NIMBUS COMMUNICATIONS LTD. Vs. PRASAR BHARTI AND ORS.

JUDGEMENT

(1.) The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (hereinafter referred to as the said Act) was deemed to have come into force with effect from November 11, 2005, as per Sub - Sec. (3) of Sec. 1 of the said Act. As per sub -Section (1) of Sec. 3 of the Act, no content rights owner or holder and no television or radio broadcasting service provider could carry a live television broadcast on any cable or Direct -to -Home network or radio commentary broadcasting in India of sporting events of national importance, unless it simultaneously shared the live broadcasting signal, without its advertisements, with Prasar Bharati to enable Prasar Bharati to re -transmit the same on its terrestrial networks and Direct -to -Home networks in such manner and on such terms and conditions as may be specified. As per sub -Section (2) of Sec. 3, the terms and conditions under sub -Section (1) of Sec. 3 were to provide that the advertisement revenue sharing between the content rights owner or holder and Prasar Bharati shall be in the ratio of not less than 75 : 25 in case of television coverage and 50 : 50 in case of radio coverage.

(2.) In exercise of the power conferred by Sec. 7 of the Act, the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Rules 2007 were promulgated. Rule 4 whereof required a sealed bid procedure to be adopted inter -se the rights owner or holder and Prasar Bharati concerning marketing of commercial time generated by the re -transmission on the Prasar Bharati's channel. Needless to state the higher bidder was entitled to undertake the marketing of commercial time. The bid amount was the minimum guaranteed amount. The party obtaining the marketing rights was to give a bank guarantee to the other party for an amount equal to the other party's share of guaranteed revenue. The said party was to receive all payments from third parties which was to be deposited in a designated escrow account. The said party was obliged to submit to the other party accounts of revenue earnings, duly audited by a chartered accountant, and with 75 days of the sporting event coming to an end was to pay the minimum guaranteed amount along with, if payable, further sum; depending upon the revenue generated.

(3.) Nimbus Communications Ltd.(hereinafter referred to as Nimbus India) is a company registered in India under the Companies Act, 1956. Nimbus Sports International PTE Ltd. Singapore (hereinafter referred to as the Nimbus Singapore) is a company registered as per laws in Singapore.