.TELECOM DISPUTES
SETTLEMENT & APPELLATE TRIBUNAL
DATED 28th May, 2009
Petition No. 99(C)
of 2005
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Hathway
Media Vision Private Limited Formerly
known as “United Cable Network Private Limited”, Rahejas,
4th Floor, Corner
of Santacruz
(W), Mumbai –
400 054. |
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…………….….Petitioner |
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Vs |
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M/s.
Spider Cables A sole
Proprietary concern of Mr. Govind Tejram Mehra, having office at H Block, Shiv
Niwas, Lala Lajpatrai Marg, Tulsiwadi, Mumbai –
400 018. |
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………………Respondent |
BEFORE :
HON’BLE MR. JUSTICE ARUN KUMAR,
CHAIRPERSON
HON’BLE MR. G.D. GAIHA, MEMBER
For Petitioner : Mr. Arun Kathpalia
Mr. Nasir Husain, Advocates
For Respondent : Mr. Meet Malhotra
Mr.
O R D E R
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1. |
The
present petition is filed by M/s. Hathway Media Vision Private Limited (formerly known
as “United Cable Network Private Limited”) against M/s. Spider Cable,
a sole proprietary concern represented by Mr. Govind Mehra, a cable TV
operator, operating in the vicinity of Worli area within the city of Mumbai,
for making payment of the outstanding cable TV feed charges to a tune of Rs.
58,39,732/- by the respondent on account of persistent default, for a
considerable period of time. On the
said amount petitioner also claims interest amounting to Rs.18,37,452/- @ 18%
per annum, which creates an alleged total liability of Rs.76,77,184/- upto
Sept, 2005 upon respondent towards petitioner. |
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2. |
The
petitioner claims to be a Multi System Operator (MSO) and signed an agreement
with the respondent on 4.11.1998.
Subsequent to this agreement another distribution agreement was also
signed between the parties on 29.07.1999.
The initial agreement dated 4.11.1998 is for obtaining the signals
from the petitioner for performing the cable operations in its network on the
basis of the input charges as agreed upon mutually by the parties. This agreement also envisages various other
services, which were to be rendered by the respondent to United Cable Network
(presently M/s. Hathway Media Vision Pvt. Ltd.) on payment of Rs. 6 lakhs as consideration from
the petitioner in the manner as specified in the annexure to the
agreement. The distribution agreement
dated 29.7.1999 signed between the parties, also mentions that the respondent
is one of its cable operators taking feed from the |
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3. |
When
this matter came up for hearing on 7.07.2008 the question of jurisdiction of
this Tribunal to hear and decide this case was raised by the counsel for
respondent. In response, the counsel for petitioner raised a preliminary
objection that the point of jurisdiction has not been pleaded by the
respondent in its reply cum counter claim.
In response to this objection, it was pleaded by the counsel for
respondent that it is settled law that maintainability of petition on the
point of inherent lack of jurisdiction
of the Courts can be argued even without making a mention of the same in the pleadings
and at any stage of proceedings. The
counsel for respondent also argued that as per the provision of the The Telecom
Regulatory Authority of India Act, 1997 (hereinafter to be referred as TRAI
Act, 1997), the disputes covered under the Act are disputes directly relating
to telecom services. The counsel for respondent further argued that in the
present case the subject matter of TRAI Act,1997 is the terms and conditions
of inter-connectivity between two service providers and settlement of dues
between them in the realm of a regulated contract. It was also argued that, the instant
disputes arise out of general law of contract and do not exclusively involve
recognition, observance or enforcement of any special/regulated right or
obligation under the TRAI Act, 1997 and, therefore, since the disputes arise
in general law of contract, the remedy lies in the Civil Court, even though
such a dispute may also constitute a telecom dispute in some manner. In
this connection it was also argued that the agreement which is subject matter
of dispute between the parties is of 1998 i.e., pre-Regulation stage. Therefore, telecom Regulations do not apply
and the matter is purely in the realm
of contract and for contractual disputes normal civil courts will have
jurisdiction. |
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4. |
It
was further argued that as per Section 14 of the TRAI Act this Tribunal is
empowered to adjudicate any dispute between two or more service providers,
however, the word ‘any’ cannot be given such a wide amplitude and meaning so
as to cover each and every type of civil dispute between service providers
like dispute regarding copyright or
trademark or tenancy which have no connection with telecom activity. |
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5. |
The
counsel for petitioner has vehemently opposed the contention of the counsel
for respondent on the ground that the present petition relates to a claim by
the petitioner against the respondent on account of signals supplied. The main dispute is regarding recovery of
dues by one service provider from the other service provider, on account of
supply of signals and, therefore, it falls within the jurisdiction of this
Tribunal. The learned counsel for petitioner
brought to our notice the preamble of the Act which provides the setting up
of the Telecom Regulatory Authority of India and the Telecom Disputes
Settlement and Appellate Tribunal to regulate telecommunication services,
adjudicate disputes, dispose of appeals and to protect the interest of
service providers and consumers of the telecom sector, to promote and ensure
orderly growth of telecom sector, and for matters connected therewith or
incidental thereto. The main emphasis
laid by the learned counsel for petitioner that besides regulating the
telecom services (which includes broadcasting services also by a notification
dated 9.1.2004 issued by the Govt. of
India), this Tribunal has been empowered to settle disputes for matters
connected therewith or incidental thereto also in both the sectors. The counsel brought to our notice the
judgment of this Tribunal in BPL
Communications Ltd. Vs. Mahanagar Telephone Nigam Ltd., in Petition No. 148
of 2005 decided on 19th March, 2005 in which dispute was about
charges for the space in a telephone exchange of the MTNL in Mumbai. This Tribunal entertained the dispute and
the MTNL was directed not to charge exorbitant amount by way of rental for
space for installing the interconnect equipment being used for telecommunication
purposes. The learned counsel has
drawn the inference from this case that, even the rental of the space
occupied by equipment was adjudicated under the Act, which is a matter
connected with the regulation of Telecom Services. Besides, the preamble to the Act, Section
14, Section 16 and Section 19 were referred, to emphasize that the amplitude
of the power of this Tribunal is very wide and the word ‘any dispute’ means
all and every dispute which can be settled by this Tribunal. At this stage we would like to quote
Section 14 of the Act as it is the main provision for present purposes. “Section 14.
Establishment of Appellate Tribunal - The
Central Government shall, by notification, establish an Appellate Tribunal to
be known as the Telecom Disputes Settlement and Appellate Tribunal to – (a)
adjudicate any dispute – (i)
between a licensor and a licensee; (ii)
between
two or more service providers; (iii)
between a service provider and a group of
consumers; Provided
that nothing in this clause shall apply in respect of matters relating to – (A) the
monopolistic trade practice, restrictive trade practice and unfair trade
practice which are subject to the jurisdiction of the Monopolies and
Restrictive Trade Practices Commission established under sub-section (1) of
section 5 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of
1969); (B) the
complaint of an individual consumer maintainable before a Consumer Dispute
Redressal Forum or a Consumer Disputes Redressal Commission or the National Consumer
Redressal Commission established under section 9 of the Consumer Protection
Act, 1986 (68 of 1986); (C) dispute
between telegraph authority and any other person referred to in sub-section
(1) of section 7B of the Indian Telegraph Act, 1885 (13 of 1885); (b) hear
and disopose of appeal against any direction, decision or order of the
Authority under this Act. The judgment of the |
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6. |
The
learned counsel for petitioner argued that barring of the jurisdiction of the
“ Civil Court not to have jurisdiction - No
civil court shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which the Appellate Tribunal is empowered by or under
this Act to determine and no injunction shall be granted by any court or
other authority in respect of any action taken or to be taken in pursuance of
any power conferred by or under this Act.” The
learned counsel for petitioner raised a question as to whether a broadcaster
can go to a civil court for any of its claims against a MSO or cable operator
irrespective of the amount of claim?
The answer is a clear ‘no’. He
strongly contended that no |
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7. |
The
learned counsel brought to our notice Regulation 3.2, 3.3, 3.6 and 4. In each of these Regulations there is a provision
in regard to default in payment of
dues not only current but also arrears and non-payment of dues may result in
disconnection of signals by following Regulation 4. To emphasize the issue of dues arising out
of a relationship between Broadcaster, Multi System Operator/Local Cable
Operator, the learned counsel for petitioner argued that the interconnection
for transmission of signal is always for a consideration and any dispute
about the consideration involved in the process, is well within the purview
of this Tribunal. The Regulation 3.2
provides that any MSO may deny signals
to a LCO on account of non-payment of dues of the previous MSO and similarly,
it can disconnect signals to the LCO after observing the provisions in
Regulation 4. In such an event also
this Tribunal decides whether any amount is outstanding or not between the
parties and, therefore, it has absolute jurisdiction to decide the case
relating to recovery of dues. |
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8. |
It
was also brought to our notice by the learned counsel for petitioner that
TDSAT has framed Procedure Rules, 2005 wherein fees has been prescribed for
petitions for recovery of money as per the Rule 4(ix). The petitioner’s counsel has submitted
that, on all counts, this Tribunal has got undisputed jurisdiction to hear
matters relating to recovery of dues. |
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9. |
So
far as the objection of the learned counsel for petitioner that since the
preliminary objection has not been
pleaded in the reply, it cannot be entertained now, is concerned, we do not
find any force in it. In our view the
nature of objection being purely legal which goes to the root of the matter,
there is no bar to it being considered at any stage and without being
specifically pleaded. However, there
is another fact which need to be stated here.
The respondent has not only not taken any objection about jurisdiction
of the Tribunal, it has filed a counter claim i.e. it has submitted to the
jurisdiction of this Tribunal without demur. Therefore, this point need not detail us. |
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10. |
After
carefully going through the arguments of the learned counsel for appellant
and respondent, we are of the view that it is most important to understand the nature and purport of the
statutory provisions. The TRAI Act,1997
is a substantive statute and provides mechanism for adjudication of disputes
between the service providers. It is
evident that the Government intended to bring under one Act, the entire
matter relating to telecommunications, which also includes broadcasting, after
issuance of the notification dated 9.1.2004.
If there was any intention to restrict Section 11 of the TRAI Act, the
purpose for which this Act has been enacted shall be defeated. In
COAI Vs. UOI, AIR 2003 SC 899, the objective and intent of this Act has been clearly
brought out. “
Having regard to the very purpose and object for which the Appellate Tribunal
was constituted and having examined the different provisions contained in
Chapter-IV, more particularly the provision dealing with ousting the
jurisdiction of Civil Court in relation to any manner which under the
Appellate Tribunal is empowered by or under the Act, as contained in Section
15, we have no hesitation in coming to the conclusion that the power of the
Appellate Tribunal is quite wide, as has been indicated in the statute itself
and the decision of this Court dealing with the power of a Court exercising
appellate power or original power, will have no application for limiting the
jurisdiction of the Appellate Tribunal under the Act.”…..…. “The learned
TDSAT should have borne in mind that its decision on fact and law is final
appeal lies to this Court in terms of Section 18 of Act only on substantial
question of law. It, therefore, was
obliged to determine the questions of law and facts so as to enable this
Court to consider the matter if any substantial question of law arises on the
face of the judgment.” |
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11. |
The
main issue in this petition is the recovery of dues from the Local Cable
Operator by a Multi System Operator.
The amount of claim as per the agreement may not be substantial,
however, this in any way cannot change the nature of the petition and the
petition has to be treated as a recovery petition for outstanding dues
between two service providers on account of the signals made available by the
petitioner to the respondent for dissemination of the same to its
customers. The fact that both parties
are service providers is admitted. A
large number of cases before this Tribunal are in the field of broadcasting which belong to
the category of recovery of dues. Regulations contain mechanism for recovery
of money. Regulation 4.1 and
Regulation 4.3 are reproduced below: “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.” “4.3 A broadcaster/multi system operator/distributor
of TV channels shall inform the consumers about such dispute to enable them
to protect their interests.
Accordingly, the notice to disconnect signals shall also be given in two
local newspapers out of which at least one notice shall be given in local
language in a newspaper which is published in the local language, in case the
distributor of TV channels is operating in one district and in two national
newspapers in case the distributor of TV channels is providing services in
more than one district. The period of three weeks mentioned in
sub-clause 4.1 and 4.2 of this
regulation shall start from the date of publication of the notice in the
newspapers or the date of service of the notice on the service provider,
whichever is later.” We
also notice that the disconnection of signals is primarily because of
non-payment of the dues or unauthorized cable casting beyond the scope of the
agreement between the service providers.
The unauthorized cable casting also indirectly generates an
outstanding amount because of the increased viewership vis-à-vis the number
mentioned in the agreements and, therefore, falls in the category of
realization of outstanding dues. The
notices under Regulations 4.1 and 4.3 are issued in large number of cases
because of alleged outstanding subscription amount. The learned counsel for respondent, has
referred to the obligations created for the respondent in the capacity as
distributor of the petitioner by virtue of a part of the initial agreement
dated 4.11.1998 and subsequent distribution agreement dated 29.07.1999, which
is also related to the business of dissemination of signal to the customers
of the petitioner including the realization
of the dues from the cable operators, verification of the declaration
given by the cable TV operators of the petitioner, maintaining a vigil on the
quality of service and work as a representative of the petitioner with
respect to liaison between the petitioner and its affiliates. On this basis he submits that it is a
peculiar contract giving rise to general obligations which can be agitated
only before a civil court. We are
unable to agree with the learned counsel for respondent. The agreement is composite one and
admittedly has telecom disputes within its ambit. It is also admitted that both parties are
service providers within the meaning of Section 14 of the TRAI Act. We cannot consider these activities to be
outside the scope of the broadcasting sector and, therefore, the claims
raised by the petitioner alongwith the counter claims raised by the
respondent are well within the scope of adjudication of this Tribunal. We, therefore, uphold that the present
petition falls within the ambit of Section 14 of the TRAI Act and, therefore,
is to be adjudicated upon by this Tribunal.
At this stage we may also deal with another argument advanced by the
learned counsel for respondent. It is
submitted that Sec. 14 of the Act deals with only parties to dispute and not
disputes. This is not correct in view
of the fact that Sec. 14 uses the words “any dispute” which means there is
reference to parties as well as disputes.
This argument is, therefore, liable to be rejected. |
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12. |
Before
we conclude we would also like to deal with another argument of the learned
counsel for respondent. It was argued
that the agreements i.e. subject matter of this case are of pre-Regulation
stage and, therefore, the Regulations cannot be pressed into service. In our view the dispute has arisen much
after the Regulations have come into force and, therefore, the Regulations
shall be applicable in this case for dispute resolution between two service
providers. This argument, therefore,
has no merit. We reject the preliminary objection
raised by the learned counsel for respondent regarding jurisdiction of this
Tribunal to try this petition. |
…………………….J
(Arun Kumar)
Chairperson
………………….
(G.D. Gaiha)
Member