VIJAY COMMUNICATIONS Vs SUN 18 MEDIA SERVICE PVT. LTD

It filed a petition before this Tribunal against the respondent for providing IRD boxes/decoders. A joint survey is stated to have been conducted. According to the petitioner it had a subscriber base of 148 which went upto 1450. However, as on 30.4.2009 it had a subscriber base of 1115 subscribers. Admittedly, an agreement was entered into sometimes in April, 2008. It is not disputed before us that respondent had been serving invoices upon the petitioner on the subscriber base of 3000. A notice under Clause 4.1 of the Telecommunication (Broadcasting & Cable Services) Regulations 2004 was issued on 23.3.2009, inter alia, on the premise that the petitioner has defaulted in payment of a sum of Rs.1,33,987.90. After issuance of the said notice, petitioner contended it had only 40-50 subscribers. It sent a demand draft of Rs.25,000/- on 31.3.2009. Another demand draft was sent on 30.4.2009 by petitioner with a forwarding letter and also a Subscriber Line Report of 1115 subscribers. Yet again the petitioner sent a letter stating that it had only 748 connections as on 17.6.2009. However, SLR showing a subscriber base of 1115 was sent on 30.6.2009.

The petitioner tendered varying sums to respondent. It had sent a sum of Rs.20,000/- for MP4 IRD boxes and issued two DDs for Rs.16,603/- for the months of September and October, 2009. The petitioner contends that respondent obtained a standard blank agreement form from it on or about 15.10.2009. The petitioner by various letters inter alia raised a contention as regard its varying subscriber base and accordingly tendering varying amounts. A contention was also raised that the distributor of the respondent Mr. K. Narayana Prasad had shares in Coastal Communications (Siti Cable) which had been acting as a rival MSO being the local distributor of respondent. However, it appears that one Shri G. Suryanarayana of Coastal Communications asked the petitioner to supply some documents for the purpose of renewal of the agreement. The petitioner allegedly supplied the relevant documents on 22.12.2010. The petitioner contends that the local distributor of the respondent had been creating various problems and did not sign the renewed agreement. A public notice was issued on 14.6.2011 wherein it was, inter alia, stated that a sum of Rs.11,59,538/- was outstanding from petitioner.

Mr. B.S. Sai, learned counsel appearing on behalf of petitioner would contend that respondent has acted illegally in issuing the said notice purported to be on the basis of subscriber base of 3000 although it’s subscriber base had all along been 1115 only.

The learned counsel contended that the petitioner had been paying a sum of Rs.16,603/- by way of subscription fee although under the agreement; demand for a sum of Rs.44,671.50 was being made. It has not been disputed that invoices were being served upon the petitioner although the same have not been filed before us. Mr.Sai, however, in response to a query made by us has produced a copy of the invoice dated 6.1.2011 from a perusal whereof it appears that the subscription charges demanded by respondent was Rs.40,500 which presumably was on the basis of subscriber base of 3000. The arrears have been shown in two parts; (i) pertaining to accounts of the respondent for the period after it had taken over the supply of signals of the channels in question; and (ii) pertaining to the period during which its predecessor in interest had been doing so viz Sun Direct Services (SDS) which remained outstanding and became payable to respondent. As in January, 2011 the total dues said to be due from the petitioner was Rs.207,357.50 paise and those on account of SDS was Rs.8,18,594.40 paise. It may be true that the outstanding had accumulated because of the difference in the demand and payment.

But, the fact remains that petitioner although intermittently had been complaining about the actual subscriber base, it neither terminated the agreement nor questioned the validity thereof before this Tribunal. In a situation of this nature where petitioner has raised a contentious issue that it had only signed a blank agreement and its subscriber base was much less than for what it was being charged, it was expected that it would have approached this Tribunal immediately upon coming to know thereabout. The petitioner is guilty of serious delay and latches on its part. The terms of contract between parties are contained in a commercial document. Non-supply of a copy of the agreements amounts to violation of the provisions of the Regulations framed by the TRAI. If the assertion of the petitioner is correct, it ordinarily should have approached this Tribunal or at least made a complaint to the TRAI. Indisputably it had been receiving invoices wherefrom also it becomes evident that the subscription fee was being charged on the basis of the subscriber base of 3000. Even the arrears were also being shown in the invoices as is required under the Regulations.

Supply of signals had started from 2008. Blank agreements in standard forms are alleged to have been procured from the petitioner, the last one being dated 15.10.2009.

The said agreement has also admittedly expired on 14.10.2010. The petitioner is said to have asked respondent to execute a fresh agreement in August and September, 2010. However, the statements made in its letter dated 27.8.2010 issued in that regard were vague, as would appear from the following:- “According to the words said by your company Executive and Distributor about repayment of some amount in the last year, till today I paid Rs.4,33,809/- for IRD Boxes and Rs.20,000/- for the new Mpeg-4 boxes. In the previous letter I had already informed you about the increase in my connectivity that is from 748 connections by Feb 2009. At present I had a total of 1115 connections for March 2010 but etv increase recently hon’ble Tdsat orders conducted joint survey subscriber base decided 1170 but invoice razing by 1200 subscribers. The same connectivity rising invoice or I am always ready to conduct joint survey I am co-operate to your company executives. For august, 2010 Actual payment I have to pay is Rs.4,14,432/- but I have paid Rs.4,33,809/- so you had excess amount Rs.19,377/- which I want you carry that payment for next months to onwards monthly payment. As I had already paid Rs.2,00,000/- deposit so, I request you to under stand my network necessities and convert some amount from deposit to the invoice accounts. Regarding all this issue I can explain to your Area Executive Mr.Uday Kiran. According to Hon’ble TDSAT Petition No.149(C) of 2009, ETV channel conducted joint survey on our network at reported that we had 1115 connections. They did agreement with us for 1200 connections. You company Area Manager Mr. Chowdhary took my signature on blank agreement. Again on the day of issuing Mpeg-4 boxes you took my signature on blank agreement. So I request you to ful fill the agreement for this connectivity and also give me one copy of it.”

Be that as it may, the petitioner on the one hand, had allegedly been sending SLRs but, on the other, had been requesting the respondent for a joint survey. The petitioner by a letter dated 19.1.2011 addressed to the respondent requested “I request you to conduct the joint survey and do the agreement on subscriber base and informed me before 7 days.” Letters in similar terms had been sent on 19.1.2011. To the similar effect various letters have been issued which are annexed to the petition. The fact, however, remains that even the period of three months from the date of expiry of the agreement has expired on or about 14.1.2011. If that be so, the petitioner should have approached this Tribunal within the aforementioned period or enter into an agreement with respondent. At this stage keeping in view the fact that the matter is at an interim stage and being heard without giving any opportunity to respondent to file any reply, it must be placed on record that the fact remains that the petitioner was made known of its liabilities to pay a higher amount of monthly subscription charges a long time back.

If a copy of the agreement had not been supplied to it, even on that ground it should have approached this Tribunal before expiry of the agreement. It is difficult to accept the contention of petitioner as regards the actual subscriber base after the expiry of the agreement and the same having been worked out. It had been making various allegations against the distributor of the respondent but it has not been impleaded as a party. In its absence it would be difficult for us to appreciate the submissions of Mr. Sai that it is a rival MSO or that it had been causing any disturbance to its network. Moreover, the distributor itself had asked the petitioner for renewal of the agreement. We do not know whether the petitioner has received any reply to its various letters addressed to the respondent. It has also not filed the invoices which were being received by it. It, therefore, has suppressed material documents which were necessary to be brought on record. Furthermore, the period of agreement is also over. We may notice Clause 8.1 of the Regulations. “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 date of disconnection of the signals.”

In terms of the second proviso appended to the said clause only a public notice in the manner prescribed therein is required to be issued. If such a public notice is issued, the respondent is entitled in law to discontinue supply of signals. For the said purpose even no other or further reason is required to be assigned. In any event, the fact that the agreement between the paties expired in October, 2010 is admitted and we are merely to consider the effect thereof in law. We, at this stage, are mainly concerned with the contention of the petitioner vis-à-vis the legal implications arising from the expiry of the agreement in the light of Clause 8.1 of the Regulations.

The petitioner, therefore, has no legal right to continue to obtain supply of signals of the channels of respondent to its network. Recently, on 8.6.2011 this Tribunal in Petitions No. 288(C) of 2011, 289(C) of 2011, 290(C) of 2011, 293(C) of 2011 entitled S.R.Cable TV Pvt. Ltd. vs. Star Den Media Services Pvt. Ltd. opined as under: “Having heard the learned counsel for the parties and keeping in view the fact that the existing agreement has expired as far back on 31.12.2010 and furthermore as the petitioner has not furnished the details of its subscriber base to the broadcaster even in May, 2011, despite having been asked to do by broadcaster as in January, 2011, we are not inclined to pass any interim order in this petition.”

I have my own doubts whether doctrine of implied contract as adumbrated in Haji Mohammed Ishaq Md. S.K. Mohammed and Ors vs. Mohamad Iqbal and Mohamed Ali & Co. (1978) 2 SCC 493 or the well known treatise of `Chitty on Contract’ would be applicable in the instant case. The parties are governed by the Regulations. The TRAI by reason of 5th Amendment Regulations 2009 (4 of 2009) inserted Clause 4A providing that all inter connect agreements must be in writing. A copy of the said agreement is also required to be supplied to the MSO/LCO.

An interconnection agreement in that view of the matter must not only be in writing but also must be executed by the parties thereto. It is one thing to say that in a case involving second proviso appended to Clause 8.1 of the Regulations would not be subject to Clause 4A thereof, but it is another thing to say that despite expiry of the agreement and lawful termination thereof as also the fact that supply of signals has lawfully been stopped upon service of a notice in the manner provided for under Clause 4.3 of the Regulations, an order of injunction can be passed. A broadcaster is only required to comply with the provisions contained in the Second Proviso appended to Clause 8.1 to supply of signals. Once it is done no other formality is required to be complied with. [See for example ESPN Software India Pvt. Ltd. vs. Fastway Transmission Pvt. Ltd., Petition Nno.435(C) of 2010.] Moreover, the legal right of the parties for the purpose of considering grant of interim relief would prima facie depend on the terms of the agreement. Sections 91 and 92 of the Evidence Act prohibits adduction of any evidence contrary thereto and inconsistent therewith. In a case of this nature the petitioner was required to establish a strong prima facie case inasmuch as according to it, it was required to pay only a sum of Rs.16,603/- in stead and in place of the invoice amount of Rs.44,670.50. As the petitioner has failed to establish even the said fact, it may not be possible for us to direct continuation of supply of signals to the petitioner’s network as has been sought for. For the reasons aforementioned, the petitioner is not entitled to an interim order of injunction as has been prayed for.

However, the hearing of this petition shall be expedited.

(S.B. Sinha) Chairperson

July 28, 2011 `anu’