Bombay HC to take up Mirchi case

MUMBAI: The Bombay High Court is scheduled to hear Entertainment Network India Ltd (Radio Mirchi)'s petition seeking an injunction against the government from encashing its bank guarantee.

The petition, which was listed for hearing at 2:30 pm, did not come up till 6 pm, information available with indicates.

At the time of posting this report, inquiries with FM industry sources could not conclusively ascertain when and if the case was to finally be heard.

ENIL, which runs FM radio station Radio Mirchi, had petitioned the court last week, attempting to get legal cover, while getting the government to accede to its request to get the deadline for payment of license fees postponed. ENIL, which runs FM stations in seven cities in India including Mumbai, Pune, Delhi, Kolkata, Chennai, Indore and Ahmedabad, is scheduled to pay up license fees of over Rs 110 million for Mumbai itself for the third year of broadcast by 29 April.

The legal route is being tried out by Mirchi, as well as other players who contemplate taking the same road, in an attempt to stall payments in the current government's reign, in the belief that the next government that comes to power after the ongoing Lok Sabha (Lower House) elections, will take a more lenient view of the radio licensing regime.

But government officials say that at this time, it would not be prudent for the government to defer the license fee payment as it would need a cabinet okay, which could be questioned by opposition political parties as the election process is on and the present government is just a caretaker one.

More importantly, officials point out, that if a deferment of the license fee happens, then it may result in financial loss for the government as the total license fee of various players put together amounts to almost Rs 1000 million.

FM broadcasters have been trying to get the government to rationalise the sector by getting a revenue sharing model in place of the license structure. Information and broadcasting minister R S Prasad had hinted in favour of the proposed model during Frames 2004 held in Mumbai in March. The Telecom Regulatory Authority of India, earlier this month, issued its interim recommendations on private FM broadcast. According to the recommendations, FM licensees were given the option of deferring payments, which could fall due till a final decision is taken.

The final recommendations of Trai would address the issue of license fee payable as well as the relevant interest rate. The I&B ministry however, has not taken a decision on the recommendations thus far.

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