S.N. CABLE Vs SILVER LINE BROADBAND SERVICES PVT LTD

S.B. SINHA

Interpreta on and/or applica on of the order of this Tribunal dated 20.5.2010 passed in Pe on No. 157 (C) of 2008 of this Tribunal direc ng M/s. Zee Turner Ltd. to enter into an agreement for supply of signal of its channels on a subscriber base of 10,000 is the ques on, which arises for considera on in this Pe on.

2. The pe oner is a Local Cable Operator. The respondent is a Mul Service Operator and is engaged in distribu on of Cable Television Services to its local cable operators in the city of Kolkata.

Admi edly, the pe oner in its capacity as a local cable operator had entered into an agreement with the respondent herein on or about 05.05.2006 to provide cable television services to its network. As per the said agreement, the subscriber base was to be determined in terms of Clause 4 thereof i.e. in terms of the number of subscribers maintained by the pe oner in its register with their names and addresses.

According to the pe oner, in compliance of the terms of the agreement, he had also been sending on quarterly basis the list of subscribers. It is on such declara on of the subscriber base, which according to the pe oner is 125 only, the respondent has been raising invoices.

The respondent had some disputes with regard to the renewal of agreement with the broadcasters, for which it approached this Tribunal by filing the aforemen oned pe on. By an order dated 05.10.2010 purported to have been passed therein, it was directed :- “We therefore are of the opinion that subject to the direc on, that a joint survey should be concluded so as to the par es hereto can arrive at a nego ated subscriber base, we direct that for the me being the respondents shall enter into agreements with the pe oner on a subscriber base of 10000. The pe oner however must make payment of the monthly subscrip on fee to the broadcaster on a regular basis”

3. The respondent herein by a le er dated 07.10.2010 asked the pe oner to pay the subscrip on fee on the basis of 603 subscribers in stead and in place of 125 subscribers, inter-alia on the premise that by a reason of the said order, this Tribunal by direc ng the subscriber base has effected 382% increase therein, as originally the subscriber base of the respondent was only 2076.

4. The pe oner is, thus, before us, ques oning the validity of the said demand, praying inter-alia for the following relief :

“direct the Respondent to accept the payment of subscrip on charges on the basis of 125 subscribers.”

5. The respondent in its reply inter-alia stated :

“4. That earlier as an interim arrangement the Respondent was directed to pay to the said Broadcasters @ 7,500 Subscribers which the Respondent has been paying with the expecta on that the excess payment will be refunded back to the Respondent when the actual connec vity of the Respondent is arrived at a er the joint survey which ought to have been conducted by the Broadcasters and the Respondent under the direc ons of this Hon’ble Tribunal given by this Hon’ble Tribunal vide its order/judgment dated 20.05.2010, which survey has not been conducted by any of the Broadcasters, thus the Respondent has no other op on but to comply with the direc ons of this Hon’ble Tribunal.

5. That is very humbly submi ed that earlier the Respondent has not demanded increased subscrip on and had con nued to pay to the Broadcaster on the basis of 7,500 as against the declared connec vity of 2,086 subscribers out of its pocket just in order to sustain itself in the Cable TV business coupled with the expecta on that excess payment will be refunded back to the Respondent when the actual connec vity of the Respondent is arrived at a er the joint survey and now it has become very difficult for the Respondent to pay to the Broadcasters on the basis of either 7,500 or on the basis of 10,000 subscribers as the connec vity as declared by the sub-operators/local cable operators of the Respondent including the Pe oner, is much less than what the Respondent has been made liable to pay and in the peculiar facts and circumstances the Respondent has no op on but to rely on the unilateral survey report of the Broadcaster (which has been relied upon by this Hon. Court to fix the liability of the Respondent) and demand increased connec vity from the Pe oner.”

6. It was furthermore stated :

“8. That it is submi ed that the Respondent had a Subscrip on Agreement with STAR for the year 2007 @ 7,500 Subscribers, which Agreement was signed on 06.03.2007. In the month of June 2007, the Subscribers of the Respondent were further decreased to 3,720 because it could not get signals of ZEE Turner, Sony and ESPN and it became very difficult for the Respondent to pay @ 7,500 subscribers and therefore, the Respondent contacted STAR and updated STAR about the changed scenario and requested STAR to decrease the subscrip on amount. The Respondent started paying on the basis of the reduced subscrip on amount, which payments were duly accepted by STAR without any objec on. With the con nuing situa on the Cable Operators of the Respondent started leaving the Respondent for joining some other MSO, who were having the signals of all the other broadcasters also and in this situa on it became very difficult for the Respondent to con nue with STAR Bouquet-I only and hence the Respondent, vide its le er dated 08.08.2007, with mutual consent of both the par es to se le the accounts with STAR, submi ed the new and updated SLR and vide its le er dated 30.8.2007 requested STAR to issue the Invoice from the month of June 2007 on the basis of the new SLR and the agreement came to end with mutual consent of both the par es.”

7. A ques on, which arises for our considera on, is as to whether the respondent can increase the subscriber base propor onately purported to be pursuant to the order of this Tribunal dated 05.10.2010, so far as the subscriber base of the pe oner and other LCOs are concerned.

8. The pe oner was not a party to the aforemen oned Pe on No. 157 (C) of 2008.

The dispute between the respondent herein and the broadcaster was strictly between the par es to the said lis. If the respondent thought it fit that it was unable to con nue to pay the subscrip on amount on the subscriber base of 10,000, the only remedy available to it was to approach this Tribunal for review of the order. It could have preferred an appeal also against the said order before the Supreme Court of India.

We are informed at the Bar that the respondent did file an appeal and as also filed a Review Applica on, but the same had been dismissed.

The order of this Tribunal, therefore, a ained finality. The aforemen oned order dated 20.5.2010 was a condi onal order. The joint survey, according to the respondent itself, has not yet been carried out. The respondent, in our opinion, in the aforemen oned situa on could not have asked the pe oner to pay a subscrip on fee on the basis of subscriber base of 603 in stead and in place of 125.

9. Mr. Bhagat, the learned counsel appearing on behalf of the respondent would urge that what has been done is to call upon the respec ve LCOs to pay the increased subscrip on fees propor onately on the premise that if the respondent was responsible for certain under-declara ons, the pe oner and other LCOs must have also under-declared.

10. In law, we are afraid, such a course of ac on cannot be taken. The par es hereto have entered into an agreement with their eyes wide open. They are bound by the terms thereof. 11. No nova on of the contract is permissible unilaterally by any other party. A contract must be preceded by agreement on the part of the par es with regard to its terms & condi ons consequently any altera on in the terms & condi ons and that too in terms whereof a fiscal liability is cast on the one party to the contract can be altered/thrust upon to the prejudice of the other without its consent.

This has been so held by the Supreme Court of India in Bharat Sanchar Nigam Ltd. & Anr. Vs. BPL Mobile Cellular Limited and Ors. reported in 2008 (13) SCC page 597.

12. The effect of an order passed by the Tribunal was not such that the pe oner would automa cally be bound thereby.

13. Mr. Bhagat, the learned counsel appearing on behalf of the pe oner, would submit that the respondent could issue the impugned no ce in terms of Clause 4.1 of the Regula ons.

The said provision read thus :

“No broadcaster or mul system operator shall disconnect the TV channel signals to a distributor of TV channels without giving three weeks no ce to the distributor clearly giving the reasons for the proposed ac on. Provided that a no ce would also be required before disconnec on of signals to a distributor of TV channels if there was an agreement, wri en or oral, permi ng the distribu on of the broadcas ng service, which has expired due to efflux of me. Provided further that no no ce would be required if there is no agreement, wri en or oral, permi ng the distribu on of the signals”

A bare perusal of the aforemen oned provision would clearly go to show that the subscriber base declared by a local cable operator or a Mul Services Operator shall not be varied save and except in the manner laid down therein.

One of the ingredients of the aforemen oned provision is existence of an excep onal circumstances which warrants increase or decrease in the subscriber base. However, the increase and decrease in the subscriber base can be effected only when all the condi ons precedents provided for therein are fulfilled namely :- i) Assignment of Reasons; and ii) Furnishing of evidence including local survey.

The impugned le er of the respondent evidently postulated a change in the condi ons of the agreement. It was issued only on one ground namely Order passed by this Tribunal dated 20.5.2010. An Order passed by a court of law ipso facto cannot be a ground for effec ng change in the subscriber base in a situa on of the present nature. The Order was passed by this Tribunal in a ma er between the respondent and M/s. Zee Turner Ltd. The pe oner was not a party thereto. There is nothing to show that it would be bound by the said order.

14. Mr. Bhagat, however, would contend that this Tribunal relied upon some survey purported to have been conducted by the broadcaster.

th The impugned le er has not been issued relying on or on the basis of the said survey. The said order dated 20 May, 2010 was passed inter-alia keeping in view the fact that the respondent had entered into an agreement with ‘Star’ for 15,000 subscribers. It was on amongst other reason th that an order was passed for the me being subject to the result of a joint survey. The said order dated 20 May 2010, therefore, was not binding on the pe oner.

rd 15. The order of this Tribunal was meant to be acted upon by the par es thereto and not by a 3 party to the lis and who had entered into a separate agreement with the respondent.

16. We, therefore, are of the opinion that the ac on on the part of the respondent cannot be said to be valid or legal.

It is, therefore, set aside.

17. This pe on is allowed and it is directed that the pe oner shall con nue to pay the subscrip on fee in terms of the agreement dated 05.05.2006 unless and un l a case is made out for invoca on of Clause 10.1 of the Regula ons.

In the facts and circumstances of this case, however, there shall be no order of costs.

……………J (S.B. Sinha)

Chairperson

..…………….. (G.D. Gaiha) Member

……………… (P.K. Rastogi) Member rkco