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TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL
NEW DELHI
DATED 25TH APRIL, 2012
Petition No.119 (C) of 2011
(With M.A. No.180 of 2011)
Kansan News Pvt. Ltd. … Petitioner
Vs.
Fastway Transmission Pvt. Ltd. & Ors. … Respondents
BEFORE:
HON’BLE MR. JUSTICE S.B. SINHA, CHAIRPERSON
For Petitioner : Mr. Tejveer Singh Bhatia, Advocate
Mr. Ravi Sodhi, Advocate
For Respondent Nos. 1,2 & 4 : Mr. Maninder Singh, Sr. Advocate
Mr. Navin Chawla, Advocate
Ms. Nidhi Parashar, Advocate
For Respondent No.3 : Mr. Nasir Husain, Advocate
For respondent No.5 : Mr. Mukesh Kumar Tiwari, Advocate for
Mr. Ruchir Mishra, Advocate
For Respondent No.6 : Mr. Vivek Goyal, AAG Punjab
Mr.Satnarain, Addl. DIPR, Punjab Govt.
Mr. Amitesh Gaurav, Advocate
For Respondent No.7 : Mr. Anasriyas, Research Officer, TRAI
Page 2 of 59
J U D G E M E N T
The Petitioner is a Broadcaster. The First, Second and Third
Respondents are Multi Service Operators operating in the State of Punjab. The
Fourth Respondent is the Managing Director of the First Respondent; a
Director of the Second Respondent and a shareholder of the Third Respondent
having 99 percent shares. Respondent No.2, furthermore, is an agent of a big
Multi Service Operator, which has a Pan India presence known as Wire &
Wireless India Ltd.
2. Petitioner entered into three agreements with the Respondents herein,
which are almost identical in terms.
We may notice Clause 8 of the agreement dated 01.8.2010 entered into
by the parties with a view to achieving maximum reach to viewers for the
channels produced by it namely „Day & Night News‟. The said agreement was
valid for a period of one year.
Clause 8 of the said agreement provides for termination. It comprises of
five sub clauses. Each sub-clause contained in Clause 8 is independent of each
other; each providing for the reason specified therein with regard to
termination of the agreement. Page 3 of 59
3. We are concerned herewith sub-clause (d) of clause 8, which reads as
under :-
“8(d) Both the parties may terminate this Agreement without
cause and without any liability whatsoever by giving the other
party thirty (7) days notice. Both the parties shall not have
any claim or demand, whatsoever, against each other in this
regard.”
The original agreement contemplated 30 days‟ notice. The correction
made therein was, however, not initialed by the parties.
4. According to the Petitioner, in or about October, 2010 a political
imbalance in the State of Punjab came into being as the then Finance Minister,
Shri Manpreet Singh Badal went out of the Punjab Government and Shiromani
Akali Dal. It is the contention of the Petitioner that thereafter the news item
related to the said Manpreet Singh Badal for reasons best known to the
Respondent Nos. 1 to 3 were being blacked out. Similar blackouts were
occasioned with regard to other leaders of the opposition parties. By reason of a
notice dated 19.01.2011 purported to have been issued under Clause 4.2 of the
Telecommunication (Broadcasting & Cable Services) Interconnection Page 4 of 59
Regulations, 2004 as amended from time to time, 30 days‟ notice was issued
terminating the said agreement.
“3. That though the agreement was for a period of one year
commencing from 01.08.2010 to 31.07.2011 clause 8 (d) of
the same provided as under :-
“Both the parties may terminate this Agreement without
cause and without cause and without any liability
whatsoever by giving the other party thirty (7) days
notice. Both the parties shall not have any claim or
demand, whatsoever, against each other in this
regard.”
4. That in exercise of the power vested in clause 8 (d), we hereby
give you the notice of 30 days is being though according to us
only 7 days notice was required, however as there was no
signature on the correction made on the agreement. We have
been advised to give a notice of 30 days as present.”
A public notice to the said effect was also issued on 21.01.2011, which is
to the following effect :-
“This notice is to be treated as a notice under Clause 4.3 of the
Interconnected Regulations as amended from time to time informing
the public that the signals of the above channel shall not be
available at our network w.e.f. 20.2.2011.”Page 5 of 59
5. Petitioner contends that the concerned Respondents formed a cartel so
as to avoid competition. Petitioner was wholly dependent on the revenue
generated from the advertisement as it has been running a digital „free to air‟
channel.
Petitioner and various persons similarly placed, made complaints to the
Ministry of Broadcasting & Information as also the State of Punjab, but no
action was taken. Petitioner is also said to have received a large number of
SMSs from the consumers to the effect that they had not been receiving proper
audio and video of the Petitioner‟s channel.
By a legal notice dated 07.01.2011, a sum of Rs.4 crores was demanded
by way of damages; in response whereto the Respondent by a letter dated
17.01.2011, with a view to avoid its liability, contended that on two occasions
the signals were disturbed due to technical reasons. It now transpires from the
evidence of RW-1 that the said technical defects had been addressed to and,
thus could not have been a ground for termination of the agreement.
6. It is the contention of the Petitioner that carriage of the channel being
governed by the Regulatory regime, the Respondent could not have terminated
the agreement relying on or on the basis of Clause 18 (d) thereof as in terms of
Clauses 4.2 and 4.3 of Telecommunication (Broadcasting and Cable Services) Page 6 of 59
Interconnection Regulations, 2004 („the Regulations‟), it was bound to assign
reasons for stoppage of retransmission of the channels of the Petitioner.
7. On the aforementioned premise, this petition has been filed claiming
inter-alia the following reliefs :-
“i) Declare that the nexus/cartel formed by Respondent No.1 to 4
is illegal and anti-competition and cannot be permitted to
operate as such;
ii) Hold that the action of the Respondent No.1 to 4 in disrupting
TV channels of the Petitioner without any proper notice is
illegal and arbitrary;
iii) Hold that the public notice dated 21.1.2011 and the notice
dated 19.1.2011 issued by the Respondent No.1 to 4 are
illegal, arbitrary and are as such void and are thus quashed;
iv) Direct the Respondent No.5 and 7 to inquire into the nexus/
cartel formed by Respondent No.1 to 4 and their political
nexus;
v) Direct the Respondent No.1 to 4 not to disrupt the signals of
TV channels of the Petitioner;
vi) Award damages to the tune of Rs.4 crores towards loss of
revenue/reputation suffered by the Petitioner due to illegal
and arbitrary acts of the Respondent Nos. 1 to 4.”Page 7 of 59
8. It may, however, be placed on record that a Writ Petition was filed by the
Petitioner before the High Court of Punjab & Haryana, which was marked as
CWP No. 3022 of 2001, inter-alia, praying for a CBI inquiry into the matter,
contending that the issues raised therein related to independence of Press and
fundamental rights of the Petitioner.
9. The Punjab & Haryana High Court dismissed the Writ Petition on the
premise that the Petitioner had an alternative remedy. Pursuant to the
observations made therein, this Petition was filed. However, it now appears
that the Petitioner had also moved the Supreme Court of India by way of a
petition for grant of special leave in terms of Article 136 of the Constitution of
India.
The said Special Leave Petition appears to have been dismissed by the
Supreme Court of India in the following terms :-
“Heard learned senior counsel for the petitioner. We are not inclined
to interfere with the impugned order of the High Court. The special
leave petition is dismissed. However, the petitioner is free to
vindicate his grievance before the TDSAT and it is for the TDSAT to
consider and pass appropriate orders.”Page 8 of 59
Petitioner prayed for grant of an interim relief, but by an order dated
13.4.2011 the same was rejected, inter-alia, opining that it was entitled only to
damages.
10. Respondent, in its reply, inter-alia contend :-
(i) Technical sneaks were detected in October, 2010 in respect
whereof e-mails had been sent to the Petitioner, but no action had
been taken thereupon;
(ii) Having regard to the Clause 18(d), the Respondent was not
obligated to assign any reason whatsoever, for termination of
contact.
11. During pendency of this Petition however, the Petitioner filed an
application before the Competition Commission constituted under Competition
Act, 2002. In that view of the matter, it filed an application for amendment of
the Petition for withdrawal of prayers 1 and 4 in the present Petition,
contending that the Competition Commission alone has jurisdiction in relation Page 9 of 59
thereto and thus, the Petitioner be permitted to continue to proceed with its
application before the said Commission.
Keeping in view the `fact that the said prayer of the Petitioner for
withdrawal of the said reliefs was not a simplicitor one under Order XXIII Rule
1 of the Code of Civil Procedure, by reason of an order dated 25.7.2011, the
said application was dismissed relying on or on the basis of a judgment of this
Tribunal in (See T.V. Network Vs. Star India Pvt. Ltd. & Another- Petition No.
412 (C) of 2005 disposed of on 14.8.2005, opining :-
“The law laid down by this Tribunal in the aforementioned case, in
our opinion, has to be given effect to. Moreover, this Tribunal having
regard to the preamble of the Telecom Regulatory Authority of India
Act, 1997 is obligated to protect the interests of the service providers
as also to promote and ensure orderly growth in the telecom sector.
In that view of the matter, we are of the opinion that liberty
sought for by the applicant, cannot be granted at this stage.
However, the contentions of the parties shall be considered with the
other issues.”
12. By an Order dated 06.9.2011, upon taking notice of the fact that the
Respondent No.5 had not filed any Reply, the following issues were framed :-
“(i) Whether the notices issued under Clauses 4.2 and 4.3 issued
by the Respondent Nos.1 and 2 are invalid?Page 10 of 59
(ii) Whether the Respondent Nos. 1 and 4 have formed a cartel
and thereby creating a monopoly to restrict the petitioner entry to
the cable market of the State of Punjab?
(iii) Whether due to illegal and arbitrary actions of the Respondent
Nos.1-4 the petitioner has suffered any damages?
(iv) Whether in view of the facts and circumstances of the present
case the petitioner is entitled to specific performance of its carriage
agreement entered with the Respondent Nos.1 to 4?
(v) Whether in the facts and circumstances of the case, the
Respondent Nos.5 & 6 are necessary or proper parties to this
petition?”
13. In support of its case, the Petitioner examined three witnesses. PW-1
Shri Harpal Singh Arora working as a News Room Head in the office of the
Petitioner supported the Petitioner‟s case as contained in the petition.
Shri Rakesh Kumar Sharma, who was examined as PW-2, in its evidence
contended that upon taking into consideration the expected revenue, the
Petitioner has suffered a loss of Rs.16,51,19,522/-. It was contended that
keeping in view interruption between October 2010 to February 2011 and
thereafter putting off the Petitioner from its channel, the drop in the revenue Page 11 of 59
ranged from 40 percent to 67 percent. Along with its evidence, it enclosed a
chart to show that fall in the PDT so far as the Petitioner‟s channel is
concerned. The Third witness examined by the Petitioner was Shri Naresh
Kumar, Head (Accounts) working in its office.
While contending that the Petitioner had incurred major operational
expenditure to the tune of Rs.23,12,48,956/-, the detailed ledger account was
not filed, stating that the same would run into hundreds of pages. The said
witness contended that the Petitioner is ready and willing to provide the details
including the „Receipts‟ of each and every payment shown in the calculations.
All the three witnesses have been cross-examined in details. We would
refer to the same at an appropriate stage.
Respondent, however, examined only Shri Piyush Mahajan,
14. Mr. Tejveer Singh Bhatia, learned counsel appearing on behalf of the
Petitioner, urged :-
(i) Parallel proceeding before this Tribunal as also Competition
Commission is not prohibited keeping in view the provisions
of Section 62 of the Competition Act, 2002.
Reliance in this behalf has been placed on Fair Air
Engineers Pvt. Ltd. Vs. N. K. Modi reported in (1996) 6 SCC
385;Page 12 of 59
(ii) From the cross-examination of RW-1, it would be clear that
he is not a truthful witness and, thus, no reliance can be
placed on his deposition as most of its answers were evasive
in nature, in so far as from paragraph 5 onwards, he merely
denied the case of the Petitioner. The statements made by
him revolved round the factual aspects, with which he was
neither conversant nor in support whereof any documentary
evidence has been produced;
(iii) It is incorrect to contend that the statement made by the
Petitioners‟ counsel at the time of hearing of the interim
prayer, would constitute estoppel against the Petitioner from
arguing that the contract was governed by the Regulations;
(iv) In any event, even a lawyer cannot make any concession
with regard to a legal position which would be binding on his
client.
Reliance in this behalf has been placed on "P.
Nallammal v. State, (1999) 6 SCC 559". "Fair Air Engineers
(P) Ltd. v. N.K. Modi, (1996) 6 SCC 38" and "National Seeds
Corporation Ltd. v. M. Madhusudhan Reddy, (2012) 2 SCC
506";
(v) As the Regulations govern the industry as a whole and the
Regulator in its wisdom having directed that reasons must
be assigned for termination of the agreement keeping in viewPage 13 of 59
the growth of the industry, it is idle to contend that no
reason was required to be assigned;
(vi) The players in the field in view of the regulatory provisions
cannot be permitted to terminate an agreement which is
otherwise valid, at its whims or fancy;
(vii) Rights conferred on a broadcaster in terms of Clauses 4.2
and 4.3 have nothing to do with Clause 3.2 thereof;
(viii) If the contention of the Respondent that no reason was
necessary to be assigned in view of the Clause 18(d) of the
Contract is accepted, Clause 4.2 would be rendered otiose;
(ix) For all intent and purport, the Respondents have put off the
signals of the Petitioner from its network and, thus, it was
obligatory on their part to issue the said notices. The very
fact that they did so, is a clear indicator that they also
understood that the contract between the parties is subject
to Regulations.
15. Mr. Maninder Singh, learned senior counsel appearing on behalf of the
Respondent, on the other hand, urged :-
(i) Having regard to the well settled principle that whereas the
Regulations contained a „must provide clause‟ but does not Page 14 of 59
deal with a „must carry clause‟, no notice under Clauses 4.2
and 4.3 were required to be issued;
(ii) The Petitioner, being a Broadcaster, having entered into the
contract with its eyes wide open and the contract having
been worked out by both the parties, is estopped and
precluded from raising the question of validity and/or
legality thereof;
(iii) If the Petitioner was aggrieved, it could have refused to enter
into the contract or could have approached this Tribunal
immediately thereafter;
(iv) The Regulator having not framed any regulation governing
carriage and placement and having emphasized on complete
commercial freedom, Clause 18(d) providing for :-
(a) termination without notice, without cause; and
(b) no liability on either of the parties, whatsoever,
This Petition must be held to be not maintainable;
(v) The Interim Order dated 13.4.2011, so far as the contentions
of the Petitioner are concerned, having attained finality, it
cannot be permitted to raise fresh contentions;
(vi) Clauses 4.2 and 4.3 of the Regulations read with the
Explanatory Memorandum of the TRAI, do not provide for
any protection to the broadcasters nor confer any right on
them but merely on the consumers;Page 15 of 59
(vii) Respondent having clearly mentioned Clause 18(d) in both of
its notices under Clause 4.2 as also the Public Notice under
Clause 4.3 of the Regulations, the same must itself be held
to be the reasons in support of the termination of the
agreement;
(viii) A clause, whereby both the parties having been given
freedom to terminate the contract on serving on the other
side 30 days‟ notice, is legal and valid as would appear from
the decisions of the Supreme Court of India in Her Highness
Maharani Shantidevi Vs. Savjibhai Haribhai Patel and Ors.
reported in AIR 2001 SC 1462, The Central Bank of India
Ltd. Vs. The Hartford Fire Insurance Co. Ltd. reported in AIR
1965 SC 1288, General Assurance Society Ltd. vs.
Chandmull Jain and Anr. reported in AIR 1966 SC 1644 and
Classic Motors Ltd. vs. Maruti Udyog Ltd. reported in 65
(1997) DLT 166 as also the decision of this Tribunal in
Petition No. 113 (C) of 2007 – Total Telefilms Pvt. Ltd. Vs.
Tata Sky Ltd.
The only exception, which can be curved out for the
purpose of awarding damages would be a case where the
liability is excluded or limited, is one where the fundamental
breach of contract has been committed and no such case
having been made out, the Petitioner is not entitled to any Page 16 of 59
decree. Reliance in this behalf has been placed on Photo
Production Ltd. vs. Securicor Transport Ltd. reported in
(1980) 1 All ER 556;
(ix) In the light of the recent decision of the Supreme Court of
India in Union of India & Anr. Vs. Association of Unified
Telecom Service Providers of India and Ors. reported in
(2011) 10 SCC 543, the Petitioner cannot be permitted to
approbate or reprobate at the same time;
(x) From the evidence adduced on behalf of the Petitioner it
would appear that the factual aspects of the matter are
sought to be proved relying on or on the basis of the
newspaper reports and/or tables and drafts as the same
being inadmissible in evidence, it must be held to have filed
its case for damage.
16. Submission of Mr. Maninder Singh that the counsel for the Petitioner at
the time of argument for obtaining the interim prayer having confined its
argument to breach of contract qua contract, it is now estopped and precluded
from raising any other contention including Clauses 4.2 and 4.3 of the
Regulations cannot be accepted. Page 17 of 59
The contentions raised in an interim matter cannot be treated to be final.
An interim order passed in a proceeding never constitutes a precedent. An
interim order even at interim stage can be varied, modified or altered.
17. Any concession on the legal issue, in any event, by a counsel is not
binding on a party.
(See P. Nallammal v. State, (1999) 6 SCC 559)
18. Petitioner admittedly has moved the Competition Commission so far as
prayer (i) and (iv) are concerned. Whether it was entitled to do so, is not a
matter of concern for this Tribunal. Section 62 of the Competition Act, 2000
provides that the provisions thereof are in addition to and not in deliberation of
any other law for the time being in force.
19. While construing a par-materia provision contained in Section 37 of the
Consumer Protection Act, the Supreme Court opined that filing an application Page 18 of 59
before the Competition Commission will not bar the Applicant to avail any
other remedy.
(See Fair Air Engineers Pvt. Ltd. and Another Vs. N. K. Modi reported in
(1996) 6 SCC 385 and National Seeds Corporation Vs. M. Madhusudan
Reddy reported in (2012) 2 SCC 506).
20. The Parliament enacted the Telecom Regulatory authority of India Act,
1997 („The 1997 Act‟), wherein „telecommunication service‟ has been defined in
Section 2 (k) to mean :-
„telecommunication service‟ means service of any description
(including electronic mail, voice mail, data services, audio tex
services, video tex services, radio paging and cellular mobile
telephone services) which is made available to users by means of
any transmission or reception of signs, signals, writing, images and
sounds or intelligence of any nature, by wire, radio, visual or other
electro-magnetic mean but shall not include broadcasting services.”
21. By reason of a notification dated 09.01.2004, „broadcasting service‟ was
brought within the purview of the „telecommunication service‟ by employing a
legal fiction.Page 19 of 59
22. The TRAI in exercise of its jurisdiction under Section 11 (1) (b) of the Act
made „the Regulations‟.
We may notice some of the provisions thereof :-
“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; [HITS operators and multi system operators shall also, on
request, re-transmit signals received from a broadcaster, on a nondiscriminatory basis to cable operators.]
. Provided that this provision shall not apply in the case of a
distributor of TV channels having defaulted in payment.
Provided further that any imposition of terms which are
unreasonable shall be deemed to constitute a denial of request
[Provided also that the provisions of this sub-regulation shall not
apply in the case of a distributor of TV channels, who seeks signals
of a particular TV channel from a broadcaster, while at the same
time demanding carriage fee for carrying that channel on its
distribution platform.]17
4.2 No distributor of TV channels shall disconnect the retransmission of any TV channel without giving three weeks notice to
the [broadcaster, multi system operator or HITS operator, as the
case may be clearly giving the reasons for the proposed action.
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 Page 20 of 59
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-clauses 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.”
23. What would be the effect of the said provisions vis-à-vis paragraph 8 (d)
of the Agreement dated 01.8.2010 is the core question?
24. It is not in controversy that whereas clause 3.2 applies in the case of a
„must provide‟ situation, it would have no application in the case of a „must
carry‟ situation.
There cannot, moreover, be any doubt or dispute that in a case governed
by contract qua contract, the parties would have the freedom to terminate a
contact by issuance of notice. They would also be at liberty to exclude or limit
their liabilities in the event of failure to comply with the terms of the contract. Page 21 of 59
25. As indicated heretobefore, Mr. Maninder Singh has relied upon a large
number of decisions, to which I shall refer to a little later.
26. The 1997 Act, however, provides for a regulatory regime. The TRAI, in its
wisdom, may regulate the trade. It has done so. The applicability thereof is in
question in a case of carriage of channel.
It is now a trite law that where freedom of contract is curtailed by
Regulations, the conditions precedents therefor must be fulfilled.
There cannot furthermore be any doubt or dispute that once the statute
is found to be governing the field; a contract between a contractor and a
distributor of T.V. channel shall be subject thereto. It is not in dispute that the
Petitioner being a „broadcaster‟ and the Respondents concerned being „Multi
Service Operators‟, they would be „service providers‟ within the meaning of the
provisions of the said Regulations.
27. The Regulations, unlike Parliamentary or Legislative Acts do not contain
„Chapters‟. They do not have different „Parts‟ dealing with different subjects. Page 22 of 59
28. Clause 3.1 prohibits the „Broadcaster‟ to engage in any practice or
activity to enter into any understanding or arrangement, including exclusive
contracts with any other distributor of TV channels that prevents any other
distributor of TV channels from obtaining such TV channels from distributor.
Clause 3.2 must be read in the said context.
Explanation appended to Clause 3.2 prohibits the broadcaster, from
whom the signals have been sought for the distribution of TV channels, the
stipulation of placement frequency or package/tier, as a pre-condition for
making available signals of the requested channels and in the event the same
is insisted upon, it would amount to imposition of unreasonable terms.
Clause 4 is under the heading „disconnection of TV channel signals‟
Clause 4.1 prohibits the Broadcaster, Multi Service Operator and a HITS
operator from disconnecting the TV channel signals to a distributor of TV
channels without giving three weeks‟ notice clearly giving the reasons for the
proposed action.
Clause 4.2 prohibits „a distributor of TV channels‟ from retransmission of
any TV channel without giving three weeks‟ notice inter-alia to the broadcaster,
clearly giving the reasons for the proposed action.
Clause 4.3 deals with issuance of a public notice, postulating giving of
reasons in brief. Page 23 of 59
29. The TRAI in paragraph 6 of its Explanatory Memorandum, stated as
under :-
“6. The notice to the service provider concerned should clearly inform
the service provider about the reasons for proposed disconnection.
The notice should specify the terms & conditions of the agreement
which have been allegedly violated and the details of such violation
rather than cryptically mentioning violation of the agreement as the
reason for issue of the notice. This is necessary so as to pin point the
issues of dispute, so that the affected service provider can take
steps either for rectifying the violation or to approach appropriate
forum for redressal. Similarly, the public notice should also have the
reasons for proposed disconnection in brief.”
30. Where the parties have the freedom of contract, they would be at liberty
to fix the terms and conditions. However, if Regulations govern the field, it shall
prevail over the contract.
Clause 8 (d) is a composite term providing for termination without any
notice or without any liability. If cause is required to be assigned for
retransmitting the channels of a broadcaster, non-compliance thereof shall
lead to its own consequences.
Re-transmission of signals and/or carriage thereof is for the benefit of
the viewers. The TRAI not only intended to protect the rights of the ultimate
consumers, but also the service providers. Termination of a contract without Page 24 of 59
service of notice containing reasons having been prohibited, the same must be
held to be imperative in character.
31. The parties are free to choose their terms. Unlike a „must provide clause‟,
the „must carry clause‟ may contain any general, technical, financial and other
terms. The Regulations do not come on the way of the parties with regard
thereto. What, however, is said to be regulated, is the termination of the
agreement.
32. The Preamble of the 1997 Act postulates protection of the rights of the
service providers and customers. It envisages growth of industry which would
mean an orderly growth.
If, for the said purpose, the minimal requirement with regard to
termination of an agreement is provided for, the same in the opinion of this
Tribunal shall also apply to a case where the parties of their own entered into
an agreement i.e. without the intervention of this Tribunal as envisaged under
Clause 3.2 of the Regulations. The safeguards contemplated in terms of
Clauses 4.2 and 4.3 presumably were to let the other side as also the public
know as to why the contract was being terminated. Page 25 of 59
A contract may not require assignment of any reason, any notice or any
liability at all. In a case, which is within the realm of private law, the parties
will be bound by the terms of the contract, but not in a case where the field is
regulated.
In Dish TV India Ltd. Vs. ESPN Software India Pvt. Ltd. disposed of on
10.4.2012, the broadcaster, despite having entered into a non-RIO contract
with a DTH operator was held to be bound to provide for an option to the later
to elect to a RIO based contract. The DTH operators merely carry the signals of
the broadcasters.
33. Mr. Maninder Singh would contend that Clauses 4.2 and 4.3 would
apply only in cases where clause 3.2 applies.
It is not possible to agree to the said contention.
Clause 3.2 merely provides for additional rights to a distributor of a TV
channel to obtain supply of signals of its channels from the concerned
broadcaster. It would apply to a case where despite request the Broadcaster
does not do so.
Would it mean that where such a right was not required to be exercised
and the parties entered into a contract voluntarily, Clauses 4.2 and 4.3 would
not apply? Page 26 of 59
In my considered opinion, before supply of signals is taken off from the
network of any service provider Clauses 4.2 and 4.3 of the Regulations shall
apply both in a case where a contract has been entered into by reason of an
order of this Tribunal and on a voluntary basis.
34. Applicability of Clauses 4.2 and 4.3 of the Regulations in a case of
carriage contract has been raised before this Tribunal in a number of
decisions. The said cases arose as Prasar Bharti had refused and/or did not
renew the contract of carriage entered into by and between it and several
broadcasters.
Prasar Bharti questioned the jurisdiction of this Tribunal contending that
it having been created under a Parliamentary Act is not a licensee within the
meaning of the provisions of the 1997 Act.
In Total Telefilms Vs. Prasar Bharti, the said contention was negatived.
Directions were issued to Prasar Bharti as a DTH Operator and, thus, a service
provider.
In Petition No. 195 (C) of 2008, Zee Turner Ltd. Vs. Prasar Bharti, a three
member Bench presided over by Arun Kumar, J., opined :-
“73. There is another dimension to this case. This issue cannot be
and should not be viewed only in terms of offer and acceptance asPage 27 of 59
per the Indian Contract Act, 1872. Prasar Bharati is a DTH operator
and it is bound by the Regulations issued by the TRAI. In this
regard, Prasar Bharati is guilty of violating clauses 4.2 and 4.3 of
the interconnection regulations mandating notice to the Petitioner as
also a public notice in two newspapers and giving 21 days notice
before disconnection.
Noticing Clauses 4.2 and 4.3 of the Regulations, it was furthermore
opined :-
“Admittedly, Prasar Bharati discontinued the carriage of the
Petitioners two channels -- Zee smile and Zee Jagran- without any
notice on the ground that the Agreement had expired and that
Prasar Bharati is not covered under the provisions of the TRAI Act.
We have already announced on the latter issue. And since Prasar
Bharati is covered under the Regulations, it is clear that in
discontinuing the channels, it is in violation of the Regulations.
74. We therefore hold that there was a consensus ad idem before
the date of expiry of the earlier Agreement, that the Respondent
Prasar Bharati had, in disregard of the Regulations, illegally
discontinued the carriage of the petitioner‟s channels. We
accordingly direct the Respondent Prasar Bharati to restore the two
channels on payment, by the Petitioner, of the carriage fee of Rs. 60
lakh for each of these channels. It shall do so within two days of the
receipt of payment. Similarly, on payment of another Rs. 60 lakh, it
will continue to air their third channel -- ETC Music.”Page 28 of 59
35. In arriving at the said decision, it was clearly held that Prasar Bharti was
guilty of violating Clauses 4.2 and 4.3 of the Interconnection Regulations
mandating notice to the Petitioner therein as also a Public Notice in two
newspapers and giving 21 days‟ notice before disconnection.
36. Similar question arose in Petition No. 407 of 2010 – Zee Turner Ltd. Vs.
Prasar Bharti. The counsel appearing on behalf of the Respondent therein
contended that Clause 8.1 of the Regulations shall apply.
It was opined :-
“We are not in a position to agree with the submission of Mr. Naveen
Chawla that despite the expiry of the agreement, the broadcasters
will be entitled to a notice under Clause 4.2. The second part of
Clause 4.3 provide for a procedure only and not of a right.”
It was, however, observed :-
“We were asked that Clause 3.2 of the Regulations may not provide
for „must carry‟ clause. But, as noticed heretobefore, Mr. Dhingra
himself suggested that Clause 8.1 of the Regulations shall apply. If
that be so, the said clause will apply on its own force and not in all
situations. It must be read with Clause 3.2.”Page 29 of 59
37. However, in Media Worldwide Pvt. Ltd. Vs. Prasar Bharti – Petition No. 17
(C) of 2011, differing opinions were expressed.
A controversy arose therein as to whether notice under Clause 4.3 was
imperative in character.
The majority of the Members opined :-
“36. In this particular case, when the process on negotiations itself
has not started, the proviso to the clause 8.1 is not applicable. Even
if we consider that disconnection has taken place without giving
three weeks notice in the manner specified under clause 4.3.
Further, we are of the view that Clause 4.3 is for the purpose of
informing the consumers and not the petitioner. Clause 4.2 relating
to disconnection of TV signals by the distributors is not applicable in
this case. This notice is necessary during the currency of the
agreement and not after the completion of the period of the
agreement. At the most consumers may approach this Tribunal and
agitate about their rights and obligations but the petitioner cannot
claim right of renewal when he has not shown any interest or
willingness to continue their relationship by executing a fresh
agreement with the respondent.”
(Emphasis supplied)
38. However, the minority opinion followed the decisions in Zee Turner Ltd.
(Supra), stating :-Page 30 of 59
“14. Regulation 3 provides for general provisions relating to
nondiscrimination in interconnect agreements. Contrary to the
Common Law principles of contract, Clause 3.2 of the Regulations
provides for a „must provide‟ clause in terms whereof every
broadcasters are obligated to provide signals of its TV channels on
non-discriminatory terms to all distributors of TV channels.
15. It is, however, not in controversy that the said „must provide‟
clause would not mean that the DTH operators like respondent
herein would be bound to carry the channels of the broadcaster on a
request made by it or otherwise.
We have noticed heretobefore Clauses 4.2 and 4.3 of the
Regulations.”
It was also observed :-
“Application of Regulations
18. Having noticed the provisions of the Regulations, it is necessary
to place on record that this Tribunal in Total TV Vs. Prasar Bharati
has clearly held that the provisions of the Regulations and in
particular, Clauses 4.2 and 4.3 would be applicable so far as
carriage of channels by Prasar Bharati is concerned. The said
decision of this Tribunal, for all intent and purport, has been
followed by us in our judgment dated 16.12.2010 in Petition No. 407
(C) of 2010 (Zee Turner Ltd. & Anr. Vs. Prasar Bharati), Petition No.
410 (C) of 2010 (Seven Star Satellite Pvt. Ltd. Vs. Prasar Bharati)
and Petition No. 416 (C) of 2010 (Enter 10 Television Pvt. Ltd. Vs.
Prasar Bharati). It is otherwise binding on us. In fact no contention
has been raised to take another view thereof.”Page 31 of 59
39. The said decision, therefore, was rendered in a case where the process
for renewal had not been started and the agreement entered into by and
between the parties had also expired.
It was, moreover, clearly held that notices would be required during
currency of the agreement.
40. A similar question arose in a case where the agreement was still in force
when the petition was filed being Petition No. 132 (C) of 2010 – M/s Polimer
Channels Vs. Samangali Cable Vision.
In the interim order passed in the said case, this Tribunal opined that
prima facie Clauses 4.2 and 4.3 are imperative in character having used a
negative word and, furthermore, the word „shall‟ has been used, stating :-
“We, prima facie however, are not in a position to agree with
the submissions of Mr.Maninder Singh that clause 4.2 and 4.3
are to be read only with clause 3.2 and not otherwise.
Submission of Mr.Chawla appears to be correct that having
regard to the fact that the Regulator consciously and
intentionally inserted clauses 4.2 and 4.3 of the Regulations,
the distributor was bound to comply with the said provisions.“Page 32 of 59
41. In its final judgment, the said principle was reiterated and a nominal
amount of damages was directed to be paid to the Petitioner therein.
It was opined :-
“Notice – Requirements of
There cannot be any doubt or dispute that keeping in view the
provisions of Regulations 4.2 and 4.3 of the 2004 Regulations, the
petitioner, being a broadcaster, was entitled to three weeks notice.
Thus, even a public notice was required to be issued.
The proviso appended to Regulation 4.1 also provides for
written agreement but such a proviso has not been appended to
Regulation 4.2.
The termination of the arrangement was, therefore, wrongful.”
The effect of such unlawful termination, however, it was held, need not
result into a direction upon the Respondent to restore supply of signals.
42. In M/s. Shreya Broadcasting Pvt. Ltd. Vs. Helapuri Cable Vision Pvt. Ltd.
– Petition No. 236 (C) of 2009 disposed of on 01.12.2009, it was held :-
“In this case, in our opinion, Regulations 4.2 and 4.3 are attracted.
It has not been denied or disputed before us by the learned counsel
for the respondents that the statutory requirements contained in Page 33 of 59
clauses 4.2 and 4.3 have not been complied with. The learned
counsel however submits that the petitioner was communicated of
the decision to disrupt retransmission of signals orally, which
according to us does not meet the requirements of law. The
contentions raised on behalf of the respondents, therefore, in our
opinion, are liable to be rejected.
As action on the part of the respondent in disconnecting or
disrupting retransmission of signals of the aforementioned TV-5
channel is illegal, the petitioner is entitled to the reliefs prayed for
herein.”
43. It should, however, also be placed on record that in M/s. Jeevan
Telecasting Corporation Ltd. Vs. Asianet Satellite Communications Ltd. -
Petition No.210 (C) of 2010, it was held :-
“Mr. Maninder Singh, the learned counsel appearing on behalf of the
petitioner, on the other hand, urged that although there exists a
distinction between `a must carry‟ clause and a `must provide‟
clause, this Tribunal even in a situation of this nature would be
entitled to determine as to what should be the reasonable amount
for carrying of a broadcaster‟s channel on the analogue and digital
platform by a Multi Service Operator.
Drawing our attention to clause 8 and 8.1 of the Memorandum
for understanding, the learned counsel would submit that this
Tribunal has jurisdiction, in a situation of this nature even to direct
specific performance of contract.Page 34 of 59
There is no doubt or dispute that having regard to the
recommendations of TRAI, the matter relating to carriage or
placement is governed by the agreement between the parties and
not by any Act or Regulation.
It has not been shown before us as to how and in what
manner the matter relating to carriage and placement is regulated. If
it is not, prima facie we are of the opinion that the petitioner would
be entitled to only damages, in the event, the parties fail to arrive at
a negotiated price for the purpose of carriage of the channel of the
broadcaster by the MSOs on either Analogue platform or Digital
platform or both.”
It was, therefore, not a case where the supply of signals was sought to be
disturbed.
In that case, the question which arose for consideration was Specific
Performance of Contract. The counsel for the parties therein were remiss in
pointing out to us as to how a carriage of placement agreement was governed
by any Regulation.
It is one thing to say that the other terms and conditions of a contract
would not be governed by the Regulations, but it is another thing to say that
keeping in view the purpose and object for which the Regulations have been
issued namely, protection of interest of the service providers and the
consumers, even provision for service of notice would be beyond the purview of
the Regulations. Page 35 of 59
44. In a situation of this nature, the doctrine of „Purposive Construction‟ may
be put into service.
In Reliance Infratel Ltd. v. Etisalat DB Telecom – Petition No. 75 of 2012,
the doctrine of „purposive construction‟ was applied, stating as under :-
“Purposive Construction – Rules of
72. Keeping in view the recent decision of the Supreme Court of
India in the case of Centre for Public Interest Litigation (supra), it
may not be necessary for us to notice the history as also the
developments in the field.
The Doctrine of Purposive Interpretation may be resorted to for
the purpose of ascertaining the purpose and object for which said
acts were enacted.
73. Francis Bennion in his book on Statutory Interpretation 5th
Edition at page 945, states the law thus:-
” ….Legislation is still about remedying what is thought to be
a defect in the law. Even the most „progressive‟ legislator,
concerned to implement some wholly novel concept of social
justice, would be constrained to admit that if the existing law
accommodated the notion there be no need to change it. No
legal need that is. Legislation possesses a propaganda value
also.
Contrast with literal construction - Although the term
`purposive construction‟ is not new, its entry into fashion betokens a
swing by the appellate courts away from literal construction. Lord
Diplock said in 1975 : Page 36 of 59
`If one looks back to the actual decisions of [the House of
Lords] on questions of statutory construction over the last 30
years one cannot fail to be struck by the evidence of a trend
away from the purely literal towards the purpose construction
of statutory provisions.‟
The matter was summed up by Lord Diplock in this way:
“…I am not reluctant to adopt a purposive construction where
to apply the literal meaning of the legislative language use
would lead to results which would clearly defeat the purposes
of the Act. But in doing so the task on which a court of justice
is engaged remains one of construction, even where this
involves reading into the Act words which are not expressly
included in it. Kammins Ballrooms Co Ltd V Zenith
Investments (Torquay) Ltd [1971] AC 850 provides an instance
of this; but in that case the three conditions that must be
fulfilled in order to justify this course were satisfied. First, it
was possible to determine from a consideration of the
provisions of the Act read as a whole precisely what the
mischief was that it was the purpose of the Act to remedy;
secondly, it was apparent that the draftsman and Parliament
had by inadvertence overlooked, and so omitted to deal with,
an eventuality that required to be dealt with if the purpose of
the Act was to be achieved; and thirdly, it was possible to
state with certainty what were the additional words that
would have been inserted by the draftsman and approved by
parliament had their attention been drawn to the omission
before the Bill passed into law. Unless this third condition is
fulfilled any attempt by a court of justice to repair the omission Page 37 of 59
in the Act cannot be justified as an exercise of its jurisdiction
to determine what is the meaning of a written law which
parliament has passed.‟
“Lord Diplock‟s third point is, with respect, erroneous. In an
earlier case the House of Lords had adopted a purposive-andstrained construction while expressly ruling out any need to
formulate the missing words. The truth is that it is almost invariably
possible to formulate the same legislative proposition in numerous
different ways. All drafters know that no two of them, given a set of
instructions will produce a Bill in identical wording, or anything like
it.”
74. In Grid Corporation of Orissa Limited v. Eastern Metals and
Ferro Alloys, (2011) 11 SCC 334 at page 342 it is stated as under:
“25. This takes us to the correct interpretation of Clause 9.1.
The golden rule of interpretation is that the words of a statute
have to be read and understood in their natural, ordinary and
popular sense. Where however the words used are capable of
bearing two or more constructions, it is necessary to adopt
purposive construction, to identify the construction to be
preferred, by posing the following questions: (i) What is the
purpose for which the provision is made? (ii) What was the
position before making the provision? (iii) Whether any of the
constructions proposed would lead to an absurd result or
would render any part of the provision redundant? (iv) Which
of the interpretations will advance the object of the provision?
The answers to these questions will enable the court to
identify the purposive interpretation to be preferred while
excluding others. Such an exercise involving ascertainment of
the object of the provision and choosing the interpretation that
will advance the object of the provision can be undertaken, Page 38 of 59
only where the language of the provision is capable of more
than one construction. (See Bengal Immunity Co. Ltd. v. State
of Bihar [ AIR 1955 SC 661 : (1995) 2 SCR 603] and Kanai Lal
Sur v. Paramnidhi Sadhukhan [ AIR 1957 SC 907 : 1958 SCR
360] and generally Justice G.P. Singh's Principles of Statutory
Interpretation, 12th Edn., published by Lexis Nexis, pp. 124 to
131, dealing with the rule in Heydon case [ (1584) 3 Co Rep
7a : 76 ER 637] .)”
75. In DLF Universal Limited v. Director, Town and Country
Planning Department, Haryana, (2010) 14 SCC 1 it was
stated:
“13. It is a settled principle in law that a contract is
interpreted according to its purpose. The purpose of a
contract is the interests, objectives, values, policy that
the contract is designed to actualise. It comprises the
joint intent of the parties. Every such contract expresses
the autonomy of the contractual parties' private will. It
creates reasonable, legally protected expectations
between the parties and reliance on its results.
Consistent with the character of purposive
interpretation, the court is required to determine the
ultimate purpose of a contract primarily by the joint
intent of the parties at the time the contract so formed. It
is not the intent of a single party; it is the joint intent of
both the parties and the joint intent of the parties is to
be discovered from the entirety of the contract and the
circumstances surrounding its formation.”
{See Regional Provident Fund Commissioner Vs The Hooghly Mills
Co. Ltd. [(2012) 2 SCC 489]}. Page 39 of 59
It is on the said premise only the purpose and object for which
the Act has been enacted has to be considered.
What was the underlying object of the 1997 Act?”
Applying the said principle, this Tribunal is of the opinion that it was
obligatory on the part of the Respondent to assign reasons as is envisaged
under Clauses 4.2 and 4.3 of the Regulations.
45. Keeping in view the aforementioned backdrop of events, we may notice
some of the decisions cited by Mr. Maninder Singh.
In Maharani Shanti Devi (Supra), a suit for specific performance was
filed. A decree was passed therein. The said decree was modified to the extent
that the same shall be subject to issue of final declaration under Section 21 of
the Urban Land (Ceiling & Regulation) Act, 1976. An appeal was preferred
thereagainst. There existed a clause in the agreement for sale that the contract
could be unilaterally terminated before the delivery of possession was effected.
It was opined :-
“50. There is no merit in the contention of Mr Dhanuka. The decision
relied upon by Mr Dhanuka is not applicable to unambiguous
documents. That is clear from the decision itself. In respect of
unambiguous documents, Odgers' Construction of Deeds and Page 40 of 59
Statutes, 5th Edn., by G. Dworkin at pp. 118-19, has been quoted in
the aforesaid decision as under:
“The question involved is this: Is the fact that the parties to a
document, and particularly to a contract, have interpreted its
terms in a particular way and have been in the habit of acting
on the document in accordance with that interpretation, any
admissible guide to the construction of the document? In the
case of an unambiguous document, the answer is „No‟.”
When there is no ambiguity in the clause, the question of intendment is
immaterial.
As regards validity of such a clause, the Supreme Court of India held
that such a power of termination need not be exercised for good and reasonable
cause as otherwise unilateral power to determine a contract would have to be
treated to be void and ineffective in law.
The Apex Court applied the principles of Raja Ramannar, C.J. in
Maddala Thathiah Vs. Union of India AIR 1957 Madras page 82 to opine that it
is unable to agree with the draft proposition that the absolute power of
termination would be void.
In arriving at the said finding, it was held :-
“57. Under general law of contracts any clause giving absolute
power to one party to cancel the contract does not amount to
interfering with the integrity of the contract. The acceptance of the
argument regarding invalidity of contract on the ground that it gives Page 41 of 59
absolute power to the parties to terminate the agreement would also
amount to interfering with the rights of the parties to freely enter into
the contracts. A contract cannot be held to be void only on this
ground.”
46. There cannot be any quarrel on the said proposition of law.
The question, however, would be as to whether the same shall apply in a
case where the termination clause is governed by a statute.
In Shanti Devi (Supra), the Apex Court also relied upon the Central Bank
of India, Amritsar Vs. Hard Core Fire Insurance Co. AIR 1965 SC 1288 and
General Assurance Society vs. Chandmull Jain & Anr. AIR 1966 SC 1644.
In Central Bank of India (supra), an insurance agreement containing a
power of termination as contained in Clause 10, was found to be not capricious
or unreasonable.
In General Assurance Society Ltd. (Supra), it was stated :-
“17. This condition gives mutual rights to the parties to cancel the
policy at any time. To the assurer it gives a right to cancel the policy
at will. It was contended that such a condition was so unreasonable
that it could not be allowed to stand. It was argued on the authority
of Sze Hal Tong Bank Ltd. v. Rambler Cycle Co. Ltd. (1959) AC 576
that the extreme width of the condition must be cut down by an
implied limitation which was that the main object and intent of the
contract should not be allowed to be defeated and that object and Page 42 of 59
intent was the insuring of the property against floods and
cancellation of the policy when floods had started would defeat the
main object and intent of the contract. This argument mixes up two
situations. The first is a question of pure principle. There is nothing
wrong in including such a mutual condition for the cancellation of
the insurance. An assured may like to invoke such a condition when
the policy is found to differ from the policy he agreed to accept or it
contained a term of condition to which he did not agree. He may not
accept the same policy from another company to which he did not
make a proposal. He may invoke this condition if the company
transfers its assets and business to another. Just as the assured
may like to terminate the policy without assigning any reasons and
at his will, the assurer may also do likewise.”
47. Reliance has also been placed on a decision of a learned Single Judge of
the Delhi High Court in Classic Motors Ltd. Vs. Maruti Udyog Ltd. 65 (1997)
DLT 166.
The High Court opined :-
“32. Let me now examine and apply the principle of the aforesaid
factors in order to test the plea of the plaintiff. The plaintiff
admittedly did not make any protest before entering into the
agreement but on the other hand, went ahead with its performance.
The validity of a clause of the agreement is now being sought to be
challenged when it was terminated. Even in the earlier two petitions
filed by the plaintiff under Section 20 of the Arbitration Act, the Page 43 of 59
plaintiff did not challenge the validity of the agreement. Thus the
plaintiff has taken full advantage under the agreement and reaped
benefits from it and now when the same was terminated, the
plaintiff immediately rushes to this Court challenging the validity of
the agreement. Therefore, the first two questions are to be answered
in the negative i.e. the plaintiff did not raise any protest before
entering into or soon after entering into the agreement and also did
not take any steps to avoid the agreement. Rather it affirmed the
agreement and repeated all the benefits of the agreement from 1983
onwards till it was terminated. After having done so, the plaintiff is
not entitled to challenge the agreement. In North Ocean Shipping Co.
Ltd. v. Hundai Construction Co. Ltd. reported in 1978(3) All E.R. 170,
it has been held that if the party complaining of an unfair contract
does not do anything to avoid it and accepts it then the complaining
party cannot make a grievance of the contract. Therefore, the third
factor also stands answered. So far as the question of independent
advice is concerned, from the facts delineated above, it is apparent
that PW1, the Chairman and Managing Director of plaintiff is a rich
and flourishing businessman having number of properties and
various businesses. He, therefore, had full knowledge as to the
implication of the terms of the agreement and he also had access to
the best of advices and suggestions. But inspite of being placed at
such an advantageous position PW1 did not react in any manner to
the terms of the agreement, rather continued to reap the benefits
under the agreement.”
The said decision has been relied upon in Vidya Securities Ltd. v.
Comfort Living Hotels Pvt. Ltd., reported in AIR 2003 Delhi 214 and has been Page 44 of 59
referred in Modi Rubber Ltd. v. Guardian International Corp., (2007) 141 DLT
822.
The Delhi High Court in Classic Motors (Supra), furthermore, opined that
the expression “without assigning any cause” can be applied by any of the
party, stating :-
“68. The aforesaid expression appears in Clause 21 of the
agreement which states that either party to the agreement could
terminate the contract after giving to the other party a notice of 90
days „without assigning any cause‟. The present agreement, it must
be remembered, was entered into by the parties in the realm of
private law as a result of purely private commercial transaction. It is
also to be remembered that in a private contract a party is free to
choose the person and the subject matter of the transaction
according to its own free Will. No restriction or fetter could be
imposed on either of the parties to the manner, mode and the nature
of the agreement that they choose to enter into. But the law
applicable would be different when such an agreement is entered
into in the realm of public law.”
(Underlining is ours)
It was, furthermore, opined :-
“70. In view of long catena of decisions and consistent view of the
Supreme Court, I hold that in private commercial transaction the
parties could terminate a contract even without assigning any
reason with a reasonable period of notice in terms of such a Clause Page 45 of 59
in the agreement. The submission that there could be no termination
of an agreement even in the realm of private law without there being
a cause or the said cause has to be valid strong cause going to the
root of the matter, therefore, is apparently fallacious and is
accordingly, rejected.”
Reliance has also been placed by Mr. Singh on Photo Production Ltd. Vs.
Securicor Transport Ltd. (1980) Vol. I All ER 556.
In that case, the Respondent therein while providing security services,
employed one Musgrove. He deliberately started a fire by throwing a match on
some cartons resulting ultimately in substantial damage/industrial
undertaking of the Appellant therein.
The following clause was contained in the said agreement :-
“Under no circumstances shall the Company (Securicor) be
responsible for any injurious act or default by any employee of the
Company unless such act or default could have been foreseen and
avoided by the exercise of due diligence on the part of the Company
as his employer; nor, in any event, shall the Company be held
responsible for; (a) Any loss suffered by the customer through
burglary, theft, fire or any other cause, except in so far as such loss
is solely attributable to the negligence of the Company‟s employees
acting within the course of their employment.”Page 46 of 59
Lord Wilberforce, who delivered the leading judgment, applied the
principle of no liability, stating :-
“The contract which falls to be considered was a contract for the
rendering of services by the defendants („Securicor‟) to the plaintiffs
(„Photo Productions‟). It was a contract of indefinite duration
terminable by one month‟s notice on either side. It had been in
existence for some 2.1/2 years when the breach that is the subjectmatter of these proceedings occurred. It is not disputed that the act
of Securicor‟s servant, Musgrove, in starting a fire in the factory
which they had undertaken to protect was a breach of contract by
Securicor; and, since it was the cause of an event, the destruction of
the factory, that rendered further performance of the contract
impossible, it is not an unnatural use of ordinary language to
describe it as a „fundamental breach‟.”
Lord Diplock opined that such a clause may not be applicable in a case
involving fundamental breach of contract.
On fact it was held that no such fundamental breach had taken place,
stating the law thus :-
“My Lords, it is characteristic of commercial contracts, nearly all of
which today are entered into not by natural legal persons, but by
fictitious ones, i.e. companies, that the parties promise to one
another that something will be done, for instance, that property and
possession of goods will be transferred, that goods will be carried by Page 47 of 59
ship from one port to another, that a building will be constructed in
accordance with agreed plans, that services of a particular kind will
be provided. Such a contract is the source of primary legal
obligations on each party to it to procure that whatever he has
promised will be done is done. (I leave aside arbitration clauses
which do not come into operation until a party to the contract claims
that a primary obligation has not been observed.)
Where what is promised will be done involves the doing to a
physical act, performance of the promise necessitates procuring a
natural person to do it; but the legal relationship between the
promisor and the natural person by whom the act is done, whether it
is that of master and servant, or principal and agent, or of parties to
an independent sub-contract, is generally irrelevant. If that person
fails to do it in the manner in which the promisor has promised to
procure it to be done, as, for instance, with reasonable skill and
care, the promisor has failed to fulfil his own primary obligation.
This is to be distinguished from „vicarious liability‟, a legal concept
which does depend on the existence of a particular legal relationship
between the natural person by whom a tortuous act was done and
the person sought to be made vicariously liable for it. In the interests
of clarify the expression should, in my view, be confined to liability
for tort.
A basic principle of the common law of contact, to which
there are no exceptions that are relevant in the instant case, is that
parties to a contract are free to determine for themselves what
primary obligations they will accept. They may state these in
express words in the contract itself and, where they do, the
statement is determinative; but in practice a commercial contract
never states all the primary obligations of the parties in full; many
are left to be incorporated by implication of law from the legal nature
of the contract into which the parties are entering. But if the parties Page 48 of 59
wish to reject or modify primary obligations which would otherwise
be so incorporated, they are fully at liberty to do so by express
words.”
48. We may, however, notice that Photo Production Ltd. has been relied upon
George Mictchell (Chesthall) V. Finney Lock Seeds (1983) AC 803.
“The duty of Securicor was, as stated, to provide a service. There
must be implied an obligation to use care in selecting their
patrolmen, to take care of the keys and, I would think, to operate the
service with due and proper regard to the safety and security of the
premises. The breach of duty committed by Securicor lay in a failure
to discharge this latter obligation. Alternatively it could be put on a
vicarious responsibility for the wrongful act of Musgrove, viz.
starting a fire on the premises; Securicor would be responsible for
this on the principle stated in Marris v. C.W. Martin & Sons Ltd. This
being the breach, does condition 1 apply? It is drafted in strong
terms, „Under no circumstances, any injurious act or default by any
employee‟. These words have to be approached with the aid of the
cardinal rules of construction that they must be read contra
proferentem and that in order to escape from the consequences of
one‟s own wrongdoing, or that of one‟s servant, clear words are
necessary. I think that these words are clear. Photo Productions in
fact relied on them for an argument that since they exempted from
negligence they must be taken as not exempting from the
consequence of deliberate acts. But this is a perversion of the rule
that if a clause can cover something other than negligence, it will not Page 49 of 59
be applied to negligence. Whether, in addition to negligence, it covers
other, e.g. deliberate, acts, remains a matter of construction
requiring, of course, clear words. I am of opinion that it does and,
being free to construe and apply the clause, I must hold that liability
is excluded. On this part of the case I agree with the judge and
adopt his reasons for judgment. I would allow the appeal.”
It was, however, clarified in Yasuda Fire & Marine Insurance Co. of
Europe Ltd. Vs. Orion Marine Insurance Underwriting Agency Ltd. & Another
1995 QB 174.
Photo Production (supra) has been noticed by the Supreme Court of India
in LIC of India and Another Vs. Consumer Education & Research Centre and
Others reported in (1995) 5 SCC and in Central Inland Water Transport
Corporation Ltd. and Another Vs. Brojo Nath Ganguly and Another reported in
(1986) 3 SCC 156.
It is of some significance to notice the following passage from the Law of
Contract (Butterworths Common Law Series) at page 1528 :-
“7.42 Right not divested. Any right, such as the right to damages,
which accrued prior to the time of termination remains enforceable
and is governed by the contract. This may be explained in terms of
the distinction between primary and secondary obligations.
Although termination discharges the unperformed primary
obligations of the parties, it does not discharge secondary
obligations such as the obligation to pay compensation. This
proposition holds true even in cases where the promisor possessed a
right to recover damages prior to the promisee‟s election to Page 50 of 59
terminate. The secondary obligation may be additional to a primary
obligation.
Moreover, because termination discharges the unperformed
obligations of a promisor, the promisor may be held liable to pay
damages not only in respect of the obligations which fell due for
performance prior to termination, but also in respect of obligations
which would have fallen due for performance after termination.
These are usually referred to as loss of bargain damages.
Where damages are assessed in respect of a future
performance obligation, it may be necessary to discount the award.
Such discount may take account of future contingencies, or the fact
that the award relates to a money sum which was not due at the
time of termination. The concept of „future contingencies‟ includes
events which might have happened had the contract not been
terminated. Thus, if the party whose breach or repudiation led to
termination would have been entitled to terminate the agreement
under an express provision, the plaintiff‟s damages may be reduced
accordingly.”
49. Photo Production Ltd. (supra) was dealing with a case involving primary
obligation.
50. Keeping in view the decisions of this Tribunal referred to hereinbefore, I
may consider the question of application of Clauses 4.2 and 4.3 of the
Regulations. Clauses 4.2 and 4.3 have statutory effect. Page 51 of 59
It was presumably inserted in the Regulations to protect the interests of
all concerned.
If reasons for termination are assigned, it is possible for a party to the
contract, would remedy the effect, if any. It may enter into negotiations. It may
take recourse to law.
Similarly, the viewers would have a right to make suitable arrangements
or even approach a Court of Law.
51. Construction of a statute, it is well known, must be resorted to upon
taking into consideration the language used therein.
I have noticed heretobefore that Clauses 4.2 and 4.3 of the Regulations
use negative words. They also use the expression „shall‟.
52. It is, however, true that no consequence with regard thereto has been
laid down, but on construction of a statute as to whether the same is directory
or imperative in character, must be judged on the terms of the provision.
If it is held to be mandatory, as has been held in the cases of Zee Turner
Ltd. Vs. Prasar Bharati (Supra) there is no escape from the conclusion that the
termination would be illegal. Page 52 of 59
53. This gives rise to the question as to what relief the Broadcaster may be
entitled to.
It is not in dispute that the consequence of termination of the agreement
like the placement agreement, is that the Respondent has refused to carry the
channel of the Petitioner. This channel is, therefore, not available on the
platforms of Respondent Nos. 1, 2 & 3. Clauses 4.2 and 4.3 clearly state about
the disconnection of supply of signals. The contract, which would not affect the
third party‟s interest, as for example in this case viewers, may be terminated in
terms of the contract.
I, therefore, am of the opinion that in a case of this nature, Clause 4.2
and 4.3 would apply.
54. What would be the consequences of illegal termination, is the question?
The relief required to be granted to a party would depend upon the facts and
circumstances of each case.
In a given case, it is possible to direct restoration of supply of signals. In
another set up of facts only the damages or nominal damages can be awarded. Page 53 of 59
55. In this case, admittedly, the agreement has come to an end in the month
of July, 2011. It is, therefore, not possible to direct restoration of supply of
signals.
56. The only question, therefore, which survives for consideration is as to
whether the Petitioner is entitled to any damages. For the purpose of proving
the quantum of damages, the Petitioner has not brought on record any basic
document.
57. As the principles for awarding damages have been considered by this
Tribunal in details in Viacom Vs. MSM Discovery – Petition No. 220 (C) of 2010
disposed of on 23.12.2011, the same may not be repeated.
Suffice it to say that as has been opined by the Supreme Court in Panna
Lal Janki Das Vs. Mohan Lal (1950) SCR 979, the dominant principle of law in
that behalf is the principle of Restitution Integrem.
The principle, therefore, is that the claim of damage should extend only
to the compensation of real and direct losses. Page 54 of 59
58. Has the Petitioner been able to prove the same?
I do not think it has.
No basic document has been brought on record. No Balance Sheet has
been filed. No Auditor‟s Report has been placed on record. No Profit & Loss
statement has been filed.
59. The blocking of the news is based upon a newspaper reports.
It is inadmissible in evidence being hearsay in nature.
As regards admissibility of a newspaper Report has been laid down in
Laxmi Raj Shetty vs. State of Tamil Nadu holding newspaper reports to be
inadmissible.
There is no dispute with regard to the said proposition of law. I, may,
however, notice the similar views have been expressed recently in Joseph M.
Puthussery Vs. T.S. John (2011) 1 SCC 503 and Bharat Sanchar Nigam Ltd.
vs. BPL Mobile Cellular Ltd. (2008) 13 SCC 597, opining statements contained
in a newspaper report are merely hearsay.
60. Mr. Bhatia, however, would contend that PW-1 in his cross examination
categorically stated that he being In-charge of the News Room, was required to
constantly monitor the same. Page 55 of 59
He furthermore stated that there are records to prove the said fact. No
record, however, has been produced.
61. Mr. Naresh Kumar is a person from Accounts Department.
He, however, proved certain charts and graphs. No basic document in
support of the said charts or graphs has been filed.
On what basis he had formed his opinion, is not known.
At page 20 of his deposition, Mr. Rakesh Kumar has provided for
calculation of revenue on per day basis. Evidently, it was based on the
Expected revenue. The witness has filed a Tariff Card, from a perusal whereof it
appears that the „Day & Night News‟ is free to air channel available not only on
Cable TV but also on DTH and IPTV from August, 2004. (Exh. PW2/2).
In paragraph 1 of his affidavit, he stated :-
“I state that the petitioner used to sell the available minutes in the
slot of 10 seconds each in the price band of Rs.500/- to Rs.900/- at
a week day depending upon the period in which the advertisement
to be showed. Similarly for week end, the rate of 10 second slot
varied from Rs.500/- to Rs.1000/-. Copy of the target revenue per
week day and per week-end is exhibited as herewith PW2/2.”Page 56 of 59
In the projected revenue of January to July 2011, according to the said
witness, there was an average drop of fifteen percent in TRP because of
disruptions and blackouts of the channel. Apart from the said statement, no
documentary proof has been adduced to support the same.
From the months of November 2010 to July 2011, according to him, net
projected revenue could have been Rs.16,76,97,180/- upon giving of about
fifteen percent discount.
It reads as under :-
Normal Per Day 712800
Week End Per Days 741600
Month
(2011)
Day
s
We
ek
En
d
Value Nor
mal
Day
s
Value Spot Value Avg.
Scroll
Value
Grand Total 15% Disc Net
Projected
Revenue
Nov.10 30 8 5932800 22 15681600 21614400 50000 21664400 3249660 18414740
Dec.10 31 8 5932800 23 16394400 22327200 50000 22377200 3356580 19020620
Jan 31 10 7416000 21 14968800 22384800 50000 22434800 3365220 19069580
Feb 28 8 5932800 20 14256000 20188800 50000 20238800 3035820 17202980
Mar 31 8 5932800 23 16394400 22327200 50000 22377200 3356580 19020620
Apr 30 9 6674400 21 14968800 21643200 50000 21693200 3253980 18439220
May 31 9 6674400 22 15681600 22356000 50000 22406000 3360900 19045100
June 30 8 5932800 22 15681600 21614400 50000 21664400 3249660 18414740
July 31 10 7416000 21 14968800 22384800 50000 22434800 3365220 19069580
Total 273 78 57844800 195 138996000 196840800 450000 197290800 29593620 167697180
A GRP chart has also been annexed to contend that GRP rate has a
direct relationship with advertisement and, thus, drop in GRP caused huge loss
in business to the Petitioner.Page 57 of 59
We may notice the following statements in his cross-examination :-
“Q. Is it correct that the channel of the petitioner is available on
DTH platform, IPTV as also on other cable networks?
A. Yes.
Q. Is it correct that by exhibit PW2/2 you wanted to show what
revenue was expected by the petitioner company and not the
actual revenue of the company?
A. This is actual figure opportunity to earn revenue. And it is the
actual figure.”
62. PW-3, in his evidence, sought to prove the expenditures incurred by the
Petitioner.
There is no proposition of law that in a case of breach of contract, the
Respondent was to restitute all expenditure made by the Petitioner. There are
sufficient materials on record to show that despite termination of the contract,
the Petitioner‟s channel is available on the platforms of 4 out of 5 DTH
operators working throughout the country.
Its channel is also available on the platforms of cable operators and the
channels of various other MSOs. Page59
63. The channel is also available on IPTV besi 58 of des on cable network in other
states namely Haryana, Himachal Pradesh and Jammu & Kashmir. The news
items, which are said to have been blocked, appear to have been carried in
other national channels. As indicated heretobefore, according to the witness,
there was a recording with regard to the purported disruptions, but the same
has not been produced.
64. It is not in dispute that the Petitioner‟s revenue is confined to
advertisements as the product is not a pay channel but a „free to air‟ channel.
The loss of advertisement directly attributable to the act of the Respondents
herein, therefore, should have been proved.
65. Incurring any loss by the Petitioner on that account could have been
proved by direct evidence namely what was the quantum of revenue before the
agreement was terminated and the fall, if any, immediately thereafter.
66. In terms of Section 73 of the Indian Contract Act, the damages sustained
by a party to a contract must be proved. Proof of damages, it will bear Page 59 of 59
repetition to state, should be brought in regard to the direct losses. Quantum
of damages cannot be determined only on surmises and conjectures.
It has been so held in IndusInd Media Vs. City Cable – Petition No. 67 (C)
of 2008 disposed of on 27.7.2011.
67. I, keeping in view the facts and circumstances of the case, need not apply
my mind with regard to the prayer (i) to (iv). The Competition Commission may
consider the prayers in that behalf on their own merits.
68. In the facts and circumstances of this case, however, I am of the opinion
that the Petitioner may be awarded nominal damages quantified at
Rs.1,00,000/- as against Respondents 1 to 3 jointly and severally.
This Petition is allowed to the aforementioned extent with the
aforementioned observations and directions.
There shall, however, be no order as to costs.
..……….......
(S.B. Sinha)
Chairperson
rkc
