Regulators

Delhi HC dismisses 9X Media, B4U Broadband, TV Vision petition challenging DD Free Dish e-auction

The court said that fixing reserve price is Prasar Bharati's commercial discretion.

DD Free Dish

MUMBAI: The Delhi High Court has dismissed the petition filed by 9X Media, B4U and MASTiii against the DD Free Dish e-auction. Within a few days of the e-auction recommencement notice, the broadcasters approached the court as they felt the base prices are very high for small players.

Senior lawyer Amit Sibal appearing for the petitioner 9XM argued that the music channels were free to air channels and they were not collecting any subscription amount. Hence, those channels could not be classified in the same bucket as general entertainment channels (GECs), and other channels.

The revised guidelines of DD Free Dish auction says that differential pricing for genre (language) will be based on principle of higher reserve price for genre (language) with greater commercial potential. Sibal argued that the guiding norm has not been followed as the music channels have been placed in the same bucket as sports and GECs. He contended that the commercial potential of sports channels is greater than music channels.

Sibal also argued that the commercial potential of music channels was much lower than news channels and yet the reserve price for news channels has been fixed at Rs 7 crore and music channels have been fixed at Rs 10 crore. He also referred to the financial statement of the petitioners to contend that they were loss making while the news channels were making profits.

Earlier 9X Media mentioned in the petition that it is a loss-making entity with losses of Rs 7.81 crore and negative earnings per share and such a decision could adversely impact its business. Rajeev Sharma on behalf of Prasar Bharati pointed out the total revenue of 9XM for the financial year 2018 was around Rs 146.12 crore including Rs 138.71 crore as revenue from operations. He submitted that the reserve price of a slot was a very small fraction of the revenue. Sharma also added that the petitioners were already paying Rs 8 crore and the reserve price was only 25 per cent more than the existing price.

Talking note of the argument, Justice Vibhu Bakhru said that the court does not agree to the argument that the reserve price fixed there under would amount to disabling an entrepreneur from carrying on the business of broadcasting a music channel. He also added that DD Free Dish is not the only platform to air the channels.

Justice Bakhru also asserted that it will not be appropriate to enter into a controversy as to the assessment of the commercial potential of various genres or channels. The court also added that the question of fixing a reserve price is a matter of commercial discretion of the public broadcaster Prasar Bharati.

“Prasar Bharti’s commercial decision to fix the prices is not amenable to judicial review under Article 226 of the Constitution of India, unless it is established that the same is so arbitrary or so unreasonable that no reasonable person could possibly take such a decision,” the judgement also said.

Justice Bakhru also found Sibal’s contention that that petitioners are not challenging the policy but the implementation is unpersuasive as the petitioners are seeking to challenge the fixation of reserve price which itself is a matter of policy.

The new policy guidelines has kept five buckets for e-auction of MPEG2 slots. Bucket A+ has been kept for Hindi GECs and teleshopping channels with a reserve price of Rs 15 crore, and Bucket A has been dedicated to Hindi movie channels with a reserve price of Rs 12 crore.

Hindi music, sports, and Bhojpuri GEC and movie come under Bucket B which has a reserve price of Rs 10 crore. All news & current affairs (Hindi), news & current affairs (English) and news & current affairs (Punjabi) channels fall under the category of Bucket C which with a reserve price of Rs 7 crore. The Bucket D with lowest reserve price of Rs 6 crore will comprise of all other remaining genres/language channels.

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