Regulators

HC to hear affected parties on 4 April

MUMBAI: A division bench of the Mumbai High Court comprising Chief Justice C L Thakkar and Dr Dhananjay Chandrachud today ruled that cable operators had the right to disconnect connections of those consumers who had not paid cable dues based on the rates applicable prior to 31 December 2002.

However, the judges also specified that cable operators couldn't disconnect those consumers who refused to pay the new rates applicable from 1 January 2003. 

The division bench also held that it would hear the arguments of the various affected parties - consumers, NGOs (non-government organisations), MSOs (multi-system operators) and broadcasters on 4 April. "All the individual petitions made by several affected parties have been clubbed together as the future ruling would have a bearing on the entire city," Chief Justice Thakkar said. 

Starting off the proceedings, MSO InMumbai Networks' lawyer Janak Dwarkadas informed the court that the MSOs were in a tricky situation as the broadcasters were pressurising them to clear the dues irrespective of whether the local cable operators had paid the MSOs or not. He produced a letter from broadcaster Sony Entertainment Television (SET) which had threatened to disconnect signals if InMumbai didn't pay an outstanding amount of Rs 12.1 million till 15 March 2003. 

"The MSO would have to make the payment in lieu of the ongoing World Cup cricket irrespective of whether it receives the payments from the cable operators within the stipulated deadline," he added. 

"The voluntary statement of order given by the cable operator to the court that they could offer consumers signals at any particular rate is not binding on the MSO. Cable operators were kept in the loop whenever the MSOs entered into an agreement with the broadcasters. Cable operators should honour the existing commitments which they had with the MSOs," Dwarkadas added. 

Dwarkadas stated that the MSOs held the cable operators responsible for withholding revenues collected from the consumers from the MSOs. He mentioned that the MSOs didn't have the appropriate technology to control the signals once they left the main control room. "Once the signal travels to the local cable operators, the MSOs can't prevent the defaulting cable operators and consumers from accessing the signals," Dwarkadas added. 

Speaking to indiantelevision.com after the ruling, InMumbai's lawyer Dwarkadas said: "The division bench accepted our argument that we don't have the technology to bypass the defaulting cable operators and the consumers. The cable operators can decide what they should charge the consumers but ensure that they pay the MSOs and the government their dues for the services." 

Seven Star's lawyer Majid Memon said: "Seven Star had taken the lead in saying that they wouldn't disconnect any cable connections of consumers who refused to pay the new rates applicable from 1 January 2003. We are happy that our stance has been vindicated and extended to all the cable operators (belonging to various cable associations) in other parts of the city."

Consumer Action Network president Abdi said: " We are happy that the High Court has stopped arbitrary disconnections. We have received nearly 5000 letters from consumers who have been victims of random disconnections. We shall await the court's ruling on 4 April 2003." 

BJP MP Kirit Somaiya was disappointed that the court held that status quo should be maintained on the old rates as of 31 December 2002. "These old monthly cable rates could be anything between Rs 200 to Rs 300. I am sure that we shall prove our case on 4 April 2003 and push for a monthly amount of Rs 150. We shall produce evidence comprising of written statements by disgruntled consumers. We shall also prove that cable operators haven't paid service tax, income tax and entertainment tax to the government."

However, some of the members of the cable trade present say that Somaiya is way off the mark when he mentions an amount of Rs 150 per month. "Our upgradation costs work out to Rs 40 per subscriber and around Rs 800 per subscriber per annum. They expect us to pay for the regular maintenance of the networks. The network wires get damaged during kite flying competitions or other building maintenance work," says a cable operator on condition of anonymity.

"Consumers and NGOs must remember that we are dealing in electronic equipment. The lifespan of an amplifier or electronic components required at the control room is limited. How can consumers expect these equipment to last a lifetime? We have dished out money for these spare parts, for salaries, office rents, electricity charges, so on and so forth. After all, it is just another business and we want to be profitable," says an MSO representative who doesn't wanted to be quoted. 

"Kiritbhai is talking about disclosing revenues to the excise and income tax department. I wish to point out that the excise department officials are extremely corrupt and they were the ones who urged honest cable operators to avoid disclosing their real subscriber numbers. Most of them made their money through bribes and have been transferred to other departments. Now, the cable operators who bribed them have been left in the lurch due to Kiritbhai's actions," says another cable operator. 

"The honest cable operator gets squeezed from all sides. Whenever there is a rate hike, he has to go to consumers and demand more money. If the consumers refuse to pay, his profit margins reduce. The dishonest cable operator makes merry in all scenarios," says a cable operator from South Mumbai. 

A politician opines that the only law which can teach dishonest cable operators a lesson is the Income Tax Act. "The revenue and excise officials must instigate IT scrutiny on one or two major defaulters. The onus of proving that the cable operator had lesser number of subscribers must be placed on the operator. The defaulters shouldn't be given amnesty and should be penalised so heavily that all other cable operators would toe the line. Once CAS comes in, everyone's true colours will be revealed!" 

Among those present for the hearing were Bharatiya Janata Party MP Kirit Somaiya, Consumer Action Network president Ahmad M Abdi, Doordarshan (DD) Mumbai deputy director Yashpal Ramavat, Hathway GM operations Rohinton Dadyburjor and one of the promoters of Seven Star Nader Ali. 

DD was represented by additional solicitor-general SB Jaisinghani; MSOs Hathway, Seven Star and InMumbai were represented by their lawyers Ravi Kadam, Majid Memon and Janak Dwarkadas respectively; Mumbai Cable Operators Federation (MCOF) was represented by its lawyer A M Saraogi.

It looks as if 14 July 2003 is a long way off. Today, everyone has had their say. All eyes are now on Mumbai High Court's room number 46 where the hearing will take place on 4 April 2003.

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