Provisions relating to Non-Discrimination in Interconnect Agreements 3.1 No broadcaster of TV channels shall engage in any practice or activity or enter into any understanding or arrangement, including exclusive contracts with any distributor of TV channels that prevents any other distributor of TV channels from obtaining such TV channels for distribution.
3.2 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 the 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 3.3 A broadcaster or his/her authorised distribution agency would be free to provide signals of TV channels either directly or through a particular designated agent or any other intermediary. A broadcaster shall not be held to be in violation of Clauses 3.1 and 3.2 if it is ensured that the signals are provided through a particular designated agent or any other intermediary and not directly. Similarly a multi system operator shall not be held to be in violation of Clause 3.1.and 3.2 if it is ensured that signals are provided through a particular designated agent or any other intermediary and not directly.
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8. Time Period for Renewal of existing agreements 8.1 Parties to an interconnection agreement for supply of TV channel signals shall begin the process of negotiations for renewal of existing agreement at least two months before the due date of expiry of the existing agreement.
Provided that if the negotiations for renewal of the interconnection agreement continue beyond the due date of expiry of the existing agreement then the terms and conditions of the existing agreement shall continue to apply till a new agreement is reached or for the next three months from the date of expiry of the original agreement, whichever is earlier. However, once the parties reach an agreement, the new commercial terms shall become applicable from the date of expiry of the original agreement.
Provided further that if the parties are not able to arrive at a mutually acceptable new agreement, then any party may disconnect the retransmission of TV channel signals at any time after the expiry of the original agreement after giving a three weeks notice in the manner specified in Clause 4.3. The commercial terms of the original agreement shall apply till the date of disconnection of signals.
15. In this case, the agreement between the parties ended in December 2006. The petitioner no doubt gave benefit of the grace period to the respondent, before disconnecting the supply in April 2007. Yet, that fact and the arrears said to have been payable by the respondents could not have been the only criteria, to the exclusion of other factors, for the TDSAT to decide whether a mandatory order should have been granted. The respondents had adverted, in their application to it, about continued correspondence with the petitioner, about other operators encroaching its area; it also mentioned about the petitioner demanding Rs. 11,50,000/- as the arrears payable, which was paid on 20-7-2007. It had apparently written repeated letters to the petitioners, on 20-7-2007; 24-8-2007 and 7-9-2007, seeking restoration of connection. Yet the petitioner did not take any action. Therefore it approached TDSAT, which, after considering all materials, and the circumstances concluded that the claim made by the petitioner about the outstanding amount being Rs. 24 lakhs, was prima facie exaggerated. On an overall conspectus of these facts, the TDSAT directed restoration of supply, subject to certain conditions.
16. This Court has examined the orders cited on behalf of the petitioners as well as the stipulations in Regulation 3.2 (supra) which oblige a broadcaster not to unreasonably withhold connection and extend it in a non-discriminatory manner. One cannot be unmindful of the fact that the impugned order is an interim measure, meant to subsist till final determination of the rights of the parties.
17. The Tribunal is invested with the power to adjudicate disputes, as an exclusive quasi judicial body. It has gathered some institutional expertise; indeed its membership is also geared to facilitate the specialized dispute adjudication which it has to engage in. Judicial review, under Article 226, has to be understood within the overall structural parameters of its original dispute resolving task. If one keeps in mind the circumstance that the impugned order is an interim one, the jurisdiction of this Court gets even more circumscribed, as it were. Commenting on such restricted jurisdiction, the Supreme Court held, in Surya Dev Rai v. Ram Chander Rai as follows:
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the above said two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred thereagainst and entertaining a petition invoking certiorari or supervisory jurisdiction of the High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a court of appeal and indulge in reappreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.
The TDSAT's orders can be interfered with where they disclose manifest errors, which are apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and a grave injustice or gross failure of justice has been occasioned. On an application of these parameters, this Court is unable to discern any such manifest error of law, or ignorance of, or utter disregard of provisions of law. The petitioner has also not been able to disclose any gross failure of justice.
18. In view of the above discussion, this Court finds that the grounds made out in the writ petition are unfounded; it has to therefore, fail. The writ petition and pending application is accordingly dismissed without order on costs. dusty.