Sun Group's entry order in FM Phase III auctions expected on 22 July in Delhi & Chennai HC

NEW DELHI: The Delhi High Court today (21 July) asked counsel for the Union of India to get instructions on whether the auctions for FM Phase III will be postponed or whether the Sun Group will be permitted to take part.


The Court adjourned the hearing of the main case and the application for stay to tomorrow to allow government counsel to get instructions. Senior Counsel Kapil Sibal presented the case for Sun Group.


The Group has sought a stay on the order of the Information and Broadcasting (I&B) Ministry in this regard. The Ministry had last week issued a list of 21 bidders, which did not include the Group’s Red FM, and then sent a formal communication to the Group on 15 July that it had been denied permission.


In Chennai, the Madras High Court reserved its orders on the interim application for stay and is expected to pronounce its verdict tomorrow (22 July). 


The Court has been asked to direct the Centre to permit Sun Group to migrate to the Phase-III regime by allowing it to resubmit the application dated 20 March, 2015 to participate in the auction.


The petitions also said the company was not involved in any dispute with the nation's security, nor had it broadcast anything that affected the security of the nation.


The petition alleges that the order denying permission had been issued “carelessly, with total non-application of mind and in a cavalier fashion, totally unmindful of its consequences and repercussions not only on Sun TV but also on the entire broadcasting and media industry.”


Apart from the denial to participate in Phase III FM auctions, the order also implied that the sister companies of the Sun Group would be compelled to close down FM radio stations, totalling 45 across the nation, the petitioners said.


“Non-inclusion of the company's name on the list is nothing but closing the entire FM stations run by it for extraneous, illegal and mala fide reasons,” the petitions said.


It has pointed out that the Indian Telegraph Act does not make any mention of security clearance, and licence can be terminated or denied only if there is violation of the terms of the agreement including any defaults in payment.


Clause 2.2(b) of the Information Memorandum and Clause 3.2(b) of the Notice Inviting Application says only a company controlled by a person convicted for an offence involving moral turpitude or money laundering or drug trafficking or terrorist activities or is declared as insolvent will not be eligible to apply. The petitioners said there was nothing in the rules to deny permission to the Sun Group, which is controlled by the Maran brothers.

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