TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
DATED
17th May, 2010
PETITION
No.25 (C) OF 2010
Indusind
Media and Communications Ltd. …Petitioner
Vs.
Star
Den Media Services Pvt. Ltd. & Anr …Respondents
PETITION
No. 54(C) OF 2006
(M.A.Nos.23
& 26 of 2006 and M.A.No.98 of 2007,M.A.No.5, 29 & 30 of 2010)
Indusind Media and
Communications Ltd. …Petitioner
Vs
Star India Pvt. Ltd. &
Anr. …Respondents
BEFORE:
HON’BLE MR. JUSTICE S.B.SINHA,
CHAIRPERSON
HON’BLE MR. G. D.
GAIHA, MEMBER
HON’BLE MR. P.K.RASTOGI,
MEMBER
|
For Petitioner |
: |
Mr. C. S. Vaidyanathan,
Senior Advocate Mr. Arun Kathpalia,
Advocate Mr.
Manjul Bajpai, Advocate Mr.Ashish
Yadav, Advocate |
|
For Respondent No. 1(Star Den) |
: |
Mr. S. Ganesh, Senior
Advocate Mr. Gopal Jain, Advocate Mr. Prateek Kumar,
Advocate |
|
For Respondent No. 2(Star |
: |
Mr. Saurabh Srivastava,
Advocate Mr. Nitin Sharma, Advocate
|
|
For Respondent No. 1 (Star |
: |
Mr. Gopal Jain, Advocate Mr. Prateek Kumar,
Advocate |
J U D G E M E N T
S.B. Sinha
These
two petitions relate to validity and/or legality of certain clauses of the
subscription agreement entered into by and between the parties hereto.
Indisputably, the
first petition relates to an agreement for the year 2009 – 2010 which has come
to an end on or about 31st March, 2009 but indisputably, the parties
have been negotiating for renewal thereof.
Petition No. 54 of
2006 relates to an agreement dated 1st April, 2006 which was valid
up to 31st March, 2007.
Indisputably, the
petitioner has not filed any petition questioning the legality of the offending
clauses contained in the agreements for the years 2007 – 2008 and 2008-2009.
The respondent herein
had inter alia raised a preliminary issue contending that the tenure of the said
agreement in question having come to an end, these petitions have become
infructuous.
We may at the
outset notice, the averments made in paragraph I of the first petition which
read as under :-
“The Petitioner is
filing the present Petition challenging, inter alia, various terms and
conditions of the Subscription Agreement provided by Star Den Media Services
Private Limited (Star Den) to Induslnd Media & Communications Limited
(IMCL) for 2009. Star Den is imposing
various terms which are, inter alia, unreasonable, contrary to various
provisions of the Interconnection Regulations of TRAI, particularly second
proviso to Clause 3.2 of the Telecommunication (Broadcasting and Cable Services
Interconnection) Regulation 2004 dated 10.12.2004 (as amended) as well as
Tariff Orders (as amended) of TRAI and, therefore, tantamount to and
constitute, inter alia, denial of request to provide signals to IMCL.”
In the other petition the following prayers
have been made :-
“(a) Hold the said Clauses as, inter alia,
unreasonable, impossible to perform, restrictive trade practices, contrary to
various provisions of the Interconnection Regulation of TRAI particularly
second proviso to Clause 3.2 of the Telecommunication (Broadcasting and Cable
Services Interconnection) Regulation 2004 dated 10.12.2004 as well as Tariff
Orders of TRAI and hold that these Clauses tantamount to and constitute, inter
alia, a denial of request to provide signals to IMCL by STAR and direct STAR to
delete/modify the said Clauses so that these do not violate the said provisions
and are not unreasonable.
(b) Direct STAR to continue to provide signals
to IMCL post 17.02.2006 and until the final disposal of the present Petition.
(c) Direct TRAI to issue guidelines with respect
to fair, reasonable and non-discriminatory terms for the future Agreements.
(d) To pass ex-parte/interim/ad-interim orders
in respect of the above prayers.”
A prayer has also
been made for a direction upon the Telecom Regulatory Authority of India (TRAI)
to issue detailed guidelines with respect to fair, reasonable and
non-discriminately terms for the future agreement.
The reasonableness
of the aforementioned clauses in the agreements in question has inter alia been
questioned on the premise that the same are violative of the provisions of
clause 3.2 of the Telecommunication (Broadcasting and Teleservices
Interconnection) Regulation 2004 dated 10.12.2004 as amended from time to time and
in particular in the year 2006 (Regulation) whereby the 2nd proviso thereto
has been inserted.
We may also notice
that similar objections in regard to the second petition having been raised,
this Tribunal, by an order dated 4th November 2009 observed as under
:-
“Learned counsel states that
another petition will be filed by the petitioner herein, questioning the
reasonableness of the clauses of the said new agreements. It was furthermore stated that the petitioner
intends to bring on record certain subsequent developments and in particular
the directions issued by the TRAI, the
validity whereof was questioned by Respondent No. 1 in an appeal, but was
subsequently withdrawn.
Let new petition(s), if any, be
filed within three weeks for the said new agreements (sic). The petitioner may also file an application
to bring on record the subsequent events within the said period in the present
petition. Mr. Jain states that his
client shall also bring on record some subsequent events within the aforesaid
period. Reply to the said application,
if any, be filed within three weeks thereafter.
We may place on record that the
learned counsel appearing on behalf of the TRAI submits that TRAI has been
unnecessarily impleaded as a party herein.
Such a stand has been taken by TRAI in its reply to the petition. However, as we feel that some assistance from
TRAI may be necessary in finally disposing of this matter and, therefore, no
order need be passed, as of now, for deletion of TRAI from the memo of parties.”
Mr. S. Ganesh, the learned Senior
Counsel appearing on behalf of the petitioner in the first petition and Mr.
Gopal Jain the learned counsel appearing on behalf of the petitioner in the
second petition in support of their contentions would, inter alia, submit :-
a)
The agreements having come to an end, hearing the present
petitions on merit would be wholly meaningless and an abuse of the process of
the Court.
b)
The first petition having not been filed within a period of
three weeks from the date of passing of the order dated 4th
November, 2009, the same should not be entertained.
c)
The petitioner having executed a number of agreements with
Respondent No. 1 for the years 2007 and
2008, and it having not questioned the legality thereof is estopped and precluded from continuing
these applications.
d)
The petitioner having accepted the terms of settlement not
only in respect of the agreement entered into with the respondent but also
other broadcasters, they should not be permitted to continue the petition.
e)
The purported condition in the RIO being justified, even on
merit, petitioners have no case.
f)
The 2006 application having been filed against Star India
Private Ltd. but as the signals are being distributed by the Star DEN, this
petition has become infructuous.
g)
Reply having not been filed in MA 5 of 2010 wherein an
interim order was issued by this Tribunal on 7.1.2010, the contents thereof
must be held to have been admitted.
h)
The Petitioner having not questioned, similar condition in
respect of agreements of the years 2007 and 2008 the doctrine of level playing
field would be attracted and in that view of the matter, the case has lost all
significance and would merely be of academic interest.
Mr.
Vaidyanathan, the learned senior counsel, appearing on behalf of the respondent,
on the other hand, urged :-
(1)
These petitions have not become infructuous despite expiry of the tenure of the agreement
as the petitioners have admittedly been receiving signals.
(2)
The 2009 agreement in question having regard to clause 8 of
the Inter-connect agreement having regard to negotiations being held for
renewal thereof, must be held be operative.
(3)
The respondents have not explained as to why despite expiry
of the agreement, the supply of signals have not been stopped.
(4)
The respondent have not deleted similar clause in their agreements
on internet, and, this, being no different from the offending clauses, these
applications have not become infructuous.
(5)
The petitioner having been lodging protests in respect of
the clauses in question on the premise that the offending clauses are
unreasonable, having regard to the doctrine of the level playing field as also the
interest of the consumers, they can neither be said to have become infructuous nor
the principle of estoppel can be said to have any application whatsoever.
(6)
The issues although are covered by the directions of TRAI
but the same having not been implemented, they require determination by this
Tribunal.
(7)
‘Star’ having preferred an appeal against the directions of
TRAI and having withdrawn the same and further in view of the fact that the
respondent although stepped into its shoes did not raise any question
thereabout, they would be deemed to have accepted the determination by TRAI.
There
cannot be any doubt or dispute that the matter is covered by provisions of the
Inter-connect Regulations framed by TRAI.
We may refer to Regulation 3.2 and the 2nd proviso appended
thereto, which read as under:-
“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 further that any
imposition of terms which are unreasonable shall be deemed to constitute a
denial of request.”
The agreement entered into by and
between a broadcaster and an MSO indisputably are governed by the provisions of
the aforementioned Regulations.
The question as to
whether the offending clauses violate the provisions for the said regulations and
in particular the second proviso appended to clause 3.2 of the regulation, can
form the subject matter of the petition
under Section 14 read with Section 14 A of the Telecom Regulatory Authority of
India Act, 1997 (The Act).
The question which arises for
consideration is as to whether only because the tenure of the agreements have
lapsed, these petitions have become infructuous.
Before, however,
we advert to the said question, we may notice that this Tribunal in Petition
No. 44 (C) of 2004, Star
“For the reasons stated above, we
direct IMCL either to enter into a subscription agreement within 30 days from
the date of receipt of this order with Star for the receipt of their signals if
need be under protest or without prejudice and if still aggrieved, challenge
the terms of agreement before this Tribunal or without signing the agreement
challenge the terms of the agreement before this Tribunal.
On facts of this case, however, we
direct Star not to disconnect the signals that are being supplied to IMCL as on
today for a period of 30 days from today on the ground that as on date there is
no subscription agreement.”
This Tribunal upon taking into
consideration the ‘must provide’ clause contained in clause 3.2 of the Regulations,
held :-
“………………..The right to propose the
terms is with the seller but this right is regulated by the Interconnect
Regulations which mandates the owner of the signals to supply signals on a
“must provide” basis and on reasonable terms. At the same time, the Regulations
governing the subscription agreement require a written agreement being signed
before the supply of signals. On a perusal of these regulations we are of the
opinion that seeker of the signal must negotiate with the supplier of signals
and if such negotiations fail he should approach this Tribunal for redressal of
his grievances. In such cases if the seeker of signals wants immediate signals
or his current signals not to be disrupted, it can always pray for an interim arrangement
being made by this Tribunal and the Tribunal may in a given case protect the
interest of both the parties by making suitable interim orders.”
Therefore, it is evident that in a given
case, it is open to a party to question the reasonableness of the terms of
agreement even after entering into the same with a broadcaster.
A ‘must provide’
clause must be construed reasonably. It is
true that identical clauses were being inserted by the respondent in its
agreement but there can not be any doubt or dispute that reasonableness thereof
would be open to question and subject to determination by this Tribunal. Only because the petitioner did not question
the validity of the agreements for the years 2007 and 2008, the same would not
mean that they have given up their right of redressal of their grievances in
this behalf.
We may also notice
the difference between an ordinary Court of Law and an Expert Tribunal.
The preamble of
the Act would clearely show that the Act provides for a two tier regulatory regime. The power of regulation in respect of an interconnect
agreement is not only by TRAI but also in appropriate cases, particularly where
the parties are at variance, by this Tribunal also.
In this view of
the matter we are of the opinion that reasonableness of the clauses of the
agreement which admittedly are being inserted by the respondent and other
broadcasters year after year deserve serious consideration by this Tribunal.
We are conscious of the fact that this
Tribunal should not unnecessarily burden itself with petitions which have
become infructuous for all intent and purport.
It may not enter into a sheer academic exercise. It is also not desirable to pursue cases
which have lost all significance but there can be no doubt or dispute that
having regard to the unusual jurisdiction this Tribunal exercises, matters of
public importance and in particular those which would in all probability be
contrary to interest of the consumers should not be rejected on technical
grounds.
It has not been denied
or disputed that even for the next year, the RIO which has been put on the internet
by the respondent herein contain similar clauses. The petitioner or some other service
providers indisputably would be entitled to question the validity thereof before
us in future. Furthermore the respondent
did not deny or dispute that despite expiry of the 2009 agreement, the supply
of signals have been continuing. The
agreement, in view of the fact that negotiations are being carried out, is
still operative.
We, furthermore, find
it difficult to accept the submissions of the learned counsel for the
respondent that the petitioner had not lodged any protest against
insertion/continuation of the offending clauses in the agreement.
In fact the
parties hereto had discussed the execution of subscription agreement for the
calendar year 2007 in terms whereof the petitioner were to operate and by a
letter dated 15th March, 2007 addressed to the President of the
Petitioner company stated in the following terms.
“As
informed to you, this is to clarify that STAR shall comply with the applicable
laws, regulations and notifications as laid down by the competent authority, as
amended from time to time, in respect to the subject matter of this
Subscription Agreement.
Looking
forward to a mutually beneficial association.”
The respondent
itself having, this, accepted to abide by the applicable laws and regulations,
there is, thus, in our opinion, no reason as to why the respondent should try
to avoid any decision of this Tribunal.
Though it may not
be very relevant, we may notice that a learned single judge of the Delhi High
Court (Sabharwal J. as the learned Chief Justice of India then was) in Civil
Writ Appeal No. 3642 at 1992 (Delhi Foods Vs. Union of India) in respect of the
validity of Milk and Milk Products Order 1992 rejected an almost similar
argument in the following terms :-
“10…………The
petitioner contends that he had hardly worked for one month when again
prohibition was imposed on converting skimmed milk into skimmed milk powder by
issue of an order dated 3rd October 1992. The said order was published in
Newspapers on 10th October 1992. The order dated 3rd October 1992 would cease
to operate on 1st January 1993. This writ petition was filed on 14th October
1992 seeking quashing of the order dated 3rd October 1992. During the pendency
of the writ petition another order dated 1st January 1993 was issued further
extending the period of prohibition. The order dated 1st January, 1993 states
that it shall cease to operate on 31st January 1993. With the leave of the
court the petitioner, on the grounds already taken in the writ petition, has
also challenged the validity of the order dated 1st January 1993. The period
mentioned in the order dated 1st January 1993 has expired but the petitioner
has still pressed his claim in the writ petition contending that if the matter
is not adjudicated by the court the respondents would again issue a similar
order of prohibition for further period thus forcing the petitioner to file yet
another petition. In the facts and circumstances of the case it is necessary to
decide the controversy although the order has lapsed on 31st January, 1993.
“19……………..The
Controller is not empowered to do something indirectly which under 1992 Milk
Order cannot be done directly. After expiry of 90 days another ban order cannot
be issued without examining the matter afresh and further material, if any,
more so when admittedly the milk was available in abundance. The temporary
prohibition cannot be for a period beyond 90 days. The words 'at a time' does
not mean that the Controller can give artificial breaks and issue successive
orders imposing restrictions on the manufacture of the milk product and thus
convert temporary restriction into almost permanent restriction.
Although, the same, in our opinion, does
not create any binding precedent but we have referred thereto only for the
purpose of showing that it will be wholly unnecessary to ask a petitioner to
file petitions after petitions in a situation of this nature.
Furthermore, as indicated heretobefore
the jurisdiction of this Tribunal is wider and far more onerous having regard
to interest of the consumers which is necessary to be protected.
Mr
Ganesh would however, submit that the petitioners are estopped by its conduct from
pursuing their proceedings. Strong
reliance in this behalf has been placed on a decision of ours dated 15.01.2010
in Petition No. 134 of 2008 ESPN Vs. Sai Darshan wherein it was held :-
“24. Mr. Handoo’s contention that the statement of
account filed by the petitioner, is not supported by any document, need not be determined in view of our
findings aforementioned. In a situation
of this nature, the principles of ‘estoppel by conduct’ can also be
invoked. The petitioner, thus, having
accepted the terms of settlement and having acted thereupon is estopped and
precluded from contending that no settlement had been arrived at.”
In that case this Tribunal was dealing
with a dispute between the parties thereto wherein a settlement had been
arrived at by parties which was binding on them. It having been acted upon the
parties thereto could not have been allowed to resile therefrom.
The
legal position in this case is somewhat different. The reasonableness of certain terms in a
contract is involved herein. Thus, these
petitions have wider ramifications.
In
Mahindra and Mahindra Vs. Union of India - 1979 (2) SCC 529, the Supreme Court of India opined :-
“12. ………………………… It is true that the
appellant did not prefer an appeal against the order dated May 14, 1976, but
the application under Section 13(2) being an alternative and perhaps a more
effective remedy available to it, the failure of the appellant to prefer an
appeal cannot be construed as acquiescence on its part. The appellant undoubtedly
asked for extension of time from the Commission for the purpose of implementing
the order dated May 14, 1976 but that also cannot amount to acquiescences,
because until the decision of the Commission in Telco case was reversed
in appeal by this Court, the appellant had no reason to believe that the order
dated May 14, 1976 was erroneous and as soon as the appellant came to know
about the decision of this Court reversing the view taken by the Commission,
the appellant immediately pointed out to the Commission that it was moving an
application for amendment or revocation of the order dated May 14, 1976 under
Section 13(2). The appellant did not at any time accept the order dated May 14,
1976 knowing that it was erroneous and it is elementary that there can be no
acquiescence without knowledge of the right to repudiate or challenge Moreover,
it may be noted that the appellant did not right up to the time it made the
application under Section 13(2), implement the order dated May 14, 1976 by
entering into revised distributorship agreement with the distributors. There
was, therefore, no acquiescence on the part of the appellant so far as the
order dated May 14, 1976 is concerned. Nor could there be any estoppel against
the appellant precluding it from challenging the Order by an application under
Section 13(2), for estoppel can arise only if a party to a proceeding has
altered his position on the faith of a representation. or promise made by
another and here there is nothing to show that the Registrar had altered his
position on the basis of the application for extension of time made by the
appellant.……………”
Yet again in Provash Chandra
Dalui v. Biswanath Banerjee, 1989 Supp (1) SCC 487, the Supreme Court of
India held as under:-
“24. The essential element of waiver is
that there must be a voluntary and intentional relinquishment of a known right
or such conduct as warrants the inference of the relinquishment of such right.
It means the forsaking the assertion of a right to the proper opportunity. The
first respondent filed suit at the proper opportunity after the land was
transferred to him, and no covenant to treat the appellants as thika tenants
could be shown to have run with the land. Waiver is distinct from estoppel in
that in waiver the essential element is actual intent to abandon or surrender
right, while in estoppel such intent is immaterial. The necessary condition is
the detriment of the other party by the conduct of the one estopped. An
estoppel may result though the party estopped did not intend to lose any
existing right. Thus voluntary choice is the essence of waiver for which there
must have existed an opportunity for a choice between the relinquishment and
the conferment of the right in question. Nothing of the kind could be proved in
this case to estop the first respondent.”
Mr. Gopal Jain, however placed reliance
on a decision of the Supreme Court of India in Shipping Corpn.of India &
Ors. Vs. Machado Brothers & Ors. - 2004(11) SCC 168 wherein, it has been held as
under :
“31. For
the reasons stated above, we are of the opinion that continuation of a suit
which has become infructuous by disappearance of the cause of action would
amount to an abuse of the process of the court, and interest of justice
requires that such suit should be disposed of as having become infructuous. The
application under Section 151 CPC in this regard is maintainable.”
The said decision was rendered on its own
facts and has no application to the fact of the present case as we are of the
opinion that the facts and circumstances of the case, these petitions can not
held to become wholly infructuous.
Furthermore,
there can be no estoppel against statute.
Preliminary Objections raised by the respondent are therefore rejected. Furthermore, we may observe that Mr. Vaidyanathan
appearing for the petitioner contended that similar clauses are being insisted
upon not only by this respondent but also other broadcasters.
It is, therefore,
all the more necessary to hear on the merits of the matters and in presence of
TRAI, so that appropriate directions can be issued.
…………….....J
(S.B.Sinha)
Chairperson
……………......
(G. D. Gaiha)
Member
…………….....
(P.K.Rastogi)
Member