TELECOM
DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
Dated 20th November, 2009
Petition No.145(C)
of 2009
Mona
Cable Network,
Opp.
Motal Kualilty,
Ghantagarh,
Uttar
Pradesh – 247001. …. Petitioner
Versus
ESPN
Software India Private Ltd.,
Having
its registered office at
F-40,
New
Delhi-110049. …. 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. N. Ganpathy, Advocate
|
JUDGEMENT
S.B. Sinha
Petitioner herein has filed this
application praying inter alia for the following reliefs :-
“A Declare the said Public Notices dated 13.05.2009 in the News
papers and the 4.1 notice dated 13.05.2009 to be illegal, null and void and
quash the same and/or
B. pass an order thereby restraining the Respondent from
disconnecting the supply of signals for ESPN, Star Sports and Star Cricket
channels for the Sahranpur area of Uttar Pradesh on the cable television
network of the Petitioner and/or
C. Pass such other/further Orders as this Hon’ble Tribunal may
deem fit and appropriate in the facts and circumstances of the present case.”
The petitioner is a cable television
service provider registered under Section 3 of the Cable Television Networks
(Regulation) Act, 1995 and is thus an ‘MSO’.
It 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 the subsidiaries/affiliates/associates/joint
venture companies/firm for re-transmission to the local cable operators and
their ultimate subscribers.
Parties hereto entered into an
agreement on or about 31st July, 2008 for transmitting the signals of
the respondent for the
Prior to entering into the said
agreement, an understanding is said to have been arrived at by and between the
parties on or about 25th June, 2008 , wherefor a memorandum was
drawn up, which reads as under :-
“Memorandum
of Understanding
1. Against an
outstanding of Rs.935106/- (Nine lakh thirty five thousand one hundred six
only) Mr.Ravi Arora of ex network, Win cable Network,
2. Mona Cable
network will start on Rs.1.5 lac per month from June, 08.
3. By any change
if “ALFA MEDIA Pvt. Ltd.” is not switched off the Mona Cable Network will pay
Rs.60000/- pm till Alfa Media Pvt. Ltd. is switched off.”
It is stated that the petitioner and
the aforementioned Alfa Media Pvt. Ltd. were the only MSOs operating in the Town
of
Grand Sports, who is a party to the
aforementioned Memorandum of Understanding is said to be the Distributor of the
respondent. .It has further been contended that Ravi Arora was one of the erstwhile
partners of the petitioner.
The respondent, however, sent a notice
in terms of Regulation 4.1 of Telecommunication (Broadcasting and Cable
Services) Interconnection Regulation 2004 (for short the ‘Regulations’) claiming
inter alia a sum of Rs.2,13,268/- being the outstanding dues. It is, however, accepted that a public notice
was also issued, inter alia in a newspaper ‘Amar Ujala’ on 13th May,
2009 wherein 9 MSOs were named. The
operative portion of the said Public Notice reads as under :-
“Notice is hereby given to
the consumers, Cable TV Operators and general public that signals of the ESPN,
Star Cricket and Star Sports Channels will be disconnected to the above named
distributors for non-payment of outstanding dues and non-signing of subscription
Agreement by them. For the above said
reason the viewers will not be able to view these channels after the completion
of 21 days from the date of publication of this notice. Some of the events that are scheduled for
this period in these channels are, ICC Twenty – 20 World Cup, 2009, Ashes
Series between England and Australia and the ICC Championship Trophy.”
It is at that stage this petition was
filed.
However,
three days prior thereto the amount in question admittedly was paid by the
respondent to the petitioner.
Despite pendency of this application,
the respondent by a letter dated 10th June, 2009 inter alia
contended that the petitioner was guilty of misrepresentation with regard to
the actual number of subscribers base as also transmission of its network beyond
the agreed area. In the said letter the
respondent furthermore alleged that the petitioner might have more than 35000
subscriber base whereas it had been paying subscription fee, only for 1082
subscribers.
In response
thereto the petitioner by its letter dated 27th July, 2009 raised
the following contentions:-
i) It has been working within the town of
ii) The agreement had been entered into by the respondent with the full knowledge with regard to the connectivity.
iii) It was ready
and willing to resolve the pending issues amicably.
Respondent, however, despite pendency
of this application issued another Public Notice on or about 1st
August, 2009, stating:
“Notice is hereby given to
the consumers, Cable TV Operators and general public that signals of the ESPN,
Star Cricket and Star Sports Channels will be disconnected to the above named
distributors for non-payment of outstanding dues transgressing out of area and
non-signing of subscription Agreement by them.
For the above said reason
the viewers will not be able to view these channels after the completion of 21
days from the date of publication of this notice.”
It is accepted that thereafter several
correspondences were exchanged between the parties.
The respondent, however, in its reply
contended that the petitioner has 26000 subscribers.
Mr. Kathpalia, learned counsel
appearing on behalf of the petitioner would contend :
i) As
no amount was outstanding when the notice was issued and as in the letter dated
10th June, 2009, only the purported breach of agreement on the part
of the petitioner was the bone of contention of the respondent, allegations of
transgression of the agreed area, as also the subscriber base were made by way
of an afterthought.
ii) If
the respondent thought that the petitioner had breached the conditions of
supply during pendency of this petition, it should have approached the Tribunal
in that behalf and should not have issued the second Public Notice.
iii) It
is incorrect to contend that the petitioner was not ready and willing to sign any
agreement as from the letters dated 27th July, 2009 and 13th
August, 2009, it would be evident that offer had been made for entering into an
agreement for the subsequent year wherefor even a meeting took place on 24th
August, 2009. Another letter for
reconciliation of the accounts was also served.
iv) The
petitioner has not transgressed the area as alleged by the respondent.
v) The
petitioner has also not made any understatement with regard to the number of
subscribers as alleged.
vi) Having
regard to the price freeze imposed by TRAI the question of any higher base of
SLR or furnishing the particulars in relation thereto did not arise.
vii) The
contention with regard to non furnishing of SLR is incorrect as would be
evident from the following :-
a) The respondent in its Memorandum of
Understanding dated 25th June, 2008 did not make any reference thereto
and agreed to accept a sum of Rs.60,000/- for transmission of the signals in the
city upon negotiations, without any demur whatsoever.
b) Between
June, 2008 and June, 2009 the respondent did not make any whisper with regard to SLR.
c) The
agreement had also been entered into without making any mention of the SLR.
d) None
of the parties to the agreement asked for SLR or variation thereof at any point of time.
e) Respondent
had been raising invoices without reference to SLR.
Mr. Ganpathy, learned counsel
appearing on behalf of the respondent, on the other hand, urged :-
i) The
ground for issuance of the Public Notice so far as the petitioner is concerned,
namely – transgression of area was not referable to the petitioner and as he
had paid the demanded amount prior to the filing of the petition, this petition
was not maintainable.
ii) The
petitioner having started its business with the respondent, it did not intend
to interfere with the supply of signals during currency of the agreement,
iii) The
agreement was in relation to a part of
iv) The
petitioner had not taken any step for renewal of the agreement in time.
v) In
any event no consensus had been arrived at by and between the petitioner and
the respondent with regard to basis of renewal.
vi) Number
of subscribers of the petitioner attributed by the respondents is on the basis
of the informations sought for from the authorities of the Entertainment Tax
Act which clearly goes to show that the petitioner had at least 13000
subscribers.
According to the petitioner it had
been taking supplies of signals in respect of the ‘bouquets’ in question for a
long time in the names of different partnership firms. The petitioner was a partner in the said
partnership firm and allegedly purchased the interest of the other partners to
convert the concern into a proprietory one.
The Memorandum of Understanding
between the parties was followed by an agreement. There cannot be any doubt or dispute that the
parties are bound thereby.
We may
notice certain terms of the agreement dated 31st July, 2008, which
are as under:
“Clause II
AREA(s) to be served by Affiliate:
parts of Sharanpur city
(‘Distribution System(s)’)
(Excluding Hotels, Offices & Other Commercial Establishments, Bars,
Restaurants, Pubs, Guest Houses, Hospitals, Cinema Halls, Theartres, Public
Viewing Areas, Stadium, Clubs and the like for which a separate agreement shall
be required)
Clause III TERM
This Agreement is for a
fixed period of 12 Months and 1 Day and shall be effective from 31-Jul-08 and
31-Jul-09 (“Minimum Term”). It is agreed
between the Parties that upon the expiry of the above said Minimum Term this
Agreement shall come to an end.
Thereafter, if the parties agree to extend the term, a fresh agreement
shall be executed upon such agreed terms and conditions.”
FEES:
Immediately upon execution of this Agreement, based on a
subscriber base as represented by the Affiliate, the Affiliate shall pay to the
Licensor, for the term of this Agreement, total subscription fees of
Rs.9,39,757/-
For purposes of this
Agreement, the ‘Total Subscription Fee’ referred to above shall be equal to the
number of Subscribers, declared by the Affiliate, multiplied by the price per
Subscriber home multiplied by the number of months (term of the contract).
Based on the representations
and subject to fulfillment obligations under this Agreement, by the Affiliate,
the Licensor has offered as discount of Rs.1,38,707/- on the total subscription
fee and therefore, the subscription fees payable by the Affiliate shall be
Rs.8,03,047/- for the term of the Agreement.
Clause (f)
It shall not misuse the
Service and shall not conceal/misrepresent about the number of Sub-operators,
Sub Affiliates/Cable Operators and the number of their respective Subscribers
connected to its Distribution System(s).”
RECORDS AND ACCOUNTS
“8.1 The affiliate shall prepare and provide to the Licensor complete
and accurate monthly subscriber base statement (“Subscriber Base Statement”),
for the Service, by 7th day of each month detailing as under:
i)
Total number of subscribers, including their name,
address and telephone number;
ii)
Maximum Retail prices charged for
the Service;
iii)
Such other information as the Licensor may require
for determining the Subscription Fees.
Upon Licensor’s written request, the Affiliate shall provide number of
subscribers by category, tier, location, sub-operator/last mile operator that
Licensor may require with prior intimation and sufficient Notice to the
Affiliate.
8.2 This obligation shall survive termination of the Agreement until
Licensor receives the Subscriber Base Statement for each relevant month and all
outstanding monies have been paid.”
It is accepted at the Bar that the
number of subscribers of the petitioner was shown to be 1082. The agreement was a subscriber based
one. Subscription fee payable by the
petitioner must have been worked out on that basis.
The
contention of Mr. Kathpalia, however, is that the said figure was arrived at on
the basis of the amount of the subscription fee. It may or may not be correct but this
Tribunal, while determining an issue between the parties in that behalf, unless
otherwise proved, must accept the figures appearing in the record.
Indisputably the matter relating to
transmission of signals is covered by the Regulations framed by the Telecom
Regulatory Authority of India known as the Telecommunication (Broadcasting and
Cable Services) Interconnection Regulation 2004 (for short ‘2004 Regulations”).
Regulation 2(p) of 2000 Regulation
defines ‘subscriber base’ to mean:-
“subscriber base” means the
number of subscribers –
(i) as agreed to by two service providers in a non-addressable
system on the basis of which payments are made by one service provider to the other, or
(ii) as reflected by the Subscriber Management System, where
addressable systems are employed.”
. Regulation 2(q) defines “subscriber line
report” or “SLR” to mean a monthly statement wherein, in a non-addrsseable
system, a multi system operator and a cable operator agree upon the subscriber
base for that month.
Regulation 4.1 reads as under :-
“4. Disconnection of TV channel signals
4.1 No broadcaster or multi system operator
shall disconnect the TV channel signals to a distributor of TV channels without
giving three weeks notice to the distributor clearly giving the reasons for the
proposed action.
Provided that a notice
would also be required before disconnection of signals to a distributor of TV
channels if there was an agreement, written or oral, permitting the distribution
of the broadcasting service, which has expired due to efflux of time.
Provided further that no
notice would be required if there is no agreement, written or oral, permitting
the distribution of the signals.
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.
First agreement between
Multi System Operator and Broadcaster
9.2 In non-addressable
systems, while executing an interconnection agreement for the first time
between a multi system operator and a broadcaster, the multi system operator
shall furnish a list of the cable operators who will be getting signals from
its network along with their subscriber base. The parties to the agreement shall
take into account the subscriber base of cable operators connected to the multi
system operator while negotiating the subscriber base of the multi system
operator. For the consumers proposed to be directly served by the multi system
operator, the procedure as laid down in sub-clause 9.1 of this regulation shall
be followed.
10.1 In non-addressable systems,
the subscriber base agreed upon by the parties at the time of execution of the
interconnection agreement between a multi system operator and a cable operator
shall remain fixed during the course of the agreement except in exceptional
circumstances that warrant an increase or decrease in the subscriber base. In
such an eventuality, it is for the service provider seeking a change in the
subscriber base to provide reasons and accompanying evidence including local
survey for the proposed change.
11. Finalising
Subscriber Base at the time of Renewal of agreement
Between Multi System
Operator and Cable Operator
11.1 In non-addressable systems, negotiations on
revision of subscriber base at the time of renewal of interconnection agreement
between a multi system operator and a cable operator shall take into account
the changes in subscriber base of the cable operator over the past three years,
as well as the changes in subscriber base of other cable operators operating in
the area in which the cable operator is operating and its adjoining areas for
the current period.
12. Monthly Subscriber Base Statement
12.1 In non-addressable systems, the multi system
operators shall furnish the updated list of cable operators along with their
subscriber base to the broadcasters on a monthly basis.
Before adverting to the rival
contentions of the parties, as noticed heretobefore, we may place on record
that a question was mooted before this Tribunal with regard to transgression of
the area by the petitioner. A prayer was
made for immediate survey of the rural areas of
“Counsel for the petitioner
submits that one of the issues is transgression in rural areas. The counsel for
respondent submits that an immediate survey should be conducted to assess
whether there is any transgression in the
rural areas or not. Let the survey be
conducted for finding out the facts about the transgression into the rural
areas at the initiative of the
respondent.
Counsel for the parties agree that Mr. Vibhav
Srivastava, Advocate, present in the Court, may
be appointed as commissioner for conducting the survey. I appoint Mr. Vibhav
Srivastava, Advocate as the Local Commissioner for conducting the survey. Parties will supply necessary material to Mr.
Srivastava to enable him to complete the survey as early as possible. Parties will fully cooperate with him. Fee of the Local Commissioner is fixed at
Rs.20,000/- per day for conducting the survey besides actual expenses for stay
and travel. All expenses will be borne by the respondent since
this survey is being conducted at the initiation of the respondent. The commissioner will be free to take
assistance of any other person. Let the
survey for rural areas start from today itself as requested by the respondent.”
Pursuant
to or in furtherance of the said direction, the Commissioner upon conducting a
survey has submitted a report, paragraph 2 whereof reads as under:-
“2. There was apprehension from the side of the Respondent in
calling of the representative of the Petitioner as the survey is not a joint
survey and more over if the petitioner get to know the exact location of survey
then the Petitioner may switch off that area during survey period therefore I
have not disclosed my exact location to the Petitioner and proceeded for the
survey on 30th Septembr, 2009.”
It is, therefore, not in dispute that
the survey was made behind the back of the petitioner. It was concluded:-
“The channels of Respondent
were coming in Village Dabki Village and Hasanpur Kadim (Manoharpur) which is
seen by me in TV installed in respective villages and the identity of MSO can
be identified the local channels run by the MSO and two of the local channel
has the name of Mona Music & Mona Cinema and other is local news channel
named Channel 9 which on enquiry found to be local news channel run by Mona
Cable Network.
The identity of the MSO
cannot be verified by me in villages Tapri, Samtagarh, Pairagpur, Mavi Kalan
and Chunehti on seeing the TV as there was no electricity and therefore cable
signals were not coming and only inference can only be drawn from the statement
of people which are duly recorded and indicates that Mona Cable Network is
operating in these areas and channels of Respondent is being shown in these
areas.”
The learned Commissioner in our
opinion should not have carried out the survey behind the back of the
petitioner.
No evidence can be collected by an
officer of the court behind the back of the party unless necessitated inter
alia by an emergency. Before a Repot
submitted by the Advocate/Commissioner can be taken on record, it must conform
to the principles of natural justice as also the procedures analogous to the ones
contained in Order XXVI Rule 9 of the Code of Civil Procedure. [See – Mahant Narayana Dossjee Varu v. The
Board of Trustees, the Tirumalai Tirupati Devasthanamas, Tirupathi, AIR
1959 AP 64 and Maroli Achuthan
v. Kunhipathumma, AIR 1968
Kerala 28.
Although the learned
Advocate/Commissioner’s report is inadmissible in evidence, it is apparent that
the petitioner did not even intend to bear the costs therefor. A joint survey was proposed by the respondent
both for the purpose of ascertaining the subscribers base as also for the
purpose as to whether the petitioner has transgressed into the rural area
unauthorisedly.
The agreement clearly provides that
the quantum of subscription fee was entered into having regard to some
subscription base. In that sense it was
not entirely a negotiated contract where subscribers base would have no role to
play. The agreement clearly provides
that increase in the number of subscribers base should be disclosed to the
respondent.
Mr. Kathpalia urged that the agreement
being a negotiated one and having nothing to do with SLR, no question for
updating the subscription base for every month arose in terms of Regulation 8.1
of the Regulations.
We are unable to accept the said
contention in view of the clear stipulations contained in the agreement.
It may be true that it was for the
respondents to produce evidence to show that there has been an increase in the
subscribers base. It may also be true
that the respondent in one of its letters being dated June 10, 2009 and its
reply to the petition had given two different figures as regards subscriber
base, namely 35000 and 26000.
It,
however, appears that the respondent in its reply categorically stated :-
“5. It would also be relevant to mention that the Petitioner is
paying to the Respondent a meagre sum of Rs.66,738/- which represents 1082
subscribers approximately whereas in actual fact as per an independent survey
conducted by the Respondent herein the Petitioner has 26000 (Twenty six
thousand) subscribers. A copy of the
list setting out all the details is enclosed herewith and collectively marked
as Annexure A.
The petitioner responded by
its letter dated July 27, 2009 (received by the Respondent on July 30, 2009)
and suggested a meeting on July 28, 2009.
The enclosure referred to in the said letter was missing.”
The
petitioner in its petition contended :-
“v. The Petitioner submits that since last many years the Petitioner
is receiving feed signals for ESPN Bouquet for the
The respondent traversed the said
allegations contending :
“(v) The contents of paragraph v as stated are denied. It is incorrect to say that for last many
years the petitioner was receiving signals of ESPN. The first and last contract in the name of
M/s Mona Cable was executed by Ravinder Kumar which was effective from July 31,
2008 till July 30, 2009. It would be
relevant to mention here that when the agreement was signed between the
parties, the Petitioner was requested to give particulars of his subscriber
base, the Petitioner stated that since he was just starting his new business,
he would furnish the particulars of his connectivity/subscriber bas at a later
date. However, till date he has not furnished any particulars of his
connectivity/subscriber base to the Respondent.
It would be
relevant to mention that upto December\ 2004, the Respondent used to bill
The said Mr.Ravi
Arora, entered into contract effective March 2005 in the name of Win Cable
Network @ 3000 subs upto June 2007 for payout of Rs.1.43 lacs for two channels
of ESPN and STAR Sports when the rates of the Respondent were Rs.42.48
only. Now the Respondent’s rates for all
their three channels are Rs.66/- and still the Respondent does not receive any
growth in the net payout. The Respondent
signed the contract on lower sub-base, since the Petitioner had newly started
his network and restricted to a very limited area in
·
It is also to be noted when the Respondent
deactivated Win Cable Network in June 2007, this operator had indulged in
piracy in
·
At the time Mona Cable executed the Service Contract
effective July 2008 they had limited Local Cable Operators connected to their
network and therefore the Respondent agreed to provide its service for a
subscription calculated @ 1082 subscriber base.
However this was not a fixed fee as is being contended by the
Petitioner. All over the country, the
Respondent agrees on a subscription fee based on the number of subscribers
attached to a network be it a MSO and/or a LCO.
But over a period of time, i.e. over the last one year, the Petitioner
has grown exponentially in join venture with Hathway and formed Hathway Digital
Saharanpur Cable Datacom Private Limited and/or Hathway Mona Cable Network
Limited and connected the whole of Saharanpur and the adjoining rural areas
comprising of a number of villages without giving any growth to the
Respondent. The Petitioner which
purports to swear by the Regulations conveniently ignores providing to the
Respondent herein updated monthly subscriber base statement as required under
Regulation 12.1. This cannot be
permitted.
·
Today, the sub-base for which the Respondent is
being paid for the entire city of
The respondent sought for the details
of the subscribers of the petitioner under the Right to Information Act, 2005
from the District Entertainment Tax Officer,,
The respondent, therefore, had
proceeded to obtain information from an independent source apart from
conducting its own survey. According to the respondents the number of
subscribers disclosed to the officer of the Entertainment Tax Department might not
be accurate and having regard to the fact that on its own independent survey it
had found that the petitioner had about 25000 subscribers, it opined that the
petitioner might have 26000 subscribers. It is beyond any cavil of doubt that the
number of subscribers of the petitioner would not be less than 13000. In terms of Section 114(g) of the Indian
Evidence Act, a presumption of official acts having been carried out in due course
of business can be drawn; even we may not agree with Mr.Ganpathy that tendency
on the part of a person to evade tax should be presumed.
Respondent, therefore, has discharged its
onus. Even otherwise having regard to
the principles contained in Section 106 of the Indian Evidence Act, the
petitioner should have, in all fairness, produced all the records before the
respondent so as to enable it to arrive at the correct number of subscribers
and on that basis the amount of subscription fee which would have been payable by reason of the
renewed agreement.
In a legal proceeding, a party should
not be allowed to withhold a document in his possession and power merely on the
bases of technical pleas.
The Supreme
Court of
“ Even if the burden of proof does not lie on a party, the
court may draw an adverse inference, if he withholds important documents in his
possession which can throw light on the facts at issue. It is not, in our opinion, a sound practice
for those desiring to rely upon a certain state of facts to withhold from the
court the best evidence which is in their possession which could throw light
upon the issues in controversy and to rely upon the abstract doctrine of onus
of proof.”
[See also Kamakshi
Builders v. Ambedkar Educational
Society, (2007) 12 SCC 27].
It is, furthermore, accepted that no
consensus has been arrived at between the parties in regard to entering into a
fresh agreement and in that view of the matter the earlier agreement must be
held to have come to an end.
Before parting, however, we would like
to place on record that Mr. Ganpathy has categorically stated that his client would
still be ready and willing to renew the agreement with the petitioner upon
negotiation on the basis of an appropriate subscriber base.
We hope and trust that the parties
hereto will arrive at a consensus so that the viewers of television may not
suffer.
For the reasons aforementioned we are
of the opinion that it is not a fit case where the petitioner should be granted
any relief. The petition is dismissed
with costs. Counsel’s fee is assessed at
Rs.50,000/-.
……….…………………..J
[ S.B. SINHA ]
Chairperson
…………………….
[
G.D. GAIHA ]
Member