Regulators

TDSAT appoints committee to recover dues from Mahua

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NEW DELHI: The Telecom Disputes Settlement and Appellate Tribunal has directed for the setting up of a committee comprising representative of five decree holders and a representative of Mahua Media Private Ltd to improve and strengthen the affairs of the broadcaster and to promote its finances so as to enable it to gradually and in a time-bound manner fully satisfy the five decrees amounting to Rs 33,44,50,344.

A 16-point order of 14 June 2016 by Chairman Justice Aftab Alam and member B B Srivastava noted that the decree holders are DEN, Digi Cable, Wire& Wireless India Ltd, Indian Cable Net Co, and Tata Sky. Mahua as the judgment debtor will be represented by P K Tiwari.

The execution proceedings against Mahua commenced with the filing of the Execution Application on behalf of DEN on 15 January 2014. Later on, the other four decree holders joined in the proceedings with their respective execution applications filed on different dates, leading to a consolidated proceeding against Mahua on behalf of all the five decreeholders. P K  Tiwari, the Managing Director of  Mahua,  after his release from custody on the basis of an order passed by the Bombay  High Court first appeared in person before the Tribunal in connection with the present proceedings on 19 March 2015. Since then, he has filed several affidavits undertaking to pay the decretal amounts to the five decree holders following highly deferred schemes of payment. No payment, however, has been made to any decree holder in terms of the undertakings given by him.

The Tribunal observed that: “In hindsight it appears that the affidavits were filed with a view to delude the Tribunal and to somehow delay the discharge of the decrees: there was no intention to make any payments to the decree holders.” The Tribunal also said that Tiwari had “persistently” breached the undertaking on oath taken following the order of the Tribunal in February last year.  

The Tribunal also noted that Tiwari made deliberate misrepresentation of facts and tried to suppress some relevant facts from the Tribunal regarding the bank accounts of Mahua and the money received on its behalf from advertisements and other sources even during the current proceedings.

The Tribunal on 30 May 2016 proposed to proceed in terms of 51(d) CPC and expressed the intent to appoint a receiver in the form of a committee comprising one representative from each the decree   holders. The decree holders accepted the suggestion “without demur”.

The committee has been appointed Receiver in terms of section 51(d) of the Civil Procedure Code. It will hold its first meeting within 15 days from the date of the order.   

The convenor for the first meeting will be the representative of Tata Sky, the decretal amount in whose favour far exceeds the decrees in favour of the other creditors. The convenor shall fix the date, time and the venue of the meeting taking into account the convenience of all concerned.

In the first  meeting of the committee,  Tiwari will make a full and complete disclosure of all the immovable, movable, tangible and intangible assets of Mahua, all its bank accounts [other than account nos. O109102000036810 (lOBI Bank), 11921900000231 (DCB Bank), and 200999454000 (Induslnd Bank)], all the details relating to its business, all the sources of its revenue, its liabilities and the expenses being incurred by it. In case Mahua has or gets any receipts in cash (as evidenced from its three bank accounts), Tiwari will make full disclosure of the same to the committee which will take control of the cash receipts which shall be appropriated for no purpose other than the legitimate business interests of Mahua.

The committee will then take full and effective and physical control of the offices and records of Mahua, all its immovable, movable, tangible and intangible assets including its business as a broadcaster of television channels subject to any orders passed by a court or any lawful authority in respect of the Mahua assets or its running business.

All the decisions by the committee will be taken by majority vote with every member, including Tiwari entitled to one vote. The committee will maintain a minute book of its   meetings. The committee in its first  meeting will also frame the rules of procedure for exercise of authority of management over the affairs of Mahua as directed, keeping in mind its object and purpose·.

In furtherance of its object and purpose, the committee shall take decisions and do all acts aimed at improving the business of Mahua a nd enhancing its finances. The committee will take all administrative as well as business decisions concerning the affairs of Mahua. For removal of any doubt, it was made clear by the Tribunal that the committee is fullyauthorized to negotiate with third parties, enter into business arrangements with third parties and execute agreements on behalf of Mahua with any third parties. It will also beopen to the committee to act through smaller sub-committees with appropriate delegation of its powers as per the rules of procedure framed by it.

The committee may, if it so decides, appoint a chartered accountant/auditor to audit  the financial affairs of Mahua including all its transactions with 'related/sister companies', for example Pragya Vision Pvt Ltd.,  for the past three years with a specific mandate  and view to take note of and report on monies that might have been defalcated/misappropriated/siphoned off by the Directors of Mahua either by themselves or in concert or collusion with Directors/Stakeholders in related companies not excluding Pragya Vision.

The committee will not act, directly or indirectly, in derogation of or contrary to any order concerning Mahua made by a court or any lawful authority and will not alienate or encumber any immovable or movable properties of Mahua without the prior permission of the Tribunal.

Any cheques on behalf of Mahua shall continue to be issued under the signature of   Tiwari but from this date no cheque will be signed by Tiwari unless it has the sanction in any special or general decision by the committee. Any cheque signed by Tiwari from this date without the sanction of the committee's decision would be invalid and make Tiwari liable for the consequences, including the breach of the Tribunal order.

The committee will submit a financial report before the Tribunal by the fifteenth day of the expiry of each financial quarter.

It will be open to the committee to approach the Tribunal for any clarification or permission or instructions or directions on any specific issue.

Any challenge to the decision of the committee by any third party or any dispute a rising from an agreement executed by the committee on behalf of Mahua with any third party shall be an action against Mahua or a dispute between Mahua and the concerned third party and shall be defended/prosecuted on behalf of Mahua by the committee and allexpenses in that connection shall be debited from Mahua's accounts.

The formation of the Committee and its appointment as Receiver does not in any way discharge the five decrees in question and the rights of the decree holders against Mahua under their respective decrees shall remain subsisting until the decrees are fully satisfied in accordance with law.

(Justice Alam’s term as Chairman has since ended and no successor has so far been announced. TDSAT is at present closed for summer but can hear urgent or important matters that come up for preliminary hearing).

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