w w w . L a w y e r S e r v i c e s . i n



INDUSIND MEDIA AND COMMUNICATIONS LTD. VERSUS STAR DEN MEDIA SERVICES PVT. LTD. & ANOTHER


Company & Directors' Information:- INDUSIND MEDIA AND COMMUNICATIONS LIMITED [Active] CIN = U92132MH1995PLC085835

Company & Directors' Information:- G L MEDIA SERVICES LIMITED [Active] CIN = U22110AS1992PLC003745

Company & Directors' Information:- C-STAR MEDIA PRIVATE LIMITED [Active] CIN = U92111TG2000PTC034196

Company & Directors' Information:- MEDIA STAR PRIVATE LIMITED [Active] CIN = U74300MH2001PTC132605

Company & Directors' Information:- C P MEDIA SERVICES PRIVATE LIMITED [Active] CIN = U65921DL1997PTC089994

Company & Directors' Information:- INDIA MEDIA SERVICES PRIVATE LIMITED [Active] CIN = U72200WB2000PTC162796

Company & Directors' Information:- STAR E-SERVICES PRIVATE LIMITED [Strike Off] CIN = U64202DL2005PTC139998

Company & Directors' Information:- DEN (INDIA) PRIVATE LIMITED [Strike Off] CIN = U73100MH2000PTC128523

Company & Directors' Information:- STAR INDIA SERVICES LIMITED [Strike Off] CIN = U80301TG2000PLC034288

Company & Directors' Information:- E-MEDIA SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74200TN2007PTC065700

Company & Directors' Information:- D MEDIA COMMUNICATIONS PRIVATE LIMITED [Strike Off] CIN = U74300AS2011PTC010493

Company & Directors' Information:- MEDIA COMMUNICATIONS (INDIA) PVT. LTD [Strike Off] CIN = U93090TN1987PTC014642

Company & Directors' Information:- S. G. MEDIA SERVICES PRIVATE LIMITED [Strike Off] CIN = U22300DL2010PTC199575

Company & Directors' Information:- STAR COMMUNICATIONS PRIVATE LIMITED [Strike Off] CIN = U74140DL1999PTC102744

Company & Directors' Information:- C R MEDIA SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999WB2011PTC161444

Company & Directors' Information:- MEDIA SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC069853

    Petition Nos.25 (C) of 2010 & 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)

    Decided On, 17 May 2010

    At, Telecom Disputes Settlement Appellate Tribunal New Delhi

    By, THE HONOURABLE MR. JUSTICE S.B. SINHA
    By, CHAIRPERSON
    By, HONOURABLE MR. G.D. GAIHA
    By, MEMBER
    By, & HONOURABLE MR. P.K. RASTOGI
    By, MEMBER

    FOR THE PETITIONER: C.S. VAIDYANATHAN, SENIOR ADVOCATE, ARUN KATHPALIA, MANJUL BAJPAI, ASHISH YADAV, ADVOCATES. FOR THE RESPONDENT: S. GANESH, SENIOR ADVOCATE, GOPAL JAIN, PRATEEK KUMAR, SAURABH SRIVASTAVA, NITIN SHARMA, GOPAL JAIN, PRATEEK KUMAR, ADVOCATES.



Judgment Text

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 India Pvt. Ltd. Vs. Indus Media and Communications Limited, in its order dated 17th January, 2006 held as under :-


?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 a

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s 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.
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