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TDSAT rejects IndiaCast, MSM Discovery, Asianet petitions claiming dues from LCOs

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NEW DELHI: Sending out a clear signal to distributors and multi system operators (MSOs), the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has once again turned down three petitions seeking payment from a local cable operator (LCO) for the period for which the signals were sent even after expiry of a valid interconnect agreement.

 

There were two cases of IndiaCast UTV Media Distribution and MSM Discovery against MSO S R Cable TV and one by Asianet Satellite Communication against Sathyadhara Communications.

 

The cases against S R Cable were for recovery of the alleged dues of subscription fees amounting to Rs 3.01 lakh along with interest at 18 per cent and Rs 8.24 lakh along with interest at 18 per cent per annum respectively till the date of payment.

 

The case of Asianet was for recovery of Rs 1.30 crore allegedly payable by Sathyadhara towards balance of carriage fees for the year 2012-13 and a further sum of Rs 20.47 lakh as interest at 18 per cent p.a. for the delay in payment of the carriage fees.

 

TDSAT chairman Justice Aftab Alam and member Kuldip Singh said, “The alleged supply of signals by IndiaCast to the respondent after the expiry of the interconnect agreement was plainly in contravention of the statutory Regulations. Having acted in breach of the Regulations, it cannot seek the help of the judicial process and realise its dues through the process of court.”

 

The petitions against S R Cable were dismissed with cost of Rs 5,000 payable to the TDSAT Employees Welfare Society.

 

It was in the case of IndiaCast that the LCO executed an interconnect agreement with it on 1 June, 2011 for the period 1 April, 2011 to 31 March under which IndiaCast was to supply the TV channels controlled by it on behalf of its principal broadcasters on payment of Rs 21 lakh as the monthly subscription fee.

 

IndiaCast said it supplied the TV channels to the LCO in terms of the agreement and regularly raised invoices for payment of the monthly subscription fee. The LCO, however, defaulted in payments as a result of which dues accumulated. Finally on 1 August, 2014 IndiaCast discontinued the supply of its signals to the respondent.

 

IndiaCast claimed it sent reminders and legal notice demanding the payment of its dues but as no payment was made by the LCO, the petition was filed on 5 August, 2014.

 

TDSAT proceeded ex parte as the LCO did not appear despite service of notice.

 

The Tribunal took note of the fact that IndiaCast had sought to fill this gap by a miscellaneous application on 23 February this year by stating that the LCO was required to pay an amount of Rs 25.20 lakh exclusive of taxes annually towards the subscription fee calculated on the basis of the said Subscription Agreement for 12 months, but the LCO on several occasions requested IndiaCast to continue to provide the signals even after the expiry of the previous agreement and gave the oral assurances that the fresh agreements will be executed between the parties. It is stated that “the parties were negotiating for the renewal of the agreement and basis the negotiation process, the petitioner continued to provide the signals.”

 

The Tribunal rejected as “misconceived” the arguments sought to be raised to the effect that the LCO was bound by law and was liable under Section 73 of the Indian Contract Act 1872 as they cannot apply to the present case.

 

Similarly, the Tribunal said the amendments made early this year do not help it.

 

“IndiaCast would indeed be entitled to recover any dues pertaining to the period of the agreement that came to end on 31 March, 2012 but it is not the case that the dues pertain to that period nor from the statement of account it is discernible whether or not there were any dues on the date the agreement came to end,” the Tribunal noted.

 

It added that clause 8 of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations 2004 (Regulations) provides for the maximum period of three months for negotiations for renewal of existing agreements and clause 4A (introduced in the Regulations with effect from 17 March, 2009 prohibits a broadcaster or a distributor of TV channels to make available signals of TV channels to any distributor without entering into a written interconnect agreement.”

 

In the MSM petition, the interconnect agreement was for the period 1 January, 2011 to 31 December, 2011 under which MSM was to supply the TV channels controlled by it on behalf of its principal broadcasters on payment of Rs 1.25 lakh as the monthly subscription fee. MSM said it supplied the TV channels to the MSO and regularly raised invoices for payment of the monthly subscription fee. The MSO defaulted in payments as a result of which dues accumulated. Finally on 17 December, 2012 MSM discontinued the supply of its signals to the respondent.

 

In the Asianet case, a carriage agreement dated 8 August, 2011 was signed between the parties for one year from 1 September, 2011 to 31 August, 2012 to carry and retransmit signals of Darshana TV channel of the respondent for an amount of Rs 60 lakh per year exclusive of taxes. The dispute pertains to a period starting from 1 September, 2012 till the disconnection of carriage of signals by the respondent on 20 November, 2013.

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