TELECOM DISPUTES
SETTLEMENT & APPELLATE TRIBUNAL
DATED 11th FEBRUARY, 2010
Petition Nos. 222(C)
of 2009
Hathway Space Vision ……….. Petitioner
Vs.
Ranjeet Mathur ……….. Respondent
BEFORE :
HON’BLE MR. JUSTICE S.B.
SINHA, CHAIRPERSON
HON’BLE MR. G.D.
GAIHA, MEMBER
For Petitioner : Mr. Arun Kathpalia, Advocate
Mr.
Nasir Husain, Advocate
For Respondent : Mr. Sharath Sampath, Advocate
Mr.
Navin Chawla, Advocate
O R D E R
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1. |
The present petition has been filed by the
petitioner against the threatened illegal action of the Respondent of
migrating from the network of the Petitioner to another competing MSO without complying with the mandatory
provisions of clause 4 of the Interconnect Regulations and without clearing
the outstanding dues and arrears of the Petitioner amount to Rs. 53.16546
lakhs. |
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2. |
Petitioner M/s. Hathway Space Vision is a
partnership firm and are providing cable TV signals. The Petitioner firm is registered under the
Provision of Section 3 of the Cable Television Networks (Regulations) Act,
1995 (hereinafter referred as “Cable Television Act”). The petitioner primarily acts as a Multi
Systems Operator (hereinafter referred to as “MSO”) and is engaged in the
business of reception and distribution of satellite television, broadcast
signals and other electronic signals primarily to various distributors,
franchises, local cable operators and sub-link operators and also directly to
individual subscribers on its own and on behalf of its subsidiaries/affiliates/associates/joint
venture companies/firm for re-transmission to the local cable operators and
their ultimate subscribers. The
petitioner receives and redistributes several satellite television channels
which comprise packages or bouquets popularly known Star Television Bouquet,
the Sony Entertainment Television Bouquet, the Zee Bouquet etc. |
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3. |
The petitioner claims to have a long standing
relationship with the respondent, who is a Director of the company known as
Space Vision Cabletel Private Limited which company is a partner of the
Petitioner firm. The other two
partners of the partnership firm namely Intere and Binary are also companies
which are wholly owned subsidiary companies of Hathway Cable and Datacom
Limited. The petitioner claims that
since the year 2006 disputes and differences arose between the partners of
the petitioner firm in relation to accounts of the firm as well as other
managerial disputes and all such disputes were referred to Arbitration before
the Sole Arbitrator Mr. Justice S.P. Bharucha (Retd.). |
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4. |
The petitioner has claimed that the arbitration
is still pending as on 8th October, 09 when the petition has been
filed. The respondent has submitted
while replying to the petition that the arbitration award has already been
given by the Hon’ble Arbitrator vide his orders dated 14th
September, 2009 in which the claims as well as counter claims of the parties
have been dismissed by the Hon’ble Arbitrator. The respondent also claims that the parties
had made claims as to dues of feed charges as claimed in the present petition
as well. A copy of the award dated
14.09.2009 has been annexed with the MA 141/2009 filed by the
respondent. |
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5. |
The petitioner in his reply to MA 141/2009 filed
by respondent has denied that the petitioner failed to mention the Arbitral
award dated 14.09.2009 with any malafide intention or otherwise. The petitioner has claimed that it had
mentioned about the pending arbitral proceeding before a sole Arbitrator in
Mumbai. Since the petition as filed by
the petitioner in this Tribunal was drafted in Mumbai and sent to Delhi
office well before the passing of the Arbitral award dated 14.9.2009 and,
therefore, the contents of the Award
were not mentioned, inadvertently for updating the petition. The petitioner has further submitted that
it was not a party to the arbitration proceeding and, therefore, the question
of petitioner making a claim in the arbitration proceeding does not and
cannot arise. The petitioner has
furthermore claimed that the relief sought for in the present petition was
also not the subject matter of the arbitral proceedings and was not decided
by the Arbitrator at all. It is
claimed that the said arbitration proceeding was interse the partners of the Petitioner firm, where the petitioner
was not a party and the present petition has been filed by the Petitioner as
an MSO against the respondent in the capacity as an independent cable
operator who is obtaining feed signals from the petitioner. The petitioner would contend that the
prayers before the arbitral claim as mentioned below are for the period prior
to 2006 while the claim in the present petition is post 2007 and the
petitioner has not prayed for recovery of Rs. 38.26969 lakhs for the period
from Jan, 2007 in the arbitration proceeding before Justice Bharucha as
alleged. The petitioner has
specifically referred to the prayers made in the arbitration proceedings
which are related to the cable casting business by the partners. “(d)(i)
the particulars of the operators of the said firm, including the
sub-operators therefore setting out
the names and other details, connectivity and the accounts of each of them as
also the amounts collected from each of them by either cash or cheque since
inception of the said firm till date hereof; (e)
That an
appropriate award/order and/or direction be passed against the Respondent,
its directors, office bearers to pay over to the said firm all amounts
retained by them pursuant to disclosure made as per prayer. (h)
that an
appropriate award/order and/or direction be passed against the Respondent,
its directors, office bearers, agents and servants to pay over to the said
firm the following amounts being amounts payable by them to the said firm
which they have siphoned off from the said firm or otherwise have wrongfully
deprived to the said firm together with interest at the rate of 24% p.a. from
such date as this Hon’ble Forum shall deem fit till payment and/or
realization as follows: (i)
a sum of Rs.
74,17,787/- (Rupees Seventy Four Lacs Seventeen Thousand Seven Hundred Eighty
Seven only) as per the Particulars of Claim, Exhibit “G” hereto, being the
amount not deposited with the said firm but collected by the Respondent on
account of Feed charges, etc. including Service Tax; (ii)
a sum of Rs.
59,40,448/- (Rupees Fifty Nine Lacs Forty Thousand Four Hundred Forty Eight
only) as per the Particulars of Claim, Exhibit “H” hereto, being the amount
Feed charges which the Respondent have collected from LJCN Operator, for
which the said firm is liable to pay; to UCN by virtue of the arrangements
referred to in paras 10 above, including Service Tax; (iii-a) a
sum of Rs.4,48,800/- (Rupees Four Lacs Forty Eight Thousand Eight Hundred
only) as per the Particulars of Claim, Exhibit “I-i” hereto, being the amount
not deposited with the account of the said firm by the Respondent on account
of transaction with Dakshin Media Gaming Pvt. Ltd.; (iii-b) IN
THE ALTERNATIVE to prayer (iii-a) above : a sum of Rs.4,48,800/- (Rupees Four Lacs Forty
Eight Thousand Eight Hundred only) as per the Particulars of Claim, Exhibit
“I-ii” hereto, being the amount payable by the Respondent to the said firm
due to loss caused to the said firm on account of its failure to collect the
amount offered by Dakshin Media Gaming Pvt. Ltd.; (iv) a sum
of Rs.59,32,913/- (Rupees Fifty Nine Lacs Thirty Two Thousand Nine Hundred
Thirteen only) as per the Particulars of Claim, Exhibit “J” hereto being the
loss suffered by the said firm on account of not hiking the rates as
permitted due to increase in Cable Television charges, which ought to have
been increased in the normal course of business; (v)
a sum of
Rs.50,00,000/- (Rupees Fifty Lacs only) as per the Particulars of Claim,
Exhibit “K” hereto, being the undisclosed income and/or such other sums as
may be discovered pursuant to prayers of disclosure sought herein, (vi)
a sum of Rs.
50,00,000/- (Rupees Fifty Lacs only) as per the Particulars of Claim, Exhibit
“L” hereto, on account of placement fees not collected and/or illegally
pocketed; (vii)
a sum of
Rs.3,52,16,866/- (Rupees Three Crores Fifty Two Lacks Sixteen Thousand Eight
Hundred Sixty Six only) as per the Particulars of Claim, Exhibit “M” hereto,
being the Feed charges payable by the directors of the Respondent to the said
firm which are not paid over to the said firm; (viii)
a sum of Rs.
40,00,000/- (Rupees Forty Lacs only) as per the Particulars of Claim, Exhibit
“N” hereto, being the amount as misappropriated and/or the amounts or such
amount as discovered to have been misappropriated pursuant to the disclosure
as sought for herein; (ix)
a sum of Rs.
25,00,000/- (Rupees Twenty Five Lacs only) as per the Particulars of Claim,
Exhibit “O” hereto, being the amount of bad debts as estimated to have been
written off unauthorized by the Respondent or such amount as disclosed;” |
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6. |
The respondent has pleaded that neither in the
petition nor in the arbitral proceeding there is any mention of the period
for which the dues are claimed and since the petitioner maintains the books
of accounts and hence it cannot claim separate amounts for separate periods
on its own volition. It is further
denied by the respondent that the petitioner has not prayed for recovery of
Rs. 38.26969 lakhs for the period from Jan, 2007 in the arbitration
proceedings and, therefore, the present petition is not maintainable and
liable to be dismissed as per the principles of Res Judicata. |
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7. |
The respondent has pleaded that the petitioner in
the said proceedings before the arbitrator has claimed feed charges due from
the respondent; hence the petitioner cannot claim the same feed charges in a
completely separate proceeding and that too after concealing the fact of the
previous proceeding coming to a logical conclusion. There is a mention of a claim at (h) (vii)
before the learned Arbitrator as above for Rs. 3,52,16,866/- which is termed
as the feed charges payable by the directors of the respondent to the said
firm and which have not been paid over to the said firm. The petitioner has categorically claimed it
has not prayed for recovery of Rs. 38,26,969/- lakhs for the period Jan, 2007
in the arbitration proceeding before Justice
Bharucha, as alleged. |
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8. |
The respondent has further raised a point that
the petitioner had no authority to file present petition for and on behalf of
the partnership. In this context the
respondent has quoted a case law AIR
1936 “It is open to a partner of a firm consisting of
several partners to institute a suit
in the name of the firm although the other partners refuse to join in the
suit. The partners refusing to join are not necessary parties
in the sense that they should be named in the cause title and served with
summons of the suit. In describing the
cause title of such suit the name of the plaintiff should be the name of the
firm only without addition of the name of the partner suing although addition
of such name does not matter in the least.
The question as to whether the partner bringing the suit should have
given an indemnity to the other partner, for bringing a suit in their name,
is a matter between them: Seal and
Edgelow v. The learned Judges have finally concluded that : “The suit could proceed accordingly in the name
of the firm with its carriage in the hands of Manik Lal Roy. We accordingly allow the appeal, set aside
the judgment and decree of the Court of appeal below and remand the case to
the Court so that the plea of the payment raised by the defendants may be
considered” |
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9. |
The respondent has further pleaded that the
petitioners have withheld the fact that there is a petition filed before the
Hon’ble High Court of Bombay being Arbitration Petition No. 184 of 2009 and that the next date of
hearing is sometime in the month of January, 2010 once the Court reopens
after the vacations. It is further
submitted that the said arbitration petition is filed by the two partners of
the Petitioner firm namely Binary Technology Transfers Private Limited and Hathway Internet Satellite
Private Limited against the third remaining partner namely Space Vision Cable Network Private Ltd., however all
three form the petitioner herein and the said petition has been filed by the
petitioner without taking any sort of authority from the third partner. It has been furthermore submitted by the
respondent that the said arbitration proceeding was filed against the partner
viz. Space Vision Cable Network Private Ltd. alleging breaches committed by
the aforesaid partner and therefore a relief has been prayed for appointment
of court receiver for ensuring the collection of feed charges and
subscription charges from the LCOs and the subscribers connected to the firm. In this context, therefore, the respondent
is not liable to pay any amount for any period to the petitioners and this
petition is liable to be dismissed on the above ground. It has been furthermore pleaded that the
present dispute is between the partners and their internal accounting and
dues which does not fall within the jurisdiction of this Hon’ble
Tribunal. It is accepted that the
petitioner is a MSO, and it is denied that the petitioner has filed the
present petition against the respondent in the capacity of an independent
cable operator who is obtaining feed signals from the petitioner. It is further denied by the respondent that
this is a dispute between the MSO and LCO who are both service providers
since the dispute is only related to the internal accounting between the
partners. |
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10. |
We have gone through the arbitral award given by
Justice Bharucha, Sole Arbitrator. The
arbitral award is between the following : 1. Hathway
Internet Satellite Pvt. Ltd. 2. Binary
Technology Transfers Pvt. Ltd. …….
Claimants And 1. Space
Vision Cable Network Pvt. Ltd………
Respondent |
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11. |
After deliberating upon various claims and
counter claims filed by the parties, the learned Arbitrator has finally
passed order as follows : “A partnership rests upon the bedrock of mutual
trust and confidence. It is crystal
clear from the Statement of Case that the Claimants do not have the slightest
confidence or trust in their partner, the Respondent. The Counter Claim makes it clear that the
Respondent has little confidence in the Claimants. The continuance of the partnership between
the Claimants and the Respondent is, therefore, a travesty that cannot be
encouraged. No court or arbitral
tribunal may give directions that will enable such a partnership to continue. Even otherwise, it is for the partners to manage
the affairs of the partnership and not for a court or arbitral tribunal to
direct how this should be done. The
Deed of Partnership, in clause 13, provides for a committee of the partners’
nominees to manage the affairs of the partnership. What are sought by prayer (c) of the
Statement of Claim are directions detailing the manner in which the committee
should function. It would be
inappropriate, in the best of situations for a court or arbitral tribunal to
give such directions. They would
certainly, be most inappropriate in the circumstances of the present case. Prayers (d) onwards of the Statement of Claim
seek manifold details, taking of particular accounts and payment into the
partnership funds of various large sums of money. The Counter Claim makes somewhat similar
claims. It is, to the Tribunal’s mind, clear that no
special case is here involved and that the general rule should be
followed. As MacClean, CJ, said in the
case quoted above(Bhut Nath Das Malakar
vs. Girish Chandra Banerjee, 11 Cal WN 311), when the Claimants think
that the Respondent has not been treating them properly, their proper remedy
is to apply for dissolution of the partnership and to have its accounts taken
on the basis of willful default. In
response, the Respondent may also seek accounts on the basis of willful
default. If it then be found that the
Respondent has cheated the Claimants, or vice versa, the court (or arbitral
tribunal) can deal with that. I affirm the view that I had prima facie taken,
namely, that the Claimants, even if they establish the allegations made in
the Statement of Claim, cannot secure the reliefs they prayed for. The claim made by the Claimants in the Statement
of Claim must, therefore, be dismissed.
For much of the same reasons, the Counter Claim must also be
dismissed. I, accordingly, make the following Award: The Claim is dismissed. The Counter Claim is dismissed. There shall be no order as to costs.” |
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12. |
As a matter of fact the learned Arbitrator has
not gone into the merits of claims and counter claims and has finally
made an order dismissing the claims in
the statement of claim as well as counter claims. The learned Arbitrator has also proposed
since the claimants think that the respondent has not been treating them
properly, their proper remedy is to apply for dissolution of the partnership
and to have its accounts taken on the basis of willful default. In regard to the proceeding of the Arbitration
Petition no. 184 of 2009 which has been filed before the Hon’ble High Court of Bombay, it is
obvious that the two partners of the
petitioner firm namely Binary Technology Transfers Private Limited and
Hathway Internet Satellite Private Limited against the third remaining
partner namely Space Vision Cable Network Private Ltd. as it appears from the rejoinder filed by
the respondent in its Miscellaneous Application no. 139 of 2009 that the
arbitration petition has been filed in the Bombay High Court is in regard to
the breaches committed by the aforesaid partner and for appointment of court
receiver for ensuring the collection of fee charges and subscription charges
from the LCOs and the Subscribers connected to the firm. It has also been submitted that there are
no feed charges which are due and the respondent has not to pay any amount
for any period to the petitioner. The
petitioner’s case is that it has submitted invoices in a CAS area exactly
according to the charges to be paid by the subscriber as annexed with the
invoices in the petition. The amounts
are, therefore, not in dispute as claimed by the petitioner and the invoices
for two different periods i.e Jan, 2009 and May, 2009 appeared to be in
accordance with the signals being provided in the CAS area. These invoices are based upon the customer
registration forms from all the end users on the basis of the details of the
pay channels subscribed by such subscribers.
The invoices are reflecting the subscription charges of the amounts to
be paid as per the customer registration forms of the previous month. The invoices have been raised as per the
records of the subscriber management system maintained by the petitioner and
the payments are also made to the broadcasters accordingly. The petitioners have claimed that the
invoices have been continuously raised on the respondent. As per the Regulations the old outstanding
has been mentioned by the petitioner in each invoice. The petitioner on the basis of these
records has claimed Rs. 38.26963 lakhs as outstanding towards signal feed charges. The petitioner has also admitted that it
has not maintained accounts in the normal course of the business because it
has a close and long standing relationship with the respondent. On 12.01.2009 the petitioner has also
addressed a letter of the outstanding to the respondent whereby the total
outstanding of Rs.32.88877 lakhs as on
31.12.2008. The respondent has not
paid any heed to it. The respondent
has not even bothered to give a reply to the legal notice. The letter dated 12.01.2009 has been annexed
with the petition, however, the proof of delivery as claimed to have been
annexed with the letter, is not available in the petition. The respondent here in this case is a Director in
the company but he is not a shareholder.
The main contention of the respondent is that claims and counter
claims have been dismissed by the learned Arbitrator and a petition filed by
the petitioner in the Hon’ble High Court of Bombay bearing No. 184 of 2009 is
still pending and therefore, the present petition is not sustainable. Another ground taken by the respondent is
that the dispute is between partners which do not fall within the ambit of
this Tribunal. |
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13. |
Order 7 Rule 11
(d) of the Code 7 Civil Procedure reads as under : “
11(d) Where the suit appears from the
statement in the plaint to be barred by any law.” From a bare
perusal of the aforementioned provision, it is absolutely clear that the suit
must be barred by any statute. The purported award of the Arbitral Tribunal
is not enforceable in law. Merit of
the matter has not been gone into therein.
Even otherwise, it was not in the petition. Dispute before us and before
the learned Arbitral Tribunal are absolutely different and distinct. The Arbitral
Tribunal, even otherwise, in view of the decision of this Tribunal in Aircel
Digilink India Ltd. Vs. UOI & Anr. had no jurisdiction in the matter
which is pending before us. If the learned
Arbitral Tribunal had no jurisdiction, its award is a nullity. Any order, it is
well settled, which has been passed without jurisdiction would be a nullity. [
See Chief Justice of Andhra Pradesh and Ors. Vs. L.V.A. Dixitulu and
Ors. AIR 1979 SC 193). In
Administrative Law by Sir William Wade on the subject of doctrine of ultra
vires in regard to the jurisdiction, the following observation has been made
: “Any administrative act or order which is ultra
vires or outside jurisdiction is void in law, i.e. deprived of legal
effect. This is because in order to be
valid it needs statutory authorization, and if it is not within the powers
given by the Act, it has no legal leg to stand on. The court will then quash it or declare it
to be unlawful or prohibit any action to enforce it. The terminology here depends to some extent
on the remedy granted. ‘Quashing’ is
used in connection with the remedy of certiorari. A declaratory judgment is an alternative
remedy with similar effect; it declares the offending act to be a nullity in
law. Prohibition of execution may be
an order of prohibition (a prerogative remedy) or an injunction. But these technicalities make no difference
to the legal result; an act found to be outside jurisdiction (ultra vires) is
void and a nullity, being destitute of the statutory authority without which
it is nothing. Once the court has declared that some
administrative act is legally a nullity, the situation is as if nothing had
happened. In this way the unlawful act
or decision may be replaced by a lawful one.
If a compulsory purchase order is quashed as being ultra vires, there
is nothing to prevent another order being made in respect of the same land,
provided that it is done lawfully.
Thus a public authority or tribunal is often given locus poenitentiae and is able to
correct an error by starting afresh – something which it might otherwise be unable
to do.” It may be that
ultimately the petition will fail, but as it makes out a cause of action, no
case has been made out to reject the petition at this stage. Merit of the
matter, except in a very exceptional case can be gone into while determining
an application under order 7 Rule 11 of the code of Civil Procedure. At this stage the Tribunal will have to
proceed on the basis that the allegations made in the petition are
correct. The matter might have been
different, had the petition even if given face value and taken to be correct
in its entirety would have disclosed no cause of action. It is now also well known that inter se
dispute between the parties would by itself be not a bar for initiating a
proceeding against a third party. We, therefore, are of the opinion that no
case has been made out for exercising our jurisdiction under Order VII Rule
11(d) of the Code of Civil Procedure. |
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The respondent is directed to file a reply
to the main petition within four weeks and rejoinder thereto may be filed
within two weeks thereafter. |
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…………………….J (S.B. Sinha) Chairperson …………………. (G.D. Gaiha) Member |